Material Agreement, Management Change/Compensation (Form 8-K)

Agreement and Plan of Merger

On November 7, 2025, Gulf Island Fabrication, Inc. (the "Company") entered into an Agreement and Plan of Merger (the "Merger Agreement") with IES Holdings, Inc. ("IES"), a Delaware corporation, and IES Merger Sub, LLC, a Louisiana limited liability company and an indirect wholly owned subsidiary of IES ("Merger Sub"). The Merger Agreement provides that, among other things and on the terms and subject to the conditions of the Merger Agreement, (1) Merger Sub will merge with and into the Company, with the Company surviving the Merger as an indirect wholly owned subsidiary of IES (the "Merger"), and (2) at the effective time of the Merger (the "Effective Time"), each issued and outstanding share of the Company's common stock, no par value per share (the "Common Stock"), as of immediately prior to the Effective Time (other than certain excluded shares) will be converted into the right to receive $12.00 in cash, without interest, and subject to deduction for any required tax withholding (the "Merger Consideration").

The Board of Directors (the "Board") of the Company has approved the Merger, Merger Agreement and the transactions contemplated thereby and has resolved to recommend that the Company's shareholders approve the Merger Agreement.

Treatment of Equity Awards

The Company's directors and executive officers hold outstanding equity-based awards consisting of both time-based and performance-based restricted stock units that represent the right to receive an equivalent number of shares of Common Stock (the "Company RSU Award(s)"). Under the terms of the Merger Agreement, each outstanding award of time-based restricted stock units granted under the Company's equity incentive plans shall, at the Effective Time, be converted into the right to receive upon vesting a cash payment in an amount equal to the product of (i) the number of shares of Common Stock subject to such Company RSU Award immediately prior to the Effective Time multiplied by (ii) $12.00, the Merger Consideration (each, a "Substitute Award"). Additionally, under the terms of the Merger Agreement, each outstanding performance-based Company RSU Award with a performance period that is incomplete (or that is complete but for which performance is not determinable) as of the Effective Time shall be treated as if performance had been achieved at the target level (i.e., 100%), and shall be converted to a Substitute Award. Each Substitute Award shall remain subject to the original vesting terms and conditions as the underlying Company RSU Award, except as otherwise provided under the terms and conditions of the Merger Agreement or any employment agreement by and between the holder of a Substitute Award and the surviving corporation, and will pay out as follows:

Conditions to the Merger

The completion of the Merger is subject to the satisfaction or waiver of certain customary mutual closing conditions, including, among other things, the approval of the Merger Agreement by at least a majority of the votes entitled to be cast on the matter by holders of the outstanding shares of Common Stock (the "Company Shareholder Approval"), and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended, the "HSR Act"). The obligation of IES to consummate the Merger is also conditioned on no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred since the execution of the Merger Agreement. The consummation of the Merger is not subject to any financing condition.

Termination

The Merger Agreement contains termination rights for each of the Company and IES (1) if the consummation of the Merger does not occur on or before August 7, 2026 (the "End Date"), (2) if the Company Shareholder Approval is not obtained following a meeting of the Company's shareholders for purposes of obtaining such Company Shareholder Approval, (3) if the other party breached its representations or warranties or failed to comply with its covenants or perform its other obligations contained in the Merger Agreement and such party does not timely cure, and (4) if an injunction has been issued and becomes final or law has been passed permanently enjoining or preventing the consummation of the transactions contemplated by the Merger Agreement. The Merger Agreement contains a termination right for the Company in order for the Company to substantially concurrently enter into a Company Acquisition Agreement (as defined in the Merger Agreement) providing for a Company Superior Offer (as defined in the Merger Agreement) prior to the receipt of the Company Shareholder Approval, subject to certain conditions. The Merger Agreement contains termination rights for IES (1) if, subject to certain conditions, the Board adversely changes its recommendation to the Company's shareholders with respect to the Merger, and (2) for a willful breach of the Company's covenants, including the non-solicitation covenant. The Company and IES may also terminate the Merger Agreement by mutual written consent.

The Company is required to pay IES a termination fee of approximately $7.6 million(the "Termination Fee") in cash upon termination of the Merger Agreement under specified circumstances, including, among others, (1) termination by IES in the event that the Board adversely changes its recommendation to the Company's shareholders with respect to the Merger or (2) termination by the Company to enter into a Company Acquisition Agreement (as defined in the Merger Agreement) providing for a Company Superior Offer (as defined in the Merger Agreement).

