Exhibit 10.1

 

Employment Contract

 

TGC INDUSTRIES, INC.

 

(Whitener)

 

This Contract is entered into between TGC Industries, Inc., a Texas corporation
(hereafter called “Company”), and Wayne A. Whitener (hereafter called
“Employee”).

 

Company is engaged in the business of providing seismic data acquisition
services primarily to domestic onshore oil and natural gas exploration and
production companies.  Company desires to retain the services of Employee as one
of its key executives, and Employee is willing and able to perform in that
capacity.

 

Accordingly, in consideration of the mutual covenants herein contained, the
parties to this Contract agree as follows:

 

1.   EMPLOYMENT.  COMPANY HEREBY CONTINUES THE EMPLOYMENT OF EMPLOYEE, AND
EMPLOYEE HEREBY ACCEPTS SUCH EMPLOYMENT FROM COMPANY, PURSUANT TO THOSE
PROVISIONS HEREIN CONTAINED.

 

2.   TERM OF EMPLOYMENT.  SUBJECT TO THE PROVISIONS FOR TERMINATION HEREAFTER
PROVIDED, THIS CONTRACT SHALL BE FOR A TERM OF TWO (2) YEARS BEGINNING ON
AUGUST 1, 2005, AND ENDING ON JULY 31, 2007.  BY A SUBSEQUENT AGREEMENT IN
WRITING SIGNED BY BOTH PARTIES, THIS CONTRACT MAY BE EXTENDED FOR ONE OR MORE
ADDITIONAL TERMS AS AGREED UPON BY THE PARTIES HERETO.

 

3.   DUTIES OF EMPLOYEE.  EMPLOYEE IS EMPLOYED AS PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF COMPANY.  EMPLOYEE SHALL DEVOTE SUBSTANTIALLY ALL OF HIS TIME,
ATTENTION, BEST EFFORTS, AND ENERGY TO THE BUSINESS OF COMPANY, AND MAY NOT,
DURING THE TERM OF THIS CONTRACT, BE ENGAGED IN ANY OTHER MATERIAL BUSINESS
ACTIVITIES WHICH INTERFERE WITH HIS ABILITY TO CARRY OUT HIS OBLIGATIONS
HEREUNDER.  HOWEVER, SUCH RESTRICTION SHALL NOT BE CONSTRUED AS PREVENTING
EMPLOYEE FROM MAKING INVESTMENTS IN (NON-COMPETITIVE) BUSINESS ENTERPRISES SO
LONG AS EMPLOYEE WILL NOT BE REQUIRED TO RENDER PERSONAL SERVICES TO ANY SUCH
BUSINESS ENTERPRISES DURING EMPLOYEE’S NORMAL BUSINESS HOURS WITH COMPANY.

 

4.   COMPENSATION.  TO THE EXTENT EMPLOYEE CONTINUES TO COMPLY WITH ALL OF THE
PROVISIONS OF THIS CONTRACT (INCLUDING THE COVENANTS REFERENCED IN PARAGRAPH 9
BELOW AND CONTAINED IN EXHIBIT ”A” ATTACHED HERETO):

 

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A.   BASE SALARY.  COMPANY SHALL PAY TO EMPLOYEE A MINIMUM BASE SALARY OF
$175,000 PER YEAR PAYABLE IN TWENTY-SIX (26) EQUAL PAYMENTS OF $6,730.77 (OR IN
ACCORDANCE WITH SUCH OTHER SEQUENCE OF PAYMENTS AS DETERMINED BY COMPANY’S THEN
EXISTING PAYROLL POLICIES), FROM WHICH FEDERAL WITHHOLDING AND SOCIAL SECURITY
TAXES WILL BE DEDUCTED; AND

 

B.   PERFORMANCE BONUS.  AT THE END OF EACH CALENDAR YEAR, COMPANY’S BOARD OF
DIRECTORS WILL MAKE A DETERMINATION AS TO WHETHER THE RESULTS OF COMPANY’S
OPERATIONS FOR SUCH PRECEDING CALENDAR YEAR WARRANT THE PAYMENT TO EMPLOYEE OF A
SPECIAL PERFORMANCE BONUS.  IF SO, EMPLOYEE SHALL BE ENTITLED TO RECEIVE, IN
ADDITION TO THE BASE SALARY REFERRED ABOVE, A SPECIAL PERFORMANCE BONUS IN SUCH
AMOUNT AS IS DETERMINED BY THE BOARD OF DIRECTORS IN THE EXERCISE OF THEIR SOLE
DISCRETION (UP TO A MAXIMUM OF $175,000).

