Document:

Exhibit 10.2

 

General Growth Properties, Inc.
 2010 Equity Incentive Plan

 

FULL VALUE LTIP UNIT AWARD AGREEMENT

 

Name of Award Recipient:   Sandeep Mathrani

 

Number of FV LTIP Units Awarded: 848,608

 

Effective Date: February 12, 2015

 

THIS FULL VALUE LTIP UNIT (“FV LTIP Unit”) AWARD AGREEMENT (this “Award Agreement”) is made effective as of February 12, 2015 (the “Effective Date”), between General Growth Properties, Inc., a Delaware corporation (the “Company”), GGP Operating Partnership, LP, a Delaware limited partnership (the “Partnership”), and Sandeep Mathrani (the “Participant”).

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the General Growth Properties, Inc. 2010 Equity Incentive Plan, as amended (the “Plan”).  Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the award provided for herein (the “Award”) to the Participant.  Pursuant to the Plan and the Partnership’s Fourth Amended and Restated Limited Partnership Agreement, as amended (the “Partnership Agreement”), GGP Real Estate Holding II, Inc. as the general partner of the Partnership and the Company hereby award to the Participant an Other Stock-Based Award in the form of, and by causing the Partnership to issue to the Participant, the number of FV LTIP Units (as defined in the Partnership Agreement) set forth below having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption and conversion set forth herein and in the Partnership Agreement.  Upon the close of business on the Effective Date pursuant to this Award Agreement, the Participant shall receive the number of FV LTIP Units specified below, subject to the restrictions and conditions set forth herein, in the Plan and in the Partnership Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

 

1.                                      Terms of the Award.

 

A.                                    The Company hereby grants to the Participant an aggregate of 848,608 FV LTIP Units as of the Effective Date noted above.

 

 

B.                                    The Participant shall be admitted as partner of the Partnership with beneficial ownership of the FV LTIP Units as of the Effective Date by (i) signing and delivering to the Partnership a copy of this Award Agreement and (ii) signing, as a Limited Partner, and delivering to the Partnership a counterpart signature page to the Partnership Agreement (attached hereto as Exhibit A).

 

C.                                    Upon execution of this Award Agreement by the Participant, the Partnership and the Company, the Partnership Agreement shall be amended to reflect the issuance to the Participant of the FV LTIP Units.  Thereupon, the Participant shall have all the rights of a Limited Partner of the Partnership with respect to a number of FV LTIP Units equal to the FV LTIP Units and the common units of the Partnership into which FV LTIP Units are converted will be redeemable for a cash amount or shares of the Company’s common stock, in each case as provided in the Partnership Agreement, subject, however, to the restrictions and conditions specified in Section 2 below.

 

D.                                    Subject to the Participant’s continued service to the Company through the applicable vesting date and the terms of the Plan, the FV LTIP Units shall vest in full on the fifth anniversary of the Commencement Date set forth in the Employment Agreement (the “Employment Agreement”) between the Participant and the Company, dated as of February 12, 2015 (the “Vesting Date”).

 

E.                                     The FV LTIP Units shall vest in full upon a Change of Control, as defined in the Plan.

 

1.                                      Termination of Service.  If the Participant’s Service is terminated due to death or Disability, by the Company without Cause or by the Participant for Good Reason, all of the unvested FV LTIP Units shall vest on the date of such termination. “Cause,” “Disability” and “Good Reason” shall have the meaning set forth in the Employment Agreement.

 

2.                                      Distributions.                         Distributions on the FV LTIP Units shall be paid to the Participant to the extent provided for in the Partnership Agreement.  The FV LTIP Full Participation Date (as defined in the Partnership Agreement) for the FV LTIP Units shall be the Effective Date and the FV LTIP Fraction (as defined in the Partnership Agreement) shall be one (1).

 

4.                                      No Right to Continued Service.  The granting of the Award evidenced hereby and this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the service of such Participant.

 

5.                                      Securities Laws/Legend on Certificates.  The issuance and delivery of common units of the Partnership or shares of common stock of the Company shall comply with all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended (the “Securities Act”), the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.  If the Company deems it

 

 

necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, each Participant to whom such security would be issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company which satisfies such requirements.  The securities shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable, and, if the securities are certificated, the Committee may cause a legend or legends to be put on such certificates to make appropriate reference to such restrictions.

