EXHIBIT 10.20
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into effective
this 1st day of September, 2001 ("Effective Date"), by and between INPUT/OUTPUT,
INC., a Delaware corporation ("Company") and Xxx Xxxxxx ("Consultant").
RECITALS
Consultant has previously served as an executive of the Company; and,
The parties, having terminated the employment relationship between
Consultant and Company pursuant to the terms of that certain Separation
Agreement and General Release which became effective on August 31, 2001 (the
"Separation Agreement"), now wish to engage Consultant to serve as a consultant
to Company commencing as of the Effective Date hereof upon and subject to the
terms and conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, for and in consideration of the mutual benefits to be
derived and the representations, conditions and promises that follow, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, Company and Consultant agree as
follows:
1. Definitions. The following terms shall have the meanings ascribed to
them below, the following definitions to be equally applicable to both the
singular and plural form of the terms:
1.1. "Affiliate" shall mean when used with reference to a
specified Person (defined below): (i) any Person that directly or
indirectly through one or more intermediaries controls or is controlled
by or is under common control with the specified Person; and (ii) any
Person that is an officer of, partner in, or serves in a similar
capacity to, the specified Person or of which the specified Person
serves in a similar capacity; and (iii) any Person owning or
controlling ten percent (10%) or more of the outstanding voting
securities of such other entity; and (iv) any member of the immediate
family of the specified Person or any legal representative or trustee
for the benefit of such member.
1.2. "Person" shall mean an individual, partnership,
corporation, trust or other entity.
1.3. "Term" shall mean the term of this Agreement, commencing
on September 1, 2001 and continuing for the lesser of one (1) year; or,
unless earlier terminated pursuant to Section 6 hereof.
2. Engagement. Notwithstanding any provision contained herein to the
contrary, this Agreement is subject to the execution, delivery and effectiveness
of the Separation Agreement and its terms and conditions. Company shall appoint
and engage the Consultant as consultant and advisor as of the Effective Date
hereof with respect to the matters specified in, subject to the terms and
conditions of, and for the compensation provided in, this Agreement. The
Consultant accepts this appointment and
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August 10, 2001
engagement effective as of such date as a consultant and advisor to Company,
subject to the terms and conditions of this Agreement.
3. Duties of Consultant. After September 1, 2001, the Company may call
upon Employee to consult with the Company. Consulting will be arranged at times
reasonably convenient to both parties and will be conducted by phone or email
when reasonably practical. The Consultant agrees that he will serve the Company
to the best of his ability, projecting a positive and professional image on
behalf of Company and its Affiliates.
4. Non-Disclosure. Consultant acknowledges, understands and agrees that
he will be furnished confidential information concerning the business of Company
and its subsidiaries, including information relating to its customers and to the
design, construction and operation of Company's products and services
("Confidential Information"). Consultant further acknowledges that all
Confidential Information, whether developed by Consultant, Company, their
Affiliates or other Persons while carrying out the terms and provisions of this
Agreement (or previously developed by Consultant, Company, their Affiliates or
other Persons, either during the term of Consultant's employment with Company or
its Affiliates, or prior thereto), shall be the exclusive and confidential
property of Company or its Affiliates, as the case may be, and shall be
regarded, treated and protected as such. Consultant shall not use, in any way,
or disclose any of the Confidential Information, directly or indirectly, or
permit any other person, firm or entity to avail himself or itself of the
benefit or use of the Confidential Information, or any aspect thereof, either
during the term of his employment with Company hereunder or otherwise, or at any
time thereafter, except as may be necessary to perform his obligations with
respect to his consulting services hereunder.
4.1. All files, records, documents, information, data and
similar items and documentation relating to the business of Company and
its subsidiaries and that of Company's and its subsidiaries' customers,
whether prepared by Consultant or otherwise coming into his possession,
shall remain the exclusive property of Company and its subsidiaries, as
the case may be, and Consultant agrees to return all such files,
records, documents, information, data and similar items and
documentation to Company immediately upon the termination of this
Agreement for any reason.
4.2. The parties hereto stipulate that as between them, the
Confidential Information is important, material and confidential, and
gravely affects the effective and successful conduct of the business of
Company and its subsidiaries and their goodwill, and that Company would
suffer irreparable injury if this information were divulged to any
Person in competition with Company or any of its subsidiaries.
Consultant agrees to disclose, fully and promptly, and only to Company,
all ideas, methods, plans, improvements or patentable inventions of any
kind, which are (i) made or discovered, in whole or in part, by
Consultant during the performance of Consultant's job duties, (ii) the
result of any aid, support or assistance by Company or its
subsidiaries, or (iii) created during his work time with Company or its
subsidiaries.