 

C.   INCREASES.  THE BOARD OF DIRECTORS OF COMPANY MAY, AT ANY TIME, ELECT TO
INCREASE EMPLOYEE’S BASE SALARY ABOVE THE AMOUNT REFERRED TO IN SUBPARAGRAPH
“A.” ABOVE (IN WHICH EVENT THE CEILING ON EMPLOYEE’S PERFORMANCE BONUS UNDER
SUBPARAGRAPH “B.” ABOVE SHALL BE SIMILARLY INCREASED).

 

5.   FRINGE BENEFITS.  DURING THE PERIOD THAT EMPLOYEE CONTINUES TO COMPLY WITH
ALL OF THE PROVISIONS OF THIS CONTRACT, EMPLOYEE SHALL RECEIVE THE FOLLOWING
FRINGE BENEFITS:

 

A.   MEDICAL BENEFITS.  EMPLOYEE AND HIS DEPENDENT FAMILY MEMBERS SHALL BE
COVERED UNDER THE SAME GROUP HOSPITALIZATION, ACCIDENT, AND MAJOR MEDICAL PLANS
AS COMPANY PROVIDES FROM TIME TO TIME FOR OTHER OFFICERS; PROVIDED, HOWEVER,
THAT (I) EMPLOYEE SHALL PAY THE SAME PORTION OF THE COST THEREOF AS MAY BE
REQUIRED FROM COMPANY’S OFFICERS GENERALLY, AND (II) EMPLOYEE SHALL APPLY FOR
AND ELECT TO PARTICIPATE IN MEDICARE PARTS A AND B, AT HIS OWN EXPENSE, AS SOON
AS HE SHALL BECOME ELIGIBLE TO DO SO;

 

b.  Paid Vacation.  Each calendar year (or portion thereof), Employee may take a
vacation of four (4) weeks during which time his compensation shall be paid in
full;

 

c.  Automobile.  Company shall provide an automobile for Employee’s use in
connection with the services to be rendered by Employee to Company.  Company
shall pay or reimburse Employee for maintenance and repair expenses of the
automobile upon submission of vouchers or itemized lists of such expenses
prepared in compliance with Company’s policy.  For so long as Company owns (or
leases) the automobile, Company shall insure the automobile with adequate
automobile insurance company coverage.  Company agrees that Employee shall be
designated as an additional insured on any Company provided policy providing
liability insurance coverage.  In the event the automobile is damaged or
destroyed

 

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by reason of accident, theft, vandalism, or otherwise, Employee will not have
any liability to Company for any such loss or damage (including out-of-pocket
deductibles); and

 

d.  Other Benefits.  No provision of this Contract shall preclude Employee from
participating in any fringe benefit plan now in effect or hereafter adopted by
Company, but Company shall be under no obligation to provide for his
participation in, or to institute, any such plan or to make any contribution
under any such plan, unless such opportunities are provided to all Company
employees as a group, or to all of Company’s senior officers as a group.

 

6.   BUSINESS EXPENSES.  EMPLOYEE MAY INCUR REASONABLE EXPENSES IN CONNECTION
WITH THE PROMOTION OF COMPANY’S BUSINESS INCLUDING EXPENSES FOR ENTERTAINMENT,
TRAVEL, AND SIMILAR ITEMS.  COMPANY AGREES TO REIMBURSE EMPLOYEE FOR ALL SUCH
REASONABLE EXPENSES UPON THE PRESENTATION BY EMPLOYEE, FROM TIME TO TIME AS
REQUIRED BY COMPANY, OF AN ITEMIZED ACCOUNT OF SUCH EXPENDITURES; PROVIDED,
HOWEVER, EMPLOYEE SHALL NOT EXPEND ANY SUMS IN EXCESS OF THOSE AMOUNTS PERMITTED
BY THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WITHOUT PRIOR WRITTEN APPROVAL
FROM COMPANY’S BOARD OF DIRECTORS.

 

7.   KEY-MAN INSURANCE.  THE PARTIES AGREE THAT COMPANY SHALL CONTINUE TO OWN
(AND PAY FOR) LIFE INSURANCE ON EMPLOYEE’S LIFE IN THE AMOUNT OF ONE MILLION
DOLLARS ($1,000,000).  EMPLOYEE AGREES THAT HE SHALL, AT COMPANY’S REQUEST,
SUBMIT TO SUCH MEDICAL EXAMINATIONS, SUPPLY SUCH INFORMATION, AND EXECUTE SUCH
DOCUMENTS AS MAY BE REQUESTED BY THE INSURING COMPANY OR COMPANIES.  IT IS
AGREED AND UNDERSTOOD THAT IF EMPLOYEE DIES DURING THE TERM OF THIS CONTRACT,
THE FULL AMOUNT OF THE PROCEEDS PAYABLE UNDER ANY SUCH POLICY WILL BE RECEIVABLE
SOLELY BY COMPANY.