 

6.                                      Transferability.  Unless otherwise provided by the Committee, the Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided, that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer of the Award to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.

 

7.                                      Tax Matters; Section 83(b) Election.  The Participant hereby agrees to make an election to include in gross income in the year of transfer the FV LTIP Units hereunder pursuant to Section 83(b) of the Internal Revenue Code (the “Code”) substantially in the form attached hereto as Exhibit B and to supply the necessary information in accordance with the regulations promulgated thereunder.

 

8.                                      Withholding and Taxes.  No later than the date as of which an amount first becomes includible in the gross income of the Participant for income tax purposes or subject to the Federal Insurance Contributions Act withholding with respect to the FV LTIP Units granted hereunder, the Participant will pay to the Company or, if appropriate, any of its Subsidiaries, or make arrangements satisfactory to the Committee regarding the payment of, any United States federal, state or local or foreign taxes of any kind required by law to be withheld with respect to such amount.  The obligations of the Company under the Award will be conditional on such payment or arrangements, and the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant.

 

9.                                      Investment Representation; Registration.  The Participant hereby makes the covenants, representations and warranties set forth on Exhibit C attached hereto as of the Effective Date and as of the Vesting Date.  All of such covenants, warranties and representations shall survive the execution and delivery of this Award Agreement by the Participant.  The Participant shall immediately notify the Partnership upon discovering that any of the representations or warranties set forth on Exhibit C was false when made or have, as a result of changes in circumstances, become false.  The Partnership will have no obligation to register under the Securities Act any of the FV LTIP Units or any other securities issued pursuant to this Award Agreement or upon conversion or exchange of the FV LTIP Units into other limited partnership interests of the Partnership or shares of capital stock of the Company.

 

 

10.                               Status of FV LTIP Units under the Plan.  The FV LTIP Units are both issued as equity securities of the Partnership and granted as “Units” under the Plan.  The Company will have the right at its option, as set forth in the Partnership Agreement, to issue common stock of the Company in exchange for partnership units into which FV LTIP Units may have been converted pursuant to the Partnership Agreement, subject to certain limitations set forth in the Partnership Agreement, and such common stock, if issued, will be issued under the Plan.  The Participant acknowledges that the Participant will have no right to approve or disapprove such election by the Company.

 

11.                               Section 409A. If any compensation provided by this Award Agreement may result in the application of Section 409A of the Code, the Company shall, in consultation with the Participant, modify the Award Agreement in the least restrictive manner necessary in order to, where applicable, (i) exclude such compensation from the definition of “deferred compensation” within the meaning of such Section 409A or (ii) comply with the provisions of Section 409A, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and to make such modifications, in each case, without any diminution in the value of the benefits granted hereby to the Participant.

 

12.                               Notices.  Any notification required by the terms of this Award Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid.  A notice shall be addressed to the Company, Attention: Chief Legal Officer, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.

 

13.                               Entire Agreement.  This Award Agreement, the Partnership Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof.  They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.

 

14.                               Waiver.  No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.

 

15.                               Successors and Assigns.  The provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Award Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.

 

16.                               Choice of Law.  This Award Agreement shall be governed by the law of the State of Delaware (regardless of the laws that might otherwise govern under applicable Delaware principles of conflicts of law) as to all matters, including but not limited to matters of validity, construction, effect, performance and remedies.

 

 

17.       Award Subject to Plan.  By entering into this Award Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan.  The Award is subject to the Plan.  The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference.  In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

 

18.       No Guarantees Regarding Tax Treatment.  The Participant (or their beneficiaries) shall be responsible for all taxes with respect to the Award.  The Committee and the Company make no guarantees regarding the tax treatment of the Award.

 

19.       Amendment.  The Committee may amend or alter this Award Agreement and the Award granted hereunder at any time, subject to the terms of the Plan.

 

20.       Severability.  The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

 

21.       Signature in Counterparts.  This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have entered into this Award Agreement.

