FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For Fiscal Year Ended DECEMBER 31, 1996.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required] For the transition period
to .
----------------- -----------------
Commission File No. 0-14488
SEITEL, INC.
------------
(Exact name of registrant as specified in its charter)
Delaware 76-0025431
- ------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
50 Briar Hollow Lane, 7th Floor West
Houston, Texas 77027
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (713) 627-1990 Securities
registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
- ---------------------------- ---------------------
Common Stock, Par Value $.01 New York
Securities registered pursuant to Section 12(g) of the Act:
None
----------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
-----
The aggregate market value of the voting stock held by non-affiliates of the
registrant at March 26, 1997 was approximately $357,851,804. For these purposes,
the term "affiliate" is deemed to mean officers and directors of the registrant.
On such date, the closing price of the Common Stock on the New York Stock
Exchange was $36.50 and there were a total of 10,384,932 shares of Common Stock
outstanding.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the Company and their ages (as of
April 1, 1997) and positions with the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position(s) with the Company Director Since
- --------------------- ------- -------------------------------------- -------------------
<S> <C> <C> <C>
Herbert M. Pearlman 64 Chairman of the Board 1982
of Directors
Paul A. Frame 50 Chief Executive Officer, 1986
President and Director
Horace A. Calvert 43 Chief Operating Officer, 1987
Executive Vice President
and Director
David S. Lawi 61 Chairman of the Executive 1982
Committee and Director
Walter M. Craig, Jr. 42 Director 1987
William Lerner 63 Director 1985
William L. Lurie 66 Director 1995
John E. Stieglitz 65 Director 1989
Debra D. Valice 40 Chief Financial Officer, 1995
Senior Vice President of Finance,
Treasurer, Corporate Secretary
and Director
Jay N. Silverman 43 Vice President of Seismic Operations --
</TABLE>
Herbert M. Pearlman, a co-founder of Seitel, Inc., has been a director of
the company since 1982, and Chairman of the Company's Board of Directors since
1987. He has served as President, Chief Executive Officer and a Director of Helm
Resources, Inc. ("Helm"), an American Stock Exchange listed company with equity
interests in diverse businesses, since 1980, and in June 1984, he became Helm's
Chairman of the Board. Since March 1984, Mr. Pearlman has been Chairman of
Intersystems, Inc. ("Intersystems"), an American Stock Exchange listed company
engaged in providing services to the thermoplastic resins industry. Since June
1990, Mr. Pearlman has served as Chairman of Unapix Entertainment, Inc. ("Unapix
Entertainment"), an American Stock Exchange listed company engaged in
multi-media entertainment.
Paul A. Frame has been Chief Executive Officer of the Company since July
1992 and President since January 1987. He was Executive Vice President of the
Company from January 1985 until his appointment as President. He was hired by
the Company in August 1984 as Vice President of Marketing.
Horace A. Calvert has been Chief Operating Officer of the Company since
July 1992 and Executive Vice President since January 1987. In March 1993, Mr.
Calvert was appointed President of DDD Energy, Inc., a wholly-owned subsidiary
of the Company engaged in the exploration and development of oil and gas
reserves. From January 1985 until his appointment as Vice President in May 1986,
he was the Company's Chief Geophysicist.
David S. Lawi has been Chairman of the Company's Executive Committee since
March 1987. He also was Assistant Secretary of the Company from May 1986 until
June 1987 and from June 1989 until July 1993. Mr. Lawi has been Treasurer,
Corporate Secretary and a Director of Helm since 1980, and he was its Executive
Vice
<PAGE>
President from 1980 through 1992. Since March 1984, Mr. Lawi has been a
Director of Intersystems and, since 1985, he has been Chairman of Intersystems'
Executive Committee. Since June 1990, Mr. Lawi has been a Director of Unapix
Entertainment and, since January 1993, Chairman of its Executive Committee, its
Treasurer and Secretary.
