Exhibit A Executive Employment Agreement Between Geokinetics Inc. and Richard F. Miles
Exhibit
A
Executive
Employment Agreement Between Geokinetics Inc. and Xxxxxxx X. Xxxxx
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Name:
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Xxxxxxx
X. Xxxxx
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Position:
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President
and Chief Executive Officer
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Initial
Term:
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Two
(2) years
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Renewal
Term:
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Two
(2) Years
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Monthly
Base Salary:
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Executive’s
initial monthly base salary shall be $31,250 USD per
month. This salary will be reviewed
annually.
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Incentive
Compensation Plan:
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Executive
shall participate in the Company’s annual bonus plan subject to plan terms
commencing on the first day of the Company’s fiscal year. The
annual period in which the plan is in effect and each annual period
thereafter is referred to as the “Bonus Period.” Executive
shall be entitled to a bonus based upon performance against a set of
pre-established performance criteria memorialized on or before the 90th
day of the fiscal year in which the performance is based. Upon
completion of the criteria for the applicable Bonus Period, such criteria
shall be communicated to Executive in writing. If Executive
successfully meets the performance criteria established by the Company,
the Company shall pay Executive the earned Bonus amount within seventy-five (75) days
after the earlier of the end of the Bonus Period or Executive’s
employment, as applicable. The Bonus, where earned, will range
from 10% to 200% of the Bonus Target.
The
Executive’s Bonus Target is seventy-five percent (75%) of
annual base salary
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Equity
Plan Participation
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Executive
shall be eligible to participate in the Company’s long-term incentive
plan(s) in place at the time of the Employment Agreement or any similar
plan or plans thereafter. Equity Plan, for the purposes of this
Employment Agreement shall represent any long-term incentive plan approved
by the Board for the Executive which includes shares, shares equivalent or
cash-denominated awards. All participation shall be in accordance with the
terms and provisions of the Plan.
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Other
Compensation or Benefits
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All
unvested stock options, restricted stock, or other equity compensation
granted to Executive shall fully vest immediately upon a termination of
Executive’s employment by the Company without Cause or by the Executive
for Good Reason. The parties agree that this provision shall
control over any contrary provision in any plan or
agreement.
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Severance
Pay Period and Non-Competition Period
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24
months
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Geographic
Region Employment & Non-Competition Obligations
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Due
to the Executive’s contact with confidential affairs of the Company,
including business matters, costs, profits, markets, sales, trade secrets,
ideas, customers, this provision is in effect globally.
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Geokinetics,
Inc.
Executive
________________________________ _____________________________
Xxxxxxx
Xxxxxxx Xxxxxxx
X. Xxxxx
Chairman
of the Board of Directors
This
_____ day of October,
2008
This 21st day of
October, 2008
1
Between Geokinetics Inc. and
Xxxxxxx X. Xxxxx
This Employment Agreement
(“Agreement”), including the attached Exhibit A, between Geokinetics Inc.
(“Company”) and Xxxxxxx X. Xxxxx (“Executive”) is effective as of the date
Executive signs below (“Effective Date”). The parties to this
Agreement execute this Agreement to maximize the value of the Company and for
other purposes stated in Exhibit A. The Company and Executive agree as
follows:
Article
1: Employment, Compensation and Benefits
1.1 Term and
Position. The Company agrees to employ Executive, and
Executive agrees to be employed by the Company, in the Position and for
the Initial Term stated on Exhibit A. This Agreement will
automatically renew for the Renewal Term stated on Exhibit A and successive
Renewal Terms unless terminated by one of the parties pursuant to the terms of
this Agreement. During the Initial and any Renewal Terms of this
Agreement, Executive shall devote his working time and best efforts to the
business and affairs of the Company and the adequate performance of his duties
on a full-time basis.
1.2 Compensation. Executive
shall be compensated as set forth on Exhibit A. Executive’s monthly
base salary shall be paid in accordance with the Company’s standard payroll
practices, and (as with all other compensation paid to Executive by the Company)
is subject to withholding of all federal, state, city, or other taxes as may be
required by law. Compensation may include base salary, annual bonus
opportunity and periodic equity-based awards as determined appropriate by the
Compensation Committee of the Board of Directors (“Compensation Committee”) or
the Board of Directors (“Board”).
