EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of January 1, 1991, and has been entered
into between Seitel, Inc., a Delaware corporation with its principal offices at
00000 Xxxxxx'x Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000 (hereinafter together with its
subsidiaries, and including any successors in interest or assigns, called
"Employer" or "Company", except where otherwise specifically referenced) and
Xxxx X. Frame (hereinafter called PAF the "Employee").
WHEREAS, Employer desires to employ the Employee on the terms and
conditions set forth herein; and
WHEREAS, the Employee desires to be employed by the Employer on the terms
and conditions set forth herein:
NOW THEREFORE, in consideration of the mutual covenants, agreement and
warranties contained in this Agreement, and intending to be legally bound, the
parties agree as follows:
1. Employment: The Employer hereby employs the Employee, and the Employee
hereby accepts employment, upon the terms and conditions hereinafter set forth.
2. Term: The term of this Agreement shall begin on January 1, 1991 and
shall terminate on December 31, 1995 (being five (5) years after the
commencement date); provided, however, that commencing on the date which is one
year after the date hereof, and on each anniversary of such date (such date and
the date of each anniversary thereof being a "Renewal Date"), the term shall be
automatically extended so as to terminate five (5) years from such Renewal Date,
unless at least Sixty (60) days prior to such Renewal Date either party hereto
gives notice to the other that the term should not be extended for an additional
year (the "Termination Date"). The term of this Agreement, as extended in the
manner described in the preceding sentence is hereafter sometimes referred to as
the "Employment Period"; and each year of the Employment Period; beginning
January 1st and ending December 31st of any year is hereafter sometimes referred
to as the "Annual Period". If the Employment Period reaches the Termination
Date, Employer will pay Employee for two (2) additional years the compensation
then applicable, which shall include for purposes of this payment the Base
Salary, together with the average of all commissions and bonus payments paid to
Employee for the prior three (3) years (the Severance Payment). The Severance
Payment will be paid provided Employee is available to act as a consultant to
Employer for up to Fifty (50%) per cent of Employee's work related time (as
compared to his final year of employment) (hereinafter "Consulting Services").
If Employee terminates this Agreement during any renewal period, Employer will
pay Employee 100% of his then current Base Salary (including One Hundred (100%)
percent of the average of all bonuses and/or commissions paid to Employee during
the immediately prior three (3) years for two additional years, provided
Employee performs the Consulting
Services (the Termination Payment). Employer shall have no obligation to pay
Employee any Severance Payment if Employee:
(i) refuses to perform the consulting services requested by Employer
although there is no requirement that Employer request such services for
Employee to be entitled to said payment; or
(ii) violates any of the provisions of the Confidential and Proprietary
Information or the Non-Compete provisions set forth in paragraphs Thirteen
(13) and Fourteen (14) herein.
3. Payments to Employee:
(a) For services rendered by the Employee under this Agreement, the
Company shall pay the Employee an annual base salary as follows:
1990 Base Salary - $100,000 per year;
1991 Base Salary - $125,000 per year;
(the "Base Salary"), which Base Salary shall be paid in twenty-four (24)
bimonthly installments and may be increased from time to time as approved by the
Company's Board of Directors, and will be increased each year by any increase in
the Consumer Price Index for the recently completed calendar year as applied to
the Houston, Texas region.
(b) Employee will receive the following annual bonus compensation:
1% on the first $12,000,000 in sales; and
1/2% on all sales in excess of $12,000,000; and
1/2% on sales in excess of $12,000,000 if at least 40% of
the Company's revenues during said year were derived from
the resale of seismic data, (which payments shall be made
on the fifteenth (15th) day of the month following such
xxxxxxxx); and
4% of the Company's pre-tax profits (which payment shall be
made within five (5) days following the Company's receipt of
its audited year-end financial statement, but in no event
later than March 15th of the following year).