 

	
 
    	
GENERAL GROWTH PROPERTIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Stacie L. Herron
    	
 
    
	
 
    	
Name:   Stacie L. Herron
    	
 
    
	
 
    	
Title:   Vice President and Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GGP OPERATING PARTNERSHIP, LP
    
	
 
    	
BY: GGP REAL ESTATE HOLDING II, INC.,  its General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Stacie L. Herron
    	
 
    
	
 
    	
Name:   Stacie L. Herron
    	
 
    
	
 
    	
Title:   Vice President and Secretary
    	
 
    
	
Acknowledged   as of the
    	
 
    
	
date   first written above:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Sandeep Mathrani
    	
 
    	
 
    
	
PARTICIPANT
    	
 
    	
 
    

 

 

EXHIBIT A

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

The Participant, desiring to become one of the within named Limited Partners of GGP Operating Partnership, LP, hereby becomes a party to the Agreement of Limited Partnership of GGP Operating Partnership, LP, as amended and/or restated through the date hereof (the “Partnership Agreement”).  The Participant agrees that this signature page may be attached to any counterpart of the Partnership Agreement.

 

	
 
    	
Signature   Line for Limited Partner:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Date:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address   of Limited Partner:
    
	
 
    	
110   N. Wacker Drive
    
	
 
    	
Chicago, IL   60606
    

 

 

EXHIBIT B

 

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF

TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B)

OF THE INTERNAL REVENUE CODE(1)

 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the fair market value of the property described below:

 

1.                                      The name, address and taxpayer identification number of the undersigned and the taxable year for which this election is being made are:

 

Name:           Sandeep Mathrani (the “Taxpayer”)

 

Address:

 

Taxpayer’s Social Security No.:

 

Taxable Year:  Calendar Year 2015

 

2.                                      Description of property with respect to which the election is being made:

 

The election is being made with respect to 848,608 FV LTIP Units in GGP Operating Partnership, LP (the “Partnership”).

 

3.                                      The date on which the FV LTIP Units were transferred is February 12, 2015

 

4.                                      Nature of restrictions to which the FV LTIP Units are subject:

 

(a)                                 With limited exceptions, until the FV LTIP Units vest, the Taxpayer may not transfer in any manner any portion of the FV LTIP Units.

 

(b)                                 The Taxpayer’s FV LTIP Units vest in accordance with the vesting provisions described in the Schedule attached hereto.  Unvested FV LTIP Units are forfeited in accordance with the vesting provisions described in the Schedule attached hereto.

 

5.                                      The fair market value at time of transfer (determined without regard to any restrictions other than nonlapse restrictions as defined in §1.83-3(h) of the Income Tax Regulations) of the FV LTIP Units with respect to which this election is being made is $0 per FV LTIP Unit.

 

6.                                      The amount paid by the Taxpayer for the FV LTIP Units was $0 per FV LTIP Unit.

 

(1) The 83(b) Election must be filed no later than 30 days after the date on which the property is transferred with the IRS office with which the taxpayer files his or her tax return.  In other contexts, the IRS has indicated that this should be the address listed for the taxpayer’s state under “Are you not including a check or money order . . .” given in Where Do You File in the Instructions for Form 1040 and the Instructions for Form 1040A (this information can also be found by clicking on your state at http://www.irs.gov/file/content/0,,id=105690,00.html)

 

 

7.                                      A copy of this statement has been furnished to the Partnership and to its general partner, General Growth Properties, Inc.  Additionally, the undersigned will include a copy of the election with his or her income tax return for the taxable year in which the property is transferred.  The undersigned is the person performing services in connection with which the FV LTIP Units were transferred.

 

Dated:  [        ]

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    

 

 

Schedule to Section 83(b) Election -Vesting Provisions of FV LTIP Units

 

FV LTIP Units vest on the fifth anniversary of the Commencement Date, provided that the Taxpayer remains an employee of General Growth Properties, Inc. (the “Company”) or its subsidiaries through such date, subject to acceleration in the event of certain extraordinary transactions.  Unvested FV LTIP Units are subject to forfeiture in the event of failure to vest based on the passage of time and continued employment with the Company or its subsidiaries.

