Document:

exv10w1

Exhibit 10.1

August 14, 2008

Mr. Jeffrey Levos

     Re: Change-In-Control Agreement

Dear Mr. Levos:

     Global Industries, Ltd. (the “Company”) considers it essential to the best interest of the
Company and its shareholders that its management and key employees be encouraged to remain with the
Company and to continue to devote full attention to the Company’s business in the event of a change
in control of the Company, whether through a tender offer, a negotiated merger or sale of the
Company’s business or otherwise. In this connection, the Company recognizes that the possibility
of a change in control and the uncertainty and questions which it may raise among management may
result in the departure or distraction of management personnel and key employees to the detriment
of the Company and its shareholders. Accordingly, the Company’s Board of Directors (the “Board”)
has determined that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s management, including yourself, to their
assigned duties without distraction in the face of the potentially disturbing circumstances arising
from the possibility of a change in control of the Company under the circumstances described below.

     In order to induce you to remain in the employ of the Company, this letter agreement
(“Agreement”) sets forth the severance benefits which the Company agrees will be provided to you in
the event your employment with the Company is terminated subsequent to a Change in Control of the
Company under the circumstances described below.

     Nothing herein shall be construed to prevent either you or the Company from terminating your
employment at any time, for cause or otherwise, subject only to the specific payment and other
provisions hereinafter provided for under certain circumstances in the event a Change in Control of
the Company shall have occurred prior to the date your termination becomes effective.

     1. CONTINUED EMPLOYMENT.

     This confirms that you have advised the Company that, in consideration of, among other things,
the Company’s entering into this Agreement with you, it is your present intention to remain in the
employ of the Company unless and until there occurs a Change in Control of the Company. This
Agreement shall commence on the date hereof and shall continue until December 31, 2009; provided,
however, that commencing on January 1, 2010 and each January 1st thereafter, the term of this
Agreement shall automatically be extended for one

 

 

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August 14, 2008

Page 2

additional year unless at least 30 days prior to such January 1st date, the Company shall have
given notice that it does not wish to extend this Agreement. Notwithstanding anything to the
contrary contained in this paragraph 1, (a) it is agreed that if a Change in Control occurs while
this Agreement is in effect, then the term of this Agreement shall be automatically extended and
shall remain in effect for two years after such Change in Control, and if within such two-year
period any termination occurs that would entitle you to the benefits hereunder, this Agreement
shall remain in effect in accordance with its terms, and (b) the Company may terminate this
Agreement at any time upon your Total Disability (as defined in paragraph 2). In the event that
your employment with the Company terminates for any reason prior to the occurrence of a Change in
Control, this Agreement shall automatically terminate as of the date of your termination, and no
benefits shall be payable to you hereunder.

     2. DEFINITIONS.

     For purposes of this Agreement, the following terms have the meanings set forth below:

     “Bonus Incentive Plan” shall mean the Company’s Management Incentive Plan or, if that
plan is no longer maintained, any cash bonus plan maintained by the Company for similarly situated
active executives of the Company.

     “Cause” shall mean only (a) if termination shall have been the result of an act or
acts of dishonesty on your part constituting a felony and resulting, or intending to result,
directly or indirectly, in gain or personal enrichment at the expense of the Company or (b) upon
the willful and continued failure by you to substantially perform your duties with the Company
(other than any such failure resulting from your incapacity due to mental or physical illness)
after a demand in writing for substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, and such failure to perform your duties results in
demonstrably material injury to the Company. Your employment shall in no event be considered to
have been terminated by the Company for Cause if such termination took place as the result of
(i) bad judgment or negligence on your part, or (ii) any act or omission without intent of gaining
therefrom, directly or indirectly, a profit to which you were not legally entitled, or (iii) any
act or omission believed by you in good faith to have been in or not opposed to the interest of the
Company, or (iv) any act or omission in respect of which a determination is made that you met the
applicable standard of conduct prescribed for indemnification or reimbursement or payment of
expenses under the by-laws of the Company or the laws of the State of Louisiana or the directors
and officers liability insurance of the Company, in each case as in effect at the time of such act
or omission. You shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting called and held for the
purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to
be heard before the Board), finding that in the good faith opinion of the Board you were guilty of
conduct set forth above in clauses (a) or (b) of the first sentence of this definition and
specifying the particulars thereof in detail.

