Document:

Exhibit 10.2

    
      

    

     

    EMPLOYMENT
      AGREEMENT

     

     

    THIS
      EMPLOYMENT AGREEMENT
      (the
      "Agreement")
      is
      entered into effective as of the 31st
      day of
      December, 2006 (the "Effective
      Date")
      by and
      between GM Offshore, Inc., a Delaware corporation (the "Company"),
      and
      Edward A. Guthrie Jr. (the "Executive").

     

     

    W
      I T
      N E S S E T H:

     

     

    WHEREAS,
      the
      Company wishes to assure itself of the continued services of the Executive
      for
      the period provided in this Agreement, and the Executive wishes to serve in
      the
      employ of the Company on the terms and conditions hereinafter provided;
      and

     

     

    WHEREAS,
      it
      is in
      the best interests of the Company and its shareholders to assure that the
      Company will have the continued attention and dedication of the Executive to
      their assigned duties without distraction in potentially disturbing
      circumstances arising from the possibility of a Change of Control (as defined
      in
      Section 1 below) of GulfMark Offshore, Inc., a Delaware corporation
      ("Parent"),
      which
      is the sole shareholder of the Company; and

     

     

    WHEREAS,
      it is
      imperative to diminish the inevitable distraction of the Executive by virtue
      of
      the personal uncertainties and risks created by a pending or threatened Change
      of Control and to encourage the Executive's full attention and dedication to
      the
      Company currently and in the event of any threatened or pending Change of
      Control; and

     

     

    WHEREAS,
      it is
      imperative to provide the Executive with compensation and benefits arrangements
      upon a Change of Control which ensure that the compensation and benefits
      expectations of the Executive will be satisfied and which are competitive with
      those of other corporations.

     

     

    NOW,
      THEREFORE,
      in order
      to accomplish these objectives, and in consideration of the mutual covenants
      and
      agreements set forth herein and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the parties, intending
      to be legally bound, agree as follows:

     

     

    1. Change
      of Control.
      For the
      purposes of this Agreement, a "Change
      of Control"
      shall
      mean the occurrence of any one or more of the following:

     

    (a) The
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
      "Exchange
      Act"))
      (a
      "Person")
      of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) of twenty percent (20%) or more of either (i) the then outstanding
      shares of common stock of Parent or (ii) the combined voting power of the then
      outstanding voting securities of Parent entitled to vote generally in the
      election of directors; provided, however, that the following acquisitions shall
      not constitute a Change of Control: (i) any acquisition directly from Parent;
      (ii) any acquisition by Parent; (iii) any acquisition by any employee benefit
      plan (or related trust) sponsored or maintained by Parent or any corporation
      controlled by Parent; or

    
      
        
        

      

      
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    (b) Parent
      shall sell, lease, exchange or transfer (in one transaction or a series of
      related transactions) substantially all of its assets, except to a wholly owned
      subsidiary; or

     

     

    (c) Approval
      by the stockholders of Parent of any plan or proposal for the liquidation or
      dissolution of the Company; or

     

     

    (d) Individuals
      who, as of the date hereof, constitute the Board of Parent (the "Incumbent
      Board")
      cease
      for any reason to constitute at least a majority of the Board; provided,
      however, that any individual becoming a director subsequent to the date hereof
      whose election, or nomination for election by the Parent's shareholders, was
      approved by a vote of at least a majority of the directors then comprising
      the
      Incumbent Board shall be considered as though such individual were a member
      of
      the Incumbent Board, but excluding, for this purpose, any such individual whose
      initial assumption of office occurs as a result of an actual or threatened
      election contest with respect to the election or removal of directors or other
      actual or threatened solicitation of proxies or consents by or on behalf of
      a
      Person other than the Board; or

     

     

    (e) Subject
      to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of
      a
      trustee or the conversion of a case involving Parent to a case under Chapter
      7;
      or

     

     

    (f) Any
      consolidation, reorganization, or merger of Parent in which Parent is not the
      continuing or surviving corporation or pursuant to which shares of Parent's
      common stock would be converted into cash, securities or other property, other
      than a consolidation, reorganization or merger of Parent in which the holders
      of
      Parent's common stock immediately prior to the consolidation, reorganization
      or
      merger have the same proportionate ownership of common stock of the surviving
      corporation immediately after the consolidation, reorganization or
      merger.

     

     

    2. Employment
      Period.
      The
      Company hereby agrees to continue the Executive in its employ, and the Executive
      hereby agrees to remain in the employ of the Company, in accordance with the
      terms and provisions of this Agreement, for the period commencing on the
      Effective Date and ending on December 31, 2007 (the "Term");
      provided, however, that on such date and on each anniversary thereafter, the
      Term of this Agreement shall automatically be extended for one additional year
      unless either party shall have given notice at least 120 days prior thereto
      that
      such party does not wish to extend the Term.

     

     

    3. Terms
      of Employment. The
      following terms shall govern the Executive's employment during the
      Term:

     

     

    (a) Position
      and Duties.

     

     

    (i) During
      the Term, the Executive shall be employed as the Executive Vice
      President-Finance and Chief Financial Officer of the Company with corresponding
      authority, duties and responsibilities.

     

    
      
        
        

      

      
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    (ii) During
      the Term, and excluding any periods of vacation and sick leave to which the
      Executive is entitled, the Executive agrees to devote reasonable attention
      and
      time during normal business hours to the business and affairs of the Company
      and, to the extent necessary to discharge the responsibilities assigned to
      the
      Executive hereunder, to use the Executive's reasonable best efforts to perform
      faithfully and efficiently such responsibilities. During the Term, it shall
      not
      be a violation of this Agreement for the Executive to serve on corporate, civic
      or charitable boards or committees, deliver lectures, fulfill speaking
      engagements, teach at educational institutions, and manage personal investments,
      so long as such activities do not significantly interfere with the performance
      of the Executive's responsibilities as an employee of the Company in accordance
      with this Agreement. It is expressly understood and agreed that to the extent
      that any such activities have been conducted by the Executive prior to the
      Effective Date, the continued conduct of such activities (or the conduct of
      activities similar in nature and scope thereto) subsequent to the Effective
      Date
      shall not thereafter be deemed to interfere with the performance of the
      Executive's responsibilities to the Company.

     

    (b) Compensation.
      During
      the Term, and prior to the termination of the Executive's employment as
      described in Section 4 or 5 hereof, the Executive shall be entitled to the
      following items of compensation:

     

     

    (i) Base
      Salary.
      During
      the Term, the Executive shall receive an annual base salary ("Annual
      Base Salary"),
      which
      shall be paid in equal installments on a semi-monthly basis (less applicable
      withholding and salary deductions), of $275,000.00. Any discretionary increase
      in Annual Base Salary during the Term shall not serve to limit or reduce any
      other obligation to the Executive under this Agreement. Annual Base Salary
      shall
      not be reduced after any such increase, and the term "Annual
      Base Salary"
      as
      utilized in this Agreement shall refer to Annual Base Salary as so
      increased.

     

     

    (ii) Annual
      Bonus.
      During
      the Term, the Executive shall receive, for each fiscal year ending during the
      Term, an annual bonus (the "Annual
      Bonus"),
      which
      shall be paid in cash within ninety (90) days of the end of each fiscal year
      for
      which the Annual Bonus is awarded, in an amount to be determined in accordance
      with the Company’s Incentive Compensation Plan. Any discretionary increase in
      the Annual Bonus during the Term shall not serve to limit or reduce any other
      obligation to the Executive under this Agreement.

     

     

    (iii) Incentive,
      Savings and Retirement Plans.
      During
      the Term, the Executive shall be entitled to participate in all incentive,
      savings and retirement plans, practices, policies and programs applicable
      generally to other peer executives of the Company and its affiliated companies.
      As used in this Agreement, the term "affiliated
      companies"
      shall
      include any company controlled by, controlling or under common control with
      the
      Company.

     

    
      
        
        

      

      
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    (iv) Welfare
      Benefit Plans.
      During
      the Term, the Executive and/or the Executive's family, as the case may be,
      shall
      be eligible for participation in and shall receive all benefits under welfare
      benefit plans, practices, policies and programs provided by the Company and
      its
      affiliated companies (including, without limitation, medical, supplemental
      health, prescription, dental, disability, salary continuance, employee life,
      group life, accidental death and travel accident insurance plans and programs)
      to the extent applicable generally to other peer executives of the Company
      and
      its affiliated companies.

     

    (v) Expenses.
      During
      the Term, the Executive shall be entitled to receive prompt reimbursement for
      all reasonable out-of-pocket employment expenses incurred by the Executive
      in
      accordance with the policies, practices and procedures of the Company and its
      affiliated companies in effect with respect to other peer executives of the
      Company and its affiliated companies.

