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Exhibit 10.6
RESTATED AND AMENDED
EMPLOYMENT AGREEMENT
THIS RESTATED AND AMENDED EMPLOYMENT AGREEMENT (the "Agreement") dated
as of October 1, 1997 (the "Effective Date"), by and between GRANT GEOPHYSICAL,
INC., a Delaware corporation ("Company"), and XXXXX X. XXXXX, XX., a resident of
Houston, Texas ("Xxxxx").
WITNESSETH:
WHEREAS, Xxxxx and Xxxxx Geophysical, Inc. as debtor-in-possession (the
"Employer") entered into that certain Employment Agreement as of January 28,
1997 (the "Prior Agreement"); and
WHEREAS, the Company will, pursuant to a plan of reorganization (the
"Plan") for the Employer, purchase substantially all of the assets of and assume
certain liabilities of the Employer; and
WHEREAS, upon the consummation of its purchase of the Employer's
assets, the Company desires to retain the services of Xxxxx as an employee for a
period of time, and the parties desire to formalize such employment relationship
and the obligations of the parties upon the termination of such employment; and
WHEREAS, the parties wish to evidence the retention of Xxxxx by the
Company pursuant to a Restated and Amended Employment Agreement in the form
hereof.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxx, and Xxxxx hereby accepts
employment by the Company, upon the terms and conditions set forth in the
Agreement.
2. TERM. (a) Subject to the termination provisions of Section 6 and the
extension provisions of Section 2(b), the term of Xxxxx'x employment under this
Agreement will be the period commencing on the Effective Date and ending on
December 31, 2000.
(b) EXTENSION TERMS. For each year in which the Company's financial
results entitle Xxxxx to a bonus pursuant to Section 4(b) of this Agreement, the
term of this Agreement shall be extended for one additional year unless Xxxxx
notifies the Company that the term shall not be extended.
3. DUTIES OF XXXXX. During the term hereof, Xxxxx shall perform the duties of
the president and chief executive officer of the Company, and such other
executive duties with the Company as may be assigned to him by the board of
directors or the Chairman of the Board of the Company and as
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are not inconsistent with the provisions hereof, and if elected, shall, without
additional compensation except as set forth herein, serve as a director of the
Company (or on any of its committees) or as an officer or director of any of its
subsidiaries. Xxxxx agrees, during the term hereof, to devote his best efforts
and skills to the business and interests of the Company, and will use his good
faith efforts to further enhance and develop the best interests and welfare of
the Company.
4. COMPENSATION AND BENEFITS. For and in consideration of the performance by
Xxxxx of the services, terms, conditions, covenants and promises herein recited,
the Company agrees and promises to pay to Xxxxx at the times and in the manner
herein stated, the following:
(a) SALARY. As part of the consideration for the services to be
performed by Xxxxx hereunder during the employment period, Xxxxx shall receive,
as gross salary before any withholding of whatever sort, the amount of $180,000
per year, such amount to be payable in the manner and on the timetable in which
the Company's payroll is customarily handled. The compensation payable pursuant
to this subparagraph is referred to herein as "base salary".
(b) BONUS. Each year (beginning with January 1, 1998) during the term
hereof, Xxxxx shall be entitled to receive a cash bonus (the "Bonus") if the
Company's income before provision for income tax (based on audited financial
statements of the Company) meets or exceeds the "target level" for such year.
The target level for such year shall be set by the Board of Directors not later
than December 15 of the immediately preceding year, taking into account the
Company's markets, demand for the services offered by the Company and such other
factors as may be reasonable in the circumstances. The target level shall be
promptly communicated in writing to Xxxxx. The Bonus shall be calculated as a
percentage of Xxxxx'x base salary as follows:
% of Target Bonus as a %
Level Achieved of Base Salary
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90% 40%
100% 50%
125% 100%
The Bonus in respect of any year, if earned, shall be paid immediately
following completion of the Company's audit for such year and shall, if earned,
be payable notwithstanding the termination of Xxxxx'x employment.