 

 

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August 14, 2008

Page 3

     “Change in Control” shall mean (i) any merger, consolidation or other reorganization
in which the Company shall not be the surviving entity (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), (ii) the dissolution or
liquidation of the Company; (iii) the sale, lease or exchange or agreement to sell, lease or
exchange all or substantially all of the assets of the Company to any other person or entity (other
than a wholly-owned subsidiary of the Company); (iv) the acquisition, directly or indirectly, of
the beneficial ownership of more than 50% of the issued and outstanding shares of the common stock
of the Company by any individual or entity, including a “group” as contemplated by Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, except an underwriter or similar entity in
connection with a public offering of common stock, alone or in concert with others; or (v) as a
result of or in connection with a contested election of directors, the persons who were directors
of the Company before such election shall cease to constitute a majority of the Board.

     “Code” shall mean the Internal Revenue Code of 1996, as amended.

     “Committee” shall mean the Compensation Committee of the Board of Directors of Global
Industries, Ltd.

     “Company” shall mean Global Industries, Ltd., and, except where the context indicates
otherwise, after the occurrence of a Change in Control, “Company” shall mean any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Global Industries, Ltd.

     “Date of Termination” shall mean the date on which you have a “separation from
service” as defined in Section 409A of the Code.

     “Good Reason” shall mean:

	 	(a)	 	without your express written consent, the assignment to you of any duties
inconsistent with your positions, duties, responsibilities and status with the Company
immediately prior to a Change in Control, or a change in your reporting
responsibilities, titles or offices as in effect immediately prior to a Change in
Control, or any removal of you from or any failure to re-elect you to any of such
positions, except in connection with the termination of your employment for Cause,
Total Disability or as a result of your death or by you other than for Good Reason;
	 
	 	(b)	 	a reduction by the Company in your base salary or total compensation for the
fiscal year in which the Change in Control occurred from your base salary or total
compensation in the fiscal year immediately preceding the year in which the Change in
Control occurred (assuming for purposes of determining whether a reduction of total
compensation has occurred that total compensation in the year preceding the fiscal year
in which the Change in Control occurred consisted of your base salary for that year
plus payment under the Bonus Incentive Plan in an

 

 

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Page 4

	 	 	 	amount equal to the highest payment under the Bonus Incentive Plan you received in
any of the three years immediately preceding the year in which the Change in Control
occurred) or the failure by the Company to increase your total salary and payment
under the Bonus Incentive Plan (based on actual salary and payment under the Bonus
Incentive Plan) each year after a Change in Control by an amount which at least
equals, on a percentage basis, the mean average percentage increase in total
compensation for all officers of the Company during the three full fiscal years
immediately preceding a Change in Control of the Company;
	 
	 	(c)	 	a failure by the Company to continue the Bonus Incentive Plan substantially on
the basis in effect prior to the Change in Control, or a failure by the Company to
continue you as a participant on at least the same basis as your participation for the
fiscal year immediately preceding a Change in Control;
	 
	 	(d)	 	a permanent relocation of your principal place of employment with the Company
from the city in which you were serving immediately prior to the date on which a Change
in Control occurs to a place which is more than 30 miles away from such location;
	 
	 	(e)	 	the failure by the Company to continue in effect any benefit or compensation
plan in addition to the bonus or incentive compensation plan, including its retirement
plans, life insurance plan, health and accident plan or disability plan in which you
are participating at the time of a Change in Control of the Company (or plans providing
you with substantially similar benefits) and stock option and stock purchase plans
providing you with substantially similar benefits as the Company plans in existence
immediately before the Change in Control, or the taking of any action by the Company
which would adversely affect your participation in or materially reduce your benefits
under any of such plans or deprive you of any material fringe benefit enjoyed by you at
the time of the Change in Control, or the failure by the Company to provide you with
the number of paid vacation days to which you are then entitled on the basis of years
of service with the Company in accordance with the Company’s normal vacation policy in
effect immediately prior to the Change in Control;
	 
	 	(f)	 	the failure of the Company to obtain an assumption of this Agreement by any
successor as contemplated in paragraph 7 hereof; or
	 
	 	(g)	 	any purported termination of your employment which is not effected pursuant to
a Notice of Termination satisfying the requirements set forth in the definition thereof
(and, if applicable, the requirements set forth in the definition of Cause).

