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EXHIBIT 10.3
SEVERANCE AGREEMENT
This Severance Agreement (this "Agreement"), dated as of April 16,
1999, is among Xxxxxx Xxxxxx Xxxxxxxx of Xxxx, England, an individual
(hereinafter sometimes referred to as "Xxxxxxxx"), and Eagle Geophysical, Inc.,
a Delaware corporation (hereinafter sometimes referred to as the "Company") and
Exploration Holdings Limited, a company organized under the laws of the United
Kingdom (hereinafter sometimes referred to as "EHL"):
WHEREAS, Xxxxxxxx entered into an Employment Agreement with EHL which
was amended on July 3, 1996, August 11, 1997 and April 1, 1998 (hereinafter
referred to collectively as the "Employment Agreement");
WHEREAS, all capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed to such terms in the Employment
Agreement;
WHEREAS, the Company indirectly owns all of the issued and outstanding
shares of EHL;
WHEREAS, in addition to his duties and obligations under the Employment
Agreement, Xxxxxxxx has served as a member of the Board of Directors and
Executive Vice President of the Company since prior to its initial public
offering of Company stock in August 1997; and
WHEREAS, the parties hereto desire that the employment of Xxxxxxxx
under the Employment Agreement be terminated and that Xxxxxxxx confirm his
resignation as an officer and director of the Company and its subsidiaries,
including EHL, on the terms set forth herein.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
agreements and covenants set forth in this Agreement, hereby agree as follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT. Xxxxxxxx and EHL hereby
terminate the Employment Agreement as of the date hereof and this Agreement
supercedes in all respects the terms of the Employment Agreement. Except as
otherwise provided herein, all provisions of the Employment Agreement, including
those which by their terms survive the termination of the Employment Agreement,
are hereby terminated in all respects. From and after the date hereof, Xxxxxxxx
shall cease to be an employee, officer and director of the Company and any
affiliate and subsidiary of the Company including but not limited to EHL,
Horizon Exploration Limited, a company organized under the law of the United
Kingdom and Energy Research International, a company organized under the laws of
the Cayman Islands (hereinafter sometimes referred to collectively as the
"Company and its Subsidiaries").
2. SEVERANCE PAYMENTS. EHL shall pay Xxxxxxxx a lump sum of
(pound)100,000 on or before May 24, 1999 (the "Severance Payment"), less any
applicable withholding taxes, by EHL check to be mailed to him at the address
set forth herein. In consideration of the agreement of EHL to make the Severance
Payment, Xxxxxxxx hereby agrees to the termination of the Employment Agreement
as provided herein.
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3. STOCK OPTIONS. Prior to April 30, 1999, the agreement between
Xxxxxxxx and the Company with respect to the stock options to purchase 75,000
shares of common stock of Company previously granted to Xxxxxxxx shall be
amended as follows:
(a) the options to purchase 25,000 shares which vested on
August 11, 1998 shall continue to be exercisable despite the
termination of Xxxxxxxx'x employment, subject to Xxxxxxxx complying
with the terms of this Agreement;
(b) the options to purchase 25,000 shares that were to vest on
August 11, 1999, subject to Xxxxxxxx'x continued employment, will vest
on such date despite the termination of Xxxxxxxx'x employment, subject
to Xxxxxxxx complying with the terms of this Agreement; and
(c) the remaining options to purchase 25,000 shares that were
to vest on August 11, 2000 shall not vest, and shall therefore be
canceled.
Such options will be exercisable at any time within the period from and after
their vesting and on or before 5:00 p.m., Houston time, on December 31, 2000.
4. FULL COMPENSATION. Xxxxxxxx acknowledges that as of the date of this
Agreement, he has received, in full, all amounts of compensation,
reimbursements, vacations, holidays, leaves of absence, allowances, and other
monies, payments, properties and benefits of any kind or nature to which he is
or might have been entitled to receive from EHL by virtue of his employment with
EHL (hereby waiving any accrued vacation not previously taken), and that the
only amount remaining to be paid to Xxxxxxxx with respect to his employment by
EHL, is as set forth in Section 2 hereof.
