EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered
into effective as of July 6, 1999 (the "Effective Date") by
and between GM Offshore, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxx Xx. (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to assure itself of the
services of the Executive for the period provided in this
Agreement, and the Executive wishes to serve in the employ
of the Company on the terms and conditions hereinafter
provided; and
WHEREAS, it is in the best interests of the Company and
its shareholders to assure that the Company will have the
continued attention and dedication of the Executive to their
assigned duties without distraction in potentially
disturbing circumstances arising from the possibility of a
Change of Control (as defined in Section 1 below) of
GulfMark Offshore, Inc., a Delaware corporation ("Parent"),
which is the sole shareholder of the Company; and
WHEREAS, it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened
Change of Control and to encourage the Executive's full
attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control; and
WHEREAS, it is imperative to provide the Executive with
compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which
are competitive with those of other corporations.
NOW, THEREFORE, in order to accomplish these
objectives, and in consideration of the mutual covenants and
agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally
bound, agree as follows:
1. Change of Control. For the purposes of this
Agreement, a "Change of Control" shall mean the occurrence
of any one or more of the following:
(a) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act) of twenty percent (20%) or more of either (i) the then
outstanding shares of common stock of Parent or (ii) the
combined voting power of the then outstanding voting
securities of Parent entitled to vote generally in the
election of directors; provided, however, that the following
acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from Parent; (ii) any acquisition
by Parent; (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Parent or
any corporation controlled by Parent; or
(b) Parent shall sell, lease, exchange or
transfer (in one transaction or a series of related
transactions) substantially all of its assets, except to a
wholly owned subsidiary; or
(c) Approval by the stockholders of Parent of any
plan or proposal for the liquidation or dissolution of the
Company; or
(d) Individuals who, as of the date hereof,
constitute the Board of Parent (the "Incumbent Board") cease
for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election
or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(e) Subject to applicable law, in a Chapter 11
bankruptcy proceeding, the appointment of a trustee or the
conversion of a case involving Parent to a case under
Chapter 7; or
(f) Any consolidation, reorganization, or merger
of Parent in which Parent is not the continuing or surviving
corporation or pursuant to which shares of Parent's common
stock would be converted into cash, securities or other
property, other than a consolidation, reorganization or
merger of Parent in which the holders of Parent's common
stock immediately prior to the consolidation, reorganization
or merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the
consolidation, reorganization or merger.
2. Employment Period. The Company hereby agrees to
continue the Executive in its employ, and the Executive
hereby agrees to remain in the employ of the Company, in
accordance with the terms and provisions of this Agreement,
for the period commencing on the Effective Date and ending
on July 6, 2001 (the "Term").
3. Terms of Employment. The following terms shall
govern the Executive's employment during the Term:
(a) Position and Duties.
(i) During the Term, the Executive shall be
employed as Executive Vice President and Chief Financial
Officer of the Company with corresponding authority, duties
and responsibilities
(ii) During the Term, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the
business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Term, it shall not be a
violation of this Agreement for the Executive to serve on
corporate, civic or charitable boards or committees, deliver
lectures, fulfill speaking engagements, teach at educational
institutions, and manage personal investments, so long as
such activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement.
It is expressly understood and agreed that to the extent
that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the
Company.
(b) Compensation. During the Term, and prior to
the termination of the Executive's employment as described
in Section 4 or 5 hereof, the Executive shall be entitled to
the following items of compensation:
(i) Base Salary. During the Term, the
Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid in equal installments on a
semi-monthly basis (less applicable withholding and salary
deductions), of $190,000.00. Any discretionary increase in
Annual Base Salary during the Term shall not serve to limit
or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after
any such increase, and the term "Annual Base Salary" as
utilized in this Agreement shall refer to Annual Base Salary
as so increased.
(ii) Annual Bonus. During the Term, the
Executive shall receive, for each fiscal year ending during
the Term, an annual bonus (the "Annual Bonus"), which shall
be paid in cash within thirty (30) days of the end of each
fiscal year for which the Annual Bonus is awarded, in an
amount to be determined at the discretion of the Company.
Any discretionary increase in the Annual Bonus during the
Term shall not serve to limit or reduce any other obligation
to the Executive under this Agreement.
(iii) Incentive, Savings and Retirement
Plans. During the Term, the Executive shall be entitled to
participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated
companies. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by,
controlling or under common control with the Company.
(iv) Welfare Benefit Plans. During the
Term, the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation,
medical, supplemental health, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies.