 

8.   TERMINATION OF EMPLOYMENT.

 

A.   BY COMPANY.

 

(1)   DATE OF TERMINATION.  COMPANY MAY AT ANY TIME TERMINATE THIS CONTRACT, IN
WHICH EVENT EMPLOYEE SHALL LEAVE THE PREMISES ON SUCH DATE (THE “DATE OF
TERMINATION”) AS IS SPECIFIED BY COMPANY IN THE NOTICE OF TERMINATION (WHICH
DATE CAN BE AS EARLY AS THE DATE OF SUCH NOTICE).

 

(2)   FOR CAUSE.  IF SUCH TERMINATION IS “FOR CAUSE,” COMPANY WILL HAVE NO
OBLIGATION TO PAY TO EMPLOYEE ANY COMPENSATION OR FRINGE BENEFITS FOLLOWING THE
DATE OF TERMINATION.  FOR PURPOSES OF THE PRECEDING SENTENCE, THE PHRASE “FOR
CAUSE” WILL BE DEEMED TO MEAN:

 

(A)  ABSENCE FROM COMPANY’S OFFICES, PHYSICAL OR MENTAL ILLNESS, OR ANY OTHER
REASON, FOR ANY SUCCESSIVE PERIOD OF FORTY-FIVE (45) DAYS, OR FOR A TOTAL PERIOD
OF NINETY (90) DAYS IN ANY ONE OF

 

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COMPANY’S FISCAL YEARS (EXCEPT THAT ANY VACATION PERIODS, TRAVEL ON COMPANY
BUSINESS, OR LEAVES OF ABSENCE SPECIFICALLY GRANTED BY COMPANY’S BOARD OF
DIRECTORS SHALL NOT BE CONSIDERED AS PERIODS OF ABSENCE FROM EMPLOYMENT);

 

(B)  EMPLOYEE’S COMMISSION OF AN ACT OF GROSS NEGLIGENCE IN THE PERFORMANCE OF
HIS DUTIES OR OBLIGATIONS HEREUNDER;

 

(C)  EMPLOYEE’S COMMISSION OF ANY ACT OF FRAUD, MALFEASANCE, DISLOYALTY, OR
BREACH OF TRUST AGAINST THE COMPANY, OR EMPLOYEE FAILS TO OBSERVE ANY COVENANT
REFERENCED IN PARAGRAPH 9 BELOW OR CONTAINED IN EXHIBIT ”A” HERETO;

 

(D)  EMPLOYEE’S REFUSAL, OR SUBSTANTIAL INABILITY, TO PERFORM THE DUTIES
ASSIGNED IN GOOD FAITH TO HIM PURSUANT TO PARAGRAPH 3 HEREOF;

 

(E)  EMPLOYEE DIES OR GIVES AFFIRMATIVE INDICATION, IN THE OPINION OF A MAJORITY
OF COMPANY’S BOARD OF DIRECTORS, THAT HE NO LONGER INTENDS TO ABIDE BY THE TERMS
OF THIS CONTRACT; OR

 

(F)  EMPLOYEE IS GUILTY OF ACTS OF MORAL TURPITUDE OR DISHONESTY IN COMPANY’S
AFFAIRS, GROSS INSUBORDINATION OR THE EQUIVALENT, OR EMPLOYEE VIOLATES, OR FAILS
TO COMPLY WITH, ANY OF THE PROVISIONS OF THIS CONTRACT.

 

(3)   NOT FOR CAUSE.  IF SUCH TERMINATION IS BASED ON ANY REASON OTHER THAN “FOR
CAUSE,” COMPANY SHALL BE OBLIGATED TO PAY TO EMPLOYEE:  (A) HIS BASE SALARY
DURING THE REMAINDER OF THE TERM OF THIS CONTRACT (ON A MONTHLY BASIS AT THE
SAME RATE AS PAYABLE IMMEDIATELY BEFORE THE DATE OF TERMINATION); AND (B) THE
FULL AMOUNT OF THE PERFORMANCE BONUS REFERRED TO IN PARAGRAPH 4.B. ABOVE WHICH
WOULD HAVE BEEN RECEIVED BY EMPLOYEE DURING THE REMAINDER OF THE TERM OF THIS
CONTRACT IF SUCH TERMINATION HAD NOT OCCURRED.