5. RELEASE OF CLAIMS.
(a) In consideration of the agreements of EHL and the Company
as stated in this Agreement, Xxxxxxxx hereby agrees to execute this
Agreement and knowingly and voluntarily releases and waives any and all
of his rights and claims, if any, on behalf of himself, his heirs,
executors, administrators, successors and assigns and further agrees
not to institute any action against EHL and the Company or any
director, officer, employee, affiliate, or agent of EHL and the
Company, existing or arising or which may exist or arise under (i) any
offer of employment letter, oral understandings, employee manual or
handbook, written employment agreement or contractual arrangement; (ii)
the Employee Retirement Income Security Act of 1974, as amended, 28
U.S.C. Sections 1001-1461 (1982); (iii) any federal, state or local
employment opportunity laws, ordinances, orders or regulations,
including but not limited to Title VII of the Civil Rights Act of 1964,
42 U.S.C. Section 2000e et seq., as amended, the Texas Commission on
Human Rights Act, Chapter 21 Tex. Lab. Code; (iv) any claims for
slander, libel, or defamation; (v) any rights, claims, or causes of
action for costs, damages, compensatory damages, liquidated damages,
exemplary damages, punitive damages, injunctive relief, front pay, back
pay, reinstatement, attorneys' fees, unpaid wages, unpaid vacation,
bonuses, salary, or expenses, severance pay, bonuses, salary, or
expenses, including the Texas Pay Day Act; as well as (vi) any claims
of wrongful discharge or
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constructive discharge; (vii) any claims in tort or contract for
separation from employment; (viii) any claims for breach of contract
relating to his employment by EHL and the Company (other than a breach
of the terms of this Agreement) under any state laws or decisions; (ix)
any claims or causes of action for assault, assault and battery; (x)
any claims for infliction of emotional distress, including mental pain
and suffering, whether statutory or tortious, for him, his heirs,
executors, legal administrators, successors or assigns, during or by
reason of his employment or termination thereof with EHL; and (xi) any
and all similar provisions which are applicable under the laws of the
United Kingdom; provided, however, that Xxxxxxxx does not release any
claim he may have against EHL or the Company for any actual damages
(other than damages for emotional distress, including mental pain and
suffering) arising from a breach by EHL or the Company of any provision
of this Agreement.
(b) The Company, on behalf of itself and its subsidiaries,
affiliates, officers, directors, shareholders, agents, representatives,
successors and assigns, hereby releases and waives any and all of its
and their rights and claims, if any, and further agrees not to
institute any action against Xxxxxxxx or his heirs, executors,
administrators, successors and assigns, for any breach of the terms of
the Employment Agreement (other than this Agreement).
6. PERSONAL PROPERTY. Except as the parties may otherwise agree,
Xxxxxxxx shall, prior to April 30, 1999, remove all of his personal effects and
personal belongings from the premises of the Company's offices located in the
United Kingdom, United States of America or elsewhere (hereinafter referred to
collectively as the "Company Offices"). Xxxxxxxx shall promptly effect a change
of his mailing address from the Company Offices to another mailing address for
purposes of all personal correspondence and deliveries. Xxxxxxxx agrees and
consents that all business correspondence and deliveries addressed to him in
care of or at the Company Offices and relating to the business of the Company
and its Subsidiaries may be opened by the Company or, if forwarded to Xxxxxxxx,
shall be promptly returned by Xxxxxxxx to the Company. Xxxxxxxx agrees that he
will not remove any written correspondence, memos, reports, manuals, policies,
decisions, data, computer programs and information, or any similar materials
which were prepared either by him or by others that relate to the business of
the Company, and any such material currently in Xxxxxxxx'x possession will be
returned immediately to the Company.
7. RESIGNATION AS OFFICER AND DIRECTOR. Xxxxxxxx hereby confirms his
resignation as an officer and director of the Company and its Subsidiaries
effective as of April 16, 1999.
8. CONTINUED RELATIONS.
(a) Xxxxxxxx agrees not to serve as an expert witness in any
lawsuit or legal proceeding against the Company, its assigns,
successors, agents, trustees, directors, officers, general partners,
limited partners, subsidiaries, affiliates, or employees and shall not
take any action which the Company might reasonably consider destructive
or damaging in any way to the goodwill and best interests of the
Company, its employees, officers, directors, agents, general partners,
limited partner, subsidiaries or affiliates, except in either case in
connection with legal proceedings in which Xxxxxxxx or his successors
or assigns are adverse to the
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Company, its assigns, successors, agents, trustees, directors,
officers, general partners, limited partners, subsidiaries, affiliates,
or employees.
(b) Xxxxxxxx and the Company shall not take any actions which
shall be destructive or damaging in any way to the goodwill or best
interests of the other.
9. PRIOR RIGHTS AND OBLIGATIONS. Except as otherwise provided herein,
this Agreement extinguishes all pre-existing rights which Xxxxxxxx has or may
have, relating to his employment with the Company and its Subsidiaries.