     “Incentive Compensation” shall mean the greater of (i) the highest annual award earned
under the Bonus Incentive Plan during any one of the five fiscal years immediately preceding the
fiscal year which includes the Date of Termination, or (ii) the Target Award.

 

 

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     “Notice of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of your employment under the
provisions so indicated. With respect to termination by you for Good Reason, the Notice of
Termination shall state that you have made a good faith determination that, due to a Change in
Control, you are not able effectively to discharge your duties. The Notice of Termination shall be
delivered no less than 30 days prior to the Date of Termination, or (i) such longer period required
by contract between you and the Company or (ii) such shorter period as agreed by you and the
Company by mutual consent. Any purported termination of your employment which is not effected
pursuant to a Notice of Termination shall be deemed ineffective.

     “Stock Incentive Plan” shall mean the Global Industries, Ltd. 1998 Equity Incentive
Plan, the Global Industries, Ltd. 2005 Stock Incentive Plan and/or any future plan under which the
Company awards long-term incentive compensation.

     “Target Award” shall mean the higher of the target award level under the Bonus
Incentive Plan (i) at the time of a Change in Control or (ii) on the Date of Termination; in each
case expressed as a dollar amount based on the base salary then in effect.

     “Total Disability” shall mean that, as a result of your incapacity due to physical or
mental illness, you are suffering from “total disability” as defined in any long-term disability
plan maintained by the Company, and shall be deemed to occur on the first date as of which you are
entitled to commence receipt of benefits thereunder.

     3. COMPENSATION DURING DISABILITY.

     If at any time during the term of this Agreement after a Change in Control you are entitled to
benefits under the Company’s short-term disability plan, this Agreement shall remain in effect and
you shall (i) continue to receive your full base salary at the rate in effect when you became
entitled to benefits under the short-term disability plan and (ii) be entitled to continue to
participate in the Bonus Incentive Plan at an award level comparable to the award level in effect
when you became entitled to benefits under the short-term disability plan. If and as of the date
you are determined to have a Total Disability, this Agreement shall be automatically terminated and
no benefits shall be payable to you hereunder. Thereafter, your benefits shall be determined in
accordance with the Company’s long-term disability plan, or a substitute plan then in effect.

     4. TREATMENT OF EQUITY UPON A CHANGE IN CONTROL.

     (a) Options held by you granted under a Stock Incentive Plan shall fully vest upon the date of
a Change in Control. Unless the Committee has determined to make an equitable adjustment or
substitution of stock options pursuant to the terms of the applicable Stock Incentive Plan, all
options held by you granted under a Stock Incentive Plan shall be surrendered to the Company by you
and such options shall be canceled by the Company, in exchange for a cash payment by the Company
within ten days after the Change in Control in an amount equal to the number of shares of the
Company’s common stock subject to your option multiplied by the

 

 

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difference between (x) and (y) where (x) equals the closing sale price of a share of common
stock on any exchange on which such shares are traded or quoted as of the date immediately prior to
the Change in Control and (y) equals the purchase price per share covered by the option.

     (b) In the event of a Change in Control, restricted stock held by you granted under a Stock
Incentive Plan shall immediately vest, and all forfeiture restrictions shall immediately expire, as
of the date of the Change in Control.

     (c) In the event of a Change in Control, performance units held by you granted under a Stock
Incentive Plan for which the performance period has not expired as of the date of a Change in
Control shall be deemed to be earned at the target performance level. Unless the Committee
determines otherwise, you shall have the right to receive the same form of equity or other
consideration as all other shareholders with respect to the common stock subject to the earned
performance units. The common stock or other property subject to the earned performance units
shall be delivered to you within ten days of the date of the Change in Control. Notwithstanding
the foregoing, if the performance units are non-qualified deferred compensation under Section 409A
of the Code, the performance units shall vest only if the Change in Control satisfies the
requirements of Treasury Regulations Section 1.409A-3(i)(5).

