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Exhibit 10.2

SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

AGREEMENT made and entered into as of December 15, 2004, first amended and
restated as of March 22, 2005 and secondly amended and restated October 19,
2005, by and between SEITEL INC., a Delaware corporation (together with its
successors and assigns, the "Company"), and Robert D. Monson (the "Executive").

W I T N E S S E T H

WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment (this "Agreement") and the
Executive desires to enter into this Agreement and to accept such employment,
subject to the terms and provisions of this Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and the Executive (individually a "Party" and
together the "Parties") agree as follows:

1.

Definitions.

 

 

(a)

"Affiliate" of a specified person or entity shall mean a person or entity that,
directly or indirectly, controls, is controlled by, or is under common control
with, the person or entity specified.  For the purposes of the term "Affiliate,"
control with respect to a Person, means the possession, directly or indirectly,
of the power to (i) vote 10% or more of the securities having ordinary voting
power for the election of directors (or comparable positions of such Person) or
(ii) direct or cause the direction of the management and policies of such
Person, whether through voting of securities, by contract, or otherwise, and the
terms controlling and controlled have meanings correlative to the foregoing.

 

 

(b)

"Base Salary" shall mean the annualized salary provided for in Section 4 below.

 

 

(c)

"Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3
under the Securities Exchange Act of 1934 and any successor to such Rule.

 

 

(d)

"Board" shall mean the Board of Directors of the Company.

 

 

(e)

 "Cause" shall mean:

 

 

 

(i)

willful misconduct or gross negligence by the Executive in the performance of
his duties under this Agreement;

 

 

 

(ii)

breach of a this Agreement by the Executive, which, if curable, is not
substantially cured to the satisfaction of the Company determined by the Company
in its sole discretion within ten (10) days after Executive's receipt of written
notice from the Company of such breach;

 

 

 

(iii)

failure by the Executive to perform his duties, if not cured to the satisfaction
of the Company determined by the Company within ten (10) days after Executive's
receipt of written notice from the Company of such breach, other than a failure
resulting from Executive's incapacity due to Disability;

 

 

 

(iv)

a material violation by the Executive of the Company's Code of Business Conduct
or the Company's policies or procedures; or

 

 

 

(v)

conviction of the Executive of, or a plea of nolo contrendere to, a felony, or
his engagement in fraud or other willful misconduct which is injurious to the
business or reputation of the Company.

 

 

(f)

 "Change in Control."  A "Change in Control" shall be deemed to have occurred
if:

 

 

 

(i)

any Person (other than the Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company immediately prior to
the occurrence with respect to which the evaluation is being made in
substantially the same proportions as their ownership of the common stock of the
Company) acquires securities of the Company and immediately thereafter is the
Beneficial Owner (except that a Person shall be deemed to be the Beneficial
Owner of all shares that any such Person has the right to acquire pursuant to
any agreement or arrangement or upon exercise of conversion rights, warrants or
options or otherwise, without regard to the sixty (60)-day period referred to in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company's
then outstanding securities (except that an acquisition of original issue
securities directly from the Company shall not be deemed an acquisition for
purposes of this clause (i));

 

 

 

(ii)

during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii), or (iv) of this paragraph)
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two thirds of the directors then
still in office who either were directors at the beginning of the two-year
period or whose election or nomination for election was previously so approved
but excluding for this purpose any such new director whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of an individual, corporation, partnership, group, associate or
other entity or Person other than the Board, cease for any reason to constitute
at least a majority of the Board;

 

 

 

(iii)

the consummation of a merger or consolidation of the Company with any other
entity, other than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving or resulting entity) more than 50% of
the combined voting power of the surviving or resulting entity outstanding
immediately after such merger or consolidation or (ii) a merger or consolidation
in which no premium is intended to be paid to any shareholder participating in
the merger or consolidation;

 

 

 

(iv)

the stockholders of the Company approve a plan or agreement for the sale or
disposition of all or substantially all of the consolidated assets of the
Company (other than such a sale or disposition immediately after which such
assets will be owned directly or indirectly by the stockholders of the Company,
in substantially the same proportions as their ownership of the common stock of
the Company immediately prior to such sale or disposition) in which case the
Board shall determine the effective date of the Change in Control resulting
therefrom; or

 

 

 

(v)

any other event occurs which the Board determines, in its discretion, would
materially alter the structure of the Company or its ownership.

 

 

(g)

 "Commencement Date" shall mean December 15, 2004.

 

 

(h)

"Date of Termination" shall mean:

 

 

 

(i)

if the Executive's employment is terminated by the Company, the date the Company
informs the Executive that his employment is so terminated;

 

 

 

(ii)

if the Executive voluntarily resigns his employment, the date the Company
receives notice from the Executive that Executive is terminating his employment;

 

 

 

(iii)

if the Executive's employment is terminated by reason of death, the date of
death; or

 

 

 

(iv)

if the Executive's employment is terminated for any reason (voluntarily or
involuntarily) after a Change in Control other than for Cause, the applicable of
the date the Company informs the Executive he is terminated or the date the
Executive provides notice to the Company of his termination.

 

 

(i)

"Disability" shall mean the Executive's inability, due to physical or mental
incapacity, to substantially perform his duties and responsibilities for a
period of ninety (90) days during any twelve-month period as determined by the
Company.  The Executive agrees to submit to any examination that is necessary
for a determination of Disability and agrees to provide any information
necessary for a determination of Disability, including any information that is
protected by the Health Insurance Portability and Accountability Act.

