Document:

Exhibit 10.3

 

Ebang
International Holdings Inc.

 

2020 SHARE INCENTIVE PLAN

 

ARTICLE
1

 

PURPOSE

 

The purpose of the Ebang
International Holdings Inc. 2020 Share Incentive Plan (the “Plan”) is to promote the success and enhance the
value of Ebang International Holdings Inc., a company formed under the laws of the Cayman Islands (the “Company”),
by linking the personal interests of the members of the Board, Employees, Consultants and other individuals as the Committee may
authorize and approve, to those of the Company’s shareholders and, by providing such individuals with an incentive for outstanding
performance, to generate superior returns to the Company’s shareholders. The Plan is further intended to provide flexibility
to the Company in its ability to motivate, attract, and retain the services of recipients of share incentives hereunder upon whose
judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE
2

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following
terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular
pronoun shall include the plural where the context so indicates.

 

2.1 “Applicable
Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate,
securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national
market system, of any jurisdiction applicable to Awards granted to residents therein.

 

2.2 “Award”
means an Option, Restricted Share or Restricted Share Unit award granted to a Participant pursuant to the Plan.

 

2.3 “Award
Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through
electronic medium.

 

2.4 “Award
Pool” shall have the meaning set forth in Section 3.1(a).

 

2.5 “Board”
means the Board of Directors of the Company.

 

     

     

    

 

2.6 “Cause”
with respect to a Participant means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable
contract with the Participant that defines such term for purposes of determining the effect that a “for cause” termination
has on the Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting
in good faith and based on its reasonable belief at the time, that the Participant:

 

(a) has been negligent
in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is incompetent
in or (other than by reason of a disability or analogous condition) incapable of performing those duties;

 

(b) has been dishonest
or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use
of inside information, customer lists, trade secrets or other confidential information;

 

(c) has breached a fiduciary
duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service Recipient; or has been
convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses);

 

(d) has materially breached
any of the provisions of any agreement with the Service Recipient;

 

(e) has engaged in unfair
competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service
Recipient; or

 

(f) has improperly induced
a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service
Recipient acts as agent to terminate such agency relationship.

 

A termination for Cause
shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the
Service Recipient first delivers written notice to the Participant of a finding of termination for Cause.

 

2.7 “Code”
means the Internal Revenue Code of 1986 of the United States, as amended.

 

2.8 “Committee”
means the Board or a committee of the Board described in Article 10.

 

2.9 “Consultant”
means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services
rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser
is a natural person who has contracted directly with the Service Recipient to render such services.

 

2.10 “Corporate
Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions, provided, however,
that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be
final, binding and conclusive:

 

(a) an amalgamation,
arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction
the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders
of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities
of the surviving entity;

 

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(b) the sale, transfer
or other disposition of all or substantially all of the assets of the Company;

 

(c) the complete liquidation
or dissolution of the Company;

 

(d) any reverse takeover
or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer followed by
a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately
prior to such takeover are converted or exchanged by virtue of the takeover into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power
of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities
immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction
or series of related transactions that the Committee determines shall not be a Corporate Transaction; or

 

(e) acquisition in a
single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any
such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction.

 

2.11 “Disability”,
unless otherwise defined in an Award Agreement, means that the Participant qualifies to receive long-term disability payments under
the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant
provides services regardless of whether the Participant is covered by such policy. If the Service Recipient to which the Participant
provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable
to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable
physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered
to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.

 

2.12 “Effective
Date” shall have the meaning set forth in Section 11.1.

 

2.13 “Employee”
means any person, including an officer or a member of the Board of the Company or any Parent or Subsidiary of the Company, who
is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work
to be performed and the manner and method of performance. The payment of a director’s fee by a Service Recipient shall not
be sufficient to constitute “employment” by the Service Recipient.

 

2.14 “Exchange
Act” means the Securities Exchange Act of 1934 of the United States, as amended.

 

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2.15 “Fair
Market Value” means, as of any date, the value of Shares determined as follows:

 

(a) If the Shares are
listed on one or more established stock exchanges or national market systems, including without limitation, The New York Stock
Exchange and The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such shares (or the closing bid,
if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee)
on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source
as the Committee deems reliable;

 

(b) If the Shares are
regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the
date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high
bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the
last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable;
or

 

(c) In the absence of
an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined
by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the
Shares and the development of the Company’s business operations and the general economic and market conditions since such
latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business
operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv)
such other methodologies or information as the Committee determines to be indicative of Fair Market Value and relevant.

 

2.16 “Incentive
Share Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision
thereto.

 

2.17 “Independent
Director” means (i) before the Shares or other securities representing the Shares are listed on a stock exchange, a member
of the Board who is a Non-Employee Director; and (ii) after the Shares or other securities representing the Shares are listed on
a stock exchange, a member of the Board who meets the independence standards under the applicable corporate governance rules of
the stock exchange.

 

2.18 “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3)
of the Exchange Act, or any successor definition adopted by the Board.

 

2.19 “Non-Qualified
Share Option” means an Option that is not intended to be an Incentive Share Option.

 

2.20 “Option”
means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified
price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option.

 

2.21 “Participant”
means a person who, as a member of the Board, Consultant or Employee, or other individuals as the Committee may authorize and approve,
has been granted an Award pursuant to the Plan.

 

2.22 “Parent”
means a parent corporation under Section 424(e) of the Code.

 

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2.23 “Plan”
means this Ebang International Holdings Inc. 2020 Share Incentive Plan, as it may be amended from time to time.

 

2.24 “Related
Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company,
a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, but which is not a Subsidiary
and which the Board designates as a Related Entity for purposes of the Plan.

 

2.25 “Restricted
Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be
subject to risk of forfeiture.

 

2.26 “Restricted
Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a Share at a future date.

 

2.27 “Securities
Act” means the Securities Act of 1933 of the United States, as amended.

 

2.28 “Service
Recipient” means the Company, any Parent or Subsidiary of the Company and any Related Entity to which a Participant provides
services as an Employee, a Consultant, or a Director.

 

2.29 “Share”
means the ordinary shares of the Company, par value US$0.0001 per share, and such other securities of the Company that may be substituted
for Shares pursuant to Article 9.

 

2.30 “Subsidiary”
means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned
or controlled directly or indirectly by the Company.

 

2.31 “Trading
Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed
with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act.

 

ARTICLE
3

 

SHARES SUBJECT TO THE PLAN

 

3.1 Number of Shares.

 

(a) Subject to the provisions
of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive
Share Options) under the Plan (the "Award Pool") shall be eight percent (8%) of the total outstanding Shares of the Company
on an as-converted basis immediately upon the completion of the initial public offering of the Company.

