Document:

exh_104.htm

EXHIBIT 10.4

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into effective as of January 25, 2013 (the “Effective Date”), by and between Global Geophysical Services, Inc., a Delaware Corporation (“GGS” or “Company”), and Ross G. Peebles (“Executive”).  Executive and the Company are collectively referred to in this Agreement as the “Parties” and individually as a “Party.”

 

RECITALS:

 

WHEREAS, Executive is to be employed as Sr. Vice President of the Company;

WHEREAS, it is the desire of the Company to engage Executive as Sr. Vice President of the Company;

 

WHEREAS, Executive desires to be employed with the Company on the terms herein provided; and

 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the Parties agree as follows:

 

AGREEMENT TERMS

 

1. Term.  Beginning on the Effective Date, the Company employs Executive, and Executive accepts such employment, on the terms and conditions set forth in this Agreement, for the period (the “Term”) commencing on the Effective Date and expiring at the earlier to occur of (a) 11:59 p.m. on December 31, 2014 (“the Expiration Date”) or (b) the Termination Date (as defined in Section 4).  Beginning on January 1, 2015, this Agreement shall be automatically renewed each January 1st for twelve (12) month terms, unless either the Company or Executive provides written notice of election not to renew, at least ninety (90) days before the applicable renewal date.

 

2. Duties as Executive of the Company.  Subject to the Agreement’s terms, Executive agrees to serve as the Sr. Vice President of the Company and act in the ordinary course of its business with all the powers reasonably incident to the position(s) or other responsibilities or duties that may be from time to time assigned to Executive by the Company’s Board of Directors (hereafter “GGS Board of Directors”) or the Company’s Chief Executive Officer.

 

3. Compensation and Related Matters.

 

(a) Base Salary.  Executive shall receive an initial Base Salary (defined below) paid by the Company of $264,000 per year during the Term.  Executive’s Base Salary may be increased annually, on January 1 of each year based upon Executive’s performance determined through an annual review process, by an amount to be determined by GGS, within its sole discretion. For purposes of this Agreement, “Base Salary” shall mean Executive’s initial base salary or, as adjusted from time to time, then the adjusted base salary at the time in question.  The Base Salary shall be paid, subject to all applicable withholdings and deductions, in substantially equal semi-monthly installments.

 

  

 

  

(b) Bonus Plan.  During the Term, Executive shall be eligible for consideration of, in addition to the Base Salary, an annual cash and/or stock bonus payment in an amount to be determined at the sole discretion of the GGS Board of Directors or such other person as shall be designated by the GGS Board of Directors in accordance with Company policies (“Annual Bonus”).  To the extent any GGS stock is granted to Executive as part of the Annual Bonus, Executive acknowledges and agrees that all stock grants shall be done in accordance with the Company’s then-applicable stock grant plan.  Subject to Sections 4(b), 4(c), and 4(d), no Annual Bonus shall be paid to Executive for a calendar year if Executive’s Termination Date occurs at any time during such year. Moreover, even if Executive is employed by the Company on the last day of the calendar year for which an Annual Bonus may be payable, Executive shall not be eligible for the payment of bonus compensation for such year if this Agreement or his employment with the Company terminates for Cause (as defined below), before the payment of such bonus compensation.

 

(c) Additional Stock Incentive. As additional consideration for entering into this Agreement and in exchange for agreeing to the restrictions in Section 8 herein, the Executive shall receive an award of restricted stock of thirty-five thousand (35,000) shares of common stock pursuant to the Global Geophysical Services, Inc. Amended and Restated 2006 Incentive Compensation Plan, subject to the terms and conditions set forth in the applicable award agreement and this Agreement (including customary vesting based on continued employment over three years).

 

(d)           Expenses.  During the Term, Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by him, in accordance with the policies and procedures established by the Company, in performing services under this Agreement and during his employment with the Company, provided that Executive properly accounts for the expenses in accordance with Company policies.  The amount of expenses eligible for reimbursement during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year.  Reimbursement of eligible expenses shall be made on or before the last day of the calendar month following the calendar month in which the expenses were incurred, or as otherwise provided in the Company’s business expense reimbursement policy.

 

(e)           Other Benefits.  From time to time, the Company may make available other compensation and employee benefit plans and arrangements. Executive shall be eligible to participate in such other compensation and employee benefit plans and arrangements in which executives at or above the level of Executive participate, subject to and on a basis consistent with the terms, conditions, and overall administration of such plans and arrangements, as amended from time to time.  Nothing in this Agreement shall be deemed to confer upon Executive or any other person, including any beneficiary, any rights under or with respect to any such plan or arrangement or to amend any such plan or arrangement, and Executive and each other person, including any beneficiary, shall be entitled to look only to the express terms of any such plan or arrangement for his or her rights thereunder.  Nothing paid to Executive under any such plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary and other benefits payable to Executive pursuant to this Agreement.