     

     

    (vi) Vacation.
      During
      the Term, and subject to the following provisions of this paragraph, the
      Executive shall be entitled to five (5) weeks paid vacation at the beginning
      of
      each fiscal year. Such vacations shall be taken at such times as are consistent
      with the reasonable business needs of the Company. Up to thirty (30) days of
      unused vacation time may be carried forward and used by the Executive in
      succeeding years. 

     

     

    (vii) Life
      Insurance.
      The
      Company has purchased a split dollar whole life insurance policy on the life
      of
      the Executive with a face value of $500,000. The insurance policy is owned
      by
      the Executive. The Executive has the right to designate one or more
      beneficiaries, and to change such designation at any time and from time to
      time.
      The Company shall continue to pay all premiums on such policy. The Company
      owns
      the cash value of the insurance policy up to the aggregate amount of premiums
      paid by the Company, and the Company shall be entitled to recover from the
      cash
      value of the insurance policy or the death proceeds the aggregate amount of
      premiums paid by the Company, pursuant to the terms of a collateral assignment
      executed by the Executive for the purpose of securing the Company's interest
      in
      the insurance policy. Such insurance coverage shall be in addition to, and
      not
      in lieu of, any other insurance normally provided by the Company to other peer
      executives of the Company and its affiliated companies.

     

     

    (ix) Club
      Membership.
      During
      the Term, the Company will pay all reasonable period dues for membership in
      the
      University Club or an equivalent club to be selected by the Executive.

     

    
      
        
        

      

      
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    (x) Office
      and Support Staff.
      During
      the Term, the Executive shall be entitled to an office or offices of a size
      and
      with furnishings and other appointments, and to secretarial and other
      assistance, at least equal to the most favorable of the foregoing provided
      to
      other peer executives of the Company and its affiliated companies.

     

    (xi) Benefits
      Not in Lieu of Compensation.
      No
      benefit or perquisite provided to the Executive shall be deemed to be in lieu
      of
      the Executive's Annual Base Salary, Annual Bonus or other
      compensation.

     

     

    4. Termination
      of Employment.

     

     

    (a) Death
      or Disability.
      The
      Executive's employment shall terminate automatically upon the Executive's death
      during the Term. If the Company determines in good faith that the Disability
      of
      the Executive has occurred during the Term (pursuant to the definition of
      Disability set forth below), it may give to the Executive written notice in
      accordance with Section 14(b) hereof of its intention to terminate the
      Executive's employment. In such event, the Executive's employment with the
      Company shall terminate effective on the 30th day after receipt of such notice
      by the Executive (the "Disability
      Date"),
      provided that, within the 30 days after such receipt, the Executive shall not
      have returned to full-time performance of the Executive's duties. For purposes
      of this Agreement, "Disability"
      shall
      mean the absence of the Executive from the Executive's duties with the Company
      on a full-time basis for 180 consecutive days as a result of incapacity due
      to
      mental or physical illness which is determined to be total and permanent by
      a
      physician selected by the Company or its insurers and acceptable to the
      Executive or the Executive's legal representative (such agreement as to
      acceptability not to be withheld unreasonably).

     

     

    (b) Termination
      by the Company for Cause.
      The
      Company may terminate the Executive's employment during the Term for Cause.
      For
      purposes of this Agreement, "Cause"
      shall
      mean (i) the willful and continued failure by the Executive to substantially
      perform his duties as an employee of the Company (other than any such failure
      resulting from incapacity due to physical or mental illness), which failure
      is
      not cured to the Board’s satisfaction within a reasonable period after written
      notice thereof to Executive, (ii) the Executive being convicted of or a plea
      of
      nolo contendere to the charge of a
      felony
      (other than a felony involving a traffic violation or as a result of vicarious
      liability), (iii) the commission by the Executive of a material act of
      dishonesty or breach of trust resulting or intending to result in personal
      benefit or enrichment to the Executive at the expense of the Company, or (iv)
      an
      unauthorized absence from employment that is not cured to the Board’s
      satisfaction within five (5) days after written notice thereof to Executive.
      For
      purposes of this paragraph, no act, or failure to act, on the Executive's part
      shall be considered "willful" unless done, or omitted to be done, by him not
      in
      good faith and without reasonable belief that his action or omission was not
      in
      the best interest of the Company. Notwithstanding the foregoing, the Executive
      shall not be deemed to have been terminated for Cause unless and until there
      shall have been delivered to him a copy of a resolution duly adopted by the
      affirmative vote of not less than two-thirds (2⁄3) of the entire authorized
      membership of the Board at a meeting of the Board (after reasonable notice
      and
      an opportunity for the Executive, together with counsel, to be heard before
      the
      Board) finding that in the good faith of the Board the Executive was guilty
      of
      conduct set forth in clauses (i), (ii), (iii) or (iv) of the second sentence
      of
      this paragraph and specifying the particulars thereof in detail.

     

     

    (c) Voluntary
      Termination by Executive for Good Reason.
      The
      Executive's employment may be terminated during the Term by the Executive for
      Good Reason. For purposes of this Agreement, "Good
      Reason"
      shall
      mean:

     

    
      
        
        

      

      
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    (i) the
      assignment to the Executive of any duties inconsistent in any respect with
      the
      Executive's position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      3(a) or any removal of the Executive from or failure to re-elect the Executive
      to any of such positions or any other actions by the Company which results
      in a
      diminution in such position, authority, duties or responsibilities (except
      in
      connection with the termination of the Executive's employment for Cause,
      Disability or retirement or as a result of the Executive's death or by the
      Executive other than for Good Reason or within a Change in Control Termination
      Period), excluding for this purpose an isolated, insubstantial and inadvertent
      action not taken in bad faith and which is remedied by the Company promptly
      after receipt of notice thereof given by the Executive;

     

    (ii) a
      material breach of this Agreement by the Company, provided the Executive gives
      the Company written notice of the occurrence of the breach which specifically
      identifies the manner in which the Executive believes that the breach has
      occurred and which is delivered to the Company within a reasonable period (but
      in no event more than 30 days) after the Executive has knowledge of the events
      asserted to give rise to the breach, and the Company fails to correct such
      breach within a reasonable period (but in no event more than 30 days) after
      receipt of such notice;

     

     

    (iii) relocation
      of the Executive’s primary work location, without the Executive’s consent, to a
      location more than 75 miles from the Executive’s primary work location as of the
      Effective Date.

     

     

    For
      purposes of this Section 4(c), any good faith determination of "Good
      Reason"
      made by
      the Executive shall be conclusive.

     

     

    (d) Termination
      by Executive during a Change in Control Termination Period.
      The
      Executive may voluntarily terminate employment during a Change in Control
      Termination Period. For purposes of this Agreement, “Change in Control
      Termination Period” means the period beginning on the six (6) month anniversary
      of a Change in Control and ending on the twelve (12) month anniversary of such
      Change in Control. If the Executive’s employment terminates during a Change in
      Control Termination Period due to death or Disability, such termination of
      employment shall not be deemed to be a voluntary termination under this
      paragraph (d) but shall be treated as a termination under paragraph (a) next
      above.

     

     

    (e) Retirement.
      The
      Executive may voluntarily terminate his employment for Retirement. For purposes
      of this Agreement, “Retirement” means the Executive’s voluntary termination of
      employment with the Company or any affiliated company, other than for Good
      Reason or during a Change in Control Termination Period, on or after attainment
      of age 62 and not becoming employed by any person or entity that is engaged
      in
      the same or similar line of business as that of the Company or an affiliated
      company as determined in the sole and absolute discretion of the Board of
      Directors of the Company.

     

    
      
        
        

      

      
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    (f) Notice
      of Termination.
      Any
      termination by the Company for Cause, or by the Executive for Good Reason or
      during a Change in Control Termination Period, shall be communicated by Notice
      of Termination to the other party hereto given in accordance with Section 14(b).
      For purposes of this Agreement, a "Notice
      of Termination"
      means a
      written notice which (i) indicates the specific termination provision in this
      Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
      detail the facts and circumstances claimed to provide a basis for termination
      of
      the Executive's employment under the provision so indicated, and (iii) if the
      Date of Termination (as defined below) is other than the date of receipt of
      such
      notice, specifies the termination date (which date shall be not more than 15
      days after the giving of such notice). The failure by the Executive or the
      Company to set forth in the Notice of Termination any fact or circumstance
      which
      contributes to a showing of Good Reason or Cause shall not waive any right
      of
      the Executive or the Company hereunder or preclude the Executive or the Company
      from asserting such fact or circumstance in enforcing the Executive's or the
      Company's rights hereunder.

