Exhibit
10.16


 


November 16, 2003


 


 


Michael A. Dunn


Geokinetics Inc.


1 Riverway Suite 2100


Houston, TX  77056


 


Re: Employment Agreement


 


Dear Mr. Dunn:


 


This is to set forth the
principal terms of an employment relationship between you and Geokinetics Inc.   (the “Company”).  Please review the following and, if acceptable, please indicate
your acceptance in the place marked below.


 


1.               You will serve as
Vice President of Geokinetics Inc.  You
will devote substantially all of your business time and attention and best
efforts to the affairs of the Company.


 


2.               You will be paid an
annual salary at the rate of $150,000 plus reimbursement of business expenses
against proper vouchers in accordance with Company policy.  Your salary will be reviewed annually.


 


3.               You will be granted
options to purchase common stock of Geokinetics Inc. at a purchase price per
share equal to the fair market value of such stock on the date of award.  For purposes of this agreement,
the date of award shall be deemed to be November 12, 2003.  Your grant will represent an option to
purchase 350,000  shares of Geokinetics Inc. common stock.  Vesting will take place over three years in
three equal installments.  The first
installment shall vest one year from the date of award, the second installment
twenty-four months from the date of award and the final installment thirty-six
months from the date of award.  The term
of these options shall be for a ten-year period from the date of award.


 


4.               In addition to your
salary, you will be eligible to participate in an executive incentive program
where you could earn additional sums as a bonus based upon the annual
performance of Geokinetics in relation to its cash flow.  Cash flow would be earnings before
depreciation, interest and taxes, less capex budget overages not previously
approved by the Board of Directors (“EBITDA” less Capex overages).  An annual bonus pool will be established for
Executives and key employees consisting of 5% of the difference of EBITDA less
CAPEX overages (“Bonus Pool”).  If earnings
from operations are negative, no bonus will be payable.  The allocation of this pool among


 

















 


the Executives and
key employees would be determined by the Board of Directors and would be paid
within 90 days after the end of the bonus earning year.  The maximum award you can receive is two
times your annual base salary.


 


5.              Should
the Company sever your employment for any reason, other than for cause, you
would be entitled to receive as compensation a sum equal to 1 times the sum of
your annual salary and most recent bonus, and the Company will pay for COBRA
insurance coverage at your then existing level.


 


6.               You will agree not
to compete in the seismic service industry during your employment and for a
period of two years after termination if you voluntarily leave the
company.  If you are terminated at the
company’s initiation, this non-compete requirement will no longer be in
force.  The non-compete would be
restricted to the areas where the Company is operating at the time of your
termination.  You will agree to execute
Company non-disclosure and confidentiality agreements with respect to
disclosure of Company proprietary or confidential information.


 


7.               You will be
entitled to the same employment benefits accorded to executives of the Company
generally, including a monthly car allowance of $400.  You will be entitled to four weeks of paid vacation, prorated
over an annual employment year if less than twelve months.


 


8.               The term of this
agreement shall be for a period of three years effective from the date of this
letter.


 


I look forward to
continuing to profitably grow our business together.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ David A. Johnson

  
	
   

  	
  David A. Johnson

  
	
   

  	
  President & CEO,
  Geokinetics

  



 


 


	
  Agreed and accepted

  
	
  17th day of
  December, 2003

  
	
   

  
	
  /s/ Michael A. Dunn

  	
   

  
	
  Michael A. Dunn