10. PROPRIETARY AND CONFIDENTIAL INFORMATION. Xxxxxxxx agrees and
acknowledges that the Company and its Subsidiaries developed, and own
"Proprietary and Confidential Information" which constitutes valuable and unique
property including, without limitation, concepts, ideas, plans, strategies,
analyses, surveys, and proprietary information which relates to the past,
present or anticipated business of the Company and its Subsidiaries. Except as
may be required by law, Xxxxxxxx agrees that he will not at any time disclose to
others, permit to be disclosed, use, permit to be used, copy, or permit to be
copied, any such Proprietary and Confidential Information (whether or not
developed by him) without the Company's prior written consent. Except as may be
required by law, Xxxxxxxx further agrees to maintain in confidence any
Proprietary and Confidential Information of the Company and its Subsidiaries
received by him. Proprietary and Confidential Information shall not include (i)
information which becomes generally known through no fault of Xxxxxxxx, (ii)
information required to be disclosed by any court or governmental authority,
(iii) information received by Xxxxxxxx in good faith from a third party who
Xxxxxxxx reasonably believed, after due inquiry, did not acquire such
information on a confidential basis, either directly or indirectly, from the
Company or any of its affiliates, and (iv) information that Xxxxxxxx can
demonstrate was within his legitimate possession prior to the commencement of
any relationship between Xxxxxxxx and the Company and its Subsidiaries and their
predecessors.
11. AGREEMENT NOT TO COMPETE. Xxxxxxxx acknowledges that (i) the
Company and its Subsidiaries are currently engaged in the business of owning,
managing and operating seismic data acquisition equipment and hiring and
managing crews to operate such equipment, which equipment and crews are
contracted or hired for the purpose of performing geological surveys onshore and
offshore (the "Company Business"); (ii) his employment with the Company has
given him, access to trade secrets of and confidential information concerning
the Company and its Subsidiaries; and (iii) the agreements and covenants
contained in this Section 11 are essential to protect the business and goodwill
of the Company and its Subsidiaries.
(a) In consideration for EHL's agreement to make the Severance
Payment to Xxxxxxxx, as well as the Company's other agreements herein,
Xxxxxxxx agrees that he shall not during the Restricted Period (as
hereinafter defined) within a one hundred (100) mile radius of the
Company Offices, including, without limitation, the locations of any
field offices, directly or indirectly (i) engage or participate in the
Company Business; or (ii) enter the employ of, or render any other
services to, any person engaged in the Company Business except as
permitted hereunder. In addition, during the Restricted Period (as
hereinafter defined) Xxxxxxxx agrees that he shall not become
interested in any person engaged in the Company Business in any
capacity, including, without limitation, as an individual, partner,
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shareholder, lender, officer, director, principal, agent or trustee
except as permitted hereunder; provided, however, that Xxxxxxxx may
own, directly or indirectly, solely as an investment, securities of any
person traded on any national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation System
if Xxxxxxxx is not a controlling person of, or a member of a group
which controls, such person and Xxxxxxxx does not, directly or
indirectly, own 5% or more of any class of equity securities, or
securities convertible into or exercisable or exchangeable for 5% or
more of any class of equity securities, of such person. As used herein,
the "Restricted Period" shall mean the period commencing on the date
hereof and terminating on May 24, 1999.
(b) As an independent covenant, Xxxxxxxx also agrees to
refrain during the Restricted Period, without written permission from
the Company, from diverting, taking, soliciting and/or accepting on his
own behalf or on the behalf of another person, firm, or company, the
business of any past or present customer of the Company, its divisions,
subsidiaries and/or other affiliated entities, or any identified
prospective or potential customer of the Company, its divisions,
subsidiaries and/or affiliated entities, whose identity became or
becomes known to Xxxxxxxx through his employment by the Company.
(c) As an independent covenant, Xxxxxxxx agrees to refrain for
a period of twelve months after the date of this Agreement from
inducing or attempting to influence any employee of the Company, its
divisions, subsidiaries and/or affiliated entities to terminate his
employment with the Company, its divisions, subsidiaries and/or
affiliated entities.
12. COOPERATION. Xxxxxxxx shall cooperate with the Company to the
extent reasonably required in all matters relating to the transfer of his
pending work on behalf of the Company and its Subsidiaries and the orderly
transfer of any such pending work as designated by the Company. Xxxxxxxx shall
take such further action and execute documents as may be reasonably necessary or
appropriate in order to carry out the provisions and purposes of this Section.
