8-K

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): November 17, 2015

GEOSPACE TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number: 001-13601

Texas	76-0447780
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

7007 Pinemont Drive, Houston, TX 77040

(Address of principal executive offices, including zip code)

(713) 986-4444

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On November 18, 2015, Geospace Technologies Corporation (the “Company”) issued a press release regarding its operating results for fiscal year 2015. The press release is attached as Exhibit 99.1. The foregoing description of the press release is qualified by reference to such exhibit.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On November 18, 2015, the Board of Directors (the “Board”) of the Company adopted a resolution expanding the size of the Board from seven to nine directors. On the same date, the Board appointed Edgar R. (Bud) Giesinger, a new director, and Walter R. (Rick) Wheeler, the Company’s current President and Chief Executive Officer, as directors of the Company.

Mr. Giesinger retired as a managing partner from KPMG LLP on September 30, 2015. He has 35 years of accounting and finance experience working mainly with publically traded corporations. Over the years, he has advised a number of clients in accounting and financial matters, capital raising, international expansions and in the dealings with the Securities and Exchange Commission. While working with companies in a variety of industries, his primary focus has been energy and manufacturing clients. He is a Certified Public Accountant in the State of Texas, a member of the American Institute of Public Accountants and the Texas Society of Certified Public Accounts. He has lectured and led seminars on various topics dealing with financial risks, controls and financial reporting.

Mr. Giesinger has been appointed to serve on the Board’s Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Mr. Wheeler has not been appointed to serve on any of the Board’s committees.

In connection with his election as a director, Mr. Geisinger is eligible to receive compensation in the same manner as the Company’s other non-employee directors. The Company previously disclosed the terms of non-employee director compensation in its definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on December 30, 2014. In connection with his election as a director, Mr. Wheeler will not receive additional compensation.

Item 8.01 Other Events.

On November 17, 2015, the Company adopted a new form of performance-based nonqualified stock option agreement (“Performance Option Agreement”) for stock option awards to its senior executive officers. As a result of discussions with one of our institutional investors, our board of directors decided to make option grants as part of the Company’s executive long-term compensation that include enhanced elements of performance intended to more closely align executive incentives with the interests of stockholders. The Performance Option Agreement provides for a ratable three-tranche vesting and exercisability schedule that is based upon specified total shareholder return performance goals as well as service time.

On November 18, 2015, the Company granted performance-based nonqualified stock options, using the Performance Option Agreement, to four of its executive officers, Walter R. Wheeler, Michael J. Sheen, Thomas T. McEntire and Robbin B. Adams. The total shareholder return goals used for the various performance-based vesting hurdles under each of these awards are 69%, 139% and 209% during a performance period of five years. The performance hurdles for these awards were recommended by the independent compensation consultant retained by our Compensation Committee, Frederic W. Cook & Co., Inc. Messrs. Wheeler and Sheen received awards of 18,400 shares of our common stock each; Mr. McEntire received an award of 17,000 shares, and Mr. Adams received an award of 15,500 shares. On November 18, 2015, the Company also granted restricted stock awards, with Messrs. Wheeler and Sheen receiving in the awards in the amount of 8,500 shares each; Mr. McEntire received an award of 7,800 shares; and Mr. Adams received an award of 7,100 shares. On the same date, the Company also made grants of restricted stock awards to employees who are not executive officers.

The foregoing descriptions do not purport to be complete and are qualified in their entirety by reference to the Performance Option Agreement, which is filed with this Form 8-K as Exhibit 10.1 and incorporated into this Item 8.01 by reference.

Item 9.01. Financial Statements and Exhibits

Exhibit 10.1 Form of Performance Option Agreement

Exhibit 99.1 Press Release dated November 18, 2015

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.

		GEOSPACE TECHNOLOGIES CORPORATION
Date: November 20, 2015	By:	/s/ Thomas T. McEntire
		Thomas T. McEntire
		Vice President, Chief Financial Officer and Secretary

EX-10.1

Exhibit 10.1

EMPLOYEE NONQUALIFIED STOCK OPTION AWARD AGREEMENT

Grantee:
Grant Date:
Total Number of Shares Subject to Option:
Exercise Price per Share:	$    .
Expiration Date:

AWARD OF NONQUALIFIED STOCK OPTION

Geospace Technologies Corporation (the “Company”), pursuant to the Geospace Technologies Corporation 2014 Long-Term Incentive Plan (the “Plan”), hereby awards to you, the above-named Grantee, effective as of the Grant Date set forth above, a nonqualified stock option (the “Option”) to purchase                 shares (the “Shares”) of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”) for the exercise price set forth above for each Share subject to the Option, subject to adjustment as provided in the Plan. The Option is exercisable in installments upon the satisfaction of both (1) the performance based vesting conditions set forth in the performance based vesting conditions schedule below (the “Performance Based Vesting Conditions”) and (2) the service based vesting conditions set forth in the service based vesting conditions schedule below (the “Service Based Vesting Conditions”) (provided that you do not incur a Termination of Employment prior to the applicable anniversary of the Grant Date) with the exercise price payable at the time of exercise. To the extent not exercised, installments shall be cumulative so that any portion of the Option that is exercisable shall remain exercisable until the earlier of the Expiration Date or the close of the period of exercisability upon your Termination of Employment specified in the attached Terms and Conditions of Employee Nonqualified Stock Option Award Agreements (the “Terms and Conditions”).

Performance Based Vesting Conditions

Performance Target	Percentage of Total Number of Shares Subject to the Option For Which a Performance Condition Has Been Satisfied (Inclusive of the Percentage of Total Number of Shares Subject to the Option for Which a Performance Condition Was Previously Satisfied)
Below Tier I Performance Target	0%
Tier I Level Performance Target	33%
Tier II Level Performance Target	67%
Tier III Level Performance Target	100%

For purposes of this Award Agreement:

“Applicable Closing Stock Price” means the average closing price of one share of Common Stock for any twenty (20) consecutive trading days during the Performance Period.

“Initial Stock Price” means the average closing price of one share of Common Stock for the twenty (20) consecutive trading days immediately preceding the first day of the Performance Period, $            .

“Performance Period” means the five-year period commencing on the Grant Date and ending on the fifth anniversary of the Grant Date.

“Tier I Performance Target” means the achievement of a TSR of [X]% or more.

“Tier II Performance Target” means the achievement of a TSR of [Y]% or more.

“Tier III Performance Target” means the achievement of a TSR of [Z]% or more.

“Total Shareholder Return” or “TSR” means the total percentage return per share of Common Stock during the Performance Period based on the Initial Stock Price and the Applicable Closing Stock Price, and assuming contemporaneous reinvestment in the Common Stock of all dividends and other distributions at the closing price of one share of Common Stock on the date such dividend or other distribution was paid.

Service Based Vesting Conditions

Anniversary of Grant Date	Percentage of Total Number of Shares Subject to the Option For Which a Service Condition Has Been Satisfied (Inclusive of the Percentage of Total Number of Shares for Which a Service Condition Was Previously Satisfied)
Before First Anniversary	0%
First Anniversary	33%
Second Anniversary	67%
Third Anniversary	100%

Illustrative Examples

If a Tier II Performance Target is achieved before the first anniversary of the Grant Date then (1) on the first anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to 33% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan) and (2) on the second anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to an additional 34% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan). Assuming that no further performance conditions are satisfied during the Performance Period, the remaining shares of Common Stock subject to the Option would be forfeited.

If a Tier I Performance Target is achieved before the first anniversary of the Grant Date and a Tier III Performance Target is achieved before the second anniversary of the Grant Date, then (1) on the first anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to 33% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan) and (2) on the second anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to the remaining 67% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan). Assuming that no further performance conditions are satisfied during the Performance Period, the remaining shares of Common Stock subject to the Option would be forfeited.

If a Tier I Performance Target is not achieved during the five-year Performance Period, the Option will forfeited and will never be exercisable even if the service based vesting condition has been satisfied in full.

General

The Option will expire and may not be exercised after the Expiration Date.

If a Change of Control of the Company occurs or you incur a Termination of Employment, your rights under the Option will be determined as provided in the Terms and Conditions.

Upon your exercise of the Option the Company shall cause to be issued to you the Shares for which the Option is exercised, and such Shares shall be transferable by you (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable federal or state securities law).

The Shares that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration Statement on Form S-8. You may obtain a copy of the Plan Prospectus by requesting it from the Company.

Capitalized terms that are not defined herein shall have the meaning ascribed to such terms in the Plan or the Terms and Conditions.

In accepting the award of the Option set forth in this Agreement you accept and agree to be bound by all the terms and conditions of the Plan, this Agreement and the Terms and Conditions.

GEOSPACE TECHNOLOGIES CORPORATION

ACCEPTED

Employee

GEOSPACE TECHNOLOGIES CORPORATION

TERMS AND CONDITIONS

OF

EMPLOYEE NONQUALIFIED STOCK OPTION AWARD AGREEMENTS

These Terms and Conditions are applicable to an award of a nonqualified stock option (the “Option”) granted pursuant to the Geospace Technologies Corporation 2014 Long-Term Incentive Plan (the “Plan”) that is not intended to be an incentive stock option that satisfies the requirements of section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). These Terms and Conditions are incorporated as part of the Nonqualified Stock Option Award Agreement setting forth the terms of the Option (the “Agreement”).

