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Exhibit 10.20

 

SEITEL, INC.

Summary of 2005 Non-Employee Director and Executive Officer

Compensation and Incentive Arrangements

 

 

Non-Employee Director Compensation

            For fiscal year 2005, non-employee directors of Seitel, Inc. (the
"Company") receive an annual fee of $30,000, annual restricted stock awards
valued at $20,000 (granted at the close of the first trading date of the
calendar year), $1,500 for each board meeting attended in person and $500 for
each board meeting attended by telephone conference, including committee
meetings attended.  In addition, the Chairman of the Board receives $250,000 per
year, the Lead Director receives $1,500 per day when performing services on
behalf of the Company, and annual fees are paid to each committee chairman as
follows: audit committee, $15,000; compensation committee, $10,000; corporate
governance and nominating committee $7,500. All directors are entitled to
reimbursement for their reasonable out-of-pocket expenditures.  These
arrangements were established in July 2004, soon after the Company emerged from
bankruptcy.  The Lead Director position was added in October 2004.

Executive Officer Compensation

            The Company has the following compensatory arrangements with each of
its executive officers for fiscal year 2005:

Name

Title

2005 Base Salary (1)

2005 Restricted Stock Grants (1)

Robert D. Monson

President and Chief Executive Officer

$400,000

316,000 (2)(3)

Marcia H. Kendrick

Senior Vice President, Acting Chief Financial Officer, Chief Accounting Officer
and Acting Secretary

$200,000

40,000

Kevin P. Callaghan

Executive Vice President and Chief Operating Officer

$330,000

160,000 (2)

Robert J. Simon

President - Seitel Data, Ltd.

$260,000

126,000(2)

(1) Each executive officer is also eligible for a cash bonus and a further
equity award of shares of restricted stock in a dollar amount equal to the
participant's target percentage multiplied by the participant's cash bonus
amount, if any.  See "Incentive Plan for 2005" below.

(2) Reflects restricted stock granted pursuant to the Incentive Plan.  See
"Incentive Plan for 2005" below.

(3) Included in the 1,000,000 shares of restricted stock awarded to Mr. Monson
on December 15, 2005.

Incentive Plan for 2005

On January 24, 2005 the Compensation Committee of the Company established the
criteria to be used in determining cash bonuses and certain incentive equity
awards (the "Incentive Plan") for fiscal year 2005.  The Company's named
executive officers and certain other executives participate in the Incentive
Plan, which is operated under the Company's 2004 Stock Option Plan (the
"Plan").  The Plan was filed as Exhibit 10.1 to the Company's Form S-4,
Registration Statement No. 333-121476. The targets and financial performance
measures established under the Incentive Plan are described below.  The
Compensation Committee reserves the right to modify the targets and financial
performance measures at any time, or to grant cash bonuses or equity awards to
executive officers even if the performance goals are not met.  The cash bonuses
and Performance Equity Awards (defined below) are subject to increase or
decrease of up to 50% in the discretion of the Compensation Committee.  In order
to receive a cash bonus and incentive equity award, if any, the participants
must be employed by the Company on the date such cash bonuses and incentive
equity awards are paid. The Company expects to pay 2005 cash bonuses and
Performance Equity Awards, if any, in early 2006.  The Compensation Committee
reserves the right to modify the Incentive Plan for subsequent fiscal years.

Cash Bonuses

The Incentive Plan provides for a target cash bonus for each participant based
upon a percentage of the participant's base salary, with the opportunity to earn
anywhere from 0% to 200% of the target cash bonus.  The targets, as a percentage
of base salary, for the Company's named executive officers are as follows:

Robert D. Monson,

   President and Chief Executive
Officer                                                     90%

 

Kevin P. Callaghan,

   Chief Operating Officer and Executive Vice
President                             60%

 

Robert J. Simon,

   President-Seitel Data,
Ltd.                                                                      60%

 

Marcia H. Kendrick,

   Chief Accounting Officer, Senior Vice President,

   Acting Chief Financial Officer and Acting
Secretary                                 25%

The Compensation Committee established cash margin, net of interest expense (80%
weight) and client pre-funding percentage (20% weight) as the financial
performance measures under the Incentive Plan.  Cash margin includes cash
resales plus all other cash revenues other than from data acquisitions, less
cash selling, general and administrative expenses, and cost of goods sold.  Cash
resales result when the Company invoices customers for purchases of licenses to
data from the Company's library.  Other cash revenues are primarily from the
reproduction and delivery of seismic data.  Client prefunding percentage is the
average of all revenue pre-commitments for each new survey as a percentage of
the total cost of such survey.  Where the level achieved under the financial
performance measures falls between zero and target level or target and maximum
levels, the cash bonus is determined by interpolation.

Incentive Equity Awards

The Incentive Plan includes two categories of equity awards.  Robert D. Monson,
Kevin P. Callaghan and Robert J. Simon are the only executives currently
eligible for the first category of equity award ("Key Executive Award(s)").  The
2005 Key Executive Awards have been made in shares of the Company's restricted
common stock, par value $.01 per share (the "Common Stock"), under the Plan,
which are reported herein or have been previously reported on Forms 8-K dated
December 20, 2004, February 16, 2005 and March 28, 2005, and are as follows:

Shares

Award Date

Robert D. Monson,

   President and Chief Executive Officer

316,000

December 15, 2004

Kevin P. Callaghan,

   Chief Operating Officer and Executive Vice President

160,000

March 24, 2005

Robert J. Simon,

   President-Seitel Data, Ltd.

126,000

February 15, 2005

Mr. Monson's Key Executive Award of 316,000 shares of restricted Common Stock
was included in the 1,000,000 shares of restricted Common Stock awarded to him
on December 15, 2004, and is subject to increase.  He is entitled to a 2005 Key
Executive Award of restricted Common Stock in an amount equal to 90% of his base
salary ($360,000) and has been deemed to have received $316,000 of this amount
with the 316,000 shares already awarded.  The closing price of the Common Stock
on the first trading day in 2006 will be divided into $44,000 to arrive at the
number of additional restricted Common Stock to be awarded to Mr. Monson. 
Unless modified by the Compensation Committee, Key Executive Awards in
subsequent years will be made in shares of restricted Common Stock in dollar
amounts equal to the participant's target percentage (Mr. Monson (90%), Mr.
Callaghan (60%), and Mr. Simon (60%)) multiplied by the participant's base
salary.  These subsequent year Key Executive Awards, will be made based on the
closing price of the Common Stock on the first trading day of the year.

All participants in the Incentive Plan are eligible for the second category of
equity awards ("Performance Equity Awards"), which will be made in shares of
restricted Common Stock in a dollar amount equal to the participant's target
percentage multiplied by the participant's cash bonus amount.  Performance
Equity Awards will be made only if the participant meets the performance
criteria to receive a cash bonus as described above.  The named executive
officers' target percentages for a Performance Equity Award are as follows:

Robert D. Monson,

   President and Chief Executive
Officer                                                     90%

 

Kevin P. Callaghan,

   Chief Operating Officer and Executive Vice
President                             60%

 

Robert J. Simon,

   President-Seitel Data,
Ltd.                                                                      60%

 

Marcia H. Kendrick,

   Chief Accounting Officer, Senior Vice President,

   Acting Chief Financial Officer and Acting
Secretary                                 50%

 

 

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