 

 

(j)

"Good Reason" shall mean the occurrence of any of the following during the Term
without the Executive's consent:

 

 

 

(i)

a material diminution in the Executive's title and duties as normally-associated
with the position of CEO and President of the Company;

 

 

 

(ii)

a reduction in the Executive's Base Salary;

 

 

 

(iii)

a change in reporting structure so that the Executive  reports to someone other
than Board; or

 

 

 

(iv)

the relocation of the Executive's principal place of employment to a location
more than fifty (50) miles from his principal place of employment with the
Company on the Commencement Date.

 

 

 

Anything herein to the contrary notwithstanding, the Executive shall not be
entitled to resign for Good Reason unless the Executive gives the Company
written notice of the event constituting "Good Reason" within 60 days of the
occurrence of such event and the Company fails to cure such event within 30 days
after receipt of such notice.

 

 

(k)

"Initial Term" shall mean the period beginning on the Commencement Date and
ending at the close of business on the day before the second anniversary of the
Commencement Date.

 

 

(l)

"Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the
Securities Exchange Act of 1934 and used in Sections 13(d) and 14(d) thereof,
and shall include a "group" as defined in Section 13(d) thereof.

 

 

(m)

"Term" shall have the meaning ascribed to such term in Section 2 below.

 

2.

Term of Employment.

 

The term of the Executive's employment hereunder shall begin on the Commencement
Date and end at the close of business on the day before the second anniversary
of the Commencement Date (the "Initial Term"); provided, however, that the
Initial Term shall thereafter be automatically extended for additional one-year
periods (the Initial Term and any one-year extension of employment hereunder
shall each be referred to as the "Term") unless either the Company or the
Executive gives the other written notice at least thirty (30) days prior to the
then-scheduled expiration of the Team that such Party is electing not to so
extend the Term. Notwithstanding the foregoing, the Term shall end on the date
on which the Executive's employment is terminated by either Party in accordance
with the provisions herein.  The period from the Commencement Date through the
Date of Termination shall be the "Employment Period."

 

3.

Position; Duties and Responsibilities.

 

During the Term, the Executive shall be employed as the Chief Executive Officer
("CEO") and President of the Company and shall perform other duties and
responsibilities as reasonably determined by the Board consistent with the
duties and responsibilities normally associated with such position in the
Company. The Executive, in carrying out his duties under this Agreement, shall
report to the Board.  The Executive shall devote all of his business time,
energy and best efforts to the business and affairs of the Company. Anything
herein to the contrary notwithstanding, nothing shall preclude the Executive
from (i) subject to the reasonable approval of the Board, serving on the boards
of directors of trade associations and/or charitable organizations, (ii)
engaging in charitable activities and community affairs and (iii) managing his
personal investments and affairs, provided that the activities described in the
preceding clauses (i) through (iii) do not interfere with the proper performance
of his duties and responsibilities for the Company or violate any term of this
Agreement, including but not limited to, Section 10.

 

4.

Base Salary.

 

During the Term, the Executive shall be paid an annualized Base Salary of
$400,000 payable in accordance with the regular payroll practices of the
Company. During the Term, the Base Salary may be increased, but not decreased,
from time to time by the Board or its Compensation Committee. The Executive
shall not be entitled to any compensation for service as a member of the Board
or for service as an officer or member of any board of directors of any
Affiliate.

 

5.

Bonus.

 

Beginning in calendar year 2005, the "Cash Bonus" for Executive shall be
determined under the annual incentive plan or program of the Company and subject
to the goals, terms and conditions of such plan or program as determined by the
Board or Compensation Committee of the Board (the "Compensation Committee") in
its sole discretion on a calendar year basis during the Term. During the Initial
Term, Executive will be eligible to receive up to 180% of his Base Salary amount
as a Cash Bonus. The Cash Bonus will be payable when bonuses are paid under
Company policies and procedures or as determined by the Board or Compensation
Committee.

 

6.

Stock Options and Other Equity Compensation.

 

Beginning in calendar year 2004, Executive shall receive in each calendar year
an award of stock options or other equity-based compensation under the Company's
2004 Stock Option Plan, or any successor thereto (the "Plan") in an amount equal
to 90% of his Base Salary (the "Guaranteed Equity-Based Award").  In addition,
but only for calendar year 2004, Executive shall receive an award of 324,000
shares of restricted stock (the "2004 Additional Equity-Based Award"). 
Beginning in calendar year 2005, if Executive meets the goals, terms and
conditions to receive a Cash Bonus, he shall receive an additional award of
stock options or other equity-based awards for such calendar year under the Plan
in an amount equal to 90% of the Cash Bonus.

 

On the date the Plan is effective and approved by shareholders of the Company,
or as soon as possible thereafter, the Company shall grant Executive 1,000,000
shares of Company common stock as restricted stock under the Plan (the
"Restricted Stock Grant") which shall vest as to 33.3% of such shares one year
from date of grant and an additional 33.3% of such shares two years from date of
grant, and Executive shall be 100% vested in such shares three years from the
date of grant.  The Restricted Stock Grant shall be subject to the terms and
conditions of the Plan and the agreement for the Restricted Stock Grant. 
360,000 shares of the Restricted Stock Grant shall be deemed Executive's 2004
Guaranteed Equity-Based Award (valued at $360,000 for purposes of this
Agreement), 324,000 shares of the Restricted Stock Grant shall be deemed
Executive's 2004 Additional Equity-Based Award (valued at $324,000 for purposes
of this agreement), and the remaining 316,000 shares (valued at $316,000 for
purposes of this Agreement) shall be deemed a prepayment of Executive's 2005
Guaranteed Equity-Based Award.  This prepaid amount shall be subtracted from the
Executive's 2005 Guaranteed Equity-Based Award calculated as described in the
first paragraph of this Section 6.

