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                                                                   Exhibit 10.25

                           RESTRICTED SHARE AGREEMENT

      This Restricted Share Agreement, dated as of the Grant Date set forth on
Schedule A hereto, between Dresser-Rand Group Inc., a Delaware corporation (the
"Company"), and the grantee whose name appears on Schedule A (the "Grantee"), is
being entered into pursuant to the Dresser-Rand Group Inc. 2005 Stock Incentive
Plan (the "Plan"). Capitalized terms used herein without definition have the
meaning given in the Plan.

      1. Grant of Restricted Shares. The Company hereby evidences and confirms
its grant to the Grantee, effective as of the Grant Date set forth on Schedule
A, of the number of Shares specified on Schedule A. All Shares received by the
Grantee under this Agreement are subject to the restrictions contained herein
and are referred to as "Restricted Shares." The Restricted Shares are subject to
the terms of the Plan, which terms are incorporated by reference herein. If
there is any inconsistency between the terms hereof and the terms of the Plan,
the terms of the Plan shall govern.

      2. Vesting of Restricted Shares.

      (a) Restricted Period. The Restricted Shares are subject to forfeiture and
may not be sold, assigned, transferred, pledged or otherwise directly or
indirectly encumbered or disposed of (collectively, "Transferred") until the
expiration of a "Period of Restriction" (although Transfers to Permitted
Transferees approved by the Committee and Transfers by will or by the laws of
descent and distribution are permitted during the Period of Restriction). Except
as provided in Section 2(b)(i) or Section 5, the Period of Restriction shall
expire on each of the dates set forth below as long as the Grantee remains an
employee of the Company or a Subsidiary on the applicable date:

<TABLE>
<CAPTION>
                 Date              % of Restricted Shares Becoming Vested
                 ----              --------------------------------------
<S>                                <C>
            August 5, 2006                           25%
            August 5, 2007                           25%
            August 5, 2008                           25%
            August 5, 2009                           25%
</TABLE>

      (b) Termination of Employment. Notwithstanding anything contained in this
Agreement to the contrary, (i) if the Grantee's employment terminates by reason
of death or Disability during the Period of Restriction, a pro rata portion (as
defined in Section 5.2 of the Plan) of the Restricted Shares shall become
nonforfeitable, and the remaining Restricted Shares shall be forfeited and
canceled as of the date of such termination and (ii) if the Grantee's employment
terminates for any reason other than death or Disability, any Restricted Shares
held by the Grantee for which the Period of Restriction has not then expired
shall be forfeited and canceled as of the date of such termination.
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      3. Grantee's Representations, Warranties and Covenants. The Grantee
represents and warrants that the Restricted Shares are being acquired by the
Grantee solely for the Grantee's own account for investment and not with a view
to or for sale in connection with any distribution thereof. The Grantee further
understands, acknowledges and agrees that the Restricted Shares may not be
Transferred except to the extent expressly permitted hereby and at all times in
compliance with the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the Securities Exchange Commission thereunder, and in compliance
with applicable state securities or "blue sky" laws and non-U.S. securities
laws.

      4. Grantee's Rights with Respect to Restricted Shares.

      (a) Rights as Stockholder. The Grantee shall have the right to vote the
Restricted Shares, but shall otherwise enjoy none of the rights of a stockholder
(including the right to receive dividends or equivalent payments) during the
Period of Restriction. Any securities issued to or received by the Grantee with
respect to Restricted Shares as a result of an Adjustment Event shall have the
same status and be subject to the same restrictions (including forfeiture) as
the Restricted Shares such securities are issued for.

      (b) Legend. The Restricted Shares shall be registered in the Grantee's
name on the Grant Date through a book entry credit in the records of the
Company's transfer agent, but shall be recorded as restricted non-dividend
paying Shares until the expiration of the Period of Restriction. Upon the
expiration of the Period of Restriction with respect to any Restricted Shares,
the Company shall instruct its transfer agent to record such Shares as
unrestricted. In the event any stock certificates are issued in respect of the
Restricted Shares during the Period of Restriction, such certificates shall bear
a restrictive legend determined by the Committee until the expiration of the
Period of Restriction with respect to such Shares.

      5. Change in Control.

      (a) Accelerated Vesting. Subject to Section 5(b) below, in the event of a
Change in Control, the Period of Restriction shall immediately expire with
respect to all Restricted Shares.

      (b) Alternative Awards. The Period of Restriction shall not expire upon a
Change in Control with respect to any Restricted Shares if the Committee
reasonably determines in good faith prior to the occurrence of a Change in
Control that the Restricted Shares shall be honored or assumed, or new rights
substituted therefor (such honored, assumed or substituted award an "Alternative
Award"), by the Grantee's employer (or the parent or a Subsidiary of such
employer) immediately following the Change in Control, provided that any such
Alternative Award must:
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            (i) be based on stock that is traded on an established U.S.
      securities market, or that will be so traded within 60 days of the Change
      in Control;

            (ii) provide the Grantee (or each Grantee in a class of Grantees)
      with rights and entitlements substantially equivalent to or better than
      the rights and terms applicable to the Restricted Shares, including, but
      not limited to, an identical or better vesting schedule;

            (iii) have substantially equivalent economic value to the Restricted
      Shares (determined at the time of the Change in Control); and

            (iv) have terms that provide that if the Grantee's employment is
      involuntarily terminated or constructively terminated, any conditions on
      the Grantee's rights under, and any restrictions on transfer, shall be
      waived or shall lapse, as the case may be.

For this purpose, a constructive termination shall mean a termination by the
Grantee following (i) a material reduction in the Grantee's base salary or
incentive compensation opportunity or (ii) a material reduction in the Grantee's
responsibilities, in each case without the Grantee's written consent.

            6. Miscellaneous.

      (a) Tax Withholding. The Company shall not instruct the transfer agent to
remove the restrictions applicable to any Restricted Shares at the expiration of
the Period of Restriction unless and until the Grantee has made arrangements
satisfactory to the Committee to satisfy applicable withholding tax obligations.
The Company shall have the right to deduct any taxes required to be withheld by
law from any amounts paid by it to the Grantee.

      (b) Binding Effect; Benefits. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended or shall be construed to give any person other than the parties to this
Agreement or their respective successors or assigns any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision
contained herein.

      (c) Amendment. This Agreement may not be amended, modified or supplemented
orally, but only by a written instrument executed by the Grantee and the
Company.

      (d) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or the Grantee without the prior written consent of
the other party, provided that the Company
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may assign all or any portion of its rights or obligations under this Agreement
to one or more persons or other entities designated by it.

      (e) APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICT OF LAWS WHICH WOULD REQUIRE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION.

      (f) Severability; Blue Pencil. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

      (g) Consent to Electronic Delivery. By executing this Agreement, the
Grantee hereby consents to the delivery of information (including, without
limitation, information required to be delivered to the Grantee pursuant to
applicable securities laws) regarding the Company and the Subsidiaries, the
Plan, and the Restricted Shares via Company web site or other electronic
delivery.

      (h) Section and Other Headings, etc. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

      (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

                           - Signature page follows -
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         IN WITNESS WHEREOF, the Company and the Grantee have executed this
Agreement as of the Grant Date.

                                       DRESSER-RAND GROUP INC.



                                       By: /s/ Elizabeth C. Powers
                                           ---------------------------
                                           Name:  Elizabeth C. Powers
                                           Title: Vice President and
                                                  Chief Administrative Officer




                                       GRANTEE



                                        /s/ Lonnie Arnett
                                        -----------------------------
                                            Lonnie Arnett