Exhibit 10.38
SPLIT-DOLLAR INSURANCE AGREEMENT
(Collateral Assignment)
          THIS AGREEMENT is entered into this 1st day of January, 2000,
effective as of January 1, 2000, by and between GM Offshore, Inc., a Delaware
corporation, hereinafter call “the Company,” and John E. Leech, hereinafter call
“Employee.”
          WHEREAS, Employee, is a valued employee of the Company and the Company
wishes to retain him in its employ, and
          WHEREAS, the Company, as an inducement to such continued employment,
previously provided the Employee with a split-dollar life insurance plan
intended to assist him with his personal life insurance, and,
          WHEREAS, the parties now desire to document and memorialize the
parties’ existing split-dollar life insurance plan and incorporate same into
this Agreement, which shall supersede the prior agreement of the parties.
          NOW THEREFORE, the Company and Employee agree as follows:
          1. The life insurance policy with which this agreement deals is Policy
Number 11-604- 671, having a policy date of November 29, 1990 (hereinafter
called the “Policy”) issued by the Northwestern Mutual Life Insurance Company
(hereinafter called “Insurer”) on the life of Employee. Employee is and shall
remain sole owner of the Policy.
          2. The entire premium on the Policy has been and shall continue to be
paid by the Company as it becomes due.
          3. The Policy may, at the Company’s discretion, provide a waiver of
premium for disability benefit. If it does so provide, the cost shall be borne
by the Company and the Company shall remit that amount to the Insurer when due.
          4. Dividends payable on the Policy shall be used to purchase
additional paid-up insurance protection.
          5. To secure the premiums paid by the Employer pursuant to paragraph 2
above (including all premiums on the Policy previously paid and all premiums to
be paid pursuant to this Agreement), Employee has executed and filed with the
Insurer a collateral assignment of the Policy. Employee agrees that the
collateral assignment agreement shall remain in effect during the term of this
Agreement, failing which the Company shall have no obligation to make the
premium payments on the Policy. The Company’s interest in the Policy shall not
exceed the total amount of premiums paid by it on the Policy.

 

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          6. In the event the Policy becomes claim by reason of Employee’s
death, the Company shall have an interest in the proceeds of the Policy equal to
the total value of the premiums paid on the Policy under paragraph 2 of this
Agreement, less any policy indebtedness to the Insurer. The balance, if any, of
the proceeds of the Policy shall be paid directly by the Insurer to the
beneficiary designated by the Employee.
          7. This Agreement may be terminated, subject to the provisions of
paragraphs 8, 9 and 10 below, by Employee, with or without the consent of the
Company, by giving notice in writing to the Company. This Agreement may be
terminated by the Company, subject to the provisions of paragraphs 8, 9 and 10
below, at any time with the written consent of Employee or, without the consent
of Employee, for cause as hereafter defined. Termination shall be effective
three (3) days following the date of giving of notice of such termination. For
purposes of tills agreement, “cause” means: a breach by Employee of one or more
of his duties to the Company, which breach is material to the purposes of
business of the Company; gross neglect by Employee of ills duties or obligations
to the Company which results in substantial damage to the business or operations
of the Company; the intentional infliction by employee of substantial damage to
the business or operations of the Company; Employee’s conviction of a federal or
state felony offense or ills conviction of any other criminal offense that would
impair ills ability to perform ills duties hereunder or would impair the
Company; and Employee’s commission of a willful serious act, such as fraud,
embezzlement or theft against the Company. For purposes of tills definition of
“cause,” the Company shall be deemed to include the Company, its parent and any
subsidiary or affiliate of the Company and its parent by which employee may be
employed. Notwithstanding anything herein to the contrary, in the event this
agreement is terminated by the Company for cause, the termination shall become
effective upon the giving of notice of the termination in writing by the Company
to Employee specifying the cause on which the termination is based.
          8. In the event of termination of this agreement as provided above,
the Company shall no longer be obligated to make payments of the premiums on the
policy, effectively immediately upon such termination, and Employee shall have
the right and option for a period of 90 days after the date of termination to
purchase from the Company all interest of the Company in the Policy upon payment
to the Company within that time of an amount equal to the premiums paid by the
Company on the Policy under paragraph 2 of this Agreement, less any policy
indebtedness to the Insurer or other indebtedness secured by the cash value of
the Policy. If Employee exercises such right and option to purchase, the Company
shall execute all necessary documents required by the Insurer to effect a
release of interest, or absolute assignment of the Policy by the Company to
Employee. Notwithstanding anything contained herein to the contrary, except for
the price due upon purchase of the Company’s interest by Employee, should
Employee so elect, Employee shall not be personally obligated to repay any
portion of the premiums on the Policy paid by the Company, but the Company shall
retain in full its right to repayment of the premiums paid by it, it being
understood and agreed that Company’s repayment shall come solely out of the
proceeds of the Policy as herein provided.
          9. If Employee fails to exercise his right and option granted in
paragraph 8 and to repay to the Company, to the extent required, the amounts
specified in that paragraph within 90 days of the date of termination of the
agreement pursuant to the provisions of paragraph 7 above, the