1.3 Benefits. Executive
shall be allowed to participate in all general employee benefit plans and
programs that the Company has made available to the Company’s employees on the
Effective Date or thereafter. Nothing in this Agreement is to be
construed to provide greater rights, participation, coverage, or benefits than
provided to similarly-situated employees under the terms of the benefit plans
and programs. The Company is not obligated
to institute, maintain, or refrain from changing, amending, or discontinuing any
benefit program or plan, so long as such actions are similarly applicable to
covered employees generally. If such benefits are taxable, the
Company shall ensure that terms of the benefits comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury
Regulations and other guidance promulgated or issued thereunder (collective,
“Section 409A”). The Company also agrees to indemnify Executive for
acts taken on behalf of the Company to the full extent provided in the Company’s
Amended Certificate of Incorporation and Bylaws. The parties to this
Agreement agree that the Company may purchase and maintain insurance on, or on
behalf of, Executive naming the Company or others as the beneficiary against any
liability asserted against the Company or Executive whether or not the Company
is obligated to indemnify Executive.
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Article 2: Termination and Associated Compensation
2.1 Termination of
Employment. The Company and Executive acknowledge and agree
that Executive's employment is at-will and that either the Company or Executive
may, at any time, with or without “Cause,” and with or without notice, terminate
the employment relationship.
2.2 Severance
Pay. The Company shall pay Executive “Severance Pay” for the
number of months stated on Exhibit A as the “Severance Pay Period” if the
Company terminates the Executive’s employment without Cause or the Executive
submits a Resignation for Good Reason. Executive is not entitled to
Severance Pay for a termination based on Death/Disability, Resignation without
Good Reason, or termination for Cause. In the event the Company
terminates the Executive’s employment without “Cause,” Severance Pay shall be
equivalent to Executive’s monthly base pay multiplied by the Severance Pay
Period. In the event Executive submits a Resignation for “Good
Reason,” Severance Pay shall be equivalent to Executive’s monthly base salary
and one-twelfth (1/12th) of the Executive’s most recent annual bonus
multiplied by the Severance Pay Period. In the event the Executive
agrees to a reduction in base salary during the Initial or Renewal Terms, the
highest base salary received subsequent to the Effective Date will be used for
purposes of calculating the base salary portion of Severance Pay.
The
Company shall pay Severance Pay monthly, or in accordance with Company standard
payroll practices; provided,
however, that the Company shall make no payments until six months after
termination, at which point all delayed payments will be made in a lump sum, if
Executive is a “Specified Employee” as defined in Section 409A. The
Company also shall continue to cover, under the same contribution terms as
active employees, Executive and his dependents as participants under the
Company’s medical and dental benefit plan during the Severance Pay Period,
unless Executive becomes eligible for coverage under another employer’s plan,
regardless of whether Severance Pay is paid monthly, delayed, or paid in a lump
sum. The Company shall have no further obligations to compensate
Executive under this Agreement for termination of employment other than paying
earned but unpaid salary, paying accrued but unused vacation, continuing to
accrue benefits up to the date of termination, and reimbursing Executive for
reasonable business expenses incurred prior to termination, such reimbursement
to be made per the Company’s standard policies and practices, but in any event,
no later than the end of the calendar month after the calendar month in which
the expense was incurred. The following are definitions of terms used
in this and other sections of this Agreement.
a. Cause. “Cause”
means (i) the Executive’s conviction by a court of competent jurisdiction, as to
which no further appeal can be taken, of a felony or crime involving moral
turpitude, or entering a guilty plea, the plea of nolo contendere, or similar
plea to such crime by the Executive regardless of whether crime is subject to
deferred adjudication, expunged, sealed, or erased; (ii) the commission by the
Executive of a material act of fraud; (iii) the material misappropriation of
funds or property by the Executive; (iv) the knowing engagement by the
Executive, without the written approval of Company, in any material activity
which directly competes with the business of the Company or its affiliates, or
which would directly result in a material injury to the business or reputation
of the Company or any affiliate; (v) Executive’s violation of any material
provision of this Agreement or Company rule, policy, or practice; or (vi)
Executive’s gross negligence or willful misconduct in the performance of
Executive’s duties for the Company or affiliates (other than by reason as set
forth in Section 2.2(d)). Provided, however, Executive
shall not be deemed to have been terminated for Cause under (v) or (vi) unless
Company management after consulting with the Board delivers written notice
specifically identifying the violation or performance failure that sets forth
specific facts, circumstances and examples of Executive’s failure, as determined
in good faith by the Company, and Executive’s continued failure or inability to
cure, if curable, such violations or performance failures within the time period
set by the Company, but in no event less than thirty business days after his
receipt of the initial notice.