 

(b) To the extent that
an Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant
of an Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution
for, any outstanding awards of any entity acquired in any form or combination by the Company or any Parent or Subsidiary of the
Company shall not be counted against Shares available for grant pursuant to the Plan. Shares delivered by the Participant or withheld
by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon,
may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Restricted Shares are
forfeited by the Participant or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject
to the limitations of Section 3.1(a). Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted
or awarded if such action would cause an Incentive Share Option to fail to qualify as an Incentive Share Option under Section 422
of the Code.

 

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3.2 Shares Distributed.
Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury shares
(subject to Applicable Laws) or Shares purchased on the open market. Additionally, in the discretion of the Committee, American
Depository Shares in an amount equal to the number of Shares which otherwise would be distributed pursuant to an Award may be distributed
in lieu of Shares in settlement of any Award. If the number of Shares represented by an American Depository Share is other than
on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American Depository Shares
in lieu of Shares.

 

ARTICLE
4

 

ELIGIBILITY AND PARTICIPATION

 

4.1 Eligibility.
Those eligible to participate in this Plan include Employees, Consultants, and all members of the Board, and other individuals,
as determined, authorized and approved by the Committee.

 

4.2 Participation.
Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those
to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to
be granted an Award pursuant to this Plan.

 

4.3 Jurisdictions.
In order to assure the viability of Awards granted to Participants in various jurisdictions, the Committee may provide for such
special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable
in the jurisdiction in which the Participant resides, is employed, operates or is incorporated. Moreover, the Committee may approve
such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate
for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section
3.1 of the Plan. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted,
that would violate any Applicable Laws.

 

ARTICLE
5

 

OPTIONS

 

5.1 General.
The Committee is authorized to grant Options to Participants on the following terms and conditions:

 

(a) Exercise Price.
The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement which
may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option
may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and
conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment
of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s
shareholders or the approval of the affected Participants. No adjustment shall be made to the exercise price of Options if it will
result in the exercise price falling below the then par value of the Shares.

 

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(b) Time and Conditions
of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including
exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except
as provided in Section 12.1. The Committee shall also determine any conditions, if any, that must be satisfied before all or part
of an Option may be exercised.

 

(c) Payment.
The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including,
without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash
or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares
held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and
having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof,
(v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker with respect
to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds
is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value
equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any other provision of the Plan to the
contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section
13(k) of the Exchange Act.

 

(d) Evidence of Grant.
All Options shall be evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include
such additional provisions as may be specified by the Committee.

 

(e) Effects of Termination
of Employment or Service on Options. Termination of employment or service shall have the following effects on Options granted
to the Participants:

 

(i) Dismissal for
Cause. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient
is terminated by the Service Recipient for Cause, the Participant’s Options will terminate upon such termination, whether
or not the Option is then vested and/or exercisable;

 

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(ii) Death or Disability.
Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates
as a result of the Participant’s death or Disability:

 

		(a)	the Participant (or his or her legal representative or
beneficiary, in the case of the Participant’s Disability or death, respectively), will have until the date that is 12 months
after the Participant’s termination of Employment to exercise the Participant’s Options (or portion thereof) to the
extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment on account
of death or Disability;

 

		(b)	the Options, to the extent not vested and exercisable on
the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination
of Employment or service on account of death or Disability; and

 

		(c)	the Options, to the extent exercisable for the 12-month
period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate
at the close of business on the last day of the 12-month period.

 

(iii) Other Terminations
of Employment or Service. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service
to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the
Participant’s death or Disability:

 

		(a)	the Participant will have until the date that is 90 days
after the Participant’s termination of Employment or service to exercise his or her Options (or portion thereof) to the
extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment or service;

 

		(b)	the Options, to the extent not vested and exercisable
on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination
of Employment or service; and

 

		(c)	the Options, to the extent exercisable for the 90-day period
following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at
the close of business on the last day of the 90-day period.

 

5.2 Incentive Share
Options. Incentive Share Options may be granted to Employees of the Company, a Parent or Subsidiary of the Company. Incentive
Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants. The terms of any
Incentive Share Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following
additional provisions of this Section 5.2:

 

(a) Individual Dollar
Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to
which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are
first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options.

 

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(b) Exercise Price.
The exercise price of an Incentive Share Option shall be equal to the Fair Market Value on the date of grant. However, the exercise
price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent
of the total combined voting power of all classes of shares of the Company may not be less than 110% of Fair Market Value on the
date of grant and such Option may not be exercisable for more than five years from the date of grant.

 

(c) Transfer Restriction.
The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option
within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to
the Participant.

 

(d) Expiration of
Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary
of the Effective Date.

 

(e) Right to Exercise. During a
Participant’s lifetime, an Incentive Share Option may be exercised only by the Participant.

 

ARTICLE
6

 

RESTRICTED SHARES 

 

6.1 Grant of Restricted
Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in
its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Shares to
be granted to each Participant.

 

6.2 Restricted Shares
Award Agreement. Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of
restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion,
shall determine. Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until
the restrictions on such Restricted Shares have lapsed.

 

6.3 Issuance and
Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the Committee
may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends
on the Restricted Share). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances,
in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

 

6.4 Forfeiture/Repurchase.
Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment
or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited
or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted
Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in
whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part
restrictions or forfeiture and repurchase conditions relating to Restricted Shares.

 

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6.5 Certificates
for Restricted Shares. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear
an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company
may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

 

6.6 Removal of Restrictions.
Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released from escrow as soon
as practicable after the last day of the period of restriction. The Committee, in its discretion, may accelerate the time at which
any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have any legend
or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant,
subject to applicable legal restrictions. The Committee (in its discretion) may establish procedures regarding the release of Shares
from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.

 

ARTICLE
7

 

RESTRICTED SHARE UNITS

 

7.1 Grant of Restricted
Share Units. The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee,
in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Share
Units to be granted to each Participant.

 

7.2 Restricted Share
Units Award Agreement. Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall specify any
vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its
sole discretion, shall determine.

 

7.3 Performance Objectives
and Other Terms. The Committee, in its discretion, may set performance objectives or other vesting criteria which, depending
on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the
Participants.

 

7.4 Form and Timing
of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the date or dates on which the Restricted
Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted
Share Units in the form of cash, in Shares or in a combination thereof.

 

7.5 Forfeiture/Repurchase.
Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment
or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or
repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share
Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived
in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part
restrictions or forfeiture and repurchase conditions relating to Restricted Share Units.

 

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ARTICLE
8

 

PROVISIONS APPLICABLE TO AWARDS

 

8.1 Award Agreement.
Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates,
and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

8.2 No Transferability;
Limited Exception to Transfer Restrictions.

 

8.2.1 Limits on Transfer.
Unless otherwise expressly provided in (or pursuant to) this Section 8.2, by applicable law and by the Award Agreement, as the
same may be amended:

 

		(a)	all Awards are non-transferable and will not be subject
in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;

 

		(b)	Awards will be exercised only by the Participant; and

 

		(c)	amounts payable or shares issuable pursuant to an Award
will be delivered only to (or for the account of), and, in the case of Shares, registered in the name of, the Participant.

