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**Exhibit 10.1**

 

 

 

**SEITEL HOLDINGS, INC.**

**2008 RESTRICTED STOCK AND RESTRICTED STOCK UNIT PLANEFFECTIVE APRIL 8, 2008**

 

1.                 Purpose of Plan.  This 2008 Restricted Stock and Restricted StockUnit Plan (the "Plan") of Seitel Holdings, Inc., a Delaware corporation(the "Company"), is designed to provide incentives to such present andfuture Employees of the Company or its Subsidiaries, as may be selected in thesole discretion of the Committee, through the grant of Restricted Stock andRestricted Stock Unit Awards by the Company to Participants.  This Plan isintended to advance the best interests of the Company by providing thosepersons who have a substantial responsibility for its management and growthwith additional incentives by allowing them to acquire an ownership interest inthe Company and thereby encouraging them to contribute to the success of theCompany and to continue to provide services to or remain employed by theCompany or a Subsidiary (as the case may be).  The availability and offering ofRestricted Stock and Restricted Stock Units under the Plan also increases theCompany's ability to attract and retain individuals of exceptional managerialtalent upon whom, in large measure, the sustained progress, growth andprofitability of the Company depends.  All Awards granted under the Plan areintended to qualify for an exemption (the "Exemption") from theregistration requirements under the Securities Act, pursuant to Rule 701 of theSecurities Act.  In the event that any provision of the Plan would cause any Awardgranted under the Plan to not qualify for the Exemption, the Plan shall bedeemed automatically amended to the extent necessary to cause all Awardsgranted under the Plan to qualify for the Exemption.

2.                  Definitions.  Certain terms used in this Plan have the meaningsset forth below:

"Approved Sale" shall have the meaningascribed to such term in the Securities Holders Agreement.

"Award" means Restricted Stock orRestricted Stock Units granted under the terms of the Plan.    

"Award Agreement" means the agreementbetween the Company and a Participant pursuant to which an Award is granted andwhich specifies the terms and conditions of that Award, including the vestingrequirements applicable to that Award.  Each Award granted under the Plan shallbe evidenced by Award Agreement.

"Award Shares" means shares ofRestricted Stock, shares of Common Stock and Units acquired pursuant to anAward.  

"Board" means the Company's board ofdirectors.

"Cause" shall have the meaning ascribedto such term in the applicable Employment Agreement, or if none, the AwardAgreement.

"Common Stock" means the Company'sCommon Stock, par value $0.001 per share.

"Code" means the Internal Revenue Codeof 1986, as amended, and the regulations promulgated thereunder, as the same maybe amended from time to time.

"Committee" means the Board or acommittee of the Board designated to administer the Plan.  Upon theconsummation of a Public Offering the Committee shall be composed of two ormore directors appointed by the Board, each of whom shall be a "non-employeedirector" as defined in Rule 16b-3 under the Securities Exchange Act of 1934,as amended (the "1934 Act"), and an "outside director" as defined inSection 162(m) of the Code. 

"Disability" means, as determined by the Committee in its solediscretion, that a Participant:

        (a)        is unable to engagein any substantial gainful activity by reason of any medically determinablephysical or mental impairment which can be expected to result in death or canbe expected to last for a continuous period of not less than 12 months, or 

        (b)        is, byreason of any medically determinable physical or mental impairment which can beexpected to result in death or can be expected to last for a continuous periodof not less than 12 months, receiving income replacement benefits for a periodof not less than 3 months under an accident and health plan covering Employees.

"Employee" meansa senior executive employee of the Company and/or any of its Subsidiaries. 

"Employment Agreement" means theemployment agreement by and between a Participant and the Company and/or any ofits Subsidiaries (if any for such Participant), as in effect from time to time.

"Investor" meansValueAct Capital Master Fund, L.P., a British Virgin Islands limitedpartnership, or any Successor thereto.

"Participant" means an Employee who isgranted an Award hereunder. 

"Person" means an individual, apartnership, a corporation, a limited liability company, an association, ajoint share company, a trust, a joint venture, an unincorporated organizationand a governmental entity or any department, agency or political subdivisionthereof.

"Public Offering" shall have the meaningascribed to such term in the Securities Holders Agreement.

