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EMPLOYMENT AGREEMENT (this "Agreement") dated January 31, 1996
between 3-D Geophysical, Inc. (the "Company"), a Delaware corporation, and
Xxxxx X. Xxxxxxxxxx (the "Employee").
WHEREAS, the Employee has been an executive officer of Northern
Geophysical of America, Inc. ("Northern") for a number of years;
WHEREAS, the Company has agreed to purchase substantially all of
the assets of Northern pursuant to that certain Asset Purchase Agreement dated
as of November 8, 1995 by and between the Company and Northern (the "Asset
Purchase Agreement");
WHEREAS, the Employee is a shareholder of Northern and the
Company has required in connection with the closing of the transactions
contemplated by such Asset Purchase Agreement that the parties hereto enter
into this Agreement;
WHEREAS, the Company desires to employ the Employee on the terms
and conditions provided in this Agreement; and
WHEREAS, the Employee desires to accept such employment and to
render services to the Company on the terms and conditions provided in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Company and the Employee hereby agree as follows:
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Section 1. Engagement. The Company hereby employs the Employee as
Executive Vice President and Chief Operating Officer of the Company, and the
Employee hereby accepts such employment, upon and subject to the terms and
conditions hereinafter set forth.
Section 2. Term. Unless sooner terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall
commence on the date of the closing of the Asset Purchase Agreement and shall
end two years thereafter, provided that such term shall automatically be
extended for successive one-year periods, unless at least three months prior to
the date on which such term would otherwise expire, either the Company or the
Employee shall give the other notice to the contrary (as so extended, the
"Term").
Section 3. Duties and Services.
3.1 The Employee shall render services to the Company as Executive Vice
President and Chief Operating Officer of the Company, shall perform such other
duties and responsibilities (including service otherwise consistent with the
Employee's duties hereunder as an officer, director or equivalent position of
any subsidiary, affiliated company or venture of the Company, without
additional compensation) as may be assigned to the Employee from time to time
by the Board of Directors (the "Directors") or Chief Executive Officer of the
Company and shall abide by the practices and policies of the Company governing
the conduct of employees. The Company and all such subsidiaries, affiliated
companies and ventures are herein collectively referred to as the "3-D
Companies."
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3.2 During the Term, the Employee shall devote his full energy and time
(exclusive of normal holidays and vacation periods and periods of sickness and
disability) to the performance of the Employee's duties as defined herein and
shall promptly and faithfully perform all the duties which pertain to the
Employee's employment. The previous sentence shall not prohibit the Employee
from activities permitted pursuant to clause (iii) of Section 8.1 or from
activities in connection with ownership of an interest in the real property
owned by Northern in Grand Junction, Colorado, provided that such activities do
not interfere with the performance of Employee's duties hereunder.
Section 4. Compensation.
4.1 Annual Compensation. In consideration of all of the services to be
rendered by the Employee hereunder and the covenants of Employee herein, the
Company agrees to pay to the Employee, and the Employee agrees to accept, a
salary at the annual rate of $140,000, payable in accordance with the Company's
normal payroll practices.
4.2 Bonus Pool. The Company intends to create a bonus plan based upon
the earnings of the Company to provide incentives for certain employees of the
Company and its subsidiaries. The Employee shall be entitled to participate in
such plan on such terms as may be determined by the Board of Directors of the
Company or a duly constituted committee thereof, in their discretion. Nothing
in this Agreement shall require the Company to pay any such bonus.
4.3 Stock Options. The Company has established a 1995 Long-Term
Incentive Compensation Plan pursuant to which the Company has granted to the
Employee options to
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purchase 45,000* shares of Common Stock of the Company as and to the extent set
forth in the Option Agreement governing such grant and subject to the terms and
conditions of such plan.
Section 5. Expenses and Reimbursement. The Employee shall be
reimbursed by the Company for reasonable and necessary out-of-pocket expenses
incurred by the Employee in performing his duties hereunder, provided such
expenses are approved in accordance with the procedures of the Company then in
effect and are presented for reimbursement in accordance with the Company's
policies and practices then in effect.