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b. Good
Reason. “Good Reason” means the occurrence of any one or more
of the following: (i) material adverse change in Executive’s status
as an executive of the Company including, without limitation, Executive’s
position, authority, duties or responsibilities; (ii) any adverse change in
Executive’s base monthly salary or target bonus; (iii) relocation of Executive’s
office from the location on the Effective Date of this Agreement to a location
more than fifty (50) miles from the location on the Effective Date; or (iv)
Company’s material breach of this Agreement. For purposes of this
Agreement, changing the Company’s status to a private entity, changing the stock
exchange on which the Company is listed, or a “Change in Control, as defined by
the Company’s most recent Stock Awards Plan, shall not be considered a “Good
Reason”
c. Resignation. “Resignation”
means Executive’s decision to terminate employment for a Good Reason or without
Good Reason as reflected in a letter the Executive shall send to the Company’s
Board of Directors.
d. Death/Disability. “Death/Disability”
means Executive’s (i) death; or (ii) becoming incapacitated or disabled so as to
entitle Executive to benefits under the Company’s long-term disability plan; or
(iii) becoming permanently and totally unable to perform Executive’s duties for
the Company as a result of any physical or mental impairment supported by a
written opinion by a physician selected by the Company, Executive, or
Executive’s heirs.
Article 3: Confidential Information; Unfair Competition
3.1 Company Property and
Inventions. All written materials, records, data, and other
documents prepared or possessed by Executive during Executive’s employment by
the Company are Company property. All Confidential Information as
defined in Section 3.2 including copyrightable works, trademarks, and inventions
(patentable or not), discovered, created, developed, or invented by Executive as
a result of work that Executive performs in connection with this Agreement
during the Initial Term and Renewal Terms of this Agreement (whether during
business hours and whether on Company premises or otherwise), and all
applications for patents and resulting patents, shall belong to and be the
property of the Company.
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Executive
agrees promptly to disclose to the Company all such intellectual property;
cooperate fully with and assist the Company in the preparation and prosecution
of all applications for patents, trademark registrations, and copyright
registrations covering any such property; execute all necessary documents
related to such property; provide necessary assistance associated with any other
protection procedures for such property; assign to the Company all patents,
trademark registrations, and copyright registrations issuing on such
applications; and aid the Company in the enforcement of its proprietary
rights. The Company shall pay Executive reasonable compensation for
and reimburse Executive for reasonable expenses associated with time spent in
assisting, preparing, and prosecuting applications, executing necessary
documents, engaging in other protection proceedings, and aiding the Company in
enforcing its proprietary rights in connection with matters arising under this
paragraph after the termination of Executive employment.
This Company Property and Inventions
section shall not apply to any inventions that Executive developed or conceived
prior to employment with the Company. Similarly and regardless of any
inventions described by Executive in the forgoing sentence, this Company
Property and Inventions section shall not apply to any inventions that meet all
of the following requirements: (i) the invention is developed
entirely by Executive on Executive’s own time without using the Company’s
equipment, supplies, facilities or Confidential Information; (ii) the invention
does not relate to the Company’s business or the actual or demonstrably
anticipated research or development of the Company; and (iii) the invention does
not result from any work performed by Executive for the Company.
At the termination of Executive’s
employment with Company for any reason, Executive shall return all of the
Company’s documents, data, or other Company property to the
Company.
3.2 Confidential
Information: Non-Disclosure. Executive acknowledges
that the business of the Company is highly competitive and that the Company is
providing Executive with access to Confidential Information relating to the
business of the Company or its affiliates. “Confidential Information”
means and includes the Company or its affiliates’ confidential and/or
proprietary information and/or trade secrets that have been developed or used
and/or will be developed and that cannot be obtained readily by third parties
from outside sources.
Confidential
Information includes, by way of example and without limitation, the
following: (i) the Company or its affiliates’ development, patent and
copyright development and licensing thereof, trade secrets, inventions,
formulas, designs, drawings, specifications and engineering, laboratory
analysis, production processes, or equipment; (ii) the Company or its
affiliates’ marketing techniques, price lists, pricing policies, sales, service,
costs, and business methods, formulas, product specifications, and planning
efforts; (iii) the names of the Company or its affiliates’ customers and their
representatives, customer services, or the type, quantity and specifications of
products purchased by or from customers; (iv) information about the Company or
its affiliates’ employees and the terms and conditions of their employment; (v)
the Company or its affiliates’ computer techniques, programs and software, or
(vi) any other confidential or proprietary information of the Company or the
Company or its affiliates’ customers, suppliers, vendors, investors, partners,
or other third parties that cannot be obtained readily by the
public.
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Executive
acknowledges that this Confidential Information constitutes a valuable, special,
and unique asset used by the Company or its affiliates in their business to
obtain a competitive advantage over their competitors. Executive
further acknowledges that protection of such Confidential Information against
unauthorized disclosure and use is of critical importance to the Company or its
affiliates in maintaining their competitive position.
