EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
by and between Input/Output, Inc., a Delaware corporation (hereinafter referred
to as "Employer"), and C. Xxxxxx Xxxxx, an individual currently resident in
Houston, Texas (hereinafter referred to as "Employee"), effective as of February
4, 2003 (the "Effective Date").
WITNESSETH:
WHEREAS, attendant to Employee's employment by Employer, Employer and
Employee wish for there to be a complete understanding and agreement between
Employer and Employee with respect to, among other terms, Employee's duties and
responsibilities to Employer; the compensation and benefits owed to Employee;
the fiduciary duties owed by Employee to Employer; Employee's obligation to
avoid conflicts of interest, disclose pertinent information to Employer, and
refrain from using or disclosing Employer's information;
WHEREAS, Employer considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing its best
interests and the best interests of its stockholders;
WHEREAS, the Board of Directors of Employer (the "Board") has
determined that appropriate steps should be taken to encourage the continued
attention and dedication of members of Employer's management; and
WHEREAS, Employer and Employee wish to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Employee agree as
follows:
Section 1. General Duties of Employer and Employee.
(a) Employer agrees to employ Employee and Employee agrees to accept employment
by Employer and to serve Employer in an executive capacity as its President and
Chief Operating Officer. At the commencement of this Agreement, Employee will
report to the Board of Directors of Employer. The powers, duties and
responsibilities of Employee as President and Chief Operating Officer include
those duties that are the usual and customary powers, duties and
responsibilities of such office, including those powers, duties and
responsibilities specified in Employer's Bylaws, and such other and further
duties appropriate to such position as may from time to time be assigned to
Employee by the Board.
(b) While employed hereunder, Employee will devote substantially all reasonable
and necessary time, efforts, skills and attention for the benefit of and with
Employee's primary attention to the affairs of Employer in order that he or she
may faithfully perform his or her duties and obligations. The preceding sentence
will not, however, be deemed to restrict Employee from attending to matters or
engaging in activities not directly related to the
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business of Employer, provided that (i) such activities or matters are
reasonable in scope and time commitment and not otherwise in violation of this
Agreement, and (ii) Employee will not become a director or officer of (or hold
any substantially similar responsibility with) any corporation or other entity
(excluding charitable or other non-profit organizations) without prior written
disclosure to, and consent of, Employer.
(c) At the commencement of Employee's employment by Employer, Employee will be
based at Employer's corporate headquarters located at 00000 Xxxx Xxxxx Xxxxx,
Xxxxxxxx, Xxxxx 00000 (the "Place of Employment").
(d) Employee agrees and acknowledges that as an officer and employee of
Employer, and consistent with the terms hereof, he or she owes a fiduciary duty
of loyalty, fidelity and allegiance to act at all times in the best interests of
Employer and to do no act knowingly which would injure Employer's business, its
interests or its reputation.
Section 2. Compensation and Benefits.
(a) Employer will pay to Employee during the term of this Agreement a base
salary at the rate of $250,000 per annum (such base salary as increased by the
Compensation Committee of the Board as hereinafter provided is referred to
herein as the "Base Salary"). The Compensation Committee of the Board will
review the Base Salary from time to time and, during the term of this Agreement,
may increase, but may not decrease, the Base Salary. The Base Salary will be
paid to Employee in equal installments every two weeks or on such other schedule
as Employer may establish from time to time for its management personnel.
(b) Employee will be eligible to participate in Employer's Incentive
Compensation Plan for the fiscal year 2003 with a target of 75% and a maximum of
120% of Employee's Base Salary for such fiscal year. Any incentive earned in
fiscal year 2003 will be prorated based on Employee's actual period of
employment during such fiscal year. During each subsequent fiscal year during
the term of this Agreement, Employee will be eligible, in the Board's sole
discretion, to participate in that year's Incentive Compensation Plan or other
replacement incentive or bonus plan Employer establishes for its key executives.
(c) Employee will be eligible for option grants to purchase shares of Employer's
common stock, $.01 par value ("Common Stock"), or other equity securities of
Employer as provided under Employer's 2000 Long-Term Incentive Plan (or other
stock option plan or plans Employer establishes for its key executives); such
grants to be made in the sole discretion of the Board or a duly authorized
committee of the Board.
