EXHIBIT 10.23
SEITEL, INC.
EMPLOYMENT AGREEMENT AMENDMENT
THIS EMPLOYMENT AGREEMENT AMENDMENT ( this "Agreement") is between Seitel,
Inc. (the "Company"), a Delaware corporation with its principal place of
business in Houston, Texas, and Xxxxxx X. Xxxxxxx (the "Employee," and
collectively with the Company, the "Parties"), and is an amendment to that
certain Employment Agreement between the Company and the Employee dated
effective January 1, 1991 (the "Employment Agreement").
Recitals
WHEREAS, the Company and the Employee entered into the Employment Agreement
to govern the terms of the Employee's employment by the Company;
WHEREAS, the Employment Agreement was entered into prior to the enactment
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
which section limits the deductibility by corporations of certain compensation
expenses;
WHEREAS, the compensation payable to the Employee under the Employment
Agreement will become subject to the restrictions of Section 162(m) of the Code
beginning January 1, 1998;
WHEREAS, the Company proposed, and its shareholders approved at the
Company's annual shareholders' meeting, the 1998 Executive Compensation Plan
(the "Plan"), the purpose of which was to cause the compensation paid to
Employee after January 1, 1998 to comply with the deductibility restrictions of
Section 162(m) of the Code;
WHEREAS, the Employee and the Company are entering into this Agreement to
amend the Employment Agreement to incorporate therein the compensation
provisions approved by the Company's shareholders as set forth in the Plan;
NOW, THEREFORE, the Parties do hereby agree as follows:
1. Compensation. Section 3 of the Employment Agreement is hereby amended
by deleting the existing Section 3 and replacing it with the
following:
"3. Compensation:
(a) Base Salary. For services rendered by the Employee under this
Agreement, the Company shall pay the Employee an annual base salary of
$444,878 in twenty-four (24) bi-monthly installments (the "Base
Salary").
(b) Pre-Tax Profits Bonus. Commencing January 1, 1998, the
Employee shall receive bonus payments based on the annual Pre-Tax
Profits (the "PTP") of the Company and its majority owned subsidiaries
("Subsidiaries"). If the PTP exceeds the PTP Threshold (hereinafter
defined), Employee shall receive a pre-tax profits bonus equal to 4.0%
of PTP for PTP up to $50 million and 4.25% of PTP for PTP in excess of
$50 million.
The PTP must equal or exceed ten million dollars ($10,000,000.00)
for fiscal year 1998 and each of the four years thereafter, twelve
million dollars ($12,000,000.00) for fiscal year 2003 and each of the
four years thereafter, and fourteen million dollars ($14,000,000.00)
for fiscal year 2008 and thereafter (the "PTP Threshold"). The PTP
shall be computed as follows:
(i) Any bonuses paid to Company employees (other than
bonuses paid to the Employee, Messrs. Xxxx X. Frame, Xxxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxx (collectively, the "Executive Group")
and bonuses paid to other employees of the Company aggregating up
to 2% of PTP) shall be deducted before any bonuses payable to the
Executive Group are calculated;
(ii) Any Sales Bonuses payable to the Employee and Mr. Frame
under Section 3(c) hereof or the similar section of Mr. Frame's
employment agreement, as amended, shall be deducted before any
bonuses payable under this Section 3(b) are calculated;
(iii)Any bonuses payable to any member of the Executive
Group under this Section 3(b) or the similar section of his
employment agreement or bonuses paid to other employees of the
Company aggregating up to 2% of PTP shall not be deducted from
pre-tax profits in order to calculate the bonus payable to any
other member of the Executive Group under this Section 3(b) or
the similar section of such member's employment agreement, as
amended;
(iv) The annual pre-tax profits calculation shall be
reviewed by the Company's outside auditors and approved by the
Company's Compensation Committee before any bonuses are paid to
the members of the Executive Group;
(v) Any payments to the Employee by any company that is not
a wholly-owned Subsidiary of the Company but whose profits are
included in the Company's pre-tax profits calculation shall
reduce the Company's pre-tax profits for purposes of calculating
any percent of Company pre-tax profits payable to the Employee;
and
(vi) PTP shall be determined in accordance with generally
accepted accounting principles and will mean, subject to the
foregoing subparagraphs (i)-(v), the consolidated profits of the
Company before payment of (A) all local, state and federal income
taxes or (B) the payment of any severance, buy-out or salary
continuation payments to Messrs. Xxxxxxxx or Xxxx, but after
deduction for: (X) all expenses of any subsidiary companies or
divisions allocable to such year; and (Y) the payment of any
management fee incurred for carrying out the activities of the
Company.
(c) Sales Bonus. Commencing January 1, 1998, the Company shall
pay the Employee a bonus equal to 1% of the consolidated sales of the
Company and its Subsidiaries in excess of $30 million, provided that
the PTP exceeds the PTP Threshold. The Company may, in its sole
discretion, advance monthly to Employee any amounts which would
otherwise be due to Employee under this paragraph (c) assuming that
the PTP Threshold for such year is achieved.
(d) Payment of Bonuses. The Company shall pay Employee the
Bonuses due hereunder no later than March 15th of the year following
the year in which it is earned, provided, however, that before the
Company is obligated to make any payments of Bonuses under Paragraphs
(b) or (c), the Company's Compensation Committee shall certify to the
Board of Directors of the Company that the material terms and
performance goals hereunder have been met, which determination shall
be made by the Compensation Committee in its sole discretion.
(e) Salary Continuation Benefits. The Company will pay, so long
as the Employee's Employment Agreement, as amended, is in full force
and effect on the date of his death, a monthly salary continuation
amount to the Employee's estate or his designee, for twelve months
beginning on the date of his death. The annual salary continuation
amount will equal the Employee's base salary at his date of death plus
an average of the bonuses paid to the Employee by the Company for the
three calendar years preceding the year of his death."
2. Termination. Paragraph 13(b) of the Employment Agreement is hereby
amended by inserting at the end thereof the following sentence:
"Employee shall have no obligation to provide the Consulting Services
to the Company under Section 2 hereof upon any termination pursuant to
this Paragraph 13(b)."
3. Amendment of Employment Agreement. This Agreement is executed as and
shall constitute an amendment to the Employment Agreement, and shall be
construed in connection with and as a part of the Employment Agreement. Except
as specifically amended by this Agreement, all of the terms and provisions of
the Employment Agreement shall remain in full force and effect. In the event of
any conflict between the terms of the Employment Agreement and the terms of this
Agreement, the terms of this Agreement shall apply.
4. Controlling Law. The execution, validity, interpretation and performance
of this Agreement shall be determined and governed by the laws of the State of
Texas, and, in any action by the Company to enforce this Agreement, venue may be
had in Xxxxxx County, Texas.
5. Entire Agreement. The Employment Agreement, as amended by this
Agreement, contains the entire agreement of the Parties. The Employment
Agreement and this Agreement may not be changed orally or by action or inaction,
but only by an agreement in writing signed by the Party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.
6. Severability. If any provision of this Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by decree of a court of last resort, the Parties shall promptly
meet and negotiate substitute provisions for those rendered or declared illegal
or unenforceable, but all remaining provisions of this Agreement shall remain in
full force and effect.
7. Execution. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which shall constitute one
instrument.
EXECUTED to be effective as of the 1st day of January, 1998.
SEITEL, INC.
By: Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
