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EXHIBIT 10.44
FORM OF
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into as of
___________, 1997 (the "Effective Date"), by and between EAGLE GEOPHYSICAL
OFFSHORE, INC., a Texas corporation (the "Company"), and XXXXX XXXXX (the
"Executive").
The Company desires to employ the Executive and the Executive desires
to accept employment with the Company, on the terms and conditions of this
Agreement.
Accordingly, the parties agree as follows:
1. Employment Duties and Acceptance.
1.1 Employment by the Company; Duties. The Company
hereby agrees to employ the Executive for a term commencing on the Effective
Date, and expiring at the end of the day twenty-four (24) months from the
Effective Date (such date, or later date to which this Agreement is extended in
accordance with the terms hereof, the "Termination Date"), unless earlier
terminated as provided in Section 4 or unless extended as provided herein (the
"Term"). The Term shall be automatically extended commencing on the second
anniversary of the Effective Date and on each anniversary of the Effective Date
thereafter (such date and each anniversary of such date being a "Renewal
Date"), so as to terminate twelve (12) months from such Renewal Date, unless
and until at least six (6) months prior to a Renewal Date either party hereto
gives written notice to the other that the Term should not be extended beyond
the next Renewal Date, in which event the Termination Date shall be the Renewal
Date following such notice. During the Term, the Executive shall serve in the
capacity of Vice President - U.S. Offshore Operations of the Company and shall
also serve in those offices and directorships of subsidiary and parent
corporations or entities of the Company to which he may from time to time be
appointed or elected. During the Term, the Executive shall devote all
reasonable efforts and all of his business time and services to the Company,
subject to the direction of the Board of Directors of the Company (the
"Board"). The Executive shall not engage in any other business activities
except for passive investments in corporations or partnerships not engaged in
the Company Business (as hereinafter defined) pursuant to Section 3 hereof.
1.2 Acceptance of Employment by the Executive. The
Executive hereby accepts such employment and shall render the services and
perform the duties described above.
2. Compensation and Other Benefits.
2.1 Annual Salary. The Company shall pay to the
Executive an annual salary at a rate of not less than one hundred forty
thousand dollars ($140,000) per year (the "Annual Salary"), subject to increase
at the sole discretion of the Board. The Annual Salary shall be
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payable in accordance with the payroll policies of the Company as from time to
time in effect, but in no event less frequently than once each month, less such
deductions as shall be required to be withheld by applicable law and
regulations.
2.2 Incentive Bonus.
Executive Incentive Scheme. The Executive shall be
entitled to participate in a Company Executive Incentive Scheme (the "Incentive
Scheme") which, subject to the conditions below, shall give the Executive the
potential to receive additional remuneration of up to 50% of salary each year.
2.2.1 The Company shall define the Incentive Scheme
annually on or before February 28th in each year for the Calendar year to which
it relates.
2.2.2 The Incentive Scheme may take the form of a
single Company goal, for example profit performance or several individual
targets such as productivity, etc., and may be varied each year.
2.2.3 Any remuneration earned under the Incentive
Scheme for a particular year shall be paid on or before 1st June of the
following calendar year.
2.2.4 The Executive shall receive remuneration
under the Incentive Scheme for 1997 equal to 50% of his Annual Salary if and
only if the Operating Profit Margin (as defined in Section 2.3 of this
Agreement) of the Marine Business (as defined in Section 2.3 of this Agreement)
for such year equals or exceeds 24% of revenues from the Marine Business.
2.3 Additional Incentive Bonus.
2.3.1 Grant of Additional Incentive Bonus. The
Executive shall receive an additional incentive bonus, if earned, with respect
to the fiscal years ending during the Term (the "Additional Incentive Bonus");
provided, however, that an Additional Incentive Bonus for a fiscal year shall
only be payable if the Net After-Tax Profits (as hereinafter defined) for such
fiscal year exceed Base Profits (as hereinafter defined).
2.3.2 Definitions.
"Base Profits" shall mean 5% of gross revenues from
the Marine Business.
"Chief Financial Officer" means the chief financial
officer of Eagle.
"Eagle" shall mean Eagle Geophysical, Inc., a
Delaware corporation.
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"Marine Business" means the marine seismic data
acquisition business of the Company and its wholly owned subsidiaries and of
any other company that is a direct or indirect wholly owned subsidiary of
Eagle.
