AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into by and between HELIX ENERGY SOLUTIONS GROUP, INC., a Minnesota
corporation (the “Company”) and Xxxxxx X. Xxxxxx (the “Employee”) effective as of January 1, 2009.
WHEREAS, the Company and the Employee previously entered into an agreement the deferred
compensation provisions of which are set forth in an exhibit to the Employee’s offer letter dated
January 22, 2006 entitled “Employment Agreement” (the “Employment Agreement”) and are incorporated
by reference into a letter agreement between the Company and Employee dated December 21, 2006 (the
“Letter Agreement”); and
WHEREAS, the Company and the Employee desire to amend the Employment Agreement to comply with
section 409A of the Internal Revenue Code of 1986, as amended;
(1) Accrued Bonus Due Upon Death. Clause (ii) of the second sentence of Section 7(b)
is deleted and the following provision is inserted in its stead:
(ii) ten (10) days after Employee’s death, any accrued but, as of the date of such
death, unpaid Incentive Bonus (or, if such death shall have occurred after the first
three (3) months of the Company’s fiscal year, any prorated portion thereof.)
(2) Accrued Bonus Due Upon Disability. The third sentence of Section 7(c) is deleted
and the following provision is inserted in its stead:
In the event of Employee’s termination of employment due to Disability the Company
shall pay to Employee, any accrued but, as of the date of such termination, unpaid
Incentive Bonus (or, if such Disability shall have occurred after the first three
(3) months of the Company’s fiscal year, any prorated portion thereof.) ten (10)
days after Employee’s Separation From Service.
(3) Cash Severance Payments. The last sentence of the first paragraphs of Section
7(d) and Section 7(e) of the Employment Agreement is deleted and the following provision is
inserted in its stead.
To the extent due, any cash severance benefits specified in Section 7(d), Section
7(e) and any other provision of the Agreement (other than Section 7(b)), shall be
paid on the date that is ten days following Employee’s Separation From Service if
Employee is not a Specified Employee or on the date that is six months following
Employee’s Separation From Service if Employee is a Specified Employee. For
purposes of this Agreement, the terms “Separation From Service” and
“Specified Employee” shall have the meanings ascribed to such terms in
section 409A of the Internal Revenue Code of 1986, as amended and the Department of Treasury regulations
issued thereunder (“Section 409A”).
(4) Medical and Dental Benefits. The Employment Agreement is amended by adding
thereto the following new Section 9(h):
To the extent that the medical or dental insurance benefits specified in Section
7(d) or Section 7(e), as applicable, are taxable to Employee and are not otherwise
exempt from Section 409A the following provisions shall apply to the reimbursement
of such benefits. The amount of medical or dental insurance expenses eligible for
reimbursement during Employee’s taxable year will not affect the expenses eligible
for reimbursement in any other taxable year (with the exception of applicable
lifetime maximums specified in the plans). Employee’s right to reimbursement is not
subject to liquidation or exchange for another benefit.
(5) Tax Gross-Up Payments. The tax gross-up payment provision of Section 7(f) is
amended in its entirety to provide as follows:
(i) Certain Additional Payments by the Company. Anything in this Agreement
to the contrary notwithstanding, in the event it shall be determined that any
payment or distribution to or for the benefit of Employee (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) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by Employee with
respect to such excise tax (such excise tax, together with any such interest and
penalties, hereinafter referred to as the “Excise Tax”), then Employee shall
be entitled to receive an additional payment (a “Gross Up Payment”) in an
amount such that after payment by Employee 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
Excise Tax imposed upon the Gross Up Payment, Employee retains an amount of the
Gross Up Payment equal to the Excise Tax imposed upon the Payments. Employee
acknowledges that the Gross Up Payment can be withheld from Employee by the Company
and, instead, paid to the Internal Revenue Service on behalf of Employee.
All determinations required to be made under this Section 7(f) with respect to the
Excise Tax imposed by Section 4999 of the Code, including whether and when the 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 an accounting
firm selected by the Company. All fees and expenses of the accounting firm shall be
borne solely by the Company. Any determination by the accounting firm shall be
binding upon the Company and Employee. 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 it is ultimately determined in accordance with the
procedures set forth in this Section 7(f) that Employee is required to make a
payment of any Code Section 4999 Excise Tax, the accounting firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall be paid
by the Company to or for the benefit of Employee within five days of the receipt of
the accounting firm’s determination of the amount of the Underpayment.
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Employee shall notify the Company in writing of any claims 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 30 days after Employee actually receives notice in writing of such claim.
Employee shall not pay such claim prior to the expiration of the 30-day period
following the date on which he 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 Employee in writing prior to the expiration of such
period that it desires to contest such claim, Employee shall:
| (i) | give the Company any information reasonably requested
relating to such claim; |
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| (ii) | take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to
time; |
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| (iii) | cooperate with the Company in good faith in order
effectively to contest such claim; and |
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| (iv) | if the Company elects not to assume and control the
defense of such claim, 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 Employee 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, the Company shall have the
right, at its sole option, to assume the defense of and control all
proceedings in connection with such contest, in which case it may
pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may either direct Employee to pay the tax claimed and xxx for
a refund or contest the claim in any permissible manner, and Employee
agrees to prosecute such 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. |
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| (v) | Notwithstanding anything in this section to the
contrary, unless an earlier payment date is specified above, the
Company shall, in accordance with Treasury Regulation §
1.409A-3(i)(1)(v), pay Employee (or pay on Employee’s behalf) all
amounts to which Employee is entitled under this section no later than
the end of Employee’s taxable year next following Employee’s taxable
year in which Employee remits the Excise Tax or tax to the Internal
Revenue Service (or in the case of costs and expenses payable under
this section, no later than the end of Employee’s taxable year next
following Employee’s taxable year in which the taxes that are the
subject of the audit or litigation are remitted to the Internal Revenue
Service, or where as a result of such audit or litigation no taxes are
remitted, the end of Employee’s taxable year next following Employee’s
taxable year in which the audit is completed or there is a final and
nonappealable settlement or other resolution of the litigation). |
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(6) Specified Employee. Section 9 is amended by adding thereto the following new
paragraph (h):
(h) Specified Employee. Notwithstanding any other provision herein, if
Employee is a Specified Employee, then any amounts under this Agreement which are
payable upon his Separation From Service and subject to the provisions of Section
409A and not otherwise excluded under Section 409A, shall not be paid until the date
that is six (6) months after the date of Employee’s Separation From Service (the
“Waiting Period”). Any payments that would have been made to Employee
during the Waiting Period but for this Section 9(h) shall instead be made to
Employee in the form of a lump sum payment on the date that is six months following
the date of Employee’s Separation From Service.
(7) Letter Agreement. With respect to the paragraph of the Letter Agreement entitled
“Termination,” the Company and Employee agree that the provisions with respect to
termination in the Employment Agreement as amended hereby (rather than in the original form
attached to the Employee’s offer letter dated January 22, 2006) shall apply.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date above first
written.
| HELIX ENERGY SOLUTIONS GROUP, INC. | XXXXXX X. XXXXXX | |||||
By:
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Name:
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Title:
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Date:
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Date: | |||||
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