Walter M. Craig, Jr. has provided legal and business advice to the Company,
from time to time, since 1984. Since 1993, he has been President of both the
Mezzanine Financial Fund, L.P., and Professional Financial Services, Inc. Both
enterprises are engaged in making capital available to small and mid-market
companies based on the value of their assets. He has served as Executive Vice
President and Chief Operating Officer of Helm since August 1992. From 1984 to
1992, he was Senior Vice President of Business and Legal Affairs of Helm. Since
April 1993, Mr. Craig has been a Director of Unapix Entertainment.
William Lerner is Chairman of the Company's Audit Committee and a member of
the Company's Compensation and Stock Option Committee. Since January 1990, Mr.
Lerner has been engaged in the private practice of law. From May 1990 until
December 1990, he was General Counsel to Hon Development Company, a California
real estate development company. From June 1986 until December 1989, Mr. Lerner
was Vice President and General Counsel of The Geneva Companies, Inc., a
financial services company engaged in counseling privately owned middle-market
companies. Since 1985, he has been a Director of Helm. Mr. Lerner is also a
Director of Rent-Way, Inc., a NASDAQ listed company headquartered in
Pennsylvania that operates a chain of rental-purchase stores, and
Micros-to-Mainframes, Inc., a NASDAQ listed company headquartered in New York
that provides advanced technology communications products and systems
integration and Internet services to Fortune 2000 companies.
William L. Lurie was elected a Director of the Company in November 1995,
and has been a member of the Company's Audit Committee and the Company's
Compensation and Stock Option Committee since July 1996. He has been a
Co-Chairman and a Director of the Foundation for the Prevention & Early
Resolution of Conflicts. Prior to that time, he was Executive Consultant to the
Chairman of The Business Roundtable from 1993 to 1994, President of The Business
Roundtable from 1984 to 1993, and Vice President-General Counsel of
International Paper Company from 1974 to 1984. Mr. Lurie has been a Director of
Minerals Technologies, Inc. since 1993 and a member of its Compensation
Committee. He has also been a Director of Intersystems, Inc. since November
1995.
John E. Stieglitz is Chairman of the Company's Compensation and Stock
Option Committee and a member of the Company's Audit Committee. He is Chairman
Emeritus of Conspectus, Inc., a privately held company, formed in 1976, engaged
in providing services in the area of executive recruitment. He served as
President of Conspectus, Inc. from 1976 to 1996. Mr. Stieglitz is also a
Director of Helm and Intersystems.
Debra D. Valice, CPA, is the Company's Chief Financial Officer, Senior Vice
President of Finance, Treasurer and Corporate Secretary. From March 1986 until
February 1987, she was the Company's Chief Accounting Officer. Ms. Valice was
elected as a director of the Company in November 1995.
Jay N. Silverman has been the Company's Vice President of Seismic
Operations since July 1993, and in January 1994 was appointed President of
Seitel Geophysical, Inc., a wholly-owned subsidiary of the Company. From August
1990 to July 1993, he was the Company's Manager of Field Operations. Prior to
joining the Company in August 1990, Mr. Silverman was Vice President of
Operations for East Coast Drilling and Boring, Inc., a privately held company
operating in the northeast region of the United States, from January 1998
through July 1990.