Executive agrees that Executive will
not, at any time during or after Executive’s employment with the Company, make
any unauthorized disclosure of any Confidential Information, or make any use of
Confidential Information, except in the carrying out of Executive’s employment
responsibilities on behalf of the Company. Executive also agrees to
preserve and protect the confidentiality of third party Confidential Information
to the same extent, and on the same basis, as the Company or its affiliates’
Confidential Information. The Company also agrees to hold in
confidence any personal or confidential information that Executive provides to
the Company including but not limited to Confidential Information as defined in
Article 21 of the Company’s Articles.
3.3 Non-Competition
Obligations. The Company agrees to provide Executive with
access to Confidential Information upon signing of this
Agreement. Executive’s non-competition obligations are ancillary to
the Company’s agreement to disclose Confidential Information to
Executive. In order to protect the Confidential Information described
above, and in consideration for Executive receiving access to this Confidential
Information and agreeing to non-disclosure of the Confidential Information,
Executive and the Company agree to the following non-competition
provisions. During the Non-Competition Period stated on Exhibit A,
Executive will not, directly or indirectly, for Executive or for others, in the
Geographic Region defined in Exhibit A:
a. engage
in the business of providing advanced software and related services to the oil
and natural gas exploration and production industry including, but not limited
to, analysis, visualization, and modeling of the Earth’s subsurface, seismic
data processing and imaging, prospect interpretation and modeling, reservoir
characterization, time/depth conversions, well planning and drilling, or any
other advanced software application or related service that was considered,
developed, or offered by the Company within the twelve months preceding the
termination of Executive’s employment with the Company;
b. call
on, service, or solicit competing business from customers or potential customers
of the Company or its affiliates with whom Executive, or any member of Executive
management, within the previous twenty-four months, had or made
contact. These restrictions are limited by geography to the specific
places, addresses, or locations where a customer is present and available for
calling on, soliciting or servicing customers; or
c. render
advice or services to, serve as a member of a Board of Directors, or otherwise
assist, any other person, association or entity in the activities referenced in
“a” or “b” above.
Executive understands that the
foregoing restrictions may limit Executive’s ability to engage in certain
activities in the Geographic Region and during the Non-Competition Period, but
acknowledges that these restrictions are necessary to protect the Confidential
Information the Company or its affiliates has provided to Executive and the
value of compensation available to Executive and others.
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Executive agrees that this provision
defining the scope of activities constituting competition with the Company is
narrow and reasonable because: (i) Executive is free to seek
employment with other companies providing services that do not directly or
indirectly compete with the business of the Company, (ii) Executive is free to
seek employment with other companies in the energy business that do not directly
or indirectly compete with the business of the Company, such as oil and gas
exploration and production companies, drilling contractors, and oil field
equipment manufacturers and merchants; and (iii) there are many other companies
in the energy industry that do not directly or indirectly compete with the
business of the Company. Thus, this restriction on Executive’s
ability to compete does not prevent Executive from using and offering the
general knowledge, skills and experience that Executive possessed prior to
receiving Confidential Information, specialized training, compensation, and
knowledge from the Company.
3.4 Non-Solicitation of
Employees. During Executive’s employment, and for the longer
of twelve months or the Severance Pay Period, if applicable, following the
termination of employment for any reason, Executive will not, either directly or
indirectly, call on, solicit, or induce any other employee or officer of the
Company or its affiliates with whom Executive had contact with, knowledge of, or
association with in the course of employment with the Company to terminate the
individual’s employment, and will not assist any other person or entity in such
a solicitation.
3.5 Warranty and
Indemnification. Executive warrants that Executive is not a
party to any other restrictive agreement limiting Executive’s activities in
Executive’s employment by the Company. Executive further warrants
that at the time of the signing of this Agreement, Executive knows of no written
or oral contract or of any other impediment that would inhibit or prohibit
employment with the Company and that Executive will not knowingly use any trade
secret, confidential information, or other intellectual property right of any
other party in the performance of Executive’s duties for the
Company. Executive shall hold the Company harmless from any and all
suits and claims arising out of any breach of such restrictive agreement or
contract.
Article
4: Miscellaneous
4.1 Statements About the
Company. Executive shall refrain, both during and after
Executive’s employment, from publishing any oral or written statements about the
Company, its affiliates, or any of their respective officers, employees, agents,
or representatives that are disparaging, slanderous, libelous, or
defamatory; or that disclose private or confidential information about their
business affairs; or that constitute an intrusion into their seclusion or
private lives; or that give rise to unreasonable publicity about their private
lives; or that constitute a misappropriation of their name or
likeness.