4.3. The obligations of Consultant set forth in this Section 4
are continuous and shall survive the termination, for any reason
whatsoever, of this Agreement.
4.4. When used or referred to in this Agreement, Confidential
Information shall not include information which is in the public domain
or information generally known in the oil and gas exploration and
production services industry or the seismic detection, data
acquisition, or information processing or interpretation equipment
industries.
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August 10, 2001
5. Covenant Not to Compete. Unless Consultant obtains the Company's
prior written consent, Consultant hereby agrees that Consultant will not, during
the Term, directly or indirectly, for himself or on behalf of or in conjunction
with any other Person: (i) engage, as an officer, director, shareholder, owner,
partner, joint venturer or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor or as a sales representative, in
any seismic detection, data acquisition, or information processing or
interpretation equipment business; (ii) call upon any Person which is, at that
time, or which has been, within one (1) year prior to that time, a customer of
Company (including the direct or indirect subsidiaries thereof) for the purpose
of soliciting or selling products or services in direct competition with the
Company or any subsidiary of the Company; or (iii) call upon any prospective
acquisition candidate, on Consultant's own behalf or behalf of any competitor,
which candidate was, to Consultant's actual knowledge after due inquiry, either
called upon by the Company (including the direct or indirect subsidiaries
thereof) or for which the Company made an acquisition analysis, for the purpose
of acquiring such entity. Notwithstanding the foregoing, this Section 5 shall
not be deemed to prohibit Consultant from acquiring as an investment not more
than two percent (2%) of the capital stock of a competing business, whose stock
is traded on a national securities exchange or over-the-counter.
5.1. Because of the difficulty of measuring economic loss to
the Company as a result of a breach of this Section 5, and because of
the immediate and irreparable damage that could be caused to the
Company for which it would have no other adequate remedy, Consultant
agrees that this Section 5 may be enforced by the Company in the event
of breach by him, by injunctions and restraining orders.
5.2 The covenants in this Section 5 are severable and
separate, and the unenforceability of any specific covenant shall not
affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and the Agreement
shall be reformed in accordance therewith.
5.3 All of the covenants in this Section 5 shall be construed
as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Consultant against
the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of such
covenants.
5.4 It is agreed by the parties that the foregoing covenants
in this Section 5 impose a reasonable restraint on Consultant in light
of the activities and business of the Company (including the Company's
direct and indirect subsidiaries) and the past and current duties of
Consultant. It is further agreed by the parties hereto that, in the
event that Consultant shall enter into a business or pursue other
activities not in violation of this Section 5, Consultant shall not be
chargeable with a violation of this Section 5 if the Person conducting
such business or activities shall thereafter enter into a business or
course of activities that is competitive with the Company, provided
that Consultant does not actively participate in any way in the
business or course of activities that competes with the Company. It is
further agreed by the parties hereto that, in the event Consultant
shall enter into a business or pursue other activities not in
competition with the Company (including the Company's direct and
indirect subsidiaries), and such new business or activities are not in
violation of this Section 5 or of Consultant's obligations under this
Section 5, Consultant
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August 10, 2001
shall not be chargeable with a violation of this Section 5 if the
Company (including the Company's direct and indirect subsidiaries)
shall thereafter enter the same, similar or a competitive business or
course of activities.
6. Covenant Not to Solicit. Consultant acknowledges that the Company's
employees are valuable to the Company's business and that information regarding
the Company's employees, including without limitation information as to their
background, training and compensation, is Confidential Information. Consultant
agrees that for a period of twenty-four (24) months from the Effective Date of
this Agreement (whether or not this Agreement is terminated sooner than the 12
month period), he will not directly or indirectly solicit or otherwise induce or
encourage any person in the employment of the Company or any consultant to the
Company to terminate such employment or consulting arrangement or to accept
employment or enter into any consulting agreement with anyone other than the
Company.
7. Early Termination. Notwithstanding any other provision of this
Agreement, at any time during the Term, Consultant's engagement hereunder shall
terminate upon his death or Disability, or by Company upon Consultant's material
breach or material violation of any of his agreements contained herein or in the
Separation Agreement. As used herein, "Disability" shall mean a physical or
mental impairment that renders Consultant unable to perform the essential
functions of his position with or without reasonable accommodation.
8. Injunctive Relief. Because of the unique nature of the Confidential
Information, Consultant acknowledges, understands and agrees that Company will
suffer immediate and irreparable harm if Consultant fails to comply with any of
his obligations under Sections 4, 5 and 6 of this Agreement, and that monetary
damages will be inadequate to compensate Company for such breach. Accordingly,
Consultant agrees that Company shall, in addition to any other remedies
available to them at law or in equity, be entitled to temporary, preliminary,
and permanent injunctive relief to enforce the terms of Sections 4, 5 and
6 without the necessity of proving inadequacy of legal remedies or irreparable
harm.