 

  

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(f)           Vacation.  Executive shall be entitled to twenty (20) days of vacation each year of full employment during the Term, exclusive of holidays, as long as the scheduling of Executive's vacation does not interfere with the Company's normal business operation.  Vacation will accrue and forfeit as provided by the terms of the Company's policy governing vacation, as that policy is updated or revised from time to time in the Company's sole discretion.  For purposes of this Section, weekends shall not count as Vacation days. Executive shall also be entitled to all paid holidays given by the Company.

 

(g)           Proration.  The Base Salary payable to Executive hereunder in respect of any calendar year during which Executive is employed by the Company for less than the entire year shall be prorated in accordance with the total number of calendar days in such calendar year during which he is so employed.

 

4. Termination.

 

(a) Definitions.

 

(1) “Cause” shall mean:

 

(i) Executive’s failure or refusal to substantially perform his material duties, responsibilities and obligations, other than a failure resulting from Executive’s incapacity due to physical or mental illness, which failure continues for a period of at least thirty (30) days after a detailed written notice of alleged Cause and a demand for substantial performance has been delivered to Executive specifying the manner in which Executive has failed substantially to perform;

 

(ii) any intentional act involving fraud, misrepresentation, theft, embezzlement, or dishonesty on a material matter which actually results in harm to the Company;

 

(iii) conviction of or a plea of nolo contendere to an offense which is a felony or which is a misdemeanor that involves fraud; or

 

(iv) a material breach of this Agreement by Executive.

 

Regarding these Sections 4(a)(1)(i), (ii) and (iv), the Company shall provide written notice to Executive describing the specific facts of any alleged Cause event within thirty (30) days of any such Cause event and Executive shall thereafter have thirty (30) calendar days to cure the Cause event to the reasonable satisfaction of the Company

 

(2) A “Disability” or “Disabled” shall mean the inability of Executive to substantially engage in the duties that he is normally expected to perform in his role at the Company by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than three (3) months.  Executive shall be considered to have a Disability (i) if he is determined to be totally disabled by the Social Security Administration or (ii) if he is determined to be disabled under GGS’s long-term disability plan in which Executive participates and if such plan defines “disability” in a manner that is consistent with the immediately preceding sentence.

 

  

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(3) A “Good Reason” shall mean any of the following (without Executive’s express written consent):

 

(i) A diminution in Executive’s Base Salary;

 

(ii) A change in the location where Executive is expected or required the majority of Executive’s job duties at the time Executive executes this Agreement (“Base Location”) to a location that is more than twenty-five (25) miles from the Base Location, without Executive’s written consent, except for travel reasonably required of Executive on the Company’s business;

 

(iii) A substantial and adverse diminution in Executive’s duties, authority, responsibility or position with the Company; or

 

(iv) Any breach by the Company of any material provision of this Agreement.

 

Regarding these Sections 4(a)(3)(i), (ii), (iii), and (iv), the Executive shall provide written notice to Company describing the specific facts of any alleged Good Reason event within thirty (30) days of any such Good Reason event, and Company shall thereafter have thirty (30) calendar days to cure the Good Reason event to the reasonable satisfaction of the Executive.  Any such notice from Executive must be provided within ninety (90) calendar days after the initial existence of the specified Good Reason event.

 

(4) “Termination Date” shall mean the date Executive’s employment with the Company terminates or is terminated for any reason under this Agreement, and which constitutes a “separation from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, or any regulations or Treasury guidance promulgated under Section 409A (the “Code”).

 

(b) Termination Without Cause or for Good Reason: Benefits.  In the event the Company involuntarily terminates Executive’s employment with the Company without Cause or if Executive terminates employment with the Company for Good Reason (a “Termination Event”), this Agreement shall terminate, but Executive shall be entitled to the following severance benefits:

 

(1) Payment of accrued but unpaid Base Salary and unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy;

 

  

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(2) An amount equal to the greater of the compensation required for the remaining term of this Agreement or one year of Base Salary (as defined in Section 3(a)) (the “Severance Payment”), at the rate in effect immediately before the Termination Event, payable in a lump sum within thirty (30) days after Executive executes the Release referenced in Section 6;

 

(3) An amount equal to the greater of; (i) the full, unprorated, amount of the Annual Bonus, relating to the calendar year immediately preceding the year containing the Termination Date, that has been paid or is payable to Executive or (ii) the average of the Annual Bonus amounts, if any, relating to the two (2) consecutive calendar years immediately preceding the year containing the Termination Date that have been paid or are payable to Executive (the “the Additional Severance Payment”), payable in a lump sum within thirty (30) days after Executive executes the Release referenced in Section 6; and

 

(4) Full vesting of all unvested restricted stock and stock options outstanding on Executive’s Termination Date, including the restricted stock granted under Section 3(c) herein, after Executive enters into the Release referenced in Section 6.