1. TERMINATION OF EMPLOYMENT. The following provisions will apply in the event you incur a Termination of Employment before the fifth anniversary of the Grant Date (the “Fifth Anniversary Date”) specified in the Agreement:

1.1 Termination of Employment Generally. If you incur a Termination of Employment on or before the Fifth Anniversary Date for any reason other than one of the reasons described in Sections 1.2 and 1.3 below, then on the date you incur a Termination of Employment, the Option will be forfeited as to the number of Shares then subject to the Service Based Vesting Conditions and the Performance Based Vesting Conditions that have not been satisfied. For the avoidance of doubt, if you incur a Termination of Employment for any reason, the Option will not continue to vest after your Termination of Employment. The Committee shall determine, in its sole discretion, whether you have incurred a Termination of Employment.

1.2 Disability. Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you incur a Termination of Employment due to your Disability before the Fifth Anniversary Date, all remaining Service Based Vesting Conditions shall immediately be fully satisfied on the date of your Termination of Employment due to your Disability and the Option will be fully exercisable only with respect to the number of Shares then subject to the Option for which the Performance Based Vesting Conditions have been satisfied as of the date of your Termination of Employment. The Option will be forfeited as to the number of Shares then subject to the Performance Based Vesting Conditions that have not been satisfied as of the date of your Termination of Employment due to your Disability.

1.3 Death. Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you die before the Fifth Anniversary Date and before you otherwise incur a Termination of Employment, all remaining Service Based Vesting Conditions shall immediately be fully satisfied on the date of your death and the Option will be fully exercisable only with respect to the number of Shares then subject to the Option for which the Performance Based Vesting Conditions have been satisfied as of the date of your death. The Option will be forfeited as to the number of Shares then subject to the Performance Based Vesting Conditions that have not been satisfied as of the date of your death.

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2. PERIOD OF EXERCISABILITY FOLLOWING TERMINATION OF EMPLOYMENT. The Option, to the extent vested and exercisable, will terminate on the earlier of (1) the Expiration Date of the Option or (2) one day less than three months after the date you incur a Termination of Employment for any reason other than your death or Disability. During this period, you may exercise the Option in respect of the number of shares that were vested on the date of your Termination of Employment. If you incur a Termination of Employment due to your death or Disability before the Expiration Date, the Option will terminate on the earlier of (1) the Expiration Date of the option or (2) the first anniversary of the date on which you incur a Termination of Employment. During this period you or your executors, administrators or any person to whom the Option may be transferred by will or by the laws of descent and distribution, as the case may be, may exercise the Option.

3. CHANGE OF CONTROL. Notwithstanding any other provision of the Agreement or these Terms and Conditions relating to vesting, if a Change of Control occurs before the the earlier to occur of (1) the Fifth Anniversary Date or (2) your Termination of Employment prior to the date of a Change of Control, then the Option will be fully exercisable and shall remain exercisable until the earlier of the Expiration Date or the close of the period of exercisability upon your Termination of Employment specified in Section 2 above.

5. EXERCISE. When the Option is exercisable, you may exercise the Option by delivering this original Agreement and an exercise notice to the Company in a form acceptable to the Committee that specifies the number of Shares with respect to which the Option is being exercised and contains such other representations and agreements as may be required by the Committee. The exercise notice must be accompanied by cash payment of the exercise price for the exercised shares or other form of payment in accordance with Section 6 below. You must also make provision to satisfy applicable tax withholding obligations (if any).

6. METHOD OF PAYMENT. When you exercise the Option, you may pay the exercise price by any combination of the following: (a) cash, certified check, bank draft or postal or express money order, (b) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Committee or an executive officer of the Company), or (c) any other form of payment acceptable to the Committee in its sole discretion.

7. TAXES AND TAX WITHHOLDING. You should consult with your tax advisor concerning the tax consequences of exercising the Option. To the extent that the receipt of the Option or the Agreement, the vesting of the Option or the exercise of the Option results in income to you for federal, state or local income, or other tax purposes with respect to which the Company or an Affiliate has a withholding obligation, You must deliver to the Company at the time of such exercise such amount of money as the Company or an Affiliate may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is authorized to withhold from the Shares subject to the Option or from any cash or stock remuneration then or thereafter payable to you any tax required to be withheld by reason of such taxable income, including (without limitation) shares subject to the Option sufficient to satisfy the withholding obligation.

