EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into
effective as of the 1st day of July, 1999 (the "Effective
Date") by and between GM Offshore, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxx (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 June 30, 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 a Vice President 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 $140,000.00. 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) Automobile. During the Term, the Company
will provide the Executive with an automobile (the
"Automobile") for use by the Executive in connection
with the performance of his duties under this
Agreement. The Executive may also use the Automobile
for reasonable personal use. The Executive agrees to
pay all operating costs of the Automobile, and the
Company agrees to reimburse to the Executive, to cover
operating costs of the Automobile related to non-
personal use, 87.5% of the actual operating costs of
the Automobile upon the submission by the Executive to
the Company of receipts evidencing such operating
costs. The Executive agrees to limit personal use so
as to not violate any of the lease provisions
concerning the Automobile, including, without
limitation, provisions related to mileage and
maintenance restrictions, and agrees to return the
Automobile to the Company at the termination of this
Agreement.
(viii) 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 from 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 Petroleum Club of Lafayette. 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.
(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 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 (b) 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 failure by the Company to pay (or
reimburse the Executive) for all reasonable moving
expenses incurred by the Executive relating to a change
of principal residence in connection with a relocation;
(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 16(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) the Executive shall be entitled to use of the
Automobile until the earliest to occur of (x) the date
the Executive is employed elsewhere, or (y) six (6)
months from the Date of Termination; provided, however,
that during such time period, the Executive shall be
solely responsible for all expenses incurred in the use
of the Automobile, including maintaining insurance of
the same types and at the same levels as previously
maintained by the Company immediately prior to the Date
of Termination; and
(vi) 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
(vii) 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
(viii) 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) the Executive shall be entitled to use of the
Automobile until the earliest to occur of (x) the date
the Executive is employed elsewhere, or (y) six (6)
months from the Date of Termination; provided, however,
that during such time period, the Executive shall be
solely responsible for all expenses incurred in the use
of the Automobile, including maintaining insurance of
the same types and at the same levels as previously
maintained by the Company immediately prior to the Date
of Termination; and
(vi) 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
(vii) 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
(viii) 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:
Xxxx X. Xxxxx
107 Winged Xxxx Xxxxx
Xxxxxxxxx, XX 00000
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.
16. 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:
XXXX X. XXXXX
Company:
GM OFFSHORE, INC.
By:
Xxxxx X. Xxxxxxxx
President
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:
Xxxxx X. Xxxxxxx
Chairman of the Board
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