Directors serve until the next annual meeting of stockholders or until
their successors are elected and qualify. Officers serve at the discretion of
the Board.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation awarded to, earned by or paid to the Chief Executive Officer of the
Company and each of the four most highly compensated executive officers of the
Company other than the Chief Executive Officer (collectively, the "named
executive officers") for the years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
------------------------------------------------- ----------------
Awards
Other ----------------
Annual Stock Options/ All Other
Name and Principal Position Year Salary ($) Bonus($)(1)<F1> Compensation($)(2)<F2> SARs (#) Compensation($)
----------------------------- ------ ------------ ------------ ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Paul A. Frame 1996 $141,898 $1,457,603 $1,204,334 74,300 $87,998 (3)<F3>
Chief Executive Officer 1995 $139,870 $806,094 $766,456 58,992 $41,358
and President 1994 $136,193 $955,213 $684,006 292,728 $94,990
Horace A. Calvert 1996 $141,898 $1,457,603 $1,205,834 68,249 $87,998 (3)<F3>
Chief Operating Officer 1995 $139,870 $806,094 $766,456 80,806 $41,358
and
Executive Vice President 1994 $136,193 $955,213 $684,006 292,728 $94,990
Herbert M. Pearlman 1996 $124,818 $1,486,168 -- 62,291 $88,654 (3)<F3>
Chairman of the 1995 $121,182 $815,712 -- 99,949 $41,358
Board of Directors 1994 $115,569 $897,141 -- 251,740 $94,990
David S. Lawi 1996 $60,588 $749,085 -- 62,291 $87,998 (3)<F3>
Chairman of the Executive 1995 $58,823 $407,856 -- 70,926 $41,358
Committee 1994 $56,098 $448,570 -- 166,884 $94,990
Jay N. Silverman 1996 $90,000 $306,577 $540,556 28,282 $3,049 (4)<F4>
Vice President of 1995 $70,000 $123,422 $264,483 25,000 $4,620
Seismic Operations 1994 $70,000 $102,195 $211,504 20,000 $4,620
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> (1) Includes bonuses based on the Company's pre-tax profits for Messrs.
Frame, Calvert, Pearlman and Lawi, and based on a subsidiary's pre-tax
profits for Silverman. For each of Messrs. Frame and Calvert, also
includes bonuses based on the Company's stock performance of $316,667
in 1996. The final installment that may be earned pursuant to the
bonuses based on the Company's stock performance occurred during the
first quarter of 1997 and amounted to $79,167 for each of Messrs.
Frame and Calvert.
<F2> (2) Includes commissions based on sales.
<F3> (3) Includes amounts paid pursuant to the program (the "Incentive
Compensation Program") pursuant to which between 2-1/2% and 5% of the
revenue generated annually by seismic creation programs that have
fully recouped their direct costs is distributed to certain officers
and key employees, and amounts contributed by the Company to its
401(k) Savings Plan (the "401(k) Plan") on behalf of such named
executive officers as discretionary and matching contributions.
Includes $84,932 contributed by the Company pursuant to its Incentive
Compensation Program, and $3,066 contributed by the Company as 401(k)
Plan matching contributions for Frame, Calvert, and Lawi, and $3,723
for Pearlman.
<F4> (4) Includes $3,049 contributed by the Company as 401(k) Plan matching
contributions.
</FN>
</TABLE>
<PAGE>
The following table sets forth certain information with respect to options
to purchase Common Stock granted during the year ended December 31, 1996 to each
of the named executive officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Individual Grants
------------------------------------------------------
Percent Potential Realizable Value
Number of of Total at Assumed Annual Rates of
Securities Options/SARs Stock Price Appreciation
Underlying Granted to Exercise for Option Term (4)<F4>