     

    (f) Date
      of Termination.
      "Date
      of Termination"
      means
      (i) if the Executive's employment is terminated by the Company for Cause, or
      by
      the Executive for Good Reason, during a Change in Control Termination Period,
      or
      for Retirement, the date of receipt of the Notice of Termination or any later
      date specified therein, as the case may be, (ii) if the Executive's employment
      is terminated by the Company other than for Cause or Disability, the Date of
      Termination shall be the date on which the Company notifies the Executive of
      such termination, and (iii) if the Executive's employment is terminated by
      reason of death or Disability, the Date of Termination shall be the date of
      death of the Executive or the Disability Date, as the case may be.

     

    5. Obligations
      of the Company upon Termination

     

     

    (a) Termination
      by the Executive for Good Reason or During a Change in Control Termination
      Period or by the Company Other Than for Cause, Death or
      Disability.
      If,
      during the Term, the Company shall terminate the Executive's employment other
      than for Cause, Death or Disability or the Executive shall terminate employment
      for Good Reason or during a Change in Control Termination Period:

     

     

    (i) the
      Company shall pay to the Executive in a lump sum in cash within 30 days after
      the Date of Termination the aggregate of the following amounts:

     

     

    A. the
      sum
      of (1) the Executive's Annual Base Salary through the Date of Termination,
      (2)
      the product of (x) the Annual Bonus paid or payable to the Executive for the
      immediately preceding year and (y) a fraction, the numerator of which is the
      number of days in the current fiscal year through the Date of Termination,
      and
      the denominator of which is 365, (3) any compensation previously deferred by
      the
      Executive (together with any accrued interest or earnings thereon), provided
      that deferrals under any arrangement subject to Code Section 409A shall be
      paid
      in accordance with the terms of such deferral arrangement, and (4) any accrued
      vacation pay, in each case to the extent not theretofore paid (the sum of the
      amounts described in clauses (1), (2), (3) and (4) shall be hereinafter referred
      to as the "Accrued
      Obligations");
      and

     

    
      
        
        

      

      
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    B. an
      amount
      equal to 2.0 multiplied by the sum of (1) the Executive's Annual Base Salary
      as
      in effect immediately prior to such Date of Termination, and (2) the Annual
      Bonus paid or payable to the Executive for the immediately preceding fiscal
      year; provided,
      however,
      that
      such amount shall be reduced by the present value (determined as provided in
      Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the
      "Code"))
      of
      any other amount of severance relating to salary or bonus continuation, if
      any,
      to be received by the Executive upon termination of employment of the Executive
      under any severance plan, policy or arrangement of the Company; and

     

     

    (ii) any
      or
      all Stock Options and shares of restricted stock awarded to the Executive under
      any plan not previously exercisable and vested shall become fully exercisable
      and vested; and

     

    (iii) for
      the
      remainder of the Term, provided that the Executive's continued participation
      is
      possible under the general terms and provisions of such plans and programs
      and
      permissible without violating the requirements of Code Section 409A, the Company
      shall continue benefits to the Executive and/or the Executive's family at least
      equal to those which would have been provided to them in accordance with the
      plans, programs, practices and policies described in Section 3(b)(iv) if the
      Executive's employment had not been terminated in accordance with the most
      favorable plans, practices, programs or policies of the Company and its
      affiliated companies as in effect generally at any time thereafter with respect
      to other peer executives of the Company and its affiliated companies and their
      families; provided,
      however,
      that if
      the Executive becomes reemployed with another employer and is eligible to
      receive medical or other welfare benefits under another employer-provided plan,
      the medical and other welfare benefits described herein shall be secondary
      to
      those provided under such other plan during such applicable period of
      eligibility; in the event that the Executive's participation in any such plan
      or
      program is barred, the Company shall arrange to provide the Executive with
      benefits substantially similar to those which he is entitled to receive under
      such plans and programs; and 

     

    (iv) subject
      to the provisions of Section 6, to the extent not theretofore paid or provided
      and to the extent permissible without violating the requirements of Code Section
      409A, the Company shall timely pay or provide to the Executive and/or the
      Executive's family any other amounts or benefits required to be paid or provided
      or which the Executive and/or the Executive's family is eligible to receive
      pursuant to this Agreement and under any plan, program, policy or practice
      of or
      contract or agreement with the Company and its affiliated companies as in effect
      generally thereafter with respect to other peer executives of the Company and
      its affiliated companies and their families (such other amounts and benefits
      shall be hereinafter referred to as the "Other
      Benefits");
      and

     

    (v) in
      addition to the benefits to which the Executive is entitled under any retirement
      plans or programs in which the Executive participates or any successor plans
      or
      programs in effect on the Date of Termination, the Company shall pay the
      Executive in one sum in cash at the Executive's normal retirement age as defined
      in the retirement plans or programs in which the Executive participates or
      any
      successor plans or programs in effect on the Date of Termination, an amount
      equal to the actuarial equivalent of the retirement pension to which the
      Executive would have been entitled under the terms of such retirement plans
      or
      programs without regard to "vesting" thereunder, had the Executive accumulated
      an additional two (2) years of continuous service at his Annual Base Salary
      in
      effect on the Date of Termination under such retirement plans or programs
      reduced by the single sum actuarial equivalent of any amounts to which the
      Executive is entitled pursuant to the provisions of said retirement plans and
      programs; for purposes of this paragraph, "actuarial equivalent" shall be
      determined using the same methods and assumptions utilized under the Company's
      retirement plans and programs on the Effective Date; and

    

    
      
        
        

      

      
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    (vi) the
      Company shall promptly transfer and assign to the Executive all such life
      insurance policies for which the Company or Parent was previously reimbursing
      premium payments made by the Executive pursuant to an agreement between the
      Executive and the Company or Parent; and

     

    (vii) for
      a
      period of six (6) months after the Date of Termination, the Company shall
      promptly reimburse the Executive for reasonable expenses incurred for
      outplacement services and/or counseling.

     

     

    (b) Termination
      upon Death.
      If the
      Executive's employment is terminated by reason of the Executive's death during
      the Term, this Agreement shall terminate without further obligations to the
      Executive's legal representatives under this Agreement, other than for (i)
      payment of Accrued Obligations (which shall be paid to the Executive's estate
      or
      beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
      of
      Termination) and (ii) the timely payment or provision of any and all Other
      Benefits, which under their terms are available in the event of
      death.

     

     

    (c) Termination
      upon Disability.
      If the
      Executive's employment is terminated by reason of the Executive's Disability
      during the Term, this Agreement shall terminate without further obligations
      to
      the Executive, other than for (i) payment of Accrued Obligations (which shall
      be
      paid to the Executive in a lump sum in cash within 30 days of the Date of
      Termination) and (ii) the timely payment or provision of any and all Other
      Benefits, which under their terms are available in the event of a
      Disability.

     

     

    (d) Termination
      for Retirement.
      If the
      Executive’s employment is terminated by reason of Retirement during the Term,
      the Executive shall be entitled to the following:

     

     

    (i) payment
      of Accrued Obligations (which shall be paid to the Executive in a lump sum
      in
      cash within 30 days of the Date of Termination); and

     

     

    (ii) any
      or
      all Stock Options and shares of restricted stock awarded to the Executive under
      any plan not previously exercisable and vested shall become fully exercisable
      and vested; and

     

     

    (iii) until
      the
      Executive becomes eligible for Medicare, and to the extent the Executive's
      continued participation is possible under the general terms and provisions
      of
      the Company’s medical plans and programs and permissible without violating the
      requirements of Code Section 409A, the Company shall continue to provide medical
      benefits to the Executive and/or the Executive's family at least equal to those
      which would have been provided to them if the Executive's employment had not
      terminated; provided,
      however,
      that if
      the Executive becomes reemployed with another employer and is eligible to
      receive medical benefits under another employer-provided plan, the medical
      benefits described herein shall be secondary to those provided under such other
      plan during such applicable period of eligibility; in the event that the
      Executive's participation in any such plan or program is barred, the Company
      shall arrange to provide the Executive with benefits substantially similar
      to
      those which he is entitled to receive under such plans and programs;
      and

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (iv) the
      Company shall promptly transfer and assign to the Executive all such life
      insurance policies for which the Company or Parent was previously reimbursing
      premium payments made by the Executive pursuant to an agreement between the
      Executive and the Company or Parent.

     

    (e) Termination
      by Company for Cause or by Executive Other than for Good Reason or During Change
      in Control Termination Period.
      If the
      Executive's employment shall be terminated for Cause during the Term, this
      Agreement shall terminate without further obligations to the Executive other
      than the obligation to pay to the Executive Annual Base Salary through the
      Date
      of Termination plus the amount of any compensation previously deferred by the
      Executive and any accrued vacation pay, in each case to the extent theretofore
      unpaid. If the Executive terminates employment during the Term, excluding a
      termination for Good Reason, during a Change in Control Termination Period,
      or
      Retirement, this Agreement shall terminate without further obligations to the
      Executive, other than for payment of Accrued Obligations and the timely payment
      or provision of any and all Other Benefits. In such case, all Accrued
      Obligations shall be paid to the Executive in a lump sum in cash within 30
      days
      of the Date of Termination.