"Restricted Stock" means Common Stockawarded by the Committee under Section 5 hereof. 

"Restricted Stock Unit" or "Unit" meansa right, granted to a Participant under Section 6 hereof, to receive the valueof Common Stock at the end of a specified deferral period. 

"Securities Act" means the SecuritiesAct of 1933, as amended, and any successor statute thereto.

"Securities Holders Agreement" means theSecurities Holders Agreement by and among Seitel Holdings, LLC, ValueactCapital Master Fund, L.P., and the Management Investors identified therein,dated January 8, 2007, as amended from time to time.

"Subsidiary" means any corporation,partnership, joint venture or other business entity of which 50% or more of theoutstanding voting power is owned, directly or indirectly, by the Company.

"Successor" means: (i) a PermittedTransferee, (ii) the legal representative of a Participant or his or her estate(in the case of a deceased Participant) or (iii) the Person or Persons whoshall acquire an Award or Award Shares by bequest or inheritance or othertransfer by reason of the death of the Participant.

Capitalized terms used in this Plan and notdefined herein shall have the meanings ascribed thereto in the SecuritiesHolders Agreement.

3.                  Administration of the Plan.  

(i)                 The Plan shall be administered by the Committee, which shall have fullpower to interpret and administer the Plan and full authority to act inselecting the Employees to whom Awards will be granted, in executing Award Agreementswith Participants under the Plan, in determining whether, and to what extent, Awardsmay be transferable by a Participant in accordance with the Securities HoldersAgreement, in determining the number of shares of Restricted Stock or thenumber of Units to be granted to each such Employee under an Award, and indetermining the terms and conditions of Awards granted under the Plan. 

(ii)                Subject to the other terms of the Plan, the Committee shall, in itsdiscretion as reflected by the terms of the applicable Award Agreement:  (i)determine the number of shares of Restricted Stock or the number of Units subjectto each Award; (ii) determine the time or times when and the manner andcondition in which each Award shall vest and/or be settled, as applicable; and(iii) determine or impose other conditions as it may deem appropriate. 

(iii)               The Committee may condition the vesting and/or settlement of an Awardupon: (i) the Employee's continued service over a period of time with theCompany or its Subsidiaries, (ii) the achievement by the Participant of certainperformance goals, or (iii) any combination of the above conditions, asspecified in the applicable Award Agreement.  If the specified conditions arenot attained, the Participant shall forfeit the portion of the Award withrespect to those conditions that are not attained.  

(iv)               The Committee shall have the power to adopt regulations for carrying outthe Plan and to make changes to such regulations as it shall, from time totime, deem advisable.  Any interpretation by the Committee of the terms andprovisions of the Plan and the administration thereof, and all actions taken bythe Committee, shall be final and binding on Participants and Successors, ifapplicable.

4.                  Shares of Common Stock Subject to the Plan.  

(i)                 Subject to adjustment as provided in Section 8 hereof, the maximumnumber of shares that may be issued under the Plan shall not exceed 25,000shares.

(ii)                Any shares issued by the Company through the assumption or substitutionof outstanding grants from an acquired company shall not reduce the sharesavailable for Awards under the Plan.  Any shares issued hereunder may consist,in whole or in part, of authorized and unissued shares or treasury shares.  Ifany Award (or portion thereof) granted hereunder is forfeited or such Award (orportion thereof) otherwise terminates, the shares subject to such Award, to theextent of any such forfeiture or termination, shall again be available for Awardsunder the Plan.

5.                  Restricted Stock. The Committee is authorized to grant RestrictedStock to Participants on the following terms and conditions: 

(i)                  Grant and Restrictions.Restricted Stock shall be subject to such restrictions on transferability, riskof forfeiture and other restrictions, if any, as set forth in an AwardAgreement and the Securities Holders Agreement.  Except as otherwise providedherein or in an Award Agreement, a Participant granted Restricted Stock shallhave all of the rights of a shareholder with respect to such Restricted Stock,including the right to vote and the right to receive dividends, subject in eachcase to the provisions of the Securities Holders Agreement.  

