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Exhibit (c)(3)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") dated
January 13, 1998 between 3-D Geophysical, Inc., a Delaware corporation (the
"Company"), and Ronald L. Koons (the "Employee").
WHEREAS, the Employee is employed by the Company in a key managerial
capacity and the Employee's services are valuable to the conduct of the business
of the Company;
WHEREAS, the Company recognizes that circumstances may arise in
which a change in control of the Company occurs, through acquisition or
otherwise, thereby causing uncertainty about the Employee's future employment
with the Company without regard to the Employee's competence or past
contributions, which uncertainty may result in the loss of valuable services of
the Employee to the detriment of the Company and its stockholders, and the
Company and the Employee wish to provide reasonable security to the Employee as
an incentive for the continuation by Employee of his current relationship with
the Company;
WHEREAS, the Employee and the Company are parties to an Employment
Agreement dated September 30, 1996 (the "Prior Agreement") and wish to amend and
restate the terms and conditions of the Prior Agreement in their entirety with
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and conditions of this Agreement;
WHEREAS, the Company desires to continue to employ the Employee on
the terms and conditions provided in this Agreement; and
WHEREAS, the Employee desires to continue 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 Vice
President, Chief Financial Officer, Secretary and Treasurer of the Company, 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 hereof (the "Effective Date") and shall end on December 31, 2000 (the
"Term").
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Section 3. Duties and Services.
3.1 The Employee shall render services to the Company as Vice President,
Chief Financial Officer, Secretary and Treasurer of the Company, shall perform
such other duties and responsibilities as may be assigned to the Employee from
time to time by the Board of Directors (the "Directors") or the Chief Executive
Officer of the Company and shall abide by the practices and policies of the
Company governing the conduct of employees.
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 is reasonably necessary to perform the Employee's duties as
defined herein and shall 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 $125,000.00, payable in accordance with the
Company's normal payroll practices.
4.2 Bonus Pool. The Company intends to create a bonus plan based upon the
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earnings of the Company to provide incentives for certain employees of the
Company and its subsidiaries. The Employee shall be entitled to participate in
such plan on such terms as may be determined by the Board of Directors of the
Company or a duly constituted committee thereof, in its discretion. Nothing in
this Agreement shall require the Company to pay any such bonus.
Section 5. Change in Control.
5.1 Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Change of Control. The term "Change of Control" means an event
which shall be deemed to have occurred if:
(i) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
any employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or
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(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Directors, and any new
director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause (iii) or
(iv) of this Section 5.1(a)) whose election by the Board of Directors of the
Company or nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors of the Company; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than 25% of the combined voting power of the
Company's then outstanding securities shall not constitute a Change of Control;
or
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(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of, or the Company sells or disposes of, all or substantially all
of the Company's assets, or any such sale or disposition is effected through
condemnation proceedings.
The Company's outside legal counsel shall notify the parties to this
Agreement whether and when a Change of Control has occurred. However, the
preceding sentence shall not preclude any party to this Agreement from giving
such notice.
(b) Code. The term "Code" means the Internal Revenue Code of 1986,
including any amendments thereto or successor tax codes thereof. References to
any section of the Code shall include any amended or successor section of
comparable import.
(c) Covered Termination. The term "Covered Termination" means any
termination of the Employee's employment for "Good Reason" after a Change of
Control of the Company which occurs prior to the end of the Term.
(d) Good Reason. The Employee shall have a "Good Reason" for
termination of employment after a Change of Control of the Company in the event
of:
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(i) a termination of the Employee's employment by the Company
for any reason other than Cause (as defined in Section 8(c) hereof); or
(ii) a good faith determination by the Employee that there has
been a significant adverse change, without the Employee's express prior written
consent, in the Employee's working conditions or status with the Company from
such working conditions or status in effect immediately prior to the Change of
Control of the Company, including but not limited to (A) a significant change in
the nature or scope of the Employee's authority, powers, functions, duties or
responsibilities or reporting responsibilities, or (B) a significant reduction
in the level of support services, staff, secretarial and other assistance,
office space and accoutrements (regardless of whether such reduction is part of
a general reduction applicable to all senior executive employees of the
Company), or (C) a reduction in the salary or benefits to which the Employee is
entitled under this Agreement, or (D) a relocation of the Employee's principal
place of business to a location which is more than 50 miles from its current
location as of the Effective Date.