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8. NONTRANSFERABILITY. The Option and the Agreement are not transferable or assignable by you other than by will or the laws of descent and distribution, and the Option shall be exercisable during your lifetime only by you.

9. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Option shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.

10. NO RIGHTS AS A STOCKHOLDER. You will not have any rights as a stockholder of the Company with respect to any Shares covered by the Option until the date of the issuance of the Shares following exercise of the Option pursuant to the Agreement and the Terms and Conditions and payment for the Shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

11. SECURITIES ACT LEGEND. You consent to the placing on any certificate for the Shares of an appropriate legend restricting resale or other transfer of the Shares except in accordance with the Securities Act of 1933 and all applicable rules thereunder.

12. LIMIT OF LIABILITY. Under no circumstances will the Company or any Affiliate be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.

13. DATA PRIVACY. The Company’s Treasury Department in Houston, Texas (U.S.A.) administers and maintains the data regarding the Plan, the grantees and the nonqualified stock options granted for all employees, Employees and directors in the Company and its Affiliates worldwide.

The data administered and maintained by the Company includes information that may be considered personal data, including the name of the awardee, the award granted and the number of shares of stock subject to any award (“Personal Data”). From time to time the Company may transfer certain of your Personal Data to Affiliates as necessary for the purpose of implementation, administration and management of your participation in the Plan (the “Purposes”), and the Company and its Affiliates may each further transfer your Personal Data to any third parties assisting the Company in the implementation, administration and management of the Plan (collectively, “Data Recipients”). The countries to which your Personal Data may be transferred may have data protection standards that are different than those in your home country and that offer a level of data protection that is less than that in your home country.

In accepting the award of the Option, you hereby expressly acknowledge that you understand that from time to time the Company and its Affiliates may transfer your Personal Data to Data Recipients for the Purposes. You further acknowledge that you

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understand that the countries to which your Personal Data may be transferred may have data protection standards that are different than those in your home country and that offer a level of data protection that is less than that in your home country.

Further, in accepting the award of the Option, you hereby expressly affirm that you do not object, and you hereby expressly consent, to the transfer of your Personal Data by the Company and its Affiliates to Data Recipients for the Purposes from time to time.

14. FORFEITURE AND RECOUPMENT OF PROCEEDS. The provisions of this Section 14 are intended to protect the Company’s goodwill, which you acknowledge and agree is a unique and valuable asset of the Company.

14.1. Forfeiture Due to Engagement in Prohibited Activities. Notwithstanding any other provision of these Terms and Conditions or the Agreement, if you engage in any of the behavior(s) prohibited in Section 15.1 at any time after the Grant Date, or any of Section 15.2, Section 15.3 or Section 15.4 during the applicable time-period(s) specified in those Sections, then, to the extent determined by the Committee in its sole discretion, all or a portion of your rights under the Option, still outstanding at that time, shall immediately terminate and become null and void.

14.2 Forfeiture and Recoupment of Proceeds Due to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, and you are then a current or former executive officer of the Company you shall forfeit and must repay to the Company any compensation awarded under this Agreement to the extent specified in any of the Company’s compensation recoupment policies established or amended (now or in the future) in compliance with the rules and standards of the Securities and Exchange Commission Committee under or in connection with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

15. PROHIBITED ACTIVITIES.

15.1 Prohibited Disclosure of Confidential Information. You agree that, in the discretion of the Committee, the Option may be forfeited in whole or in part if you make any unauthorized disclosure of any Confidential Information of the Company or any of its Affiliates, or make any use of such Confidential Information, except in the carrying out of your responsibilities for the Company or any of its Affiliates, and such unauthorized disclosure or use of Confidential Information is materially and demonstrably injurious to the Company or any of its Affiliates.

For purposes of these Terms and Conditions, “Confidential Information” means and includes the Company’s or any of its Affiliate’s confidential and/or proprietary information and/or trade secrets that have been developed or used and/or will be developed and that cannot be obtained readily by third parties from outside sources. Confidential Information includes, by way of example and without limitation, the following: information and strategies discussed in Plan Meetings, human resources

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information such as salary and budget information, performance ratings and headcount numbers, information about underperforming districts or contracts, and cost structures as well as, information regarding customers, employees, vendors, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes; procurement plans and procedures, and pricing techniques; the names of and other information concerning customers, investors, and business affiliates (such as contact name, service provided, pricing for that customer, amount of services used, credit and financial data, and/or other information relating to the Company’s or any of its Affiliate’s relationship with that customer); pricing strategies and price curves; plans and strategies for divestitures, mergers, expansion or acquisitions; budgets; customer lists; research and development projects and results; financial and sales data; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; service strategies, prospective customers’ names and marks; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company or any of its Affiliates; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; salaries of personnel; payment amounts or rates paid to Employees or other service providers; and other such confidential or proprietary information.