(v) Expenses. During the Term, the
Executive shall be entitled to receive prompt reimbursement
for all reasonable out-of-pocket employment expenses
incurred by the Executive in accordance with the policies,
practices and procedures of the Company and its affiliated
companies in effect with respect to other peer executives of
the Company and its affiliated companies.
(vi) Vacation. During the Term, the
Executive shall be entitled to paid vacation in amounts to
be determined by the Company at the beginning of each fiscal
year. Such vacations shall be taken at such times as are
consistent with the reasonable business needs of the
Company. Up to an aggregate total of two weeks of unused
vacation time may be carried forward and used by the
Executive in succeeding years.
(vii) Life Insurance. The Company shall
purchase, or have Parent purchase and assign to the Company,
a split dollar whole life insurance policy on the life of
the Executive with a face value of $500,000. The insurance
policy shall be owned by the Executive. The Executive shall
have the right to designate one or more beneficiaries, and
to change such designation at any time and from time to
time. The Company shall pay all premiums on such policy.
The Company shall own the cash value of the insurance policy
up to the aggregate amount of premiums paid by the Company,
and the Company shall be entitled to recover from the cash
value of the insurance policy or the death proceeds the
aggregate amount of premiums paid by the Company. The
Executive agrees to execute a collateral assignment in order
to assign the insurance policy to the Company for the
purpose of securing the Company's interest in the insurance
policy. Such insurance coverage shall be in addition to,
and not in lieu of, any other insurance normally provided by
the Company to other peer executives of the Company and its
affiliated companies.
(viii) Club Membership. During the Term,
the Company will pay all reasonable period dues for
membership in the University Club or an equivalent club to
be selected by Executive. The membership will remain the
property of the Company and on the expiration of this
Agreement will be transferred to such individual as the
Company may designate.
(ix) Office and Support Staff. During the
Term, the Executive shall be entitled to an office or
offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, at
least equal to the most favorable of the foregoing provided
to other peer executives of the Company and its affiliated
companies.
(x) Benefits Not in Lieu of Compensation.
No benefit or perquisite provided to the Executive shall be
deemed to be in lieu of the Executive's Annual Base Salary,
Annual Bonus or other compensation.
4. Termination of Employment.
(a) Death or Disability. The Executive's
employment shall terminate automatically upon the
Executive's death during the Term. If the Company
determines in good faith that the Disability of the
Executive has occurred during the Term (pursuant to the
definition of Disability set forth below), it may give to
the Executive written notice in accordance with Section
15(b) hereof of its intention to terminate the Executive's
employment. In such event, the Executive's employment with
the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability
Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a
full-time basis for 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 the
Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld
unreasonably).
(b) Termination by the Company for Cause. The
Company may terminate the Executive's employment during the
Term for Cause. For purposes of this Agreement, "Cause"
shall mean (i) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a
result of incapacity due to physical or mental illness)
which is demonstrably willful and deliberate on the
Executive's part and which is not remedied in a reasonable
period of time after receipt of written notice from the
Company specifically identifying such breach, (ii) the
conviction of the Executive of a felony involving moral
turpitude, or (iii) the willful engaging by the Executive in
gross misconduct materially and demonstrably injurious to
the Company. For purposes of this paragraph, no act, or
failure to act, on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or
omission was not in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for cause unless and until
there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire authorized membership of
the Board at a meeting of the Board (after reasonable notice
and an opportunity for the Executive, together with counsel,
to be heard before the Board) finding that in the good faith
of the Board the Executive was guilty of conduct set forth
in clauses (i), (ii) or (iii) of the second sentence of this
paragraph and specifying the particulars thereof in detail.
(c) Voluntary Termination by Executive for Good
Reason. The Executive's employment may be terminated during
the Term by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any removal of the Executive
from or failure to re-elect the Executive to any of such
positions or any other actions by the Company which results
in a diminution in such position, authority, duties or
responsibilities (except in connection with the termination
of the Executive's employment for Cause, Disability or
retirement or as a result of the Executive's death or by the
Executive other than for Good Reason), excluding for this
purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply
with any of the provisions of Section 3(b) or the taking of
any action by the Company which would adversely affect the
Executive's participation in or materially reduce his
benefits under any of the items described in Section 3(b),
other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the assignment of the Executive to
perform his services in a location other than where the
Executive was initially employed in Houston, Texas or any
office of the Company located in Houston, Texas which is the
principal office of the Company;
(iv) any purported termination by the
Company of the Executive's employment otherwise than as
expressly permitted by this Agreement (and for purposes of
this Agreement, no such purported termination shall be
effective); or
(v) any failure by the Company to comply
with and satisfy Section 14(c) hereof, provided that such
successor has received at least ten days, prior written
notice from the Company or the Executive of the requirements
of Section 14(c) hereof.