"Net After-Tax Profits" means the amount of net
profits of the Marine Business calculated by the Chief Financial Officer
applying U.S. generally accepted accounting principles and such other
accounting principles and assumptions as may be reasonable and taking into
account expenses attributable to allocable overhead (based on revenues) from
all other companies controlled by or under common control with the Company
engaged in the Marine Business and of such companies' parent corporation(s),
and subtracting therefrom all income tax liabilities attributable to the Marine
Business.
"Operating Profit Margin" means the amount of revenue
less cost of sales of the Marine Business calculated by the Chief Financial
Officer applying U.S. generally accepted accounting principles and such other
accounting principles and assumptions as may be reasonable.
2.3.3 Calculation of Bonus. If Net After-Tax
Profits for a fiscal year exceed Base Profits for such fiscal year, the
Executive shall receive an Additional Incentive Bonus equal to the Applicable
Percentage set forth in the table below multiplied by the difference between
actual Net After-Tax Profits and Base Profits.
Net After-Tax Profits
(percent of gross revenues) Applicable Percentage
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greater than 5%, but less than 1.0%
or equal to 6%
greater than 6%, but less than 1.5%
or equal to 7%
greater than 7% 2.0%
2.3.4 Applicable Percentage if Significant Increase
in Revenues. Notwithstanding the determination of Applicable Percentage in the
table set forth in Subsection 2.3.3 above, if gross revenues for a fiscal year
of the Marine Business increase by an amount of 20% or more as compared to
gross revenues for the previous fiscal year of the Marine Business, then the
Applicable Percentage for such fiscal year will be 2.0% so long as Net After
Tax Profits for such fiscal year exceed Base Profits for such fiscal year.
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2.3.5 Payment of Additional Incentive Bonus. The
Chief Financial Officer shall calculate the Net After-Tax Profits, and any
Additional Incentive Bonus payable to the Executive in connection therewith,
shall certify such calculations and shall deliver such calculations to the
Executive as soon as reasonably practicable after the end of each fiscal year,
but in any event within seventy-five (75) days following the end of such fiscal
year. Any Additional Incentive Bonus payable hereunder shall be paid by the
Company to the Executive within seven (7) days of delivery of such calculations
by the Chief Financial Officer and in any event within eighty-two (82) days
following the end of the applicable fiscal year. The additional remuneration
payable pursuant to Section 2.2 hereof and the Additional Incentive Bonus
payable pursuant to this Section 2.3 are hereinafter collectively referred as
the "Bonuses."
2.4 Grant of Option. The Company agrees to grant the
Executive, pursuant to the terms of Eagle's Option Plan created in connection
with the initial public offering (the "IPO") of Eagle's common stock, options
to acquire seventy-five thousand (75,000) shares of Eagle's common stock, at an
exercise price equal to the IPO issue price. Such stock options shall vest
over a period of three years, with stock options to acquire 25,000 shares
vesting on each of the first three anniversaries of the Effective Date, subject
to the terms of the Company's Option Plan. The Company agrees to use all
reasonable efforts, consistent with the foregoing, to ensure that such stock
options meet all requirements for treatment as Incentive Stock Options under
the Internal Revenue Code of 1986, as amended, and that such stock option plan
meets the requirements of Rule 16b-3, promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended (the "Act").
2.5 Vacation Policy. The Executive shall be entitled to
a paid vacation of five weeks during each year of the Term.
2.6 Participation in Employee Benefit Plans. The Company
agrees to permit the Executive during the Term, if and to the extent eligible,
to participate in any group life, hospitalization or disability insurance plan,
health program, pension plan, similar benefit plan or other so-called "fringe
benefits" of the Company (collectively, "Benefits") which may be available to
other executives of the Company on terms no less favorable to the Executive
than the terms offered to such other executives. The Company agrees to use its
best efforts to obtain immediate coverage for the Executive upon the
commencement of the Term under its existing or newly adopted medical expense
and hospitalization plan for employees without premium surcharge and without
exclusions for disclosed preexisting conditions. The Executive shall cooperate
with the Company in applying for such coverage, including submitting to a
physical exam and providing all relevant health and personal data.
2.7 General Business Expenses. The Company shall pay or
reimburse the Executive for all expenses reasonably and necessarily incurred by
the Executive during the Term in the performance of the Executive's services
under this Agreement. Such payment shall be made upon presentation of such
documentation as the Company customarily requires of its senior executive
employees prior to making such payments or reimbursements.