 

(A)  INCLUDED WITHIN THE DEFINITION OF A TERMINATION OF EMPLOYEE OTHER THAN “FOR
CAUSE” WILL BE A “CHANGE IN CONTROL OF COMPANY.”  FOR PURPOSES OF THIS CONTRACT,
THE TERM “CHANGE IN CONTROL OF COMPANY” WILL MEAN:

 

(I)  THE CONSUMMATION OF ANY CONSOLIDATION OR MERGER OF COMPANY INTO OR WITH
ANOTHER CORPORATION OR OTHER LEGAL PERSON, AND AS A RESULT OF SUCH CONSOLIDATION
OR MERGER LESS THAN A MAJORITY OF THE COMBINED VOTING POWER

 

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OF THE THEN-OUTSTANDING SECURITIES OF SUCH CORPORATION OR PERSON IMMEDIATELY
AFTER SUCH TRANSACTION ARE HELD IN THE AGGREGATE BY HOLDERS OF VOTING STOCK (AS
DEFINED BELOW) OF COMPANY IMMEDIATELY PRIOR TO SUCH TRANSACTION;

 

(II)  ANY SALE, LEASE, EXCHANGE, OR OTHER TRANSFER, WHETHER IN ONE TRANSACTION
OR ANY SERIES OF RELATED TRANSACTIONS, OF ALL OR SIGNIFICANT PORTIONS OF THE
ASSETS OF COMPANY TO ANY OTHER CORPORATION OR OTHER LEGAL PERSONS, LESS THAN A
MAJORITY OF THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING SECURITIES OF SUCH
CORPORATION OR PERSON IMMEDIATELY AFTER SUCH SALE, LEASE, EXCHANGE, OR TRANSFER
IS HELD IN THE AGGREGATE BY THE HOLDERS OF VOTING STOCK OF COMPANY IMMEDIATELY
PRIOR TO SUCH SALE, LEASE, EXCHANGE, OR TRANSFERS;

 

(III)  THE SHAREHOLDERS OF COMPANY APPROVE ANY PLAN FOR THE LIQUIDATION OR
DISSOLUTION OF COMPANY;

 

(IV)  ANY PERSON (AS SUCH TERM IS USED IN SECTIONS 13(D) AND 14(D)(2) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”)), BECOMES,
EITHER DIRECTLY OR INDIRECTLY, THE BENEFICIAL OWNER (WITHIN THE MEANING OF
RULE 13D-3 UNDER THE EXCHANGE ACT) OF SECURITIES REPRESENTING MORE THAN 50% OF
THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING SECURITIES ENTITLED TO VOTE
GENERALLY IN THE ELECTION OF DIRECTORS OF COMPANY (“VOTING STOCK”); OR

 

(V)  IF AT ANY TIME DURING A FISCAL YEAR A MAJORITY OF THE BOARD OF DIRECTORS
ARE REPLACED BY PERSONS WHO WERE NOT RECOMMENDED FOR THOSE POSITIONS BY AT LEAST
TWO-THIRDS OF THE DIRECTORS OF COMPANY WHO WERE DIRECTORS OF COMPANY AT THE
BEGINNING OF THE FISCAL YEAR.

 

NOTWITHSTANDING THE PRECEDING, A “CHANGE OF CONTROL” SHALL NOT BE DEEMED TO HAVE
OCCURRED WITH RESPECT TO ANY OF THE FOREGOING TRANSACTIONS CONDUCTED BY ANY
EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY COMPANY, ANY
CORPORATION CONTROLLED BY COMPANY, OR ANY AFFILIATE OF COMPANY.

 

(B)  IF, AT THE TIME OF TERMINATION, COMPANY WAS PROVIDING AN AUTOMOBILE TO
EMPLOYEE UNDER PARAGRAPH 5.C. ABOVE, THEN, FOR A CONSIDERATION OF TEN DOLLARS
($10.00) CASH PAID BY EMPLOYEE TO

 

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COMPANY, THE FOLLOWING SHALL APPLY:  (I) IF COMPANY OWNED THE AUTOMOBILE,
COMPANY SHALL TRANSFER THE TITLE (FREE AND CLEAR OF ANY LIENS OR OTHER
ENCUMBRANCES) TO EMPLOYEE (ALONG WITH ANY INSURANCE COVERAGE [IF ASSIGNABLE]);
AND (II) IF COMPANY WAS LEASING SUCH AUTOMOBILE, COMPANY SHALL ASSIGN TO
EMPLOYEE ALL OF ITS RIGHT, TITLE, AND INTEREST IN AND TO SUCH LEASE.

 

(C)  EMPLOYEE SHALL NOT BE REQUIRED TO MITIGATE THE AMOUNT OF ANY PAYMENT
PROVIDED FOR IN THIS SUBPARAGRAPH 3) BY SEEKING OTHER EMPLOYMENT OR OTHERWISE,
NOR SHALL THE AMOUNT OF ANY PAYMENT PROVIDED FOR IN THIS SUBPARAGRAPH 3) BE
REDUCED BY ANY COMPENSATION EARNED BY EMPLOYEE AS THE RESULT OF SELF-EMPLOYMENT
OR EMPLOYMENT BY ANOTHER EMPLOYER.

