Exhibit 99.3
CHANGE OF CONTROL AGREEMENT
This Change of Control
Agreement (the "Agreement") between Gulf Island
Fabrication, Inc., a Louisiana corporation (the "Company"), and
Robin A. Seibert
(the "Executive") is dated effective June 17, 2009 (the "Agreement
Date").
ARTICLE I
DEFINITIONS
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Whenever the following terms
are used in this Agreement, they shall have
the meaning specified below unless
the context clearly indicates to the
contrary. The singular pronoun shall
include the plural where the context so
indicates.
1.1 "Accrued
Salary" has the meaning provided in Section 2.3(a)(i).
1.2 "Affiliate" of
any Person means any other
Person directly or
indirectly controlling or controlled by or
under direct or indirect common
control with such Person. For purposes of this
definition, "control" means the
possession, directly or indirectly, of
the power to direct or cause the
direction of the management and policies of
such person or entity, whether
through the ownership of voting
securities or otherwise; and the
terms
"controlling" and "controlled" shall have correlative meanings.
1.3 "Base Salary"
has the meaning provided in Section 2.2(a).
1.4 "Beneficial
Owner" (and variants thereof) with
respect to a
security, means a Person who, directly or
indirectly (through any contract,
understanding, relationship, or otherwise) has or shares (a)
the power to vote,
or direct of the voting of, the security, and (b) the power to
dispose of, or to
direct the disposition of, the security.
1.5 "Board" means
the Board of Directors of the Company.
1.6 "Business
Combination" means the consummation of a reorganization,
merger or consolidation (including a merger or
consolidation of the Company or
any direct or indirect subsidiary of the Company), or sale or
other disposition
of all or substantially all of the assets of the Company.
1.7 "Cause."
(a) "Cause" means:
(i) the Executive's willful and
continued failure to
perform
substantially the Executive's duties with
the Company or its
Affiliates (other than
any such failure resulting from incapacity due to
physical or mental
illness), after a written demand for
substantial
performance
is delivered to the Executive
by the Board, which
specifically
identifies the manner in which the Board believes that
the
Executive has not
substantially performed the Executive's duties;
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(ii) the willful engaging in conduct that
is demonstrably
and materially
injurious to the Company or any of
its Affiliates,
monetarily or otherwise;
(iii) unauthorized acts or omissions by the
Executive that
could reasonably
be expected to cause material financial harm to
the
Company or materially disrupt
Company operations;
(iv) commission by the Executive of an act
of dishonesty
(even if not a crime)
resulting in the enrichment of the Executive at the
expense of the Company;
(v) the Executive's knowing
falsification or knowing
attempted falsification
of financial records of the Company in violation
of SEC Rule 13b2-1; or
(vi) the final conviction of the Executive or an entering
of
a guilty plea or a plea of no
contest by the Executive to a felony.
(b) For purposes of subparagraphs (a)(i) and
(a)(ii) above, no
act or failure to act, on the part of
the Executive, shall be considered
"willful" unless it is done, or omitted to be
done, by the Executive in bad
faith or without reasonable belief that the Executive's
action or omission was
in the best interest of the Company or its Affiliates.
(c) Any act, or failure to act, based on authority
given pursuant
to a resolution duly adopted by the Board, upon
the instructions of a senior
officer of the company, or based upon the advice of
counsel for the Company or
its Affiliates shall be conclusively
determined to be done, or omitted to be
done, by the Executive in good faith and in the best interest
of the Company or
its Affiliates.
(d) The termination of employment of
the Executive shall not be
deemed to be for Cause unless and until there shall have
been delivered to the
Executive 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 of
the Board called and held for such purpose (after reasonable
notice is provided
to the Executive and the Executive,
together with counsel, is given
an
opportunity to be heard before the Board),
finding that, in the good faith
opinion of the Board, the
Executive is guilty of conduct
described in
subparagraph (a) above, and specifying the particulars of such
conduct.