For purposes of this Section 4(c), any good faith
determination of "Good Reason" made by the Executive shall
be conclusive.
(d) Notice of Termination. Any termination by
the Company for Cause, or by the Executive for Good Reason,
shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 15(b). For
purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be
not more than 15 days after the giving of such notice). The
failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or
preclude the Executive or the Company from asserting such
fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of Termination"
means (i) if the Executive's employment is terminated by the
Company for Cause, or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall
be the date on which the Company notifies the Executive of
such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or
the Disability Date, as the case may be.
5. Obligations of the Company upon Termination.
(a) Termination for Good Reason or Other Than for
Cause, Death or Disability Prior to a Change of Control or
after Twelve Months after a Change of Control. If, during
the Term and prior to a Change of Control or after twelve
(12) months after a Change of Control, the Company shall
terminate the Executive's employment other than for Cause,
Death or Disability or the Executive shall terminate
employment for Good Reason:
(i) the Company shall pay to the Executive
in a lump sum in cash within 30 days after the Date of
Termination the aggregate of the following amounts:
A. the sum of (1) the Executive's
Annual Base Salary through the Date of Termination, (2) the
product of (x) the Annual Bonus paid or payable to the
Executive for the immediately preceding year and (y) a
fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination, and
the denominator of which is 365, (3) any compensation
previously deferred by the Executive (together with any
accrued interest or earnings thereon) and (4) any accrued
vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2),
(3) and (4) shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the amount equal to the sum of (1)
the Executive's Annual Base Salary, calculated from the Date
of Termination through the remainder of the Term, and (2)
the Annual Bonus paid or payable to the Executive for the
immediately preceding fiscal year annualized and calculated
from the Date of Termination through the remainder of the
Term; provided, however, that such amount shall be reduced
by the present value (determined as provided in Section
280G(d)(4) of the Internal Revenue Code of 1986, as amended
(the "Code")) of any other amount of severance relating to
salary or bonus continuation, if any, to be received by the
Executive upon termination of employment of the Executive
under any severance plan, policy or arrangement of the
Company; and
(ii) any or all Stock Options awarded to the
Executive under any plan not previously exercisable and
vested shall become fully exercisable and vested; and
(iii) for the remainder of the Term,
provided that the Executive's continued participation is
possible under the general terms and provisions of such
plans and programs, the Company shall continue benefits to
the Executive and/or the Executive's family at least equal
to those which would have been provided to them in
accordance with the plans, programs, practices and policies
described in Section 3(b)(iv) if the Executive's employment
had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the
Company and its affiliated companies as in effect generally
at any time thereafter with respect to other peer executives
of the Company and its affiliated companies and their
families; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive
medical or other welfare benefits under another employer-
provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under
such other plan during such applicable period of
eligibility; in the event that the Executive's participation
in any such plan or program is barred, the Company shall
arrange to provide the Executive with benefits substantially
similar to those which he is entitled to receive under such
plans and programs; and
(iv) subject to the provisions of Section 6,
to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive and/or the
Executive's family any other amounts or benefits required to
be paid or provided or which the Executive and/or the
Executive's family is eligible to receive pursuant to this
Agreement and under any plan, program, policy or practice of
or contract or agreement with the Company and its affiliated
companies as in effect generally thereafter with respect to
other peer executives of the Company and its affiliated
companies and their families (such other amounts and
benefits shall be hereinafter referred to as the "Other
Benefits"); and
(v) in addition to the benefits to which the
Executive is entitled under any retirement plans or programs
in which the Executive participates or any successor plans
or programs in effect on the Date of Termination, the
Company shall pay the Executive in one sum in cash at the
Executive's normal retirement age (or earlier retirement age
should the Executive so elect) as defined in the retirement
plans or programs in which the Executive participates or any
successor plans or programs in effect on the Date of
Termination, an amount equal to the actuarial equivalent of
the retirement pension to which the Executive would have
been entitled under the terms of such retirement plans or
programs without regard to "vesting" thereunder, had the
Executive accumulated additional years of continuous service
through the remainder of the Term at his Annual Base Salary
in effect on the Date of Termination under such retirement
plans or programs reduced by the single sum actuarial
equivalent of any amounts to which the Executive is entitled
pursuant to the provisions of said retirement plans and
programs; for purposes of this paragraph, "actuarial
equivalent" shall be determined using the same methods and
assumptions utilized under the Company's retirement plans
and programs on the Effective Date; and
(vi) the Company shall promptly transfer and
assign to the Executive all such life insurance policies for
which the Company or Parent was previously reimbursing
premium payments made by the Executive pursuant to an
agreement between the Executive and the Company or Parent;
and
(vii) for a period of six (6) months after
the Date of Termination, the Company shall promptly
reimburse the Executive for reasonable expenses incurred for
outplacement services and/or counseling.