(d) Employee will be eligible to participate in Employer's Deferred Compensation
Plan (or any replacement deferred compensation plan Employer establishes for its
key executives);
(e) Employee will be entitled to paid vacation of not less than three (3) weeks
each year. Vacation may be taken by Employee at the time and for such periods as
may be mutually agreed upon between Employer and Employee.
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(f) Employee will be reimbursed in accordance with Employer's normal expense
reimbursement policy for all of the actual and reasonable costs and expenses
incurred by him or her in the performance of his or her services and duties
hereunder, including, but not limited to, travel and entertainment expenses.
Employee will furnish Employer with all invoices and vouchers reflecting amounts
for which Employee seeks Employer's reimbursement.
(g) Employee will be entitled to participate in all insurance and retirement
plans, incentive compensation plans (at a level appropriate to his or her
position) and such other benefit plans or programs as may be in effect from time
to time for the key management employees of Employer including, without
limitation, those related to savings and thrift, retirement, welfare, medical,
dental, disability, salary continuance, accidental death, travel accident, life
insurance, incentive bonus, membership in business and professional
organizations, and reimbursement of business and entertainment expenses.
Specifically, Employee will be entitled to participate in the Input/Output, Inc.
Deferred Compensation Plan as long as it is made available to other key
management employees.
(h) Employer, during the term of this Agreement and thereafter without limit of
time, will indemnify Employee for claims and expenses to the extent provided in
Employer's Certificate of Incorporation and Bylaws. Employer will also provide
Employee coverage under Employer's policy or policies of directors' and
officers' liability insurance to the same extent as other executive officers of
Employer during the term of this Agreement.
(i) All Base Salary, bonus and other payments made by Employer to Employee
pursuant to this Agreement will be subject to such payroll and withholding
deductions as may be required by law and other deductions applied generally to
employees of Employer for insurance and other employee benefit plans in which
Employee participates.
Section 3. Fiduciary Duty; Confidentiality.
(a) In keeping with Employee's fiduciary duties to Employer, Employee agrees
that he or she will not knowingly take any action that would create a conflict
of interest with Employer, or upon discovery thereof, allow such a conflict to
continue. In the event that Employee discovers that such a conflict exists,
Employee agrees that he or she will disclose to the Board any facts which might
involve a conflict of interest that has not been approved by the Board.
(b) As part of Employee's fiduciary duties to Employer, Employee agrees to
protect and safeguard Employer's information, ideas, concepts, improvements,
discoveries, and inventions and any proprietary, confidential and other
information relating to Employer or its business (collectively, "Confidential
Information") and, except as may be required by Employer, Employee will not
knowingly, either during his or her employment by Employer or thereafter,
directly or indirectly, use for his or her own benefit or for the benefit of
another, or disclose to another, any Confidential Information, except (i) with
the prior written consent of Employer; (ii) in the course of the proper
performance of Employee's duties under this Agreement; (iii) for information
that becomes generally available to the public other than as a result of the
unauthorized disclosure by Employee; (iv) for information that becomes available
to Employee
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on a nonconfidential basis from a source other than Employer or its affiliated
companies who is not bound by a duty of confidentiality to Employer; or (v) as
may be required by any applicable law, rule, regulation or order.
(c) Upon termination of his or her employment with Employer, Employee will
immediately deliver to Employer all documents in Employee's possession or under
his or her control which embody any of Employer's Confidential Information.
(d) In addition to the foregoing provisions of this Section 3, and effective as
of the Effective Date, Employee reaffirms the duties imposed upon Employee by
that certain Employee Proprietary Information Agreement dated as of November 1,
1999 by and between Employer and Employee.
(e) Employee will comply with Employer's Code of Ethics issued on January 17,
1994, and any amendments or replacement policies adopted by the Board (the "Code
of Ethics").
Section 4. Term of Agreement; At-Will Employment.
The term of this Agreement will commence effective as of the Effective
Date, and, subject to the terms and conditions hereof, will continue for a
two-year period ending on February 4, 2005 and thereafter, the term will be
automatically extended for successive periods of one year unless prior to the
end of the original two-year period (or, if applicable, any such one-year
period), Employer gives Employee at least ninety (90) days prior written notice
that Employer has decided not to extend the term of this Agreement.