1.8 "Change of
Control" means
(a) The acquisition by any Person of Beneficial
Ownership of 30%
or more of the outstanding shares of the
Common Stock or 30% or more of the
combined voting power of the Company's then-outstanding
securities entitled to
vote generally in the election of directors; provide, however, that
for purposes
of this Section 1.8(a), the following acquisitions shall not
constitute a Change
of Control:
(i) any acquisition (other than
a Business Combination
which constitutes a
Change of Control under Section 1.8(c)) of
Common
Stock directly from the
Company,
(ii) any acquisition of Common Stock by the Company,
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(iii) any acquisition of Common Stock by any employee benefit
plan (or related
trust) sponsored or maintained by the Company or
its
Affiliates, or
(iv) any acquisition by Alden J. Laborde,
his Immediate
Family Members or
any entity controlled by Alden J.
Laborde or his
Immediate Family Members;
or
(b) individuals who, as of the Agreement
Date, constituted 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
such date whose election or
nomination for election by the
Company's
shareholders was approved by a vote of at least two-thirds of the
directors then
comprising the Incumbent Board, unless such
individual's 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
Incumbent Board; or
(c) a Business Combination, provided, however,
that in no such
case shall any such transaction constitute a Change of
Control if immediately
following such Business Combination:
(i) the individuals and entities who were
the Beneficial
Owners of the Company's
outstanding Common Stock and the Company's voting
securities
entitled to vote generally in the
election of directors
immediately prior to
such Business Combination have direct or indirect
Beneficial
Ownership, respectively, of more than
50% of the then
outstanding shares of
Common Stock, and more than 50% of the
combined
voting power of the then
outstanding voting securities entitled to vote
generally in
the election of directors
of the Post-Transaction
Corporation;
(ii) except to the extent that such ownership existed
prior
to the Business
Combination, no Person (excluding the
Post-Transaction
Corporation and any
employee benefit plan or related trust of either the
Company, the
Post-Transaction Corporation, or any Affiliates of
either)
beneficially owns,
directly or indirectly, 25% or more of
the then
outstanding shares of common
stock of the corporation resulting from such
Business Combination or
25% or more of the combined voting power of the
then outstanding voting
securities of such corporation; and
(iii) at least a majority of the members of
the board of
directors of
the Post-Transaction Corporation were
members of the
Incumbent Board at the time of
the execution of the initial agreement, or
of the action of the
Board of Directors, providing for such
Business
Combination; or
(d) approval by the shareholders of the
Company of a complete
liquidation or dissolution of the Company.
1.9 "Code" means
the Internal Revenue Code of 1986, as amended.
1.10 "Common
Stock" means the common stock, no par value per share, of
the Company.
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1.11 "Company" means the
Company as defined above and any successor to
or assignee of (whether direct or indirect, by purchase,
merger, consolidation,
or otherwise) all or substantially all of the assets of the
Company.
1.12 "Confidential
Information" means any information,
knowledge, or
data of any nature and in any form (including information that is
electronically
transmitted or stored on any form of magnetic
or electronic storage media)
relating to the past, current, or
prospective business or operations of the
Company and its Affiliates, that at the time or times concerned is
not generally
known to persons engaged in
businesses similar to those
conducted or
contemplated by the Company and its Affiliates (other than
information known by
such persons through a violation of an obligation
of confidentiality to the
Company), whether produced by the Company and its
Affiliates or any of their
consultants, agents, or independent contractors or by
Executive, and whether or
not marked confidential, including without
limitation information relating to
the Company's or its Affiliates' products and services, business
plans, business
acquisitions, processes, product or service
research and development ideas,
methods or techniques, training methods and
materials, and other operational
methods or techniques, quality assurance
procedures or standards, operating
procedures, files, plans, specifications, proposals,
drawings, charts, graphs,
support data, trade secrets, supplier lists, supplier
information, purchasing
methods or practices, distribution and selling activities,
consultants' reports,
marketing and engineering or other
technical studies, maintenance records,
employment or personnel data,
marketing data, strategies or
techniques,
financial reports, budgets, projections, cost
analyses, price lists, formulae
and analyses, employee lists, customer records, customer
lists, customer source
lists, proprietary computer software, and internal notes and
memoranda relating
to any of the foregoing.