     5. COMPENSATION UPON TERMINATION AFTER A CHANGE IN CONTROL.

     No benefits shall be payable under this Agreement unless a Change in Control shall have
occurred. If your employment by the Company is terminated within two years after a Change in
Control, then the Company will, as additional compensation for services rendered to the Company,
pay to you the following amounts (subject to any applicable payroll or other taxes required to be
withheld and employee benefit premiums):

	 	(a)	 	If your employment is terminated for Cause or if you voluntarily terminate your
employment without Good Reason, the Company shall pay your full base salary through the
Date of Termination at the rate in effect at the time Notice of Termination is given
and your Target Award (pro-rated for full months of service during the year in which
your Date of Termination occurs), and the Company shall have no further obligations to
you under this Agreement.
	 
	 	(b)	 	If the Company terminates your employment other than due to death, Total
Disability or for Cause or if you terminate your employment for Good Reason, then the
Company will pay to you in a lump sum on the Date of Termination (subject to paragraph
13 hereof and except as set forth in item (iv) below), the following amounts:

	 	(i)	 	(A) your full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and (B) an amount
equal to your Incentive Compensation times a fraction, the numerator of which

 

 

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	 	 	 	is the number of days elapsed in the fiscal year to and including the Date
of Termination and the denominator of which is 365;
	 
	 	(ii)	 	in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, an amount equal to 3 times (A) your
annual base salary plus (B) your Incentive Compensation as of the date of the
Notice of Termination;
	 
	 	(iii)	 	an amount equal to the difference between the amount you are
entitled to receive under the Company’s retirement plans in a lump sum upon
termination of employment and the amount you would be entitled to receive in a
lump sum as of the Date of Termination if you had a 100% vested interest in
your accounts on the Date of Termination; and
	 
	 	(iv)	 	the Company shall also pay all legal fees and expenses incurred
by you as a result of such termination (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this Agreement). Any
reimbursement provided hereunder during one calendar year shall not affect the
amount or availability of reimbursements in another calendar year. Any
reimbursement provided hereunder shall be paid no later than the earlier of (i)
the time prescribed under the Company’s applicable policies and procedures, or
(ii) the last day of the calendar year following the calendar year in which
your Date of Termination occurs.
	 
	 	(v)	 	in the event that you relocated at the request of the Company
within two years prior to the Date of Termination, the Company hereby agrees in
the event you should desire to relocate back to your point of origin within one
year after the Date of Termination, to apply all terms of its relocation policy
then in effect for internal transfers and to indemnify you in connection with
any loss you may sustain in the sale of your residence. Any reimbursements
provided hereunder shall be only for expenses actually incurred and shall be
made prior to the last day of your second taxable year after your Date of
Termination.

	 	(c)	 	Unless you are terminated as a result of death, Total Disability or for Cause,
the Company shall cause you to continue to be covered, without any cost to you in
excess of the cost borne by you prior to the Change in Control, under health, medical
and dental benefits and life insurance comparable to those in effect immediately prior
to the Change in Control including, but not limited to, medical, dental and life
insurance. Such continuation shall (i) also apply to your dependents who would
otherwise be eligible to participate under the terms of such plans and (ii) apply for
two years after the Date of Termination.

 

 

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	 	(d)	 	Upon your termination of employment for any reason, all country club
memberships, luncheon clubs and other memberships, which the Company was providing for
your use at the time Notice of Termination was given, to the extent possible shall be
transferred to you, at no cost to you (other than taxes), the cost of transfer, if any,
to be borne by the Company.
	 