     

     

    6. Waiver
      of Rights For Other Severance.
      The
      Executive hereby agrees any and all benefits or payments arising out of or
      relating to any plan, program, policy or practice of or contract or agreement
      with the Company and its affiliated companies relating to the severance of
      employment, shall be fully offset against any benefits or payments due and
      owing
      hereunder.

     

     

    7. Non-Exclusivity
      of Rights.
      Nothing
      herein shall limit or otherwise affect such rights as the Executive may have
      under any contract or agreement with the Company or any of its affiliated
      companies. Amounts which are vested benefits or which the Executive is otherwise
      entitled to receive under any plan, policy, practice or program of or any
      contract or agreement with the Company or any of its affiliated companies at
      or
      subsequent to the Date of Termination shall be payable in accordance with such
      plan, policy, practice or program or contract or agreement except as explicitly
      modified by this Agreement.

     

     

    8. Full
      Settlement; Resolution of Disputes.

     

     

    (a) The
      Company's obligation to make the payments provided for in this Agreement and
      otherwise to perform its obligations hereunder shall not be affected by any
      set-off, counterclaim, recoupment, defense or other claim, right or action
      which
      the Company may have against the Executive or others. In no event shall the
      Executive be obligated to seek other employment or take any other action by
      way
      of mitigation of the amounts payable to the Executive under any of the
      provisions of this Agreement and, except as specifically provided in Section
      5,
      such amounts shall not be reduced whether or not the Executive obtains other
      employment. The Company agrees to pay promptly as incurred, to the full extent
      permitted by law, all legal fees and expenses which the Executive may reasonably
      incur as a result of any contest (regardless of the outcome thereof) by the
      Company, the Executive or others of the validity or enforceability of, or
      liability under, any provision of this Agreement or any guarantee of performance
      thereof (including as a result of any contest by the Executive about the amount
      of any payment pursuant to this Agreement), plus in each case interest on any
      delayed payment at the applicable Federal rate provided for in Section
      7872(f)(2)(A) of the Code.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b) If
      there
      shall be any dispute between the Company and the Executive (i) in the event
      of
      any termination of the Executive's employment by the Company, whether such
      termination was for Cause, or (ii) in the event of any termination of employment
      by the Executive, whether Good Reason existed, then, unless and until there
      is a
      final, nonappealable judgment by a court of competent jurisdiction declaring
      that such termination was for Cause or that the determination by the Executive
      of the existence of Good Reason was not made in good faith, as the case may
      be,
      the Company shall pay all amounts, and provide all benefits, to the Executive
      and/or the Executive's family or other beneficiaries, as the case may be, that
      the Company would be required to pay or provide pursuant to Section 5 as though
      such termination were by the Company without Cause or by the Executive with
      Good
      Reason; provided,
      however,
      that the
      Company shall not be required to pay any disputed amounts pursuant to this
      paragraph except upon receipt of an undertaking by or on behalf of the Executive
      and/or the Executive's family or other beneficiaries, as the case may be, to
      repay all such amounts to which the Executive is ultimately adjudged by such
      court not to be entitled.

     

     

    9. Certain
      Additional Payments by the Company.

     

     

    (a) Notwithstanding
      anything in this Agreement to the contrary, in the event it shall be determined
      that any payment or distribution by the Company to or for the benefit of the
      Executive (whether paid or payable or distributed or distributable pursuant
      to
      the terms of this Agreement or otherwise, but determined without regard to
      any
      additional payments required under this Section 9) (a "Payment")
      would
      be subject to the excise tax imposed by Section 4999 of the Code, or any
      successor provision thereto, or any interest or penalties are incurred by the
      Executive with respect to such excise tax (such excise tax, together with any
      such interest and penalties, are hereinafter collectively referred to as the
      "Excise
      Tax"),
      then
      the Executive shall be entitled to receive an additional payment (a
      "Gross-Up
      Payment")
      in an
      amount such that after payment by the Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes), including, without
      limitation, any income taxes (and any interest and penalties imposed with
      respect thereto) and any Excise Tax imposed upon the Gross-Up Payment, the
      Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
      imposed upon the Payments.

     

     

    (b) Subject
      to the provisions of Section 9(c), all determinations required to be made under
      this Section 9, including whether and when a Gross-Up Payment is required and
      the amount of such Gross-Up Payment and the assumptions to be utilized in
      arriving at such determination, shall be made by the Company's independent
      certified public accountants (the "Accounting
      Firm")
      which
      shall provide detailed supporting calculations both to the Company and the
      Executive within 15 business days of the receipt of notice from the Executive
      that there has been a Payment, or such earlier time as is requested by the
      Company. In the event that the Accounting Firm is serving as accountant or
      auditor for the individual, entity or group effecting the Change of Control,
      the
      Executive shall appoint another nationally recognized accounting firm to make
      the determinations required hereunder (which accounting firm shall then be
      referred to as the Accounting Firm hereunder). All fees and expenses of the
      Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
      as
      determined pursuant to this Section 9, shall be paid by the Company to the
      Executive within five days of the receipt of the Accounting Firm's
      determination. If the Accounting Firm determines that no Excise Tax is payable
      by the Executive, it shall furnish the Executive with a written opinion that
      failure to report the Excise Tax on the Executive's applicable federal income
      tax return would not result in the imposition of a negligence or similar
      penalty. Any determination by the Accounting Firm shall be binding upon the
      Company and the Executive. As a result of the uncertainty in the application
      of
      Section 4999 of the Code at the time of the initial determination by the
      Accounting Firm hereunder, it is possible that Gross-Up Payments which will
      not
      have been made by the Company should have been made ("Underpayment"),
      consistent with the calculations required to be made hereunder. In the event
      that the Company exhausts its remedies pursuant to Section 9(c) and the
      Executive thereafter is required to make a payment of any Excise Tax, the
      Accounting Firm shall determine the amount of the Underpayment that has
      occurred, and any such Underpayment shall be promptly paid by the Company to
      or
      for the benefit of the Executive.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c) The
      Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service that, if successful, would require the payment by the Company
      of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than ten business days after the Executive is informed in writing
      of such claim and shall apprise the Company of the nature of such claim and
      the
      date on which such claim is requested to be paid. The Executive shall not pay
      such claim prior to the expiration of the 30-day period following the date
      on
      which it gives such notice to the Company (or such shorter period ending on
      the
      date that any payment of taxes with respect to such claim is due). If the
      Company notifies the Executive in writing prior to the expiration of such period
      that it desires to contest such claim, the Executive shall:

     

     

    (i) give
      the
      Company any information reasonably requested by the Company relating to such
      claim,

     

     

    (ii) take
      such
      action in connection with contesting such claim as the Company shall reasonably
      request in writing from time to time, including, without limitation, accepting
      legal representation with respect to such claim by an attorney reasonably
      selected by the Company,

     

     

    (iii) cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

     

     

    (iv) permit
      the Company to participate in any proceedings relating to such
      claim;

     

     

    provided,
      however,
      that the
      Company shall bear and pay directly all costs and expenses (including additional
      interest and penalties) incurred in connection with such contest and shall
      indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
      Tax or income tax (including interest and penalties with respect thereto)
      imposed as a result of such representation and payment of costs and expenses.
      Without limitation on the foregoing provisions of this Section 9(c), the Company
      shall control all proceedings taken in connection with such contest and, at
      its
      sole option, may pursue or forgo any and all administrative appeals,
      proceedings, hearings and conferences with the taxing authority in respect
      of
      such claim and may, at its sole option, either direct the Executive to pay
      the
      tax claimed and sue 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 sue 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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (d) If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 9(c) hereof, the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall, subject to the Company's complying
      with the requirements of Section 9(c), promptly pay to the Company the amount
      of
      such refund (together with any interest paid or credited thereon after taxes
      applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 9(c) hereof, a determination is
      made
      that the Executive shall not be entitled to any refund with respect to such
      claim and the Company does not notify the Executive in writing of its intent
      to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

     

     

    10. Confidential
      Information.
      The
      Executive shall hold in a fiduciary capacity for the benefit of the Company
      all
      secret or confidential information, knowledge or data relating to the Company
      or
      any of its affiliated companies, and their respective businesses, which shall
      have been obtained by the Executive during the Executive's employment by the
      Company or any of its affiliated companies and which shall not be or become
      public knowledge (other than by acts by the Executive or representatives of
      the
      Executive in violation of this Agreement). After termination of the Executive's
      employment with the Company, the Executive shall not, without the prior written
      consent of the Company or as may otherwise be required by law or legal process,
      communicate or divulge any such information, knowledge or data to anyone other
      than the Company and those designated by it. In no event shall an asserted
      violation of the provisions of this section constitute a basis for deferring
      or
      withholding any amounts otherwise payable to the Executive under this
      Agreement.

