EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(the
"Agreement")
is
entered into effective as of the 31st
day of
December, 2006 (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 continued 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
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(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 Parent'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 December 31, 2007 (the "Term");
provided, however, that on such date and on each anniversary thereafter, the
Term of this Agreement shall automatically be extended for one additional year
unless either party shall have given notice at least 120 days prior thereto
that
such party does not wish to extend 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 the Executive Vice
President-Finance and Chief Financial Officer of the Company with corresponding
authority, duties and responsibilities.
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(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 $275,000.00. 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 ninety (90) days of the end of each fiscal year
for
which the Annual Bonus is awarded, in an amount to be determined in accordance
with the Company’s Incentive Compensation Plan. 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.
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(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, and subject to the following provisions of this paragraph, the
Executive shall be entitled to five (5) weeks paid vacation 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 thirty (30) days of
unused vacation time may be carried forward and used by the Executive in
succeeding years.
(vii) Life
Insurance.
The
Company has purchased a split dollar whole life insurance policy on the life
of
the Executive with a face value of $500,000. The insurance policy is owned
by
the Executive. The Executive has the right to designate one or more
beneficiaries, and to change such designation at any time and from time to
time.
The Company shall continue to pay all premiums on such policy. The Company
owns
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, pursuant to the terms of a collateral assignment
executed by the Executive 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.
(ix) 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 the Executive.
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(x) 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.
(xi) 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 14(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) the willful and continued failure by the Executive to substantially
perform his duties as an employee of the Company (other than any such failure
resulting from incapacity due to physical or mental illness), which failure
is
not cured to the Board’s satisfaction within a reasonable period after written
notice thereof to Executive, (ii) the Executive being convicted of or a plea
of
nolo contendere to the charge of a
felony
(other than a felony involving a traffic violation or as a result of vicarious
liability), (iii) the commission by the Executive of a material act of
dishonesty or breach of trust resulting or intending to result in personal
benefit or enrichment to the Executive at the expense of the Company, or (iv)
an
unauthorized absence from employment that is not cured to the Board’s
satisfaction within five (5) days after written notice thereof to Executive.
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 (⅔) 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), (iii) or (iv) 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:
5
(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 or within a Change in Control Termination
Period), 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) a
material breach of this Agreement by the Company, provided the Executive gives
the Company written notice of the occurrence of the breach which specifically
identifies the manner in which the Executive believes that the breach has
occurred and which is delivered to the Company within a reasonable period (but
in no event more than 30 days) after the Executive has knowledge of the events
asserted to give rise to the breach, and the Company fails to correct such
breach within a reasonable period (but in no event more than 30 days) after
receipt of such notice;
(iii) relocation
of the Executive’s primary work location, without the Executive’s consent, to a
location more than 75 miles from the Executive’s primary work location as of the
Effective Date.
For
purposes of this Section 4(c), any good faith determination of "Good
Reason"
made by
the Executive shall be conclusive.
(d) Termination
by Executive during a Change in Control Termination Period.
The
Executive may voluntarily terminate employment during a Change in Control
Termination Period. For purposes of this Agreement, “Change in Control
Termination Period” means the period beginning on the six (6) month anniversary
of a Change in Control and ending on the twelve (12) month anniversary of such
Change in Control. If the Executive’s employment terminates during a Change in
Control Termination Period due to death or Disability, such termination of
employment shall not be deemed to be a voluntary termination under this
paragraph (d) but shall be treated as a termination under paragraph (a) next
above.
(e) Retirement.
The
Executive may voluntarily terminate his employment for Retirement. For purposes
of this Agreement, “Retirement” means the Executive’s voluntary termination of
employment with the Company or any affiliated company, other than for Good
Reason or during a Change in Control Termination Period, on or after attainment
of age 62 and not becoming employed by any person or entity that is engaged
in
the same or similar line of business as that of the Company or an affiliated
company as determined in the sole and absolute discretion of the Board of
Directors of the Company.
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(f) Notice
of Termination.
Any
termination by the Company for Cause, or by the Executive for Good Reason or
during a Change in Control Termination Period, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 14(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.
(f) 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, during a Change in Control Termination Period,
or
for Retirement, 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
by the Executive for Good Reason or During a Change in Control Termination
Period or by the Company Other Than for Cause, Death or
Disability.
If,
during the Term, the Company shall terminate the Executive's employment other
than for Cause, Death or Disability or the Executive shall terminate employment
for Good Reason or during a Change in Control Termination Period:
(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), provided
that deferrals under any arrangement subject to Code Section 409A shall be
paid
in accordance with the terms of such deferral arrangement, 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
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B. an
amount
equal to 2.0 multiplied by the sum of (1) the Executive's Annual Base Salary
as
in effect immediately prior to such Date of Termination, and (2) the Annual
Bonus paid or payable to the Executive for the immediately preceding fiscal
year; 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 and shares of restricted stock 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
and
permissible without violating the requirements of Code Section 409A, 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
and to the extent permissible without violating the requirements of Code Section
409A, 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 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
an additional two (2) years of continuous service 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
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(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 Retirement.
If the
Executive’s employment is terminated by reason of Retirement during the Term,
the Executive shall be entitled to the following:
(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) any
or
all Stock Options and shares of restricted stock awarded to the Executive under
any plan not previously exercisable and vested shall become fully exercisable
and vested; and
(iii) until
the
Executive becomes eligible for Medicare, and to the extent the Executive's
continued participation is possible under the general terms and provisions
of
the Company’s medical plans and programs and permissible without violating the
requirements of Code Section 409A, the Company shall continue to provide medical
benefits to the Executive and/or the Executive's family at least equal to those
which would have been provided to them if the Executive's employment had not
terminated; provided,
however,
that if
the Executive becomes reemployed with another employer and is eligible to
receive medical benefits under another employer-provided plan, the medical
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
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(iv) 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.
(e) Termination
by Company for Cause or by Executive Other than for Good Reason or During Change
in Control Termination Period.
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, during a Change in Control Termination Period,
or
Retirement, 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.
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.
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(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.
11
(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.
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(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. Nonsolicitation;
No Tampering.
During
the Term and, unless the Agreement terminates pursuant to Section 5(a), through
the first anniversary of the expiration thereof, the Executive shall not (a)
solicit, attempt to solicit, 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) solicit, attempt to sell to, 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) solicit, attempt
to solicit, 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.
12. Remedies.
The
Executive acknowledges that a remedy at law for any breach or attempted breach
of the Executive's obligations under Sections 10 and 11 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.
13
13. 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.
14. 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,
XX 00000-0000
If
to the
Company: GM
Offshore, Inc.
00000
Xxxxxxxx Xxx., Xxxxx 000
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.
14
(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.
15. Prior
Employment Agreements Superseded.
Upon
execution and delivery of this Agreement, any and all prior employment
agreements, if any, between (a) the Company, GulfMark Offshore, Inc., GulfMark
International, Inc. and its and their affiliates and subsidiaries and (ii)
the
Executive shall be of no further force or effect and this Agreement shall
supersede all such prior agreements, if any.
* * *
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first above
written.
Executive:
/s/
Xxxxxx X. Xxxxxxx
Xxxxxx
X.
Xxxxxxx
Company:
GM
OFFSHORE, INC.
By:
/s/
Xxxxx X. Xxxxxxxx
Title:
President & CEO
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:
/s/
Xxxxx X. Xxxxxxx
Chairman
of the Board
15