	 	(e)	 	Notwithstanding any contrary provisions in any plan, program or policy of the
Company, if all or any portion of the benefits payable under the Agreement, either
alone or together with other payments and benefits which you receive or are entitled to
receive from the Company, would constitute a “parachute payment” within the meaning of
Section 280G of the Code, the Company shall reduce the payments and benefits payable to
you under the Agreement to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason
of such reduction, the net after-tax benefit shall exceed the net after-tax benefit if
such reduction were not made. “Net after-tax benefit” for these purposes shall mean
the sum of (i) the total amount payable to you under the Agreement, plus (ii) all other
payments and benefits which you receive or are then entitled to receive from the
Company that, alone or in combination with the payments and benefits payable under the
Agreement, would constitute a “parachute payment” within the meaning of Section 280G of
the Code, less (iii) the amount of federal income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to you (based upon the rate in effect for such year as set
forth in the Code at the time of the payment under the Agreement), less (iv) the amount
of excise taxes imposed with respect to the payments and benefits described in (i) and
(ii) above by Section 4999 of the Code. Any reduction, pursuant to this paragraph, of
amounts payable to you shall be made in a manner such that you receive the best
economic benefit, and to the extent economically equivalent, such reduction shall be
made on a pro-rata basis among all amounts payable under this Agreement.
	 
	 	(f)	 	If you are a party to an employment agreement with the Company, in the event of
any termination of your employment to which this Agreement would apply by its terms,
you shall have all of the benefits provided under either this Agreement or such other
agreement, whichever one (in its entirety) provides the greater total benefit, but not
under both agreements, and the agreement providing the lower total benefit shall be
superseded in its entirety and shall be of no further force or effect, and neither
party shall have any obligation to the other thereunder.

     6. PAYMENT OBLIGATION ABSOLUTE.

     The Company’s obligation to pay you the amounts and to make the arrangements provided herein
shall be absolute and unconditional and shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company
may have against you or anyone else. All amounts payable by

 

 

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the Company shall be paid without notice or demand. You shall not be required to mitigate the
amount of any payment or benefit provided for you herein by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for herein be reduced by any compensation
earned by you as a result of employment by another employer after the Date of Termination, or
otherwise.

     7. SUCCESSORS, BINDING AGREEMENT.

     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.
This Agreement shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amount would still be payable to you hereunder if you had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee, or other designee or, if there be no such
designee, to your estate.

     8. NOTICE.

     Any termination by the Company shall be communicated by written Notice of Termination to the
other party thereto. Notices and all other communications provided for in this Agreement shall be
in writing and shall be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all notices to the Company shall be
directed to the attention of the Secretary of the Company, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

     9. MISCELLANEOUS.

     This Agreement supersedes any and all prior agreements between you and the Company concerning
the subject matter hereof except an employment agreement between you and the Company which provides
for benefits upon termination after a change in control as defined in such other agreement. No
provisions of this Agreement may be modified, waived or discharged unless such modification, waiver
or discharge is agreed to in writing signed by you and such officer as may be specifically
designated by the Board (which shall in any event include the Company’s Chief Executive Officer).
No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of

 

 

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Texas. Except as contemplated in paragraph 4 hereof, the obligation to pay amounts under this
Agreement is an unfunded obligation of the Company, and no such obligation shall create a trust or
be deemed to be secured by any pledge or encumbrance on any property of the Company.

     This Agreement shall not be deemed to constitute a contract of employment, nor shall any
provision hereof restrict the right of the Company to discharge you at will. Nothing herein shall
be construed to preclude the transfer of your employment to a subsidiary or affiliate of the
Company and such a transfer shall not be considered a termination of your employment hereunder.
For purposes of this Agreement, “Company” includes all subsidiaries and affiliates of the Company
to the extent such subsidiary and/or affiliate is carrying on any portion of the business of the
Company or a business similar to that being conducted by the Company.

     10. VALIDITY.

     The invalidity or unenforceability of any one or more provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.

     11. COUNTERPARTS.

     This Agreement may be executed in counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.

     12. ARBITRATION.

     Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Houston, Texas in accordance with the rules of the American
Arbitration Association then in effect; provided that all arbitration expenses shall be borne by
the Company. Notwithstanding the pendency of any dispute or controversy concerning termination or
the effects thereof, the Company will continue to pay your base salary, retroactive to the Date of
Termination, if applicable, in effect immediately before any Notice of Termination giving rise to
the dispute was given and continue you as a participant in all compensation, benefit and insurance
plans in which you were then participating, until the dispute is finally resolved. Subject only to
item (e) of paragraph 5, amounts paid under this paragraph are in addition to all other amounts due
under this Agreement and shall not be offset against or reduce any other amounts due under this
Agreement. Judgment may be entered on the arbitrators’ award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

     13. SECTION 409A.

     (a) This Agreement is intended to comply with Section 409A of the Code and accompanying
Treasury regulations and guidance (“Section 409A”) and any ambiguous provision will be construed in
a manner that is compliant with or exempt from the application of

 

 

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Section 409A.