Xxxxxxxx shall not be obligated to incur any costs or expenses in connection
with the cooperation required hereby.
13. NON-ADMISSION OF LIABILITY.
(a) The payment of the consideration by the Company and EHL
above is not to be taken or understood as an admission of liability by
the Company or any person or entity released herein.
(b) Nothing in this Agreement shall be taken or understood as
an admission of liability by Xxxxxxxx of any wrongdoing.
14. INDEMNIFICATION.
(a) As a part of the consideration for the payment of the
above sum, Xxxxxxxx for himself, his heirs, executors, administrators
and assigns, releases and agrees to indemnify and hold harmless the
Company and all persons released above from and against all claims,
including attorneys' fees and costs of defending any such claims, and
causes of action of any
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nature, without limitation, which may be asserted by any person, firm,
or entity claiming by, through, or under him for any relief claimed to
be due him and released by this Agreement.
(b) The Company, on behalf of itself and its subsidiaries,
affiliates, officers, directors, shareholders, agents,
representatives, successors and assigns, releases and agrees to
indemnify and hold harmless Xxxxxxxx and his heirs, executors,
administrators and assigns from and against all claims, including
attorneys' fees and costs of defending any such claims, and causes of
action of any nature, without limitation, which may be asserted by any
person, firm, or entity claiming by, through, or under it for any
relief claimed to be due it and released by this Agreement.
15. EXPLANATION TO THIRD PARTIES; CONFIDENTIALITY OF AGREEMENT. The
parties hereto agree that they shall describe, as necessary in the conduct of
their business, the termination of the relationship between Xxxxxxxx and the
Company and its Subsidiaries. The parties agree that, hereafter, any facts,
events, or incidents occurring during Xxxxxxxx'x employment and the terms,
amounts, or other incidents related to this Agreement and any documents, papers,
and writing related to it, as well as the fact of settlement, shall remain
confidential and shall not be disclosed by them to any third parties, except to
professional advisors, accountants, legal counsel, or as is necessary to carry
out any obligations under this Agreement or to enforce its rights under this
Agreement, and as may be required by any federal or state agency or court. In
the event of any disclosure to any authorized person, the parties shall instruct
such individuals of the provisions of this Section. In the event of necessary
disclosure by Xxxxxxxx to such agency or court (except tax filings), Xxxxxxxx
shall promptly notify the Company of such necessity, prior to any disclosure.
16. WAIVER OF REEMPLOYMENT. Xxxxxxxx further agrees that he will not
apply for employment or reemployment with the Company.
17. UNDERSTANDING OF WAIVER. Xxxxxxxx agrees that prior to the
execution of the Agreement, he has had a reasonable period of time within which
to consider this Agreement; and he understands the terms and conditions of this
Agreement and agrees to abide by this document and knowingly and voluntarily
executes it without hidden reservations.
18. NON-ASSIGNMENT. Xxxxxxxx affirms that he has not assigned, pledged,
sold, transferred, or otherwise conveyed any right, claim, or interest that he
has or may have in any matters released herein.
19. TAX RELATED INDEMNIFICATION. In the event any federal, state, or
local taxing authority challenges any tax treatment of any payments described in
this Agreement, Xxxxxxxx shall give notice to the Company as soon as is
practicable, and provide the Company with a copy of any written indication from
any local, state, or federal agency that the tax consequences of this Agreement
are being challenged. Further, in the event Xxxxxxxx fails to make adequate
provision for federal income taxes with respect to any amounts due to him
hereunder by the payment of estimated quarterly federal income tax payments,
Xxxxxxxx shall indemnify and hold harmless the Company for any taxes, penalties
and interest that may be assessed against the Company attributable to amounts
received by Xxxxxxxx required under law. Notwithstanding anything to the
contrary
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contained in this Section, however, neither the Company nor Xxxxxxxx shall be
obligated to defend the tax audit of the other by the Internal Revenue Service
or any other taxing authority.
20. WAIVER. The failure at any time of either party to this Agreement
to require performance by the other party of any provision of this Agreement
shall in no way affect the right to require full performance at any time
thereafter, nor shall the waiver by either party of a breach of or default under
any provision of this Agreement be taken or held to be or operate as a waiver of
any succeeding breach or default, whether similar to or different from the
breach or default waived, or as a waiver of the provision itself. No provision
of this Agreement, or breach of or default under any provision of this
Agreement, may be waived except in a writing signed by the party charged with
such waiver.