 

In addition, the shares shall be
subject to the restrictions set forth in the applicable Award Agreement.

 

8.2.2 Further Exceptions
to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will not apply to:

 

		(a)	transfers to the Company or a Subsidiary;

 

		(b)	transfers by gift to “immediate family” as
that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act;

 

		(c)	the designation of a beneficiary to receive benefits if
the Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in
the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; or

 

		(d)	if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or

 

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		(e)	subject to the prior approval of the Committee or an executive
officer or director of the Company authorized by the Committee, transfer to one or more natural persons who are the Participant’s
family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but
not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s
family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions
and procedures as the Committee or may establish. Any permitted transfer shall be subject to the condition that the Committee
receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis consistent
with the Company’s lawful issue of securities.

 

Notwithstanding anything else in
this Section 8.2.2 to the contrary, but subject to compliance with all applicable laws, Incentive Share Options, Restricted Shares
and Restricted Share Units will be subject to any and all transfer restrictions under the Code applicable to such Awards or necessary
to maintain the intended tax consequences of such Awards. Notwithstanding clause (b) above but subject to compliance with all applicable
laws, any contemplated transfer by gift to “immediate family” as referenced in clause (b) above is subject to the condition
precedent that the transfer be approved by the Administrator in order for it to be effective.

 

8.3 Beneficiaries.
Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions
of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and
resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary
with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written
consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be
made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to
the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation
is filed with the Committee.

 

8.4 Share Certificates.
Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing
the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and,
if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share certificates delivered pursuant
to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply
all Applicable Laws, and the rules of any national securities exchange or automated quotation system on which the Shares are listed,
quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares.
In addition to the terms and conditions provided herein, the Committee may require that a Participant make such reasonable covenants,
agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations,
or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions
with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion
of the Committee.

 

    12

     

    

 

8.5 Paperless Administration.
Subject to Applicable Laws, the Committee may make Awards, provide applicable disclosure and procedures for exercise of Awards
by an internet website or interactive voice response system for the paperless administration of Awards.

 

8.6 Foreign Currency.
A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and
taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control
laws and regulations. In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted
by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the
People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the Peoples Republic of China, the exchange
rate as selected by the Committee on the date of exercise.

 

ARTICLE
9

 

changes
in capital structure

 

9.1 Adjustments.
In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change
affecting the shares of Shares or the share price of a Share, the Committee shall make such proportionate adjustments, if any,
as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type
of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b)
the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria
with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.

 

9.2 Corporate Transactions.
Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company
and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee
may, in its sole discretion (without the need to seek approval from the Shareholders of the Company or the Participants, to the
extent permitted by all Applicable Laws), provide for (i) any and all Awards outstanding hereunder to terminate at a specific time
in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as
the Committee shall determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been
attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good
faith that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company
without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion
or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof,
with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of Award in cash based on the value
of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would
otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.

 

    13

     

    

 

9.3 Outstanding Awards
– Other Changes. In the event of any other change in the capitalization of the Company or corporate change other than
those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number
and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise
price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights.

 

9.4 No Other Rights.
Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of
Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant
to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares
of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares subject to
an Award or the grant or exercise price of any Award.

 

ARTICLE
10

 

ADMINISTRATION

 

10.1 Committee.
The Plan shall be administered by the Board or a committee of one or more members of the Board to whom the Board shall delegate
the authority to grant or amend Awards to Participants other than any of the Committee members. Any grant or amendment of Awards
to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee.

 

10.2 Action by the
Committee. A majority of the members of the Committee shall constitute a quorum. The acts of a majority of the members of the
Committee present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu
of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act
upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary,
the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained
by the Company to assist in the administration of the Plan.

 

10.3 Authority of
the Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion
(without the need to seek approval from the Shareholders of the Company or the Participants, to the extent permitted by all Applicable
Laws) to:

 

(a) designate
Participants to receive Awards;

 

(b) determine
the type or types of Awards to be granted to each Participant;

 

    14

     

    

 

(c) determine
the number of Awards to be granted and the number of Shares to which an Award will relate;

 

(d) determine
the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price,
or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions
on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture
of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;

 

(e) determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be
paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f) prescribe
the form of each Award Agreement, which need not be identical for each Participant;

 

(g) decide
all other matters that must be determined in connection with an Award;

 

(h) establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 

(i) interpret
the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and

 

(j) make all
other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to
administer the Plan.

 

10.4 Decisions Binding.
The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions
and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

 

ARTICLE
11

 

EFFECTIVE AND EXPIRATION DATE

 

11.1 Effective Date.
The Plan is effective immediately upon the completion of the initial public offering of the Company (the “Effective Date”).
The Plan will be deemed to be approved by the shareholders if it receives the affirmative vote of the holders of a majority of
the share capital of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable
provisions of the Company’s Memorandum of Association and Articles of Association or unanimous written approval by all the
shareholders of the Company.

 

11.2 Expiration Date.
The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any
Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the
Plan and the applicable Award Agreement.

 

    15

     

    

 

ARTICLE
12

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

12.1 Amendment, Modification,
And Termination. With the prior approval of the Board (whether by way of general authorization or specific approval), at any
time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent
necessary and desirable to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in
such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the
Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that (i) increases
the number of Shares available under the Plan (other than any adjustment as provided by Article 9), or (ii) permits the Committee
to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant.

 

12.2 Awards Previously
Granted. Except with respect to amendments made pursuant to Section 12.1, no termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent
of the Participant.

 

ARTICLE
13

 

GENERAL PROVISIONS

 

13.1 No Rights to
Awards. No Participant, employee, or other person shall have any claim to be granted any Award pursuant to the Plan, and neither
the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly.

 

13.2 No Shareholders
Rights. No Award gives the Participant any of the rights of a Shareholder of the Company unless and until Shares are in fact
issued to and registered in the name of such person in connection with such Award.

 

13.3 Taxes. No
Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee
for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or any Subsidiary
shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by Applicable
Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee
may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold
Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required
to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the
issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such
Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable
to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved
by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal
to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll
tax purposes that are applicable to such supplemental taxable income.

 

    16

     

    

 

13.4 No Right to
Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the
Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any
right to continue in the employment or services of any Service Recipient.

 

13.5 Unfunded Status
of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments
not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant
any rights that are greater than those of a general creditor of the Company or any Subsidiary.

 

13.6 Indemnification.
To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member
in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid
by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives
the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as
a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

13.7 Relationship
to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any
pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except
to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

13.8 Expenses.
The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

 

13.9 Titles and Headings.
The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.

 

13.10 Fractional
Shares. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given
in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate.

