EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 27, 1997
between J.R.S. Exploration Company Limited, an Alberta corporation (the
"Company"), and X.X. Xxxxxxxxx (the "Employee").
WHEREAS, the Company desires to employ the Employee on the terms and
conditions provided in this Agreement with a view to maintaining and developing
the goodwill, trade secrets, proprietary rights, know-how and customer and
client relationships of the Company; and
WHEREAS, the Employee desires to accept such employment and to render
services to the Company on the terms and conditions provided in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Company and the Employee hereby agree as follows:
Section 1. Engagement. The Company hereby employs the Employee as its
Sales Manager and Operations Supervisor, and the Employee hereby accepts such
employment, upon and subject to the terms and conditions hereinafter set forth.
Section 2. Term. Unless sooner terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall
commence on the date (the "Effective Date") that
the Company is sold to 3-D Geophysical, Inc., a Delaware corporation ("3-D"),
and shall end on the third anniversary thereof (the "Term"). On or before the
second anniversary of the Effective Date, 3-D will notify the Employee in
writing whether or not 3-D elects to extend the Term for one additonal year. If
3-D so notifies the Employee that it elects to extend the Term, the Term will
end on the fourth anniversary of the Effective Date.
Section 3. Duties and Services.
3.1 The Employee shall render services to the Company as its Sales
Manager and Operations Supervisor and shall perform such other duties and
responsibilities as may be assigned to the Employee from time to time by the
President of the Company or the Board of Directors of the Company (the
"Directors") and shall abide by the practices and policies of the Company
governing the conduct of employees. However, any assignments presented to the
Employee for continuous work outside of Canada for a duration of two weeks or
longer may be accepted or rejected in the discretion of the Employee. The
Employee will perform all such services hereunder with a view to maintaining and
developing the goodwill, trade secrets, proprietary rights, know-how and
customer and client relationships of the Company.
3.2 During the Term, the Employee shall devote such energy and time
(exclusive of normal holidays and vacation periods and periods of sickness and
disability) as are reasonably necessary to perform the Employee's duties as
defined herein and shall
-2-
promptly and faithfully perform all the duties which pertain to
the Employee's employment.
Section 4. Compensation.
4.1 Annual Compensation. In consideration of all of the services to be
rendered by the Employee hereunder and the covenants of Employee herein, the
Company agrees to pay to the Employee, and the Employee agrees to accept, a
salary at the annual rate of $100,000.00 (Canadian).
4.2 Bonus Pool. 3-D intends to create a bonus plan based upon the
earnings of 3-D to provide incentives for certain employees of 3-D and its
subsidiaries, including the Company. The Employee shall be entitled to
participate in such plan on such terms as may be determined by the Compensation
Committee of the Board of Directors of 3-D, in its discretion. Nothing in this
Agreement shall require 3-D to pay any such bonus.
Section 5. Expenses and Reimbursement. The Employee shall be reimbursed
by the Company for reasonable and necessary out-of-pocket expenses incurred by
the Employee in performing his duties hereunder, provided such expenses are
approved in accordance with the procedures of the Company then in effect and are
presented for reimbursement in accordance with the Company's policies and
practices then in effect.
Section 6. Benefits. During the Term, the Company agrees
to provide the Employee, in addition to and not in limitation of
the compensation set forth in Section 4, the following benefits,
-3-
which shall be determined in the sole discretion of the Directors (or a duly
constituted committee thereof):
(a) The Employee shall be entitled, subject to qualification
requirements, to participate in any and all group insurance plans, group health
or medical insurance plans and group accidental and disability insurance plans
made generally available to the senior executive employees of the Company.
(b) The Employee shall be entitled to participate in 3-D's pension,
profit-sharing, stock option, stock purchase and other employee benefit programs
made generally available to the senior executive employees of the Company.
(c) The Employee shall be entitled to four weeks annual paid vacation,
as well as sick leave and holidays in accordance with the Company's policies for
senior executive employees generally.
(d) During the term of employment under this Agreement, the Company
shall pay the Employee, on a monthly basis, an amount equal to $650 (Canadian)
per month as a non-accountable allowance for lease payments, insurance and other
expenses of an automobile leased by the Employee.