 

(c)           Termination In Event of Death: Benefits.  If Executive’s employment with the Company is terminated by reason of Executive’s death during the Term, this Agreement shall terminate without further obligation to Executive’s legal representatives under this Agreement, other than for payment of all accrued Base Salary through the Termination Date, unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d), and the amount of any bonus under Section 3(b) that relates to a prior year and that is unpaid as of the date of death.  The accrued but unpaid Base Salary shall be paid to Executive’s estate in a lump sum in cash within six (6) days after the Termination Date or by the next regularly scheduled payday.  Unreimbursed business expenses shall be paid to Executive’s estate within the time period required by the Company’s business expense reimbursement policy.  Executive shall be entitled to consideration for the Annual Bonus payment under Section 3(b) with respect to the calendar year in which Executive dies; provided that the payment of such bonus, if any, shall be payable within thirty (30) days after the Termination Date (if calculable), but in no event later than March 15 of the year following the year of death; and further provided, that the amount of the Annual Bonus shall be prorated in accordance with the number of days in such calendar year during which he is so employed.  In addition, Executive or his estate shall become fully vested in all unvested restricted stock and stock options outstanding on Executive’s Termination Date in the event of death, including the restricted stock granted under Section 3(c) herein.

 

(d) Termination In Event of Disability: Benefits.  If Executive’s employment with the Company is terminated by reason of Executive’s Disability during the Term, this Agreement shall terminate, but the Company shall pay Executive all accrued Base Salary through the Termination Date, unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d), and the amount of any bonus under Section 3(b) that relates to a prior year and that is unpaid as of the date of Disability.  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy.  Executive shall be entitled to consideration for the Annual Bonus payment under Section 3(b) with respect to the calendar year in which Executive’s employment terminates due to Disability; provided that the payment of such bonus, if any, shall be payable within thirty (30) days after the Termination Date (if calculable), but in no event later than March 15 of the year following the year of containing such Termination Date; and further provided, that the amount of the Annual Bonus shall be prorated in accordance with the number of days in such calendar year during which he is so employed.  In addition, Executive shall become fully vested in all unvested restricted stock and stock options outstanding on Executive’s Termination Date in the event of Disability, including the restricted stock granted under Section 3(c) herein.

 

  

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(e) Voluntary Termination by Executive and Termination for Cause: Benefits.  Executive may terminate his employment with the Company by giving written notice of his intent and stating an effective Termination Date at least thirty (30) days after the date of such notice; provided, however, that the Company may accelerate such effective date by paying Executive through the proposed Termination Date (but not to exceed thirty (30) days).  Upon such a termination by Executive or upon termination of Executive’s employment with the Company for Cause by the Company, this Agreement shall terminate, but the Company shall pay to Executive all accrued Base Salary and all unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date or by the next regularly scheduled payday.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy. Executive shall have no entitlement to any Annual Bonus for the year in which the Termination Date occurs.

 

(f) No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.  No such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

 

5.           Non-Renewal of Agreement.  If the Company or Executive elects not to renew this Agreement under the terms provided in Section 1, this Agreement shall terminate without further obligation of the Company, but the Company shall pay Executive all accrued Base Salary through the Termination Date and unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  If the Company elects not to renew this Agreement, Executive shall be eligible to receive any unpaid Annual Bonus(es) attributable to prior year(s), if any, and the Annual Bonus(es) for the year in which the non-renewal notice is provided along with full vesting of all restricted stock granted under Section 3(c) herein.  Payment of the prior year(s) Annual Bonus(es) shall be paid within thirty (30) days of any such non-renewal notification (if calculable), but in no event later than January 15th of the year following the year in which the non-renewal notice is provided.  Payment of the Annual Bonus for the year in which notice of non-renewal is given shall be paid by January 15th of the year following the year in which the non-renewal notice is provided (if calculable); and further provided, that the amount of the Annual Bonus for the year in which the non-renewal notice is provided shall be prorated in accordance with the number of days in such calendar year during which Executive is so employed.

 

6.           Release Agreement.  Notwithstanding any provision of this Agreement to the contrary, in order to receive the Severance Payment, the Additional Severance Payment, and the immediate vesting of unvested restricted stock under Section 4(b)(2)-(4), Executive must first execute, enter into and not revoke a reasonable release and hold harmless agreement (on a form provided by the Company) (“Release”), within the time period specified under the release and hold harmless agreement, whereby Executive agrees to release and waive, in return for the Severance Payment and Additional Severance Payment, any claim or cause of action that Executive may have against the Company and any of its affiliates, including, without limitation, for unlawful discrimination or retaliation; provided, however, such agreement shall not release any claim by Executive for any payment or benefit that is due under the express terms of this Agreement at the time the time Executive executes the release agreement.