Options/SARs Employees or Base Expiration --------------------------------------------
Name Granted (#) in 1996 Price ($/Sh) Date 0 Percent($) 5 Percent($) 10 Percent($)
- --------------------- ------------- --------- ------------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul A. Frame 25,000 (1)<F1> 2.84 $25.375 04/22/06 $0 $398,955 $1,011,030
3,053 (3)<F3> 0.35 $43.000 11/26/01 ($9,922) $23,459 $63,812
1,621 (3)<F3> 0.18 $41.625 11/27/01 ($3,039) $14,684 $36,110
11,021 (3)<F3> 1.25 $41.000 11/29/01 ($13,776) $106,726 $252,396
15,221 (3)<F3> 1.73 $40.500 12/02/01 ($11,416) $155,376 $357,078
15,387 (3)<F3> 1.75 $40.000 12/03/01 ($3,847) $164,765 $368,666
2,997 (3)<F3> 0.34 $40.000 12/04/01 ($749) $32,164 $71,981
Horace A. Calvert 25,000 (1)<F1> 2.84 $25.375 04/22/06 $0 $398,955 $1,011,030
7,206 (3)<F3> 0.82 $41.000 11/29/01 ($9,008) $69,782 $165,027
16,325 (3)<F3> 1.85 $40.500 12/02/01 ($12,244) $166,646 $382,978
16,503 (3)<F3> 1.87 $40.000 12/03/01 ($4,126) $176,715 $395,405
3,215 (3)<F3> 0.36 $40.000 12/04/01 ($804) $34,504 $77,217
Herbert M. Pearlman 1,381 (3)<F3> 0.16 $43.000 11/26/01 ($4,488) $10,611 $28,865
733 (3)<F3> 0.08 $41.625 11/27/01 ($1,374) $6,640 $16,329
4,982 (3)<F3> 0.57 $41.000 11/29/01 ($6,228) $48,245 $114,095
6,883 (3)<F3> 0.78 $40.500 12/02/01 ($5,162) $70,262 $161,472
6,957 (3)<F3> 0.79 $40.000 12/03/01 ($1,739) $74,496 $166,687
1,355 (3)<F3> 0.15 $40.000 12/04/01 ($339) $14,542 $32,544
40,000 (2)<F2> 4.54 $32.000 04/28/00 $150,000 $430,860 $750,853
David S. Lawi 1,381 (3)<F3> 0.16 $43.000 11/26/01 ($4,488) $10,611 $28,865
733 (3)<F3> 0.08 $41.625 11/27/01 ($1,374) $6,640 $16,329
4,982 (3)<F3> 0.57 $41.000 11/29/01 ($6,228) $48,245 $114,095
6,883 (3)<F3> 0.78 $40.500 12/02/01 ($5,162) $70,262 $161,472
6,957 (3)<F3> 0.79 $40.000 12/03/01 ($1,739) $74,496 $166,687
1,355 (3)<F3> 0.15 $40.000 12/04/01 ($339) $14,542 $32,544
40,000 (2)<F2> 4.54 $32.000 04/28/00 $150,000 $430,860 $750,853
Jay N. Silverman 25,000 (1)<F1> 2.84 $33.500 09/25/06 $0 $526,699 $1,334,759
3,282 (3)<F3> 0.37 $41.125 11/21/01 ($2,462) $34,149 $78,438
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> (1) These options were granted under the Company's 1993 Incentive Stock
Option Plan, as amended, and are exercisable starting 12 months after
the grant date of April 22, 1996 for Frame and Calvert and September
25, 1996 for Silverman, with 33% of the options granted becoming
exercisable at that time and with an additional 33% of the options
becoming exercisable on each successive anniversary date, with full
vesting occurring on the third anniversary date. The options were
granted for a term of 10 years, subject to certain events related to
termination of employment.
<F2> (2) The expiration dates of the options listed were extended from December
10, 1997 to April 28, 2000.
<PAGE>
<F3> (3) These common stock purchase warrants were granted under the terms of
the Company's 1995 Warrant Reload Plan upon the exercise of the same
number of previously granted warrants subject to the Warrant Reload
Plan. The common stock purchase warrants were fully exercisable on the
date of grant, and will expire on the expiration date indicated,
subject to certain events related to termination of employment.
<F4> (4) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. The actual value an executive may
realize will depend on the extent to which the stock price exceeds the
exercise price of the options or warrants on the date the option or
warrant is exercised. Accordingly, the value, if any, realized by an
executive will not necessarily equal any of the amounts set forth in
the table above. These calculations are not intended to forecast
possible future appreciation, if any, of the price of the Company's
Common Stock.
