SEPARATION AND CONSULTING AGREEMENT
Exhibit 10.69
SEPARATION AND CONSULTING AGREEMENT
This Separation and Consulting Agreement (collectively, the “Agreement”) dated as of December 27, 2019 (the “Effective Date”) is made by and between SAExploration Holdings, Inc. (the “Company”) and Xxxx Xxxxx (“Xxxxx”). Xxxxx and the Company together are referred to as the “Parties.”
Preamble
WHEREAS, Xxxxx was previously employed by the Company as Vice President, Capital Markets and Investor Relations and is currently employed as Vice President, Finance, pursuant to an Executive Employment Agreement effective on or about August 3, 2016, as amended by the First Amendment to Executive Employment Agreement and Second Amendment to Executive Employment Agreement (as amended, the “Employment Agreement”) attached hereto as Exhibit A;
WHEREAS, Xxxxx is now resigning from the Company pursuant to the terms of this Agreement; and
WHERES, Xxxxx and the Company desire for Xxxxx to provide consulting services as an independent contractor following termination of Xxxxx’x employment during the period of time and upon the terms and conditions set forth herein.
NOW THEREFORE in consideration of the mutual promises exchanged in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
Agreement
Definition. When used in this Agreement, “Company and/or its Affiliates” shall mean and include SAExploration Holdings, Inc. and all of its predecessors, successors, parents, subsidiaries, divisions and other affiliated companies, partners, partnerships, assigns, and all of their respective present and former officers, directors, employees, shareholders or equity holders, board members, agents and insurers, whether in their individual or official capacities.
1.Resignation Date. As of December 22, 2019 (the “Resignation Date”), Xxxxx will be deemed to voluntary resign from employment with the Company and from any and all positions ever held as an officer, manager, director or similar position with any subsidiary of the Company.
2.Accrued Obligations and Severance Benefits. In consideration for the release in Section 4 below and the covenants contained in this Agreement, the Company shall provide the following to Xxxxx:
(a)Accrued Obligations: The Company shall pay Xxxxx the following accrued obligations: (i) payment of his current base salary through December 22, 2019; and (ii) payment of his accrued, unused vacation, in the amount of $29,769.25 (collectively, the “Accrued Obligations”). Such base salary will be paid in accordance with the Company’s normal payroll schedule and the payments identified in this part (ii) of the previous sentence will be paid in a lump sum within thirty (30) days after the Effective Date.
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(b)Severance Pay: The Company shall pay Xxxxx an additional two weeks of his current base salary (the “Severance Pay”) in a lump sum within thirty (30) days after the Effective Date of this Agreement. Xxxxx acknowledges that this consideration is in addition to anything of value to which Xxxxx already is entitled from the Company and that Xxxxx is not entitled to the Severance Pay except as provided in this Agreement.
(c)Continuation of Health Insurance Benefits: If Xxxxx elects to continue group health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company shall pay Xxxxx the portion of the COBRA premium that the Company was paying for Xxxxx’x health insurance coverage as of the Resignation Date (the “COBRA Premium Payments”) to Xxxxx to assist with Xxxxx’x COBRA coverage for a period of three months, continuing through March 2020. The Company will pay the COBRA Premium Payments to Xxxxx within thirty (30) days after the end of each month. For the avoidance of doubt, the Company is not paying the entire cost of COBRA coverage, but is simply reimbursing Xxxxx the COBRA Premium Payments equal to the payments the Company was making prior to the Resignation Date. The Severance Pay and COBRA Premium Payments are collectively referred to as the “Severance Benefits.”
(d)All amounts paid pursuant to this Agreement will be reduced by applicable deductions and withholdings required by local, state, or federal law.
3.Clawback. The Parties acknowledge and agree that the Company may claw back and recover any bonus or other incentive compensation provided to Xxxxx pursuant to the Employment Agreement or any other incentive or bonus plan, the Xxxxxxxx-Xxxxx Act, and other applicable law, and Xxxxx hereby consents to the Company doing so to the maximum extent permitted by law. To the extent that Xxxxx received or receives any amount in excess of the amount that Xxxxx should otherwise have received under the terms of the applicable compensation plan, program, agreement or arrangement (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), Xxxxx shall be required to repay any such excess amount to the Company.