 

 

EXHIBIT C

 

PARTICIPANT’S COVENANTS, REPRESENTATIONS AND WARRANTIES

 

The Participant hereby represents, warrants and covenants as follows:

 

(a)           The following documents have been made available to the Participant (the “Background Documents”):

 

(i)            The Annual Report to Stockholders;

 

(ii)           The Company’s Proxy Statement for its most recent Annual Meeting of Stockholders;

 

(iii)          The Company’s Report on Form 10-K for the fiscal year most recently ended;

 

(iv)          The Company’s Form 10-Q for the most recently ended quarter if one has been filed by the Company with the Securities and Exchange Commission since the filing of the Form 10-K described in clause (iii) above;

 

(v)           Each of the Company’s Current Report(s) on Form 8-K, if any, filed since the later of the end of the fiscal year most recently ended for which a Form 10-K has been filed by the Company;

 

(vi)          The Fourth Amended and Restated Agreement of Limited Partnership of GGP Operating Partnership, LP, as then amended;

 

(vii)         The Company’s 2010 Equity Incentive Plan, as then amended; and

 

(viii)        The Company’s Articles of Incorporation, as then amended.

 

The Participant also acknowledges that any delivery of the Background Documents and other information relating to the Company and the Partnership prior to the determination by the Partnership of the suitability of the Participant as a holder of FV LTIP Units shall not constitute an offer of FV LTIP Units until such determination of suitability shall be made.

 

(b)           The Participant hereby represents and warrants that

 

(i)            The Participant either (A) is an “accredited investor” as defined in Rule 501(a) under the Securities Act, or (B) by reason of the business and financial experience of the Participant, together with the business and financial experience of those persons, if any, retained by the Participant to represent or advise him or her with respect to the grant to him or her of FV LTIP Units, the potential conversion of FV LTIP Units into common units of the Partnership (“Common Units”) and the potential redemption of such Common Units for shares of common stock of the Company (“Shares”), has such knowledge, sophistication and experience in financial and business matters and in making

 

 

investment decisions of this type that the Participant (I) is capable of evaluating the merits and risks of an investment in the Partnership and potential investment in the Company and of making an informed investment decision, (II) is capable of protecting his or her own interest or has engaged representatives or advisors to assist him or her in protecting his or her its interests, and (III) is capable of bearing the economic risk of such investment.

 

(ii)           The Participant understands that (A) the Participant is responsible for consulting his or her own tax advisors with respect to the application of the U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which the Participant is or by reason of the award of FV LTIP Units may become subject, to his or her particular situation; (B) the Participant has not received or relied upon business or tax advice from the Company, the Partnership or any of their respective employees, agents, consultants or advisors, in their capacity as such; (C) the Participant provides or will provide services to the Partnership on a regular basis and in such capacity has access to such information, and has such experience of and involvement in the business and operations of the Partnership, as the Participant believes to be necessary and appropriate to make an informed decision to accept this Award of FV LTIP Units; and (D) an investment in the Partnership and/or the Company involves substantial risks.  The Participant has been given the opportunity to make a thorough investigation of matters relevant to the FV LTIP Units and has been furnished with, and has reviewed and understands, materials relating to the Partnership and the Company and their respective activities (including, but not limited to, the Background Documents).  The Participant has been afforded the opportunity to obtain any additional information (including any exhibits to the Background Documents) deemed necessary by the Participant to verify the accuracy of information conveyed to the Participant.  The Participant confirms that all documents, records, and books pertaining to his or her receipt of FV LTIP Units which were requested by the Participant have been made available or delivered to the Participant.  The Participant has had an opportunity to ask questions of and receive answers from the Partnership and the Company, or from a person or persons acting on their behalf, concerning the terms and conditions of the FV LTIP Units.  The Participant has relied upon, and is making its decision solely upon, the Background Documents and other written information provided to the Participant by the Partnership or the Company.  The Participant did not receive any tax, legal or financial advice from the Partnership or the Company and, to the extent it deemed necessary, has consulted with its own advisors in connection with its evaluation of the Background Documents and this Award Agreement and the Participant’s receipt of FV LTIP Units.

 

(iii)          The FV LTIP Units to be issued, the Common Units issuable upon conversion of the FV LTIP Units and any Shares issued in connection with the redemption of any such Common Units will be acquired for the account of the Participant for investment only and not with a current view to, or with any intention of, a distribution or resale thereof, in whole or in part, or the grant of any participation therein, without prejudice, however, to the Participant’s right (subject to the terms of the FV LTIP Units, the Plan and this Award Agreement) at all times to sell or otherwise dispose of all or any part of his or her FV LTIP Units, Common Units or Shares in compliance with the

 

 

Securities Act, and applicable state securities laws, and subject, nevertheless, to the disposition of his or her assets being at all times within his or her control.