 

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Company shall have the right, at its sole option, to exercise the rights
provided in the collateral assignment granted pursuant to paragraph 5 to cause
the Policy cash value to be paid to Company or to cancel the policy and receive
the cash value thereof, up to the full amount of the premiums paid by the
Company pursuant to paragraph 2, less any policy or other indebtedness secured
by the cash value of the Policy; Employee shall execute any and all instruments
that may be required to allow the Company to exercise those rights.
          10. Any payments under the Policy to the Company in connection with
the rights granted to the Company in the collateral assignment referred to in
paragraph 5 shall first be made from Policy cash value attributable to the
paid-up additional life insurance purchased by the dividends on the Policy.
Employee shall have no interest in the paid-up additional life insurance
protection except to the extent the death benefit or cash value thereof exceeds
the total of the premiums on the Policy paid by the Company.
          11. Employee shall have the right to assign any part or all of
employee’s retained interest in the Policy and this Agreement to any person,
entity or trust by execution of a written assignment delivered to the Company
and to the Insurer.
          12. The Company and Employee can mutually agree to amend this
agreement and such amendment shall be in writing and signed by the Company and
Employee in order to have legal effect.
          13. This agreement shall bind and inure to the benefit of the Company
and its successors and assigns; Employee and his heirs, executors,
administrators and assigns; and any beneficiary of the Policy.
          14. In the event of any conflict between a provision of this Agreement
and any provision or provisions of any employment agreement or supplemental
income plan between the Company and Employee, this agreement shall control,
unless the parties expressly declare otherwise in the employment agreement or
plan.
          15. Any notice which either party mayor is required to give hereunder
shall be given in writing to the other party, each at the address set forth
below, or at such other address as may be designated in writing by the party
from time to time in a notice given pursuant to this paragraph, by (a) certified
or registered mail, return receipt requested, postage prepaid, in which event
notice shall be deemed given upon deposit in the United States Mail or (b) in
the case of a notice to the Company, hand delivery to the representative of the
Company designated below or such other representative as may be designated in
writing by the Company from time to time in a notice given pursuant to this
paragraph, or, in the case of a notice to Employee, hand delivery to Employee,
in either of which cases notice shall be deemed given upon delivery. Rejection
or other refusal to accept or the inability to deliver because of a changed
address of which no notice was given, shall be nevertheless effective notice for
all purposes under this agreement.
(2) The claimant shall have 60 days following his receipt of the denial of the
claim to file with the Claims Manager a written request for review of the
denial.

 

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For such review, the claimant or his representative may submit pertinent
documents and written issues and comments.
(3) The Claims Manager shall decide the issue on review and furnish the claimant
with a copy within 60 days of receipt of the claimant’s request for review of
his claim. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent Plan provisions on
which the decision is based. If a copy of the decision is not so furnished to
the claimant within such 60 days, the claim shall be deemed denied on review.
(4) Factual determinations and interpretations of the Plan and its terms by the
Claims Manager shall be subject to de novo review by a court of competent
jurisdiction, in accordance with applicable law, and the Claims Manager shall
not be deemed to have discretion in interpreting the Plan.
          18. This Agreement shall be governed by the laws of the United States
of American, and to the extent state law is applicable, by the laws of the State
of Louisiana.
          IN WITNESS WHEREOF the parties have signed this agreement.
In the presence of

         
 
         GM Offshore, Inc.
 
       
 
       

 
         /s/ Bruce A. Streeter
 
   Bruce A. Streeter
 
       
 
       

 
         /s/ John E. Leech
 
   John E. Leech