5.2 Benefits. If there is a Covered Termination, the Employee shall be
entitled to the following benefits:
(a) Accrued Benefits. The Employee shall be paid the amount of the
Employee's Accrued Benefits. For purposes of this Agreement, the Employee's
"Accrued Benefits" shall consist of the aggregate of the following amounts,
payable as
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described herein: (i) all base salary, and accrued vacation pay, for the time
period ending with the date of termination; (ii) reimbursement for any and all
monies or other reimbursable costs advanced in connection with the Employee's
employment for reasonable and necessary expenses incurred by the Employee on
behalf of the Company for the time period ending with the date of termination;
(iii) any and all other cash earned through the date of termination and deferred
at the election of the Employee or pursuant to any deferred compensation plan
then in effect, and any increments thereon as determined under such plan; and
(iv) a lump sum payment of the bonus or incentive compensation otherwise payable
to the Employee with respect to the year in which termination occurs, or for the
prior year, under all bonus or incentive compensation plans in which the
Employee is a participant. Payment of Accrued Benefits shall be made promptly in
accordance with the Company's prevailing practice.
(b) Severance Payment. The Employee will be entitled to cash
compensation, calculated as described below, payable in one lump sum within
fifteen (15) days of the Company's receipt of notice of the Covered Termination.
The aggregate cash compensation will be calculated as one times the Employee's
annual rate of salary as provided for in Section 4.1 and bonus. Cash
compensation paid pursuant to this provision shall be subject to appropriate
payroll deductions.
(c) Payment Adjustment.
(i) Anything in this Agreement to the contrary
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notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Employee (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would be nondeductible by the Company for
Federal income tax purposes because of Section 280G of the Code, then the
aggregate present value of amounts payable or distributable as severance
benefits hereunder shall be reduced to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the aggregate
present value of such severance benefits without causing any Payment to be
nondeductible by the Company because of Section 280G of the Code. Anything in
this Agreement to the contrary notwithstanding, if the Reduced Amount is zero
and it is determined further that any Payment which is not part of the severance
benefits payable hereunder would nevertheless be nondeductible by the Company
for Federal income tax purposes because of Section 280G of the Code, then the
aggregate present value of Payments which are not severance benefits under this
Agreement shall also be reduced (but not below zero) to an amount expressed in
present value which maximizes the aggregate present value of Payments without
causing any Payment to be nondeductible by the Company because of Section 280G
of the Code. For purposes of this Section 5.2(c), present value shall be
determined in accordance with Section 280G(d)(4) of the Code.
(ii) All determinations required to be made under this Section
5.2(c) shall be made by the Company's independent auditors which shall provide
detailed supporting calculations both to the Company and the Employee within 15
business days of the date of termination or such earlier time as is requested by
the Company and, to the
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extent appropriate under the circumstances, an opinion to the Employee that he
has substantial authority not to report any excise tax on his Federal income tax
return with respect to any Payments. Any such determination by the Company's
independent auditors shall be binding upon the Company and the Employee. The
Employee shall determine which and how much of the Payments shall be eliminated
or reduced consistent with the requirements of this Section 5.2(c), provided
that, if the Employee does not make such determination within ten business days
of the receipt of the calculations made by the Company's independent auditors,
the Company shall elect which and how much of the Payments shall be eliminated
or reduced consistent with the requirements of this Section 5.2(c) and shall
notify the Employee promptly of such election; and provided further that any
Payments which do not constitute gross income to the Employee shall not be
reduced or eliminated unless all other Payments have first been eliminated.
Within five business days thereafter, the Company shall pay to or distribute to
or for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(iii) As a result of the uncertainty in the application of
Section 280G of the Code at the time of the initial determination by the
Company's independent auditors hereunder, it is possible that Payments will have
been made by the Company which should not have been made ("Overpayment") or that
Payments will not have been made by the Company which could have been made
("Underpayment"), in each case, consistent with the calculations required to be
made hereunder. In the event that the Company's independent auditors, based upon
the assertion of a deficiency by the Internal Revenue Service against Employee
or the Company which the Company's independent
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auditors believe has a high probability of success, determine that an
Overpayment has been made, any such Overpayment paid or distributed by the
Company to or for the benefit of the Employee shall be treated for all purposes
as a loan ab initio to the Employee which the Employee shall repay to the
Company together with interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Code, compounded semiannually; provided, however, that
no such loan shall be deemed to have been made and no amount shall be payable to
the Company if and to the extent such deemed loan and payment would not either
reduce the amount on which the Employee is subject to tax under Section 1 and
Section 4999 of the Code or generate a refund of such taxes. In the event that
the Company's independent auditors, based upon controlling precedent or other
substantial authority, determine that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Employee together with interest at 120% of the applicable Federal rate provided
for in Section 7872(f)(2) of the Code, compounded semiannually.
Section 6. 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 7. 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,
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the following benefits, 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, 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 the Company'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 three 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 per month as
a non-accountable allowance for lease payments, insurance and other expenses of
an automobile leased by the Employee.