     (b) Notwithstanding any provision in this Agreement to the contrary, if the payment of any
compensation or benefit hereunder (including, without limitation, any severance benefit) would be
subject to additional taxes and interest under Section 409A because the timing of such payment is
not delayed as provided in Section 409A(a)(2)(B) of the Code, then any such payment or benefit that
you would otherwise be entitled to during the first six months following the Date of Termination
shall be accumulated and paid or provided, as applicable, on the date that is one day (or if such
date does not fall on a business day of the Company, the next following business day of the
Company) after the earlier of (i) the date of your death, (ii) six months after the Date of
Termination, or (iii) such earlier date upon which such amount can be paid or provided under
Section 409A without being subject to such additional taxes and interest. In the event that a
payment is delayed under this paragraph 13, the Company shall pay to you, as of the date it pays
the delayed payment, interest on the delayed payment amount at the semi-annual, short-term
applicable federal rate in effect on the Date of Termination, as provided in Section 1274(d) of the
Code, plus 2%, based on the number of days the payment was delayed beyond the Date of Termination.

     If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter which will then constitute our agreement
on this subject.

	 	 	 	 	 
	 	Sincerely,

Global Industries, Ltd.

 	 
	 	By:  	/s/ David R. Sheil
 	 
	 	Name:  	David R. Sheil 	 
	 	Title:  	Vice President, Human Relations 	 
	 

AGREED TO THIS 14th DAY OF AUGUST, 2008

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Jeffrey Levos
 	 
	 	Name:  	Jeffrey Levos 	 
	 	Title:  	Senior Vice President and
Chief Financial Officerexv10w42

Exhibit 10.42

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Phone: (303) 573-1660

Fax: (303) 595-9385

Email: info@royalgold.com

www.royalgold.com

April 3, 2008

Mr. Mike Scott, President

MinEx Projects (PTY) Limited

Dunkeld Court

16 North Road

Dunkeld West

Johannesburg

2196

Republic of South Africa

Dear Mr. Scott:

Royal Gold, Inc. (“Royal Gold”) sincerely appreciates the invitation from MinEx Projects (PTY)
Limited (“MinEx”) to submit an offer to purchase the Messina and Dwaalkop royalty interests, as
defined in the Royalty Background document previously provided by MinEx. Royal Gold is pleased to
submit the following offer for MinEx’s consideration.

I. THE OFFER

Royal Gold offers to purchase all of MinEx’s right, title and interest in and to the following two
royalty interests at Lonmin’s Limpopo Mine (collectively, the “Royalties”):

	 	a.	 	The 0.704% gross receipts royalty on the Messina lease area (“Messina
Royalty”); and
	 
	 	b.	 	The 1.5% gross receipts royalty on the Dwaalkop lease area (“Dwaalkop
Royalty”).

Royal Gold understands from information provided by MinEx that the entire Dwaalkop Royalty is
subject to a right of first refusal in favor of Lonmin, as well as to the right to “buy down” the
royalty from 1.5% to 1.0% upon payment to MinEx of $US 125,000. Royal Gold further understands
that the royalties apply to 100% of Net Smelter Revenue derived from production in the Messina and
Dwaalkop areas.

This offer is extended based upon MinEx’s representation to Royal Gold, made by MinEx upon its
execution of this interim agreement, that MinEx and its affiliates are not parties to or otherwise
bound by any letter agreement, letter of intent, contract, agreement or other understanding,
whether written or oral, for the purchase and sale of the Royalties. If this representation is not
accurate, then this offer shall be deemed immediately revoked and shall have no further force or
effect.