4.Release by Xxxxx. In exchange for the consideration contained herein, including the Severance Benefits, Xxxxx, on behalf of himself, and his agents, spouse, heirs, executors, successors and assigns, unconditionally, fully and forever waives, releases, discharges, agrees to hold harmless, and promises not to xxx the Company and/or its Affiliates, from and for any claim, action or right of any sort, known or unknown, arising on or before the Effective Date, for any wages, salary, bonuses, equity interests (excluding any equity interests that vested prior to the Resignation Date), compensation, sick time, vacation time, paid leave or other remuneration of any kind or any claim for additional or different compensation or benefits of any sort, including severance payments or benefits pursuant to the Employment Agreement or any other agreement (including any of the amounts identified in Section 5 of the Employment Agreement), or additional or different compensation or benefits related to his resignation or termination of employment with the Company. For the avoidance of doubt, Xxxxx is not releasing his right to his base salary earned through the Resignation Date, current employment benefits through the Resignation Date, the vacation pay identified in Section 2, the Severance Pay, the COBRA Premium Payments, the Consulting Compensation described below, or vested benefits under any Company benefit plan to which Xxxxx is already entitled pursuant to applicable law or the terms
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of such plans. Nothing in this Agreement shall be construed to divest Xxxxx of any vested interest or shares in the Company, except as may be permitted or required pursuant to the Clawback Provision contained herein. Likewise, nothing in this Agreement waives any rights Xxxxx has under the October 2, 2019 amended and restated letter agreement (the “A&R Letter Agreement”) attached hereto as Exhibit B, including any applicable indemnification rights or related agreements referenced therein. However, nothing in this Agreement or carve out in the release impairs or limits the Board or Special Committee of the Board from finding that Xxxxx is not entitled to further indemnification under applicable law.
5.Continued Obligations. Xxxxx acknowledges and agrees that he previously agreed to be bound by certain ongoing and post-employment obligations pursuant to Sections 6 and 7 of the Employment Agreement (the “Continued Obligations”), which are hereby incorporated herein by reference.
6.Consulting. The Company agrees to engage Xxxxx on an independent contractor basis as a consultant to the Company and Xxxxx accepts such engagement and agrees to provide the services reasonably requested of him in writing by Xxxxx Xxxxxxx (“Xxxxxxx”), or his designee. The term of this consultancy engagement will commence on the Effective Date and shall continue for one (1) month until January 27, 2020 or unless otherwise terminated by the Company or Xxxxx (the “Consulting Period”). The Company and Xxxxx may terminate the Consulting Period for any reason or no reason upon written notice. Xxxxx, as an independent contractor during the Consulting Period, shall control the manner and methods employed by him in performing the services, pursuant to the general instructions and directions from the Company. Xxxxx will perform his obligations as a consultant as a reasonable and prudent professional, in a good and workmanlike manner, and in compliance with all applicable laws and regulations, applicable written policies and procedures of the Company, and applicable professional standards. He must perform the services requested without undue delay and keep the Company informed about his services for the Company. Any services to the Company will be on an as-needed basis and will not exceed forty (40) hours per workweek.
7. Independent Contractor. The relationship between Xxxxx and the Company will be that of independent contractors during the Consulting Period. He is not and shall not be deemed to be an employee, agent, joint venturer, or partner of the Company and/or its Affiliates. Nothing herein shall be construed as creating or establishing an employment relationship after the Resignation Date. Xxxxx shall not be entitled to, and Company shall not provide, any contribution, profit sharing, pension, health, worker’s compensation or other insurance programs, or other benefits commensurate with employee status during the Consulting Period (other than any entitlement that he was already entitled to by virtue of his employment with the Company prior to the Resignation Date). Furthermore, Xxxxx agrees that he shall not be treated as an employee of Company for tax purposes during the Consulting Period, and that Company shall not pay any contributions to Social Security, unemployment insurance, or federal or state withholding taxes on behalf of Xxxxx in connection with the Consulting Fees identified herein. Xxxxx agrees and understands that he is solely responsible for all taxes or other payments related to compensation Xxxxx receives pursuant to this Agreement. Xxxxx understands and agrees that the Company shall not be obligated to pay for any expenses related to any illnesses or injuries that Xxxxx may suffer related, directly or indirectly, to the performance of the consulting services hereunder.
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8.Consultant Fees. Xxxxx will be paid $100 per hour (the “Consulting Compensation”) for all services performed during the Consulting Period that have been approved in advance in writing by the Company. Such amounts for each month in which the Consulting Period is in effect will be paid no later than thirty (30) days after the end of such month. The Company agrees to reimburse Xxxxx for actual, documented and reasonable travel and out-of-pocket expenses in connection with the performance of the services that have been approved in advance in writing by the Company.