 

7.

Employee Benefit Programs.

 

During the Term, the Executive shall be entitled to participate in all employee
savings and welfare benefit plans and other employee programs made available to
the Company's senior-level executives, as such plans or programs may be amended
and as may be in effect from time to time, including, without limitation,
savings and other retirement plans or programs, medical, dental,
hospitalization, short-term and long-term disability and life insurance plans,
accidental death and dismemberment protection, travel accident insurance, and
any deferred compensation plans or programs, provided that Executive's
eligibility and participation shall be subject to and governed by the terms and
conditions of the applicable plan or program.  Notwithstanding the foregoing,
nothing contained herein shall require the Company to establish any particular
employee benefit plan or program.

 

8.

Reimbursement of Business and Other Expenses; Perquisites; Vacation.

 

 

(a)

During the Term, the Executive is authorized to incur reasonable and necessary
business expenses in carrying out his duties and responsibilities under this
Agreement and the Company shall promptly reimburse him for such expenses
incurred in connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy.

 

 

(b)

The Executive shall be entitled to four (4) weeks paid vacation per year.

 

9.

Benefits Upon Termination of Employment.

 

 

(a)

Termination Without Cause by the Company or Resignation for Good Reason prior to
a Change in Control.

 

In the event the Executive's employment is terminated without Cause by the
Company (other than upon death or Disability) or the Executive resigns for Good
Reason prior to a Change in Control, the Executive shall be entitled to the
following:

 

 

 

(i)

Base Salary earned and payable through the Date of Termination;

 

 

 

(ii)

any unpaid Cash Bonus earned and accrued with respect to any year preceding the
Date of Termination and payable when bonuses for such year are paid to other
Company executives subject to the terms or requirements of such bonus as may be
established by the Board or Compensation Committee;

 

 

 

(iii)

an amount equal to two times the Executive's annual Base Salary plus 90% of Base
Salary (for a total of 3.8 times Base Salary), as in effect on the Date of
Termination, to be paid in a lump sum as soon as administratively feasible after
the Date of Termination but in no event later than two and one-half months after
the Date of Termination;

 

 

 

(iv)

outstanding stock option, equity and performance awards shall be vested and
exercised in accordance with the applicable plan and award agreements;

 

 

 

(v)

continued participation for twelve (12) months by the Executive and his eligible
dependents in the Company's group medical and dental benefits plan in which he
and his eligible dependents were participating immediately prior to the Date of
Termination, subject to the terms and conditions of the plans as such plans are
amended from time to time.  The Executive shall be required to continue to pay
the employee-paid portion of such coverage during the period of coverage.  Upon
the earlier of twelve (12) months coverage or the date the Executive becomes
eligible for medical coverage under a subsequent employer's plan, this coverage
under the Company's plan shall cease and the Executive and his dependents, if
applicable, may elect group continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA");

 

 

 

(vi)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8; and

 

 

 

(vii)

except as provided in 9(h) below, any payment and benefit in accordance with the
applicable plans and programs of the Company.

 

 

(b)

Termination upon Death.

 

In the event the Executive's employment is terminated upon death, the Executive
(or his estate or legal representative, as the case may be) shall be entitled
to:

 

 

 

(i)

Base Salary through the Date of Termination;

 

 

 

(ii)

any unpaid Cash Bonus earned and accrued with respect to any year preceding the
Date of Termination and payable when bonuses for such year are paid to other
Company executives subject to the terms and requirements of such bonus as may be
established by the Board or Compensation Committee;

 

 

 

(iii)

outstanding stock options, equity and performance awards shall be vested and
exercised in accordance with the applicable plan and award agreements;

 

 

 

(iv)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8 above; and

 

 

 

(v)

any other payment and benefit in accordance with applicable plans or programs of
the Company.

 

 

(c)

Termination Upon Disability. 

 

In the event Executive is terminated on account of Disability, the Executive (or
his estate or legal representative) shall be entitled to:

 

 

 

(i)

an amount equal to the Base Salary and the Cash Bonus amount that would have
been payable through the earlier of the end of the Term or one year from the
Date of Termination reduced by any disability insurance payments payable to
Executive from any policy, plan or program sponsored by the Company or its
Affiliates to be paid in a lump sum as soon as administratively feasible after
the Date of Termination but in no event later than two and one-half months after
the Date of Termination;

 

 

 

(ii)

any unpaid Cash Bonus earned and accrued with respect to any year preceding the
Date of Termination and payable when bonuses for such year are paid to other
Company executives subject to the terms and requirements of such bonus as may be
established by the Board or Compensation Committee;

 

 

 

(iii)

outstanding stock options, equity and performance awards shall be vested and
exercised in accordance with the applicable plan and award agreements;

 

 

 

(iv)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8 above; and

 

 

 

(v)

except as provided in 9(h) below, any other payment and benefit in accordance
with applicable plans or programs of the Company.

 

 

(d)

Termination by the Company for Cause or a Voluntary Resignation by the
Executive.

