Exhibit 10(l)
Description of Cash Bonus Compensation Arrangements for Employees and Officers
     Since 1995, we have had a practice of paying cash bonuses to all of our
employees each year except in 1998, when no bonuses were paid to employees.
There is no formal bonus plan, nor any written formulas for determining bonus
amounts. Because whether or not bonuses will be paid and in what amounts is
determined by the Compensation Committee of our Board of Directors on a
Company-wide basis; executive officers receive bonuses only if all employees
receive bonuses.
     Our bonus practices currently classify employees into five levels for bonus
compensation purposes, three of which are determined solely based on salary
level. The remaining two levels include managers, as defined by senior
executives, and officers. At the first bonus level, which includes all
employees, bonuses generally range from zero to ten percent of base salaries,
although in the past bonuses paid at this and all other levels have been as high
as twelve and one-half percent of base salary in an exceptionally good year.
There is an additional compensation layer for all employees in the next salary
level, which generally includes the professional group (the second level),
whereby these employees may receive an additional level of bonuses of up to ten
percent of base salaries, for or a total bonus ranging from zero to twenty
percent. Those in the third or highest salary level, which generally includes
the higher performing professionals, technical experts or supervisors and
managers, can receive an additional bonus equal to seven and one-half percent of
base salary, or a total bonus ranging from zero to twenty-seven and one-half
percent. In addition, employees that are considered managers, as determined by
senior executives, (the fourth level) are eligible to receive an additional
level of bonuses of up to seven and one-half percent of base salaries in
addition to the bonus they receive from the first three levels, or a maximum
bonus of 35%. Lastly, our corporate officers (the fifth level) are eligible to
receive an additional level of bonuses of up to seven and one-half percent of
base salaries, for a total bonus ranging from zero to forty-two and one-half
percent. All of our executive officers are eligible for bonuses at all five
levels. All bonuses are paid at the same percentage for each level (i.e. if
level one is 10%, level two is 10% and levels three through five are 7.5%).
     Since this practice began in 1995, we have paid cash bonuses ranging from
0% to 50% of base salary to our executive officers, depending on the Company’s
results for that year, as determined by the Compensation Committee of our Board
of Directors. In addition to the aforementioned bonus practice, we have usually
paid a Christmas bonus each year that is equivalent to one week of each
employee’s base salary.
     Bonus determinations are made by the directors on our Compensation
Committee subjectively, not based on arithmetic methods or formulas, generally
based on our overall corporate results and whether or not the Company has
achieved predetermined Company-wide goals and objectives. Any measure that might
be considered to determine whether or not an oil and gas company had a good year
(or other measures of success or failure) is a possible consideration by the
Compensation Committee. These measures have historically included an evaluation
of production levels, stock performance, achievement of acquisition or
disposition goals, completion of significant transactions, completion of
significant projects (such as software

 

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systems or significant construction projects), operating and administrative
expense levels as compared to budget, capital expenditures as compared to
budget, and the changes in our proved, probable and possible reserves for that
period as compared to costs incurred. As the Compensation Committee’s decisions
are subjective evaluations made on an overall basis, it is not possible to
determine how these measures are weighted or evaluated by the Compensation
Committee.