Section 6. Benefits. During the Term, the Company agrees to provide
the Employee, in addition to and not in limitation of the compensation set
forth in Section 4, the following benefits, which shall be determined in the
sole discretion of the Directors (or a duly constituted committee thereof):
(a) The Employee shall be entitled, subject to general qualification
requirements, to participate in any and all group insurance plans, group health
or medical insurance plans, group accidental and disability insurance plans
made generally available to the senior executive employees of the Company
provided that the Employee shall be entitled at the closing of the Asset
Purchase Agreement to medical, health insurance and disability coverage
substantially equivalent to that currently provided to the Employee by Northern
provided that (i) in the event that the group health or medical insurance plans
in which the Employee participates are changed to increase the deductible
amount to be paid by the Employee, the Employee shall be entitled,
----------------------------------
* Subject to adjustment in connection with changes to the
capitalization of the Company prior to the Company's initial public
offering.
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during the remainder of the Term, to reimbursement from the Company for any
health or medical expenses which but for such change would have been paid by
such plans and which as a result of such change are obligations of the
Employee; and (ii) in the event that this Agreement is terminated pursuant to
Section 7(b), the Company shall pay to the Employee during the lesser of (A)
six months following such termination and (B) the remainder of the Term an
amount equal to the Employee's salary pursuant to Section 4.1 less any payments
to Employee pursuant to any plan of disability insurance based on the
Employee's disability. Except to the extent set forth in the prior sentence,
any payment owed by the Company pursuant to such sentence is in addition to and
not in lieu of any policy of disability insurance, and payments owed by the
Company pursuant to such sentence shall not be deemed co-insurance but
additional salary.
(b) The Employee shall be entitled to participate in the Company's
pension, profit-sharing, stock option, stock purchase and other employee
benefit programs made generally available to the senior executive employees of
the Company.
(c) The Employee shall be entitled to vacation, sick leave and
holidays in accordance with the Company's policies for senior executive
employees generally but in no case less than four weeks paid vacation per
annum.
(d) During the term of employment under this Agreement, the Company
shall pay the Employee $575 per month as a non-accountable allowance for lease
payments, insurance and other expenses of an automobile leased by the Employee.
The Company shall provide all insurance for such vehicles required by law or
applicable lease terms.
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Section 7. Termination. Subject to the provisions of Section 8, which
shall survive the termination of this Agreement, this Agreement shall terminate
upon:
(a) The death of the Employee;
(b) Illness, disability or incapacity that prevents the Employee from
performing his duties hereunder for sixty (60) consecutive days, or for any
sixty (60) days within any one hundred and eighty (180) day period, and the
provision of written notice of such termination to the Employee by the Company;
(c) Upon written notice by the Company for Cause, which shall
include: (i) the failure of the Employee to observe or perform any material
term of this Agreement for twenty (20) days after written notice thereof
specifying such failure; (ii) any act of illegality, dishonesty, moral
turpitude or fraud in connection with the Employee's employment; (iii) any
course of action which is materially detrimental to the business of the Company
(other than good faith actions of the employee to fulfill his duties hereunder
in the exercise of his business judgment and not inconsistent with the
direction of the Chief Executive Officer or Directors of the Company); or (iv)
the commission by the Employee of any felony; or
(d) Upon written notice by the employee for Good Reason. As used
herein, "Good Reason" shall mean: (i) assignment to the Employee of duties
inconsistent with his position as described herein without his consent; or (ii)
the Employee's permanent relocation to a location (A) more than 100 miles from
Denver or Grand Junction, Colorado or (B) outside the Anchorage, Alaska
metropolitan area; in either case provided that the Company fails to rescind
such
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assignment or relocation within 20 days after written notice thereof from the
Employee specifying the condition which is the subject of such notice.
Section 8. Restrictive Covenants. In consideration of the undertakings
of the Company set forth herein, the Employee agrees as follows:
8.1 Covenant Not to Compete. The Employee will not in any way, as an
agent, employee, officer, director, stockholder, partner or otherwise of any
corporation, partnership or other venture or enterprise, compete with the 3-D
Companies in the provision of seismic data acquisition or analysis services or
any services related thereto (a "Competing Business") during the Term, and,
unless this Agreement is terminated by the Company without Cause or by the
Employee for Good Reason, for a period of one (1) year after the termination of
this Agreement for any reason whatsoever other than (i) pursuant hereto; (ii)
by ownership for investment purposes of no more than 1% of the stock of a
company which is traded on a national securities exchange or interdealer
quotation system; or (iii) the sale, use and licensing by the Employee,
directly or indirectly, in a manner which does not interfere with the
performance of Employee's duties hereunder, of seismic data retained by
Northern pursuant to the Asset Purchase Agreement and transferred to the
Employee or an entity in which the Employee has an interest (the "Seismic Data
Library").