 

B.   BY EMPLOYEE.  IF SUCH TERMINATION IS CAUSED BY EMPLOYEE FOR ANY REASON,
COMPANY WILL HAVE NO OBLIGATION TO PAY TO EMPLOYEE ANY COMPENSATION OR FRINGE
BENEFITS FOLLOWING THE DATE OF TERMINATION.

 

9.   DISCLOSURE OF CONFIDENTIAL INFORMATION; COVENANT NOT TO COMPETE.  COMPANY
POSSESSES SECRET AND CONFIDENTIAL EQUIPMENT, TECHNIQUES, PROCESSES, PROCEDURES,
TECHNICAL DATA AND INFORMATION, AND CUSTOMER LISTS USED OR INTENDED FOR
UTILIZATION IN ITS OPERATIONS OF WHICH EMPLOYEE HAS OBTAINED OR MAY OBTAIN
KNOWLEDGE, AND COMPANY WOULD SUFFER SERIOUS HARM IF THIS CONFIDENTIAL
INFORMATION WERE DISCLOSED OR IF EMPLOYEE USED THIS INFORMATION TO COMPETE
AGAINST COMPANY.  ACCORDINGLY, EMPLOYEE HEREBY AGREES THAT SIMULTANEOUSLY WITH
THE EXECUTION OF THIS CONTRACT HE SHALL EXECUTE AND DELIVER TO COMPANY AND
THEREAFTER ABIDE BY THE TERMS OF A “CONFIDENTIALITY AGREEMENT AND COVENANT NOT
TO COMPETE” A COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT ”A” AND INCORPORATED
HEREIN BY REFERENCE.

 

10.   REMEDIES.  EMPLOYEE AGREES THAT IN THE EVENT OF HIS BREACH OF HIS
COVENANTS AND AGREEMENTS CONTAINED OR REFERENCED IN THIS CONTRACT, COMPANY SHALL
BE ENTITLED TO OBTAIN INJUNCTIVE OR SIMILAR RELIEF FROM A COURT OF COMPETENT
JURISDICTION.  THE COVENANTS CONTAINED IN EXHIBIT ”A” HEREOF SHALL BE CONSTRUED
AS AGREEMENTS INDEPENDENT OF ANY OTHER AGREEMENTS BETWEEN COMPANY AND EMPLOYEE,
AND THE EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION OF EMPLOYEE AGAINST COMPANY,
WHETHER PREDICATED ON THIS CONTRACT OR OTHERWISE, SHALL NOT CONSTITUTE A DEFENSE
TO THE ENFORCEMENT BY COMPANY OF THOSE COVENANTS AND AGREEMENTS.  COMPANY SHALL
BE ENTITLED TO REASONABLE ATTORNEYS’ FEES AND RELATED LEGAL COSTS IN THE EVENT
OF A BREACH, OR ATTEMPTED BREACH, OF SUCH COVENANTS BY EMPLOYEE.  THE REMEDIES
OF COMPANY AND EMPLOYEE UNDER THIS CONTRACT ARE CUMULATIVE AND WILL NOT EXCLUDE
ANY OTHER REMEDIES TO WHICH ANY PARTY MAY BE ENTITLED HEREUNDER, INCLUDING A
RIGHT OF OFFSET, WHETHER AT LAW OR IN EQUITY.

 

11.   NOTICES.  ALL NOTICES ALLOWED OR REQUIRED TO BE GIVEN HEREUNDER MUST BE IN
WRITING AND DISPATCHED BY UNITED STATES CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE

 

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ADDRESS OF THE PARTY ENTITLED TO SUCH NOTICE SHOWN AT THE END OF THIS CONTRACT. 
EITHER PARTY HERETO MAY CHANGE THE ADDRESS TO WHICH ANY SUCH NOTICE IS TO BE
ADDRESSED BY GIVING NOTICE IN WRITING TO THE OTHER PARTY OF SUCH CHANGE.  ANY
TIME LIMITATION PROVIDED FOR IN THIS CONTRACT SHALL COMMENCE WITH THE DATE THAT
THE PARTY ACTUALLY RECEIVES SUCH WRITTEN NOTICE, AND THE DATE OR POSTMARK OF ANY
RETURN RECEIPT INDICATING THE DATE OF DELIVERY OF SUCH NOTICE TO THE ADDRESSEE
SHALL BE CONCLUSIVE EVIDENCE OF SUCH RECEIPT.  IN ADDITION TO THE PARTIES
HERETO, COPIES OF ALL NOTICES SHOULD BE SENT TO:

 

Mr. William J. Barrett

c/o Barrett-Gardner Associates, Inc.

636 River Road

P. O. Box 6199

Fair Haven, NJ  07704

 

Haynes and Boone, LLP

201 Main Street, Suite 201

Fort Worth, Texas 76102

Attn:   Rice M. Tilley, Jr., Esq.