9.Cooperation.
(a)For a period of three (3) months from the Effective Date, upon reasonable request, Xxxxx agrees to cooperate with the Company and all individuals employed by the Company in any and all matters relating to the transition of his duties of Vice President, Finance. During the Consulting Period, he will be entitled to the Consulting Compensation as defined herein. Additionally, upon reasonable request and not limited to a three (3) month period, Xxxxx agrees to cooperate with the Company with respect to any ongoing investigations by the Securities and Exchange Commission (the “SEC”) and related investigations or any other related matters at the request of the Company.
(b)Xxxxx agrees that he will not discuss with any current Company employees or potential or actual customers of the Company, or otherwise interfere with, directly or indirectly, any matters relating to the SEC investigation, the Company’s own investigation, any Company business, or any related matters. Notwithstanding the foregoing, Xxxxx may discuss these matters with Xxx Xxxxxx, Director of the Company (“Xxxxxx”), as well as others so long as Xxxxxx gives Xxxxx permission to do so. Nothing in this Agreement inhibits or prohibits Xxxxx from (i) communicating with the SEC or any other government agency about any matter, or (ii) making disclosures that may be required by law or compelled by legal process.
(c)Xxxxx represents and warrants that he has previously disclosed or will in the future disclose and advise the Company of all instances of any alleged regulatory violations or potential noncompliance of law by the Company of which he is aware. Xxxxx further agrees that he will make no knowing and intentional misstatements of fact to Sidley Austin and Ankura investigators in interviews.
10.Enforcement.
(a)Arbitration.
(i)With the exception of Section 10 of the Employment Agreement (relating to a breach or threatened breach of Section 6 or 7 of that agreement), the Parties agree that any and all disputes, claims or controversies arising out of, relating to, or in connection with this Agreement or Xxxxx’ resignation, including the execution, performance, and termination of this Agreement and related documents, that are not resolved by their mutual agreement shall be resolved by final and binding confidential arbitration as the exclusive remedy. Xxxxx understands that by entering into this Agreement, Xxxxx is waiving any right he may have to file a lawsuit or other civil action or proceeding, and Xxxxx is waiving any right he may have to resolve disputes through trial by judge or jury.
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(ii)Either Party may commence the arbitration process by filing a written demand for arbitration with the American Arbitration Association (“AAA”) and sending a copy by personal delivery or certified mail to the other party. The Parties agree that, except as provided in this Agreement, the arbitration shall be in accordance with the AAA’s then–current rules Commercial Arbitration Rules. The arbitration shall be conducted by one arbitrator (“Arbitrator”) admitted to practice law in Texas for at least ten (10) years who is a former judge, selected pursuant to the selection procedures provided by AAA or by an arbitrator mutually selected by the parties. Proceedings to enforce, confirm, modify, set aside or vacate an award or decision rendered by the Arbitrator will be controlled by and conducted in conformity with the Federal Arbitration Act, 9 U.S.C. § 1 et seq., or applicable state law. The arbitration shall be final and binding upon the parties. The Parties will be responsible for paying their own costs and attorney’s fees except as otherwise provided by the arbitration rules. Any arbitration proceeding shall take place in Xxxxxx County, Texas. The arbitration proceeding and all related documents will be confidential, unless disclosure is required by law.
(iii)THE PARTIES HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY AND AGREE TO HAVE ANY AND ALL DISPUTES RESOLVED IN ARBITRATION IN ACCORDANCE WITH THIS SECTION.
11.Notices. Any notices provided under this Agreement shall be effective if provided concurrently by both email and federal express (overnight delivery) as follows:
(a)If to Xxxxx:
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(i) |
Xxxx Xxxxx |
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(ii) |
With a courtesy copy (which does not constitute notice) to: |
G. Xxxxx Xxxxxx
Streusand Xxxxxx Xxxxxx Xxxxxx LLP
0000 Xxxxx Xx Xxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
xxxxxx@xxxxxx.xxx
(b)If to the Company:
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(i) |
To SAExploration Holdings, Inc. |
Attn: Xxxxxxx Xxxxx, Chief Executive Officer.
xxxxxx@xxxxxxxxxxxxx.xxx
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(ii) |
With a courtesy copy (which does not constitute notice) to: |
E. Xxxxx Xxxxx
Xxxxxx Xxxxxx LLP
0000 Xxxx Xx., 00xx Xxxxx, Xxxxxxx, XX 00000
xxxxxx@xxxxxxxxxxxx.xxx
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12.Authority. The Parties warrant that they or their undersigned representatives are legally competent and fully authorized to execute and deliver this Agreement. Xxxxx additionally warrants that he has not heretofore assigned or transferred, or purported to have assigned or transferred, to any firm, entity, or person, any dispute released herein.