</FN>
</TABLE>
The following table sets forth certain information with respect to the
exercise of options during the year ended December 31, 1996, and unexercised
options held at December 31, 1996, and the value thereof, by each of the named
executive officers.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND 12/31/96 OPTION/SAR VALUES
Number of Securities
Underlying Unexercised Value of Unexercised In-the
Shares Options/SARs Money Options/SARs at
Acquired at 12/31/96 (#) 12/31/96 ($)
on Value ------------------------------- ---------------------------------
Name Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ------------ --------------- ------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Paul A. Frame 49,300 $1,342,120 383,785 58,333 $8,075,050 $861,458
Horace A. Calvert 52,873 $1,458,047 385,068 58,333 $8,299,730 $861,458
Herbert M. Pearlman 22,291 $606,839 261,958 33,333 $4,541,218 $495,833
David S. Lawi 22,291 $606,839 211,196 16,667 $3,738,411 $247,917
Jay N. Silverman 23,813 $751,514 24,949 48,333 $353,599 $527,083
</TABLE>
EMPLOYMENT ARRANGEMENTS
Agreements with Messrs. Frame, Calvert, Pearlman and Lawi
Effective as of January 1, 1991, the Company entered into employment
agreements with each of Messrs. Frame, Calvert, Pearlman and Lawi for service in
their respective capacities set forth in the listing of directors and executive
officers. During 1992, Mr. Pearlman passed the Chief Executive Officer title and
duties to Mr. Frame, and Mr. Calvert added the additional title and duties of
Chief Operating Officer to those he already held. The employment agreements were
not revised for these changes. Each agreement is for a term of five years,
renewable each year for an additional year unless either party to the agreement
gives notice to the contrary. In accordance with these agreements, Messrs.
Frame, Calvert, Pearlman and Lawi receive an annual base salary of $141,898,
$141,898, $124,818, and $60,588, respectively. Additionally, each of Messrs.
Frame and Calvert receive a 1% commission on the first $12,000,000 in revenues
for the year and 1/2% commission on revenues in excess thereof, plus an
additional 1/2% commission on revenues over $12,000,000 if at least 40% of the
Company's revenues are resale revenues, plus a bonus of 4% of the Company's
pre-tax profits (as defined therein). Each of Messrs. Pearlman and Lawi receive
an annual bonus of 5% and 2-1/2%, respectively, of the Company's pre-tax profits
(as defined).
<PAGE>
Each of the agreements with Messrs. Frame and Calvert provide that if at
any time during the term of such agreement, (i) the employment agreements of
Messrs. Pearlman or Lawi are terminated by the Company prior to the stated term
thereof, or (ii) Messrs. Pearlman and Lawi resign from the Company's Board of
Directors prior to the expiration of the term of 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 Messrs. Frame, Calvert, Pearlman
and Lawi (each a "Change in Control"), the employee shall have the right to
terminate the agreement immediately and receive from the Company all
compensation required to be paid during the unexpired term thereof as well as
the severance payment described below without any obligation to perform
consulting services as described below. The Company believes that the Change in
Control provisions in these agreements may tend to discourage attempts to
acquire a controlling interest in the Company and may also tend to make the
removal of management more difficult.
Each agreement provides that if it is not renewed, the Company will pay the
employee for two additional years' compensation including his then current base
salary plus the average of all commissions and bonuses paid to the employee for
the then prior three years. The severance payments are contingent upon the
employee remaining available to perform consulting services for the benefit of
the Company.
Each agreement provides for certain noncompetition and nondisclosure
covenants of the employee and for certain Company-paid fringe benefits such as
an automobile allowance, disability insurance and inclusion in pension, deferred
compensation, profit sharing, stock purchase, savings, hospitalization and other
benefit plans in effect from time to time.
Bonuses Based On Stock Performance
On July 21, 1992, when the stock price was $5.375, the Compensation and
Stock Option Committee and the entire Board of Directors approved payment of a
one-time $2,500,000 special shareholder value bonus to be divided among Messrs.