 

13.11 Limitations
Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded
to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act)
that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

    17

     

    

 

13.12 Government
and Other Regulations. The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all
Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register
any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction. If
the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or
other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the
availability of any such exemption.

 

13.13 Governing Law.
The Plan and all Award Agreements shall be construed in accordance with and governed by the Cayman Islands.

 

13.14 Section 409A.
To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code.
To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and
the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any
such regulation or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the
contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A
of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after
the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies
and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee
determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and
related U.S. Department of Treasury guidance.

 

13.15 Appendices.
The Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for
purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered a part
of the Plan, subject to Section 12,1 of the Plan.

 

 

18Document

EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made and entered into by and between Mitcham Industries, Inc., a Texas corporation (the “Company”), and Dennis P. Morris (“Employee”) effective as of March 31, 2020 (the “Effective Date”). 

1.Employment.  During the Employment Period (as defined in Section 4), the Company shall employ Employee, and Employee shall serve, as Chief Operating Officer of the Company and in such other position or positions as may be assigned from time to time by the board of directors (the “Board”) of the Company. Duties and Responsibilities of Employee.
a.During the Employment Period, Employee shall devote Employee’s full business time, attention and best efforts to the businesses of the Company and its direct and indirect subsidiaries (collectively, the “Company Group”) as may be requested by the Board from time to time.  Employee’s duties shall include those normally incidental to the position(s) identified in Section 1, as well as such additional duties as may be assigned to Employee by the Board from time to time, which duties may include providing services to other members of the Company Group in addition to the Company.  Employee may, without violating this Agreement, (i) as a passive investment, own publicly traded securities in such form or manner as shall not require any services by Employee in the operation of the entities in which such securities are owned; (ii) engage in charitable and civic activities; or (iii) with the prior written consent of the  Board, engage in other personal and passive investment activities, in each case, so long as such interests or activities do not interfere with Employee’s ability to fulfill Employee’s duties and responsibilities under this Agreement and are not inconsistent with Employee’s obligations to the Company Group or competitive with the business of the Company Group. 
b.Employee hereby represents and warrants that Employee is not the subject of, or a party to, any employment agreement, non-competition covenant, nondisclosure agreement, or any other agreement, obligation, restriction or understanding that would prohibit Employee from executing this Agreement or fully performing each of Employee’s duties and responsibilities hereunder, or would in any manner, directly or indirectly, limit or affect any of the duties and responsibilities that may now or in the future be assigned to Employee hereunder.
c.Employee owes each member of the Company Group fiduciary duties (including (i) duties of loyalty and disclosure and (ii) such fiduciary duties that an officer of the Company would have if the Company were a corporation organized under the laws of the State of Delaware), and the obligations described in this Agreement are in addition to, and not in lieu of, the obligations Employee owes each member of the Company Group under statutory and common law.
2.Compensation.  
a.Base Salary.  During the Employment Period, the Company shall pay to Employee an annualized base salary of $285,000 (the “Base Salary”) in consideration for Employee’s services under this Agreement. The Base Salary shall be payable in substantially equal installments in conformity with the Company’s customary payroll practices for other senior executives as may exist from time to time, but no less frequently than monthly. The Base Salary shall be reviewed by the compensation committee of the Board (“Compensation Committee”) in accordance with the Company’s policies and practices, but no less frequently than once annually, and may be increased. To the extent 

applicable, the term “Base Salary” shall include any such increases to the Base Salary enumerated above.
b.Annual Bonus.  Employee shall be eligible for discretionary bonus compensation for each complete calendar year that Employee is employed by the Company hereunder (the “Annual Bonus”).  The target value for each Annual Bonus shall be established by the Compensation Committee for each calendar year to which such Annual Bonus relates (the “Bonus Year”). The performance targets that must be achieved in order to be eligible for certain bonus levels shall be established by the Compensation Committee annually, in its sole discretion, and communicated to Employee within the first ninety (90) days of the applicable Bonus Year. Each Annual Bonus, if any, shall be paid as soon as administratively feasible after the Compensation Committee certifies whether the applicable performance targets for the applicable Bonus Year have been achieved, but in no event later than May 15 following the end of such Bonus Year. Regardless of the attainment of any target values or performance targets the Annual Bonus for any Bonus Year will be not less that 25% of Employees Base Salary. Notwithstanding anything in this Section 3(b) to the contrary, no Annual Bonus, nor any portion thereof, shall be payable for any Bonus Year unless Employee remains continuously employed by the Company from the Effective Date through the date on which such Annual Bonus is paid.  Additionally, Employee shall receive a “sign-on bonus” in the amount of $25,000, payable within 30 days of the Effective Date.
c.Incentive Compensation. During the Employment Period, Employee shall be eligible to receive awards under any equity incentive plans, programs or arrangements made available by the Company, in amounts determined by the Compensation Committee in its sole discretion and subject to the terms and conditions of such plans, programs or arrangements as in effect from time to time. Nothing herein shall be construed to give Employee any rights to any amount or type of grant or award except as provided in a written award agreement with Employee and approved by the Compensation Committee, subject to the terms of the equity incentive plan, program or arrangement under which such equity awards are granted and the applicable award agreement entered into between the Company and Employee.  Employee shall receive an initial grant of 15,000 shares of restricted stock and options to purchase 250,000 shares of common stock.
d.Benefits.  During the Employment Period, Employee shall be eligible to participate in the same benefit plans and programs in which other senior executives are eligible to participate, subject to the terms and conditions of the applicable plans and programs in effect from time to time.  The Company shall not, however, by reason of this Section 3(d), be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or policy, so long as such changes are similarly applicable to other senior executives generally.
e.Vacation.  During the Employment Period, Employee shall be entitled to twenty (20) paid vacation days per calendar year (prorated for partial years) in accordance with the Company's vacation policies, as in effect from time to time.
f.Other Consideration.  During such time that his duties require that he is resident in Salem, New Hampshire Employee shall be reimbursed for temporary living expenses and shall be reimbursed for two round-trip coach airline tickets each month between Boston and Tacoma/Seattle.  Temporary living expenses shall be $2,000 per month, or such other amount that the Company and Employee shall mutually agree.  At such time the Employees primary place of business is relocated to the Company’s 
2