 

  

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7.           Change in Control.  Upon the occurrence of a Change in Control (as defined in the Global Geophysical Services, Inc. Amended and Restated 2006 Incentive Compensation Plan), Executive shall become fully vested in all unvested equity awards and stock grants outstanding as of such date and shall receive the Severance Payment set forth in Section 4(b)(2).

 

8.           Non-Competition, Non-Solicitation and Confidentiality.  During Executive’s employment with the Company, the Company shall give Executive access to some or all of its Confidential Information, as defined below, that Executive has not had access to or knowledge of before the execution of this Agreement.

 

(a) Non-Competition During Employment.  Executive agrees that, in consideration for the Company’s promise to provide Executive with Confidential Information, during the Term, he will not compete with the Company by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that he will not work for, in any capacity, assist, or become affiliated with as an owner, partner, etc., either directly or indirectly, any individual or business which offers or performs services, or offers or provides products substantially similar to the services and products provided by Company; provided, however, Executive shall not be prevented from owning no more than 2% of any company whose stock is publicly traded.

 

(b) Conflicts of Interest.  Executive agrees that during the Term, he will not engage, either directly or indirectly, in any activity (a “Conflict of Interest”) that might adversely affect the Company, including ownership of a material investment in a competitor of the Company, ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or acceptance of any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the CEO or the GGS Board of Directors as to each offer received by Executive to engage in any such activity.  As used in this Section 8(b), “materiality” shall be viewed from the perspective of Executive.  Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which in Executive’s good faith judgment could reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

 

(c) Non-Competition After Termination from Employment.  Executive agrees that, in order to protect the Company’s Confidential Information, it is necessary to enter into the following restrictive covenant, which is ancillary to the enforceable promises between the Company and Executive otherwise contained in this Agreement.  Executive agrees that Executive shall not, at any time during the Restricted Period (as hereinafter defined), within any of the markets in which the Company has sold products or services or formulated a plan to sell products or services into a market during the last twelve (12) months of Executive’s employ, engage in or contribute Executive’s knowledge to any work which is competitive with or similar to a product, process, apparatus, service, or development on which Executive worked while employed by the Company.  It is understood that the geographical area set forth in this covenant is divisible so that if this clause is invalid or unenforceable in an included geographic area, that area is severable and the clause remains in effect for the remaining included geographic areas in which the clause is valid.  For the purpose of this Agreement, “Restricted Period” means a period of twelve (12 months) after termination for any reason whatsoever, whether by Executive or the Company, of Executive’s employment with the Company.  The Restricted Period shall commence at the time Executive ceases to be a full-time employee of the Company.

 

  

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(d) Confidential Information.  Executive agrees that he will not, except as the Company may otherwise consent or direct in writing, reveal or disclose, sell, use, lecture upon, publish or otherwise disclose to any third party any Confidential Information or proprietary information of the Company, or authorize anyone else to do these things at any time either during or subsequent to his employment with the Company.  This Paragraph shall continue in full force and effect after termination of Executive’s employment and after the termination of this Agreement.  Executive’s obligations under this Paragraph with respect to any specific Confidential Information and proprietary information shall cease when that specific portion of the Confidential Information and proprietary information becomes publicly known, in its entirety and without combining portions of such information obtained separately.  It is understood that such Confidential Information and proprietary information of the Company include matters that Executive conceives or develops, as well as matters Executive learns from other employees of the Company.  “Confidential Information” is defined to include information:  (1) disclosed to or known by Executive as a consequence of or through his employment with the Company; (2) not generally known outside the Company; and (3) that relates to any aspect of the Company or its business, finances, operation plans, budgets, research, or strategic development.  “Confidential Information” includes, but is not limited to, the Company’s trade secrets, proprietary information, financial documents, long range plans, customer or supplier lists, employer compensation, marketing strategy, data bases, costing data, computer software developed by the Company, investments made by the Company, and any information provided to the Company by a third party under restrictions against disclosure or use by the Company or others.

 

(e) Non-Solicitation.  To protect the Company’s Confidential Information, and in the event of Executive’s termination of employment for any reason whatsoever, whether by Executive or the Company, it is necessary to enter into the following restrictive covenant, which is ancillary to the enforceable promises between the Company and Executive otherwise contained in this Agreement.  Executive covenants and agrees that during Executive’s employment and for a period of twelve (12) months from the date of termination of Executive’s employment for any reason whatsoever (the “Non-Solicitation Period”), Executive will not, directly or indirectly, either individually or as a principal, partner, agent, consultant, contractor, employee or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, except on behalf of the Company, solicit business, or attempt to solicit business, and products or services competitive with products or services sold by the Company, from the Company’s clients, suppliers or customers, or those individuals or entities with whom the Company did business during Executive’s employment. Executive further agrees that during Executive’s employment and for the Non-Solicitation Period, Executive will not, either directly or indirectly, or by acting in concert with others, solicit or influence any Company employee to leave the Company’s employment.