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2.8 Company Car and Cellular Telephone. The Company
shall pay the Executive a car allowance of five hundred and no/100 dollars
($500.00) per month, which the Executive may apply, in his discretion, to the
cost associated with purchasing or leasing, insuring, operating and maintaining
an automobile of the Executive's choice. The Executive may use the automobile
for personal as well as business purposes. The Company shall also furnish the
Executive with a cellular telephone of his choice and the Company shall pay all
charges in connection with the use thereof, other than charges for calls not
related to the Executive's duties hereunder.
3. Non-Competition, Confidentiality and Company Property.
3.1 Covenants Against Competition. The Executive
acknowledges that (i) the Company is 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 work for the Company will give
him access to trade secrets of and confidential information concerning the
Company; and (iii) the agreements and covenants contained in this Agreement are
essential to protect the business and goodwill of the Company. Accordingly,
the Executive covenants and agrees as follows:
3.1.1 Non-Compete. As an independent covenant, and
in order to enforce the provisions of Sections 3.1.3 and 3.1.5 hereof and the
other provisions of this Agreement, the Executive agrees that he shall not
during the Restricted Period (as hereinafter defined) within a one hundred
(100) mile radius of any office of the Company or any of its affiliates,
including, without limitation, the locations specified from time to time
pursuant to Section 7.2 hereof and any field offices, directly or indirectly
(except in the Executive's capacity as an officer of the Company), (i) engage
or participate in the Company Business; (ii) enter the employ of, or render any
other services to, any person engaged in the Company Business except as
permitted hereunder; or (iii) become interested in any such person in any
capacity, including, without limitation, as an individual, partner,
shareholder, lender, officer, director, principal, agent or trustee except as
permitted hereunder; provided, however, that the Executive 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 the Executive is not a
controlling person of, or a member of a group which controls, such person and
the Executive 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 a period commencing on the
date hereof and terminating upon the first to occur of (a) the date on which
the Company terminates or is deemed to terminate the Executive's employment
without Cause (as hereinafter defined), (b) the date the Executive terminates
or is deemed to terminate his employment pursuant to Section 4.6 hereof or (c)
the date of termination of this Agreement; provided, however, that if the
Company shall have terminated the Executive's employment for Cause and such
Cause in fact exists or if the Executive shall have terminated his employment
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with the Company in breach of the terms of this Agreement, the Restricted
Period shall end one (1) year following the termination of the Executive's
employment hereunder.
3.1.2 Customers. As an independent covenant, the
Executive 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 known to the Executive
through his employment by the Company.
3.1.3 Confidential Information.
3.1.3.1 The Executive acknowledges that the
Company has a legitimate and continuing proprietary interest in the protection
of its confidential information and that it has invested substantial sums and
will continue to invest substantial sums to develop, maintain and protect
confidential information. The Company agrees to provide the Executive access
to confidential information in conjunction with the Executive's duties,
including, without limitation, information of a technical and business nature
regarding the Company's past, current or anticipated business that may
encompass financial information, financial figures, trade secrets, customer
lists, details of client or consultant contracts, pricing policies, operational
methods, marketing plans or strategies, product development techniques or
plans, business acquisition plans, Company employee information, organizational
charts, new personnel acquisition plans, technical processes, designs and
design projects, inventions and research projects, ideas, discoveries,
inventions, improvements, trade secrets, design specifications, writings and
other works of authorship. In exchange, as an independent covenant, the
Executive agrees not to make any unauthorized use, publication, or disclosure,
during or subsequent to his employment by the Company, of any Intellectual
Property of a confidential or trade secret nature, generated or acquired by him
during the course of his employment, except to the extent that the disclosure
of Intellectual Property Information is necessary to fulfill his
responsibilities as an employee of the Company. The Executive understands that
confidential matters and trade secrets include information not generally known
by or available to the public about or belonging to the Company, its divisions,
subsidiaries, and related affiliates, or belonging to other companies to whom
the Company, its divisions, subsidiaries, and related affiliates, may have an
obligation to maintain information in confidence, and that authorization for
public disclosure may only be obtained through the Company's written consent.
3.1.3.2 The Executive further agrees not to
disclose to the Company, or induce any personnel of the Company to use, any
confidential information, trade secret, or confidential material belonging to
others.