(b) Termination upon Death. If the Executive's
employment is terminated by reason of the Executive's death
during the Term, this Agreement shall terminate without
further obligations to the Executive's legal representatives
under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive's estate
or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination) and (ii) the timely
payment or provision of any and all Other Benefits, which
under their terms are available in the event of death.
(c) Termination upon Disability. If the
Executive's employment is terminated by reason of the
Executive's Disability during the Term, this Agreement shall
terminate without further obligations to the Executive,
other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination) and (ii) the timely
payment or provision of any and all Other Benefits, which
under their terms are available in the event of a
Disability.
(d) Termination for Cause or Other than for Good
Reason. If the Executive's employment shall be terminated
for Cause during the Term, this Agreement shall terminate
without further obligations to the Executive other than the
obligation to pay to the Executive Annual Base Salary
through the Date of Termination plus the amount of any
compensation previously deferred by the Executive and any
accrued vacation pay, in each case to the extent theretofore
unpaid. If the Executive terminates employment during the
Term, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations and
the timely payment or provision of any and all Other
Benefits. In such case, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.
(e) Termination within Twelve Months after a
Change of Control. If, within twelve (12) months after a
Change of Control, the Company (or any successor of the
Company) shall terminate the Executive's employment other
than pursuant to Sections 2, 4(a) or 4(b) hereof or if the
Executive shall terminate his employment for Good Reason:
(i) the Company (or any successor of the
Company) shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate
of the following amounts:
A. the Accrued Obligations; and
B. the amount equal to the sum of (1)
the Executive's Annual Base Salary at the rate in effect as
of the Date of Termination multiplied by two (2), and (2)
the Annual Bonus paid or payable to the Executive for the
immediately preceding fiscal year annualized and calculated
from the Date of Termination through the second anniversary
of the Date of Termination; provided, however, that such
amount shall be reduced by the present value (determined as
provided in Section 280G(d)(4) of the Code) of any other
amount of severance relating to salary or bonus
continuation, if any, to be received by the Executive upon
termination of employment of the Executive under any
severance plan, policy or arrangement of the Company; and
(ii) any or all Stock Options awarded to the
Executive under any plan not previously exercisable and
vested shall become fully exercisable and vested; and
(iii) for the period from the Date of
Termination through the first anniversary of the Date of
Termination, provided that the Executive's continued
participation is possible under the general terms and
provisions of such plans and programs, the Company shall
continue benefits to the Executive and/or the Executive's
family at least equal to those which would have been
provided to them in accordance with the plans, programs,
practices and policies described in Section 3(b)(iv) if the
Executive's employment had not been terminated in accordance
with the most favorable plans, practices, programs or
policies of the Company and its affiliated companies as in
effect and applicable generally to other peer executives and
their families during the 90-day period immediately
preceding the Date of Termination or, if more favorable to
the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its
affiliated companies and their families; provided, however,
that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare
benefits under another employer-provided plan, the medical
and other welfare benefits described herein shall be
secondary to those provided under such other plan during
such applicable period of eligibility; in the event that the
Executive's participation in any such plan or program is
barred, the Company shall arrange to provide the Executive
with benefits substantially similar to those which he is
entitled to receive under such plans and programs; and
(iv) subject to the provisions of Section 6,
to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive and/or the
Executive's family any other amounts or benefits required to
be paid or provided or which the Executive and/or the
Executive's family is eligible to receive pursuant to this
Agreement and under any plan, program, policy or practice of
or contract or agreement with the Company and its affiliated
companies as in effect and applicable generally to other
peer executives and their families during the 90-day period
immediately preceding the Date of Termination or, if more
favorable to the Executive, as in effect generally
thereafter with respect to other peer executives of the
Company and its affiliated companies and their families; and
(v) in addition to the benefits to which the
Executive is entitled under any retirement plans or programs
in which the Executive participates or any successor plans
or programs in effect on the Date of Termination, the
Company shall pay the Executive in one sum in cash at the
Executive's normal retirement age (or earlier retirement age
should the Executive so elect) as defined in the retirement
plans or programs in which the Executive participates or any
successor plans or programs in effect on the Date of
Termination, an amount equal to the actuarial equivalent of
the retirement pension to which the Executive would have
been entitled under the terms of such retirement plans or
programs without regard to "vesting" thereunder, had the
Executive accumulated additional years of continuous service
through the first anniversary of the Date of Termination at
his Annual Base Salary in effect on the Date of Termination
under such retirement plans or programs reduced by the
single sum actuarial equivalent of any amounts to which the
Executive is entitled pursuant to the provisions of said
retirement plans and programs; for purposes of this
paragraph, "actuarial equivalent" shall be determined using
the same methods and assumptions utilized under the
Company's retirement plans and programs on the Effective
Date; and
(vi) the Company shall promptly transfer and
assign to the Executive all such life insurance policies for
which the Company or Parent was previously reimbursing
premium payments made by the Executive pursuant to an
agreement between the Executive and the Company or Parent;
and
(vii) for a period of six (6) months after
the Date of Termination, the Company shall promptly
reimburse the Executive for reasonable expenses incurred for
outplacement services and/or counseling.