Frame and Calvert and three other key employees upon the event of the market
price of the Company's stock maintaining or exceeding $20.00 per share for at
least 90 consecutive days (the "Target Date") at any time before July 21, 1997.
The Target Date was achieved in June 1994. The bonus vests equally over the 12
quarters following the Target Date, contingent upon continued full-time
employment, except in the event of termination without cause, death or
disability in which case the balance of the bonus will be due and payable
immediately.
On January 27, 1995, the Company's Board of Directors approved a
shareholder value incentive bonus under which a cash bonus aggregating
$4,000,000 would be paid to all salaried employees if the market price of the
Company's stock reaches $60 per share on or before April 30, 1998, and maintains
that price for at least 90 consecutive days. This bonus would be shared by all
salaried employees on a basis proportionate to their respective compensation
ranking in the Company, and it would vest and be paid out in escalating
quarterly installments over a three-year period, subject to continued employment
with the Company. This shareholder value incentive bonus was approved by Company
Shareholders at the 1995 annual meeting. As of April 15, 1997, the market price
of the Company's common stock was $32.875 per share.
<PAGE>
Directors Compensation
Outside directors receive an annual fee of $20,000 for serving on the board
and are reimbursed for out of pocket expenses for meeting attendance. On July
25, 1996, the Company's Board of Directors adopted the Non-Employee Directors'
Deferred Compensation Plan which permits each non-employee director to elect to
receive annual director fees in the form of stock options and to defer receipt
of any directors fees in a deferred cash account or as deferred shares. As of
December 31, 1996, 30,000 shares have been reserved for issuance under this plan
and directors have accumulated 687 deferred shares in their accounts which will
not be distributed until such time as designated by the director. Directors who
are also employees receive no separate compensation for their services as
directors.
Nonemployee directors also participate in the Non-Employee Directors' Stock
Option Plan (the "Plan"), which was approved by Company Shareholders at the 1994
annual meeting. Under the terms of the Plan, each non-employee director receives
on the date of each annual meeting during the term of the Plan an option to
purchase 1,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date of grant. In addition, each
non-employee director who is elected or appointed to the Board of Directors for
the first time is granted on the date of such election or appointment an option
to purchase 5,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date of grant. Options granted under the
Plan become exercisable one year after the date of grant. All options expire at
the earlier of five years after the date of grant, twelve months after the
optionee ceases to serve as a director due to death, disability, or retirement
at or after age 65, or sixty days after the optionee otherwise ceases to serve
as a director of the Company. If a director ceases to serve as such for any
reason other than death, disability, or retirement at or after age 65, the
option may be exercised only if it was exercisable at the date of such cessation
of service. During 1996, William Lerner, John E. Stieglitz and William L. Lurie
were granted 1,000 options each, at an exercise price of $29.125.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation and Stock Option Committee is composed of
William Lerner, John E. Stieglitz and William L. Lurie. In 1996, William Lurie
invested as a general partner in a partnership for which the Company's
subsidiary DDD Energy, Inc. acts as managing partner. See Item 13, Certain
Relationships and Related Transactions.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of April 15, 1997, by (i) persons known to the
Company to be beneficial owners of more than 5% of the Common Stock, (ii) each
of the Company's directors (iii) each of the named executive officers, and (iv)
all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership (1)<F2>(2)<F3> Percentage of Class
- ------------------------------------ ---------------------------------- -------------------
<S> <C> <C>
Driehaus Capital Management, Inc. 831,900 8.6%
25 East Erie Street
Chicago, IL 60611
Horace A. Calvert 551,711 (3) <F4> 5.1%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Paul A. Frame, Jr. 542,737 (4) <F5> 5.0%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Herbert M. Pearlman 386,386 (5) <F6> 3.6%
537 Steamboat Road
Greenwich, CT 06830
David S. Lawi 262,909 (6) <F7> 2.5%
537 Steamboat Road
Greenwich, CT 06830
Debra D. Valice 143,548 (7) <F8> 1.4%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Jay N. Silverman 43,795 (8) <F9> *<F1>
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Walter M. Craig, Jr. 30,981 (9)<F10> *<F1>
2 Bridge Avenue
Redbank, NJ 07701
William Lerner 10,585 (10)<F11> *<F1>
423 East Beau Street
Washington, PA 15301
John E. Stieglitz 6,000 (10)<F11> *<F1>
Conspectus, Inc.