headquarters, Employee shall be reimbursed for reasonable and customary relocation  costs, not including the purchase of his current residence.
3.Term of Employment.  The initial term of Employee’s employment under this Agreement shall be for the period beginning on the Effective Date and ending on the second anniversary of the Effective Date (the “Initial Term”).  On the second anniversary of the Effective Date and on each subsequent anniversary thereafter, the term of Employee’s employment under this Agreement shall automatically renew and extend for a period of twelve (12) months (each such twelve-month period being a “Renewal Term”) unless written notice of non-renewal is delivered by either party to the other not less than sixty (60) days prior to the expiration of the then-existing Initial Term or Renewal Term, as applicable.  Notwithstanding any other provision of this Agreement, Employee’s employment pursuant to this Agreement may be terminated at any time in accordance with Section 5.  The period from the Effective Date through the expiration of this Agreement or, if sooner, the termination of Employee’s employment pursuant to this Agreement, regardless of the time or reason for such termination, shall be referred to herein as the “Employment Period.” 
4.Termination of Employment.
a.Company’s Right to Terminate Employee’s Employment for Cause.  The Company shall have the right to terminate Employee’s employment hereunder at any time for “Cause.”  For purposes of this Agreement, “Cause” shall mean: 
i.Employee’s commission of fraud, breach of fiduciary duty, theft, or embezzlement against the Company, its subsidiaries, affiliates or customers;
ii.Employee’s willful refusal without proper legal cause to faithfully and diligently perform Employee’s duties; 
iii.Employee’s breach of Sections 8, 9 or 10 of this Agreement or material breach of any other written agreement between Employee and one or more members of the Company Group; 
iv.Employee’s conviction of, or plea of guilty or nolo contendere to, a felony (or state law equivalent) or any crime involving moral turpitude;
v.Employee’s willful misconduct or gross negligence in the performance of duties to the Company that has or could reasonably be expected to have a material adverse effect on the Company; or
vi.Employee’s material breach and violation of the Company’s written policies pertaining to sexual harassment, discrimination or insider trading.
Provided, however, that solely with respect to the actions or omissions set forth in Section 5(a)(ii), (iii), (v) and (vi), such actions or omissions must remain uncured thirty (30) days after the Board has provided Employee written notice of the obligation to cure such actions or omissions. For the avoidance of doubt, the actions or omissions set forth in Section 5(a)(i) and (iv) are not permitted to be cured by Employee under any circumstances. 
3

b.Company’s Right to Terminate for Convenience.  The Company shall have the right to terminate Employee’s employment for convenience at any time and for any reason, or no reason at all, upon written notice to Employee.
c.Employee’s Right to Terminate for Good Reason.  Employee shall have the right to terminate Employee’s employment with the Company at any time for “Good Reason.”  For purposes of this Agreement, “Good Reason” shall mean:
i.the relocation of the geographic location of Employee’s principal place of employment by more than fifty (50) miles from the location of Employee’s principal place of employment as of the Effective Date (excluding reasonably required business travel in connection with the performance of Employee’s duties under this Agreement);
ii.a material diminution in Employee’s position, responsibilities or duties or the assignment of Employee to a position, responsibilities or duties of a materially lesser status or degree of responsibility than his position, responsibilities or duties immediately following the Effective Date; 
iii.any material breach by the Company of any provision of this Agreement; or
iv.non-renewal by the Company of the then-existing Initial Term or Renewal Term pursuant to Section 4 (other than during the Protection Period (as defined below)). 
Notwithstanding the foregoing provisions of this Section 5(c) or any other provision of this Agreement to the contrary, any assertion by Employee of a termination for Good Reason shall not be effective unless all of the following conditions are satisfied: (A) the condition described in Section 5(c)(i), (ii), (iii) or (iv) giving rise to Employee’s termination of employment must have arisen without Employee’s consent; (B) Employee must provide written notice to the Board of the existence of such condition(s) within thirty (30) days of the initial existence of such condition(s); (C) the condition(s) specified in such notice must remain uncorrected for thirty (30) days following the Board’s receipt of such written notice; and (D) the date of Employee’s termination of employment must occur within sixty-five (65) days following the Board’s receipt of such notice.
d.Death or Disability.  Upon the death or Disability of Employee, Employee’s employment with Company shall terminate.  For purposes of this Agreement, a “Disability” shall exist if Employee is entitled to receive long-term disability benefits under the Company’s disability plan or, if there is no such plan, Employee’s to perform the essential functions of Employee’s position (after accounting for reasonable accommodation, if applicable), due to an illness or physical or mental impairment or other incapacity that continues, or can reasonably be expected to continue, for a period in excess of one hundred-twenty (120) days, whether or not consecutive.  The determination of whether Employee has incurred a Disability shall be made in good faith by the Board.
e.Employee’s Right to Terminate for Convenience.  In addition to Employee’s right to terminate Employee’s employment for Good Reason, Employee shall have the right to terminate Employee’s employment with the Company for convenience at any time and for any other reason, or no reason at all, upon thirty (30) days’ advance written notice to the Company; provided, however, that if Employee has provided notice to the Company of Employee’s termination of employment, the Company may determine, in its sole discretion, that such termination shall be effective on any date prior to the effective date of termination provided in such notice (and, if such earlier date is so required, then it shall 
4