 

In the event the Company terminates the Executive's employment for Cause or the
Executive voluntarily resigns, the Executive shall be entitled to:

 

 

 

(i)

Base Salary through the Date of Termination;

 

 

 

(ii)

outstanding stock options, equity and performance awards shall be vested and
exercised in accordance with the applicable plan and award agreements;

 

 

 

(iii)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8 above; and

 

 

 

(iv)

any other payment and benefit in accordance with the applicable plans or
programs of the Company.

 

 

(e)

Termination as a Result of an Election by Company Not to Extend the Term.

 

In the event the Company elects not to extend the Term pursuant to Section 2
hereof, and the Executive continues to be employed with the Company to the end
of the Term, at the end of the Term the Executive shall be entitled to:

 

 

 

(i)

Base Salary through the Date of Termination;

 

 

 

(ii)

any unpaid Cash Bonus earned and accrued with respect to any year preceding the
Date of Termination and payable when bonuses for such year are paid to other
Company executives subject to the terms and requirements of such bonus as may be
established by the Board or Compensation Committee;

 

 

 

(iii)

outstanding stock options, equity and performance awards shall be vested and
exercisable in accordance with the applicable plan and award agreement;

 

 

 

(iv)

continued participation for twelve (12) months by the Executive and his eligible
dependents in the Company's medical plan in which he and his eligible dependents
were participating immediately prior to the Date of Termination, pursuant to the
plan's terms as may be amended from time to time.  Executive shall be
responsible for the payment of the employee-paid portion of any premiums for
such coverage.  Upon the earlier of the end of the twelve-month period or the
date upon which the Executive is eligible for other medical coverage with
subsequent employer, this coverage shall cease and Executive or his dependents
may elect COBRA continuation coverage in accordance with COBRA;

 

 

 

(v)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8 above;

 

 

 

(vi)

except as provided in 9(h) below, any payment and benefit in accordance with the
applicable plans or programs of the Company; and

 

 

 

(vii)

a severance payment equal to one and nine tenths (1.9) times the Executive's
annual Base Salary, as in effect on the Date of Termination, to be paid in a
lump sum as soon as administratively feasible after the Date of Termination but
in no event later than two and one-half months after the Date of Termination.

 

 

(f)

Termination After a Change in Control.  In the event Executive's employment  is
terminated, without Cause, voluntarily or involuntarily after a Change in
Control, the Executive shall be entitled to do the following:

 

 

 

(i)

Base Salary earned and payable through the Date of Termination;

 

 

 

(ii)

any unpaid Cash Bonus earned and accrued with respect to any year preceding the
Date of Termination and payable when bonuses for such year are paid to other
Company executives subject to the terms and requirements of such bonus as may be
established by the Board or Compensation Committee;

 

 

 

(iii)

an amount equal to three times the Base Salary plus 90% of Base Salary (for a
total of 5.7 times Base Salary), as in effect on the Date of Termination, to be
paid in a lump sum as soon as administratively feasible after Executive's Date
of Termination but in no event later than two and one-half months after the Date
of Termination;

 

 

 

(iv)

outstanding stock options, equity and performance awards shall be vested and
exercised in accordance with the terms of the applicable plan and award
agreements;

 

 

 

(v)

continued participation for twelve (12) months by the Executive and his eligible
dependents in the Company's group medical and dental plan in which he and his
eligible dependents were participating immediately prior to the Date of
Termination, subject to the terms and conditions of the plans as such plans are
amended from time to time.  The Executive shall be required to continue to pay
the employee-paid portion of such coverage.  Upon the earlier of the expiration
of twelve (12) months or the date the Executive becomes eligible for medical
benefits with a subsequent employer, this coverage shall cease, and the
Executive and his dependents, if applicable, may elect group continuation
coverage under COBRA;

 

 

 

(vi)

any amounts earned, accrued or owing to the Executive but not yet paid under
Section 8; and

 

 

 

(vii)

Except as provided in 9(h) below, any payment and benefit in accordance with the
applicable plans and programs of the Company.

 

 

(g)

If any amount is payable to Executive under any one subsection of Section 9(a)
though (f), no amounts shall be payable under any other subsection of this
Section 9; for example, if any amount is payable to Executive under Section
9(f), no amounts shall be payable pursuant to Sections 9(a) - (e).

 

 

(h)

Exclusivity of Benefits; Release of Claims.

 

Any payments provided pursuant to Section 9(a), (c), (e) or (f) shall be in lieu
of any salary continuation arrangements or any other severance-type payments
under any other severance program of the Company or its Affiliates.  In order to
be entitled to the payments, rights and other entitlements in Section 9(a), (c),
(e), (f) OR (k), the Executive shall be required to execute and deliver a
general release of claims against the Company and its Affiliates and their
officers, directors and employees and their successors and assigns including,
but not limited to, any claims under the Age Discrimination Act, in the form and
subject to such terms as provided to him by the Company and Executive must
execute the release and not revoke such general release within the applicable
time periods therein.

 

 

(i)

No Mitigation. 

 

Executive shall not be required to mitigate the amount of any payment provided
for under this Agreement by seeking other employment and there shall be no
offset against amounts due to him on account of any remuneration or benefits
provided by any subsequent employment he may obtain, except as expressly
provided herein with respect to eligibility for medical benefits with a
subsequent employer.

 

 

(j)

Resignation.