222 Purchase Street
Rye, NY 10580
William L. Lurie 6,000 (11)<F12> *<F1>
93 Taylor Lane
Harrison, NY 10528
All directors and executive officers
as a group (10 persons) 1,984,652 (12)<F13> 16.8%
<PAGE>
<FN>
<F1> * Less than 1%
<F2> (1) Except as otherwise noted, each named holder has, to the best of the
Company's knowledge, sole voting and investment power with respect to
the shares indicated.
<F3> (2) Includes shares that may be acquired within 60 days by any of the
named persons upon exercise of any right.
<F4> (3) Includes 40,553 and 345,399 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise prices of the options
range from $4.13 to $25.38 per share, and the exercise prices of the
common stock purchase warrants range from $13.05 to $41.00 per share.
<F5> (4) Includes 40,297 and 345,399 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise prices of the options
range from $4.13 to $25.38 per share, and the exercise prices of the
common stock purchase warrants range from $13.05 to $43.00 per share.
<F6> (5) Includes 16,667 and 245,291 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise price of the options is
$25.13, and the exercise prices of the common stock purchase warrants
range from $13.05 to $43.00 per share.
<F7> (6) Includes 8,333 and 202,863 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise price of the options is
$25.13, and the exercise prices of the common stock purchase warrants
range from $13.05 to $43.00 per share.
<F8> (7) Includes 8,333 and 78,666 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise prices of the options
range from $25.13 to $33.50 per share, and the exercise prices of the
common stock purchase warrants range from $24.00 to $40.00 per share.
<F9> (8) Includes 28,333 and 3,282 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock
purchase warrants, respectively. The exercise prices of the options
range from $15.00 to $33.50 per share, and the exercise price of the
common stock purchase warrants is $41.13 per share.
<F10>(9) Includes 30,652 shares which may be acquired from the Company within
60 days upon exercise of common stock purchase warrants. The exercise
prices of the common stock purchase warrants range from $30.13 to
$32.00 per share.
<F11>(10) Includes 6,000 shares which may be acquired from the Company within 60
days upon exercise of options at an exercise price ranging from $30.00
to $30.50 per share.
<F12>(11) Includes 5,000 shares which may be acquired from the Company within 60
days upon exercise of options at an exercise price of $25.00 per
share.
<F13>(12) Includes an aggregate of 1,411,069 shares which may be acquired from
the Company within 60 days upon exercise of 159,517 options and
1,251,552 common stock purchase warrants, respectively, by the group
of 10 persons which comprises all executive officers and directors.
The exercise prices of the options range from $4.13 to $33.50 per
share, and the exercise prices of the common stock purchase warrants
range from $13.05 to $43.00 per share.
</FN>
</TABLE>
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 21, 1992, the Company granted ten year loans at an interest rate of
4% to most of its employees for purchases of the Company's common stock at the
then market price of $5.375 per share. The Company recorded compensation expense
of $48,000 related to these loans in 1996. Payments of 5% of the original
principal balance plus accrued interest are due annually on August 1, with a
balloon payment of the remaining principal and accrued interest due August 1,
2002. The stock certificates are held by the Company as collateral until payment
is received. Loans in excess of $60,000 were made to Messrs. Frame and Calvert
and Ms. Valice, amounting to $537,500, $537,500 and $134,375, respectively. The
largest aggregate amounts of principal and interest outstanding on such loans
during 1996 were approximately $474,000, $474,000 and $119,000, respectively. As
of April 15, 1997, the aggregate amounts of principal and interest outstanding
on such loans were approximately $441,000, $441,000 and $110,000, respectively.