(ii)                 Forfeiture.Except as otherwise provided in the applicable Award Agreement, the SecuritiesHolders Agreement or determined by the Committee in its sole discretion, all ofa Participant's unvested shares of Restricted Stock shall be forfeited upon theTermination Date (as defined in the Securities Holders Agreement) of suchParticipant's employment with the Company and all Subsidiaries. 

(iii)                 Certificatesfor Stock. Restricted Stock granted under the Plan may be evidenced in suchmanner as the Committee shall determine. If certificates representingRestricted Stock are registered in the name of the Participant, the Committeemay require that such certificates bear an appropriate legend referring to theterms, conditions and restrictions applicable to such Restricted Stock, thatthe Company retain physical possession of the certificates, and that theParticipant deliver a stock power to the Company, endorsed in blank, relatingto the Restricted Stock. 

(iv)                Dividends. All dividends to which a Participant is entitled to receive by reason of his orher ownership of unvested shares of Restricted Stock shall be paid in shares ofRestricted Stock (as determined by the Committee in its sole discretion) whichshall be subject to the same terms and conditions as the Restricted Stock onwhich such dividends were granted.  

6.                 Restricted Stock Units. The Committee is authorized to grantUnits to Participants, which are rights to receive Common Stock, cash, or anycombination thereof at the end of a specified deferral period (as set forth inan Award Agreement), subject to the following terms and conditions: 

(i)                 Nature of Units. Units are solely a device for the measurement and determination of the amountsto be paid to a Participant under the Plan.  Each Participant's right in Unitsis limited to the right to receive payment, if any, as may be provided in anAward Agreement.  Units do not constitute Common Stock and shall not be treatedas (or as giving rise to) property or as a trust fund of any kind; provided,however, that the Company may establish a mere bookkeeping reserve tomeet its obligations hereunder or a trust or other funding vehicle that wouldnot cause the Plan to be deemed to be funded for tax purposes or for purposesof Title I of the Employee Retirement Income Security Act of 1974, as amended. The right of any holder of Units to receive payments by virtue of participationin the Plan shall be no greater than the right of any unsecured generalcreditor of the Company.  Nothing contained in the Plan shall be construed togive any Participant any rights with respect to Common Stock or any ownershipinterest in the Company by reason of being granted an Award of Units.  Noprovision of the Plan shall be interpreted to confer any voting, dividend,derivative or other similar rights with respect to any Units, except asprovided in Section 6(iv).  

(ii)                Award and Restrictions.Payment or delivery of an Award of Units shall occur pursuant to the terms ofthe applicable Award Agreement.  Units shall be satisfied by delivery of CommonStock, unless otherwise determined by the Committee. 

(iii)                 Forfeiture. Exceptas otherwise provided in the applicable Award Agreement, the Securities HoldersAgreement or determined by the Committee in its sole discretion, all of aParticipant's unvested Units shall be forfeited upon the Termination Date (asdefined in the Securities Holders Agreement) of such Participant's employmentwith the Company and all Subsidiaries.   

(iv)                Dividends.  All dividends to which a Participant is entitledto receive by reason of his or her ownership of Units shall be paid in Units(as determined by the Committee in its sole discretion) which shall be subjectto the same terms and conditions as the Units on which such dividends weregranted. 

7.                  Listing, Registration and Compliance with Laws and Regulations. Each Award shall be subject to the requirement that if at any time theCommittee shall determine, in its discretion, that the listing, registration orqualification of the shares subject to the Award upon any securities exchangeor under any federal, state or foreign securities or other law or regulation,or the consent or approval of any governmental regulatory body, is necessary ordesirable as a condition to or in connection with the granting of such Award orthe issue or purchase of shares thereunder, no such Award may be issued or paidin shares of Common Stock in whole or in part unless such listing,registration, qualification, consent or approval (a "Required Listing")shall have been effected or obtained.  The Participant of each such Award willsupply the Company with such certificates, representations and information asthe Company shall request which are reasonably necessary or desirable in orderfor the Company to obtain such Required Listing or otherwise comply with anyother applicable federal, state, local or foreign law, and shall otherwisecooperate with the Company in obtaining such Required Listing or in complyingwith such law(s).  The Company agrees to use commercially reasonable efforts toeffect or obtain any Required Listing.  