 

Notwithstanding any other provision of this Agreement, upon the termination of
the Executive's employment for any reason, unless otherwise requested by the
Board, he shall immediately resign from the Board, from all boards of directors
of any Affiliate of the Company of which he may be a member, and as a trustee
of, or fiduciary to, any employee benefit plans of the Company or any Affiliate.
The Executive hereby agrees to execute any and all documentation of such
resignations upon request by the Company, but he shall be treated for all
purposes as having so resigned upon termination of his employment, regardless of
when or whether he executes any such documentation.

 

 

(k)

Requirement of Additional Payment in Certain Circumstances.

 

 

 

(i)

In the event that Executive is deemed to have received an Aexcess parachute
payment@ (as defined in Section 280G(b) of the Internal Revenue Code of 1986, as
amended (the "Code") which is subject to the excise taxes (the AExcise Taxes@)
imposed by Section 4999 of the Code in respect of any payment pursuant to this
Agreement or any other agreement, plan, instrument or obligation, in whatever
form arising from or in connection with Executive's employment with the Company
or a Change in Control, the Company shall make the Additional Payment (defined
below) to Executive notwithstanding any contrary provision in this Agreement or
any other agreement, plan, instrument or obligation.

 

 

 

(ii)

The term AAdditional Payment@ means a cash payment in an amount equal to the sum
of (i) all Excise Taxes payable by Executive, plus (ii) all additional Excise
Taxes and federal or state income taxes to the extent such taxes are imposed in
respect of the Additional Payment, such that Executive shall be in the same
after-tax position and shall have received the same benefits that he would have
received if the Excise Taxes had not been imposed.  For purposes of calculating
any income taxes attributable to the Additional Payment, Executive shall be
deemed for all purposes to be paying income taxes at the highest marginal
federal income tax rate, taking into account any applicable surtaxes and other
generally applicable taxes which have the effect of increasing the marginal
federal income tax rate and, if applicable, at the highest marginal state income
tax rate, to which the Additional Payment and Executive are subject.  An example
of the calculation of the Additional Payment is set forth as follows: Assume
that the Excise Tax rate is 20%, the highest federal marginal income tax rate is
40% and Executive is not subject to state income taxes.  Further assume that
Executive has received an excess parachute payment in the amount of $200,000, on
which $40,000 ($200,000 x 20%) in Excise Taxes are payable.  The amount of the
required Additional Payment is thus computed to be $100,000, i.e., the
Additional Payment of $100,000, less additional Excise Taxes on the Additional
Payment of $20,000 (i.e., 20% x $100,000) and income taxes of $40,000 (i.e., 40%
x $100,000), yields $40,000, the amount of the Excise Taxes payable in respect
of the original excess parachute payment.

 

 

 

(iii)

Executive agrees to cooperate with the Company to minimize the amount of the
excess parachute payments, including, without limitation, assisting the Company
in establishing that some or all of the payments received by Executive that are
Acontingent on a change@, as described in Section 280G(b)(2)(A)(i) of the Code,
are reasonable compensation for personal services actually rendered by Executive
before the date of such change or to be rendered by Executive on or after the
date of such change.  In the event that the Company is able to establish that
the amount of the excess parachute payments is less than originally anticipated
by Executive, Executive shall refund to the Company any excess Additional
Payment to the extent not required to pay Excise Taxes or income taxes
(including those incurred in respect of receipt of the Additional Payment). 

 

 

 

(iv)

The Company shall make any payment required to be made under this Section 9(k)
in a cash lump sum within sixty (60) days after it is determined by the Company
with advice from its tax advisor that the Executive has received an excess
parachute payment that would be subject to Excise Taxes under Code Section 4999.

 

 

 

(v)

In the event that there is any change to the Code which results in the
recodification of Section 280G or Section 4999 of the Code, or in the event that
either such section of the Code is amended, replaced or supplemented by other
provisions of the Code of similar import (ASuccessor Provisions@), then this
Agreement shall be applied and enforced with respect to such new Code provisions
in a manner consistent with the intent of the parties as expressed herein, which
is to assure that Executive is in the same after-tax position and has received
the same benefits that he would have been in and received if any taxes imposed
by Section 4999 (or any Successor Provisions) had not been imposed.

 

10.

Confidentiality, Assignment of Rights, Non-Competition and Non-Solicitation.

 

 

(a)

Confidentiality

 

 

 

(i)

Concurrent herewith and during the Employment Period, the Executive will create,
receive and/or have access to trade secrets or proprietary or confidential
information of the Company and its Affiliates consisting of written, oral, and
visual material including, but not limited to, client lists, corporation and
personal business contacts and relationships, corporation and personal business
opportunities, memoranda, computer disks or files, rolodex cards or other lists
of names, addresses or telephone numbers, financial information, projects,
prospects, potential projects and prospects (including ideas and concepts for
potential prospects) projects and prospects in development, business strategies,
contracts, releases, and other documents, materials or writings that belong to
the Company or its Affiliates including those which are prepared or created by
Executive or come into the possession of Executive by any means or manner and
which relate directly or indirectly to one or more of the parties which
compromise Company or its Affiliates or any of them (all of the above
collectively referred to herein as the "Confidential Information" or "Trade
Secrets").

 

 

 

(ii)

The Confidential Information is, and at all times shall be and remain, private
and confidential and the sole and exclusive property of, and owned and
controlled by, the Company regardless whether said Confidential Information is
in tangible or intangible form.