not change the basis for Employee’s termination of employment nor be construed or interpreted as a termination of employment pursuant to Section 5(b)).
5.Obligations of the Company upon Termination of Employment.  
a.For Cause; Other than for Good Reason. If Employee’s employment is terminated during the Employment Period (i) by the Company for Cause pursuant to Section 5(a) or (ii) by Employee other than for Good Reason pursuant to Section 5(e) (including, for the avoidance of doubt, as a result of a non-renewal by Employee of the then-existing Initial Term or Renewal Term pursuant to Section 4), then Employee shall be entitled to all Base Salary earned by Employee through the date that Employee’s employment terminates (the “Termination Date”) and, subject to the terms and conditions of any benefit plans in which he may participate at the time of such termination, any post-employment benefits available pursuant to the terms of those plans; however, Employee shall not be entitled to any additional amounts or benefits as the result of such termination of employment.
b.Without Cause; Good Reason. Subject to Section 6(e) below, Employee shall be entitled to certain severance consideration described below, payable at the times and in the form set forth in Section 6(d) below, if Employee’s employment is terminated during the Employment Period (x) by the Company without Cause pursuant to Section 5(b), or (y) by Employee for Good Reason pursuant to Section 5(c):
i.If such termination occurs during the Protection Period (as defined below), the Company shall provide Employee with a severance payment (“Change in Control Severance Payment”) in an amount equal to two (2) times the sum of  (A) Employee’s Base Salary as in effect immediately prior to the Termination Date and (B) the greater of (1) the value of Employee’s Annual Bonus received for the most recently completed Bonus Year prior to the Termination Date, or (2) 25% of the Employee’s Base Salary as in effect immediately prior to the Termination Date.
ii.If such termination does not occur during the Protection Period (as defined below), the Company shall provide Employee with a severance payment (“Severance Payment”) in an amount equal to the greater of (A) the Change in Control Severance Payment, or (B) the sum of (1) the value of the Base Salary, as currently in effect, the Employee would have received under this Agreement for the time period beginning on the Termination Date and ending on the last date of the then-existing Initial Term or Renewal Term and (2) the greater if (i) the value Employee’s Annual Bonus received for the most recently completed Bonus Year prior to the Termination Date and (ii) 25% of the Employee’s Base Salary as in effect immediately prior to the Termination Date.
iii.Certain Definitions.
A.As used herein, “Protection Period” is the period of time beginning on the date of a Change in Control (as defined below) and ending on the second anniversary of the date of such Change in Control.
B.As used herein, “Change in Control” means the occurrence of any one or more of the following events on or after the Effective Date:
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I.any individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) (other than (a) the Company, (b) any trustee or other fiduciary holding securities under any employee benefit plan of the  Company, (c) any company or entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of common stock of the Company or (d) pursuant to a transaction or series of transactions in which the holders of the securities entitled to vote generally in the election of directors to the Board (the “Voting Securities”) of the Company outstanding immediately prior thereto, continue to retain or represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Securities of the surviving entity), more than 50% of the combined voting power of the Voting Securities of the Company, such surviving entity or any ultimate parent thereof outstanding immediately following such transaction or series of transactions (an “Exempt Transaction”)), becomes the beneficial owner (within the meaning of  Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting Securities;
II.the consummation of a merger, reorganization or consolidation of the Company with another Person, other than an Exempt Transaction;  
III.the consummation of a sale, disposition or other change in ownership of assets of the Company and/or any of its direct and indirect subsidiaries having a value (with “value” of such assets defined, for this purpose, as either (a) the value of the assets of the Company and/or any of its direct and indirect subsidiaries or (b) the value of the assets being disposed of, in each case, as determined without regard to any liabilities associated with such assets) constituting at least 50% of the total gross fair market value of all of the assets of the Company and its direct and indirect subsidiaries (on a consolidated basis), (with “gross fair market value” of such assets determined without regard to any liabilities associated with such assets), immediately prior to such transaction to a Person or Persons in one or a series of related transactions; or
IV.the consummation of a transaction that implements in whole or in part a resolution of the stockholders of the Company authorizing a complete liquidation or dissolution of the Company.
c.Death or Disability. If Employee’s employment is terminated during the Employment Period due to Employee’s death or Disability pursuant to Section 5(d), then Employee shall be entitled to all Base Salary earned by Employee through the Termination Date and, subject to the terms and conditions of any benefit plans in which he may participate at the time of such termination, any post-employment benefits available pursuant to the terms of those plans; however, Employee shall not be entitled to any additional amounts or benefits as the result of such termination of employment.
d.Payment Timing. Payment of the Severance Payment or the Change in Control Severance Payment (individually, as applicable, the “Cash Severance Payment”), as applicable, shall be divided into substantially equal installments and paid in accordance with the Company’s normal 
6