(c) For purposes of this Agreement, "cause" means that Xxxxx shall have
(1) committed an intentional act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the Company, (2)
intentionally or wrongfully damaged property of the company, (3) intentionally
or wrongfully disclosed secret processes or confidential information of the
Company, (4) intentionally violated the provisions of Section 8(b), or (5)
willfully failed or refused to follow the lawful and proper directives of the
board of directors of the Company, consistent with Xxxxx'x position and within
his power to do so, after receipt by Xxxxx of a resolution duly adopted by the
board and specifying in reasonable detail the alleged failure or refusal and
after a reasonable opportunity for Xxxxx to cure the alleged failure or refusal.
For purposes of this
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Agreement, an act or omission on the part of Xxxxx shall not be deemed
"intentional," if it was due to an error in judgment or negligence, but shall be
deemed "intentional" if done by Xxxxx not in good faith and without reasonable
belief that the act or omission was in the best interests of the Company.
(d) BENEFITS. In addition to the above compensation, the Company shall
provide Xxxxx with the following benefits:
(i) participation, for Xxxxx and his dependents, in any
present or future disability, health, dental or other insurance or
welfare benefit plan generally available to all employees of the
Company;
(ii) participation in any pension plan, deferred compensation
plan or any other employee benefit plan which the board of directors
elects to make available generally to employees of the Company during
the employment period;
(iii) reasonable periods of vacation with pay, aggregating
four weeks during each fiscal year of the Company; provided, however,
that such vacation shall not accrue or accumulate from year to year;
(iv) the Company shall pay for or reimburse Xxxxx for all
reasonable out-of-pocket expenses incurred by him in furtherance of the
business activities of the Company which, but for the benefit of the
Company, would not have been incurred by Xxxxx; and
(v) the Company shall pay to Xxxxx an automobile allowance of
$600 per month, before withholding of any sort, if applicable, which
amount shall be paid to Xxxxx no less frequently than monthly.
The parties acknowledge that Xxxxx shall have no right to receive any
compensation except at the time, in the amounts and in the manner herein
provided.
5. OBLIGATIONS OF THE COMPANY UPON DEATH OF XXXXX. In the event of Xxxxx'x death
during the term of this Agreement, the Company shall:
(a) make payment of any and all base salary and Bonus earned by Xxxxx
through the date of his death and not theretofore paid;
(b) make payment pursuant to Section 4(d)(iv) hereof of any and all
expenses incurred by Xxxxx through the date of his death and not theretofore
reimbursed;
(c) notwithstanding any provision thereof, honor the exercise by the
proper person or persons of any stock options vested at the date of Xxxxx'x
death or stock purchase agreements which Xxxxx was a party to by his heirs,
successors-in-interest or legal representatives for a period equal to the lesser
of (i) the then remaining term, without regard to any provision triggered by
Xxxxx'x death, of the stock options or stock purchase agreements or (ii) three
years.
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The payments to be made under this Section 5 shall be made to Xxxxx'x heirs or
assigns under his will duly probated, or, in the event Xxxxx dies intestate, to
the administrator duly appointed by any court having jurisdiction of Xxxxx'x
estate, or under the laws of descent and distribution.
6. TERMINATION OF EMPLOYMENT.
(a) At any time without cause the Company may terminate, upon 30 days
prior written notice, the employment of Xxxxx at a date earlier than the
expiration of the term hereof.
(b) At any time the Company may terminate the employment of Xxxxx for
cause, as defined in Section 4(c) hereof, upon notice from the Company to Xxxxx
in accordance with the provision of such section.
(c) At any time Xxxxx may terminate his employment, upon 60 days prior
written notice, for good reason.