 

12.   ASSIGNMENT.  NEITHER EMPLOYEE NOR ANYONE CLAIMING UNDER HIM MAY COMMUTE,
ENCUMBER, OR DISPOSE OF THE RIGHT TO RECEIVE BENEFITS HEREUNDER.  SUCH RIGHT TO
RECEIVE BENEFITS HEREUNDER IS EXPRESSLY DECLARED TO BE NON-ASSIGNABLE AND
NON-TRANSFERABLE BY EMPLOYEE, AND IN THE EVENT OF ANY ATTEMPTED ASSIGNMENT OR
TRANSFER, COMPANY SHALL HAVE NO FURTHER LIABILITY HEREUNDER; PROVIDED, HOWEVER,
THE FOREGOING SHALL NOT APPLY TO ASSIGNMENTS BY OPERATION OF LAW, SUCH AS TO A
GUARDIAN OR TO AN EXECUTOR OF EMPLOYEE’S ESTATE.

 

13.   WAIVER.  THE WAIVER BY COMPANY OF EMPLOYEE’S BREACH OF ANY PROVISION
HEREOF SHALL NOT OPERATE OR BE CONSTRUED AS A WAIVER OF ANY SUBSEQUENT BREACH BY
EMPLOYEE.

 

14.   BINDING EFFECT.  THIS CONTRACT SHALL BE BINDING UPON THE PARTIES HERETO
AND THEIR HEIRS, SUCCESSORS, EXECUTORS, ADMINISTRATORS, PERSONAL
REPRESENTATIVES, AND (EXCEPT AS PROVIDED IN PARAGRAPH 12) ASSIGNS.

 

15.   SURVIVAL OF PROVISIONS.  ALL PROVISIONS OF THIS CONTRACT, INCLUDING ALL
REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS CONTAINED OR REFERENCED
HEREIN, WILL SURVIVE THE EXECUTION AND DELIVERY HEREOF AND ANY INVESTIGATION OF
THE PARTIES WITH RESPECT THERETO.  THE PROVISIONS OF PARAGRAPHS 9 AND 10, AND
EXHIBIT ”A,” WILL SURVIVE THE TERMINATION OR AMENDMENT OF THIS CONTRACT.

 

16.   VALIDITY.  IF ANY PROVISION OF THIS CONTRACT IS HELD BY A COURT OF LAW TO
BE ILLEGAL OR UNENFORCEABLE, THE REMAINING PROVISIONS OF THE CONTRACT WILL
REMAIN IN FULL FORCE AND EFFECT.  IN LIEU OF SUCH ILLEGAL OR UNENFORCEABLE
PROVISION, THERE SHALL BE ADDED

 

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AUTOMATICALLY AS A PART OF THIS CONTRACT A PROVISION AS SIMILAR IN TERMS TO SUCH
ILLEGAL OR UNENFORCEABLE PROVISION AS MAY BE POSSIBLE AND BE LEGAL AND
ENFORCEABLE.

 

17.   AMENDMENTS.  THIS CONTRACT MAY BE AMENDED AT ANY TIME AND FROM TIME TO
TIME IN WHOLE OR IN PART BY AN INSTRUMENT IN WRITING SETTING FORTH THE
PARTICULARS OF SUCH AMENDMENT AND DULY EXECUTED BY COMPANY AND EMPLOYEE.

 

18.   DUPLICATE ORIGINALS.  THIS CONTRACT HAS BEEN EXECUTED IN DUPLICATE
ORIGINALS, EACH OF WHICH FOR ALL PURPOSES IS TO BE DEEMED AN ORIGINAL, AND ALL
OF WHICH CONSTITUTE, COLLECTIVELY, ONE AGREEMENT; BUT IN MAKING PROOF OF THIS
CONTRACT, IT WILL NOT BE NECESSARY TO PRODUCE OR ACCOUNT FOR MORE THAN ONE SUCH
DUPLICATE.

 

19.   CAPTIONS.  THE CAPTIONS OR SECTION HEADINGS OF THIS CONTRACT ARE PROVIDED
FOR CONVENIENCE AND SHALL NOT LIMIT OR AFFECT THE INTERPRETATION OF THIS
CONTRACT.

