EXHIBIT 10.36
SEITEL, INC.
INCENTIVE COMPENSATION AGREEMENT
THIS CONTRACT AND AGREEMENT made and entered into this 11th day of March,
1993, by and between SEITEL, INC., a Delaware corporation, (referred to herein
as the "Company"), XXXXX X. XXXXXX, XXXX X. FRAME and XXXXXX X. XXXXXXX,
Trustees of the Supplemental Income Trust and each individual who executes the
Ratification Form attached hereto as Exhibit "A" (hereinafter referred to as
"Employee").
WHEREAS, the services of the Employees, their experience and dedication to
the Company, their reputation and contacts in the industry are invaluable to the
Company; and,
WHEREAS, the Company wishes to reward each Employee for his/her involvement
in the Company's projects and subsequent success that he/she has brought to the
Company;
WHEREAS, the Company has established the trust in which these benefits are
to be placed for the Employee;
NOW, THEREFORE, in further consideration for the Employee's continued
employment, and upon the terms and conditions stated below, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Unless the context of this Agreement otherwise requires,
the terms defined herein shall have the following meanings:
(a) The term "Beneficiary" shall mean the Employee and any successor
in interest to such Employee who acquires his/her interest by devise or
intestate succession.
(b) The term "Benefits" shall mean those amounts which are payable to
the Beneficiary as a result of this agreement.
(c) The term "Company" shall mean Seitel, Inc., a Delaware
corporation.
(d) The term "Contributions" shall mean the amounts paid by the
Company equal to (i) a percentage of the revenue so designated for the
contributions to the Trusts and (ii) those amounts due and payable directly
to Beneficiaries who are not or are no longer Employees of the Company.
(e) The term "Designated Percentage" means the percentage of a
particular Funding Pool assigned to a specific Employee by the Company.
(f) The term "Designated Project Line" means any Project Line
separately identified by the Company pursuant to the procedures set forth
in Paragraph 3.1.
(g) The term "Employee" shall mean any employee of the Company who has
executed the Ratification form attached hereto as Exhibit "A".
(h) The term "Funding Pool" shall have the meaning as provided in
Article IV hereof.
(i) The term "Net Billing" shall mean the amount of revenue received
for a Project Line by the Company net of the typical selling commission,
which is 6% at the time of the execution of this Agreement.
(j) The term "Partially Funded Project Line" means one in which all
Third Party Costs are not paid for or underwritten by parties other than
the Company and Company elects to pay the shortfall.
(k) The term "Project Line" shall mean each separate and identifiable
group of reports, data, software, charts, graphs and other forms of
information related to a line of seismic exploration, which is gathered by
the Company.
(1) The term "Third Party Costs" shall mean those costs incurred by
the Company for a Project Line. It is understood by the parties that even
after a Project Line starts to produce revenue, additional third party
costs may be added to a Project Line because of subsequent development.
Third Party Costs excludes any capitalized internal charges, capitalized
management fees or any other form of overhead allocation.
(m) The term "Trust" means the Supplemental Income Trust executed
effective the 30th day of December, 1990.
(n) The term "Trustees" means Xxxxx X. Xxxxxx, Xxxx X. Frame and
Xxxxxx X. Xxxxxxx, or the then acting trustees of the Trust.
(o) The term "Zero Cost Project Line" means a Project Line under which
all Third Party Costs are paid for or will be underwritten by parties other
than the Company.
ARTICLE II
EMPLOYER'S CONTRIBUTION
2.1 Contributions. The Company agrees to make Contributions under the
terms stated in this Agreement for the benefit of those Employees who have
executed a Ratification Agreement. If the Employee is currently employed by the
Company, such contribution shall be made to the Trust selected by Employee upon
the execution of the Ratification Agreement. If
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Beneficiary is not an Employee, or an Employee no longer employed by the
Company, for any reason, any amounts due and payable under this Agreement shall
be made directly to the Employee/Beneficiary.
2.2 Amount of Contributions. The Company shall fund for each calendar
quarter an amount for each Employee equal to such Employee's Designated
Percentage (as established on Exhibit B for such employees) times such
Employee's assigned Funding Pool. The Company retains the right to increase or
decrease such Designated Percentage for each Employee or switch an Employee from
one Funding Pool to another (any such change collectively called a
"Redesignation"); however the following limitations apply:
(a) Any new Redesignation applies only to new Project Lines dedicated
to this program. For any Project Line previously designated, the old
designation applies.