8.2 Non-Solicitation Covenant. During the Term and for a period of one
(1) year after the termination of this Agreement for any reason whatsoever, the
Employee shall not solicit, sell to or contract with, on behalf of the Employee
or on behalf of any Competing Business, any person or entity to which the 3-D
Companies shall have provided seismic data acquisition or
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analysis services at any time during the Term or to which Northern provided
such services during the year preceding the commencement of the Term where such
solicitation, sale or contract relates to the provision of seismic data
acquisition or analysis services or any services related thereto. This Section
8.2 shall not prohibit the sale, use and licensing by the Employee, directly or
indirectly, in a manner which does not interfere with the performance of
Employee's duties hereunder, of the Seismic Data Library.
8.3 Covenant Not to Solicit Employees of the Company. During the Term
and for a period of one (1) year after the termination of this Agreement for
any reason whatsoever, the Employee shall not solicit for employment any sales,
engineering or other technical or management employee who was employed by the
3-D Companies during the six months prior to the conclusion of the Term.
8.4 Certain Payments. Upon the termination of this Agreement other
than by the Company for Cause or by the Employee without Good Reason, the
provisions of Sections 8.1, 8.2 and 8.3 shall lapse unless, during the year
following such termination, the Company pays to the Employee an amount equal to
80% of the Employee's salary pursuant to Section 4.1 in equal monthly
installments commencing on the first day of the month following such
termination. Such lapse shall occur if the Company (i) fails to pay the first
such installment within 20 days of notice from the Employee citing this Section
or (ii) fails to make any subsequent payment within seven days of notice from
the Employee citing this Section. In the event the Company makes the payment
described in clause (i) of the preceding sentence and the circumstances
described in clause (ii) occur, the remaining payments described in the
preceding sentence shall become
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immediately due and payable. The amounts owed pursuant to this Section 8.5
shall be reduced (or if already paid shall be repaid by the Employee) to the
extent that such amounts plus any amounts earned by the Employee as an employee
or independent contractor during such year exceed 120% of the Employee's annual
salary pursuant to Section 4.1.
8.5 Non-Disclosure Covenant. The Employee recognizes and acknowledges
that, prior to and in the course of his employment, the Employee may have had
and shall have access to trade secrets and other confidential or proprietary
information of the 3-D Companies, including, but not limited to, information
acquired or developed by the 3-D Companies and Northern concerning seismic
data, marketing strategy, technology, techniques and know-how, customer
specifications and customer lists, cost figures, budgets, sales forecasts and
business plans (other than the Seismic Data Library). The Employee agrees that
the disclosure of any such trade secrets or information could be harmful to the
interests of the 3-D Companies and that, during the Employee's employment by
the Company, the Employee will take appropriate caution to safeguard such trade
secrets and information, and will not during the Term or thereafter use,
disclose, divulge or publish any such trade secrets or information except as
required by law or as the Employee's duties during the Employee's employment by
the Company may require or as the Company may in writing specifically consent.
8.6 Proprietary Information. The Employee recognizes and acknowledges
that all documents, manuals, letters, notebooks, reports, records, computer
programs or data banks and other evidences of trade secrets and other
confidential or proprietary information of the 3-D Companies, including copies
thereof, whether prepared by the Employee or others, are the sole
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property of and belong exclusively to the 3-D Companies, and agrees that,
during the Employee's employment by the Company, the Employee will under no
circumstances remove any such material for use outside of his offices except in
connection with the business of the 3-D Companies during the course of the
Employee's employment. In the event of the termination of this Agreement for
any reason whatsoever, the Employee shall immediately return to the Company any
and all documents, manuals, letters, notebooks, records, computer programs or
data banks or other evidence of trade secrets and other confidential or
proprietary information of the 3-D Companies (and all copies thereof) which are
the property of the 3-D Companies.
8.7 Remedies. The Employee further agrees that in the event of a
breach or threatened breach of any of the covenants contained in this Section
8, the Company's remedy at law is likely to be inadequate and that accordingly
the Company will be entitled to obtain an injunction or other equitable relief
with regard thereto without proving damages or that damages would not
constitute an adequate remedy. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 8 is invalid
or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power to, and is
hereby directed to, reduce the scope, duration or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid
and unenforceable term or provision, and this Agreement shall be enforceable as
so modified after the expiration of the time within which the judgment may be
appealed.
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9. Miscellaneous Provisions.