The Company's wholly-owned subsidiary DDD Energy, Inc. ("DDD Energy"),
which acquires and develops non-operating interests in mineral properties, acts
as managing partner of a general partnership (the "1996 Partnership"). The 1996
Partnership was formed to permit officers, directors and employees of the
Company and its subsidiaries, and members of their immediate families, who are
accredited investors to invest in mineral interests as general partners
("Contributing General Partners") in the 1996 Partnership. The 1996 Partnership
is a blind pool which invested partnership funds throughout the year in mineral
interests. Pursuant to the partnership agreement governing the 1996 Partnership,
DDD Energy agreed to use its reasonable efforts to allow the 1996 Partnership to
invest, along with DDD Energy, in all non-operating mineral interests in which
DDD Energy invested during 1996, and the 1996 Partnership was obligated to
invest in all interests in which DDD Energy invested (to the extent allowed by
the sellers of such interests) until funds of the 1996 Partnership allocated to
acquisitions were exhausted. Pursuant to the partnership agreement, the amount
of the investment of the 1996 Partnership equals three percent of the total
investment in each such mineral interest made by the 1996 Partnership and DDD
Energy. DDD Energy determines the amount that it desires to invest in a
particular mineral interest, and then adds the amount to be invested by the 1996
Partnership to determine the total level of investment by DDD Energy and the
1996 Partnership. Therefore, DDD Energy does not forego any opportunity to
invest in transactions by allowing the 1996 Partnership to invest with DDD
Energy. All sums required for the 1996 Partnership to acquire such interests and
pay costs related to such interests thereafter are provided by the Contributing
General Partners, and no funds for the 1996 Partnership's investments are
provided by DDD Energy or the Company. During 1996, the Contributing General
Partners contributed an aggregate of $702,000 to the 1996 Partnership. Paul A.
Frame, Horace A. Calvert, Herbert M. Pearlman, David S. Lawi, Jay N. Silverman,
Debra D. Valice, William L. Lurie, Sheryl Pearlman (wife of Herbert Pearlman),
Julia L. Pearlman, Lee R. Pearlman, Lawrence Marolda, Nicole E. Lawi and Neil A.
Lawi have 14.3%, 14.3%, 13.5%, 11.4%, 7.1%, 10.7%, 7.1%, 3.6%, 1.4%, 1.4%, 1.4%,
1.4% and 1.4% general partnership interests, respectively, in the 1996
Partnership.
DDD Energy acts a managing partner of a similar partnership relating to the
non-operating mineral interest in which it will invest in 1997 (the "1997
Partnership"). The amount of the investment of the 1997 Partnership will equal
two and one half percent of the total investment in each such mineral interest
made by the 1997 Partnership and DDD Energy. Officers, directors and employees
of the Company and its subsidiaries, and members of their immediate families,
have contributed $575,000 to the 1997 Partnership. Horace A. Calvert, Herbert M.
Pearlman, David S. Lawi, Jay N. Silverman, Debra D. Valice, William L. Lurie,
Sheryl Pearlman (wife of Herbert Pearlman), Julia L. Pearlman, Lee R. Pearlman,
Lawrence Marolda, Nicole E. Lawi and Neil A. Lawi have 17.4%, 16.5%, 13.9%,
8.7%, 4.4%, 4.4%, 4.4%, 1.7%, 1.7%, 1.7%, 1.7% and 1.7% general partnership
interests, respectively, in the 1997 Partnership.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on the 29th of April 1997.
SEITEL, INC.
By: /s/ Paul A. Frame
-------------------------------------
Paul A. Frame
President and Chief Executive Officer
