SEC Contract Filing

Filing Date: 2017-12-01

Document Content:
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<TYPE>EX-10.22
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<FILENAME>geos-ex1022_287.htm
<DESCRIPTION>EX-10.22
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<p style="text-align:right;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-weight:bold;font-size:12pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;">Exhibit 10.22<font style="margin-left:36pt;"></font></p>
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<p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="text-align:center;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-weight:bold;font-size:12pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;"><font style="text-decoration:underline;">FY 2017 Bonus Plan</font></p>
<p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-weight:bold;font-size:12pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;">Overview</p>
<p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The fiscal year 2017 Bonus Plan, if fully earned, will provide <font style="font-weight:bold;">$5,850,000</font> of incentive compensation payments to full-time employees of Geospace Technologies Corporation and its subsidiaries (the &#8220;Company&#8221;), including the company&#8217;s employees in Canada, China, UK and Colombia (the &#8220;2017 Plan&#8221;).&nbsp;&nbsp;Employees at the Company&#8217;s subsidiary in the Russian Federation are excluded since they have a locally administered incentive program designed specifically for their operation. There was no bonus distribution in 2016 or 2015. The 2014 Bonus Plan resulted in a distribution of $6.49 million of incentive compensation. </p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Participants eligible to participate in the 2017 Plan must be (i) employed for at least three months during fiscal year 2017 in order to earn a bonus, and (ii) actively employed with the Company at the time of the bonus distribution, which if all criteria are met, would occur in late November to mid-December after the year-end BOD meeting where the final fiscal year audited results and bonus distribution are approved.</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The 2017 Plan is divided into two tiers.&nbsp;&nbsp;The Tier 1 plan is a profit sharing plan whereby all participants are eligible to participate.&nbsp;&nbsp;The Tier 2 plan is set aside for key employees and managers of the Company.&nbsp;&nbsp;It should be noted that Tier 2 participants are also participants in the Tier 1 plan.&nbsp;&nbsp;Each plan is further described below.</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;">&nbsp;</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Bonuses are earned under the 2017 Plan using a basic return on investment (ROI) calculation.&nbsp;&nbsp;In the ROI calculation, the numerator (earnings) will be the Company&#8217;s consolidated pretax earnings during fiscal year 2017 (exclusive of any bonus expenses), and the denominator (investment) will be the end of year stockholder&#8217;s equity as of September 30, 2016 (approximately $244.5 million).&nbsp;&nbsp;Before any bonuses are earned under the 2017 Plan, the Company must generate a minimum ROI of 5% (approximately $12.2 million).&nbsp;&nbsp;This minimum ROI is referred to as the &#8220;Minimum Hurdle&#8221;.&nbsp;&nbsp;Upon reaching the Minimum Hurdle, the bonus pool will be funded at the rate of approximately 16.0% of the Company&#8217;s subsequent pretax earnings. The 2017 Plan is designed to maximize bonuses when the &#8220;post-bonus&#8221; ROI reaches 20% (or pretax earnings of $48.9 million, including bonus expense of $5.85 million). This basic program design is similar to previous years.</p>
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