payroll procedures over a 24-month period following the Termination Date; provided, however, that (i) the first installment of the Cash Severance Payment shall be paid on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Termination Date, the Company shall pay to Employee, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Termination Date and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Termination Date had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Termination Date, and each of the remaining installments shall be paid on a monthly basis thereafter, (ii) to the extent, if any, that the aggregate amount of the installments of the Cash Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6(d) after March 15 of the calendar year following the calendar year in which the Termination Date occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Employee in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess), and (iii) all remaining installments of the Cash Severance Payment, if any, that would otherwise be paid pursuant to the preceding provisions of this Section 6(d) after December 31 of the calendar year following the calendar year in which the Termination Date occurs shall be paid with the installment of the Cash Severance Payment, if any, due in December of the calendar year following the calendar year in which the Termination Date occurs. 
e.Conditions to Receipt of Severance Consideration. Notwithstanding the foregoing, Employee’s eligibility and entitlement to the Cash Severance Payment and any other payment or benefit referenced in Section 6 above (collectively, the “Severance Consideration”) are dependent upon Employee’s (i) continued compliance with Employee’s obligations under each of Sections 8, 9 and 10 below and (ii) execution and delivery to the Company, on or before the Release Expiration Date (as defined below), and non-revocation within any time provided by the Company to do so, of a release of all claims in a form acceptable to the Company (the “Release”), which Release shall release each member of the Company Group and their respective affiliates, and the foregoing entities’ respective shareholders, members, partners, officers, managers, directors, fiduciaries, employees, representatives, attorneys, agents and benefit plans (and fiduciaries of such plans) from any and all claims, including any and all causes of action arising out of Employee’s employment with the Company and any other member of the Company Group or the termination of such employment, but excluding all claims to severance payments Employee may have under this Section 6. If the Release is not executed and returned to the Company on or before the Release Expiration Date, and the required revocation period has not fully expired without revocation of the Release by Employee, then Employee shall not be entitled to any portion of the Severance Consideration. As used herein, the “Release Expiration Date” is that date that is twenty-one (21) days following the date upon which the Company delivers the Release to Employee (which shall occur no later than seven (7) days after the Termination Date) or, in the event that such termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967, as amended), the date that is forty-five (45) days following such delivery date.
f.After-Acquired Evidence.  Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that Employee is eligible to receive any 
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Severance Consideration pursuant to this Section 6 but, after such determination, the Company subsequently acquires evidence or determines that: (i) Employee has failed to abide by Employee’s continuing obligations under Sections 8, 9 or 10; or (ii) a Cause condition existed prior to the Termination Date that, had the Company been fully aware of such condition, would have resulted in the termination of Employee’s employment pursuant to Section 5(a), then the Company shall have the right to cease the payment of any future installments of any Cash Severance Payment (other than the first six such installments) or other Severance Consideration and Employee shall promptly return to the Company all installments of the Cash Severance Payment (other than the first six such installments) or other Severance Consideration (to the extent possible) received by Employee prior to the date that the Company determines that the conditions of this Section 6(f) have been satisfied. In the event that the Company determines that the conditions of this Section 6(f) have been satisfied, Employee acknowledges and agrees that the first six installments of the Cash Severance Payment constitute adequate consideration for the Release.
6.Disclosures.  Promptly (and in any event, within three business days) upon becoming aware of (a) any actual or potential Conflict of Interest or (b) any lawsuit, claim or arbitration filed against or involving Employee or any trust or vehicle owned or controlled by Employee, in each case, Employee shall disclose such actual or potential Conflict of Interest or such lawsuit, claim or arbitration to the Board.  A “Conflict of Interest” shall exist when Employee engages in, or plans to engage in, any activities, associations, or interests that conflict with, or create an appearance of a conflict with, Employee’s duties, responsibilities, authorities, or obligations for and to the Company Group.  
7.Confidentiality.  In the course of Employee’s employment with the Company and the performance of Employee’s duties on behalf of the Company Group hereunder, Employee shall be provided with, and shall have access to, confidential information of the Company.  In consideration of Employee’s receipt and access to such confidential information and in exchange for other valuable consideration provided hereunder, and as a condition of Employee’s employment, Employee shall execute the “Employee Confidentiality Agreement” furnished to Employee by the Company (as amended from time to time, the “Confidentiality Agreement”), which shall govern Employee’s obligations with respect to Confidential Information (as defined in the Confidentiality Agreement). Any breach of the Confidentiality Agreement shall be deemed a breach of this Section 8.
8.Non-Competition; Non-Solicitation.
a.The Company shall provide Employee access to Confidential Information for use only during the Employment Period, and Employee acknowledges and agrees that the Company Group shall be entrusting Employee, in Employee’s unique and special capacity, with developing the goodwill of the Company Group, and in consideration thereof and in consideration of the Company providing Employee with access to Confidential Information and as an express incentive for the Company to enter into this Agreement and employ Employee, Employee has voluntarily agreed to the covenants set forth in this Section 9.  Employee further agrees and acknowledges that the limitations and restrictions set forth herein, including geographical and temporal restrictions on certain competitive activities, are reasonable in all respects and not oppressive, shall not cause Employee undue hardship, and are material and substantial parts of this Agreement intended and necessary to prevent unfair competition and to protect the Company Group’s Confidential Information, goodwill and substantial and legitimate business interests.
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b.Employee agrees that, during the Prohibited Period, Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalf of or in conjunction with any other person or entity of any nature:
i.engage in or participate within the Market Area in competition with any member of the Company Group in any aspect of the Business, which prohibition shall prevent Employee from directly or indirectly owning, managing, operating, joining, becoming an officer, director, employee or consultant of, or loaning money to, or selling or leasing equipment or real estate to or otherwise being affiliated with any person or entity engaged in, or planning to engage in, the Business in the Market Area in competition, or anticipated competition, with any member of the Company Group;
ii.appropriate any Business Opportunity of, or relating to, the Company Group located in the Market Area;
iii.solicit, canvass, approach, encourage, entice or induce any customer or supplier of any member of the Company Group to cease or lessen such customer’s or supplier’s business with the Company Group; or
iv.solicit, canvass, approach, encourage, entice or induce any employee or contractor of the Company Group to terminate his, her or its employment or engagement with any member of the Company Group.
c.Because of the difficulty of measuring economic losses to the Company Group as a result of a breach or threatened breach of the covenants set forth in Section 8 and in this Section 9, and because of the immediate and irreparable damage that would be caused to the members of the Company Group for which they would have no other adequate remedy, the Company and each other member of the Company Group shall be entitled to enforce the foregoing covenants, in the event of a breach or threatened breach, by injunctions and restraining orders from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security.  The aforementioned equitable relief shall not be the Company’s or any other member of the Company Group’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company and each other member of the Company Group at law and equity.
d.The covenants in this Section 9, and each provision and portion hereof, are severable and separate, and the unenforceability of any specific covenant (or portion thereof) shall not affect the provisions of any other covenant (or portion thereof).  Moreover, in the event any arbitrator or court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which such arbitrator or court deems reasonable, and this Agreement shall thereby be reformed.
e.For purposes of this Section 9, the following terms shall have the following meanings:
i.“Business” shall mean the business and operations that are the same or similar to those performed by the Company and any other member of the Company Group for which Employee provides services or about which Employee obtains Confidential Information during 
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the Employment Period, which business and operations include the design, manufacture, sale or lease of  seismic, hydrographic or oceanographic equipment.
ii.“Business Opportunity” shall mean any commercial, investment or other business opportunity relating to the Business. 
iii.“Market Area” shall mean the world.
iv.“Prohibited Period” shall mean the period during which Employee is employed by any member of the Company Group and continuing for a period of 24 months following the date that Employee is no longer employed by any member of the Company Group.
9.Ownership of Intellectual Property.  Employee agrees that the Company shall own, and Employee shall (and hereby does) assign, all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designs, know-how, ideas and information authored, created, contributed to, made or conceived or reduced to practice, in whole or in part, by Employee during the period in which Employee is or has been employed by or affiliated with the Company or any other member of the Company Group that either (a) relate, at the time of conception, reduction to practice, creation, derivation or development, to any member of the Company Group’s businesses or actual or anticipated research or development, or (b) were developed on any amount of the Company’s or any other member of the Company Group’s time or with the use of any member of the Company Group’s equipment, supplies, facilities or trade secret information (all of the foregoing collectively referred to herein as “Company Intellectual Property”), and Employee shall promptly disclose all Company Intellectual Property to the Company.  All of Employee’s works of authorship and associated copyrights created during the period in which Employee is employed by or affiliated with the Company or any member of the Company Group and in the scope of Employee’s employment shall be deemed to be “works made for hire” within the meaning of the Copyright Act.  Employee shall perform, during and after the period in which Employee is or has been employed by or affiliated with the Company or any other member of the Company Group, all reasonable acts deemed necessary by the Company to assist the Company Group, at the Company’s expense, in obtaining and enforcing its rights throughout the world in the Company Intellectual Property.  Such acts may include execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask work, or other applications, (ii) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Company Intellectual Property.
10.Arbitration.  
a.Subject to Section 11(b), any dispute, controversy or claim between Employee and the Company arising out of or relating to this Agreement or Employee’s employment with the Company shall be finally settled by arbitration in Houston, Texas before, and in accordance with the then-existing American Arbitration Association (“AAA”) Employment Arbitration Rules.  The arbitration award shall be final and binding on both parties.  Any arbitration conducted under this Section 11 shall be heard by a single arbitrator (the “Arbitrator”) selected in accordance with the then-applicable rules of the AAA.  The Arbitrator shall expeditiously (and, if practicable, within ninety (90) days after the selection of the Arbitrator) hear and decide all matters concerning the dispute.  Except as 
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expressly provided to the contrary in this Agreement, the Arbitrator shall have the power to (i) gather such materials, information, testimony and evidence as the Arbitrator deems relevant to the dispute before him or her (and each party shall provide such materials, information, testimony and evidence requested by the Arbitrator), and (ii) grant injunctive relief and enforce specific performance.  The decision of the Arbitrator shall be reasoned, rendered in writing, be final and binding upon the disputing parties and the parties agree that judgment upon the award may be entered by any court of competent jurisdiction; provided, however, that the parties agree that the Arbitrator and any court enforcing the award of the Arbitrator shall not have the right or authority to award punitive or exemplary damages to any disputing party.  The party whom the Arbitrator determines is the prevailing party in such arbitration shall receive, in addition to any other award pursuant to such arbitration or associated judgment, reimbursement from the other party of all reasonable legal fees and costs associated with such arbitration and associated judgment.
b.Notwithstanding Section 11(a), either party may make a timely application for, and obtain, judicial emergency or temporary injunctive relief to enforce any of the provisions of Sections 8 through 10; provided, however, that the remainder of any such dispute (beyond the application for emergency or temporary injunctive relief) shall be subject to arbitration under this Section 11.
c.By entering into this Agreement and entering into the arbitration provisions of this Section 11, THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVING THEIR RIGHTS TO A JURY TRIAL.
d.Nothing in this Section 11 shall prohibit a party to this Agreement from (i) instituting litigation to enforce any arbitration award, or (ii) joining the other party to this Agreement in a litigation initiated by a person or entity that is not a party to this Agreement.
11.Defense of Claims.  During the Employment Period and thereafter, upon request from the Company, Employee shall cooperate with the Company Group in the defense of any claims or actions that may be made by or against any member of the Company Group that relate to Employee’s actual or prior areas of responsibility.  The Company shall pay or reimburse Employee for all of Employee’s reasonable travel and other direct expenses reasonably incurred, to comply with Employee’s obligations under this Section 12, so long as Employee provides reasonable documentation of such expenses and obtains the Company’s prior approval before incurring such expenses.
12.Withholdings; Deductions.  The Company may withhold and deduct from any benefits and payments made or to be made pursuant to this Agreement (a) all federal, state, local and other taxes as may be required pursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing by Employee.
13.Title and Headings; Construction.  Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof.  Any and all Exhibits or Attachments referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes.  Unless the context requires otherwise, all references herein to an agreement, instrument or other document shall be deemed to refer to such agreement, instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof.  All references to “dollars” or “$” in this Agreement refer to 
11