(e) As further consideration of the services to be rendered by the
Employee, on the Effective Date the Employee shall be granted an option (the
"Option"), pursuant to the 3-D's 1995 Long-Term Incentive Compensation Plan (the
"Plan"), to purchase 15,000 shares of the Common Stock, par value $.01 per
share, of
-4-
3-D (the "Common Stock") at a per share exercise price equal to the closing
price of one share of Common Stock on the NASDAQ National Market on the
Effective Date, as reported by The Wall Street Journal. The Option shall vest in
four cumulative annual installments of 3,750 shares each, commencing on the
first anniversary of the Effective Date. The terms of the Option shall be
governed by the Plan, as well as the terms of the option agreement entered into
pursuant to the terms of the Plan.
Section 7. Termination. Subject to the provisions of Section 8, which
shall survive the termination of this Agreement, this Agreement shall terminate
upon:
(a) The death of the Employee;
(b) Illness, disability or incapacity that prevents the Employee from
performing his duties hereunder for one hundred twenty (120) consecutive days,
or for any one hundred twenty (120) days within any twelve (12) month period,
and the provision of written notice to the Employee by the Company of such
election to terminate; or
(c) Upon written notice for Cause, which shall include, without
limitation, (i) the failure of the Employee to observe or perform any material
term of this Agreement for twenty (20) days after written notice thereof
specifying such failure; (ii) any act of illegality, dishonesty, moral turpitude
or fraud in connection with the Employee's employment; or (iii) the commission
by the Employee of any serious indictable offense.
-5-
Section 8. Restrictive Covenants. In consideration of the undertakings
of the Company set forth herein, the Employee agrees as follows:
8.1 Covenant Not to Solicit Employees of the Company. During the Term
and for a period of one (1) year after the termination of this Agreement for any
reason whatsoever, the Employee shall not solicit for employment any sales,
engineering or other technical or management employee who was employed by the
Company or any of its subsidiaries during the Term.
8.2 Non-Disclosure Covenant. The Employee recognizes and acknowledges
that, in the course of his employment, the Employee will have access to trade
secrets, proprietary rights, know-how and other confidential information
(collectively, "Confidential Information") of the Company, 3-D and their
respective subsidiaries, including, but not limited to, information concerning
seismic data, marketing strategy, technology, techniques and know-how, customer
specifications and customer lists, cost figures, budgets, sales forecasts and
business plans. The Employee agrees that the disclosure of any such Confidential
Information could be harmful to the interests of the Company, 3-D or such
subsidiaries and that, during the Employee's employment by the Company or its
subsidiaries, the Employee will take appropriate caution to safeguard all such
Confidential Information, and will not during the Term or thereafter use,
disclose, divulge or publish any such Confidential Information except as
required by law or as the Employee's duties during the
-6-
Employee's employment by the Company or its subsidiaries may require or as the
Company may in writing specifically consent.
8.3 Proprietary Information. The Employee recognizes and acknowledges
that all documents, manuals, letters, notebooks, reports, records, computer
programs or data banks and other evidences of trade secrets, proprietary rights,
know-how and other confidential or proprietary information of the Company, 3-D
and their respective subsidiaries, including copies thereof, whether prepared by
the Employee or others, are the sole property of and belong exclusively to the
Company, 3-D and their respective subsidiaries, and agrees that, during the
Employee's employment by the Company or its subsidiaries, the Employee will
under no circumstances remove any such material for use outside of his offices
except in connection with the business of the Company during the course of the
Employee's employment. In the event of the termination of this Agreement for any
reason whatsoever, the Employee shall immediately return to the Company any and
all documents, manuals, letters, notebooks, records, computer programs or data
banks or other evidence of such Confidential Information of the Company,
including copies thereof, which are the property of the Company, 3-D or any of
their respective subsidiaries.
8.4 Remedies. The Employee hereby agrees that all restrictions imposed
upon the Employee hereunder are reasonable, fair and valid, and all defenses to
the strict enforcement of the provisions hereof are hereby waived by the
Employee. The
-7-
Employee further agrees that in the event of a breach or threatened breach of
any of the covenants contained in this Section 8, the Company's remedy at law is
likely to be inadequate and that accordingly the Company will be entitled to
obtain an injunction or other equitable relief with regard thereto without
proving damages or that damages would not constitute an adequate remedy. If the
final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 8 is invalid or unenforceable, in whole or in part,
the parties hereto agree that the court making the determination of invalidity
or unenforceability shall have the power to, and is hereby directed to, reduce
the scope, duration or area of the term or provision, by deleting specific words
or phrases, as necessary to comply with applicable law or to be enforceable by a
court of competent jurisdiction or by replacing any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid and unenforceable
term or provision, and this Agreement shall be enforceable as so modified.