13.Entire Agreement. This Agreement, together with the Continued Obligations and Sections 10, 11, 13, 16, 17, 19, 20, 22, 23, and 24 of the Employment Agreement, embody the entire agreement between the Parties relating to the subject matter hereof, and may be amended or modified only by an instrument in writing executed jointly by the Parties. For the avoidance of doubt, nothing herein waives any rights Xxxxx has with respect to (i) equity or stock in the Company that vested prior to the Resignation Date pursuant to the applicable governing agreements; (ii) any rights arising out of the A&R Letter Agreement; or (iii) any applicable indemnification rights or related agreements referenced in the A&R Letter Agreement. However, nothing in this Agreement impairs or limits the Board or Special Committee of the Board from finding that Xxxxx is not entitled to further indemnification under applicable law.
14.Neutral Reference. If any potential employers contact the Company to inquire about Xxxxx, the Company will provide only dates of employment and Xxxxx’x last job title with the Company.
15.Choice of Law. This Agreement is made and shall be enforced pursuant to the laws of the State of Texas. It is the intent of the Parties that this Agreement may be disclosed to a court of law and that the terms of the Agreement are binding upon the Parties in a court of law.
16.No Admission. The Parties acknowledge that this Agreement is the result of a compromise and shall never be construed as, or said by either of them to be, an admission by the other of any liability, wrongdoing, or responsibility. The Parties expressly disclaim any such liability, wrongdoing, fault, or responsibility.
17.Other Representations. By executing this Agreement and as a condition precedent to any obligations or liabilities of the Parties, Xxxxx expressly acknowledges, represents, and warrants that Xxxxx (i) is not relying upon any statements, understandings, representations, expectations, or agreements other than those expressly set forth in this Agreement; (ii) was represented by legal counsel of his own choosing in connection with the negotiation of this Agreement; (iii) has made his own investigation of the facts, has had a full opportunity to review the terms of this Agreement, and has and is relying solely upon his own knowledge and the advice of his own legal counsel; (iv) has carefully read and understood all of the provisions of this Agreement; (v) knowingly waives any claim that this Agreement was induced by any misrepresentation, omission, or nondisclosure and any right to rescind or avoid this Agreement based upon presently existing facts, known or unknown; and (vi) he is the lawful owner of the claims released herein and has not assigned, transferred, sold, pledged, or in any manner whatsoever conveyed any right, title, interest, or claim in or to any claim released by this Agreement. Xxxxx stipulates that the Company is relying upon these representations and warranties in entering into this Agreement. These representations and warranties shall survive the execution of this Agreement.
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18.Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future laws or public policies, such provisions shall be fully severable and shall in no way affect the validity or enforceability of this Agreement or any other provision herein.
19.Waiver. The provisions of this Agreement may only be waived with the prior written consent of the Company and Xxxxx, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect, or enforceability of this Agreement or any provision herein.
20.Agreement Jointly Drafted. The Parties agree that this Agreement shall be construed as if the Parties jointly prepared this Agreement and that this Agreement shall not be construed against any Party on the ground that such Party drafted the Agreement.
21.Voluntary Execution. Xxxxx further acknowledges that he has had sufficient time to consider this Agreement, that he was represented by counsel of his choosing in negotiating this Agreement, and that Xxxxx is signing this Agreement knowingly and voluntarily for purposes of receiving additional, valuable compensation beyond what Xxxxx would otherwise be entitled to.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as follow:
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/s/Xxxx Xxxxx |
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Xxxx Xxxxx |
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Date: |
12/27/19 |
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[Signature page to Separation Agreement]
10506954v1
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/s/ Xxxxxxx X. Xxxxx |
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Printed Name: |
Xxxxxxx X. Xxxxx |
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Title: |
Chief Executive Officer |
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Date: |
12/27/19 |
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[Signature page to Separation Agreement]
10506954v1