 

 

Mr. Mike Scott

April 3, 2008

Page 2

II. THE PURCHASE PRICE

At Closing, as defined below, MinEx shall assign to Royal Gold, and Royal Gold shall purchase from
MinEx, the Messina Royalty for US$6,039,500 in cash, and the Dwaalkop Royalty for US$13,210,500 in
cash, in each case exclusive of South African value added tax, if applicable. This consideration
assumes Royal Gold’s effective ownership of the Royalties commences on January 1, 2008, and the
purchase price for the Messina Royalty of US$6,039,500 shall be reduced by the aggregate of any
royalty payments received by MinEx after February 1, 2008. If Lonmin exercises its right of first
refusal to acquire the entire Dwaalkop Royalty, then Royal Gold shall not acquire the Dwaalkop
Royalty and shall not owe MinEx any consideration in respect thereof.

III. CONDITIONS PRECEDENT

The obligation of Royal Gold to complete the transaction contemplated by this letter is subject to
the following conditions precedent:

	 	a.	 	The negotiation and execution of a mutually acceptable purchase and sale
agreement which shall supersede and replace this interim agreement, and which shall
contain representations, warranties, covenants, indemnifications and other terms and
conditions common to similar agreements, including mutually acceptable assignment and
conveyance documentation. Said agreement shall contain provisions permitting that
agreement to remain valid and enforceable until a mutually agreed deadline for closing
the transactions contemplated herein, subject to certain rights of each party to
terminate said agreement;
	 
	 	b.	 	MinEx shall have delivered certified copies of resolutions of its board of
directors, or other documentation evidencing corporate authority, approving and
authorizing the assignment of the Royalties;
	 
	 	c.	 	Royal Gold shall have received the approval of its Board of Directors for the
acquisition of the Royalties;
	 
	 	d.	 	The parties shall have received all third party and governmental consents or
approvals, without material conditions or restrictions and in form and substance
satisfactory to Royal Gold acting reasonably; and with respect to Royal Gold’s
purchase of the Dwaalkop Royalty, Lonmin shall not have exercised its right of first
refusal to acquire the Dwaalkop Royalty;
	 
	 	e.	 	There shall not have occurred a material adverse change with respect to the
royalty agreements, or the operations or prospects of Messina or Dwaalkop prior to
Closing;
	 
	 	f.	 	Royal Gold’s review of and satisfaction with, among other matters (i) the
ownership, terms and conditions, validity and good standing of the Royalties and the
lands, mineral and mining rights which are subject thereto, and (ii) the adequacy,
validity and enforceability of the agreements creating and
documenting the Royalties, and (iii) the payment history and supporting documentation
for the Messina Royalty;

 

 

Mr. Mike Scott

April 3, 2008

Page 3

	 	g.	 	Royal Gold’s satisfaction with a due diligence technical review of, among
other matters, the Messina Mine and future expansion plans for the Messina and
Dwaalkop lease areas, as well as production profiles associated with the Royalties and
smelting and refining terms; and
	 
	 	h.	 	MinEx’s express representation and warranty to Royal Gold that (i) MinEx and
its affiliates are not bound by any letter agreement, letter of intent, contract,
agreement or other understanding, whether written or oral, for the purchase and sale
of the Royalties, and (ii) neither Royal Gold’s extension of this offer, nor its
acceptance by MinEx, nor the completion of the transactions contemplated herein
conflicts with or constitutes a breach of any other letter agreement, letter of
intent, contract, agreement or other understanding, whether written or oral, to which
MinEx or its affiliates are bound.

IV. CLOSING

The Closing shall be held on a date, time and location mutually agreed upon by Royal Gold and
MinEx. Royal Gold and MinEx shall use their commercially reasonable efforts to hold the Closing on
or before May 30, 2008.

V. EXPENSES

Each of Royal Gold and MinEx shall bear its own costs and expenses associated with this
transaction, including the fees and expenses of counsel or other representatives.

VI. CONFIDENTIALITY

The terms and conditions of this interim agreement, and all subsequent negotiations related to the
transaction contemplated hereunder, shall remain strictly confidential and shall not be disclosed
by one party to any third party without the prior written consent of the other party. Should
either party be obligated to make any disclosure in terms of stock exchange rules, listing
requirements, or statutory obligations, the other party shall have the right to reasonable review
and consent to the content prior to release of any statements, such consent not to be unreasonably
withheld or delayed.