9. Compensation. Subject to the terms and conditions hereof, in
consideration of the consulting services to be rendered by Consultant to Company
hereunder, and in consideration of the covenants of Consultant set forth in
Sections 4, 5 and 6 herein,
9.1. Company and Consultant agree that compensation for
services during the term shall be at $8333.33 per month.
10. Independent Contractor. While serving as Consultant, the Consultant
shall at all times be an independent contractor rather than a co-venturer,
agent, employee or representative of Company or its Affiliates. It is understood
and agreed that Contractor shall pay all taxes, licenses, and fees levied or
assessed on Contractor in connection with or incident to the performance of this
Agreement by any governmental agency, including, without limitation,
unemployment compensation insurance, old age benefits, social security, or any
other taxes upon wages of Contractor, its agents, employees, and
representatives. Contractor agrees to require the same agreements of its
subcontractors and to be liable for any breach of any such agreements by any of
its subcontractors. Contractor agrees to reimburse Company on demand for all
such taxes or governmental charges, state or federal, which the Company may be
required or deem it necessary to pay on account of employees of the Contractor
or its subcontractors. Contractor agrees to furnish the Company with the
information required to enable it to make the necessary reports and pay such
taxes or charges. If statutorily required, the Company is authorized to deduct
all sums
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required to be paid for such taxes and governmental charges from any
amounts that may be or become due to Contractor.
11. Governing Law. This Agreement shall be governed by the internal
laws (without giving effect to principles of conflict of laws) of the State of
Texas and the internal laws (without giving effect to principles of conflict of
laws) of the United States of America.
12. Notice. Any notice provided or permitted to be given under this
Agreement must be in writing, but may be served by deposit in the mail,
addressed to the party to be notified, postage prepaid, and registered or
certified, with a return receipt requested. Notice given by registered mail
shall be deemed delivered and effective on the date of delivery shown on the
return receipt. Notice may be served in any other manner, including telex,
telecopy, telegram, etc., but shall be deemed delivered and effective as of the
time of actual delivery. For purposes of notice the addresses of the parties
shall be as follows:
12.1. If to Company:
Input/Output, Inc.
00000 Xxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
12.2. If to Consultant:
Xxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Each party may change its address for notice by giving written notice of such
address to the other party.
13. Entire Agreement. Except as specifically contemplated under Section
2 hereof, this Agreement, which incorporates all prior understandings relating
to its subject matter, contains the entire agreement of the parties with respect
to its subject matter and shall not be modified except by written instrument
executed by each party.
14. Waiver. The failure of a party to insist upon strict performance of
any provision of this Agreement shall not constitute a waiver of, or estoppel
against asserting, the right to require performance in the future. A waiver or
estoppel in any one instance shall not constitute a waiver or estoppel with
respect to a later breach.
15. Severability. If any of the terms and conditions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over this subject
matter, that contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as it if did not contain
the particular provision or provisions held to be invalid, the rights and
obligations of the parties shall be construed and enforced accordingly, and this
Agreement shall remain in full force and effect.
16. Construction. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe, interpret,
define, or limit the scope, extent, or intent of this
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Agreement or any other provisions hereof. Whenever the context requires, the
gender of all words used in this Agreement shall include the masculine,
feminine, and neuter, and the number of all words shall include the singular and
the plural. In the event of a conflict among this Agreement and any Exhibit,
this Agreement shall control.
17. Counterpart Execution. This Agreement may be executed in any number
of counterparts with the same effect as if all the parties had signed the same
document. All counterparts shall be construed together and shall constitute one
and the same instrument.
18. Successors and Assigns. Except as otherwise provided, this
Agreement shall apply to, and shall be binding upon, the parties hereto, their
respective successors and assigns, and all persons claiming by, through or under
any of these persons. This Agreement is personal to Consultant and cannot be
assigned or delegated by Consultant.
19. Cumulative Rights. The rights and remedies provided by this
Agreement are cumulative, and the use of any right or remedy by any party shall
not preclude or waive its right to use any or all other remedies. These rights
and remedies are given in addition to any other rights a party may have by law,
statute, in equity or otherwise.
20. No Third Party Beneficiary. Except as expressly provided pursuant
to Section 9 hereof concerning payments to Consultant's estate, heirs or
descendants, any agreement to pay an amount or any assumption of liability
herein contained, express or implied, shall be only for the benefit of the
undersigned parties and their permitted successors and assigns, and such
agreements and assumption shall not inure to the benefit of the obligees of any
other party whomsoever, it being the intention of the undersigned that, except
as otherwise expressly contemplated herein, no one shall be deemed to be a third
party beneficiary of this Agreement.