Notwithstanding any provision contained herein to the contrary, Employee
acknowledges that his or her employment with Employer is at will and that
Employer may terminate his or her employment at any time and for any reason or
for no reason at the discretion of Employer, but subject to any rights Employee
has under Sections 6 and 8 of this Agreement.
Section 5. Termination.
(a) Employee's employment with Employer hereunder will terminate upon the first
to occur of the following:
(1) The death or "Disability" (as defined in Section 5(b) hereof) of
Employee;
(2) Employer terminates such employment for "Cause" (as defined in
Section 5(c) hereof);
(3) Employee terminates such employment for "Good Reason" (as defined
in Section 5(d) hereof);
(4) Employer terminates such employment for any reason other than
Cause, or for no reason at all;
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(5) Employee terminates such employment for any reason other than Good
Reason, or for no reason at all; or
(6) Employee's sixty-fifth (65th) birthday, at which time Employee will
continue to be employed by Employer as an employee at will.
(b) As used in this Agreement, "Disability" means permanent and total disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision) which has existed for at least
180 consecutive days.
(c) As used in this Agreement, "Cause" means:
(1) the willful and continued failure by Employee to substantially
perform his or her obligations under this Agreement (other than any such failure
resulting from his Disability) after a demand for substantial performance has
been delivered to him or her by the Board which specifically identifies the
manner in which the Board believes Employee has not substantially performed such
provisions and Employee has failed to remedy the situation within ten (10) days
after such demand or a willful and material violation of the Employer's Code of
Ethics;
(2) Employee's willfully engaging in conduct materially and
demonstrably injurious to the property or business of Employer, including
without limitation, fraud, misappropriation of funds or other property of
Employer, other willful misconduct, gross negligence or conviction of a felony
or any crime of moral turpitude; or
(3) Employee's material breach of this Agreement which breach has not
been remedied by Employee within ten (10) days after receipt by Employee of
written notice from Employer that he or she is in material breach of the
Agreement, specifying the particulars of such breach.
For purposes of this Agreement, no act, or failure to act, on the part of
Employee shall be deemed "willful" or engaged in "willfully" if it was due
primarily to an error in judgment or negligence, but shall be deemed "willful"
or engaged in "willfully" only if done, or omitted to be done, by Employee not
in good faith and without reasonable belief that his action or omission was in
the best interest of Employer. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated as a result of "Cause" hereunder unless and
until there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the Board
then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with his
or her counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board of Directors, Employee has committed an act set forth above
in this Section 5(c) and specifying the particulars thereof in detail. Nothing
herein shall limit the right of Employee or his or her legal representatives to
contest the validity or propriety of any such determination.
(d) As used in this Agreement, "Good Reason" means:
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(1) Employer's failure to comply with any of the provisions of Section
2 of this Agreement (including, but not limited to, such a failure resulting
from any reduction in the Base Salary) which failure is not remedied within ten
(10) days after receipt of written notice from Employee specifying the
particulars of such breach;
(2) Employer's breach of any other material provision of this Agreement
which is not remedied within ten (10) days after receipt by Employer of written
notice from Employee specifying the particulars of such breach;
(3) the assignment to Employee of any duties materially inconsistent
with Employee's position, duties, functions, responsibilities or authority as
contemplated by Section 1 of this Agreement; or
(4) the relocation of Employee's principal place of performance of his
or her duties and responsibilities under this Agreement to a location more than
fifty miles (50) miles from the Place of Employment;
(5) Any failure by Employer to comply with Section 9(c); or
(6) Any purported termination of Employee's employment by Employer
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 5(e) hereof (and for purposes of this Agreement, no such
purported termination shall be effective).
(e) Any termination by Employer or Employee of Employee's employment with
Employer (other than any such termination occurring on Employee's sixty-fifth
(65th) birthday) shall be communicated by written notice (a "Notice of
Termination") to the other party that shall:
(1) indicate the specific provision of this Agreement relied upon for
such termination;
(2) indicate the specific provision of this Agreement pursuant to which
Employee is to receive compensation and other benefits as a result of such
termination; and
(3) otherwise comply with the provisions of this Section 5(e) and
Section 11(a).