3.1.3.3 The Executive agrees that the
covenants set forth in Sections 3.1.3.1 and 3.1.3.2 are independent covenants
and indefinite obligations binding upon the Executive both during and after the
termination of the Executive's relationship with the Company.
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3.1.4 Property of the Company. All memoranda,
notes, lists, records, engineering drawings, technical specifications and
related documents and other documents or papers (and all copies thereof)
relating to the Company, including such items stored in computer memories,
microfiche or by any other means, made or compiled by or on behalf of the
Executive after the date hereof, or made available to the Executive after the
date hereof relating to the Company, its affiliates or any entity which may
hereafter become an affiliate thereof, shall be the property of the Company,
and shall be delivered to the Company promptly upon the termination of the
Executive's employment with the Company or at any other time upon request;
provided, however, that the Executive's address books, diaries, chronological
correspondence files and rolodex files shall be deemed to be property of the
Executive.
3.1.5 Original Material. The Executive agrees that
any inventions, discoveries, improvements, ideas, concepts or original works of
authorship relating directly to the Company Business, including without
limitation information of a technical or business nature such as ideas,
discoveries, designs, inventions, improvements, trade secrets, know-how,
manufacturing processes, product formulae, design specifications, writings and
other works of authorship, computer programs, financial figures, marketing
plans, customer lists and data, business plans or methods and the like, which
relate in any manner to the actual or anticipated business or the actual or
anticipated areas of research and development of the Company and its divisions,
subsidiaries, affiliates, or related entities, whether or not protectable by
patent or copyright, that have been originated, developed or reduced to
practice by the Executive alone or jointly with others during the Executive's
employment with the Company shall be the property of and belong exclusively to
the Company. The Executive shall promptly and fully disclose to the Company
the origination or development by the Executive of any such material and shall
provide the Company with any information that it may reasonably request about
such material. Either during the subsequent to the Executive's employment,
upon the request and at the expense of the Company or its nominee, and for no
remuneration in addition to that due the Executive pursuant to his employment
by the Company, but at no expense to him, the Executive agrees to execute,
acknowledge, and deliver to the Company or its attorneys any and all
instruments which, in the judgment of the Company or its attorneys, may be
necessary or desirable to secure or maintain for the benefit of the Company
adequate patent, copyright, and other property rights in the United States and
foreign countries with respect to any such inventions, improvements, ideas,
concepts, or original works of authorship embraced within this Agreement.
3.1.6 Employees of the Company and its Affiliates.
As an independent covenant, the Executive agrees to refrain during his
employment by the Company, and in the event of the termination of his
employment for any reason for a period of one year thereafter, from inducing or
attempting to influence any employee of the Company, its divisions,
subsidiaries and/or affiliated entities to terminate his employment.
3.1.7 Company's Interest. The Executive further
agrees that these covenants are made to protect the legitimate business
interests of the Company, including interests in the Company's property
described in and pursuant to Section 3.1.4 and Section 3.1.5, and not to
restrict his mobility or to prevent him from utilizing his general technical
skills. The
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Executive understands as a part of these covenants that the Company intends to
exercise whatever legal recourse against him for any breach of this Agreement
and, in particular, for any breach of these covenants.
3.2 Rights and Remedies Upon Breach. If the Executive
breaches, or threatens to commit a breach of, any of the provisions contained
in Section 3.1 of this Agreement (the "Restrictive Covenants"), the Company
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the others and severally enforceable, and each of which
is in addition to, and not in lieu of, any other rights and remedies available
to the Company under law or in equity:
3.2.1 Specific Performance. The right and remedy
to have the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened breach of
the Restrictive Covenants would cause irreparable injury to the Company and
that money damages would not provide an adequate remedy to the Company.
3.2.2 Accounting. The right and remedy to require
the Executive to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Executive as the result of any action constituting a breach of the
Restrictive Covenants.
3.3 Severability of Covenants. The Executive
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in duration and geographical scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect without regard to the
invalid portions.
3.4 Court Review. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of, or scope of activities restrained by, such
provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.
3.5 Enforceability in Jurisdictions. The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
such Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants unenforceable by reason of the
breadth of such scope or otherwise, it is the intention of the Company that
such determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.
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4. Termination.