1.13 "Continuation
Period" has the meaning
provided in Section
2.3(c)(iii).
1.14 "Disability"
means a condition that would entitle the Executive to
receive benefits under the Company's long-term
disability insurance policy in
effect at the time either because he is Totally Disabled or
Partially Disabled,
as such terms are defined in the Company's policy in effect
as of the Agreement
Date or as similar terms are defined in any successor policy. If
the Company has
no long-term disability plan in effect,
"Disability" shall occur if (a) the
Executive is rendered incapable
because of physical or mental illness
of
satisfactorily discharging his duties and responsibilities to
the Company for a
period of 90 consecutive days, (b) a duly
qualified physician chosen by the
Company and acceptable to the
Executive or his legal
representatives so
certifies in writing, and (c) the Board determines that the
Executive has become
disabled.
1.15 "Employment Term"
has the meaning provided in Section 2.1(a).
1.16 "Expiration Date"
has the meaning provided in Section 2.1(a).
1.17 "Good Reason" means
any action or inaction during the Employment
Term that constitutes a material negative change
in the service relationship
between the Executive and the Company and a
material breach by the Company of
its obligations under the terms of this Agreement,
provided that the Executive
shall have provided written notice to the Company within 90
days of the initial
existence of the condition described in
this Section 1.17 and such event or
condition continues uncured for a period of 30 days after written
notice thereof
is given by the Executive to the Company. A termination
by the Executive with
Good Reason shall constitute an involuntary termination for
purposes of Section
409A of the Internal Revenue Code of 1986, as amended.
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1.18 "Immediate Family
Members" means the spouse and the
natural or
adopted children or grandchildren of a specified individual.
1.19 "Incumbent Board"
means individuals who, as of a specified
date,
constituted the Board of Directors of the Company.
1.20 "Person"
means a natural person, company, limited
partnership,
general partnership, limited liability company or
partnership, joint venture,
association, trust, bank, trust company, land
trust, business trust or other
organization, whether or not a legal
entity, and a government or agency or
political subdivision thereof.
1.21 "Post-Transaction
Corporation."
(a) Unless a Change of Control includes a
Business Combination,
Post-Transaction Corporation means the Company after the Change of
Control.
(b) If a Change of Control
includes a Business Combination,
Post-Transaction Corporation means the corporation
resulting from the Business
Combination unless, as a result of such Business Combination, an
ultimate parent
corporation controls the Company or all or
substantially all of the Company's
assets either directly or
indirectly, in which case,
Post-Transaction
Corporation shall mean such ultimate parent corporation.
1.22 "Pro Rata Bonus"
has the meaning provided in Section 2.3(a)(ii).
1.23 "Section
409A" means Section 409A of the Code, as amended, and the
regulations and guidance issued thereunder.
1.24 "Termination Date"
means, if Executive's status as an officer and
employee is terminated (a) by reason
of Executive's death, the date of
Executive's death; (b) by reason of Disability, the date on which
termination of
Executive's status as an officer
and employee becomes effective due
to
Disability; (c) by the Company other than by reason of death
or Disability, the
date of delivery of the notice of termination or any later date
specified in the
notice of termination, which date will not be more than 30 days
after the giving
of the notice; or (d) by the Executive other than by reason
of death, the date
of delivery of the notice of termination or any
later date specified in the
notice of termination, which date will not be more than 30 days
after the giving
of the notice.
ARTICLE
II
CHANGE OF CONTROL BENEFIT
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2.1 Employment
Term and Capacity after Change of Control.
(a) This Agreement shall commence on
the Agreement Date and
continue in effect through December 31, 2010 (the
"Expiration Date"). If the
Executive continues to serve as an officer
of the Company and a Change of
Control occurs on or before the Expiration Date, then the
Executive's employment
term (the "Employment Term") shall continue
for a period of eighteen months
following the Change of Control,
subject to any earlier termination
of
Executive's status as an officer and employee pursuant to this
Agreement.