 

  

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(f) Return of Documents, Equipment, Etc.  All writings, records, and other documents and things comprising, containing, describing, discussing, explaining, or evidencing any Confidential Information, and all equipment, components, parts, tools, and the like in Executive’s custody or possession that have been obtained or prepared in the course of Executive’s employment with the Company shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without Executive retaining any copies, upon notification of the termination of Executive’s employment or at any other time requested by the Company.  The Company shall have the right to retain, access, and inspect all property of Executive of any kind in the office, work area, and on the premises of the Company upon termination of Executive’s employment and at any time during employment by the Company to ensure compliance with the terms of this Agreement.

 

(g) Reaffirmation of Obligations.  Upon termination of Executive’s employment with the Company, Executive, if requested by Company, shall reaffirm in writing Executive’s recognition of the importance of maintaining the confidentiality of the Company’s Confidential Information and proprietary information, and reaffirm any other obligations set forth in this Agreement.

 

(h) Prior Disclosure.  Executive represents and warrants that Executive has not used or disclosed any Confidential Information he may have obtained from the Company prior to signing this Agreement, in any way inconsistent with the provisions of this Agreement.

 

(i) No Previous Restrictive Agreements.  Executive represents that, except as disclosed in writing to the Company, Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of Executive’s employment by the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party.  Executive further represents that Executive’s performance of all the terms of this Agreement and Executive’s work duties for the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Executive in confidence or in trust prior to Executive’s employment with the Company, and Executive will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or other party.

 

(j) Breach.  Executive agrees that any breach of Sections 8(a) through (f) above cannot be remedied solely by money damages, and that in addition to any other remedies Company may have, Company is entitled to obtain injunctive relief against Executive.  Nothing herein, however, shall be construed as limiting the Company’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement and/or any termination or offset against any payments that may be due pursuant to this Agreement.

 

  

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(k) Enforceability.  The agreements contained in this Section 8 are independent of the other agreements contained herein.  Accordingly, failure of the Company to comply with any of its obligations outside of this Section does not excuse Executive from complying with the agreements contained herein.

 

(l) Survivability.  The agreements contained in this Section 8 shall survive the termination of this Agreement for any reason.

 

9.           Reformation.  If a court concludes that any time period or the geographic area specified in Sections 8(c) or (e) of this Agreement are unenforceable, then the time period will be reduced by the number of months, or the geographic area will be reduced by the elimination of the overbroad portion, or both, so that the restrictions may be enforced in the geographic area and for the time to the fullest extent permitted by law.  Additionally, nothing in this Agreement is intended to conflict with Rule 5.06 of the Texas Disciplinary Rules of Professional Conduct.

 

10.           Director and Officer Positions.  Executive agrees that, upon termination of employment, for any reason, Executive will immediately tender his resignation from any and all Board or officer positions held with the Company and/or any of its direct or indirect parents or subsidiaries.

 

11.           Indemnification & D&O

 

(a) Claims.  The Company shall, to the maximum extent not prohibited by law, indemnify Executive if Executive is made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company to procure a judgment in its favor (collectively, a “Proceeding”), by reason of the fact that Executive is or was a director or officer of the Company or an affiliate, or is or was serving in any capacity at the request of the Company for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys’ fees and disbursements) paid or incurred in connection with any such Proceeding.

(b) Expenses.  The Company shall, from time to time, reimburse or advance to Executive the funds necessary for payment of expenses, including attorneys’ fees and disbursements, incurred in connection with any Proceeding in advance of the final disposition of such Proceeding; provided, however, that such expenses incurred by or on behalf of Executive may be paid in advance of the final disposition of a Proceeding only upon receipt by the Company of an undertaking, by or on behalf of Executive, to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that Executive is no entitled to be indemnified for such expenses.

(c) Non-Exclusivity.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall not be deemed exclusive of any other rights which Executive may now or hereafter have under any law, bylaw, constituency document, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in Executive’s official capacity and as to action in another capacity while holding such office.

  

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(d) Continuation of Rights.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall continue as to Executive after Executive has ceased to be a director, officer, or employee of the Company and shall inure to the benefit of the heirs, executors and administrators of Executive’s estate, both with respect to proceedings that are threatened, pending or completed at the date of such termination and with respect to proceedings that are threatened, pending or completed after the date.