4.1 Termination Upon Death. If the Executive dies during
the Term, this Agreement shall terminate, provided, however, that in any such
event, the Company shall pay to the Executive, or to his estate, any portion of
the Annual Salary that shall have been earned by the Executive prior to the
termination but not yet paid, any Benefits that have vested in the Executive at
the time of such termination as a result of his participation in any of the
Company's benefit plans shall be paid to the Executive, or to his estate or
designated beneficiary, in accordance with the provisions of such plan; and the
Company shall reimburse the Executive, or his estate, for any expenses with
respect to which the Executive is entitled to reimbursement pursuant to Section
2.7 of this Agreement, and the Executive's right to indemnification, payment or
reimbursement pursuant to Section 6 of this Agreement shall not be affected by
such termination and shall continue in full force and effect, both with respect
to proceedings that are threatened, pending or completed at the date of such
termination and with respect to proceedings that are threatened, pending or
completed after that date.
4.2 Termination With Cause. The Company has the right,
at any time during the Term, subject to all of the provisions hereof,
exercisable by serving notice, effective on or after the date of service of
such notice as specified therein, to terminate the Executive's employment under
this Agreement and discharge the Executive with Cause. If such right is
exercised, the Company's obligation to the Executive shall be limited solely to
the payment of unpaid Annual Salary accrued, together with unpaid Bonuses, if
any, and Benefits vested up to the effective date specified in the Company's
notice of termination. As used in this Agreement, the term "Cause" shall mean
and include (i) chronic alcoholism or controlled substance abuse as determined
by a doctor reasonably selected by the Company, (ii) an act of proven fraud or
dishonesty on the part of the Executive with respect to the Company or its
subsidiaries; (iii) knowing and material failure by the Executive to comply
with material applicable laws and regulations relating to the business of the
Company or its affiliates; (iv) the Executive's continuing failure to
satisfactorily perform his duties hereunder (as reasonably determined by the
Board) or a material breach by the Executive of this Agreement except, in each
case, where such failure or breach is caused by the illness or other similar
incapacity or disability of the Executive; or (v) conviction of a crime
involving moral turpitude or a felony. Prior to the effectiveness of
termination for Cause under subclause (i), (ii), (iii) or (iv) above, the
Executive shall be given 30 days' prior notice from the Board specifically
identifying the reasons which are alleged to constitute Cause for any
termination hereunder and an opportunity to be heard by the Board in the event
the Executive disputes such allegations.
4.3 Termination Without Cause. The Company has the
right, at any time during the Term, subject to all of the provisions hereof,
exercisable by serving notice, effective on or after the date of service of
such notice as specified therein, to terminate the Executive's employment under
this Agreement and discharge the Executive without Cause. If the Executive is
terminated during the Term without Cause (including any termination which is
deemed to be a constructive termination without Cause under Section 4.6
hereof), the Company's obligation to the Executive shall be limited solely to
(i) the payment, at the times and upon the terms
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provided for herein, of (A) the Executive's Annual Salary and car allowance (as
set forth in Section 2.8 hereof) for the months remaining in the Term at the
time of such termination, based on the Annual Salary of the Executive in effect
on the date of termination (or, if the Company has reduced the Executive's
Annual Salary in breach of this Agreement, the Executive's Annual Salary before
such reduction), and (B) all unpaid bonuses and Benefits awarded or accrued up
to the date of termination, and (ii) the vesting of any unvested stock options
granted by the Company pursuant to Section 2.4 hereof. In the event of a
termination by the Company without Cause within 180 days after Change of
Control (as hereinafter defined), including a constructive termination without
Cause pursuant to Section 4.6, the amounts due to the Executive pursuant to
this Section 4.3 shall be due and payable in one lump-sum payment within 60
days after such termination. In all other cases, any amounts due to the
Executive pursuant to this Section 4.3 shall be due and payable as and when
they would have become due and payable absent such termination.
4.4 Termination by the Executive. Any termination of
this Agreement by the Executive during the Term, except such termination as is
deemed to be a constructive termination without Cause by the Company under
Section 4.6 of this Agreement, shall be deemed to be a breach of the terms of
this Agreement for the purposes of Section 3.1.1 hereof and shall entitle the
Company to discontinue payment of all Annual Salary, Bonuses and Benefits
accruing from and after the date of such termination.