21. Drafting Party. This Agreement expresses the mutual intent of the
parties to this Agreement. Accordingly, regardless of the party preparing any
document, the rule of construction against the drafting party shall have no
application to this Agreement.
22. Reliance. All covenants, agreements, representations and warranties
made in this Agreement shall be conclusively considered to have been relied upon
by the parties in entering into this Agreement.
23. Dispute Resolution. Subject to Company `s right to seek legal or
equitable relief in court as provided in Section 8 of this Agreement, any
dispute, controversy or claim arising out of or in relation to or connection to
this Agreement, including without limitation any dispute as to the construction,
validity, interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration, and either party may submit such
dispute, controversy or claim, including a claim for indemnification under this
Section 23, to arbitration.
23.1. Arbitrators. The arbitration shall be heard and
determined by one arbitrator, who shall be impartial and who shall be
selected by mutual agreement of the parties; provided, however, that if
the dispute involves more than $ 25,000, then the arbitration shall be
heard and determined by three (3) arbitrators. If three (3) arbitrators
are necessary as provided above, then (i) each side shall appoint an
arbitrator of its choice within thirty (30) days of the submission of a
notice of arbitration and (ii) the party-appointed arbitrators shall in
turn appoint a presiding arbitrator of the tribunal within thirty (30)
days following the appointment of the last party-
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appointed arbitrator. If (x) the parties cannot agree on the sole
arbitrator, (y) one party refuses to appoint its party-appointed
arbitrator within said thirty (30) day period or (z) the
party-appointed arbitrators cannot reach agreement on a presiding
arbitrator of the tribunal, then the appointing authority for the
implementation of such procedure shall be the Senior United States
District Judge for the Southern District of Texas, who shall appoint an
independent arbitrator who does not have any financial interest in the
dispute, controversy or claim. If the Senior United States District
Judge for the Southern District of Texas refuses or fails to act as the
appointing authority within ninety (90) days after being requested to
do so, then the appointing authority shall be the Chief Executive
Officer of the American Arbitration Association, who shall appoint an
independent arbitrator who does not have any financial interest in the
dispute, controversy or claim. All decisions and awards by the
arbitration tribunal shall be made by majority vote.
23.2. Proceedings. Unless otherwise expressly agreed in
writing by the parties to the arbitration proceedings:
i. The arbitration proceedings shall be held in Houston,
Texas, or Stafford, Texas, at a site chosen by mutual
agreement of the parties, or if the parties cannot
reach agreement on a location within thirty (30) days
of the appointment of the last arbitrator, then at a
site chosen by the arbitrators;
ii. The arbitrators shall be and remain at all times
wholly independent and impartial;
iii. The arbitration proceedings shall be conducted in
accordance with the Commercial Arbitration Rules of
the American Arbitration Association, as amended from
time to time;
iv. Any procedural issues not determined under the
arbitral rules selected pursuant to item (iii) above
shall be determined by the law of the place of
arbitration, other than those laws which would refer
the matter to another jurisdiction;
v. The costs of the arbitration proceedings (including
attorneys' fees and costs) shall be borne in the
manner determined by the arbitrators;
vi. The decision of the arbitrators shall be reduced to
writing; final and binding without the right of
appeal; the sole and exclusive remedy regarding any
claims, counterclaims, issues or accounting presented
to the arbitrators; made and promptly paid in United
States dollars free of any deduction or offset; and
any costs or fees incident to enforcing the award
shall, to the maximum extent permitted by law, be
charged against the party resisting such enforcement;
vii. The award shall include interest from the date of any
breach or violation of this Agreement, as determined
by the arbitral award, and from the date of the award
until paid in full, at 6% per annum; and
viii. Judgment upon the award may be entered in any court
having jurisdiction over the person or the assets of
the party owing the judgment or application may be
made to such court for a judicial acceptance of the
award and an order of enforcement, as the case may
be.
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23. Acknowledgment Of Parties. Each party acknowledges that he or she or it has
voluntarily and knowingly entered into an agreement to arbitration under this
Section by executing this Agreement.
EXECUTED effective as of the date written above.
COMPANY:
INPUT/OUTPUT, INC.
By: /s/ XXX XXXXXXX
------------------------------------------
Name: Xxx Xxxxxxx
Title: President & Chief Executive Officer
CONSULTANT:
/s/ XXX XXXXXX
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Xxx Xxxxxx
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