     

     

    11. Nonsolicitation;
      No Tampering.
      During
      the Term and, unless the Agreement terminates pursuant to Section 5(a), through
      the first anniversary of the expiration thereof, the Executive shall not (a)
      solicit, attempt to solicit, request, induce or attempt to influence any
      distributor or supplier of goods or services to the Company or its affiliated
      companies to curtail or cancel any business they may transact with the Company
      or its affiliated companies; (b) solicit, attempt to sell to, request, induce
      or
      attempt to influence any customers of the Company or its affiliated companies
      or
      potential customers which have been in contact with the Company or its
      affiliated companies to curtail or cancel any business they may transact with
      any member of the Company or its affiliated companies; or (c) solicit, attempt
      to solicit, request, induce or attempt to influence any employee of the Company
      or its affiliated companies to terminate his or her employment with the Company
      or its affiliated companies.

     

     

    12. Remedies.
      The
      Executive acknowledges that a remedy at law for any breach or attempted breach
      of the Executive's obligations under Sections 10 and 11 may be inadequate,
      agrees that the Company may be entitled to specific performance and injunctive
      and other equitable remedies in case of any such breach or attempted breach,
      and
      further agrees to waive any requirement for the securing or posting of any
      bond
      in connection with the obtaining of any such injunctive or other equitable
      relief. The Company shall have the right to offset against amounts paid to
      the
      Executive pursuant to the terms hereof any amounts from time to time owing
      by
      the Executive to the Company. The termination of the Agreement shall not be
      deemed a waiver by the Company of any breach by the Executive of this Agreement
      or any other obligation owed the Company, and notwithstanding such a termination
      the Executive shall be liable for all damages attributable to such a
      breach.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    13. Successors
      and Assigns.

     

     

    (a) This
      Agreement is personal to the Executive and without the prior written consent
      of
      the Company shall not be assignable by the Executive otherwise than by will
      or
      the laws of descent and distribution. This Agreement shall inure to the benefit
      of and be enforceable by the Executive's legal representatives.

     

     

    (b) This
      Agreement shall inure to the benefit of and be binding upon the Company and
      its
      successors and assigns.

     

     

    (c) The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. As used in this
      Agreement, "Company"
      shall
      mean the Company as hereinbefore defined and any successor to its business
      and/or assets as aforesaid which assumes and agrees to perform this Agreement
      by
      operation of law, or otherwise.

     

     

    14. Miscellaneous.

     

     

    (a) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas, without reference to principles of conflict of laws. The
      captions of this Agreement are not part of the provisions hereof and shall
      have
      no force or effect. This Agreement may not be amended or modified otherwise
      than
      by a written agreement executed by the parties hereto or their respective
      successors and legal representatives.

     

     

    (b) All
      notices and other communications hereunder shall be in writing and shall be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed as follows:

     

     

    If
      to the
      Executive:  
Edward
      A.
      Guthrie, Jr.

                                                                                
      12306
      Francel Lane

                                                                                 Cypress,
      TX 77429-6039

     

     

    If
      to the
      Company:      GM
      Offshore, Inc.

                                                                                
      10111
      Richmond Ave., Suite 340

                                                                                
      Houston,
      Texas 77042

     

     

    or
      to
      such other address as either party shall have furnished to the other in writing
      in accordance herewith. Notice and communications shall be effective when
      actually received by the addressee.

     

     

    (c) The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (d) The
      Company may withhold from any amounts payable under this Agreement such Federal,
      state or local taxes as shall be required to be withheld pursuant to any
      applicable law or regulation.

     

     

    (e) The
      Executive's or the Company's failure to insist upon strict compliance with
      any
      provision of this Agreement or the failure to assert any right the Executive
      or
      the Company may have hereunder, including, without limitation, the right of
      the
      Executive to terminate employment for Good Reason pursuant to Section
      4(c)(i)-(v) hereof, shall not be deemed to be a waiver of such provision or
      right or any other provision or right of this Agreement.

     

     

    15. Prior
      Employment Agreements Superseded.
      Upon
      execution and delivery of this Agreement, any and all prior employment
      agreements, if any, between (a) the Company, GulfMark Offshore, Inc., GulfMark
      International, Inc. and its and their affiliates and subsidiaries and (ii)
      the
      Executive shall be of no further force or effect and this Agreement shall
      supersede all such prior agreements, if any.

     

     

    * * *

     

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the date first above
      written.

     

    Executive:

    

    /s/
      Edward A. Guthrie

    Edward
      A.
      Guthrie

    

    Company:

    

    GM
      OFFSHORE, INC.

    By:
      /s/
      Bruce A. Streeter

    Title:
      President & CEO

     

    The
      undersigned executes this Agreement to evidence its agreement to guarantee
      to
      the Executive the prompt payment and the prompt performance when due of all
      obligations and liabilities of the Company to the Executive arising out of
      or
      pursuant to this Agreement, in which event the undersigned shall have all of
      the
      rights of the Company described in this Agreement.

     

     

    GULFMARK
      OFFSHORE, INC.

     

     

    By:
      /s/
      David J. Butters

     

     

    Chairman
      of the Board

     

     

    

     

    
      
        
        

      

      
        15Exhibit 10.3

    
      

    

     

    EMPLOYMENT
      AGREEMENT

     

     

    THIS
      EMPLOYMENT AGREEMENT
      (the
      "Agreement")
      is
      entered into effective as of the 31st
      day of
      December, 2006 (the "Effective
      Date")
      by and
      between GM Offshore, Inc., a Delaware corporation (the "Company"),
      and
      John E. Leech (the "Executive").

     

     

    W
      I T
      N E S S E T H:

     

     

    WHEREAS,
      the
      Company wishes to assure itself of the continued services of the Executive
      for
      the period provided in this Agreement, and the Executive wishes to serve in
      the
      employ of the Company on the terms and conditions hereinafter provided;
      and

     

     

    WHEREAS,
      it
      is in
      the best interests of the Company and its shareholders to assure that the
      Company will have the continued attention and dedication of the Executive to
      their assigned duties without distraction in potentially disturbing
      circumstances arising from the possibility of a Change of Control (as defined
      in
      Section 1 below) of GulfMark Offshore, Inc., a Delaware corporation
      ("Parent"),
      which
      is the sole shareholder of the Company; and

     

     

    WHEREAS,
      it is
      imperative to diminish the inevitable distraction of the Executive by virtue
      of
      the personal uncertainties and risks created by a pending or threatened Change
      of Control and to encourage the Executive's full attention and dedication to
      the
      Company currently and in the event of any threatened or pending Change of
      Control; and

     

     

    WHEREAS,
      it is
      imperative to provide the Executive with compensation and benefits arrangements
      upon a Change of Control which ensure that the compensation and benefits
      expectations of the Executive will be satisfied and which are competitive with
      those of other corporations.

     

     

    NOW,
      THEREFORE,
      in order
      to accomplish these objectives, and in consideration of the mutual covenants
      and
      agreements set forth herein and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the parties, intending
      to be legally bound, agree as follows:

     

     

    1. Change
      of Control.
      For the
      purposes of this Agreement, a "Change
      of Control"
      shall
      mean the occurrence of any one or more of the following:

     

    (a) The
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
      "Exchange
      Act"))
      (a
      "Person")
      of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) of twenty percent (20%) or more of either (i) the then outstanding
      shares of common stock of Parent or (ii) the combined voting power of the then
      outstanding voting securities of Parent entitled to vote generally in the
      election of directors; provided, however, that the following acquisitions shall
      not constitute a Change of Control: (i) any acquisition directly from Parent;
      (ii) any acquisition by Parent; (iii) any acquisition by any employee benefit
      plan (or related trust) sponsored or maintained by Parent or any corporation
      controlled by Parent; or

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (b) Parent
      shall sell, lease, exchange or transfer (in one transaction or a series of
      related transactions) substantially all of its assets, except to a wholly owned
      subsidiary; or

     

    (c) Approval
      by the stockholders of Parent of any plan or proposal for the liquidation or
      dissolution of the Company; or

     

     

    (d) Individuals
      who, as of the date hereof, constitute the Board of Parent (the "Incumbent
      Board")
      cease
      for any reason to constitute at least a majority of the Board; provided,
      however, that any individual becoming a director subsequent to the date hereof
      whose election, or nomination for election by the Parent's shareholders, was
      approved by a vote of at least a majority of the directors then comprising
      the
      Incumbent Board shall be considered as though such individual were a member
      of
      the Incumbent Board, but excluding, for this purpose, any such individual whose
      initial assumption of office occurs as a result of an actual or threatened
      election contest with respect to the election or removal of directors or other
      actual or threatened solicitation of proxies or consents by or on behalf of
      a
      Person other than the Board; or

     

     

    (e) Subject
      to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of
      a
      trustee or the conversion of a case involving Parent to a case under Chapter
      7;
      or

     

     

    (f) Any
      consolidation, reorganization, or merger of Parent in which Parent is not the
      continuing or surviving corporation or pursuant to which shares of Parent's
      common stock would be converted into cash, securities or other property, other
      than a consolidation, reorganization or merger of Parent in which the holders
      of
      Parent's common stock immediately prior to the consolidation, reorganization
      or
      merger have the same proportionate ownership of common stock of the surviving
      corporation immediately after the consolidation, reorganization or
      merger.