Section 8. Termination. Subject to the provisions of Sections 5 and 9,
which shall survive the termination of this Agreement, this Agreement shall
terminate upon:
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(a) The death of the Employee;
(b) Illness, disability or incapacity that prevents the Employee from
performing his duties hereunder for sixty (60) consecutive days, or for any
sixty (60) days within any one hundred and eighty (180) day period, and the
provision of written notice of such termination to the Employee by the Company;
(c) Upon written notice by the Company 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 felony; or
(d) Upon written notice by the Employee to the Company for Good
Reason.
Section 9. Restrictive Covenants. In consideration of the undertakings
of the Company set forth herein, the Employee agrees as follows:
9.1 Covenant Not to Compete. The Employee will not in any way,
directly or indirectly, as an agent, employee, officer, director, stockholder,
partner or otherwise of any corporation, partnership or other venture or
enterprise compete with the Company or any of its subsidiaries in the provision
of seismic data acquisition or analysis services or
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any services related thereto (a "Competing Business") during the Term, other
than due to the Employee's performance of his duties hereunder, and for a period
of one (1) year after the termination of this Agreement for any reason
whatsoever, unless this Agreement is terminated by the Company without Cause.
9.2 Non-Solicitation Covenant. 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, sell to or contract with, on behalf of the Employee
or on behalf of any Competing Business, any person or entity to which the
Company or any subsidiary of the Company shall have provided seismic data
acquisition or analysis services at any time during the Term.
9.3 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.
9.4 Non-Disclosure Covenant. The Employee recognizes and acknowledges
that, prior to and in the course of his employment, the Employee may have had
and shall have access to trade secrets and other confidential or proprietary
information of the Company and its subsidiaries, including, but not limited to,
information acquired or developed by the Company and its subsidiaries concerning
seismic data, marketing strategy,
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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 trade secrets or information could be harmful to
the interests of the Company or its subsidiaries and that, during the Employee's
employment by the Company or its subsidiaries, the Employee will take
appropriate caution to safeguard such trade secrets and information, and will
not during the Term or thereafter use, disclose, divulge or publish any such
trade secrets or information except as required by law or as the Employee's
duties during the Employee's employment by the Company or its subsidiaries may
require or as the Company may in writing specifically consent.
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9.5 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 and other
confidential or proprietary information of the Company and its subsidiaries,
including copies thereof, whether prepared by the Employee or others, are the
sole property of and belong exclusively to the Company and its 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, reports, records, computer programs or data banks or other evidence
of trade secrets and other confidential or proprietary information of the
Company and its subsidiaries (and all copies thereof) which are the property of
the Company or any of its subsidiaries.
9.6 Remedies. The Employee further agrees that in the event of a
breach or threatened breach of any of the covenants contained in this Section 9,
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 9 is invalid or
unenforceable, the parties hereto agree that the court making the determination
of invalidity or unenforceability shall have the power to, and is hereby
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directed to, reduce the scope, duration or area of the term or provision, to
delete specific words or phrases, or to replace 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.
Section 10. Miscellaneous Provisions.
10.1 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 upon such other party at such other party's address set
forth below in this Section 10.1; 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 10.1; 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 10.1; 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 10.1.
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
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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:
Ronald Koons
c/o 3-D Geophysical, Inc.
8226 Park Meadows Drive
Littleton, Colorado 80124
Telecopier No.: (303) 708-8941
If to the Company:
3-D Geophysical, Inc.
599 Lexington Avenue
Suite 4102
New York, New York 10022
Telecopier No.: (212) 317-9230
Attention: Joel Friedman, Chairman
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Telecopier No.: (212) 715-8000
Attention: Peter S. Kolevzon, Esq.
10.2 Entire Agreement; Amendment. This Agreement contains the entire
agreement between the parties, expressly supersedes the Prior Agreement in its
entirety, which the parties hereto agree shall be of no further force and
effect, merges all prior negotiations, agreements and understandings, if any,
and states in full all representations,
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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.
10.3 Assignment; Binding Nature; Assumption; No Beneficiaries. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, personal representatives,
legatees, successors and permitted assigns. This Agreement shall not confer any
rights or remedies upon any person other than the parties hereto and their
respective heirs, personal representatives, legatees, successors and permitted
assigns. This Agreement 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.
10.4 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
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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.
10.5 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.
10.6 Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
10.7 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 this 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 United States funds.
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10.8 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware applicable to
contracts made and to be entirely performed therein.
10.9 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date and year first written above.
3-D GEOPHYSICAL, INC.
By
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Attest: Name:
--------------------------------- Title:
Name:
Title:
EMPLOYEE:
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Ronald L. Koons
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