(d) The employment of Xxxxx shall also terminate upon:
(i) the death of Xxxxx;
(ii) the voluntary resignation of Xxxxx other than for good reason
(as defined below), in which event Xxxxx shall only be entitled
to any and all base salary and Bonus earned by Xxxxx through the
date of his resignation, plus all amounts payable pursuant
to paragraph 4(d)(iv), and no other compensation shall be payable
to Xxxxx after the date of such voluntary resignation pursuant to
the terms of this Agreement except in accordance with paragraph 7
hereof.
(e) For the purposes hereof, the phrase "for good reason" means any of
the following: (a) the Company's material breach of this Agreement; (b) the
assignment of Xxxxx without his consent to a position, responsibilities, or
duties of a materially lesser status or degree of responsibility that his
position, responsibilities, or duties at the Effective Date; or (c) the
requirement by the Company that Xxxxx be based anywhere other than the Company's
principal executive offices, in either case without Xxxxx'x consent.
7. EFFECT OF TERMINATION BY THE COMPANY. In the event that the Company
terminates the employment of Xxxxx pursuant to paragraph 6(a), or Xxxxx resigns
pursuant to paragraph 6(c), prior to the expiration of the term hereof, the
Company shall:
(a) make payment of any and all base salary and Bonus earned by Xxxxx
through the date of such termination and not theretofore paid;
(b) continue to make base salary compensation payments for the
remainder of the term hereof (including any extension pursuant to Section 2(b)
hereof) at 100% of the most recent base salary rate in effect, payable in equal
monthly installments and continue to allow Xxxxx to participate in any health,
life and welfare benefit plans offered to employees of the Company on the same
basis as if Xxxxx were still a full-time employee of the Company;
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(c) notwithstanding any provision thereof, honor the exercise by Xxxxx,
his heirs, successors-in-interest or legal representatives of any stock options
or stock purchase agreements vested as of the date of the termination for a
period equal to the lesser of (i) the then remaining term of the stock options
or stock purchase agreements (without regard to any provision triggered by
Xxxxx'x termination) or (ii) three years.
(d) make payment pursuant to paragraph 4(d)(iv) hereof of any and all
expenses incurred by Xxxxx through the date of termination and not theretofore
reimbursed;
(e) make all payments pursuant to paragraph 8 hereof on the dates which
such amounts are payable under such paragraph.
8. COVENANT NOT TO COMPETE.
(a) This covenant between Xxxxx and the Company is being executed and
delivered by the parties in consideration of the covenants of the Company
contained in this Agreement and for other good and valuable consideration,
receipt of which is hereby acknowledged.
(b) Provided that the Company is in compliance with all of its
obligations to Xxxxx under paragraph 7 hereof, Xxxxx agrees that during the
period set forth in paragraph 7(b) above plus a period of 24 months or if
Xxxxx'x employment is terminated pursuant to paragraph 6(c) or 6(d)(ii), then
for a period of 24 months following termination, neither Xxxxx nor any of his
Affiliates (defined below) shall, directly or indirectly, for himself or on
behalf of any other person, corporation, firm, partnership, association or any
other entity (whether as an individual, agent, servant, employee, employer,
officer, director, shareholder, investor, principal, consultant or in any other
capacity) (i) engage or participate in any "competing business" (defined below)
anywhere in the "restricted territories" (defined below); (ii) induce any
customers of the Company or any of its subsidiaries to patronize any competing
business; (iii) canvass, solicit or accept any similar business from any
customer of the Company or any of its subsidiaries; or (iv) request or advise
any customers of the Company or any of its subsidiaries to withdraw, curtail or
cancel such customer's business with the Company or any of its subsidiaries;
provided, however, that this Section 8(b) shall not prohibit Xxxxx and his
Affiliates from purchasing or holding in the aggregate, equity interests of up
to 2% in any business entity or person in competition, directly or indirectly,
with the company or any of its subsidiaries.