(b) The Company may only change the designation twice a year, once
between January 1 and January 31 applicable that January 1 and once between
July 1 and July 31 applicable for that July 1. The Company must provide
written notice to Trustees of any change in designation in January by March
1 and in July by September 1.
2.3 Funding of Contributions. The Contributions shall be funded as provided
in Article III.
ARTICLE III
MECHANICS FOR DETERMINING PROFITS
ELIGIBLE FOR CONTRIBUTION
3.1 Designation of Project Line. Upon the instigation or purchase of a new
Project Line by the Company, the Company shall notify the Trustees that a new
Project Line has been established in the Company records. At the time of the
execution of this Agreement, those Project Lines listed on Exhibit C have
already been designated by the Company. The head of the Geophysical Department
of the Company shall be responsible for designation of new project lines and
shall do so by written notice to the Trustees.
3.2 Eligible Project Lines. Once a Project Line has been designated as a
project under this agreement, then the Company must designate it as a Zero Cost
Project Line or a Partially Funded Project Line. All data listed on Exhibit C
represents Zero Cost Project Lines. New Project Lines purchased by the Company
shall be eligible for participation once sufficient revenue has been received by
the Company to make it a Zero Cost Project Line.
(a) If the project is a Zero Cost Project Line, then all net xxxxxxxx
are eligible for the Funding Pools.
(b) If the project is a Partially Funded Project Line, then the
Company must first receive sufficient revenues from third parties to make
such project a Zero Cost
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Project Line. Once such revenues have been received, the project then
becomes a Zero Cost Project Line and all future net xxxxxxxx are
eligible for the Funding Pools.
(c) The Chief Financial Officer of the Company shall
determine when a project line becomes a Zero Cost Project Line. Such
determination shall be made on a quarterly basis and may be audited by
the Trustees.
3.3 Allocation of Contributions. There will be three Funding Pools: Alpha,
Beta and Iota. Each Employee's Designated Percentage of a Funding Pool is
determined by the Company pursuant to Article II.
3.4 Determination of Funding Pool Size. The amount considered available in
each Funding Pool will be determined on the following sliding scale:
Net Billing Available Funding Percentage
In Excess Sales Pool Alpha Beta Iota
-------------------- -------------------------------------------
$ 0 - $ 6,000,000 2.5000% 3.0000% 3.5000%
$ 6,000,000 - $ 7,000,000 2.6667% 3.3333% 4.0000%
$ 7,000,000 - $ 8,000,000 2.7857% 3.5714% 4.3571%
$ 8,000,000 - $ 9,000,000 2.8750% 3.7500% 4.6250%
$ 9,000,000 - $ 10,000,000 2.9444% 3.8889% 4.8333%
> $ 10,000,000 3.0000% 4.0000% 5.0000%
(a) For example, for the first 0-$6,000,000 in Net Xxxxxxxx by
the Company from all designated Zero Cost Project Lines for the
calendar year
Funding Pool Alpha= 2-1/2% of the net revenues
Funding Pool Beta= 3% of the net revenues
Funding Pool Iota= 3-1/2% of the net revenues
(b) The Parties understand that the above calculation represents
the maximum potential of each Funding Pool, but only that amount equal
to the Designated Percentage of the Funding Pool will be contributed
to each Employee.
(c) The contribution amount shall be calculated quarterly (always
based on cumulative costs and cumulative revenues to date). For
example, if at the end of the second quarter, the increase in the
excess sales pool necessitates use of higher funding percentage, the
new percentages are applied to the six months excess sales pool
information and the adjustment to the first quarter contribution is
made at that time. Same procedure should be used at the end of nine
and twelve months, respectively. The calculation starts over again at
the beginning of the next fiscal year.
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ARTICLE IV
MISCELLANEOUS
4.1 LAWS OF TEXAS TO GOVERN. THIS AGREEMENT SHALL BE CONSTRUED AND
REGULATED BY THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT PREEMPTED BY
FEDERAL LAW.
4.2 Titles and Headings not to Control. The titles to Articles and
headings of Sections in this Agreement are placed herein for convenience of
reference only and in case of any conflict the text of this Agreement, rather
than such titles or headings, shall control.
4.3 Successors and Assigns. This Agreement may not be assigned by either
party without the prior written consent of the other, and any purported
assignment without such prior written consent shall be null and void. This
Agreement shall be binding upon the successors and permitted assigns of each
party hereto.
4.4 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under the present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be effected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. In lieu of such illegal, invalid or unenforceable
provisions, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid and unenforceable
provision as may be possible and be legal, valid and enforceable.