If a Notice of Termination states that Employee's employment with Employer has
been terminated as a result of Employee's Disability, the notice shall (i)
specifically describe the basis for the determination of Employee's Disability,
and (ii) state the date of the determination of Employee's Disability, which
date shall be not more than ten (10) days before the date such notice is given.
If the notice is from Employer and states that Employee's employment with
Employer is terminated by Employer as a result of the occurrence of Cause, the
Notice of Termination shall specifically describe the action or inaction of
Employee that Employer believes constitutes Cause and shall be accompanied by a
copy of the resolution satisfying Section 5(c). If the Notice of Termination is
from Employee and states that Employee's
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employment with Employer is terminated by Employee as a result of the occurrence
of Good Reason, the Notice of Termination shall specifically describe the action
or inaction of Employer that Employee believes constitutes Good Reason. Any
purported termination by Employer of Employee's employment with Employer shall
be ineffective unless such termination shall have been communicated by Employer
to Employee by a Notice of Termination that meets the requirements of this
Section 5(e) and the provisions of Section 11(a).
(f) As used in this Agreement, "Date of Termination" means:
(1) if Employee's employment with Employer is terminated for
Disability, sixty (60) days after Notice of Termination is received by Employee
or any later date specified therein, provided that within such sixty (60) day
period Employee shall not have returned to full-time performance of Employee's
duties;
(2) if Employee's employment with Employer is terminated as a result of
Employee's death, the date of death of Employee;
(3) if Employee's employment with Employer is terminated for Cause, the
date Notice of Termination, accompanied by a copy of the resolution satisfying
Section 5(c), is received by Employee or any later date specified therein,
provided that Employer may, in its discretion, condition Employee's continued
employment upon such considerations or requirements as may be reasonable under
the circumstances and place a reasonable limitation upon the time within which
Employee will comply with such considerations or requirements;
(4) if Employee's employment with Employer is terminated upon the
occurrence of Employee's sixty-fifth (65th) birthday, the date of such birthday,
at which time Employee will continue to be employed by Employer as an employee
at will; or
(5) if Employee's employment with Employer is terminated for any reason
other than Employee's Disability, Employee's death, Cause or the occurrence of
Employee's sixty-fifth (65th) birthday, or for no reason, the date that is
fourteen (14) days after the date of receipt of the Notice of Termination.
Section 6. Effect of Termination of Employment.
(a) Upon termination of Employee's employment by Employer for Cause, or by
Employee for no reason or any reason other than Good Reason, all compensation
and benefits will cease upon the Date of Termination other than: (i) those
benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Employee that are earned and
vested by the Date of Termination, (ii) as provided in Section 8, (iii)
Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.
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(b) Upon termination of Employee's employment due to the death of Employee or
upon termination by Employer due to the Disability of Employee, all compensation
and benefits will cease upon the Date of Termination other than: (i) those
benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Employee that are earned and
vested by the Date of Termination, (ii) as provided in Section 8, (iii)
Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.
(c) Upon termination of this Agreement due to Employee's reaching his or her
sixty-fifth (65th) birthday, Employee will continue to be employed by Employer
as an employee at will.
