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EXHIBIT 10.28
BONUS AGREEMENT
THIS BONUS AGREEMENT (this "Agreement"), is entered into as of
___________, 1997 (the "Effective Date"), by and between EAGLE GEOPHYSICAL,
INC., a Delaware corporation (the "Company"), and XXXX X. FRAME ("Frame").
WHEREAS, Frame is a director of the Company; and
WHEREAS, in addition to his duties as a director, the Company desires
for Frame to provide services to the Company relating to marketing of the
Company's services and expansion of the Company's business, and Frame desires
to provide such services pursuant to the terms hereof;
NOW, THEREFORE, for and in consideration of the mutual agreements herein, the
parties agree as follows:
1. Duties. Frame agrees to provide services to the Company, in
addition to his services as a director, relating to marketing the Company's
services and expansion of the Company's business for a term commencing on the
Effective Date, and expiring December 31, 1999 (the "Term"). Frame shall be
primarily responsible for expansion of the Company's domestic and international
business and in that connection will initiate, develop and propose to the
Company Board of Directors strategies for expansion of the Company's onshore
and offshore domestic and international businesses. During the Term, Frame
shall devote all reasonable efforts and 20% of his professional time and
services to the Company, subject to the direction of the Board of Directors of
the Company (the "Board"). The Company acknowledges that Frame is the
President and Chief Executive Officer of Seitel, Inc., and as such will devote
the balance of his professional time and services to Seitel, Inc.
2. Compensation. As compensation for the services provided by
Frame to the Company hereunder, the Company shall pay Frame an annual Revenue
Increase Bonus and an annual Profit Bonus as set forth in this Section 2. The
Revenue Increase Bonus and the Profit Bonus are hereinafter collectively
referred as the "Bonuses."
2.1 Revenue Increase Bonus.
2.1.1 Grant of Revenue Increase Bonus. Frame shall
receive a revenue increase bonus, if earned, with respect to the fiscal years
ending during the Term (the "Revenue Increase Bonus"), calculated in accordance
with this Section 2.1.
2.1.2 Calculation of Bonus. If the Company's gross
revenues for any year during the term exceed the Company's gross revenues for
the previous year, the Company shall pay Frame a Revenue Increase Bonus equal
to 1.0% of the difference between the gross revenues for such year and the
gross revenues for the previous year. For purposes of calculation of the
Revenue Increase Bonus only, gross revenues for a particular year will not
include revenues attributable to mergers or acquisitions in the year of such
merger or acquisition, unless such year is the final year of the Term. In
addition, gross revenues for the Company for the year ended December 31, 1996
shall be deemed to be $90,915,000.
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2.2 Profit Bonus.
2.2.1 Grant of Profit Bonus. Frame shall receive a
profit bonus, if earned, with respect to the fiscal years ending during the
Term (the "Profit Bonus"), calculated in accordance with this Section 2.2;
provided, however, that no Profit Bonus will be payable for any fiscal year if
the Net After-Tax Profits (as hereinafter defined) for such fiscal year are
less than or equal to $800,000.
2.2.2 Net After-Tax Profits. "Net After-Tax
Profits" means the amount of net profits of the Company calculated by the chief
financial officer of the Company applying generally accepted accounting
principles and such other accounting principles and assumptions as may be
reasonable, and subtracting therefrom all income tax liabilities of the
Company.
2.2.3 Calculation of Bonus. If the Company's Net
After-Tax Profits for any year during the term exceed $800,000, the Company
shall pay Frame a Profit Bonus equal to 4.0% of the difference between the Net
After-Tax Profits for such year and $800,000.
2.3 Proration of Bonuses. For purposes of determining
the Bonuses payable to Frame hereunder attributable to the Company's fiscal
year ending December 31, 1997 the gross revenues of the Company for the year
ending December 31, 1996 shall be reduced to an amount equal to $90,915,000
multiplied by a fraction the numerator of which is the number of days from the
Effective Date to and including December 31, 1997 and the denominator of which
is 365 (the "Proration Formula") and for purposes of calculating the Profit
Bonus, $800,000 shall be reduced to an amount equal to $800,000 multiplied by
the Proration Formula.
