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Exhibit 10.3

 

SEITEL, INC.

Summary of Amendment to 2005 Non-Employee Director

and Updates to Executive Officer Compensation and Incentive Arrangements

 

 

Non-Employee Director Compensation Amendment

            On May 23, 2005, the independent directors of the board of directors
(the "Board") of Seitel, Inc. (the "Company") voted to reduce the compensation
of Fred S. Zeidman, as Chairman of the Board, from $250,000 per year to $100,000
per year, effective July 1, 2005.  The Board made this decision based on the
recommendation of its compensation committee.

Executive Officer Compensation Updates

            On July 14, 2005, the Company made grants of restricted common
stock, par value $.01 per share (the "Common Stock"), to its named executive
officers as follows:

Kevin Callaghan,

Chief Operating Officer and Executive Vice President

100,000 shares

Robert Simon,

President-Seitel Data, Ltd.

75,000 shares

Marcia Kendrick,

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

36,000 shares

Garis Smith,

President Olympic Seismic, Ltd.

50,000 shares

            With the exception of Marcia Kendrick, these awards were made to the
executives in addition to and outside of the Company's annual incentive plan
established in January of 2005 (the "Incentive Plan").  These additional awards
were made in recognition of the executive's performance and contributions to the
Company in the first six months of 2005.

            Marcia Kendrick was added to the category of executive officers
eligible for guaranteed stock options or other equity-based awards ("Key
Executive Awards") under the Incentive Plan.  Ms. Kendrick's award of 36,000
shares of restricted Common Stock represents her 2005 Key Executive Award, which
was based on the July 14, 2005 closing price of the Common Stock ($1.39 per
share).  This Key Executive Award represents approximately 25% (Ms. Kendrick's
target for Key Executive Awards) of her base salary.

            Garis Smith was determined by the Board to be an executive officer,
as defined by the rules promulgated under the Securities Exchange Act of 1934,
as amended, on May 23, 2005.  Mr. Smith is the president of Seitel, Inc.'s
wholly owned subsidiary, Olympic Seismic, Ltd.  His annual base salary is
$240,000 (Canadian dollars) and he is eligible for cash bonuses and Performance
Equity Awards under the Incentive Plan.  Under the Incentive Plan, Mr. Smith's
target for a cash bonus is 45% of his base salary and his target for a
Performance Equity Award is 50% of his cash bonus amount.  In addition, on
February 15, 2005, Mr. Smith was granted 48,000 shares of restricted Common
Stock.

            All of the above described restricted stock grants will vest as to
one-third of the shares on each of first, second and third anniversary of the
grant date.  Each of the restricted stock grants will be 100% vested on the date
immediately preceding a change in control, and upon termination resulting from
the executive's death or disability.  These grants were made under Seitel's 2004
Stock Option Plan and subject to the form of Restricted Stock Award Agreement
filed as Exhibit 10.2 to Seitel's 2004 Form 10-K.

            William Restrepo joined the Company as its chief financial officer,
executive vice president and secretary on July 25, 2005.  Mr. Restrepo's annual
base salary is $240,000 and he was granted 90,000 shares of restricted Common
Stock as an inducement award on that date.  His employment agreement and
restricted stock agreement are filed as Exhibits 10.1 and 10.2, respectively, to
the Company's Form 10-Q for the quarterly period ended June 30, 2005.  Under the
Incentive Plan, Mr. Restrepo's targets are as follows: 50% of base salary for
cash bonuses and Key Executive Awards; and 50% of his cash bonus amount for
Performance Equity Awards.  His 2005 cash bonus will be prorated in the
discretion of the compensation committee because of his July 25, 2005
commencement date.  Likewise, his 2005 Key Executive Award and any 2005
Performance Equity Award will reflect proration.  The Key Executive Award will
be valued at approximately $52,600 on the date of grant (expected in early
January 2006).

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