1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 16, 1999
MITCHAM INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Texas 000-25142 76-0210849
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
44000 Highway 75 South, Huntsville, Texas 77340
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (409) 291-2277
2
ITEM 5. OTHER EVENTS.
a. Effective December 16, 1999, Mitcham Industries, Inc. (the "Company") renewed
its exclusive leasing arrangement with Sercel, S.A. ("Sercel"), a major
manufacturer of 3-D seismic data acquisition equipment, by entering into a new
Exclusive Equipment Lease Agreement (the "Agreement"). With the exception of a
different minimum purchase requirement for the Company, the Agreement is
substantially similar to the former Exclusive Equipment Lease Agreement that the
Company and Sercel entered into in September 1996 (the "Former Agreement"). The
Former Agreement required the Company to purchase from Sercel an aggregate of
$10.2 million of Sercel equipment by December 31, 1999, and the Company
satisfied that purchase requirement in fiscal 1998.
Under the Agreement, the Company acts as Sercel's exclusive third-party
worldwide short-term (for leases of a duration of less than one year) leasing
representative and Sercel will refer to the Company all requests it receives to
lease Sercel 3-D data acquisition equipment and other field equipment, through
December 31, 2002. Except for the fact that Sercel may engage in short-term
leasing directly to its customers and affiliates, Sercel may not recommend or
suggest any competitor of the Company as a potential lessor of such data
acquisition equipment.
A condition of the Agreement is that the Company purchase, at favorable
prices, a total of six 408UL 3-D data acquisition systems with at least 600
channels and other field equipment from Sercel over the term of the Agreement,
with at least one such system to be purchased in each of the following periods:
December 16, 1999-June 30, 2000; July 1, 2000-December 31, 2000; January 1,
2001-June 30, 2001; July 1, 2001-December 31, 2001; January 1, 2002-June 30,
2002; and July 1, 2002-December 31, 2002. The list price of a 600-channel system
is approximately $1,100,000. Subject to certain exceptions, if the Company does
not purchase such equipment on or before such dates, then Sercel may terminate
the Agreement on 10 days' written notice to the Company. In that event, the
Company will have no further obligation to purchase additional equipment from
Sercel.
The Agreement is subject to termination by Sercel before December 31,
2002: (i) at any time upon (a) Sercel's reasonable belief that the Company has
violated or intends to violate the Foreign Corrupt Practices Act of 1977, as
amended, (b) the Company's refusal or inability to certify that it is in
compliance with laws applicable to its activities, or (c) the Company's
insolvency, voluntary or involuntary bankruptcy, assignment for the benefit of
creditors or discontinuance as a going concern, and (ii) upon 90 days prior
written notice if the Company no longer employs Billy F. Mitcham, Jr. in a
senior management capacity. The Agreement is attached as Exhibit 10.
b. On December 20, 1999, the Company issued a Press Release with respect to the
Agreement. The Press Release is attached as Exhibit 99.
2
3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS. NONE
(B) PRO FORMA FINANCIAL INFORMATION. NONE
(C) EXHIBITS.
Exhibit Number Description
-------------- -----------
10 Exclusive Equipment Lease Agreement,
effective December 16, 1999
99 Press Release dated December 20, 1999
3
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MITCHAM INDUSTRIES, INC.
--------------------------------------
(Registrant)
DATED: December 31, 1999
By: /s/ BILLY F. MITCHAM, JR.
--------------------------------------
Billy F. Mitcham, Jr.
Chairman of the Board,
Chief Executive Officer and President
4
5
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
10 Exclusive Equipment Lease Agreement
99 Press Release dated December 20, 1999