8.                 Adjustment for Change in Common Stock.  In the event of areorganization, recapitalization, stock split, stock dividend, combination ofshares, merger, consolidation or other change in Common Stock (or Common Stockgenerally), the Committee shall make appropriate changes in the number and typeof shares authorized by this Plan and the number and type of shares covered byoutstanding Awards.

9.                 Taxes.  The Company shall be entitled, if necessary or desirable,to withhold (or secure payment from the Participant in lieu of withholding) theamount of any withholding or other tax due from the Company with respect to anyAward, including the vesting or settlement thereof, issued under this Plan, andthe Company may defer granting such Award, or its vesting or settlement, unlessindemnified to the Board's satisfaction.  In any event, each Participant shallbe required to indemnify the Company and hold it harmless for any and allwithholding and similar tax obligations arising in connection with an Award.

10.               Termination and Amendment.  The Committee at any time may suspendor terminate this Plan and make such additions or amendments as it deemsadvisable under this Plan (except that it may not extend the term of thisPlan); providedthat, subject to the other provisions hereof, theCommittee may not change any of the terms of an Award Agreement in a mannerwhich would have a material adverse effect on the Participant without suchParticipant's consent.  Notwithstanding the foregoing, any amendment to the SecuritiesHolders Agreement that affects a provision contained herein shall be deemed tobe an amendment to the Plan.  To the extent any such amendment to the SecuritiesHolders Agreement affects the terms of an Award Agreement, the Participant andany Successor shall be deemed to have consented to that amendment.  This Planshall terminate on the 10th anniversary of the effective date.  

11.               Participant Acknowledgments.  In connection with the grant of anyAward and/or the issuance of any Award Shares, each Participant acknowledgesand agrees, that as a condition to any such grant or issuance:

(i)                 The Company will have no duty or obligation to disclose to anyParticipant, and no Participant will have any right to be advised of, anymaterial information regarding the Company or its Subsidiaries at any timeprior to, upon or in connection with, the Company's exercise of any repurchaserights in the Securities Holders Agreement with respect to any Award Shares.

(ii)                Such Participant will have consulted, or will have had an opportunity toconsult with, independent legal counsel regarding his or her rights andobligations under this Plan and any written agreement evidencing any grant ofany Award or the issuance of any Award Shares and he or she fully understandsthe terms and conditions contained herein and therein.

(iii)                Each Participant shall acknowledge the restrictive covenants containedin his or her Employment Agreement, if any, and/or the Securities HoldersAgreement and shall execute and deliver to the Company a joinder to theSecurities Holders Agreement reasonably satisfactory in form and substance tothe Company.

12.               Application of Securities Holders Agreement; Restrictions on Transfer.

(i)                 Each Participant and his or her Permitted Transferees shall be requiredto join the Securities Holders Agreement and agree to be subject to its termsupon receipt of an Award granted hereunder.

(ii)                Except as provided below, Awards may not be pledged, assigned ortransferred for any reason during the Participant's lifetime, and any attemptto do so shall be void and the relevant Award shall be forfeited.  TheCommittee may grant Awards that are transferable by the Participant during hisor her lifetime, but such Awards shall be transferable only to the extentspecifically provided in an Award Agreement and subject to the SecuritiesHolders Agreement.  The transferee of the Participant shall, in all cases, besubject to the Plan, the Securities Holders Agreement and the provisions of theapplicable Award Agreement.

(iii)                An Employee, or if applicable a Successor, who receives an Award shall bebound by the Securities Holders Agreement to the same extent as would a "ManagementInvestor," as that term is defined in the Securities Holders Agreement, and eachAward Share shall be an "Incentive Security" within the meaning of the SecuritiesHolders Agreement.  Accordingly, any Award and all Award Shares shall be held,transferred, sold or otherwise disposed of only in accordance with the SecuritiesHolders Agreement. Without limiting the generality of the foregoing, each Participantand any Successor shall comply with the provisions set forth in the SecuritiesHolders Agreement with regard to an Approved Sale, as well as be bound by anytransfer restrictions, restrictive covenants and other obligations delineatedin the Securities Holders Agreement.  Any rights of a "Management Investor"under the Securities Holders Agreement will be available to a Participant orSuccessor only in respect of any portion of an Award which is then vested.  Inaddition, and notwithstanding anything to the contrary herein, all Award Sharesshall, regardless of whether such Award Shares are subject to restrictions orconditions or whether such Award Shares are vested under the applicable termsof the Plan or Award Agreement, be subject to the Repurchase Option of theCompany upon any termination of the Employee's employment with the Company andall Subsidiaries in accordance with the terms of the Securities HoldersAgreement.   