15.2 Prohibition Against Solicitation of Customers. Ancillary to the grant of the Option, to protect the Company’s goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be forfeited in whole or in part if within eighteen (18) months following the date you incur a Termination of Employment for any reason, you call on, service, solicit, or accept competing business from customers of the Company or any of its Affiliates with whom you, within the previous eighteen (18) months, (i) had or made contact, or (ii) had access to information and files regarding, and such action is materially and demonstrably injurious to the Company or any of its Affiliates.

15.3 Prohibition Against Solicitation of Employees. Ancillary to the grant of the Option, to protect the Company’s goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be forfeited in whole or in part if within twenty-four (24) months following the date you incur a Termination of Employment you:

(i) either directly or indirectly, call on, solicit, or induce any other employee or officer of the Company or any of its Affiliates to terminate his or her employment with the Company or any of its Affiliates, or

(ii) assist any other person or entity in such a solicitation.

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15.4 Other Prohibited Activities. Ancillary to the grant of the Option, to protect the Company’s goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be forfeited in whole or in part if during your affiliation with the Company you engage in fraud, embezzlement or other felony that is detrimental to the Company or any of its Affiliates.

15.5 Determinations. All determinations under this Section 15, including whether you have engaged in any of the activities described in any of Sections 15.1, 15.2, 15.3 or 15.4 shall be made by the Committee in its sole discretion.

16. ACKNOWLEDGMENTS AND AGREEMENTS BY YOU. In accepting the award of the Option you acknowledge and agree as follows:

(i) you have helped to develop the Company’s goodwill, including the relationships the Company has developed with its customers and employees and their identities, and are capable of diverting that goodwill;

(ii) the consideration for the non-solicitation and confidentiality agreements contained in Sections 15.1 through 15.3, the grant of the Option and the transfer of shares of Common Stock pursuant to the Option, are reasonably related to the Company’s interest in protecting its goodwill;

(iii) you have no right to be granted the Option but rather, the grant of the Option is in the sole discretion of the Committee;

(iv) the Confidential Information constitutes a valuable, special, and unique asset used by the Company and its divisions in their business to obtain a competitive advantage over their competitors who do not have access to such Confidential Information;

(v) protection of the Confidential Information against unauthorized disclosure and use is of critical importance to the Company and its divisions in maintaining their competitive position;

(vi) the restrictions of Section 15.2 are limited by geography to the specific places, addresses, or locations where a customer is present and available for soliciting or servicing; and

(vii) you shall bear sole responsibility for the amount of any taxes paid by you with respect to your exercise of the Option, notwithstanding any subsequent recoupment under Section 14.2 of the proceeds of such Option exercise by the Company.

17. OTHER AGREEMENTS. Nothing in these Terms and Conditions is intended to reduce the Company’s protections or your obligations under (1) any other agreement between you and the Company or any of its Affiliates, (2) the common law, or (3) any applicable state or federal statute.

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18. GOVERNING LAW AND VENUE. The Plan, these Terms and Conditions and the award of the stock option set forth in the Agreement shall be governed by the laws of the State of Texas, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan, these Terms and Conditions and the award of the Option to the substantive law of another jurisdiction. In accepting the award of the Option you are deemed to agree to submit to the exclusive jurisdiction and venue of the federal or state courts of Harris County, Houston, Texas, to resolve any and all issues that may arise out of or relate to the Plan, these Terms and Conditions and the award of the Option.

19. SEVERABILITY AND BLUE PENCILING. If any single Section or clause of these Terms and Conditions should be found unenforceable, it shall be severed and the remaining Sections and clauses of these Terms and Conditions shall be enforced in accordance with the intent of these Terms and Conditions. If any particular provision of these Terms and Conditions shall be adjudicated to be invalid or unenforceable, the Company and you specifically authorize the court making such determination to edit the invalid or unenforceable provision to allow these Terms and Conditions, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy.

20. MISCELLANEOUS. The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any. In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control. The terms “you” and “your” refer to the Participant named in the Agreement. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan or the Agreement.

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EX-99.1

Exhibit 99.1

NEWS RELEASE

7007 Pinemont Drive

Houston, TX 77040 USA

Contact: Walter R. Wheeler

President and CEO

TEL: 713.986.4444

FAX: 713.986.4445

FOR IMMEDIATE RELEASE

GEOSPACE TECHNOLOGIES REPORTS FISCAL YEAR 2015 RESULTS

Houston, Texas – November 18, 2015 – Geospace Technologies Corporation (NASDAQ Global: GEOS) today announced a net loss of $32.6 million, or $2.51 per diluted share, on revenue of $84.9 million for its fiscal year ended September 30, 2015. This compares with net income of $36.9 million, or $2.81 per diluted share, on revenue of $236.9 million for the prior year.