(e) Enforcement.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall be enforceable by Executive in any court of competent jurisdiction.  The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Company.  Neither the failure of the Company (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Company (including its board of directors, independent legal counsel, or its stockholders) that Executive is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that Executive is not so entitled.  The Executive shall also be indemnified for any expenses incurred in connection with successfully establishing the Executive’s right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any proceeding.

(f) Other Services.  If Executive serves (i) an affiliate of the Company, or (ii) any employee benefit plan of the Company or any corporation referred to in clause (i), in any capacity, then Executive shall be deemed to be doing so at the request of the Company.

12.          Assignment.  In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute.  Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the written consent of the Company.  Any attempted assignment by Executive in violation of this Section 12 shall be void.  This Agreement, and any rights and obligations hereunder, may be assigned by the Company to a successor by merger or a purchaser of substantially all of the assets of the Company.

 

13.           Binding Agreement.  Executive understands that his obligations under this Agreement are binding upon Executive’s heirs, successors, personal representatives, and legal representatives.

 

14.           Notices.  All notices pursuant to this Agreement shall be in writing and sent certified mail, return receipt requested, addressed as set forth below, or by delivering the same in person to such party, or by transmission by email (which shall not constitute notice).  Notice deposited in the United States Mail, mailed in the manner described hereinabove, shall be effective upon deposit.  Notice given in any other manner shall be effective only if and when received:

 

  

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If to Executive:                                                      Ross Peebles

9075 Gaylord Road, Apt. 46

Houston, TX 77024

	
If to the Company:

	
Global Geophysical Services, Inc.

13927 South Gessner Rd.

Missouri City, TX 77489

Attn: Board of Directors

15.           Waiver.  No waiver by either Party to this Agreement of any right to enforce any term or condition of this Agreement, or of any breach hereof, shall be deemed a waiver of such right in the future or of any other right or remedy available under this Agreement.

 

16.           Entire Agreement.   Except as may be provided in the Indemnification Agreement between Executive and the Company, and any stock option or restricted stock grant agreement(s), the terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral. In the event of a conflict between these agreements, it is intended that Executive shall be granted the greater of rights for Executive’s benefit(s). Notwithstanding the foregoing, this Agreement will not in any way affect the Executive’s stock options which are governed by his option agreement and the Company’s stock option plan, except to the extent expressly provided for in such agreement or plan. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

 

17.           Modification of Agreement.  This Agreement may not be changed or modified or released or discharged or abandoned or otherwise terminated, in whole or in part, except by an instrument in writing signed by Executive and an officer or other authorized executive of the Company.

 

18.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflicts of laws principles thereof.

 

19.           Jurisdiction and Venue.  With respect to any litigation regarding this Agreement, Executive and the Company agree to venue in the state or federal courts in Harris County, Texas, and agrees to waive and does hereby waive any defenses and/or arguments based upon improper venue and/or lack of personal jurisdiction.  By entering into this Agreement, Executive and the Company agree to personal jurisdiction in the state and federal courts in Harris County, Texas.

 

  

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20.           Independent Representation.  Executive has not relied upon Company for legal or tax advice regarding this Agreement and Executive has been advised to consult legal, accounting or other advisors of Executive’s choice before executing this Agreement.

 

21.           Compliance With Section 409A.

 

(a) Delay in Payments. Notwithstanding anything to the contrary in this Agreement, if upon the Termination Date, any stock of the Company is publicly traded on an established securities market within the meaning of Code Section 409A, and in the opinion of reputable outside counsel engaged by the Company and acceptable to Executive, Executive is a “specified employee” within the meaning of Code Section 409A and the deferral of any amounts otherwise payable under this Agreement as a result of Executive’s termination of employment is necessary in order to prevent any accelerated or additional tax to Executive under Code Section 409A, then the Company will defer the payment of any such amounts hereunder until the earlier of: (i) the date that is six (6) months following the date of Executive’s termination of employment with the Company, or (ii) the date of Executive’s death, at which time any such delayed amounts will be paid to Executive in a single lump sum.

 

(b) Reformation.  If any compensation or benefits provided by this Agreement may result in the application of Code Section 409A, the Company shall, in consultation with Executive, modify the Agreement in the least restrictive manner necessary in an effort to exclude such compensation from the definition of “deferred compensation” within the meaning of such Code Section 409A or in an effort to comply with the provisions of Code Section 409A, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions, without any diminution in the value of the payments or benefits to Executive.  Notwithstanding the foregoing, the Company shall not be required to assume any increased economic burden.