(d) If Employee's employment with Employer is terminated (i) by Employer for no
reason or for any reason other than Cause, the death or Disability of Employee,
or Employee's reaching his or her sixty-fifth (65th) birthday, (ii) by Employee
for Good Reason, or (iii) by Employee for any reason or for no reason, if
Employer appoints any individual other than Employee as Chief Executive Officer
of Employer, and at any time during the ninety (90) day period commencing on the
ninetieth (90th) day following the effective date of such other individual's
appointment as Chief Executive Officer, Employee gives Employer a Notice of
Termination, then the obligations of Employer and Employee under Sections 1 and
2 will terminate as of the Date of Termination, and Employer will pay or provide
to Employee the following:
(1) Employee's Base Salary through the Date of Termination;
(2) incentive compensation due Employee, if any, under the terms of the
relevant incentive compensation arrangement, which, in the absence of any
agreement to the contrary, shall be the pro rata amount due to Employee based on
payments that would be due if Employee had remained employed by Employer for the
full fiscal year;
(3) Employer shall pay to Employee an aggregate amount (the "Severance
Payment") equal to one and one-half (1 1/2) times Employee's Base Salary at the
highest annual rate in effect on or before the Date of Termination (but prior to
giving effect to any reduction therein which precipitated such termination),
which Severance Payment will be paid to Employee as follows: (i) two-thirds (66
2/3%) of the Severance Payment amount will be paid (to the extent practicable)
in equal monthly installments during the one-year period ending on the first
anniversary date of the Date of Termination, and (ii) the remainder of the
Severance Payment amount will be paid by Employer in a lump sum to Employee on
the first anniversary of the Date of Termination; provided however, that if
during such one-year period ending on the first anniversary of the Date of
Termination, there occurs any default or series of defaults by Employer or any
of its subsidiaries of any material obligation or indebtedness of Employer or
any of its subsidiaries having a face value, individually or in the aggregate,
of $5,000,000 or more, and such default(s) remain uncured for forty-five (45)
days or more, then on such 45th day, as the case may be, Employer shall pay to
Employee in a lump sum the remainder of the Severance Payment amount then
remaining unpaid;
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(4) if immediately prior to the Date of Termination, Employee (and, if
applicable, his or her spouse and/or dependents) was covered under Employer's
group medical, dental, health and hospital plan in effect at such time, then
Employer shall provide to Employee for eighteen (18) months after the Date of
Termination, and provided that Employee has timely elected under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), to
continue coverage under such plan, Employer will, at no greater cost or expense
to Employee than was the case immediately prior to the Date of Termination,
maintain such continued coverage in full force and effect; and
(5) on the Date of Termination, the restrictions on shares of
restricted Common Stock of Employer acquired by Employee in May 2000 under
Employer's matching share program shall automatically cease and terminate, and
such shares shall thereupon be freely transferable by Employee without
restriction (subject to limitations under applicable federal and state
securities laws), regardless of whether the conditions as to full vesting
contained in Employee's restricted stock award agreement(s) shall have been
satisfied.
Except as otherwise provided above and in Section 8, all other compensation and
benefits will cease upon the Date of Termination other than the following: (i)
those benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Employee that are earned and
vested by the Date of Termination, (ii) any rights Employee or his survivors may
have under any grants of options to purchase Employer's Common Stock, restricted
stock grants, performance share grants, or other similar equity compensation
plans; and (iii) medical and similar benefits the continuation of which is
required by applicable law or as provided by the applicable benefit plan. As a
condition to making the payments and providing the benefits specified in this
Section 6(d), Employer will require that Employee execute a release of all
claims Employee may have against Employer at the time of Employee's termination.
Such release will be in substantially the same form as Exhibit A attached
hereto.
Section 7. No Obligation to Mitigate; No Rights of Offset.
(a) Employee shall not be required to mitigate the amount of any payment or
other benefit required to be paid to Employee pursuant to this Agreement,
whether by seeking other employment or otherwise, nor shall the amount of any
such payment or other benefit be reduced on account of any compensation earned
by Employee as a result of employment by another person.
(b) Subject to Section 10(e), Employer'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 Employer may have against Employee
or others.
Section 8. No Effect on Other Rights.
Nothing in this Agreement shall prevent or limit Employee's continuing
or future participation in any plan, program, policy or practice of or provided
by Employer or any of its
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affiliates and for which Employee may qualify, nor shall anything herein limit
or otherwise affect such rights as Employee may have under any stock option or
other agreements with Employer or any of its affiliates. Amounts which are
vested benefits or which Employee is otherwise entitled to receive under any
plan, program, policy or practice of or provided by, or any other contract or
agreement with, Employer or any of its affiliates at or subsequent to the Date
of Termination shall be payable or otherwise provided in accordance with such
plan, program, policy or practice or contract or agreement except as explicitly
modified by this Agreement.
Section 9. Successors; Binding Agreement.