 

(iv)          The Participant acknowledges that (A) neither the FV LTIP Units to be issued, nor the Common Units issuable upon conversion of the FV LTIP Units, have been registered under the Securities Act or state securities laws by reason of a specific exemption or exemptions from registration under the Securities Act and applicable state securities laws and, if such FV LTIP Units or Common Units are represented by certificates, such certificates will bear a legend to such effect, (B) the reliance by the Partnership and the Company on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Participant contained herein, (C) such FV LTIP Units, or Common Units, therefore, cannot be resold unless registered under the Securities Act and applicable state securities laws, or unless an exemption from registration is available, (D) there is no public market for such FV LTIP Units and Common Units and (E) neither the Partnership nor the Company has any obligation or intention to register such FV LTIP Units or the Common Units issuable upon conversion of the FV LTIP Units under the Securities Act or any state securities laws or to take any action that would make available any exemption from the registration requirements of such laws, except, that, upon the redemption of the Common Units for Shares, the Company currently intends to issue such Shares under the Plan and pursuant to a Registration Statement on Form S-8 under the Securities Act, to the extent that (I) the Participant is eligible to receive such Shares under the Plan at the time of such issuance and (II) the Company has filed an effective Form S-8 Registration Statement with the Securities and Exchange Commission registering the issuance of such Shares.  The Participant hereby acknowledges that because of the restrictions on transfer or assignment of such FV LTIP Units acquired hereby and the Common Units issuable upon conversion of the FV LTIP Units which are set forth in the Partnership Agreement and this Award Agreement, the Participant may have to bear the economic risk of his or her ownership of the FV LTIP Units acquired hereby and the Common Units issuable upon conversion of the FV LTIP Units for an indefinite period of time.

 

(v)           The Participant has determined that the FV LTIP Units are a suitable investment for the Participant.

 

(vi)          No representations or warranties have been made to the Participant by the Partnership or the Company, or any officer, director, shareholder, agent, or affiliate of any of them, and the Participant has received no information relating to an investment in the Partnership or the FV LTIP Units except the information specified in this Paragraph (b).

 

(c)           So long as the Participant holds any FV LTIP Units, the Participant shall disclose to the Partnership in writing such information as may be reasonably requested with respect to ownership of FV LTIP Units as the Partnership may deem reasonably necessary to ascertain and to establish compliance with provisions of the Code, applicable to the Partnership or to comply with requirements of any other appropriate taxing authority.

 

 

(d)           The Participant hereby agrees to make an election under Section 83(b) of the Code with respect to the FV LTIP Units awarded hereunder, and has delivered with this Award Agreement a completed, executed copy of the election form attached to this Award Agreement as Exhibit B.  The Participant agrees to file the election (or to permit the Partnership to file such election on the Participant’s behalf) within thirty (30) days after the Award of the FV LTIP Units hereunder with the IRS Service Center at which such Participant files his or her personal income tax returns if no check or money order is included with the returns, and to file a copy of such election with the Participant’s U.S. federal income tax return for the taxable year in which the FV LTIP Units are awarded to the Participant.

 

(e)           The address set forth on the signature page of this Award Agreement is the address of the Participant’s principal residence, and the Participant has no present intention of becoming a resident of any country, state or jurisdiction other than the country and state in which such residence is sited.

 

(f)            The representations of the Participant as set forth above are true and complete to the best of the information and belief of the Participant, and the Partnership shall be notified promptly of any changes in the foregoing representations.Ex 10.43 - Heinlein Transition and Separation Agreement

EXHIBIT 10.43

October 30, 2014

Gregory J. Heinlein
866 Rosastone Trail
Houston, Texas 77024

Re: Transition and Separation Agreement 

Dear Greg:

This letter, upon your signature, will constitute the agreement between you and ION Geophysical Corporation (hereinafter “Employer”) regarding the terms of your transition and separation from employment with Employer. This agreement acknowledges the parties’ desire to end the employment relationship and terminate the Employment Agreement dated November 28, 2011 (hereinafter “Employment Agreement”) by accepting your resignation in the form set forth in Exhibit A.