13.                Approved Sale, Public Offering or Other Corporate Transaction

(i)                 Notwithstanding any provision in this Plan to the contrary and unlessotherwise provided in the applicable Award Agreement, in the event of (a) anApproved Sale, (b) a Public Offering, or (c) a Change in Control (as defined inthe applicable Award Agreement or as otherwise determined by the Committee inits sole discretion) (each, a "Transaction"), the Committee may, in its solediscretion:

         (a)        accelerate the vesting of all or a portion of an Award,

         (b)        settle any vested Units for per-share consideration received in theTransaction or the equivalent value thereof, as determined by the Committee inits sole discretion, or

         (c)        require the successor corporation, following a Transaction if theCompany does not survive such Transaction, to assume all outstanding Awards orto substitute such Awards with awards of such successor corporation on termsand conditions necessary to preserve the rights of Participants under suchAwards.

14.               Severability.  Whenever possible, each provision of this Planwill be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Plan is held to be invalid,illegal or unenforceable in any respect under any applicable law or rule in anyjurisdiction, such invalidity, illegality or unenforceability will not affectany other provision or any other jurisdiction, but this Plan will be reformed,construed and enforced in such jurisdiction as if such invalid, illegal orunenforceable provision had never been contained herein.

15.               Remedies.  Each of the Company and any Participant will beentitled to enforce its rights under this Plan specifically, to recover damagesand costs (including reasonable attorneys' fees) caused by any breach of anyprovision of this Plan and to exercise all other rights existing in its favor. Each Participant and the Company acknowledges and agrees that money damages maynot be an adequate remedy for any breach of the provisions of this Plan andthat any party may in its sole discretion apply to any court of law or equityof competent jurisdiction (without posting any bond or deposit) for specificperformance and/or other injunctive relief in order to enforce or prevent anyviolations of the provisions of this Plan.

16.             * *Business Days.  If any time period for giving notice or takingaction hereunder expires on a day which is a Saturday, Sunday or holiday in thestate in which the Company's chief executive office is located, the time periodshall be automatically extended to the business day immediately following suchSaturday, Sunday or holiday.

17.               Governing Law.  All issues concerning this Plan will be governedby and construed in accordance with the laws of the State of Delaware, withoutgiving effect to any choice of law or conflict of law provision or rule(whether of the State of Delaware or any other jurisdiction) that would causethe application of the law of any jurisdiction other than the State ofDelaware. ** **Each of the Company and each Participant waives the necessityfor personal service of any and all process upon it and consents that all suchservice of process may be made by registered or certified mail (return receiptrequested) or an overnight courier with delivery confirmation, in each casedirected to such party in accordance with the notice requirements set forth inthis Plan, and service so made will be deemed to be completed on the date ofactual receipt.  Each of the Company and each Participant consents to serviceof process as aforesaid.  Nothing in this Plan will prohibit personal servicein lieu of the service by certified or registered mail or an overnight courierwith delivery confirmation contemplated herein.

18.               Notices.  Any notice required or permitted under this Plan or anyagreement executed and delivered in connection with this Plan shall be inwriting and shall be either delivered by reputable overnight courier withdelivery confirmation, personally delivered, or certified or registered mail,return receipt requested, to any Participant at the address indicated in the Company'srecords for such Participant, and to the Company at the address belowindicated:

   Notices to the Company:

 

   Seitel Holdings, Inc.

   c/o ValueAct Capital MasterFund, L.P.

   435 Pacific Avenue, 4thFloor

   San Francisco, CA  94133

   Attention:          AllisonBennington, General Counsel

or such other address or to the attention of such otherperson as the recipient party shall have specified by prior written notice tothe sending party.  Any notice under this Plan shall be deemed to have beengiven when so delivered or mailed.

 

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