 

 

 

(iii)

Except to the extent required in connection with the performance of his duties
for the conduction of the business of the Company, Executive shall not make
copies of any Confidential Information, nor shall Executive remove any such
Confidential Information from Company's office location without the prior
express written consent of Company.  Any and all Confidential Information and
any and all other property of Company that is in the possession or control of
Executive shall be returned to Company forthwith upon the termination of
Executive's employment by Company.

 

 

 

(iv)

Executive shall not, directly or indirectly, verbally or otherwise, either
during the Employment Period or after the Employment Period, provide any person,
firm or entity with any of the Confidential Information or cause, or permit, the
same to be published, disseminated or disclosed (herein collectively
"Disclosure") to any person, firm or entity whatsoever including, but not
limited to, Company's business associates or competitors (herein collectively
"Third Parties") and shall take any and all action possible to present such
Disclosure to any Third Parties except for the sole purpose to conduct the
Company's business.

 

 

 

(v)

Except as authorized by the foregoing for the conduction of the Company's
business, Executive is aware that any Disclosure of Confidential Information by
Executive to Third Parties will be, and is, a breach of Executive's employment,
a breach of trust and confidence, a breach of fiduciary duty, invasion of
privacy, a misappropriation of Company's trade secrets and/or exclusive property
rights, and may constitute fraud and deceit.

 

 

 

(vi)

Except as authorized by the foregoing for the conduction of the Company's
business, Executive is aware that Disclosure of any of the Confidential
Information to Third Parties could cause Company to suffer major adverse
economic consequences due to the fact that such disclosure could result in (a)
the diversion of Company's business opportunities, and (b) the dilution or
diminution in value of Company's business opportunities and (c) other adverse
consequences in addition to those set forth above.

 

 

 

(vii)

In the event that Executive is compelled by subpoena or other similar compulsory
means to testify or provide evidence in a manner that constitutes engaging in a
prohibited Disclosure of Confidential Information, it shall be presumed that no
violation of this Agreement has occurred with respect to that compulsory
prohibited Disclosure if, immediately upon first learning that such prohibited
Disclosure may be compelled, Executive notifies Company of all facts relative
thereto and makes every effort to assert Company's trade secret privilege and
all other privileges and rights of Company to keep the Confidential Information,
including the prohibited Disclosure, secret and confidential.  However, under no
circumstances shall Executive volunteer to engage in any such prohibited
communication or Disclosure.

 

 

 

(viii)

The Executive hereby sells, assigns and transfers to the Company all of his
right, title and interest in and to all inventions, discoveries, improvements
and copyrightable subject matter (the "rights") which during the course of his
employment are made or conceived by him, alone or with others, and which are
within or arise out of any general field of the Company's business or arise out
of any work he performs, or information he receives regarding the business of
the Company, while employed by the Company. The Executive shall fully disclose
to the Company as promptly as available all information known or possessed by
him concerning the rights referred to in the preceding sentence, and upon
request by the Company and without any further remuneration in any form to him
by the Company, but at the expense of the Company, execute all applications for
patents and for copyright registration, assignments thereof and other
instruments and do all things which the Company may deem necessary to vest and
maintain in it the entire right, title and interest in and to all such rights.

 

 

(b)

Non-Competition.

 

 

 

(i)

Executive acknowledges that he is currently an employee of the Company and
Executive agrees in consideration of (x) Executive's employment as the CEO and
President of the Company and the Executive's receipt of, access to and exposure
to Confidential Information or Trade Secrets herewith and (y) during the
Employment Period the receipt of, access to and exposure to Confidential
Information or Trade Secrets and the Company's provision of specialized training
that during the Employment Period and for a period of one year following
Executive's Date of Termination with Company for any reason, Executive shall not
(1) compete or engage in any business, directly or indirectly, with Company or
its Affiliates in the seismic or similar business of the Company or of its
Affiliates in any geographical area where the Company or its Affiliates have or
solicited any business or at any time during the two (2) years had any business
preceding Date of Termination (the "Area of No-Compete") as an individual,
owner, investor, partner, shareholder, director, officer, principal, agent,
employee, trustee, consultant, or in any relationship or capacity, (2) without
limiting the foregoing, solicit or negotiate, or manage, supervise or direct
others in the solicitation or negotiation of, any contract or agreement that
constitutes or would constitute engaging in competition with the seismic
business in the portions of  the Area of No-Compete, or (3) solicit, take away,
attempt to solicit or take away, or do any act the foreseeable consequences of
which would lead to the solicitation or taking away of any marketing prospects,
projects or customers of Company's business in the Area of No-Compete.

 

 

 

(ii)

 For a period of one year following the Executive's Date of Termination with
Company for any reason, Executive shall not, directly or indirectly, solicit for
employment, employ or be in business in any form with, directly or indirectly,
in the seismic or business of the Company, any employee (i) employed by Company
or Affiliates or who was so employed within the two-year period immediately
prior to such termination, or (ii) knowingly solicit or encourage any employee
to leave the employ of the Company or its Affiliates.

 

 

 

(iii)

The Executive agrees that for a period of one year following Date of Termination
he will not solicit or encourage any customer of the Company or any of its
Affiliates to reduce or cease its business with the Company or any such
Affiliate or otherwise knowingly interfere with the relationship of the Company
or any Affiliate with its customers.

 

 

(c)

Additional Covenants and Acknowledgments.