		
	1.
	Your employment as the Chief Financial Officer of the Company and the Employment Agreement will be deemed to end effective upon the simultaneous return by you to the Employer of (i) the Resignation attached hereto at Exhibit A and (ii) the Non-Revocation Statement attached hereto as Exhibit B, both no earlier than eight days after your execution of this agreement (the “Separation Date”); provided that, you will continue to be a general employee of the Company acting as the Advisor to the CFO until December 31, 2014. Sections 2 (Fiduciary Duty; Confidentiality) and 4 (Non-Competition; Non-Solicit; No Hire) of the Employment Agreement shall survive its termination for the time periods specified in the Employment Agreement.

 
		
	2.
	From the Separation Date through December 31, 2014, you agree to provide transition services to the Employer as an employee acting as the Advisor to the CFO (the “Transition Period”).Transition services will be provided in two phases:

		
	A.
	Phase 1: From the date of this letter through November 14, you will continue to report to ION’s Houston office during normal business hours and will assist with the orderly transition of information, duties and team members. 

		
	B.
	Phase 2: After November 14, you will no longer be required to be present in the office for the purpose of fulfilling your transition duties except as may be requested from time to time by Steve Bate upon reasonable advance notice. During Phase 2 of the Transition Period, you will remain available to respond to questions and to assist in the transition of the business during business hours by telephone and electronic mail but will not otherwise be required to attend to any business matters on behalf of the Company. 

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	C.
	During the Transition Period, you will continue to be paid installments of your bi-weekly Base Salary as defined in the Employment Agreement as and when customarily paid by the Company as well as receive all other benefits given to other employees of the Company (401k match, medical benefits, etc.). 

		
	3.
	You have received or will receive by separate cover information regarding your rights to health insurance continuation and your retirement benefits. To the extent that you have such rights, nothing in this agreement will impair those rights; more specifically, you waive no rights to bring an action pursuant to 29 U.S.C. §1132(a)(1)(B) of the Employee Retirement Income Security Act or the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) related to providing eligible employees the opportunity for continuation of participation in the employer’s group health insurance plan under certain circumstances. 

		
	4.
	Except as necessary to perform your duties during Phase 1, you have returned or will immediately return to Employer any company property and any trade secrets or other confidential information belonging to Employer, including Employer computer equipment, documents and electronic files, employee identification, keys, building access cards, and other property. Any items retained for the purpose of completing Phase 1, shall be returned upon the conclusion of Phase 1. The foregoing does not include Employee’s mobile phone, outlook contacts, mobile phone number and laptop computer which Employee shall own after Employer is permitted to remove all Employer information.

		
	5.
	In consideration of your acceptance of this agreement and the return of Exhibits A and B, the Employer will provide you with (i) an aggregate amount (the “Payment”), minus applicable taxes and withholdings, equal to $330,000.00, which Payment will be paid to you in bi-weekly installments over a period of 26 pay periods at times consistent with regular payroll payments to employees of Employer commencing at the end of the Transition Period and (ii) reimbursement for Employee’s COBRA payments from the end of the Transition Period through the end of calendar year 2015. If you do not sign and return this agreement including all exhibits hereto at a date no later than the maximum period set forth in Section 12, this agreement will terminate and you will not receive any of the additional consideration outlined above or the consideration to be paid during the Transition Period because you would not otherwise be entitled to such consideration.

		
	6.
	You will remain eligible to participate in the 2014 ION Incentive Compensation Plan (ICP) for the 2014 period. The CEO will recommend payment of a bonus to Employee at the time and in the manner all other bonuses are general paid; provided that, the amount of such bonus is discretionary and must be approved by the Board and Compensation Committee.

		
	7.
	Concurrent with the execution of this Agreement, Employer will provide Employee with a letter of reference in the form attached. Employer will not have any future obligations with respect to references except to confirm the matters set forth in the letter of reference

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	8.
	Employee agrees that Employee shall not, directly or with or through any other person, directly or indirectly, make, issue, release or authorize any written or oral statement to any third person that are derogatory or defamatory in nature with respect to Employer, or any of their respective members, directors, officers, employees, subcontractors or agents. Employer agrees that, neither Employer nor any of its officers, directors, affiliates or agents shall, directly or with or through any other person, directly or indirectly , make, issue, release or authorize any written or oral statements to any third person that are derogatory or defamatory in nature with respect to Employee, Employee’s family members, or any of his affiliates. Provided, however, that this provision shall not apply to communications required by law or made in response to a valid subpoena or other lawful order compelling a party to provide testimony or information; provided further, that in responding to a valid subpoena or other lawful order, the responding party will provide the other parties with advance notice and an opportunity to seek a protective order or other safeguard for its confidential information. Any inquiries about Employees employment will be directed to the SVP of Human Resources.