For the fourth quarter ended September 30, 2015, the company recorded revenue of $16.0 million and a net loss of $13.5 million, or $1.03 per diluted share. For the comparable period last year, the company recorded revenue of $26.3 million and a net loss of $1.8 million, or $0.14 per diluted share.

Walter R. (“Rick”) Wheeler, Geospace Technologies’ President and CEO said, “Our 2015 fiscal year has represented perhaps the most challenging year in our company’s history. As market conditions continually worsened throughout the year, our fourth quarter experienced accelerated weakness in demand for our seismic products. Compared to fiscal year 2014, fourth quarter revenue fell by 39%, and our full fiscal year revenue declined 64% from last year. Net losses sustained in all four quarters were largely driven by our high fixed manufacturing overhead costs which were left unabsorbed by lower factory activity, along with depreciation expenses on our under-utilized GSX rental equipment. Contributing to the fiscal year loss was a $1.8 million write-off of goodwill in our fourth quarter, which was determined to be impaired in light of current market conditions in our seismic business segment. Also contributing to the loss was a $1.3 million increase in our bad debt expense. Excluding these charges, operating expenses for fiscal year 2015 were reduced by 11% from fiscal year 2014 levels.”

“Traditional seismic exploration products generated revenue of $6.5 million in the fourth quarter, down 26% from the same period a year ago. For the full fiscal year, revenue totaled $30.1 million, a decrease of 42% compared to fiscal year 2014. A large majority of these products constitute consumable items that become used up and worn out as a function of our customer’s seismic operations. As such, the comparative revenue reductions in these periods are a testament to the slow seismic exploration activity currently taking place in the wake of lower oil prices and the subsequent reduced exploration spending by oil companies. This is further exacerbated by the fact that our customers can draw from their existing stocks of unutilized equipment which reduces their need for new equipment.”

“Demand for our wireless seismic equipment has also been impacted by these same market conditions. Wireless product revenue in our fourth quarter was $1.3 million compared to $8.3 million in last year’s fourth quarter. For fiscal year 2015, wireless product revenue totaled $25.1 million, a 68% reduction compared to revenue of $78.6 million last year. Fiscal year 2015 sales of our GSX wireless land system totaled just under 7,000 channels, most of which were sold from our rental fleet. However, as the year unfolded, we saw continued demand for rental of our OBX ocean bottom nodal marine systems. As previously announced, we recently executed an agreement to rent a system comprised of 5,000 OBX stations, which is scheduled for delivery in our second fiscal quarter ending March 31, 2016. This is a very positive note in an otherwise retracting seismic exploration market. The technical merits of our OBX system have seen increasing recognition and acceptance worldwide, and its operational benefits are being continually proven.”

“Revenue from our reservoir seismic products totaled $0.9 million in the fourth quarter. This compares to revenue of $3.6 million in the fourth quarter of the previous year. For the fiscal year 2015, our reservoir seismic products generated revenue of only $5.4 million compared with $84.3 million last year. This represents a year-over-year decline of 94% and is largely the result of having no contracts in fiscal year 2015 for permanent reservoir monitoring (PRM) systems. In fiscal year 2014, PRM contracts with Statoil, BP and Makamin Petroleum Services contributed revenue of $71.5 million. While discussions and real opportunities exist for PRM system contracts in fiscal year 2016, we are cautious in today’s market that they will materialize without delays or postponements. However, because PRM systems facilitate increased recovery and enhanced production which maximizes the value of existing assets and infrastructure, we believe they represent sensible investments even in today’s market of lower oil prices.”

“Although our seismic business segment struggled throughout fiscal year 2015, our non-seismic businesses posted fourth quarter revenue of $7.2 million compared with $5.5 million for the same period last year, an increase of 31%. For the full fiscal year, non-seismic revenue grew to $23.8 million in 2015, up from $21.4 million in 2014 yielding a year-over-year revenue increase of 11%. For the first time, our industrial products now represent a majority of our product revenue in this segment and we’re very pleased to see these products gain acceptance and penetration in their respective markets.”

