I'm not sure how I feel about this one?
HOUSTON, June 23 /PRNewswire/ -- Seitel, Inc. (NYSE: SEI), announced today
that the management incentive bonus compensation has been reduced to 8.5% of
pre-tax income from 17.5%, a decrease in excess of 50%. In addition Herbert
Pearlman, Chairman of the Board, and Paul Frame, President and Chief Executive
Officer of Seitel, Inc., have elected to discontinue the automatic renewal
feature of their employment contracts. Furthermore, David Lawi, Chairman of
the Executive Committee and co-founder of Seitel, Inc. has resigned from the
board of directors. This, in addition to the resignation of Horace Calvert
announced June 7, 2000, reduces the size of the board to seven.
Seitel, Inc. will take a one-time non-recurring pre-tax restructuring
charge of $4.5 million ($3.9 million after-tax, or $0.16 per share) in the
second quarter of 2000 relating to the buyout of management incentive bonus
contracts. Mr. Pearlman's contractual bonus has been reduced to 3.5% of pre-
tax profits in exchange for 150,000 shares of restricted Seitel stock and four
annual payments of $187,500, net of taxes, beginning January 1, 2001.
Mr. Frame has reduced his contractual bonus to 3.0% of pre-tax profits in
exchange for 100,000 shares of restricted Seitel stock and four annual
payments of $125,000, net of taxes, beginning January 1, 2001. Mr. Lawi's
contractual bonus has been eliminated for 125,000 shares of restricted Seitel
stock and $1.6 million, net of taxes, payable over four years. The
withholding taxes on these payments will be 35%.
Mr. Pearlman stated, "the sweeping changes to executive compensation and
the board of directors were in response to shareholder comments. We believe
today's announcements combined with improving industry fundamentals will have
a material positive impact on the future earnings of Seitel and shareholder
value. Our commitment to that belief is illustrated by taking stock in
exchange for reducing the incentive bonus contracts."
Mr. Frame stated, "our business model for growth demands that management
deliver value to our shareholders by increasing revenue and profits. In
addition, we believe management should have an equity interest in the
decisions that form the company. We believe that restructuring executive
compensation, coupled with an improved climate for geophysical and seismic
services, will be reflected in our ability to once again deliver value to our
shareholders."
Statements in this release about the future outlook related to Seitel
involve known and unknown risks and uncertain ties, which may cause the
Company's actual results to differ materially from expected results. While
the Company believes its forecasting assumptions are reason able, there are
factors that are hard to predict and influenced by economic and other
conditions that are beyond the Company's control. These risk factors are
detailed in Seitel's filings with the Securities and Exchange Commission,
including its most recent Form 10-K Annual Report, a copy of which may be
obtained from the Company without charge.
SOURCE Seitel, Inc.
CONTACT: Russell J. Hoffman, Vice President Corporate Communications of
Seitel, Inc., 203-629-0633
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