 

(c) Overall Compliance.  In the event that it is reasonably determined by the Company and Executive that, as a result of Code Section 409A, any of the payments that Executive is entitled to under the terms of this Agreement or any nonqualified deferred compensation plan (as defined under Section 409A) may not be made at the time contemplated by the terms hereof or thereof, as the case may be, without causing Executive to be subject to an income tax penalty and interest, the Company will make such payment on the first day that would not result in Executive incurring any tax liability under Section 409A.

 

(d) Consultation with Tax Advisor.  Executive is hereby advised to consult immediately with his own tax advisor regarding the tax consequences of this Agreement, including the consequences of Code Section 409A.

 

 

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the Parties have executed this Agreement in multiple copies, effective as of the date first written above.

 

	
EXECUTIVE:

 

 

 

/s/ Ross G. Peebles

Ross G. Peebles, Sr. Vice President

	
COMPANY:

Global Geophysical Services, Inc.

 

 

/s/ Richard C. White

Richard C. White, President and CEO

 

 

 

 

 

 

Signature Page

Employment Agreement – Ross G. Peeblesex4-1.htm

Exhibit 4.1

 

PROMISSORY NOTE

 

	
Borrower:

	
Telanetix, Inc. (Delaware)

Telanetix, Inc. (California)

AccessLine Holdings, Inc.

AccessLine Communications Corporation

11201 SE 8th Street

Bellevue, WA  98004

	
Lender:

	
East West Bank

Loan Servicing Department

9300 Flair Drive, 6th Floor

El Monte, CA  91731

	
Principal Amount:  $1,000,000.00

	
Date of Note:  January 16, 2013

 

PROMISE TO PAY.  Telanetix, Inc., a Delaware corporation, Telanetix, Inc., a California corporation, AccessLine Holdings, Inc., a Delaware corporation and AccessLine Communications Corporation, a Delaware corporation (collectively, “Borrowers” and individually each a “Borrower”) jointly and severally promise to pay to East West Bank ("Lender"), or order, in lawful money of the United States of America, the principal amount of One Million & 00/100 Dollars ($1,000,000.00) or, if less, the outstanding “Advances” made under the Loan and Security Agreement dated December 14, 2012 between Borrowers and Lender, as amended and modified from time to time (the “Loan Agreement”), together with interest on the unpaid outstanding principal balance of each Advance.  Interest shall be calculated from the date of each Advance until repayment thereof.

 

PAYMENT.  Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on January 15, 2015.  In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning February 2, 2013, with all subsequent interest payments to be due on the same day of each month after that.  Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs.  Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

 

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the daily Wall Street Journal Prime Rate, as quoted in the "Money Rates" column of The Wall Street Journal (Western Edition), rounded to two decimal places, all as determined by Lender (the "Index").  The Index is not necessarily the lowest rate charged by Lender on its loans.  If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrowers.  Lender will tell Borrowers the current Index rate upon Borrowers’ request.  The interest rate change will not occur more often than each day.  Borrowers understand that Lender may make loans based on other rates as well.  The Index currently is 3.250% per annum.  Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate of 1.250 percentage points over the Index, resulting in an initial rate of 4.500% per annum based on a year of 360 days.  NOTICE:  Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.

 

INTEREST CALCULATION METHOD.  Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  All interest payable under this Note is computed using this method.

 

PREPAYMENT PENALTY; MINIMUM INTEREST CHARGE.  Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law.    In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $100.00.  Upon prepayment of this Note caused by termination or cancellation of this Note on or before January 15, 2014, Lender is entitled to the following prepayment penalty:  Prepayment Premium.  No prepayments shall be permitted under the Note, notwithstanding anything to the contrary contained elsewhere in the Note or the other documents executed in connection herewith, other than under the terms and conditions set forth below.  Borrower may only prepay the loan evidenced by the Note, in full, but not in part, upon at least five days prior written irrevocable notice to Lender, and on the condition that: Borrower shall also pay, at the time of and in addition to such prepayment, a premium (the "Prepayment Premium") equal to one percent (1%) of the original amount of this Note amount so prepaid if such prepayment is effected during the period from the date hereof to the first (1st) year anniversary of the date hereof. There will be no prepayment penalty after the first (1st) year anniversary of the date hereof.

 

 

 

 

 

Borrower hereby expressly agrees that upon prepayment of the balance of the loan at any time and for any reason, Borrower or any other party making any such prepayment shall be obligated to pay, concurrently with such prepayment, as a prepayment fee, the Prepayment Premium provided for above, whether such prepayment is made or occurs (i) as the result of a voluntary acceptance by Lender of a prepayment tendered by Borrower; (ii) by the Lender's acceleration as a result of an Event of Default; (iii) in connection with any reinstatement of the loan under any foreclosure proceedings or in connection with the purchase of any property at a foreclosure sale; or (iv)  in connection with any right of redemption exercised by Borrowers or any other party having the right to redeem or prevent any foreclosure of any deed of trust.  By initialing this provision in the space provided below, Borrowers declare that Lender's agreement to make the subject loan at the interest rate and for the terms set forth in the Note constitutes adequate consideration, given individual weight by Borrowers, for this waiver and agreement.

