Free Notice (Other) - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-00413-JLK-BNB M.D. MARK, INC., Plaintiff, v. KERR-McGEE CORPORATION and ORYX ENERGY COMPANY, Defendants.

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DEPOSITION OF GLENN MORTON May 20, 2002

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Pursuant to Notice and the Colorado Rules of Civil Procedure, the deposition of GLENN MORTON was taken by the Plaintiffs at 1873 South Bellaire Street, Suite 1401, Denver, Colorado 80222, at 9:00 a.m., before Kimberley W. Gauthier, Professional Shorthand Reporter and Notary Public of the State of Colorado.

HAZLETT & BOWEN REPORTING
303.690.6633 1.800.929.3303 Fax: 303.690.6972 P.O. Box 460456, Aurora, Colorado 80046
Deposition of Glenn Morton, Page 5 line 20 through Page 7, line 4
20 21 22 Q: A: Okay. Can you tell me what subsidiaries Kerr-McGee, Inc. has that you're aware of? I am not aware of very many subsidiaries, to

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be honest with you -- that's a legal thing, and it doesn't come under my purview. Well, there's -- one that at one time, you

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were employed by Kerr-McGee Oil and Gas Company; is that correct? Yes. And what was your title at Kerr-McGee Oil and Gas Company? Manager of geophysics for the Gulf of Mexico. And was there a manager of geophysics for the continental United States, or something similar to that? I don't think that title was actually given. Was there anyone who was in charge of geophysics for the continental United States, other than -Yes. And who was that? That would have been Brian -- I've gone blank on his name. Is it Brian Lindsey? Let me look it up. Is it Brian Lindsey? That's it. That's what I about said, and then I just went blank on the name. It's Brian Lindsey. All right. Let me step back a little bit. I want to ask you some other questions. Okay. Tell me about your educational background. I've got a bachelors of science in physics,

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and did some graduate work in philosophy, but no degree. How long have you been employed by Kerr-McGee? Around 13 years.

Deposition of Glenn Morton, Page 13 line 23 through Page 16, line 2
23 24 25 .... 1 1 3 4 5 6 7 8 9 A: Q: A: Oh, that would have been sometime in I guess the Novemberish time frame of 1998. And what were you asked to do, or -I wasn't asked to do anything, per se. I told management that there would be some companies asking for transfer fees, and I was then told to compile a list. And that was for the Gulf of Mexico. And what did you -- well, let me step back then. You say for the Gulf of Mexico. So I take it there Q: All right. Tell me this: When was the first time you became involved in the issues of geophysics, as it relates to the merger between Oryx and Kerr-McGee?

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was another person, then, who was looking at other areas, or area data sets that Oryx had? If there was, I am not aware of them at that time. But you were referring to the Gulf of Mexico, and I know that from -- from documents I've looked at, that Oryx had seismic data in numerous other areas, including foreign seismic data; is that correct? Including what seismic data? Foreign. Australia? North Sea? Yes, sir. China? Yes, sir. Yes. Who was charged with the responsibility of looking at agreements for those other areas? Eventually, I was brought in to most of those

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areas. Not all. And who else was involved in the process of looking at the agreements? There was some people over here in the UK office who handled the UK. My charge consisted of everything foreign, except for the UK and the Gulf of Mexico, and eventually it was into the onshore. And who was charged with the onshore data? Who was in charge of looking at the onshore data? I was. All right. And who assisted you? Brian. Brian Lindsey? Brian Lindsey. Anyone else? We had lots of people that were, you know, compiling data. But you know, those were the -- Brian and I were the two people who really had the say in what went on, I guess. Let me ask this: Patricia Orsfall sent out numerous letters to people in the geophysical industry; are you aware of that? Yes. Yeah, I would hardly describe a vice-president as assisting me. I wasn't trying to say that, okay? She was

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senior to you; is that correct? Yes, sir.