 

20.   GOVERNING LAW.  THIS AGREEMENT HAS BEEN MADE IN, AND ITS VALIDITY,
INTERPRETATION, CONSTRUCTION, AND PERFORMANCE SHALL BE GOVERNED BY AND BE IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO ITS LAWS
GOVERNING CONFLICTS OF LAW.  EACH PARTY HEREBY IRREVOCABLY AGREES THAT ANY LEGAL
ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF TEXAS, OR IN ANY UNITED STATES DISTRICT COURT OF TEXAS,
AND, BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO EACH SUCH JURISDICTION AND HEREBY IRREVOCABLY WAIVES ANY
AND ALL OBJECTIONS WHICH IT MAY HAVE AS TO VENUE IN ANY OF THE ABOVE COURTS. 
EACH PARTY FURTHER CONSENTS AND AGREES THAT ANY PROCESS OR NOTICE OF MOTION OR
OTHER APPLICATION TO EITHER OF SAID COURTS OR ANY JUDGE THEREOF, OR ANY NOTICE
IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE
THE STATE OF TEXAS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
POSTAGE PREPAID, AND BE EFFECTIVE AS OF THE RECEIPT THEREOF, OR IN SUCH OTHER
MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.

 

21.   COMPLETE UNDERSTANDING.  THIS CONTRACT CONSTITUTES THE COMPLETE
UNDERSTANDING BETWEEN THE PARTIES HERETO, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
OR REFERENCED HEREIN, WITH RESPECT TO THE EMPLOYMENT OF EMPLOYEE.  THIS CONTRACT
SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF.

 

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IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS CONTRACT TO BE EFFECTIVE
AUGUST 1, 2005.

 

COMPANY:

 

EMPLOYEE:

 

 

 

 

TGC INDUSTRIES, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 William J. Barrett,

 

 

 

Wayne A. Whitener

 

 

 Director

 

 

 

49 Sunrise Circle

 

 

 

 

 

 

Pottsboro, Texas 75076

 

 

 

 

 

 

 

 

 

Date: August        , 2005

 

 

 

Date: August        , 2005

 

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Exhibit ”A”

to

Employment Contract

 

Confidentiality Agreement and

Covenant Not To Compete

 

Wayne A. Whitener (hereafter called “Employee”) has entered into an Employment
Contract with TGC Industries, Inc., a Texas corporation (hereafter called
“Company”), which is in the business of providing seismic data acquisition
services primarily to domestic onshore oil and natural gas exploration and
production companies.

 

By signing this Agreement, Employee acknowledges his understanding of the
following:

 

A.                                   All companies have information, generally
not known outside the company, called “confidential information.” All companies
must conduct their businesses through their employees, and consequently many
employees must have access to confidential information.  At times the employee
himself may generate confidential information as a part of his job;

 

B.                                     The phrase “confidential information” as
used in this Agreement includes information known as, referred to, or considered
to be, trade secrets, and comprises, without limitation, any technical,
economic, financial marketing, computer program, computer software, computer
data (regardless of the medium on which they are stored), computer source and
object programs or codes, job operating control language procedures, data entry
utility programs, and miscellaneous utilities, disk record layouts, flow charts,
data entry input forms, operations and installation instructions, report
samples, data files, printouts, or other information about Company or its
business which is not common knowledge among competitors or other companies who
might like to possess such confidential information or might find it useful. 
Some examples of confidential information include customer lists, price lists,
details of training methods, new products or new uses for old products, refining
technology, contracts, and licenses, purchasing, accounting, long-range
planning, financial plans and results, computer programs and operating manuals,
computer source codes, and any other information affecting or relating to the
business of Company, its manner of operation, its plans or processes.  This list
is merely illustrative, and the confidential information covered by this
Agreement is not limited to such illustrations; and

 

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C.                                     Company’s confidential information,
including information referred to as, known as, or considered to be, trade
secrets, represents the most important, valuable, and unique aspect of Company’s
business, and it would be seriously damaged if Employee breached the position of
confidential trust in which Company has placed him by disclosing such
confidential information to others or by departing and taking with him the
aforesaid unique information compiled over a period of time for the purpose of
himself competing against Company or disclosing such information to Company’s
competitors, now existing or hereafter formed.

 

Accordingly, in consideration of TEN DOLLARS ($10.00) cash in hand paid to
Employee by Company, the receipt and sufficiency of which are hereby
acknowledged, and Company’s agreement to employ him, Employee agrees as follows
(which will constitute an agreement ancillary to Employee’s Employment Contract
with Company):

 

1.                                       Confidential information, including
information referred to as, known as, or considered to be, trade secrets, is
proprietary to Company.  Employee agrees to hold such information in strictest
confidence, and not to make use thereof except in performance of duties under
the Employment Contract.  Whether during or after his employment with Company,
Employee may not disclose to others (excepting Company officers or employees
having a need to know who have also signed a written agreement expressly binding
themselves not to use or disclose it) any confidential information originated,
known to, or acquired by Employee while employed by Company.  Employee further
agrees during such period not to remove from the premises any of Company’s
records or other written or tangible materials, including without limitation
computer programs and floppy disks (whether prepared by Employee or others)
containing any confidential information, except as required for Employee to
properly perform his duties as an employee of Company.  Exceptions to these
restrictions may be made only by means of Company’s permission given in writing
signed by the Chairman of the Board of the Company pursuant to an affirmative
approval by a majority of Company’s Board of Directors granting permission to
disclose.