 

Initials: DJ         DJ          DJ          DJ               

 

Additional Borrower Waiver.  By its signature below, Borrowers expressly waive any right to prepay the Note except on the express terms of this Note. Borrowers acknowledge that prepayment of the loan may result in additional costs, liabilities and expenses to Lender and also the loss of foregone opportunities to have instead loaned the funds advanced to Borrowers to another borrower at the same interest rate.  Borrowers therefore agree to pay the Prepayment Premium described above, and further acknowledges that the Prepayment Premium represents a reasonable estimate of the prepayment costs, liabilities, expenses and loss of Lender. Borrowers are a knowledgeable investor and fully understands that Lender's willingness to offer a fixed interest rate is sufficient and independent consideration for this waiver, and Borrowers understand that Lender would not offer this rate to Borrowers absent this waiver.  Other than Borrowers' obligation to pay any minimum interest charge and prepayment penalty, Borrowers may pay all or a portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by Lender in writing, relieve Borrowers of Borrowers' obligation to continue to make payments under the payment schedule.  Rather, early payments will reduce the principal balance due and may result in Borrowers making fewer payments.  Borrowers agree not to send Lender payments marked "paid in full", "without recourse", or similar language.  If Borrowers send such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrowers will remain obligated to pay any further amount owed to Lender.  All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to:  East West Bank, Loan Service Department, 9300 Flair Drive, 6th Floor El Monte, CA  91731.

 

LATE CHARGE.  If a regularly scheduled payment of principal (other than at maturity, whether by acceleration or otherwise) is 10 days or more late, Borrowers will be charged 4.000% of the unpaid portion thereof.

 

INTEREST AFTER DEFAULT.  During the existence of an Event of Default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional 4.000 percentage point margin ("Default Rate Margin").  The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default.  After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in this Note.  If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment at the rate in effect at the time judgment is entered.  However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

 

LINE OF CREDIT.  This Note evidences a Line, as defined in the Loan Agreement.

 

DEFAULT.  Any "Event of Default" under the Loan Agreement shall constitute an "Event of Default" hereunder.

 

LENDER'S RIGHTS.  Upon the occurrence of an Event of Default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

 

ATTORNEYS' FEES; EXPENSES.  Lender may hire or pay someone else to help collect this Note if Borrower does not pay.  Borrower will pay Lender that amount.  This includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's reasonable legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals.  If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

 

JURY WAIVER.  Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

 

 

2

 

 

GOVERNING LAW.  This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of New York without regard to its conflicts of law provisions.  This Note has been accepted by Lender in the State of Washington.

 

DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of $18.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored.

 

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrowers’ accounts with Lender (whether checking, savings, or some other account).  This includes all accounts Borrower holds jointly with someone else and all accounts which any Borrower may open in the future.  However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law.  Borrowers authorize Lender, to the extent permitted by applicable law, to charge or setoff during the existence of an Event of Default all sums owing on the indebtedness against any and all such accounts.

 

CHOICE OF VENUE. If there is a lawsuit, Borrowers agree upon Lender's request to submit to the Jurisdiction of the court of King County, State of Washington.

 

COUNTERPART PROVISION. This document may be signed in any number of counterparts, which, when delivered in the original to Lender, shall together constitute one original document.

 

FACSIMILE OR OTHER IMAGE. A facsimile, scanned or other copy of this  Promissory Note, as executed, shall be deemed the equivalent of the originally executed copy for all purposes, so long as Lender is the holder hereof.

 

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon Borrowers and upon Borrowers' successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

 

GENERAL PROVISIONS.  If any part of this Note cannot be enforced, this fact will not affect the rest of the Note.  Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.  Borrowers and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone.  All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made.  The obligations under this Note are joint and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWERS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWERS AGREE TO THE TERMS OF THE NOTE.

 

BORROWERS ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

 

3

 

 

BORROWERS:

Telanetix, Inc., a Delaware corporation

 

By: /s/ Douglas Johnson                                                                      

      Name:  Douglas Johnson

      Title:  CEO

 

Telanetix, Inc., a California corporation

 

By: /s/ Douglas Johnson                                                                      

      Name:  Douglas Johnson

      Title:  CEO

AccessLine Holdings, Inc., a Delaware corporation

 

By: /s/ Douglas Johnson                                                                      

      Name:  Douglas Johnson

      Title:  CEO

 

AccessLine Communications Corporation, a Delaware corporation

 

By: /s/ Douglas Johnson                                                                      

      Name:  Douglas Johnson

      Title:  CEO

 

4

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