6. Waiver of Rights For Other Severance. The
Executive hereby agrees any and all benefits or payments
arising out of or relating to any plan, program, policy or
practice of or contract or agreement with the Company and
its affiliated companies relating to the severance of
employment, shall be fully offset against any benefits or
payments due and owing hereunder.
7. Non-Exclusivity of Rights. Nothing herein shall
limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any
of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.
8. Full Settlement; Resolution of Disputes.
(a) The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any
of the provisions of this Agreement and, except as
specifically provided in Section 5, such amounts shall not
be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly as incurred,
to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by
the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each
case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
(b) If there shall be any dispute between the
Company and the Executive (i) in the event of any
termination of the Executive's employment by the Company,
whether such termination was for Cause, or (ii) in the event
of any termination of employment by the Executive, whether
Good Reason existed, then, unless and until there is a
final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause
or that the determination by the Executive of the existence
of Good Reason was not made in good faith, as the case may
be, the Company shall pay all amounts, and provide all
benefits, to the Executive and/or the Executive's family or
other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Section 5 as
though such termination were by the Company without Cause or
by the Executive with Good Reason; provided, however, that
the Company shall not be required to pay any disputed
amounts pursuant to this paragraph except upon receipt of an
undertaking by or on behalf of the Executive and/or the
Executive's family or other beneficiaries, as the case may
be, to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.
9. Certain Additional Payments by the Company.
(a) Notwithstanding anything in this Agreement to
the contrary, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would
be subject to the excise tax imposed by Section 4999 of the
Code, or any successor provision thereto, or any interest or
penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect
thereto) and any Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c),
all determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be
made by the Company's independent certified public
accountants (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the Change of
Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall
furnish the Executive with a written opinion that failure to
report the Excise Tax on the Executive's applicable federal
income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been
made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the
Underpayment that has occurred, and any such Underpayment
shall be promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days
after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:
(i) give the Company any information
reasonably requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including, without
limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good
faith in order effectively to contest such claim, and
(iv) permit the Company to participate in
any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 9(c),
the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed
and xxx for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute and contest to
a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim
and xxx for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further
provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder, and the Executive shall
be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any
other taxing authority.
(d) If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section
9(c) hereof, the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall,
subject to the Company's complying with the requirements of
Section 9(c), promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant
to Section 9(c) hereof, a determination is made that the
Executive shall not be entitled to any refund with respect
to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
10. Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment
by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the
Executive's employment with the Company, 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 information, knowledge or
data to anyone other than the Company and those designated
by it. In no event shall an asserted violation of the
provisions of this section constitute a basis for deferring
or withholding any amounts otherwise payable to the
Executive under this Agreement.
11. No Competition. During the Term and, unless the
Agreement terminates pursuant to Section 5(a) or 5(e),
through the first anniversary of the expiration thereof, the
Executive shall not directly or indirectly engage in any
business which is competitive with any of those business
activities in which the Company or its affiliated companies
were engaged directly or indirectly during the Term of the
Agreement; provided, however, that the restriction in this
section shall apply to the reasonable and limited geographic
area consisting of any state in which the Company or its
affiliated companies directly or indirectly has offices,
operations or customers, or otherwise conducts business.