IES Voting

Based on representations made to the Company in the Merger Agreement, IES owns approximately 565,886 shares (or 3.5%) of the Common Stock. Pursuant to the Merger Agreement, IES has agreed to, and will cause its affiliates to, at the Special Meeting, and at every adjournment or postponement of the shareholder meeting (subject to the limits on the number of postponements and adjournments set forth in the Merger Agreement), and in any action by written consent of shareholders of the Company, (1) appear (in person or by proxy) at each such meeting or otherwise cause all of the securities of the Company that IES and its affiliates are entitled to vote to be counted as present thereat for purposes of calculating a quorum, and (2) cause all of the shares of Common Stock with respect to which IES and its affiliates have voting rights to be voted, and duly execute and deliver any written consent of shareholders of the Company with respect to such shares of Common Stock, "FOR" (i) the proposal to approve the Merger Agreement and the Merger, (ii) any proposal to adjourn or postpone the Special Meeting to a later date if there are not sufficient votes for approval (subject to the limits on the number of postponements and adjournments set forth in the Merger Agreement), and (iii) each of the other actions contemplated by the Merger Agreement.

Other Terms of the Merger Agreement

The Merger Agreement contains customary representations and warranties of the Company, IES and Merger Sub, in each case generally subject to materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants of the Company, IES and Merger Sub, including covenants relating to the Company conducting its and its subsidiaries' business in the ordinary course, preserving its business organizations substantially intact, preserving existing relations with key business partners substantially intact and refraining from taking certain actions without IES's consent, subject to certain exceptions.

The Merger Agreement generally restricts the Company's ability to directly or indirectly solicit Company Acquisition Proposals (as defined in the Merger Agreement) from third parties (including by furnishing non-public information), to participate in discussions or negotiations with third parties regarding any Company Acquisition Proposal or to enter into agreements providing for any Company Acquisition Proposal. Under certain circumstances, however, and in compliance with certain obligations contained in the Merger Agreement, the Company is permitted to engage in negotiations with, and provide non-public information to, third parties that have made an unsolicited Company Acquisition Proposal on the Board's determination in good faith, after consultation with financial advisors and outside legal counsel, that such Company Acquisition Proposal constitutes, or could reasonably be expected to result in, a Company Superior Offer (as defined in the Merger Agreement) and the failure to participate in such negotiations or to furnish such information would reasonably be likely to be inconsistent or deemed inconsistent with the Board's fiduciary duties under applicable law.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.

The Merger Agreement and the above description have been included to provide investors and shareholders with information regarding its terms. They are not intended to provide any other factual information about the Company or the other parties thereto. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. Accordingly, the Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company, IES and Merger Sub and the transactions contemplated by the Merger Agreement that will be contained in or attached as annexes to the proxy statement that the Company will file in connection with the transactions contemplated by the Merger Agreement, as well as in other filings that the Company will make with the U.S. Securities and Exchange Commission (the "SEC").

Voting and Support Agreement

Concurrently with the execution of the Merger Agreement, certain of the Company's directors and executive officers and Piton Capital Partners LLC ("Piton Capital"), an affiliate of Robert Averick, a director of the Company (collectively, the "Supporting Shareholders"), entered into a voting and support agreement (the "Voting Agreement") with IES. Under the Voting Agreement, each of the Supporting Shareholders agreed, among other things, to vote the shares of Common Stock beneficially owned by the Supporting Shareholders in favor of the approval of the Merger Agreement and certain other matters, subject to the terms and conditions of such Voting Agreement. The Supporting Shareholders own approximately 20% of the Common Stock.

The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting and Support Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

In connection with the signing of the Merger Agreement, the Company entered into employment agreements with Mr. Heo (the "Heo Employment Agreement"), and Mr. Stockton (the "Stockton Employment Agreement" and, together with the Heo Employment Agreement, the "Employment Agreements"), to be effective as of, and contingent upon the occurrence of, the Closing Date (as defined in the Merger Agreement). Pursuant to the Employment Agreements, as of the Closing Date, Mr. Heo will serve as Senior Vice President and General Manager of the Company, with a term expiring on September 30, 2026, and Mr. Stockton will serve as Senior Vice President, Finance, of the Company, with a term expiring on June 30, 2026.

The Heo Employment Agreement provides for, among other things, an annual base salary of $535,000 (pro-rated for the term of employment) and a cash bonus of $401,250. The Stockton Employment Agreement provides for, among other things, an annual base salary of $375,000 (pro-rated for the term of employment) and a cash bonus of $150,000. The executive's receipt of the cash bonus is contingent on continued employment through the applicable term, provided, however, that if the executive dies or is terminated by the Company prior to expiration of the term, he will receive a prorated bonus. The Employment Agreements also contain certain restrictive covenants following the expiration of the agreement, including non-competition covenants (lasting one-year for Mr. Heo and through December 31, 2026 for Mr. Stockton).

Under the Employment Agreements, if the executive maintains employment through the applicable term of his employment agreement, or if he dies or is terminated by the Company for any reason prior to the end of the applicable term of employment, then: (i) he will receive the cash severance payments due under his current change of control agreement with the Company, and (ii) any outstanding Company RSU Awards held by such executive will vest and be paid out at the Merger Consideration price of $12.00 per share. If either Messrs. Heo or Stockton resign prior to the end of the applicable term of employment, he will forfeit his change of control severance payments and his unvested Company RSU Awards.

The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreements, copies of which are filed as Exhibits 10.2 and 10.3 hereto and incorporated herein by reference.