 

2.                                       During a period of one (1) year
following the cessation of Employee’s employment with Company (for any reason
other than “Change in Control of Company” as defined in paragraph 8.a.(3) of the
Employment Contract), Employee covenants that Employee, either individually or
in any capacity, including without limitation, as an agent, consultant, officer,
shareholder, or employee of any business enterprises or person with which he may
become associated or in which Employee may have a direct or indirect interest,
shall not, directly or indirectly for himself or on behalf of any other person
or business entity, engage in any business venture or other undertaking which is
directly or indirectly competitive with the business or operations of Company
(and/or any of its subsidiaries) as generally conducted at, or prior to, the
cessation of Employee’s employment with Company.  Without limiting the
generality of the foregoing, Employee shall not (i) so compete with Company or
its subsidiaries, (ii) be employed by, (iii) be an affiliate (as defined by
Securities and Exchange Commission Rule 405 under the

 

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Securities Act of 1933), (iv) perform any services for, or (v) have an equity or
ownership interest in, any person, firm, partnership, joint venture, or
corporation that so competes, directly or indirectly, with Company or any of its
subsidiaries.  Further, Employee will not solicit for employment or advise or
recommend to any other person that such person employ, or solicit for
employment, any employee of Company or any of its subsidiaries who was an
employee at, or prior to, the cessation of Employee’s employment with Company. 
The foregoing covenant not to compete shall be limited to a territory consisting
of those states in which Company was doing business as of the time of cessation
of Employee’s employment with Company.  If for any reason any court of competent
jurisdiction finds these covenants to be unreasonable in duration or geographic
scope, the prohibitions herein contained shall be restricted to such time and
geographic areas as such court determines to be reasonable and enforceable. 
However, the restrictions stated above will not apply if Company liquidates or
if Employee becomes employed by a company (or its affiliate) which acquires (in
a voluntary transaction) the stock or business assets of Company.

 

3.                                       Employee understands and agrees that
his violation of any of the provisions of this Agreement will constitute
irreparable injury to Company immediately authorizing it to enjoin Employee or
the business enterprise with which he may have become associated from further
violations, in addition to all other rights and remedies which Company may have
under law and equity, including recovery of damages from Employee and a right of
offset.

 

4.                                       Each party shall be entitled to receive
from the other party reimbursement of attorney’s fees and related legal costs to
the extent incurred in connection with the successful enforcement or defense, as
the case may be, of the terms and conditions hereof.

 

5.                                       The waiver by Company of Employee’s
breach of any provision hereof shall not operate or be construed as a waiver of
any subsequent breach by Employee.  This Agreement shall be binding upon the
parties hereto and their heirs, successors, executors, administrators, personal
representatives, and assigns.  Employee may not assign to any person his
covenants, obligations and duties hereunder.  All provisions of this Agreement
shall survive the termination or amendment of Employee’s Employment Contract.

 

6.                                       If any provision of this Agreement is
held by a court of law to be illegal or unenforceable, the remaining provisions
of the Agreement shall remain in full force and effect.  In lieu of such illegal
or unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal or unenforceable
provision as may be possible and be legal and enforceable.

 

7.                                       This Agreement has been made in, and
its validity, interpretation, construction, and performance shall be governed by
and be in accordance with, the laws

 

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of the State of Texas, without reference to its laws governing conflicts of
law.  Each party hereby irrevocably agrees that any legal action or proceedings
with respect to this Agreement may be brought in the courts of the State of
Texas, or in any United States District Court of Texas, and, by its execution
and delivery of this Agreement, each party hereby irrevocably submits to each
such jurisdiction and hereby irrevocably waives any and all objections which it
may have as to venue in any of the above courts.  Each party further consents
and agrees that any process or notice of motion or other application to either
of said Courts or any judge thereof, or any notice in connection with any
proceedings hereunder, may be served inside or outside the State of Texas by
registered or certified mail, return receipt requested, postage prepaid, and be
effective as of the receipt thereof, or in such other manner as may be
permissible under the rules of said Courts.

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
August 1, 2005.

 

 

 

 

 

 

 

 

 

Wayne A. Whitener

 

 

 

49 Sunrise Circle

 

 

 

Pottsboro, Texas 75076

 

 

 

Date:  August       , 2005

 

 

 

 

ACCEPTED:

 

 

 

 

 

 

 

 

TGC INDUSTRIES, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

William J. Barrett,

 

 

 

 

 

Director

 

 

 

 

 

Date:  August       , 2005

 

 

 

 

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