For purposes of this section, the Executive shall be deemed
to engage in a business if he directly or indirectly engages
or invests in, owns, manages, operates, controls or
participates in the ownership, management, operation or
control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any
enterprise engaged in any business which is competitive with
any of those business activities in which the Company or its
affiliated companies were engaged directly or indirectly
during the Term of the Agreement; provided, however, that
the Executive may invest in the securities of any enterprise
(but without otherwise participating in the activities of
such enterprise) if (x) such securities are listed on any
national or regional securities exchange or have been
registered under Section 12(g) of the Exchange Act and (y)
the Executive does not beneficially own (as defined in Rule
13d-3 promulgated under the Exchange Act) in excess of 5% of
the outstanding capital stock of such enterprise.
The Executive agrees that if a court of competent
jurisdiction determines that the length of time or any other
restriction, or portion thereof, set forth in this section
is overly restrictive and unenforceable, the court may
reduce or modify such restrictions to those which it deems
reasonable and enforceable under the circumstances, and as
so reduced or modified, the parties hereto agree that the
restrictions of this section shall remain in full force and
effect. The Executive further agrees that if a court of
competent jurisdiction determines that any provision of this
section is invalid or against public policy, the remaining
provisions of this section and the remainder of this
Agreement shall not be affected thereby, and shall remain in
full force and effect.
The Executive acknowledges that the restrictions
imposed by this Agreement are legitimate, reasonable and
necessary to protect the Company's and its affiliated
companies' investment in their business and the goodwill
thereof. The Executive acknowledges that the scope and
duration of the restrictions contained herein are reasonable
in light of the time that the Executive has been engaged in
the business of the Company and its affiliated companies and
the Executive's relationship with the suppliers, customers
and clients of the Company and its affiliated companies.
The Executive further acknowledges that the restrictions
contained herein are not burdensome to the Executive in
light of the consideration paid therefor and the other
opportunities that remain open to the Executive. Moreover,
the Executive acknowledges that he has other means
available to him for the pursuit of his livelihood.
12. No Tampering. During the Term and, unless the
Agreement terminates pursuant to Section 5(a) or 5(e),
through the first anniversary of the expiration thereof, the
Executive shall not (a) request, induce or attempt to
influence any distributor or supplier of goods or services
to the Company or its affiliated companies to curtail or
cancel any business they may transact with the Company or
its affiliated companies; (b) request, induce or attempt to
influence any customers of the Company or its affiliated
companies or potential customers which have been in contact
with the Company or its affiliated companies to curtail or
cancel any business they may transact with any member of the
Company or its affiliated companies; or (c) request, induce
or attempt to influence any employee of the Company or its
affiliated companies to terminate his or her employment with
the Company or its affiliated companies.
13. Remedies. The Executive acknowledges that a
remedy at law for any breach or attempted breach of the
Executive's obligations under Sections 10, 11 and 12 may be
inadequate, agrees that the Company may be entitled to
specific performance and injunctive and other equitable
remedies in case of any such breach or attempted breach, and
further agrees to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any
such injunctive or other equitable relief. The Company
shall have the right to offset against amounts paid to the
Executive pursuant to the terms hereof any amounts from time
to time owing by the Executive to the Company. The
termination of the Agreement shall not be deemed a waiver by
the Company of any breach by the Executive of this Agreement
or any other obligation owed the Company, and
notwithstanding such a termination the Executive shall be
liable for all damages attributable to such a breach.
14. Successors and Assigns.
(a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall
not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and
assigns.
(c) The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.
15. Miscellaneous.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas,
without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications
hereunder shall be in writing and shall be given by hand
delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed
as follows:
If to the Executive: Xxxxxx X. Xxxxxxx Xx.
00000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000-0000
If to the Company: GM Offshore, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or to such other address as either party shall have
furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually
received by the addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts
payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) The Executive's or the Company's failure to
insist upon strict compliance with any provision of this
Agreement or the failure to assert any right the Executive
or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 4(c)(i)-(v)
hereof, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
Executive:
_________________________
Xxxxxx X. Xxxxxxx Xx.
Company:
GM OFFSHORE, INC.
By:
Name:
Title
The undersigned executes this Agreement to evidence its
agreement to guarantee to the Executive the prompt payment
and the prompt performance when due of all obligations and
liabilities of the Company to the Executive arising out of
or pursuant to this Agreement, in which event the
undersigned shall have all of the rights of the Company
described in this Agreement.
GULFMARK OFFSHORE, INC.
By:
Name:
Title:
1