“As we look back over fiscal year 2015, we saw crude oil prices continue to fall to six-year lows. This price drop had a significant impact on the seismic exploration industry as oil companies have minimized or eliminated spending on exploration projects. We believe that this reduced level of spending on seismic exploration will likely continue through 2016, and we do not anticipate any improvement in demand for our seismic exploration products in the foreseeable future. However, we also believe that low crude oil prices and, more particularly, continued curtailment of seismic exploration activities are not sustainable for an indefinite period of time. Furthermore, we believe that seismic technologies will continue to be an important tool used by the oil and gas industry to find and exploit oil and gas reservoirs long into the future. In the meantime, we intend to continue our focus on conservative financial management and minimal capital expenditures while continuing the research and development that will both maintain and extend our leadership position in the science and technology required for the seismic industry. We believe this strategy combined with our strong balance sheet provides us the means to weather the current market conditions.”

In a separate matter, the company is pleased to announce that Mr. E. R. (“Bud”) Giesinger has joined its board of directors as an independent director. Mr. Giesinger recently retired from KPMG LLP where he served a distinguished 35-year career, and most recently held the position as the firm’s Houston office Managing Partner. The company is also pleased to announce that Walter R. (“Rick”) Wheeler, the company’s President and Chief Executive Officer, has joined the board of directors as a non-independent director.

Conference Call Information

Geospace Technologies will host a conference call to review its review its fiscal year 2015 full year financial results on November 19, 2015, at 10:00 a.m. Eastern Time (9 a.m. Central). Participants can access the call at (877) 888-4294 (US) or (785) 424-1877 (International). Please reference the conference ID: GEOSQ415 prior to the start of the conference call. A replay will be available for approximately 60 days and may be accessed through the Investor tab of our website at www.geospace.com.

About Geospace Technologies

Geospace Technologies Corporation designs and manufactures instruments and equipment used by the oil and gas industry to acquire seismic data in order to locate, characterize and monitor hydrocarbon producing reservoirs. The company also designs and manufactures non-seismic products, including industrial products, offshore cables, thermal printing equipment and film.

Forward Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included herein including statements regarding potential future products and markets, our potential future revenue, future financial position, business strategy, future expectations and estimates and other plans and objectives for future operations, are forward-looking statements. We believe our forward-looking statements are reasonable. However, they are based on certain assumptions about our industry and our business that may in the future prove to be inaccurate. Important factors that could cause actual results to differ materially from our expectations include the level of seismic exploration worldwide, which is influenced primarily by prevailing prices for oil and gas, the extent to which our new products are accepted in the market, the availability of competitive products that may be more technologically advanced or otherwise preferable to our products, tensions in the Middle East and other factors disclosed under the heading “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission. Further, all written and verbal forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such factors. We assume no obligation to revise or update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of new information, future developments or otherwise.

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	Three Months Ended September 30,						Year Ended September 30,
	2015			2014			2015			2014
	(unaudited)			(unaudited)
Revenue:
Products	$	14,928		$	19,414		$	73,691		$	209,581
Rental equipment		1,080			6,871			11,176			27,331
Total revenue		16,008			26,285			84,867			236,912
Cost of revenue:
Products		20,750			14,956			79,998			125,497
Rental equipment		4,547			5,240			16,069			14,956
Total cost of revenue		25,297			20,196			96,067			140,453
Gross profit (loss)		(9,289	)		6,089			(11,200	)		96,459
Operating expenses:
Selling, general and administrative		5,380			5,799			22,671			25,291
Research and development		4,138			3,397			14,694			16,536
Goodwill impairment		1,843			—			1,843			—
Bad debt expense		1,017			175			2,147			833
Total operating expenses		12,378			9,371			41,355			42,660
Income (loss) from operations		(21,667	)		(3,282	)		(52,555	)		53,799
Other income (expense):
Interest expense		26			(93	)		(229	)		(471	)
Interest income		115			55			427			123
Foreign exchange gains		1,001			50			2,622			182
Other, net		38			(2	)		(99	)		(90	)
Total other income (expense), net		1,180			10			2,721			(256	)
Income (loss) before income taxes		(20,487	)		(3,272	)		(49,834	)		53,543
Income tax expense (benefit)		(7,037	)		(1,439	)		(17,193	)		16,632
Net income (loss)	$	(13,450	)	$	(1,833	)	$	(32,641	)	$	36,911
Basic earnings (loss) per share	$	(1.03	)	$	(0.14	)	$	(2.51	)	$	2.82
Diluted earnings (loss) per share	$	(1.03	)	$	(0.14	)	$	(2.51	)	$	2.81
Weighted average shares outstanding - Basic		13,004,574			12,954,373			12,996,958			12,950,958
Weighted average shares outstanding - Diluted		13,004,574			12,954,373			12,996,958			12,997,009