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(b) After a Change of Control and during the Employment
Term, (i)
the Executive's position (including status,
offices, titles, and reporting
requirements), authority, duties, and
responsibilities shall be at least
commensurate in all material respects with the most
significant of those held,
exercised, and assigned at any time during
the 120-day period immediately
preceding the Change of Control; and (ii) the
Executive's services shall be
performed at the location where the Executive was employed
immediately preceding
the Change of Control or any office or
location less than 50 miles from such
location. Executive's position, authority, duties, and
responsibilities after a
Change of Control shall not be considered commensurate in all
material respects
with Executive's position, authority, duties, and
responsibilities prior to a
Change of Control unless after the Change of
Control the Executive holds an
equivalent position in the Post-Transaction Corporation.
2.2 Compensation
and Benefits. During the
Employment Term, the
Executive shall be entitled to the following compensation and
benefits:
(a) Salary. An annual salary ("Base Salary") at
the highest rate
in effect for the Executive at any time during the
120-day period immediately
preceding the Change of Control, payable to the Executive at
such intervals no
less frequent than the most frequent intervals in effect at
any time during the
120-day period immediately preceding the Change of Control or, if
more favorable
to the Executive, the intervals in
effect at any time after the Change of
Control for other most senior executives of the Post-Transaction
Corporation and
its Affiliates.
(b) Bonus. Executive shall be
entitled to participate in an
annual incentive bonus program applicable to other most senior
executives of the
Post-Transaction Corporation and its
Affiliates but in no event shall such
program provide the Executive with incentive
opportunities less favorable than
the most favorable of those provided by the Company and
its Affiliates for the
Executive under the Company's annual cash plan as in effect for
Executive at any
time during the 120-day period immediately preceding
the Change of Control or,
if more favorable to the Executive, those provided
generally at any time after
the Change of Control to other most senior executives
of the Post-Transaction
Corporation and its Affiliates. Any such bonus
shall be paid in cash no later
than two and a half months following the close of the
fiscal year for which it
is earned.
(c) Fringe Benefits. The Executive shall be
entitled to fringe
benefits (including, but not limited to, automobile
allowance, air travel, and
reimbursement for club membership dues) in
accordance with the most favorable
agreements, plans, practices, programs,
and policies of the Company and its
Affiliates in effect for the Executive at any
time during the 120-day period
immediately preceding the Change of
Control or, if more favorable to the
Executive, as in effect generally at any time
thereafter with respect to other
most senior executives of the Post-Transaction Corporation and its
Affiliates.
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(d) Expenses. The Executive shall be entitled to
receive prompt
reimbursement for all reasonable business expenses (including
food and lodging)
incurred by the Executive in accordance with the
most favorable agreements,
policies, practices, and procedures of the Company and its
Affiliates in effect
for the Executive at any time during the 120-day period
immediately preceding
the Change of Control or, if more favorable
to the Executive, as in effect
generally at any time thereafter with respect to other most senior
executives of
the Post-Transaction Corporation and its Affiliates.
(e) Incentive, Savings and Retirement Plans. The
Executive shall
be entitled to participate in all
incentive, savings and retirement plans,
practices, policies, and programs
applicable generally to other most senior
executives of the Post-Transaction Corporation and its
Affiliates, but in no
event shall such plans, practices, policies, and programs
provide the Executive
with incentive opportunities (measured with respect to both
regular and special
incentive opportunities, to the extent, if
any, that such distinction is
applicable), savings opportunities and retirement benefit
opportunities, in each
case, less favorable than the most favorable of
those provided by the Company
and its Affiliates for the Executive under any
agreements, plans, practices,
policies, and programs as in effect at any
time during the 120-day period
immediately preceding the Change of Control.
(f) Welfare Benefit Plans. The
Executive and the Executive's
family shall be eligible for participation in and
shall receive all benefits
under welfare benefit plans, practices, policies, and
programs provided by the
Post-Transaction Corporation and its Affiliates (including,
without limitation,
medical, prescription, dental, disability, employee life, group
life, accidental
death, and travel accident insurance
plans and programs) to the extent
applicable generally to other most senior
executi