8.5 Survival. The provisions of this Section 8 shall survive the Term.
9. Miscellaneous Provisions.
9.1 Notices. All notices and demands of any kind which any party hereto
may be required or desire to serve upon another party under the terms of this
Agreement shall be in writing and shall be served upon such other party: (a) by
personal service
-8-
upon such other party at such other party's address set forth below in this
Section 9.1; or (b) by mailing a copy thereof by certified or registered mail,
postage prepaid, with return receipt requested, addressed to such other party at
the address of such other party set forth below in this Section 9.1; or (c) by
sending a copy thereof by Federal Express or equivalent courier service,
addressed to such other party at the address of such other party set forth below
in this Section 9.1; or (d) by sending a copy thereof by facsimile to such other
party at the facsimile number, if any, of such other party set forth below in
this Section 9.1.
In case of service by Federal Express or equivalent courier
service or by facsimile or by personal service, such service shall be deemed
complete upon receipt. In the case of service by mail, such service shall be
deemed complete upon reasonable proof of receipt. The address and facsimile
number to which, and person to whose attention, notices and demands shall be
delivered or sent may be changed from time to time by notice served, as
hereinabove provided, by any party upon the other party.
The current addresses and facsimile numbers of the parties are:
If to the Employee:
X.X. Xxxxxxxxx
c/o J.R.S. Exploration Company Limited
-9-
0000 00xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X000
Telecopier No.: (000) 000-0000
If to the Company:
J.R.S. Exploration Company Limited
0000 00xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
with copies to:
3-D Geophysical, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Chairman
-and-
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
9.2 Entire Agreement; Amendment. This Agreement contains the entire
agreement between the parties respecting the subject matter hereof, merges all
prior negotiations, agreements and understandings, if any, respecting the
subject matter hereof and states in full all representations, warranties and
agreements which have induced this Agreement. Each party agrees that in dealing
with third parties no contrary representations will be made. This Agreement may
not be amended, modified or otherwise changed orally but only by an agreement in
writing signed by the party against whom enforcement of any amendment,
modification or change is sought.
-10-
9.3 Assignment; Binding Nature; Assumption. This Agreement shall inure
to the benefit of and be enforceable by, and may be assigned by the Company to,
any purchaser of all or substantially all of the Company's business or assets,
any successor to the Company or any assignee thereof (whether direct or
indirect, by purchase, merger, consolidation or otherwise). The Company will
require any such purchaser, successor or assignee to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such purchase, succession or
assignment had taken place. This Agreement may not be assigned by the Employee
without the prior written consent of the Company.
9.4 Nonwaiver. No waiver by any party of any term, provision or
covenant contained in this Agreement (or any breach thereof) shall be effective
unless it is in writing executed by the party against which such waiver is to be
enforced; no waiver shall be deemed or construed as a further or continuing
waiver of any such term, provision or covenant (or breach) on any other occasion
or as a waiver of any other term, provision or covenant (or of the breach of any
other term, provision or covenant) contained in this Agreement on the same or
any other occasion.
9.5 Remedies. The remedies provided for or permitted by this Agreement
shall be cumulative and the exercise by any party of any remedy provided for
herein or otherwise available shall not preclude the assertion or exercise by
such party of any other right or remedy provided for herein or otherwise
available.
-11-
9.6 Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
9.7 Construction. In this Agreement (i) words denoting the singular
include the plural and vice versa, (ii) "it" or "its" or words denoting any
gender include all genders, (iii) any reference herein to a Section refers to a
Section of the Agreement, unless otherwise stated, (iv) when calculating the
period of time within or following which any act is to be done or steps taken,
the date which is the reference day in calculating such period shall be excluded
and if the last day of such period is not a business day, then the period shall
end on the next day which is a business day, and (v) all dollar amounts are
expressed in Canadian funds.
9.8 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Province of Alberta applicable
to contracts made and to be entirely performed therein.
9.9 Counterparts. For the convenience of the parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be
deemed an original and all such counterparts together shall constitute one and
the same instrument.
9.10 Termination of Existing Employment Agreement. On the Effective
Date, the oral employment agreement between the Company and the Employee shall
automatically terminate and be of no
-12-
further force or effect and the Employee shall not be entitled to any further
payment pursuant thereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
-13-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date and year first written above.
J.R.S. EXPLORATION COMPANY LIMITED
By /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
EMPLOYEE:
/s/ X.X. Xxxxxxxxx
------------------------------
X.X. Xxxxxxxxx
-14-