4.5 Termination upon Disability. If during the Term the
Executive becomes physically or mentally disabled, whether totally or
partially, as determined by a physician reasonably selected by the Company, so
that the Executive is unable substantially to perform his services hereunder
for (i) a period of four consecutive months, or (ii) for shorter periods
aggregating six months during any twelve-month period, the Company may at any
time after the last day of the four consecutive months of disability or the day
on which the shorter periods of disability equal an aggregate of six months, by
written notice to the Executive, terminate the Executive's employment hereunder
and discontinue payments of the Annual Salary, Bonuses and Benefits accruing
from and after the date of such termination. The Executive shall be entitled
to the full compensation payable to him hereunder for periods of disability
shorter than the periods specified in clauses (i) and (ii) of the previous
sentence.
4.6 Constructive Termination Without Cause.
Notwithstanding any other provision of this Agreement, the Executive's
employment under this Agreement may be terminated during the Term by the
Executive, which shall be deemed to be constructive termination by the Company
without Cause, if one of the following events shall occur without the consent
of the Executive: (i) a failure to elect or reelect or to appoint or reappoint
the Executive to the office of Vice President - U.S. Offshore Operations of the
Company or other material change by the Company of the Executive's functions,
duties or responsibilities which change would reduce the ranking or level,
dignity, responsibility, importance or scope of the Executive's position with
the Company from the position and attributes thereof described in Section 1
above; (ii) the liquidation, dissolution, consolidation or merger of the
Company, or transfer of all or substantially all of its assets, other than a
transaction in which a successor
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corporation with a net worth at least equal to that of the Company assumes this
Agreement and all obligations and undertakings of the Company hereunder; (iii)
a reduction in the Executive's fixed salary; (iv) the failure of the Company to
continue to provide the Executive with office space, related facilities and
secretarial assistance that are commensurate with the Executive's
responsibilities to and position with the Company; (v) the notification by the
Company of the Company's intention not to observe or perform one or more of the
obligations of the Company under this Agreement; (vi) the failure by the
Company to indemnify, pay or reimburse the Executive at the time and under the
circumstances required by Section 6 of this Agreement; or (vii) the occurrence
of any other material breach of this Agreement by the Company or any of its
subsidiaries. Any such termination shall be made by written notice to the
President of the Company, specifying the event relied upon for such termination
and given within 60 days after such event. Any constructive termination shall
be effective 60 days after the date the President of the Company has been given
such written notice setting forth the grounds for such termination with
specificity; provided, however, that the Executive shall not be entitled to
terminate this Agreement in respect of any of the grounds set forth above if
within 60 days after such notice the action constituting such ground for
termination is no longer continuing. A constructive termination by the Company
without Cause shall terminate the Restrictive Period hereunder.
4.7 For the purposes hereof, a "Change of Control of the
Company" shall be deemed to have occurred if after the effective date and the
IPO (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding securities
without the prior approval of at least a majority of the members of the Board
in office immediately prior to such person attaining such percentage interest;
(ii) there occurs a proxy contest or a consent solicitation, or the Company is
a party to a merger, consolidation, sale of assets, plan of liquidation or
other reorganization not approved by at least a majority of the members of the
Board in office, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a majority
of the Board thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (ii) of this Section
4.7, individuals who at the beginning of such period constituted the Board
(including for this purpose any new director whose election or nomination for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a
majority of the Board.
5. Insurance. The Company may, from time to time, apply for and
take out, in its own name and at its own expense, naming itself or one or more
of its affiliates as the designated beneficiary (which it may change from time
to time), policies for life, health, accident, disability or other insurance
upon the Executive in any amount or amounts that it may deem necessary or
appropriate to protect its interest. The Executive agrees to aid the Company
in procuring such insurance by submitting to medical examinations and by
filling out, executing and delivering such applications and other instruments
in writing as may reasonably be required by an insurance
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company or companies to which any application or applications for insurance may
be made by or for the Company.
6. Indemnification.
6.1 The Company shall, to the maximum extent not
prohibited by law, indemnify the Executive if he is made, or threatened to be
made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
an action by or in the right of the Company to procure a judgment in its favor
(collectively, a "Proceeding"), by reason of the fact that the Executive is or
was a director or officer of the Company, or is or was serving in any capacity
at the request of the Company for any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against judgments,
fines, penalties, excise taxes, amounts paid in settlement and costs, charges
and expenses (including attorneys' fees and disbursements) paid or incurred in
connection with any such Proceeding.