 

 

 

(i)

Executive hereby specifically acknowledges and agrees that the temporal,
geographical and other restrictions contained in this Section 10 are reasonable
and necessary to protect the Company's legitimate business interests, including
but not limited to, the business, goodwill, Confidential Information or Trade
Secrets and prospects of Company.

 

 

 

(ii)

Executive specifically agrees that the actual or threatened breach by Executive
of the provisions in Section 10 of this Agreement will cause irreparable harm to
Company causing damages and injuries that are not measurable or susceptible to
calculation.  In the event of any breach or threatened breach of this Section 10
by the Executive, the Company shall be entitled to extraordinary or emergency
relief, including, but not limited to, obtaining an ex parte restraining order,
preliminary injunction and permanent injunction and to recover the Company's
attorney's fees, costs and expenses related to Executive's breach or threatened
breach.  Nothing contained in this Agreement shall be construed as prohibiting
the Company from pursuing any other remedies available to it for breach or
threatened breach by Executive, including, without limitation, the recovery of
money damages.

 

 

 

(iii)

Executive further agrees that in the event either the length of time,
geographical or any other restrictions, or portion thereof, set forth in this
Section 10 is overly restrictive and unenforceable in any court proceeding, the
court may reduce or modify such restrictions, but only to the extent necessary,
to those which it deems reasonable and enforceable under the circumstances and
the parties agree that the restrictions of this Section 10 will be enforced as
reduced or modified.

 

 

 

(iv)

Executive further agrees that, in the event any provision of this Section 10 is
held to be invalid, overbroad, void, or against public policy, the remaining
provisions of this Section 10 and all other provisions of this Agreement shall
not be affected thereby, and that the provision held invalid shall be reformed
to the minimum extent necessary to validate such provision, consistent with the
purpose and intent of this Agreement.

 

 

 

(v)

If the Company believes that Executive has violated any of the provisions of
this Section 10, all benefits and payments payable under this Agreement shall
cease and the non-competition period shall be suspended and will not run in
favor of the Executive from the time of the commencement of such breach until
the time when the Executive cures the breach to the Company's satisfaction.  If
the Executive does not cure the violation to the satisfaction of the Company, no
further benefits or payments will be made and all rights of Executive to such
payments lapse and become void and the Company may pursue any other remedies
provided herein.

 

 

(d)

Return of Materials.

 

Promptly upon the termination of Executive's employment for any reason and in
any event within five days after request by the Company, Executive shall return
all Confidential Information and all copies thereof to the Company, and
Executive shall destroy all extracts, memoranda, notes and any other material
prepared by Executive based upon Confidential Information.

 

11.

Cooperation.

 

Following the Date of Termination, upon reasonable request by the Company, the
Executive shall cooperate with the Company with respect to any litigation or
other dispute relating to any matter in which he was involved or had knowledge
during his employment with the Company. The Company shall reimburse the
Executive for all reasonable and necessary out-of-pocket costs, such as travel,
hotel and meal expenses, incurred by the Executive in providing any cooperation
pursuant to this Section 11.

 

12.

Assignability; Binding Nature.

 

This Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs (in the case of the Executive) and assigns.
For purposes of this Section 12, a successor or assign of the Company shall
include any type of successor or assign of the Company upon a Change in Control
and Executive's consent to the assignment shall not be required.  No rights or
obligations, benefits or payments of the Executive under this Agreement may be
assigned or transferred by the Executive other than his rights to compensation
and benefits, which may be transferred only by will, operation of law or in
accordance with Section 19 below.

 

13.

Entire Agreement.

 

This Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto. In the event of any
inconsistency between any provision of this Agreement and any other provision of
any other plan, policy or program of, or other agreement with, the Company, the
provisions of this Agreement shall control.

 

14.

Amendment or Waiver.

 

No provision in this Agreement may be amended unless such amendment is agreed to
in writing and signed by the Executive and an authorized officer of the Company.
No waiver by either Party of any breach by the other Party of any condition or
provision contained in this Agreement to be performed by such other Party shall
be deemed a waiver of a similar or dissimilar condition or provision at the same
or any prior or subsequent time. Any waiver must be in writing and signed by the
Party against whom it is being enforced (either the Executive or an authorized
officer of the Company, as the case may be).

 

15.

Severability.

 

In the event that any provision or portion of this Agreement shall be determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the .fullest extent permitted by law.

 

16.

Survivorship.

 

The respective rights and obligations of the Parties hereunder, including,
without limitation, Section 9 (termination of employment), Section 10
(confidentiality, assignment of rights, non-competition; non-solicitation,
injunctive and other relief), Section 11 (cooperation), and Section 19
(resolution of disputes), shall survive any termination of the Executive's
employment to the extent necessary to the intended preservation of such rights
and obligations.

 

17.

Beneficiaries/References.

 

The Executive shall be entitled, to the extent permitted under applicable plans,
agreements or law, to select and change a beneficiary or beneficiaries to
receive any benefit payable hereunder following the Executive's death by giving
the Company written notice thereof. In the event of the Executive's death or a
judicial determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.

 

18.

Governing Law.

 

This Agreement shall be governed by and construed and interpreted in accordance
with the laws of Texas without reference to principles of conflicts of law,
except as preempted by applicable federal law.

 

19.

Resolution of Disputes.