21. NOTICE. Any and all notices and other communications required or
permitted to be given under this Agreement shall be given in writing and shall
be sent by (i) United States mail, postage prepaid, registered or certified
mail, return receipt requested, or (ii) personal delivery, or (iii) expedited
delivery service with proof of delivery, or (iv) prepaid telegram or fax
(provided that such telegram or fax is confirmed by expedited delivery service
or by mail in the manner previously described), addressed as follows:
When being sent to EHL:
Exploration Holdings Limited
0 Xxxxxxx Xxx
XxxxxXxxx
Xxxx XX00 0XX
Xxxxxxx
Facsimile: 011-44-1732-742-746
When being sent to the Company:
Eagle Geophysical, Inc.
0000 Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile (000) 000-0000
When being sent to Xxxxxxxx:
Xxxxxx Xxxxxxxx
Gorsey Down Farm
Xxxxxxxx Xxxx Road
Tatsfield, Kent TN 16 2NB
Facsimile: 011-44-1959-571-928
Change of any such address shall be valid if and when notice of such
change is given to the other party in accordance with this Agreement. Any such
notice or other communication shall be deemed to have been given (i) at the time
of personal delivery in the case of delivery service, (ii) as of the date of
first attempted delivery at the address and in the manner provided herein in the
case of mail, or (iii) upon receipt in the case of telegram or fax.
22. MERGER. This Agreement supersedes, replaces and merges all previous
agreements and discussions relating to the same or similar subject matters
between Xxxxxxxx and the Company and, along with the Stock Options and the Stock
Option Plan, constitutes the entire agreement between the parties with respect
to be the subject matter of this Agreement. This
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Agreement may not be changed or terminated orally, and no change, termination or
waiver of this Agreement or of any of the provisions herein contained shall be
binding unless made in writing and signed by all parties.
23. NO DEROGATORY COMMENTS. Xxxxxxxx and the Company shall refrain from
making public or private comments relating to each other which are derogatory or
which may tend to injure Xxxxxxxx or the Company or the employees, officers,
directors, agents or affiliates, of the Company in its or their business, public
or private affairs, except in connection with legal proceedings in which
Xxxxxxxx or his successors or assigns are adverse to the Company, its assigns,
successors, agents, trustees, directors, officers, general partners, limited
partners, subsidiaries, affiliates, or employees.
24. EXPENSES. Each of the parties hereto shall pay the fees and
expenses incurred by it in connection with the negotiation, preparation,
execution and performance of this Agreement, including, without limitation,
attorneys' fees.
25. APPLICABLE LAW. This Agreement shall be governed by and interpreted
and construed in accordance with the laws of the State of Texas.
26. RESOLUTION OF CLAIMS AND DISPUTES. Any claim, controversy or
dispute between the parties arising under, out of or relating to this Agreement,
or the breach thereof, shall be determined by a civil action in the District
Court of Xxxxxx County, Texas, or other court of competent jurisdiction located
in Xxxxxx County, Texas.
27. BINDING AGREEMENT. This Agreement shall inure to the benefit of and
be binding upon the Company and EHL and their successors and assigns and
Xxxxxxxx, his heirs, executors, administrators, personal representatives,
successors and assigns. Each of the agreements, covenants, representations,
warranties, consents, acknowledgments, receipts, releases, and waivers by the
parties contained in this Agreement constitutes a material inducement for the
parties to enter into and to perform this Agreement, and both parties would not
enter into this Agreement but for all of such inducements by the other.
28. CAPTIONS AND HEADINGS. The captions, headings and titles to the
Sections of this Agreement are not a part of this Agreement and shall have no
effect upon the construction or interpretation of any part of this Agreement.
29. EXECUTION OF THIS AGREEMENT; ORIGINAL COUNTERPARTS. The Company,
EHL and Xxxxxxxx shall execute and deliver three (3) original counterparts of
this Agreement simultaneously with the execution and delivery of this Agreement.
Each party may
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retain one (1) such executed original counterparts. Each such executed
counterpart of this Agreement shall be deemed an original document, and all such
executed counterparts shall together constitute only one (1) and a single
agreement between the parties.
IN WITNESS HEREOF, the parties hereto have executed this Agreement in
multiple counterparts, effective as of the date above written.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
XXXXXX X. XXXXXXXX
EAGLE GEOPHYSICAL, INC.
BY:/s/ Xxx X. Xxxxxxxxx
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Xxx X. Xxxxxxxxx, President
EXPLORATION HOLDINGS LIMITED
BY:/s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx, Director
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