Deposition of Glenn Morton, Page 28 line 25 through Page 31, line 10
25 .... Q: All right. I guess when the merger issue

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came up and brought it to the attention of management that some companies were going to ask for transfer fees, what did you do to report to management on that topic? I compiled all the contracts that we had, that I could get my hands on, read them. I prepared a spreadsheet that had the various companies, and behind was the relevant contractual clauses, so that we could quickly look at it. How were you able to compile all the license agreements? I called -- well, some copies -- I had no original licenses in my office. I had Xeroxes of some licenses. For those that I did not have, I would call Roger Foulke at the Welsh Road facility and ask him -F-o-l-k? F-o-u-l-k-e. And he's at the facility at where now? I have no idea where Roger is now. He retired. No. I'm sorry. Where was he? He was at the Welsh Road facility, where I earlier said that some of the contracts were kept. All right. And where else did you call? That was it. And what did you ask Roger Foulke to do?

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Provide me with a Xerox, or fax of the contract. And did he do that? Most of the time. You say "most of the time," what -- tell mewhat events took place where he didn't provide you with a contract. Didn't find it. Okay. Did you have in your possession a list of all the companies that had licensed exploration information to Oryx? Not a comprehensive list, no. Did anyone, to your knowledge? Well, I didn't have the UK. We did our best to get every contract in the United States and the other foreign places. All right. So I take it, then, you took ­ you got a copy of the contracts, and then you looked for relevant clauses; is that right? Yes, sir. And who told you what to look for? Once again, I'm not sure if I'm supposed to talk about when I talk to my counsel within my company. All right. So then did you talk to anyone other than the counsel for Oryx?

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No. Who was the counsel that you talked to for Oryx? That would be Carlos Salazar. And when did you to talk to Carlos Salazar? Lots of times. All right. So based upon your conversations with Carlos Salazar, you were looking for classes in license agreements, is that correct? Yes, sir.

Deposition of Glenn Morton, Page 31 line 18 through line 20
18 19 20 Q: (By Mr. Pelz) What was the plan relating to dealing with companies that had licensed exploration products to Oryx as a result of the merger?

Deposition of Glenn Morton, Page 34 line 19 through Page 36, line 9
19 20 21 22 23 24 25 .... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 deal with it. The next item on the letter, it says, "The second page is a chart showing the results of Carlos Salazar's examination of the contracts." And that's KM00672; do you have that? Yes, sir. And can you tell me, is this -- well, let me ask you this: Can you tell me what these little X's mean and the circles? Not anymore. They were just scribbling as I was trying to do the business. I have no idea what those things mean anymore. Do you know what -- there's a heading "definitely yes." Yes, sir. Oh that. Are you talking about those Xs? Yeah. What does that mean? Okay. That meant that we felt like we were definitely going to -- hang on a minute. Let me look back. Okay. The first -- the "definitely yes" meant we could definitely transfer the data. Without paying a fee? There was no fee required at merger, that's Q: (By Mr. Pelz) Okay. Let me ask you this: What was the plan at Oryx as to how to negotiate with these geophysical data owners to negotiate a transfer fee? The contracts sometimes outlined the transfer fee, in which we would negotiate with them. Sometimes the contract just said the license terminates. We negotiated with the people, and that's how we planned to

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right. And then there's another group that said no

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reference merger affiliates, or something: What does that refer to? That was no reference to merger per se in the contract, and it talked about affiliates. And then the last group says "definitely no"? Those were the contracts that had a clear statement that said contract terminates upon merger. So my question is, who made this list? I did.

Deposition of Glenn Morton, Page 45 line 13 through line 15
13 14 15 Q: All right. Now, so as I understand it, then the memo that you prepared here, this 671, that there was no memo prepared for the onshore data; is that correct?

Deposition of Glenn Morton, Page 50, line 11 through line 12
11 12 Q: Now, did you at any time before the merger look at the M.D. Mark agreements?