For purposes of calculating the Bonuses payable to Frame in 1998 and
thereafter the gross revenues of the Company for the year ended December 31,
1997 shall be annualized.
2.4 Payment of Bonuses. The chief financial officer of
the Company shall calculate the gross revenues, Net After-Tax Profits, and any
Bonuses payable to Frame in connection therewith, shall certify such
calculations and shall deliver such calculations to Frame and the Chairman of
the Company Compensation Committee (for his review and approval) as soon as
reasonably practicable after the end of each fiscal year during the Term, but
in any event within seventy-five (75) days following the end of such fiscal
year. Any Bonuses payable hereunder shall be paid by the Company to Frame
within fifteen (15) days of delivery of such calculations by the chief
financial officer and in any event within ninety (90) days following the end of
the applicable fiscal year.
2.4 Section 162(m) Compensation Deferral.
Notwithstanding anything herein to the contrary, if the total compensation
payable to Frame by the Company during any year would cause the Company to lose
the federal income tax deduction for any portion of such compensation under
Section 162(m) of the Internal Revenue Code if 1986, as amended (the "Code"):
(a) the amount of compensation payable by the Company to Frame during such year
shall be reduced to the maximum amount for which the Company may receive a
current deduction under Section 162(m) of the Code, and (b) the excess of such
compensation shall be deferred and paid by the Company to Frame (without
interest) at such time (whether during the Term or after the expiration of the
Term) as the Company may pay such deferred compensation
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to Frame and receive a corresponding federal income tax deduction under Section
162(m) of the Code.
3. Grant of Option. The Company agrees to grant Frame, pursuant
to the terms of the Company's Option Plan created in connection with the
initial public offering (the "IPO") of the Company's common stock, options to
acquire one hundred thousand (100,000) shares of Eagle's common stock, at an
exercise price equal to the IPO issue price, effective at the time of
completion of the IPO. Such stock options shall vest on the fifth anniversary
of the date of grant, subject to (i) performance by Frame of his duties under
this agreement and (ii) earlier vesting in cumulative installments of one-third
of the total shares subject thereto when the Company's gross revenues reach
$150,000,000, $175,000,000, and $200,000,000, respectively, if the Company's
Net After-Tax Profits are at least 4% of gross revenues for the fiscal year in
which such revenue target is attained. Such options will expire ten years from
the date of grant.
4. Confidentiality and Company Property.
4.1 Confidential Information.
4.1.1 Frame acknowledges that the Company has a
legitimate and continuing proprietary interest in the protection of its
confidential information and that it has invested substantial sums and will
continue to invest substantial sums to develop, maintain and protect
confidential information. The Company agrees to provide Frame access to
confidential information in conjunction with Frame's duties, including, without
limitation, information of a technical and business nature regarding the
Company's past, current or anticipated business that may encompass financial
information, financial figures, trade secrets, customer lists, details of
client or consultant contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans,
business acquisition plans, Company employee information, organizational
charts, new personnel acquisition plans, technical processes, designs and
design projects, inventions and research projects, ideas, discoveries,
inventions, improvements, trade secrets, design specifications, writings and
other works of authorship (collectively, "Intellectual Property"). In
exchange, as an independent covenant, Frame agrees not to make any unauthorized
use, publication, or disclosure, during or subsequent to the term of this
Agreement, of any Intellectual Property of a confidential or trade secret
nature, generated or acquired by him during the course of this Agreement,
except to the extent that the disclosure of Intellectual Property is necessary
to fulfill his responsibilities hereunder or as a director of the Company.
Frame understands that confidential matters and trade secrets include
information not generally known by or available to the public about or
belonging to the Company, its divisions, subsidiaries, and related affiliates,
or belonging to other companies to whom the Company, its divisions,
subsidiaries, and related affiliates may have an obligation to maintain
information in confidence, and that authorization for public disclosure may
only be obtained through the Company's written consent.