(c) The term "competing business" shall be defined to mean any business
in competition with the business or businesses conducted or planned to be
conducted pursuant to a written strategic plan by the Company or its
subsidiaries upon the date of termination of this Agreement or Xxxxx'x
employment hereunder or in any manufacturing business, the products or services
of which, at the date hereof or at any time during the term of this Agreement,
are sold or licensed by or marketed by the Company or its subsidiaries in any
state of the United States, any province of Canada or any foreign countries in
which the Company or its subsidiaries regularly transact business on the date on
which the employment period terminated. The term "restricted territories," shall
be defined to mean any geographical area located anywhere in the world.
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(d) The parties hereto recognize and agree that this Agreement is
necessary and essential to protect the business conducted by the Company and
that the area and duration of the covenants contained herein are in all aspects
reasonable and necessary to protect the Company, and do not unduly oppress or
restrict the occupational future of Xxxxx.
(e) In addition to all other amounts payable to Xxxxx herein, the
Company shall compensate Xxxxx during each of the final 24 months of the
covenant not to compete contained herein at a per annum rate equal to 50% of the
base salary rate in effect immediately prior to the termination of Xxxxx'x
employment, payable on a current basis in equal installments not less frequently
than monthly. During such 24 month period, Xxxxx shall be entitled to
participate in the health and life insurance plans offered to employees of the
Company on the same basis as if Xxxxx were still a full time employee of the
Company.
(f) If any court determines that any provision of the covenant not to
compete contained herein, or any part thereof is invalid or unenforceable, the
remainder of such covenant not to compete shall not thereby be affected and
shall be given full effect, without regard to the invalid provisions. If any
court determines any provision of the covenant not to compete, or any part
thereof, is unenforceable because of the duration or geographic scope of such
provision, the parties agree that such court shall have the power to reduce the
duration or geographic scope of such provision, as the case may be, and the
parties agree to request the court to exercise such power, and in its amended
form, such provision shall be enforceable and shall be enforced.
(g) If, pursuant to an action initiated by Xxxxx, a court has limited
the scope of the non-compete as contemplated in paragraph (f) above, and
following such limitation, Xxxxx engages in a competing business as originally
defined, then the Company's obligation to continue to make payments or provide
benefits to or to permit the exercise of stock options or stock purchase
agreements by Xxxxx shall terminate.
(h) for the purposes of this Agreement, the term "Affiliate" means any
person or entity that, directly or indirectly, controls, is controlled by, or is
under common control with, the person in question. "Affiliate" shall be deemed
not to include any adult children of Xxxxx solely by virtue of their status as
Xxxxx'x children. The provisions of this paragraph 8 shall survive the
termination of this Agreement.
9. CONFIDENTIAL INFORMATION. Xxxxx acknowledges and agrees that his employment
by the Company under this Agreement necessarily involves his understanding of
and access to certain trade secrets and confidential information pertaining to
the business of the Company and its subsidiaries, and Xxxxx agrees that at all
times after the date hereof, both during and following his employment with the
Company, he will not disclose to any unauthorized third party any of the trade
secrets or confidential information pertaining to the business of the Company
and its subsidiaries, and will not remove or retain, without the express written
consent of the board of directors of Company, except in the normal conduct of
his duties under this Agreement, any figures, calculations, letters, papers,
documents, instruments, drawings, designs, or copies thereof, or any other
confidential information of any type or description; provided, however, that
after reasonable measures have been taken to maintain confidentiality (such as
the execution of confidentiality agreements) and after reasonable notice to the
Company specifying the information involved and
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the manner and extent of the proposed disclosure thereof, any disclosure of such
information may be made to the extent required by applicable law, regulation, or
judicial or regulatory process. The provisions of this paragraph shall survive
the termination of this Agreement.