     

     

    2. Employment
      Period.
      The
      Company hereby agrees to continue the Executive in its employ, and the Executive
      hereby agrees to remain in the employ of the Company, in accordance with the
      terms and provisions of this Agreement, for the period commencing on the
      Effective Date and ending on December 31, 2007 (the "Term");
      provided, however, that on such date and on each anniversary thereafter, the
      Term of this Agreement shall automatically be extended for one additional year
      unless either party shall have given notice at least 120 days prior thereto
      that
      such party does not wish to extend the Term.

     

     

    3. Terms
      of Employment. The
      following terms shall govern the Executive's employment during the
      Term:

     

     

    (a) Position
      and Duties.

     

     

    (i) During
      the Term, the Executive shall be employed as Executive Vice President-Operations
      of the Company with corresponding authority, duties and
      responsibilities.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (ii) During
      the Term, and excluding any periods of vacation and sick leave to which the
      Executive is entitled, the Executive agrees to devote reasonable attention
      and
      time during normal business hours to the business and affairs of the Company
      and, to the extent necessary to discharge the responsibilities assigned to
      the
      Executive hereunder, to use the Executive's reasonable best efforts to perform
      faithfully and efficiently such responsibilities. During the Term, it shall
      not
      be a violation of this Agreement for the Executive to serve on corporate, civic
      or charitable boards or committees, deliver lectures, fulfill speaking
      engagements, teach at educational institutions, and manage personal investments,
      so long as such activities do not significantly interfere with the performance
      of the Executive's responsibilities as an employee of the Company in accordance
      with this Agreement. It is expressly understood and agreed that to the extent
      that any such activities have been conducted by the Executive prior to the
      Effective Date, the continued conduct of such activities (or the conduct of
      activities similar in nature and scope thereto) subsequent to the Effective
      Date
      shall not thereafter be deemed to interfere with the performance of the
      Executive's responsibilities to the Company.

     

    (b) Compensation.
      During
      the Term, and prior to the termination of the Executive's employment as
      described in Section 4 or 5 hereof, the Executive shall be entitled to the
      following items of compensation:

     

     

    (i) Base
      Salary.
      During
      the Term, the Executive shall receive an annual base salary ("Annual
      Base Salary"),
      which
      shall be paid in equal installments on a semi-monthly basis (less applicable
      withholding and salary deductions), of $275,000.00. Any discretionary increase
      in Annual Base Salary during the Term shall not serve to limit or reduce any
      other obligation to the Executive under this Agreement. Annual Base Salary
      shall
      not be reduced after any such increase, and the term "Annual
      Base Salary"
      as
      utilized in this Agreement shall refer to Annual Base Salary as so
      increased.

     

     

    (ii) Annual
      Bonus.
      During
      the Term, the Executive shall receive, for each fiscal year ending during the
      Term, an annual bonus (the "Annual
      Bonus"),
      which
      shall be paid in cash within ninety (90) days of the end of each fiscal year
      for
      which the Annual Bonus is awarded, in an amount to be determined in accordance
      with the Company’s Incentive Compensation Plan. Any discretionary increase in
      the Annual Bonus during the Term shall not serve to limit or reduce any other
      obligation to the Executive under this Agreement.

     

     

    (iii) Incentive,
      Savings and Retirement Plans.
      During
      the Term, the Executive shall be entitled to participate in all incentive,
      savings and retirement plans, practices, policies and programs applicable
      generally to other peer executives of the Company and its affiliated companies.
      As used in this Agreement, the term "affiliated
      companies"
      shall
      include any company controlled by, controlling or under common control with
      the
      Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (iv) Welfare
      Benefit Plans.
      During
      the Term, the Executive and/or the Executive's family, as the case may be,
      shall
      be eligible for participation in and shall receive all benefits under welfare
      benefit plans, practices, policies and programs provided by the Company and
      its
      affiliated companies (including, without limitation, medical, supplemental
      health, prescription, dental, disability, salary continuance, employee life,
      group life, accidental death and travel accident insurance plans and programs)
      to the extent applicable generally to other peer executives of the Company
      and
      its affiliated companies.

     

    (v) Expenses.
      During
      the Term, the Executive shall be entitled to receive prompt reimbursement for
      all reasonable out-of-pocket employment expenses incurred by the Executive
      in
      accordance with the policies, practices and procedures of the Company and its
      affiliated companies in effect with respect to other peer executives of the
      Company and its affiliated companies.

     

     

    (vi) Vacation.
      During
      the Term, and subject to the following provisions of this paragraph, the
      Executive shall be entitled to five (5) weeks paid vacation at the beginning
      of
      each fiscal year. Such vacations shall be taken at such times as are consistent
      with the reasonable business needs of the Company. Up to thirty (30) days of
      unused vacation time may be carried forward and used by the Executive in
      succeeding years. 

     

     

    (vii) 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.

     

     

    (viii) Life
      Insurance.
      The
      Company has purchased a split dollar whole life insurance policy on the life
      of
      the Executive with a face value of $500,000. The insurance policy is owned
      by
      the Executive. The Executive has the right to designate one or more
      beneficiaries, and to change such designation at any time and from time to
      time.
      The Company shall continue to pay all premiums on such policy. The Company
      owns
      the cash value of the insurance policy up to the aggregate amount of premiums
      paid by the Company, and the Company shall be entitled to recover from the
      cash
      value of the insurance policy or the death proceeds the aggregate amount of
      premiums paid by the Company, pursuant to the terms of a collateral assignment
      executed by the Executive for the purpose of securing the Company's interest
      in
      the insurance policy. Such insurance coverage shall be in addition to, and
      not
      in lieu of, any other insurance normally provided by the Company to other peer
      executives of the Company and its affiliated companies.

     

     

    (ix) Club
      Membership.
      During
      the Term, the Company will pay all reasonable period dues for membership in
      one
      country club or similar club to be selected by the Executive. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (x) Office
      and Support Staff.
      During
      the Term, the Executive shall be entitled to an office or offices of a size
      and
      with furnishings and other appointments, and to secretarial and other
      assistance, at least equal to the most favorable of the foregoing provided
      to
      other peer executives of the Company and its affiliated companies.

     

    (xi) Benefits
      Not in Lieu of Compensation.
      No
      benefit or perquisite provided to the Executive shall be deemed to be in lieu
      of
      the Executive's Annual Base Salary, Annual Bonus or other
      compensation.

     

     

    4. Termination
      of Employment.

     

     

    (a) Death
      or Disability.
      The
      Executive's employment shall terminate automatically upon the Executive's death
      during the Term. If the Company determines in good faith that the Disability
      of
      the Executive has occurred during the Term (pursuant to the definition of
      Disability set forth below), it may give to the Executive written notice in
      accordance with Section 14(b) hereof of its intention to terminate the
      Executive's employment. In such event, the Executive's employment with the
      Company shall terminate effective on the 30th day after receipt of such notice
      by the Executive (the "Disability
      Date"),
      provided that, within the 30 days after such receipt, the Executive shall not
      have returned to full-time performance of the Executive's duties. For purposes
      of this Agreement, "Disability"
      shall
      mean the absence of the Executive from the Executive's duties with the Company
      on a full-time basis for 180 consecutive days as a result of incapacity due
      to
      mental or physical illness which is determined to be total and permanent by
      a
      physician selected by the Company or its insurers and acceptable to the
      Executive or the Executive's legal representative (such agreement as to
      acceptability not to be withheld unreasonably).