		
	9.
	Unless required or otherwise permitted by law, you will not disclose to others any information regarding the following:

		
	A.
	Any information regarding Employer’s trade secrets or any other confidential information.

		
	B.
	The terms of this agreement, the benefit being paid under it and the fact of its payment (except that you may disclose this information to your spouse, attorney, accountant or other professional advisor to whom you must make the disclosure in order for them to render professional services to you; provided that you instruct such persons to maintain the confidentiality of the information just as you must).

		
	10.
	Complete Release, Waiver of Claims and Covenant Not to Sue.

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	A.
	Release and Waiver: On behalf of yourself and your heirs, executors, successors and assigns, you hereby irrevocably and unconditionally release Employer and its predecessors, subsidiaries, related entities, officers, directors, shareholders, parent companies, agents, attorneys, employees, successors and assigns (for purposes of this Section 7, hereinafter collectively referred to as “Employer”), from all claims or demands you have, may have, or may have had based on or in any way related to your employment with Employer and your Employment Agreement, the termination of that employment and the Employment Agreement, or based on any previous act or omission by or on behalf of Employer. You further agree to waive any right you may have with respect to the claims or demands from which Employer is herewith released. This release and waiver includes, but is not limited to, any rights or claims you may have under , Title VII of the Civil Rights Acts of 1964, as amended; , 42 U.S.C. § 1981; the Civil Rights Act of 1991; Section 1981 of the Civil Rights Act of 1866; the Family and Medical Leave Act, including the revised regulations effective January 16, 2009; the Genetic Information Nondiscrimination Act (GINA); the Equal Pay Act ; the Rehabilitation Act of 1973 and the Americans with Disabilities Act;, ADA Amendments Act of 2008; the Age Discrimination in Employment Act; the Employee Retirement Income Security Act; the Fair Labor Standards Act, the Workers Adjustment and Retraining Notification Act (WARN); 29 U.S.C. § 2101 et seq.; the Older Workers Benefit Protection Act of 1990 (OWBPA); the Occupational Safety and Health Act (OSHA); claims under the Texas Commission on Human Rights Act as codified in the Texas Labor Code, claims for discrimination or retaliation under the Texas Workers’ Compensation Act, and any other federal, state or local laws or regulations. This release and waiver also includes any claims for wrongful discharge, whether based on claimed violations of statutes, regulations or public policy, or based on claims in contract or tort. Employee expressly retains all rights pursuant to existing director and officer insurance policies held by Employer and indemnification obligations pursuant to Employer’s bylaws. On behalf of Employer and its affiliate, Employer hereby irrevocably and unconditionally releases Employee and his affiliates, agents, attorneys, employees, successors and assigns (for purposes of this Section 7, hereinafter collectively referred to as (“Employee”), from all claims or demands Employer has, may have or may have had based on or in any way related to Employee’s employment with Employer and Employee’s Employment Agreement, the termination of that employment and the Employment Agreement, or based on any previous act or omission by or on behalf of Employee. The foregoing releases and waiver also includes any claims that either party suffered, any harm by or through the actions or omissions of the other, including, but not limited to, negligence claims and any other tort, whether intentional or unintentional, or contract claims, including but not limited to defamation, invasion of privacy, and/or wrongful discharge.

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	B.
	Scope of Release/Non-release of Future Claims based on subsequent acts or omissions: The foregoing releases and waiver, to which both parties voluntarily agree, covers all claims or demands based on any facts or events, whether known or unknown by either party that occurred on or before the effective date of this release. Each party fully understands that if any of the facts or circumstances on which they premise their execution of the foregoing releases and waiver be found, suspected or claimed hereafter to be other than or different from the facts and circumstances now believed by such party to be true, each party nonetheless expressly accepts and assumes the risk of such possible differences in fact or circumstances and agree that this release and waiver shall be and remain effective notwithstanding any such difference in any such fact or circumstances. 