Deposition of Glenn Morton, Page 51, line 23 through Page 53, line 6
23 24 25 .... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 marked as Bates MD01-0133 and MD01-0134, and it's signed February 3rd, 1998, and it's -I don't have that, I don't believe. It's signed by somebody who is the geophysical -- manager of geophysical data services. And his first name begins with a J, and his last name begins with an F. Is that a Mr. Fuller, or something like that? There was a James Fuller who worked for our company. And was he manager of geophysical data services at one time? Yeah. Now, I don't have that document. I want that clear that I don't have that thing. Okay. You say it's James Fuller? Let's see, hand on a minute. This is -- no I don't have that document. There is a James Fuller. And does he still work for Kerr-McGee? No, sir. Q: I was asking you a question about the PGI license agreements. And there was agreements between Sun Exploration and Production -- and I'm looking at what's

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Do you know who he's employed by? No, sir. All right. The license agreement that I'm referring to has a clause it in that says -- and it's Article 4 -- it says any part who's eligible to receive the data or any part thereof pursuant to this Section 4, may not receive the same until one -- such parties as executed with

license -- sublicense agreeing to the restricted use of the data, and the seismic sections and the information derived therefrom, and to be bound by the other terms and conditions of this agreement. Two, licensee has notified PGI in writing of such sublicense and three, the group rate free [sic] for providing such copies has been paid to PGI.

Deposition of Glenn Morton, Page 54 line 24 through Page 55, line 15
24 25 .... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 of these documents I've just referred to; is that correct? Yes, sir. Are these documents that were sent to you by Mr. Hammond? Yes, sir. Okay. My question to you is, did you review the language in paragraph four of this license agreement prior to the merger between Oryx and Kerr-McGee? Yes, sir. And did you seek assistance from any other person in understanding the meaning of the language in this document? Excluding my attorney? Yes. No. Q: (By Mr. Pelz) All right. I am looking at MD01-0328 and MD01-329. And I take it that you have copies

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Deposition of Glenn Morton, Page 58, line 9 through Page 58, line 13
9 10 11 12 13 Q: (By Mr. Pelz) Now, did Oryx or Kerr-McGee pay money to Seitel Data Corporation as a result of the merger? I believe we did. I would have to review my notes.

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Deposition of Glenn Morton, Page 59, line 7 through Page 62, line 22
7 Q: All right. Now, I notice -- I'm looking a

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Seitel Data Corporation master seismic data license agreement, and I do not see, from my review of that contract, there's anything regarding mergers. Did you review the Seitel master seismic data licensing agreement? Yes, sir, I did. And did you also determine that there was no prohibition on the transfer of the seismic data by a merger? Let me look at that and see what I originally did. MR. HAMMOND: Well, he doesn't know what you're looking at. No, I don't know what you're looking at. So it's going to be real hard for me to answer your question. On the list, in December, that KM671, we had them down both ways, one handwritten, one not handwritten. So I don't recall what the issue was on that one. (By Mr. Pelz) Well, what I'm looking at is KM00603, KM00604.

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I probably don't have that document. To my knowledge, I have no master license agreements. All right. Did you have any conversations with anyone from Seitel concerning the transfer of the seismic data as part of the merger? Yes. Who did you talk to? Oh, golly. Bob Simons. And can you tell me what your conversations were, as you recall? I don't recall much about that one. It was just too long ago. And did Bob Simons ask that a transfer fee be paid? I can't remember the details of that conversation. I mean, I just can't. There would be records of whether we paid one or not. All right. Was there -- did any company that you sent, or that letters were sent out to, concerning the -- the geophysical, or rather the -- not the geophysical, but the exploration products being able to be kept by Kerr-McGee, did you anyone threaten to file lawsuits? I think one gentleman did. And who was that? I believe Bob Gray did.

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And did you send his data back? Yes, we did. And why did you send the data back? We had no interest in the areas in which his data were in, so why fight over something that you don't really want? Okay. Did you have somebody do an

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examination of the data to see whether it was information that Kerr-McGee may be interested in maintaining? Yes. And who did that. Brian. Brian Lindsey? Yeah. And what did Brian Lindsey do to conduct that evaluation? Not much. He told me that we're not working those areas. Okay. Now, did anyone perform an evaluation of the M.D. Mark data or the PGI data? Yes. And who was that? Brian. Did Brian report to you of his evaluation? Yes.