(c) If (i) the employment agreement of Xxxxxxx Xxxxxxxx or the
employment agreement of Xxxxx Xxxx is ever terminated by the Company prior to
the completion of the term thereof, or (ii) Messrs. Xxxxxxxx and Lawi should
resign from the Company's Board of Directors prior to completion of their
Employment Period, as described in their employment agreements, or (iii) the
majority of the members of the Company's Board of Directors is no longer
nominated and supported by a majority of the Company's current management team
(Messrs. Frame, Xxxxxxx, Xxxxxxxx and Xxxx), the Employee shall have the right
to terminate this Agreement as set forth in Section 13(b) hereof and shall
receive from the Company all compensation required to be paid during the term of
this Agreement as set forth in paragraph 3 hereof, as well as the Severance
Payment provided in Section 2 hereof, and Employee shall have no obligation to
perform any
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services in order to receive such payments.
For purposes of calculating any bonus, "pretax profit" of the Company
will mean consolidated profits of the Company before payment of (i) all local,
state and federal income taxes and (ii) payment of any severance or buy-out
payments to Messrs. Xxxxxxxx and/or Lawi, but after deduction for: (i) all
expenses of any subsidiary companies and divisions allocable to that year; (ii)
the payment of any management fee incurred for carrying out the activities of
the Company; and (iii) the payment of any bonuses to employees of each company
of Employer.
Pretax profits will be determined in accordance with generally
accepted accounting principles and shall include only the results from
operations under each company's direct and complete control. Employer will remit
payment of any bonus to Employee within thirty (30) days of the date Employer's
independent auditors complete the financial statements of the Company.
4. Deferred Compensation Plan: As further consideration for Employee's
services under this Agreement, Employer agrees to provide Employee with deferred
compensation pursuant to the program set forth in Exhibit A which is attached
hereto and made a part hereof. In the event this Agreement is terminated, or at
its expiration, if not renewed, Employee shall have the right to receive that
portion of his vested deferred compensation payable to him within the period
prescribed by the Deferred Compensation Program.
5. Duties: The Employee is employed as President of the Company. His duties
shall be consistent with the responsibilities of such office, as same are
directed by the Company's Board of Directors. Employee shall be responsible for
all day-to-day operations related to such office and shall perform the
activities related to such office as assigned to him by the Company's Board of
Directors. Employee shall not be required to relocate his residence to perform
his duties under this Agreement.
6. Extent of Services: During the term of his employment, Employee will
devote One Hundred (100%) per cent of his work-related time, attention and
energies to the business of the Employer, unless written permission to the
contrary is given by the Company's Board of Directors.
7. Vacation: Employee shall be entitled each year to a vacation of four (4)
weeks, during which time his compensation shall be paid in full.
8. Automobile Allowance: During the term of this Agreement, Employer will
provide Employee with an automobile allowance that will enable Employee to lease
a top of the line Mercedes Sedan.
9. Fringe Benefits: The Employee shall be entitled to participate on the
same bases, except where stated otherwise in this Agreement, and subject to the
same qualifications as other executives of the Employer, in any pension, profit
sharing, stock purchase, savings, hospitalization, sick leave and other fringe
benefit plans in effect from
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time to time with respect to executives of Employer (the "Fringe Benefits").
Employer agrees that each of the Fringe Benefits of the Employer in effect on
the date hereof, or at any time during the Employment Period shall not be
terminated or modified in any manner which reduces the benefits of the Employee
without first obtaining the written consent of the Employee.
10. Common Stock Purchase Warrant: As further consideration for the
Employee's consent to enter into this Agreement, the Company's Board of
Directors has agreed to issue the Employee a total of 250,000 Common Stock
Purchase Warrants (the "Warrants"). The Warrants will entitle the Employee to
purchase 125,000 shares of the Company's restricted common stock at a price of
$14.00 per share and 125,000 shares of common stock at $22.00 per share over a
five (5) year and a ten (10) year period, respectively. The Warrants will be
evidenced by certificates as set forth in Exhibit B, which Exhibit further
defines all terms and conditions thereof.