4.5 Notices. All notices, elections, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
considered as properly given or made when personally delivered or two days after
deposit in the United States mail, first class postage, prepaid addressed to the
Beneficiary at the address set forth opposite such Beneficiary's name on Exhibit
B hereto, to the Company at 00000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000 and the Trustees at the address specified on the signature page hereto.
Any party may change his address by giving notice to the other parties of the
new address.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year as provided
below, but effective as of the date first written above.
SEITEL, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: [Xxxxx X. Xxxxxx]
-------------------------------
Title: Chief Financial Officer
-------------------------------
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TRUSTEES:
/s/ Xxxxx X Xxxxxx
------------------------------
XXXXX X. XXXXXX
00000 Xxxxxxx Xxxxx Xxxxx
Xxxx, Xxxxx 00000
/s/ Xxxx A Frame
------------------------------
XXXX X. FRAME
0000 Xxx Xxxx
Xxxxxxx, Xxxxx 00000
/s/ Xxxxxx X Xxxxxxx
------------------------------
XXXXXX X. XXXXXXX
0 Xxxx Xxx Xxxxx
Xxxxxx, Xxxxx 00000
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THE STATE OF TEXAS Section
COUNTY OF XXXXXX Section
The foregoing instrument was acknowledged before me on this the 11th day of
MARCH, 1993, by XXXXX X. XXXXXX, CHIEF FINANCIAL OFFICER of SEITEL, INC., a
Texas corporation, on behalf of said corporation.
/s/ [ILLEGIBLE]
--------------------------------
Notary Public in and for
the State of Texas
THE STATE OF TEXAS Section
COUNTY OF XXXXXX Section
The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by XXXXX X. XXXXXX.
/s/ [ILLEGIBLE]
--------------------------------
Notary Public in and for
the State of Texas
THE STATE OF TEXAS Section
COUNTY OF XXXXXX Section
The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by XXXX X. FRAME.
/s/ [ILLEGIBLE]
--------------------------------
Notary Public in and for
the State of Texas
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THE STATE OF TEXAS Section
COUNTY OF XXXXXX Section
The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by XXXXXX X. XXXXXXX.
/s/ [ILLEGIBLE]
--------------------------------
Notary Public in and for
the State of Texas
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EXHIBIT A
RATIFICATION
By execution hereof, the undersigned Executive agrees to the terms
contained in the Incentive Compensation Agreement, effective December 30, 1990.
------------------------------
Designated Percentage:
-------------------------
Applicable Funding Pool:
-------------------------
EXHIBIT B
NAMES OF EMPLOYEES
Designated Percentage
---------------------
Funding Pool Iota
Xxxxxxx X. Xxxxxxxx 12.00%
Xxxxx X. Xxxx 12.00%
Xxxx X. Frame, Jr. 12.00%
Xxxxxx X. Xxxxxxx 12.00%
Funding Pool Beta
Xxxxx X. Xxxxx, Xx. 9.854168%
Xxxxx X. Xxxxxx 9.854168%
Funding Pool Alpha
Xxxxxxx X. Xxxxx (pre-1992 programs) 6.75%
Xxxxxx X. Xxxxx, Xx. 6.75%
Xxxxxx X. Xxxxx, Xx. 6.75%
Xxxxxx X. Xxxxxx (post-1991 programs) 6.75%
Xxxxxx X. May 5.30%
Xxx X. Xxxxxx, Xx. 5.30%
Xxxxx X. Xxxxxx 5.30%
EXHIBIT C
ZERO COST PROJECTS
(AS OF 1/1/93)
SEL
TERREBORNE II
SLM
TERREBORNE III
TRP
CEY
SWP
TTZ
SEL II
SLM II
SLM III
TERREBORNE IV
NUECES CO.
LTZ
SEL III
SEL -15l
NUECES II
NLA
SPC
SPC 20X
HCP II
NTR
SEP
SEP 105
SEP 265
CRP
NLP
XXX XX
XXXXX 000
XXX
XXX 227
MTZ 262-263
MTZ 266-269
VIP
GTC
CYP
MBA
ATC
BMF
TCF
SPC II
WMP
EBR
MOURA
THP
SEL V
IPH
STL
WAP
JOY
MDY
LOG
SUP
JOP
ACA
RAP
TOP
CANADIAN DATA
TELEDYNE
XXXXXXXX
ARKOMA
LAKE XXXXXX
XXX-SEISMIC
GRANT-TENSLIP
XXXXXXX 3D
BLACK BAVOU 3D
XXXXXXX XXXXXXX 3D