6.2 The Company shall, from time to time, reimburse or
advance to the Executive the funds necessary for payment of expenses, including
attorneys' fees and disbursements, incurred in connection with any Proceeding
in advance of the final disposition of such Proceeding; provided, however,
that, if required by the Texas Business Corporation Act, such expenses incurred
by or on behalf of the Executive may be paid in advance of the final
disposition of a Proceeding only upon receipt by the Company of an undertaking,
by or on behalf of the Executive, to repay any such amount so advanced if it
shall ultimately be determined by final judicial decision from which there is
no further right of appeal that the Executive is not entitled to be indemnified
for such expenses.
6.3 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall not be deemed exclusive of any other rights which the Executive may now
or hereafter have under any law, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
6.4 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall continue as to the Executive after he has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of the Executive.
6.5 The Company shall purchase and maintain director and
officer liability insurance on such terms and providing such coverage as the
Board determines is appropriate, and the Executive shall be covered by such
insurance on the same basis as the other directors and executive officers of
the Company.
6.6 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall be enforceable by the Executive
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in any court of competent jurisdiction. The burden of proving that such
indemnification or reimbursement or advancement of expenses is not appropriate
shall be on the Company. Neither the failure of the Company (including its
board of directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that such
indemnification or reimbursement or advancement of expenses is proper in the
circumstances nor an actual determination by the Company (including its board
of directors, independent legal counsel, or its stockholders) that the
Executive is not entitled to such indemnification or reimbursement or
advancement of expenses shall constitute a defense to the action or create a
presumption that the Executive is not so entitled. The Executive shall also be
indemnified for any expenses incurred in connection with successfully
establishing his right to such indemnification or reimbursement or advancement
of expenses, in whole or in part, in any such proceeding.
6.7 If the Executive serves (i) another corporation of
which a majority of the shares entitled to vote in the election of its
directors is held by the Company, (ii) another corporation which owns a
majority of the shares entitled to vote in the election of the directors of the
Company (a "Parent Corporation") or of which a majority of the shares entitled
to vote in the election of its directors is held by the Parent Corporation or
(iii) any employee benefit plan of the Company or any corporation referred to
in clause (i) or (ii), in any capacity, then he shall be deemed to be doing so
at the request of the Company.
6.8 The right to indemnification or reimbursement or
advancement of expenses shall be interpreted on the basis of the applicable law
in effect at the time of the occurrence of the event or events giving rise to
the applicable Proceeding.
7. Other Provisions.
7.1 Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:
(i) "affiliate" with respect to the Company means any
other person controlled by or under common control with the Company
but shall not include any stockholder or director of the Company, as
such.
(ii) "person" means any individual, corporation,
partnership, firm, joint Company, association, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or
other entity.
(iii) "subsidiary" means any corporation 50% or more
of the voting securities of which are owned directly or indirectly by
the Company.
7.2 Notices. Any notice or other communication required
or permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such
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notice shall be deemed given when so delivered personally, telegraphed, telexed
or sent by facsimile transmission or, if mailed, on the date of actual receipt
thereof, as follows:
(i) if to the Company, to:
Eagle Geophysical Offshore, Inc.
00 Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxx, 0xx Floor
Xxxxxxx, Xxxxx 00000
Attention: President
with a copy to:
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: X. X. Xxxxxxx III
(ii) if to the Executive, to:
Xxxxx Xxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Any party may change its address for notice hereunder by notice to the other
party hereto.
7.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.
7.4 Waivers and Amendments. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof. Nor shall any waiver on the part of any
party of any such right, power or privilege hereunder, nor any single or
partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder.
7.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas (without giving
effect to the choice of law provisions thereof) where the employment of the
Executive shall be deemed, in part, to be performed and enforcement of this
Agreement or any action taken or held with respect to this Agreement shall be
taken in the courts of appropriate jurisdiction in Houston, Texas.
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7.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by the Executive and may be assigned
by the Company (subject to Section 4.6 (iii) hereof) only to a successor by
merger or purchasers of substantially all of the assets of the Company.
7.7 Counterparts. This Agreement may be executed in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
7.8 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
7.9 Validity Contest. The Company shall promptly pay any
and all legal fees and expenses incurred by the Executive from time to time as
a direct result of the Company's contesting the due execution, authorization,
validity or enforceability of this Agreement.
7.10 Binding Agreement. This Agreement shall inure to the
benefit of and bit binding upon the Company and its respective successors and
assigns and the Executive and his legal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EAGLE GEOPHYSICAL OFFSHORE, INC.
By:____________________________
Name:____________________
Title:___________________
EXECUTIVE
_______________________________
Xxxxx Xxxxx
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