11. Expenses: The Employee shall be entitled to reimbursement, upon
presentation of a voucher indicating the amount and purpose, for reasonable
expenses incurred on behalf of the Employer.
12. Termination for Disability: In the event that the Employee shall have
been prevented from substantially rendering the services required under this
Agreement by reason of his disability (as confirmed by medical authority and
Social Security guidelines) for a period of six (6) consecutive months (or 180
consecutive days), Employer shall have the right to terminate this Agreement
upon thirty (30) days written notice, provided such disability continues during
said notice period. If the Employer shall terminate this Agreement as a result
of Employee's disability, Employee shall receive from Employer, until reaching
65 years of age, annual disability payments in an amount equal to the greater of
Ten Thousand ($10,000) Dollars per month, or sixty (60%) percent of the
Employee's Base Salary (which shall include any disability payments from state
or federal authorities). In order to cover this payment, Employer shall purchase
such disability insurance necessary under which the Employee is the insured and
beneficiary.
13. Termination:
(a) Termination for Employee's Breach. Employer shall have the right
to terminate this Agreement and the employment hereunder if Employee violates
his responsibilities under paragraph 5. of this Agreement and such violation
continues after having received notice of such violation and thirty (30) days to
cure such violations to the satisfaction of Employer's Board of Directors.
Employer may also immediately terminate this Agreement and the employment
hereunder by reason of: (i) determination by Employer's Board of Directors that
there has been a defalcation of the Employer's funds by Employee, (ii)
conviction of Employee on a felony charge, commission of an act of moral
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turpitude or; (iii) determination by Employer's Board of Directors that the
Employee has had unauthorized discussions of Employer's business activities, or
improperly disclosed trade secrets or confidential information concerning
Employer's business activities or proposed business activities.
(b) Termination for Employer's Breach: Employee shall have the right
to terminate this Agreement if (i) Employer terminates the employment contracts
of Xxxxxxx Xxxxxxxx or Xxxxx Xxxx, or (ii) Messrs. Xxxxxxxx and Lawi resign from
the Company's Board of Directors prior to the resignation of Messrs. Frame and
Xxxxxxx, or (iii) the majority of Employer's Board of Directors is no longer
comprised of persons who are nominated or supported by a majority of the
Company's current management group (Messrs. Frame, Xxxxxxx, Xxxxxxxx and Xxxx),
or (iv) Employer materially breaches any of the provisions hereof and such
breach is not cured within thirty (30) days after the Employer receives written
notice from Employee thereof. In such event, or in the event of a wrongful
termination of Employee, all monies due to Employee through the term of this
Agreement, including the Severance Payment, shall be paid by Employer in a lump
sum amount within thirty (30) days of Employee's termination, with bonuses to be
paid quarterly for the remaining term of this Agreement based on the relevant
performance criteria of the Company; provided, however, that in no event will
bonuses payable be less than the average of all bonuses paid under this
Agreement during the immediately preceding three (3) years. Employee shall have
no obligation to mitigate his loss or any occasioned damages as a result of such
termination.
14. Confidential and Proprietary Information: Employee recognizes that
Employer's business involves the handling of confidential information of both
Employer and its clients and requires a confidential relationship between
Employer and its clients and also between Employer and Employee. Employer's
business requires the fullest practical protection and confidential treatment of
various information, trade secrets, data and other knowledge of both Employer's
clients and Employer which will be conceived or learned by Employee in the
course of his employment. Accordingly, Employee agrees to keep secret all
confidential information, trade secrets and proprietary information acquired by
him during his employment concerning the business and affairs of the Employer
(the "Information") and further agrees for the period of his employment and at
all times following the termination of his employment, for any reason, not to
disclose any such Information to any person, firm or corporation other than as
directed by Employer, unless and until such Information becomes publicly known
outside of Employer (other than through any violation by the Employee of his
obligation hereunder). Employee also agrees, upon request by Employer, to
execute a confidentiality and non-disclosure agreement if Employer has same
prepared to protect the confidentiality of certain information relating to the
Company.