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4.2 Notices. Notices
and all other communications shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by United States
registered or certified mail. Notices to the Company, shall be sent
to 0000 XxxxXxxx Xxxx, Xxxxxxx,
Xxxxx 00000 attention: Vice President - Human
Resources. Notices and communications to Executive shall be
sent to the address Executive most recently provided to the
Company.
4.3 No
Waiver. No failure by either party at any time to give notice
of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of any
provisions or conditions of this Agreement.
4.4 Enforcement. If
a dispute arises out of or related to this Agreement, Executive’s employment
with the Company (except as indicated below) and if the dispute cannot be
settled through direct discussions, then the Company and Executive agree to try
to settle the dispute as set forth in this Section. The parties
initially will attempt to resolve any disputes by mediation. Should
the parties not be able to resolve disputes by mediation, the parties agree to
use confidential, binding arbitration to resolve any disputes. The
arbitration shall be conducted in accordance with then-current employment
arbitration rules of the Judicial Arbitration & Mediation Services, Inc.
(JAMS) in Houston, Texas before a single arbitrator licensed to practice
law. Either party may seek a temporary restraining order, preliminary
injunction, specific performance or other equitable relief regarding the
obligations stated in Section 2.2, Article 3, and Section 4.1 before a court of
law pending a final resolution of the disputes between the parties before an
arbitrator, and either party may seek a judgment including a permanent
injunction, if appropriate, from the court based on the final decision of the
arbitrator. If the court or arbitrator finds that Section 3.3
contains limitations as to time, geographical area, or scope of activity to be
restrained that are not reasonable and impose a greater restraint than is
necessary to protect the goodwill or other business interest of the Company, the
court or arbitrator may reform the covenant to the extent necessary to cause the
limitations contained in Section 3.3 as to time, geographical area, or scope of
activity to be reasonable and to impose a restraint that is not greater than
necessary to protect the goodwill or other business interest of the Company, and
enforce Section 3.3.
4.5 Choice of
Law. The Company’s principal place of business is in Houston,
Texas. This Agreement was negotiated and signed in Houston,
Texas. This Agreement shall be governed by Texas law.
4.6 Assignment. This
Agreement shall be binding upon and inure to the benefit of the Company and any
other person, association, or entity that may acquire or succeed to all or
substantially all of the business or assets of the
Employer. Executive’s rights and obligations under this Agreement are
personal, and they shall not be assigned or transferred without the Company’s
prior written consent.
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4.7 Other
Agreements. Other agreements exist between the Company and
Executive relating to the employment relationship (e.g., agreements contained in
the acknowledgment of receipt of employee handbook, the Company’s code of
conduct, stock option agreements, and the Company’s benefit
plans). This Agreement does not supersede those agreements, but
doesreplace and merge other, previous agreements and discussions pertaining to
terms and conditions of Executive’s employment and termination of Executive’s
employment, and this Agreement constitutes the entire agreement of the parties
with respect to the subject matters stated in this Agreement; provided, however, that
should a court, jury or arbitrator determine that the provisions of Section 3.3
are invalid or unenforceable, Section 3.3 shall not supersede, replace, or merge
any prior non-competition agreements between the parties and the court, jury or
arbitrator shall determine the validity and enforceability of such prior
agreements. No representation, inducement, promise, or agreement has
been made by either party with respect to such subject matters, and no
agreement, statement, or promise relating to the employment of Executive by the
Company that is not contained in this Agreement shall be valid or
binding. Any modification of this Agreement will be effective only if
it is in writing and signed by each party.
4.8 Survival/Severability/Headings. It
is the express intention and agreement of the parties that the provisions of
Section 2.2, Article 3, and Section 4.1 shall survive the termination of
Executive’s employment. In addition, all other obligations of the
Company to make payments under this Agreement shall survive any termination of
this Agreement on the terms and conditions set forth in this
Agreement. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which shall remain in full force and
effect. Article and section headings contained in this Agreement are
provided for convenience and reference only, and do not define or affect the
meaning, construction, or scope of any of the provisions of this
Agreement.
IN WITNESS WHEREOF, the Company and
Executive have executed this Agreement in multiple originals to be effective on
the Effective Date.
Geokinetics,
Inc. .
Executive
________________________________ _____________________________
Xxxxxxx
Xxxxxxx
Xxxxxxx X. Xxxxx
Chairman
of the Board of Directors
This ____
day of October,
2008
This 21st day
of October, 2008
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