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And what did he determine? To the best of my recollection, he said that there was some data in the M.D. Mark that they wanted to have. What particular data did they want to have? He didn't tell me. It wouldn't have meant anything to me if he had mentioned the numbers. Okay. And did he prepare a written report? Not to the best of my knowledge. I don't believe so. What, to your knowledge, did Brian Lindsey do to determine whether the PGI data should be maintained by Kerr-McGee? Looked at where the group was working. And did anyone assist him in that endeavor? I have no knowledge of that. He was in another office. And when did you ask him to make that determination? Best I can tell you right now is spring of '99, or first part of '99. That's about all I can nail that one down.

Deposition of Glenn Morton, Page 63, line 7 through Page 65, line 15
7 8 9 10 11 12 13 14 15 Q: Now, I'm looking at some documents that I have here where there's language taken from. It's called Seismic Contracts Affected by Merger, and it's KM002401. Okay. Hang on a minute. MR. HAMMOND: He won't have that number. Glenn, you won't have that document by that number. Is that the spreadsheet? MR. HAMMOND: Well, what he's looking at are excerpts from license agreements.

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Oh, okay. Let me see if I can find that. Okay. I have the piece of paper that says Seismic Contracts Affected by Merger. It starts out Angstrom Precision Corp.? Yes. Okay. And I see where it goes -- several pages down, it refers to Seitel, section nine. I don't know. Let me see if I can find the rest of it. Oh, here it is.

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Do you see that? Okay. Several pages -- how many pages down? Well, it's just in alphabetical order there, and I'm not sure. MR. HAMMOND: He may not have the same order you have. (By Mr. Pelz) Mine is seven pages down. Okay. I have that page, I believe. MR. HAMMOND: What's the Kerr-McGee number? (By Mr. Pelz) I have KM002407, and can you tell me -I don't have any numbers. MR. HAMMOND: That's just for my benefit. (By Mr. Pelz) Okay. So you have documents with no numbers on them? Yes, sir. All right. The language says, "This license shall not be assigned in whole or in part by licensee, nor shall it be transferred to any party under any circumstances, unless specifically approved in writing by Seitel prior to such transfer." And my question to you is -MR. HAMMOND: Let's be sure he has the same document. (By Mr. Pelz) Is that the same document you

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have? That is correct. And based upon that language, what category should these license agreements be placed in? Which license agreements? The Seitel. Seitel's? Yeah. It's only one license agreement. Do you have -Obviously, from my list, that KM00671 ­ felt like this one should be -- should go on through, because our merger is not a transfer. It is the same physical entity that continues on. Indeed, I have the very same retirement program through this thing. So this was not a transfer.

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Deposition of Glenn Morton, Page 65, line 22 through Page 66, line 6
22 23 24 25 .... 1 2 3 4 5 6 conclusion. (By Mr. Pelz) You may answer the question. MR. HAMMOND: If you know. If I know? (By Mr. Pelz) Yes. I worked for Kerr-McGee Oil and Gas. Q: On March 1st, did you work for Kerr-McGee, Incorporated, or did you work for Kerr-McGee Oil and Gas Company? MR. HAMMOND: Objection, calls for a legal

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Deposition of Glenn Morton, Page 66, line 11 through line 14
11 12 13 14 Q ...One of the things I wanted to find out about is the letters that were sent out to those persons to get their -- the ones where consent wasn't required. Who drafted that particular letter?

Deposition of Glenn Morton, Page 83, line 9 through Page 83, line 19
9 10 11 12 13 14 15 16 17 18 19 Q: Maybe that's who it is. All right. Here's a letter from Dave Christian to Western Geophysical, and it says that Kerr-McGee has completed the inventory of applicable Oryx licenses submitted by Western, and is pleased to offer a payment of $9,400,000, which includes all sums due under the alliance agreement dated January 26, 1995, and any and all transfer fees that will be due as a result of the Kerr-McGee and Oryx merger. Did Western Geophysical accept that offer of $9,400,000? Yes, or some figure very close to that.

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