15. Employee's Non-Compete.
(a) In connection with its business, Employer has developed and refined
(and will in the future develop and refine) numerous techniques, procedures,
methods, and data used in connection with its business. In
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addition, Employer has developed (and will in the future develop) substantial
goodwill with its customers, clients, and generally within the geophysical and
energy exploration industry. This goodwill is of extreme importance to the
future financial success of Employer because of the highly specialized nature of
Employer's business. During Employee's association with Employer, Employee has
or will become familiar with the nature of Employer's business and with these
special techniques, procedures, methods and data and will become associated with
and participate in Employer's goodwill.
(b) Therefore, for so long as Employee is associated with Employer as an
officer director, employee or consultant and for a period of Twelve (12) months
after the date when Employee ceases to be associated with Employer in any such
capacity ("Termination Date"), Employee shall not, directly or indirectly, for
his own account or for the account of others, as an officer, director,
stockholder, owner, partner, employee, promoter, consultant, manager, advisor or
otherwise, engage in or solicit the same or similar business(es) as Employer is
engaged in on the Termination Date, within a Two Hundred (200) mile radius of
(i) Houston, Texas, (ii) New Orleans, Louisiana, or (iii) any other city in
which Employer has an office on the Termination Date. In addition, Employee
agree that, for so long as Employee is associated with Employer as an officer,
director, employee or consultant, and for a period of two (2) years after the
Termination Date, Employee shall not, directly or indirectly, solicit or induce,
or attempt to solicit or induce, any employee to leave Employer for any reason
whatsoever.
16. Remedies. In the event of any breach of Employee's covenants contained
in Paragraph 13 or 14, Employer would suffer immediate and irreparable harm for
which Employer would not have an adequate remedy at law. Accordingly, Employee
understands that in the event of any breach of Employee's covenants contained in
paragraph 13 or 14, Employer shall be entitled to injunctive relief as well as
any and all other applicable remedies at law or in equity available to Employer.
17. Miscellaneous Provisions:
(a) Notices and Communications. All notices and communications
hereunder shall be in writing and shall be hand delivered or sent postage
prepaid by registered or certified mail, return receipt requested, to the
addresses first above written or to such other address of which notice shall
have been given in the manner herein provided.
(b) Entire Agreement. All prior agreements and understandings between
the parties with respect to the subject matter of this agreement are superseded
by this Agreement, and this Agreement constitutes the entire understanding
between the parties with respect to employment of the Employee by Employer, and
Employer and Employee hereby release the other from any claims or amounts due
under any prior agreements. This Agreement may not be modified, amended, changed
or discharged, except by a writing signed by the parties hereto and then only to
the extent therein set forth.
(c) Non-Assignment. This agreement shall be binding upon and inure to
the benefit of the parties hereto, and any administrator,
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executor or successor of Employer. This Agreement may not be assigned by either
of the parties hereto without prior written consent of the other party.
(d) Waiver. No waiver of any breach of this Agreement or of any
objection to any act or omission connected herewith shall be implied or claimed
by any party, or be deemed to constitute a consent to any continuation of such
breach, act or omission, unless in a writing signed by the party against whom
enforcement of such waiver or consent is sought, and then only to the extent
therein set forth.
(e) Section Headings. The section headings of this Agreement are
solely for the purpose of convenience and shall neither be deemed a part of this
Agreement nor used in any interpretation thereof.
(f) Governing Law. This Agreement and the relationship of the parties
shall be governed by, and construed in accordance with, the laws of the State of
Texas.
(g) Legal Expenses. All legal fees and expenses incurred by Employee
in attempts to receive the benefits granted hereunder or to enforce this
Agreement or any of its terms will be paid by the Company providing Employee's
claims are not dismissed in a summary proceeding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
ATTEST SEITEL, INC.
By: /s/ [ILLEGIBLE]
---------------------------- -------------------
[ILLEGIBLE]
WITNESS:
/s/ [ILLEGIBLE]
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