EXHIBIT 10.1
AMENDED AND RESTATED EXTENSION AND MODIFICATION
OF NONCOMPETITION
AGREEMENT
This Amended and Restated Extension and Modification of Noncompetition
Agreement (this "Extension") is entered into as of the 1st day of April 1998, by
and between Halter Marine Group, Inc., a Delaware corporation ("Halter"), and
Xxxxxx X. Xxxxxxxx ("Xxxxxxxx").
WHEREAS, Mortimer, Trinity Industries, Inc. ("Trinity") and A. Xxxx Xxx
entered into that certain Acquisition and Reorganization Agreement dated as of
October 31, 1994 (the "Gulf Coast Acquisition Agreement"), pursuant to which
Trinity acquired Gulf Coast Fabrication, Inc. ("Gulf Coast");
WHEREAS, in order to preserve the goodwill of Gulf Coast, Mortimer entered
into certain noncompetition covenants with Trinity, as set forth in Article II
of the Gulf Coast Acquisition Agreement (the "Existing Noncompetition
Covenants");
WHEREAS, Halter is the successor to Trinity's marine vessel construction
business and, therefore, is entitled to the benefit of the Existing
Noncompetition Covenants;
WHEREAS, as a result of certain provisions set forth in Article II of the
Gulf Coast Acquisition Agreement, Trinity's transfer of its marine vessel
construction business to Halter would, if not for this Extension, result in the
termination of the Existing Noncompetition Covenants as of March 31, 1998;
WHEREAS, the parties desire to preserve the goodwill of Gulf Coast by
extending the Existing Noncompetition Covenants in certain respects;
WHEREAS, in order to effect the purposes of the foregoing recitals, the
parties entered into that certain Extension and Modification of Noncompetition
Agreement dated as of the 20th day of November, 1997 (the "Original
Extension");
WHEREAS, the Original Extension failed to accurately reflect the agreement
of the parties in certain respects; and
WHEREAS, the parties are entering into this Extension in order to amend,
restate and replace the Original Extension in its entirety.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, in order to preserve the goodwill of
Gulf Coast, the parties hereto hereby agree as follows:
1. During the Noncompetition Period (as defined below), Mortimer will not
engage, directly or indirectly, either as an employee, consultant, partner,
joint venturer, trustee, officer or director of any person, partnership, trust,
corporation or other entity, or as a shareholder of a corporation of which he
owns more than ten percent (10%) of any class of stock, anywhere in the
continental United States, in the manufacture, fabrication or sale of marine
products of the type and variety that in the past have been manufactured or
fabricated by Gulf Coast, Halter or any of their respective predecessors.
2. As consideration for the covenant of Mortimer set forth in Section 1
hereof, Halter shall pay to Mortimer the sum of $250,000 on or prior to April 1
of each of 1998, 1999 and 2000. Additional payments may be made, at the
election of Halter, at the beginning of Halter's fiscal years (each, a "Fiscal
Year") subsequent to the Fiscal Year beginning on April 1, 2000 in accordance
with the terms described in Section 3 below.
3. As used herein, the term "Noncompetition Period" means the longer of
(i) the period commencing on April 1, 1998 and ending on March 31, 2001 (the
"Initial Noncompetition Period") or (ii) the period commencing on April 1, 1998
and ending on the date specified for termination of the Noncompetition Period in
this paragraph 3. The Noncompetition Period may, at the sole election of
Halter, be extended beyond the Initial Noncompetition Period in accordance with
the following provisions:
(a) If, at the beginning of any Fiscal Year which begins following the
expiration of the Initial Noncompetition Period, Mortimer is still employed by
Halter or any of its subsidiaries, then Halter may extend the Noncompetition
Period through the end of such Fiscal Year. Any such extension pursuant to this
paragraph 3(a) for any particular Fiscal Year shall be deemed to be made if
Halter pays to Mortimer an additional $250,000 fee on or prior to April 10 of
such Fiscal Year.
(b) If, during the Initial Noncompetition Period, Mortimer ceases to be
employed by Halter or any of its subsidiaries for any reason, then Halter may,
at its sole option, extend the Noncompetition Period beyond the expiration of
the Initial Noncompetition Period for one or more additional Fiscal Years;
provided, that Halter may not extend the Noncompetition Period, pursuant to this
paragraph 3(b), beyond the end of the third full Fiscal Year following the
Fiscal Year in which such termination of employment occurs. Any extension
pursuant to this paragraph 3(b) for any particular Fiscal Year following
expiration of the Initial Noncompetition Period shall be deemed to be made if
Halter pays to Mortimer an additional $250,000 fee on or prior to April 10 of
such Fiscal Year.
(c) If, following expiration of the Initial Noncompetition Period, Mortimer
ceases to be employed by Halter or any of its subsidiaries for any reason, then
Halter may, at its sole option, extend the Noncompetition Period for one or more
additional Fiscal Years; provided, that Halter may not extend the Noncompetition
Period, pursuant to this paragraph 3(c), beyond the end of the third full Fiscal
Year following the Fiscal Year in which such termination of employment occurs.
Any extension pursuant to this paragraph 3(c) for any particular Fiscal Year
following such termination of employment shall be deemed to be made if Halter
pays to Mortimer an additional $250,000 fee on or prior to April 10 of such
Fiscal Year.
(d) Notwithstanding the foregoing, Halter may not extend the Noncompetition
Period pursuant to paragraphs 3(a), (b) or (c) hereof if, prior to the date on
which such extension otherwise would be effective, the Noncompetition Period has
terminated (provided, that if the Noncompetition Period would terminate as of
the end of a particular Fiscal Year but Halter properly elects to extend the
Noncompetition Period pursuant to paragraphs 3(a), (b) or (c) by paying the
applicable $250,000 on or prior to April 10 of the next succeeding Fiscal Year,
then the Noncompetition Period will not be deemed to have terminated prior to
such extension).
4. This Extension constitutes the entire agreement of the parties with
respect to the subject matter hereof.
5. This Extension shall be interpreted in accordance with the internal
laws of the State of Mississippi.
HALTER MARINE GROUP, INC.
By: /s/ Xxxx Xxxx III
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Title: President
/s/ Xxxxxx X. Xxxxxxxx
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