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 30, 2015			September 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	22,314		$	33,357
Short-term investments		18,112			19,861
Trade accounts receivable, net of allowance of $2,516 and $1,125		12,693			24,602
Current portion of notes receivable		2,004			3,786
Income tax receivable		17,369			2,570
Inventories, net		124,800			145,890
Deferred income tax assets		6,422			7,244
Prepaid expenses and other current assets		1,295			6,698
Total current assets		205,009			244,008
Rental equipment, net		46,036			53,873
Property, plant and equipment, net		48,709			49,205
Goodwill		—			1,843
Non-current deferred income tax assets		1,586			75
Non-current notes receivable		1,516			28
Prepaid income taxes		4,095			5,848
Other assets		95			106
Total assets	$	307,046		$	354,986
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable trade	$	4,077		$	4,964
Accrued expenses and other current liabilities		9,679			14,590
Deferred revenue		165			3,752
Deferred income tax liabilities		10			23
Income tax payable		3			22
Total current liabilities		13,934			23,351
Non-current deferred income tax liabilities		3,488			2,377
Total liabilities		17,422			25,728
Commitments and contingencies
Stockholders’ equity:
Preferred stock, 1,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $.01 par value, 20,000,000 shares authorized, 13,147,916 and 13,147,416 shares issued and outstanding		131			131
Additional paid-in capital		74,160			70,704
Retained earnings		228,278			260,919
Accumulated other comprehensive loss		(12,945	)		(2,496	)
Total stockholders’ equity		289,624			329,258
Total liabilities and stockholders’ equity	$	307,046		$	354,986

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	(32,641	)	$	36,911
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred income tax expense (benefit)		(943	)		818
Depreciation and amortization		19,547			17,774
Goodwill impairment		1,843			—
Accretion of discounts on short-term-investments		225			49
Stock-based compensation expense		4,539			4,119
Bad debt expense		2,147			833
Inventory obsolescence expense		3,887			2,617
Gross profit from the sale of used rental equipment		(3,208	)		(9,031	)
Loss (gain) on disposal of property, plant and equipment		26			(64	)
Realized loss on short-term investments		7			—
Excess tax expense from stock-based compensation		(1,083	)		—
Effects of changes in operating assets and liabilities:
Trade accounts and notes receivable		7,088			25,605
Income tax receivable		(14,799	)		(2,639	)
Inventories		9,661			(10,452	)
Costs and estimated earnings in excess of billings		—			12,400
Prepaid expenses and other current assets		997			998
Prepaid income taxes		1,753			353
Accounts payable		(834	)		(11,756	)
Accrued expenses and other		(6,004	)		(3,435	)
Deferred revenue		(3,567	)		2,685
Income taxes payable		(10	)		(135	)
Net cash provided by (used in) operating activities		(11,369	)		67,650
Cash flows from investing activities:
Purchase of property, plant and equipment		(2,189	)		(6,792	)
Proceeds from the sale of property, plant and equipment		—			27
Investment in rental equipment		(3,973	)		(26,719	)
Proceeds from sale of used rental equipment		4,278			16,390
Purchases of short-term investments		(6,306	)		(21,610	)
Proceeds from the sale of short-term investments		7,902			2,000
Net cash used in investing activities		(288	)		(36,704	)
Cash flows from financing activities:
Net payments under line of credit		—			(931	)
Excess tax benefits from stock-based compensation		—			178
Proceeds from exercise of stock options and other		—			424
Net cash used in financing activities		—			(329	)
Effect of exchange rate changes on cash		614			14
Increase (decrease) in cash and cash equivalents		(11,043	)		30,631
Cash and cash equivalents, beginning of period		33,357			2,726
Cash and cash equivalents, end of period	$	22,314		$	33,357

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SUMMARY OF SEGMENT REVENUE AND OPERATING INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended September 30,				Year Ended September 30,
	2015		2014		2015		2014
Seismic segment revenue:
Traditional exploration products	$	6,470	$	8,729	$	30,083	$	52,001
Wireless exploration products		1,274		8,303		25,070		78,636
Reservoir products		909		3,607		5,412		84,309
		8,653		20,639		60,565		214,946
Non-Seismic segment revenue		7,210		5,504		23,758		21,420
Corporate revenue		145		142		554		546
Total Revenue	$	16,008	$	26,285	$	84,867	$	236,912

	Three Months Ended September 30,						Year Ended September 30,
	2015			2014			2015			2014
Operating income (loss):
Seismic segment	$	(19,350	)	$	(1,006	)	$	(42,732	)	$	65,159
Non-Seismic segment		700			919			3,031			2,733
Corporate		(3,017	)		(3,195	)		(12,854	)		(14,093	)
Total operating income (loss)	$	(21,667	)	$	(3,282	)	$	(52,555	)	$	53,799