10. INVENTIONS. Xxxxx agrees that any invention, improvements, developments or
discoveries (whether or not patentable) that he may conceive, make or invent
during the course of his services pursuant to this Agreement (whether
individually or jointly with any person or persons) relating to or useful by the
business of the Company and its subsidiaries shall be the sole, exclusive and
absolute property of the Company and its subsidiaries as the case may be. Xxxxx
will immediately disclose any such invention, improvement, development or
discovery to the Company and will, at any time, at the Company's request and
without additional compensation, execute and deliver patent papers covering such
invention, improvement, developments or discoveries as well as any papers which
may be considered necessary or helpful by the Company in the prosecution of
applications for patents thereon or which may relate to any litigation or
controversy in connection therewith. All expenses incident to the filing of such
applications, the prosecution thereof, and the conduct of any such litigation
shall be borne by Company. The provisions of this paragraph shall survive the
termination of this Agreement.
11. MISCELLANEOUS.
(a) The undersigned parties to this Agreement warrant and represent
that they have the power and authority to enter into this Agreement in the
names, titles and capacities herein stated.
(b) A waiver by either party of any of the terms and conditions of this
Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any subsequent breach thereof, or
of any other term and condition of the Agreement.
(c) This Agreement constitutes the entire agreement between the parties
respecting the matters contained herein, and there are no representations,
warranties, agreements or commitments between the parties hereto except as set
forth herein. This Agreement may be amended only by an instrument in writing
executed by the undersigned parties.
(d) Any and all notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when personally
delivered or deposited in the United States mails, certified or registered mail,
postage prepaid and addressed as follows:
If to Xxxxx: Xxxxx X. Xxxxx, Xx.
000 Xxxxxxxxxx
Xxxxxxx, XX 00000
If to the Company: Grant Geophysical, Inc.
00000 Xxxx Xxx
Xxxxxxx, XX 00000
Attn: Chairman of the Board
Either party may change by notice the address to which notices to it are to be
addressed.
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(e) This Agreement shall be construed in accordance with and governed
by the laws of the State of Delaware.
Xxxxx may not assign, transfer or convey this Agreement. This
Agreement and all of the Company's rights and obligations hereunder may be
assigned or transferred by it, in whole but not in part, to and shall be binding
upon and inure to the benefit of any "successor" of the Company but such
assignment by the company shall not relieve it of any of its obligations
hereunder. As used herein, the term "successor" shall mean only any person,
firm, corporation or other business entity which at anytime by reorganization,
merger, consolidation, transfer, divestiture or otherwise shall have acquired
all or substantially all of the assets of the Company or to which the Company
shall have transferred all of the assets of the Company or to which the Company
shall have transferred all or substantially all of its assets. Any such
successor shall be deemed to be substituted for all purposes as the "Company"
hereunder.
(g) If any provision of this Agreement, as applied to either party or
to any circumstances, shall be adjudged by a court of competent jurisdiction to
be void or unenforceable, the same shall in no way effect any other provision of
this Agreement or the validity or enforceability of this Agreement.
This Agreement supersedes all employment agreements presently in effect between
the Company and Xxxxx, and the parties hereby terminate all such agreements,
provided however, that the provisions of Section 3.1(b) and Section 3.2 of the
Prior Agreement shall survive and become an obligation of Company to the extent,
but only to the extent, that the Employer fails to pay Xxxxx the amount of
$350,000 which the parties hereto agree has been earned by and is due and
payable to Xxxxx pursuant to Section 3.2 of the Prior Agreement on or before
December 31, 1997. In the event that Employer fails to make all of such payment,
the Company shall promptly pay Xxxxx, upon notification by Xxxxx, of nonpayment
by the Employer. To the extent that Company is required to and does pay Xxxxx
all or any portion of the $350,000 pursuant to Section 3.2 of the Prior
Agreement and to the extent that Company does not otherwise receive a credit for
such payments against its obligations to make payments to the Employer pursuant
to the Plan, Company shall be subrogated to Xxxxx'x right to receive such
amounts under Section 3.2 of the Prior Agreement from the Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of October 1,
1997.
GRANT GEOPHYSICAL, INC.
By: /s/ Xxx Xxxxxxx
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/s/ Xxxxx X. Xxxxx, Xx.
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Xxxxx X. Xxxxx, Xx.
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