     

     

    (b) Termination
      by the Company for Cause.
      The
      Company may terminate the Executive's employment during the Term for Cause.
      For
      purposes of this Agreement, "Cause"
      shall
      mean (i) the willful and continued failure by the Executive to substantially
      perform his duties as an employee of the Company (other than any such failure
      resulting from incapacity due to physical or mental illness), which failure
      is
      not cured to the Board’s satisfaction within a reasonable period after written
      notice thereof to Executive, (ii) the Executive being convicted of or a plea
      of
      nolo contendere to the charge of a
      felony
      (other than a felony involving a traffic violation or as a result of vicarious
      liability), (iii) the commission by the Executive of a material act of
      dishonesty or breach of trust resulting or intending to result in personal
      benefit or enrichment to the Executive at the expense of the Company, or (iv)
      an
      unauthorized absence from employment that is not cured to the Board’s
      satisfaction within five (5) days after written notice thereof to Executive.
      For
      purposes of this paragraph, no act, or failure to act, on the Executive's part
      shall be considered "willful" unless done, or omitted to be done, by him not
      in
      good faith and without reasonable belief that his action or omission was not
      in
      the best interest of the Company. Notwithstanding the foregoing, the Executive
      shall not be deemed to have been terminated for Cause unless and until there
      shall have been delivered to him a copy of a resolution duly adopted by the
      affirmative vote of not less than two-thirds (2⁄3) of the entire authorized
      membership of the Board at a meeting of the Board (after reasonable notice
      and
      an opportunity for the Executive, together with counsel, to be heard before
      the
      Board) finding that in the good faith of the Board the Executive was guilty
      of
      conduct set forth in clauses (i), (ii), (iii) or (iv) of the second sentence
      of
      this paragraph and specifying the particulars thereof in detail.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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 or within a Change in Control Termination
      Period), excluding for this purpose an isolated, insubstantial and inadvertent
      action not taken in bad faith and which is remedied by the Company promptly
      after receipt of notice thereof given by the Executive;

     

    (ii) a
      material breach of this Agreement by the Company, provided the Executive gives
      the Company written notice of the occurrence of the breach which specifically
      identifies the manner in which the Executive believes that the breach has
      occurred and which is delivered to the Company within a reasonable period (but
      in no event more than 30 days) after the Executive has knowledge of the events
      asserted to give rise to the breach, and the Company fails to correct such
      breach within a reasonable period (but in no event more than 30 days) after
      receipt of such notice;

     

     

    (iii) relocation
      of the Executive’s primary work location, without the Executive’s consent, to a
      location more than 75 miles from the Executive’s primary work location as of the
      Effective Date.

     

     

    For
      purposes of this Section 4(c), any good faith determination of "Good
      Reason"
      made by
      the Executive shall be conclusive.

     

     

    (d) Termination
      by Executive during a Change in Control Termination Period.
      The
      Executive may voluntarily terminate employment during a Change in Control
      Termination Period. For purposes of this Agreement, “Change in Control
      Termination Period” means the period beginning on the six (6) month anniversary
      of a Change in Control and ending on the twelve (12) month anniversary of such
      Change in Control. If the Executive’s employment terminates during a Change in
      Control Termination Period due to death or Disability, such termination of
      employment shall not be deemed to be a voluntary termination under this
      paragraph (d) but shall be treated as a termination under paragraph (a) next
      above.

     

     

    (e) Retirement.
      The
      Executive may voluntarily terminate his employment for Retirement. For purposes
      of this Agreement, “Retirement” means the Executive’s voluntary termination of
      employment with the Company or any affiliated company, other than for Good
      Reason or during a Change in Control Termination Period, on or after attainment
      of age 62 and not becoming employed by any person or entity that is engaged
      in
      the same or similar line of business as that of the Company or an affiliated
      company as determined in the sole and absolute discretion of the Board of
      Directors of the Company.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (f) Notice
      of Termination.
      Any
      termination by the Company for Cause, or by the Executive for Good Reason or
      during a Change in Control Termination Period, shall be communicated by Notice
      of Termination to the other party hereto given in accordance with Section 14(b).
      For purposes of this Agreement, a "Notice
      of Termination"
      means a
      written notice which (i) indicates the specific termination provision in this
      Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
      detail the facts and circumstances claimed to provide a basis for termination
      of
      the Executive's employment under the provision so indicated, and (iii) if the
      Date of Termination (as defined below) is other than the date of receipt of
      such
      notice, specifies the termination date (which date shall be not more than 15
      days after the giving of such notice). The failure by the Executive or the
      Company to set forth in the Notice of Termination any fact or circumstance
      which
      contributes to a showing of Good Reason or Cause shall not waive any right
      of
      the Executive or the Company hereunder or preclude the Executive or the Company
      from asserting such fact or circumstance in enforcing the Executive's or the
      Company's rights hereunder.

     

    (f) Date
      of Termination.
      "Date
      of Termination"
      means
      (i) if the Executive's employment is terminated by the Company for Cause, or
      by
      the Executive for Good Reason, during a Change in Control Termination Period,
      or
      for Retirement, the date of receipt of the Notice of Termination or any later
      date specified therein, as the case may be, (ii) if the Executive's employment
      is terminated by the Company other than for Cause or Disability, the Date of
      Termination shall be the date on which the Company notifies the Executive of
      such termination, and (iii) if the Executive's employment is terminated by
      reason of death or Disability, the Date of Termination shall be the date of
      death of the Executive or the Disability Date, as the case may be.

     

    5. Obligations
      of the Company upon Termination

     

     

    (a) Termination
      by the Executive for Good Reason or During a Change in Control Termination
      Period or by the Company Other Than for Cause, Death or
      Disability.
      If,
      during the Term, the Company shall terminate the Executive's employment other
      than for Cause, Death or Disability or the Executive shall terminate employment
      for Good Reason or during a Change in Control Termination Period:

     

     

    (i) the
      Company shall pay to the Executive in a lump sum in cash within 30 days after
      the Date of Termination the aggregate of the following amounts:

     

     

    A. the
      sum
      of (1) the Executive's Annual Base Salary through the Date of Termination,
      (2)
      the product of (x) the Annual Bonus paid or payable to the Executive for the
      immediately preceding year and (y) a fraction, the numerator of which is the
      number of days in the current fiscal year through the Date of Termination,
      and
      the denominator of which is 365, (3) any compensation previously deferred by
      the
      Executive (together with any accrued interest or earnings thereon), provided
      that deferrals under any arrangement subject to Code Section 409A shall be
      paid
      in accordance with the terms of such deferral arrangement, and (4) any accrued
      vacation pay, in each case to the extent not theretofore paid (the sum of the
      amounts described in clauses (1), (2), (3) and (4) shall be hereinafter referred
      to as the "Accrued
      Obligations");
      and

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    B. an
      amount
      equal to 2.0 multiplied by the sum of (1) the Executive's Annual Base Salary
      as
      in effect immediately prior to such Date of Termination, and (2) the Annual
      Bonus paid or payable to the Executive for the immediately preceding fiscal
      year; provided,
      however,
      that
      such amount shall be reduced by the present value (determined as provided in
      Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the
      "Code"))
      of
      any other amount of severance relating to salary or bonus continuation, if
      any,
      to be received by the Executive upon termination of employment of the Executive
      under any severance plan, policy or arrangement of the Company; and

     

     

    (ii) any
      or
      all Stock Options and shares of restricted stock awarded to the Executive under
      any plan not previously exercisable and vested shall become fully exercisable
      and vested; and

     

    (iii) for
      the
      remainder of the Term, provided that the Executive's continued participation
      is
      possible under the general terms and provisions of such plans and programs
      and
      permissible without violating the requirements of Code Section 409A, the Company
      shall continue benefits to the Executive and/or the Executive's family at least
      equal to those which would have been provided to them in accordance with the
      plans, programs, practices and policies described in Section 3(b)(iv) if the
      Executive's employment had not been terminated in accordance with the most
      favorable plans, practices, programs or policies of the Company and its
      affiliated companies as in effect generally at any time thereafter with respect
      to other peer executives of the Company and its affiliated companies and their
      families; provided,
      however,
      that if
      the Executive becomes reemployed with another employer and is eligible to
      receive medical or other welfare benefits under another employer-provided plan,
      the medical and other welfare benefits described herein shall be secondary
      to
      those provided under such other plan during such applicable period of
      eligibility; in the event that the Executive's participation in any such plan
      or
      program is barred, the Company shall arrange to provide the Executive with
      benefits substantially similar to those which he is entitled to receive under
      such plans and programs; and 

     

    (iv) subject
      to the provisions of Section 6, to the extent not theretofore paid or provided
      and to the extent permissible without violating the requirements of Code Section
      409A, the Company shall timely pay or provide to the Executive and/or the
      Executive's family any other amounts or benefits required to be paid or provided
      or which the Executive and/or the Executive's family is eligible to receive
      pursuant to this Agreement and under any plan, program, policy or practice
      of or
      contract or agreement with the Company and its affiliated companies as in effect
      generally thereafter with respect to other peer executives of the Company and
      its affiliated companies and their families (such other amounts and benefits
      shall be hereinafter referred to as the "Other
      Benefits");
      and

     

     

    (v) 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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (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 as defined
      in the retirement plans or programs in which the Executive participates or
      any
      successor plans or programs in effect on the Date of Termination, an amount
      equal to the actuarial equivalent of the retirement pension to which the
      Executive would have been entitled under the terms of such retirement plans
      or
      programs without regard to "vesting" thereunder, had the Executive accumulated
      an additional two (2) years of continuous service at his Annual Base Salary
      in
      effect on the Date of Termination under such retirement plans or programs
      reduced by the single sum actuarial equivalent of any amounts to which the
      Executive is entitled pursuant to the provisions of said retirement plans and
      programs; for purposes of this paragraph, "actuarial equivalent" shall be
      determined using the same methods and assumptions utilized under the Company's
      retirement plans and programs on the Effective Date; and