4.1.2 Frame further agrees not to disclose to the
Company, or induce any personnel of the Company to use, any confidential
information, trade secret, or confidential material belonging to others.
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4.1.3 Frame agrees that the covenants set forth in
Sections 4.1.1 and 4.1.2 are independent covenants and indefinite obligations
binding upon Frame both during and after the termination of Frame's
relationship with the Company.
4.2 Property of the Company. All memoranda, notes,
lists, records, engineering drawings, technical specifications and related
documents and other documents or papers (and all copies thereof) relating to
the Company, including such items stored in computer memories, microfiche or by
any other means, made or compiled by or on behalf of Frame after the date
hereof, or made available to Frame after the date hereof relating to the
Company, its affiliates or any entity which may hereafter become an affiliate
thereof, shall be the property of the Company, and shall be delivered to the
Company promptly upon the termination of this Agreement or at any other time
upon request; provided, however, that Frame's address books, diaries,
chronological correspondence files and rolodex files shall be deemed to be
property of Frame.
4.3 Rights and Remedies Upon Breach. If Frame breaches,
or threatens to commit a breach of, any of the provisions contained in Section
4.1 of this Agreement (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
4.3.1 Specific Performance. The right and remedy
to have the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened breach of
the Restrictive Covenants would cause irreparable injury to the Company and
that money damages would not provide an adequate remedy to the Company.
4.3.2 Accounting. The right and remedy to require
Frame to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by Frame as
the result of any action constituting a breach of the Restrictive Covenants.
5. Other Provisions.
5.1 Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:
(i) "affiliate" with respect to the Company means any
other person controlled by or under common control with the Company
but shall not include any stockholder or director of the Company, as
such.
(ii) "person" means any individual, corporation,
partnership, firm, joint Company, association, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or
other entity.
(iii) "subsidiary" means any corporation 50% or more
of the voting securities of which are owned directly or indirectly by
the Company.
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5.2 Notices. Any notice or other communication required
or permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, on the date of actual receipt thereof, as follows:
(i) if to the Company, to:
Eagle Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxx, 0xx Floor
Houston, Texas 77027
Attention: President
(ii) if to Frame, to:
Xxxx X. Frame
00 Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxx, 0xx Floor
Xxxxxxx, Xxxxx 00000
Any party may change its address for notice hereunder by notice to the other
party hereto.
5.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.
5.4 Waivers and Amendments. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof. Nor shall any waiver on the part of any
party of any such right, power or privilege hereunder, nor any single or
partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder.
5.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas (without giving
effect to the choice of law provisions thereof) where the employment of Frame
shall be deemed, in part, to be performed and enforcement of this Agreement or
any action taken or held with respect to this Agreement shall be taken in the
courts of appropriate jurisdiction in Houston, Texas.
5.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by Frame and may be assigned by the
Company only to a successor by merger or purchasers of substantially all of the
assets of the Company.
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5.7 Counterparts. This Agreement may be executed in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
5.8 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
5.9 Dispute Resolution. If any dispute arises out of or
relates to this Agreement, or the breach thereof, Frame and the Company agree
to promptly negotiate in good faith to resolve such dispute. If the dispute
cannot be settled by the parties through negotiation, Frame and the Company
agree to try in good faith to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association before
resorting to arbitration, litigation or any other dispute resolution procedure.
If the parties are unable to settle the dispute by mediation as provided in the
preceding sentence, any claim, controversy or dispute arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration before a panel of three arbitrators in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be conducted in Houston, Xxxxxx County, Texas, or such other
location to which the parties mutually agree. The decision of the
arbitrator(s) shall be final and binding and judgment upon the award rendered
may be entered in any court having jurisdiction thereof. The costs of
mediation and arbitration may be awarded to either party by the mediator or the
arbitrators and absent such award shall be borne equally by the parties.
5.10 Binding Agreement. This Agreement shall inure to the
benefit of and bit binding upon the Company and its respective successors and
assigns and Frame and his legal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EAGLE GEOPHYSICAL, INC.
By:
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Xxx X. Xxxxxxxxx, President
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XXXX X. FRAME
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