(a) This Agreement is personal to Employee and without the prior written consent
of Employer shall not be assignable by Employee otherwise than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
(b) This Agreement shall inure to the benefit of and be binding upon Employer
and its successors and assigns.
(c) Employer will require any successor (whether direct or indirect, by
purchase, merger, amalgamation, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Employer would be required to perform it if no such succession had taken place.
As used in this Agreement, "Employer" shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by execution and delivery of the
agreement provided for in this Section 9(c) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law or otherwise.
Section 10. Non-Competition; Non-Solicitation; No Hire.
(a) Employee agrees that, effective as of the Effective Date and for a period
that includes the term of this Agreement and twelve (12) months thereafter (such
applicable period being referred to herein as the "Non-Compete Period"),
Employee shall not, without the prior written consent of Employer, directly or
indirectly, anywhere in the world, engage, invest, own any interest, or
participate in, consult with, render services to, or be employed by any
business, person, firm or entity that is in competition with the "Business" (as
defined in Section 10(d)) of Employer or any of its subsidiaries or affiliates,
except for the account of Employer and its subsidiaries and affiliates;
provided, however, that during the Non-Compete Period Employee may acquire,
solely as a passive investment, not more than five percent (5%) of the
outstanding shares or other units of any security of any entity subject to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended. Employee acknowledges that a remedy at law for any breach or attempted
breach of this covenant not to compete will be inadequate and further agrees
that any breach of this covenant not to compete will result in
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irreparable harm to Employer, and, accordingly, Employer shall, in addition to
any other remedy that may be available to it, be entitled to specific
performance and temporary and permanent injunctive and other equitable relief
(without proof of actual damage or inadequacy of legal remedy) in case of any
such breach or attempted breach. Employee acknowledges that this covenant not to
compete is being provided as an inducement to Employer to enter into this
Agreement and that this covenant not to compete contains reasonable limitations
as to time, geographical area and scope of activity to be restrained that do not
impose a greater restraint than is necessary to protect the goodwill or other
business interest of Employer. Whenever possible, each provision of this
covenant not to compete shall be interpreted in such a manner as to be effective
and valid under applicable law but if any provision of this covenant not to
compete shall be prohibited by or invalid under applicable law, such provision
of this covenant not to compete shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
covenant not to compete. If any provision of this covenant not to compete shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this covenant not to compete but shall be confined in its operation
to the provision of this covenant not to compete directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this covenant not to compete should ever be deemed to exceed
the time or geographic limitations permitted by applicable laws, then such
provision shall be reformed to the maximum time or geographic limitations
permitted by applicable law.
(b) In addition to the restrictions set forth in Section 10(a), Employee agrees
that, during the Non-Compete Period, Employee will not, either directly or
indirectly, (i) make known to any person, firm or entity that is in competition
with the Business of Employer or any of its subsidiaries or affiliates the names
and addresses of any of the suppliers or customers of Employer or any of its
subsidiaries or affiliates, potential customers of Employer or any of its
subsidiaries or affiliates upon whom Employer or any of its subsidiaries or
affiliates has called upon in the last twelve (12) months or contacts of
Employer or any of its subsidiaries or affiliates or any other information
pertaining to such persons, or (ii) call on, solicit, or take away, or attempt
to call on, solicit or take away any of the suppliers or customers of Employer
or any of its subsidiaries or affiliates, whether for Employee or for any other
person, firm or entity.
(c) Regardless of the reason for any termination of Employee's employment,
effective as of the Effective Date and for a period that includes the term of
this Agreement and twelve (12) months thereafter, Employee will not, either on
his or her own account or for any other person, firm, partnership, corporation,
or other entity (i) solicit any employee of Employer or any of its subsidiaries
or affiliates to leave such employment; or (ii) induce or attempt to induce any
such employee to breach her or his employment agreement with Employer or any of
its subsidiaries or affiliates.
(d) As used in this Agreement, "Business" means the business of design,
manufacture, marketing and sale of equipment for seismic acquisition, processing
and interpretation.
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(e) In the event that Employee violates any of the terms and conditions of this
Section 10 during the Non-Compete Period, then in addition to the other rights
and remedies available to Employer hereunder and under Section 12 hereof,
Employer's obligations to make any remaining payments of the Severance Payment
amount otherwise then due and owing pursuant to Section 6(d)(3) hereof shall
cease and terminate.