 

 

(a)

Arbitration. All disputes and controversies of every kind and nature between any
parties hereto arising out of or in connection with this Agreement or the
transactions described herein as to the construction, validity, interpretation
or meaning, performance, non-performance, enforcement, operation or breach,
shall be submitted to arbitration pursuant to the following procedures:

 

 

 

(i)

After a dispute or controversy arises, any party may, in a written notice
delivered to the other parties to the dispute, demand such arbitration. Such
notice shall designate the name of the arbitrator (who shall be an impartial
person) appointed by such party demanding arbitration, together with a statement
of the matter in controversy.

 

 

 

(ii)

Within thirty (30) days after receipt of such demand, the other parties shall,
in a written notice delivered to the first party, name such parties' arbitrator
(who shall be an impartial person). If such parties fail to name an arbitrator,
then the second arbitrator shall be named by the American Arbitration
Association (the "AAA"). The two arbitrators so selected shall name a third
arbitrator (who shall be an impartial person) within thirty (30) days, or in
lieu of such agreement on a third arbitrator by the two arbitrators so
appointed, the third arbitrator shall be appointed by the AAA. If any arbitrator
appointed hereunder shall die, resign, refuse or become unable to act before an
arbitration decision is rendered, then the vacancy shall be filled by the method
set forth in this Section for the original appointment of such arbitrator.

 

 

 

(iii)

Each party shall bear its own arbitration costs and expenses. The arbitration
hearing shall be held in Houston, Texas at a location designated by a majority
of the arbitrators. The Commercial Arbitration Rules of the American Arbitration
Association shall be incorporated by reference at such hearing and the
substantive laws of the State of Texas (excluding conflict of laws provisions)
shall apply.

 

 

 

(iv)

The arbitration hearing shall be concluded within ten (10) days unless otherwise
ordered by the arbitrators and the written award thereon shall be made within
fifteen (15) days after the close of submission of evidence. An award rendered
by a majority of the arbitrators appointed pursuant to this Agreement shall be
final and binding on all parties to the proceeding, shall resolve the question
of costs of the arbitrators and all related matters, and judgment on such award
may be entered and enforced by either party in any court of competent
jurisdiction.

 

 

 

(v)

Except as set forth in Section 19(b) and (c), the parties stipulate that the
provisions of this Section shall be a complete defense to any suit, action or
proceeding instituted in any federal, state or local court or before any
administrative tribunal with respect to any controversy or dispute arising out
of this Agreement or the transactions described herein. The arbitration
provisions hereof shall, with respect to such controversy or dispute, survive
the termination or expiration of this Agreement.

 

 

 

No party to an arbitration may disclose the existence or results of any
arbitration hereunder without the prior written consent of the other parties;
nor will any party to an arbitration disclose to any third party any
confidential information disclosed by any other party to an arbitration in the
course of an arbitration hereunder without the prior written consent of such
other party.

 

 

(b)

Emergency Relief. Notwithstanding anything in this Section 19(a) to the
contrary, any party may seek from a court any provisional remedy that may be
necessary to protect any rights or property of such party pending the
establishment of the arbitral tribunal or its determination of the merits of the
controversy or to enforce a party's rights under this Section 19.

 

 

(c)

Emergency or Extraordinary Relief Related to Section 10.  Notwithstanding the
foregoing, the Company shall have right to seek emergency or extraordinary
relief, including but not limited to, a temporary restraining order, injunctive
relief or any relief described in Section 10, for Executive's breach or
threatened breach of any provision in Section 10 of this Agreement.

 

20.

Notices.

 

Any notice given to a Party shall be in writing and shall be deemed to have been
given (i) when delivered personally, (ii) three days after being sent by
certified or registered mail, postage prepaid, return receipt requested or (iii)
two days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any such
notice duly addressed to the Party concerned at the address indicated below or
to such other address as such Party may subsequently give such notice of in
accordance with this Section 20:

 

 

 

If to the Company:                                            Seitel Inc.

                                                                        10811 S.
Westview Circle

                                                                        
Houston, Texas 77043

                                                                        
Attention: General Counsel

 

If to the Executive:                                             Robert D.
Monson

                                                                         22131
Glen Arden Lane

                                                                         Katy,
TX  77450

 

21.

Withholding.

 

The Company may withhold or deduct from any and all amounts payable under this
Agreement (a) such federal, state, local and other taxes or deductions as may be
required to be withheld pursuant to applicable law or regulation, (b) all other
normal employee deductions made with respect to the employee plans and programs
in which Executive participates.

 

22.

General Assets.

 

All payments to Executive provided for under this Agreement shall be paid in
cash from the Company and no special or separate funds shall be established and
no segregation of assets shall be made to assure payment.  To the extent that
any person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.

 

23.

Headings.

 

The headings of the sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement.

 

24.

Certain Interpretive Matters.

 

The definitions contained in this Agreement are applicable to the singular as
well as plural form of such terms and to the masculine as well as to the
feminine and neuter genders of such term.

 

25.

Counterparts.

 

This Agreement may be executed in two or more counterparts.

 

26.

Code Section 409A.

 

The parties agree that this Agreement shall be operated and amended at the
Company's discretion to the extent necessary to comply with or to be exempt from
Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), if
the Company determines upon advice from counsel that Code Section 409A applies
to any of the provisions of this Agreement.

      

[signature page follows]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of October
19, 2005.

 

SEITEL INC.      THE EXECUTIVE

 

By: /s/ Fred Zeidman                   By: /s/ Robert D. Monson                 
  Mr. Fred Zeidman         Mr. Robert D. Monson

 

 

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