     

    

    (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 Retirement.
      If the
      Executive’s employment is terminated by reason of Retirement during the Term,
      the Executive shall be entitled to the following:

     

     

    (i) payment
      of Accrued Obligations (which shall be paid to the Executive in a lump sum
      in
      cash within 30 days of the Date of Termination); and

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (ii) any
      or
      all Stock Options and shares of restricted stock awarded to the Executive under
      any plan not previously exercisable and vested shall become fully exercisable
      and vested; and

     

     

    (iii) the
      Executive shall be entitled to use of the Automobile for a period of 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

     

     

    (iv) until
      the
      Executive becomes eligible for Medicare, and to the extent the Executive's
      continued participation is possible under the general terms and provisions
      of
      the Company’s medical plans and programs and permissible without violating the
      requirements of Code Section 409A, the Company shall continue to provide medical
      benefits to the Executive and/or the Executive's family at least equal to those
      which would have been provided to them if the Executive's employment had not
      terminated; provided,
      however,
      that if
      the Executive becomes reemployed with another employer and is eligible to
      receive medical benefits under another employer-provided plan, the medical
      benefits described herein shall be secondary to those provided under such other
      plan during such applicable period of eligibility; in the event that the
      Executive's participation in any such plan or program is barred, the Company
      shall arrange to provide the Executive with benefits substantially similar
      to
      those which he is entitled to receive under such plans and programs;
      and

     

    (v) the
      Company shall promptly transfer and assign to the Executive all such life
      insurance policies for which the Company or Parent was previously reimbursing
      premium payments made by the Executive pursuant to an agreement between the
      Executive and the Company or Parent.

     

    (e) Termination
      by Company for Cause or by Executive Other than for Good Reason or During Change
      in Control Termination Period.
      If the
      Executive's employment shall be terminated for Cause during the Term, this
      Agreement shall terminate without further obligations to the Executive other
      than the obligation to pay to the Executive Annual Base Salary through the
      Date
      of Termination plus the amount of any compensation previously deferred by the
      Executive and any accrued vacation pay, in each case to the extent theretofore
      unpaid. If the Executive terminates employment during the Term, excluding a
      termination for Good Reason, during a Change in Control Termination Period,
      or
      Retirement, this Agreement shall terminate without further obligations to the
      Executive, other than for payment of Accrued Obligations and the timely payment
      or provision of any and all Other Benefits. In such case, all Accrued
      Obligations shall be paid to the Executive in a lump sum in cash within 30
      days
      of the Date of Termination.

     

     

    6. Waiver
      of Rights For Other Severance.
      The
      Executive hereby agrees any and all benefits or payments arising out of or
      relating to any plan, program, policy or practice of or contract or agreement
      with the Company and its affiliated companies relating to the severance of
      employment, shall be fully offset against any benefits or payments due and
      owing
      hereunder.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (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 sue 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 sue 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (d) If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 9(c) hereof, the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall, subject to the Company's complying
      with the requirements of Section 9(c), promptly pay to the Company the amount
      of
      such refund (together with any interest paid or credited thereon after taxes
      applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 9(c) hereof, a determination is
      made
      that the Executive shall not be entitled to any refund with respect to such
      claim and the Company does not notify the Executive in writing of its intent
      to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

     

     

    10. Confidential
      Information.
      The
      Executive shall hold in a fiduciary capacity for the benefit of the Company
      all
      secret or confidential information, knowledge or data relating to the Company
      or
      any of its affiliated companies, and their respective businesses, which shall
      have been obtained by the Executive during the Executive's employment by the
      Company or any of its affiliated companies and which shall not be or become
      public knowledge (other than by acts by the Executive or representatives of
      the
      Executive in violation of this Agreement). After termination of the Executive's
      employment with the Company, the Executive shall not, without the prior written
      consent of the Company or as may otherwise be required by law or legal process,
      communicate or divulge any such information, knowledge or data to anyone other
      than the Company and those designated by it. In no event shall an asserted
      violation of the provisions of this section constitute a basis for deferring
      or
      withholding any amounts otherwise payable to the Executive under this
      Agreement.

     

     

    11. Nonsolicitation;
      No Tampering.
      During
      the Term and, unless the Agreement terminates pursuant to Section 5(a), through
      the first anniversary of the expiration thereof, the Executive shall not (a)
      solicit, attempt to solicit, request, induce or attempt to influence any
      distributor or supplier of goods or services to the Company or its affiliated
      companies to curtail or cancel any business they may transact with the Company
      or its affiliated companies; (b) solicit, attempt to sell to, request, induce
      or
      attempt to influence any customers of the Company or its affiliated companies
      or
      potential customers which have been in contact with the Company or its
      affiliated companies to curtail or cancel any business they may transact with
      any member of the Company or its affiliated companies; or (c) solicit, attempt
      to solicit, request, induce or attempt to influence any employee of the Company
      or its affiliated companies to terminate his or her employment with the Company
      or its affiliated companies.

     

     

    12. Remedies.
      The
      Executive acknowledges that a remedy at law for any breach or attempted breach
      of the Executive's obligations under Sections 10 and 11 may be inadequate,
      agrees that the Company may be entitled to specific performance and injunctive
      and other equitable remedies in case of any such breach or attempted breach,
      and
      further agrees to waive any requirement for the securing or posting of any
      bond
      in connection with the obtaining of any such injunctive or other equitable
      relief. The Company shall have the right to offset against amounts paid to
      the
      Executive pursuant to the terms hereof any amounts from time to time owing
      by
      the Executive to the Company. The termination of the Agreement shall not be
      deemed a waiver by the Company of any breach by the Executive of this Agreement
      or any other obligation owed the Company, and notwithstanding such a termination
      the Executive shall be liable for all damages attributable to such a
      breach.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    13. Successors
      and Assigns.

     

     

    (a) This
      Agreement is personal to the Executive and without the prior written consent
      of
      the Company shall not be assignable by the Executive otherwise than by will
      or
      the laws of descent and distribution. This Agreement shall inure to the benefit
      of and be enforceable by the Executive's legal representatives.

     

     

    (b) This
      Agreement shall inure to the benefit of and be binding upon the Company and
      its
      successors and assigns.

     

     

    (c) The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. As used in this
      Agreement, "Company"
      shall
      mean the Company as hereinbefore defined and any successor to its business
      and/or assets as aforesaid which assumes and agrees to perform this Agreement
      by
      operation of law, or otherwise.

     

     

    14. Miscellaneous.

     

     

    (a) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas, without reference to principles of conflict of laws. The
      captions of this Agreement are not part of the provisions hereof and shall
      have
      no force or effect. This Agreement may not be amended or modified otherwise
      than
      by a written agreement executed by the parties hereto or their respective
      successors and legal representatives.

     

     

    (b) All
      notices and other communications hereunder shall be in writing and shall be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed as follows:

     

    If
      to the
      Executive:      John
      E.
      Leech

                                                             
      13722
      Pristine Lake Lane

                                                                                
      Cypress,
      Texas 77429

     

    If
      to the
      Company:      GM
      Offshore, Inc.

                                                                                
      10111
      Richmond Ave., Suite 340

                                                                                 Houston,
      Texas 77042

     

     

    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.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (d) The
      Company may withhold from any amounts payable under this Agreement such Federal,
      state or local taxes as shall be required to be withheld pursuant to any
      applicable law or regulation.

     

     

    (e) The
      Executive's or the Company's failure to insist upon strict compliance with
      any
      provision of this Agreement or the failure to assert any right the Executive
      or
      the Company may have hereunder, including, without limitation, the right of
      the
      Executive to terminate employment for Good Reason pursuant to Section
      4(c)(i)-(v) hereof, shall not be deemed to be a waiver of such provision or
      right or any other provision or right of this Agreement.

     

     

    15. Prior
      Employment Agreements Superseded.
      Upon
      execution and delivery of this Agreement, any and all prior employment
      agreements, if any, between (a) the Company, GulfMark Offshore, Inc., GulfMark
      International, Inc. and its and their affiliates and subsidiaries and (ii)
      the
      Executive shall be of no further force or effect and this Agreement shall
      supersede all such prior agreements, if any.

     

     

    * * *

     

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the date first above
      written.

     

    Executive:

    

    /s/
      John E. Leech

    John
      E.
      Leech

    

    Company:

    

    GM
      OFFSHORE, INC.

    By:
      /s/
      Edward A. Guthrie

    Title:
      Executive Vice President - Finance & CFO

     

    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/
      David J. Butters

     

     

    Chairman
      of the Board

     

    
      
        
        

      

      
        16

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