VII. SCHEDULE OF ACTIVITIES

Following approval of this offer by the appropriate authority within MinEx and receipt by Royal
Gold of an executed copy of this interim agreement, Royal Gold will immediately prepare a purchase
and sale agreement for the parties to review and commence its due diligence program. Royal Gold
and MinEx will use best reasonable efforts to conclude negotiation of the definitive purchase and
sale agreement on or before April 25, 2008. MinEx shall give notice to Lonmin of its intent to
transfer the Dwaalkop Royalty no later than April 25, 2008, unless MinEx and Royal Gold mutually
agree in writing to a later date.

Royal Gold will use best reasonable efforts to complete its due diligence program by
May 15th, 2008, subject to the availability of its personnel and its technical and legal
advisors, and to fulfill all suspensive conditions by May 30th, 2008. Royal Gold will
seek

 

 

Mr. Mike Scott

April 3, 2008

Page 4

Board of Director approval for the transaction promptly following satisfactory completion of its
due diligence program. In preparation of this work, we would appreciate it if MinEx would forward
to Royal Gold copies of all guiding agreements and documents that govern the Royalties that have
not already been provided.

VIII. NON-SOLICITATION

Commencing upon MinEx’s execution of this interim agreement and continuing until Closing or
termination of the definitive purchase and sale agreement in accordance with its terms, MinEx shall
not (a) solicit, initiate or encourage submission of proposals or offers from any third person or
entity relating to any purchase, sale or transfer of the Royalties with the exception of offering
the First Right of Refusal on Dwaalkop for a period of 30 days to Lonmin, or (b) enter into or
continue negotiations or discussions with any third person or entity with respect to the purchase,
sale or transfer of the Royalties with the exception of offering the First Right of Refusal on
Dwaalkop for a period of 30 days to Lonmin. MinEx agrees to promptly notify Royal Gold if any such
proposal or offer, or if any inquiry from or contact with any third person with respect thereto, is
made.

IX. GENERAL

This interim agreement and the definitive purchase and sale agreement to be negotiated shall be
governed by the laws of the Republic of South Africa.

Neither party may assign its rights or delegate its duties or obligations hereunder without the
prior written consent of the other party.

No modification or amendment to this interim agreement shall be valid unless made in writing and
approved by both parties.

X. ACCEPTANCE OF THE OFFER

MinEx may accept this offer at any time prior to its expiry by delivering a duly executed copy of
this interim agreement by facsimile or electronic mail, with an original to be couriered to:

Royal Gold, Inc.

1660 Wynkoop St.

Suite 1000

Denver, CO 80202

Attention: William Heissenbuttel

Facsimile: (303) 595-9385

e-mail: bheissenbuttel@royalgold.com

This offer shall expire at 5:00 p.m., Denver, Colorado time, on Thursday, April 3, 2008, unless
extended or withdrawn in writing by Royal Gold prior to its acceptance.

 

 

Mr. Mike Scott

April 3, 2008

Page 5

This interim agreement, including without limitation MinEx’ non-solicitation obligations set forth
in Section VIII, shall expire on June 30, 2008 unless (a) MinEx and Royal Gold have entered into
the definitive purchase and sale agreement contemplated in Section IIIa., in which case the terms
and conditions of such definitive agreement shall govern and control, (b) MinEx and Royal Gold
agree in writing to extend the duration of this interim agreement, or (c) any third party or
governmental consent or approval that has been requested is pending on such date, including any
consent or approval of, or notice from, Lonmin.

Finally, I would emphasize that the purchase price funds are not subject to any financing
contingencies as Royal Gold has sufficient cash on the balance sheet.

I look forward to working diligently with MinEx to promptly consummate a successful transaction for
both parties.

Sincerely,

Tony Jensen

President and Chief Executive Officer

AGREED AND ACCEPTED ON BEHALF OF MINEX PROJECTS (PTY) LIMITED, BY THE FOLLOWING AUTHORIZED
INDIVIDUAL

	 	 	 	 	 
	/s/ Mike Scott	 	 
	 	 	 
	By:

	 	Mike Scott	 	 
	Title:

	 	President	 	 
	Entity:

	 	MinEx Projects	 	 
	Date:
	 	03/04/2008

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