Section 11. Miscellaneous.
(a) All notices and other communications required or permitted hereunder or
necessary or convenient in connection herewith will be in writing and will be
delivered by hand or by registered or certified mail, return receipt requested
to the addresses set forth below in this Section 11(a):
If to Employer, to:
Input/Output, Inc.
00000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
If to Employee, to:
0000 X Xxxxx
Xxxxxxx, Xxxxx 00000
or to such other names or addresses as Employer or Employee, as the case may be,
designate by notice to the other party hereto in the manner specified in this
Section.
(b) This Agreement (including the Exhibit(s) attached hereto) supersedes,
replaces and merges all previous agreements and discussions relating to the same
or similar subject matters between Employee and Employer and constitutes the
entire agreement between Employee and Employer with respect to the subject
matter of this Agreement, except for (i) the Employer Proprietary Information
Agreement referred to in Section 3(d) hereof, (ii) the Severance and Change of
Control Agreement dated ____________ by and between Employer and Employee, (iii)
the Indemnity Agreement dated March 23, 2002, between Employer and Employee, and
(iv) except as expressly modified by the terms of this Agreement, the stock
option, restricted stock award and other agreements of the nature contemplated
under Section 8 hereof, each of which shall remain in full force and effect.
This Agreement may not be modified in any respect by any verbal statement,
representation or agreement made by any employee, officer, or representative of
Employer or by any written agreement unless signed by an officer of Employer who
is expressly authorized by the Board to execute such document.
(c) If any provision of this Agreement or application thereof to any one or
under any circumstances should be determined to be invalid or unenforceable,
such invalidity or unenforceability will not affect any other provisions or
applications of this Agreement which can be given effect without the invalid or
unenforceable provision or application. In addition, if any provision of this
Agreement is held by an arbitration panel or a court of competent jurisdiction
to be invalid, unenforceable, unreasonable, unduly restrictive or overly broad,
the parties intend that
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such arbitration panel or court modify said provision so as to render it valid,
enforceable, reasonable and not unduly restrictive or overly broad.
(d) The internal laws of the State of Texas will govern the interpretation,
validity, enforcement and effect of this Agreement without regard to the place
of execution or the place for performance thereof.
(e) The covenants, agreements, rights and obligations of Employer under this
Agreement, and the covenants, agreements, rights and obligations of Employee
under this Agreement, shall survive the termination of this Agreement for any
reason including, but not limited to, the termination of Employee's employment
with Employer. All covenants, agreements, indemnities, warranties, rights and
obligations contained herein shall continue for so long as necessary in order
for Employer and Employee to enforce their rights hereunder.
Section 12. Arbitration.
(a) Employer and Employee agree to submit to final and binding arbitration any
and all disputes or disagreements concerning the interpretation or application
of this Agreement. Any such dispute or disagreement will be resolved by
arbitration in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association (the "AAA Rules").
Arbitration will take place in Houston, Texas, unless the parties mutually agree
to a different location. Within 30 calendar days of the initiation of
arbitration hereunder, each party will designate an arbitrator. The appointed
arbitrators will then appoint a third arbitrator. Employee and Employer agree
that the decision of the arbitrators will be final and binding on both parties.
Any court having jurisdiction may enter a judgment upon the award rendered by
the arbitrators. In the event the arbitration is decided in whole or in part in
favor of Employee, Employer will reimburse Employee for his or her reasonable
costs and expenses of the arbitration (including reasonable attorneys' fees).
(b) Notwithstanding the provisions of Section 12(a), Employer may, if it so
chooses, bring an action in any court of competent jurisdiction for injunctive
relief to enforce Employee's obligations under Sections 3(b), 3(c), 3(d), 3(e)
and 10 hereof.
SIGNATURES TO FOLLOW ON NEXT PAGE
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as to be effective as of the Effective Date.
EMPLOYER:
INPUT/OUTPUT, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------
Vice President
EMPLOYEE:
C. XXXXXX XXXXX
/s/ C. Xxxxxx Xxxxx
----------------------------------
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