United States dollars.  The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement, including all Exhibits attached hereto, and not to any particular provision hereof.  Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.  The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.
14.Applicable Law; Submission to Jurisdiction.  This Agreement shall in all respects be construed according to the laws of the State of Texas without regard to its conflict of laws principles that would result in the application of the laws of another jurisdiction.  With respect to any claim or dispute related to or arising under this Agreement, the parties hereby consent to the arbitration provisions of Section 11 and recognize and agree that should any resort to a court be necessary and permitted under this Agreement, then they consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Houston, Harris County, Texas.
15.Entire Agreement and Amendment.  This Agreement and the Confidentiality Agreement contain the entire agreement of the parties with respect to the matters covered herein and supersede all prior and contemporaneous agreements and understandings, oral or written, between the parties hereto concerning the subject matter hereof.  This Agreement may be amended only by a written instrument executed by both parties hereto.
16.Waiver of Breach.  Any waiver of this Agreement must be executed by the party to be bound by such waiver.  No waiver by either party hereto of a breach of any provision of this Agreement by the other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, shall operate or be construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision or condition at the same or any subsequent time.  The failure of either party hereto to take any action by reason of any breach shall not deprive such party of the right to take action at any time.
17.Assignment.  This Agreement is personal to Employee, and neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise transferred by Employee.  The Company may assign this Agreement without Employee’s consent, including to any member of the Company Group and to any successor (whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of the Company.
18.Notices.  Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received (a) when delivered in person, (b) when sent by facsimile transmission (with confirmation of transmission) on a Business Day to the number set forth below, if applicable; provided, however, that if a notice is sent by facsimile transmission after normal business hours of the recipient or on a non-Business Day, then it shall be deemed to have been received on the next Business Day after it 
12

is sent, (c) on the first Business Day after such notice is sent by air express overnight courier service, or (d) on the second Business Day following deposit with an internationally-recognized overnight or second-day courier service with proof of receipt maintained, in each case, to the following address, as applicable:
If to the Company, addressed to:
Mitcham Industries, Inc. c/o  Robert P. Capps
2002 Timberloch, Suite 400
The Woodlands, Texas 77380
Email: rob.capps@mitchamindustries.com 
If to Employee, addressed to:
Dennis P. Morris7026 Teal LoopGig Harbor, WA  98335
          Email: 
morrisdpm@yahoo.com
19.Counterparts.  This Agreement may be executed in any number of counterparts, including by electronic mail or facsimile, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.  Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party, but together signed by both parties hereto.
20.Deemed Resignations.  Except as otherwise determined by the Board or as otherwise agreed to in writing by Employee and any member of the Company Group prior to the termination of Employee’s employment with the Company or any member of the Company Group, any termination of Employee’s employment shall constitute, as applicable, an automatic resignation of Employee: (a) as an officer of the Company and each member of the Company Group; (b) from the Board; and (c) from the board of directors or board of managers (or similar governing body) of any member of the Company Group and from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in which any member of the Company Group holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) Employee serves as such Company Group member’s designee or other representative. 
21.Certain Excise Taxes.  Notwithstanding anything to the contrary in this Agreement, if Employee is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Employee has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (i) reduced (but not below zero) so that the present value of such total amounts and benefits received by Employee from the Company or any of its affiliates shall be one dollar ($1.00) less than three times 
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Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Employee shall be subject to the excise tax imposed by Section 4999 of the Code or (ii) paid in full, whichever produces the better net after-tax position to Employee (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes).  The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order.  The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith.  If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company or any of its affiliates used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Employee’s base amount, then Employee shall immediately repay such excess to the Company upon notification that an overpayment has been made.  Nothing in this Section 22 shall require the Company to be responsible for, or have any liability or obligation with respect to, Employee’s excise tax liabilities under Section 4999 of the Code.  
22.Section 409A.  
a.Notwithstanding any provision of this Agreement to the contrary, all provisions of this Agreement are intended to comply with Section 409A of the Code, and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall be construed and administered in accordance with such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of Employee’s employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A.  
b.To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period in which the arrangement is in effect.  
c.Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt of such payment or benefit is not delayed until the earlier of  the date of Employee’s death or  the date that is six (6) months after the Termination Date (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to Employee (or Employee’s 
14

estate, if applicable) until the Section 409A Payment Date.  Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement are exempt from, or compliant with, Section 409A and in no event shall any member of the Company Group be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.
23.Clawback.  To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Board (or a committee thereof), amounts paid or payable under this Agreement shall be subject to the provisions of any applicable clawback policies or procedures adopted by the Company, which clawback policies or procedures may provide for forfeiture and/or recoupment of amounts paid or payable under this Agreement.  Notwithstanding any provision of this Agreement to the contrary, the Company reserves the right, without the consent of Employee, to adopt any such clawback policies and procedures, including such policies and procedures applicable to this Agreement with retroactive effect.
24.Effect of Termination.  The provisions of Sections 5, 8-13 and 21 and those provisions necessary to interpret and enforce them, shall survive any termination of this Agreement and any termination of the employment relationship between Employee and the Company.
25.Third-Party Beneficiaries.  Each member of the Company Group that is not a signatory to this Agreement shall be a third-party beneficiary of Employee’s obligations under Sections 7-10 and shall be entitled to enforce such obligations as if a party hereto.
26.Severability.  If an arbitrator or court of competent jurisdiction determines that any provision of this Agreement (or portion thereof) is invalid or unenforceable, then the invalidity or unenforceability of that provision (or portion thereof)  shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.
 [Remainder of Page Intentionally Blank;Signature Page Follows]
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IN WITNESS WHEREOF, Employee and the Company each have caused this Agreement to be executed and effective as of the Effective Date.

EMPLOYEE

          
Dennis P. Morris

MITCHAM INDUSTRIES, INC.

By:   Name: Robert P. CappsTitle: Co-CEO

Signature Page to
Employment Agreement

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