9.1 Notices. All notices and demands of any kind which any party
hereto may be required or desire to serve upon another party under the terms of
this Agreement shall be in writing and shall be served upon such other party:
(a) by personal service upon such other party at such other party's address set
forth below in this Section 9.1; (b) by mailing a copy thereof by certified or
registered mail, postage prepaid, with return receipt requested, addressed to
such other party at the address of such other party set forth below in this
Section 9.1; or (c) by sending a copy thereof by Federal Express or equivalent
courier service, addressed to such other party at the address of such other
party set forth below in this Section 9.1.
In case of service by Federal Express or equivalent courier
service or by personal service, such service shall be deemed complete upon
receipt. In the case of service by mail, such service shall be deemed complete
upon reasonable proof of receipt. The address to which, and person to whose
attention, notices and demands shall be delivered or sent may be changed from
time to time by notice served, as hereinabove provided, by any party upon the
other party.
The current addresses of the parties are:
If, to Employee:
Xxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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copy to: Xxxx X. Xxxxx, Esq.
Moye, Giles, X'Xxxxx, Xxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
If, to the Company: 3-D Geophysical, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, Chief Executive
Officer
copy to: Xxxxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
9.2 Entire Agreement; Amendment. This Agreement contains the entire
agreement between the parties, merges all prior negotiations, agreements and
understandings, if any, and states in full all representations, warranties and
agreements which have induced this Agreement. Each party agrees that in
dealing with third parties no contrary representations will be made. This
Agreement may not be amended, modified or otherwise changed orally but only by
an agreement in writing signed by the party against whom enforcement of any
amendment, modification or change is sought.
9.3 Assignment; Binding Nature; No Beneficiaries. This Agreement may
not be assigned by any party hereto without the written consent of the other
party. This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, personal
representatives, legatees, successors and permitted assigns. This Agreement
shall not confer any rights or remedies upon any person other than the parties
hereto and their respective heirs, personal representatives, legatees,
successors, and permitted assigns.
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9.4 Nonwaiver. No waiver by any party of any term, provision or
covenant contained in this Agreement (or any breach thereof) shall be effective
unless it is in writing executed by the party against which such waiver is to
be enforced; no waiver shall be deemed or construed as a further or continuing
waiver of any such term, provision or covenant (or breach) on any other
occasion or as a waiver of any other term, provision or covenant (or of the
breach of any other term, provision or covenant) contained in this Agreement on
the same or any other occasion.
9.5 Remedies. The remedies provided for or permitted by this
Agreement shall be cumulative and the exercise by any party of any remedy
provided for herein or otherwise available shall not preclude the assertion or
exercise by such party of any other right or remedy provided for herein or
otherwise available.
9.6 Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
9.7 Construction. In this Agreement (i) words denoting the singular
include the plural and vice versa, (ii) "it" or "its" or words denoting any
gender include all genders, (iii) any reference herein to a Section refers to a
Section of this Agreement, unless otherwise stated, (iv) when calculating the
period of time within or following which any act is to be done or steps taken,
the date which is the reference day in calculating such period shall be
excluded and if the last day of such period is not a business day, then the
period shall end on the next day which is a business day, and (v) all dollar
amounts are expressed in United States funds.
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9.8 Governing Law; Arbitration. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware applicable to contracts made and to be entirely performed therein.
Any controversy arising out of or relating to this Agreement or the breach
hereof shall be settled by arbitration in Denver, Colorado before a single,
neutral arbitrator who shall be a former state or federal judge in accordance
with the Commercial Arbitration rules of the American Arbitration Association
then obtaining and judgment upon the award rendered may be entered in any court
having jurisdiction thereof, except that in the event of any controversy
relating to any violation or alleged violation of any provision of Section 8
hereof, the Company in its sole discretion shall be entitled to seek injunctive
relief from a court of competent jurisdiction without any requirement to seek
arbitration. The party (or aligned parties) substantially prevailing in such
arbitration or judicial proceeding shall receive in addition to other relief
afforded by the arbitrator or judge an award of costs, expert witness fees and
reasonable attorneys' fees.
9.9 Counterparts. For the convenience of the parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be
deemed an original and all such counterparts together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date and year first written above.
3-D GEOPHYSICAL, INC.
Attest: By /s/ XXXX XXXXXXXX
------------------------------
Name: Xxxx Xxxxxxxx
/s/ XXXX X. XXXXX, XX. Title: Chief Executive Officer
-------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Secretary
EMPLOYEE:
/s/ XXXXX X. XXXXXXXXXX
--------------------------------
Xxxxx X. Xxxxxxxxxx
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