EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into effective as of
the 1st day of January, 1998 (the "Effective Date") by and between GM
Offshore, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxx
(the "Executive").
W I T N E S S E T H:
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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, 2000 (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 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 $180,000.00. 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 (
) 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 15(b). For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such notice). The failure
by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company hereunder or
preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination, and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Date, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION OR UPON A CHANGE OF CONTROL.
(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.
Notwithstanding the foregoing provisions of this Section 5(e), if the
Company shall be required to pay the Executive pursuant to this Section 5(e),
the Company shall be entitled to a credit and may deduct from any payment to
the Executive the amount paid to the Executive pursuant to Section 5(f) of
this Agreement.
(f) Upon a Change of Control. Upon a Change of Control, 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 the Change of Control the
amount equal to the sum of (1) the Executive's Annual Base Salary at the rate
in effect as of the date of the Change of Control 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 the Change
of Control through the second anniversary of the date of the Change of
Control.
No amount paid to the Executive upon a Change of Control pursuant to
this section shall be deemed to be in lieu of the Executive's Annual Base
Salary, Annual Bonus or other compensation for employment by the Company
after the Change of Control.
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: Xxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 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:
/s/Xxxxx X. Xxxxxxxx
XXXXX X. XXXXXXXX
Company:
GM OFFSHORE, INC.
By:/s/Xxxx X. Xxxxx
Xxxx X. Xxxxx
Executive Vice 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:/s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Chairman of the Board