		
	C.
	No Future Lawsuits, Complaints, or Claims: Each party hereby waives their right to file any claim or complaint against the other arising out of Employee’s Employment Agreement or Employee’s employment with or separation from employment before any federal, state or local court or any federal, state or local administrative agency, except where such waivers are prohibited by law. This agreement , does not prevent you from filing a timely charge with the EEOC (or with any other agency with similar provisions or regulations concerning the regulation of releases between private parties) concerning claims of discrimination, including a challenge to the validity of the waiver contained in this agreement; although you hereby waive your right to recover any damages or other relief in any claim or suit brought by or through the EEOC or any other federal, state, or local agency on your behalf. 

		
	11.
	Denial of Liability: The parties agree that no statement or consideration given in this agreement or the execution of this agreement by any party is intended to or will constitute any evidence of wrongdoing or liability by any of them, any such admission being expressly denied.

		
	12.
	Right to Revoke Release and Waiver of Claims: You acknowledge that you have been given a copy of this Agreement and have been encouraged and advised to consult with an attorney prior to executing this Agreement. You further acknowledge that you have been given twenty-one (21) calendar days after receipt of this Agreement within which to consider its terms before signing it. In addition, for a period of seven (7) days following the execution of this Agreement, you will have the opportunity to revoke this Agreement by notifying Larry Burke, SVP of Human Resources, in writing of your intent to do so and by returning at that time any monies or other benefits paid or provided to you in connection with this Agreement. 

5

		
	13.
	Entire Agreement/Severability: This agreement, including release, waiver and covenant not to sue, contains all of the promises and covenants exchanged by the parties, and would not have been agreed upon but for the inclusion of every one of its conditions. The terms and conditions hereof constitute the entire agreement between Employer and you and supersede all previous and contemporaneous statements, communications, representations or agreements, either written or oral, by or between Employer and you with respect to the subject matter hereof (except for the terms of any confidentiality, non-competition, non-solicitation, no-hire and/or proprietary information agreements entered by you with or for the benefit of Employer in connection with your employment and Employment Agreement). No contemporaneous or subsequent agreement or understanding modifying, varying or expanding this agreement shall be binding upon either party unless in writing and signed by a duly authorized representative of Employer and you. The release and waiver of claims and covenant not to sue contained in Paragraph 7 of this agreement are essential and material parts of this agreement. 

		
	14.
	Outplacement. The Employer will provide outplacement services for the benefit of Employee with Right Management in the manner provided to all prior employees of Employers for a period of one year from the date of this agreement. 

		
	15.
	Cooperation. You agree to cooperate with the Employer with regard to any litigation or other legal proceedings involving the Released Parties that relate to matters within your knowledge or responsibility. Without limiting the foregoing, with respect to any proceedings subject to this paragraph, you agree to: (i) meet with a Released Party’s representatives or counsel at mutually convenient times and places; (ii) give truthful and complete testimony to any court, regulatory authority, or other adjudicatory body; (iii) assist in responding to discovery served in the proceedings; and (iv) notify the Company of any contact by an adverse party or its counsel, except as may be prohibited by law. The Company will reimburse you for reasonable expenses incurred by you under this paragraph.

		
	16.
	Applicable Law and Venue: This agreement shall be interpreted and construed in accordance with and shall be governed by the laws of the State of Texas, except to the extent that federal law may apply and have preemptive effect. All disputes arising under or relating to this Agreement shall be brought by the parties in a court of competent jurisdiction in Houston, Harris County, Texas.

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I KNOWINGLY AND VOLUNTARILY CHOOSE TO ACCEPT THE TERMS OF THIS AGREEMENT IN CONNECTION WITH THE TERMINATION OF MY EMPLOYMENT.

s/s Gregory J. Heinlein            11/5/14    
Gregory J. Heinlein                    Date

ION GEOPHYSICAL CORPORATION

s/s Brian Hanson            11/5/14    
Brian Hanson                    Date
Chief Executive Officer                        

7

EXHIBIT A

Corporate Resignation

I, Gregory J. Heinlein, hereby resign from any and all officer, director or other executive positions I may hold with ION Geophysical Corporation and any of its subsidiaries, joint ventures or affiliates effective as of November ___, 2014. 

_______________________            
Gregory J. Heinlein                

8

EXHIBIT B

Non-Revocation Statement

I, Gregorgy J. Heinlein, hereby acknowledge and reaffirm my execution of the Transition and Separation Agreement and waive all rights to revocation of the Transition and Separation Agreement. 

s/s Gregory J. Heinlein    
Gregory J. Heinlein

November 13, 2014    

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