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Exhibit 10.2

 

**SEITEL, INC.**

**RESTRICTED STOCK AWARDAGREEMENT**

THIS RESTRICTED STOCK AGREEMENT (this"Agreement") is made and entered into by and between Seitel, Inc., a Delawarecorporation (the "Company"), and William Restrepo ("Grantee"), the ChiefFinancial Officer of the Company, effective as of the grant date shown inAppendix A attached hereto pursuant to the Seitel, Inc. 2004 Stock OptionPlan (the "Plan").  The Plan is incorporated by reference herein in itsentirety.  Capitalized terms not otherwise defined in this Agreement shall havethe meaning given such terms as defined in the Plan.

WHEREAS, effective July 14, 2005, Granteeentered into an employment agreement with the Company to serve as the ChiefFinancial Officer (the "CFO") of the Company, and as a material inducement tosuch employment, the Committee on behalf of the Company has authorized a grantto Grantee a number of restricted shares of the Company's Stock, par value $.01per share (the "Common Stock"), effective July 25, 2005, in the amount indicatedon Appendix A and which is pursuant to and shall be subject to the terms andconditions of this Agreement and the Plan, with a view to increasing Grantee'sinterest in the Company's welfare and growth; and

WHEREAS, Grantee desires to receive shares ofthe Common Stock as Restricted Stock pursuant to this Agreement as inducementstock.

NOW, THEREFORE, in consideration of thepremises, mutual covenants and agreements contained herein, and other good andvaluable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereto, intending to be legally bound hereby, agreeas follows:

**1.                 Grant of Common Stock**.  Subject to therestrictions, forfeiture provisions and other terms and conditions set forthherein (a) the Company hereby grants to Grantee the number of shares ofCommon Stock ("Restricted Shares") as set out in Appendix A hereto, and(b) subject to the terms hereof, Grantee shall have and may exerciserights and privileges of ownership of such Restricted Shares, including, withoutlimitation, the voting rights of such shares and the right to receive dividendsdeclared in respect thereof.  This Agreement and the grant of Restricted Sharesare subject to administration by and the rules and procedures established bythe Committee under the Plan.

**2.                  Transfer Restrictions; Vesting**.

*(a)              Generally.*  Grantee shall not sell, assign, transfer,exchange, pledge, encumber, gift, devise, hypothecate or otherwise dispose of(collectively, "Transfer") any Restricted Shares prior to their vesting in accordancewith the Vesting Dates set out in Appendix A.  Further, even after suchRestricted Shares becomes vested, such vested Restricted Shares may not be soldor otherwise disposed of in any manner which would constitute a violation ofany applicable federal or state securities laws or other applicable law, rulesof any exchange on which the Company's securities are traded or listed, orCompany rules or policies as determined by Company in its sole discretion. Restricted Shares shall vest as of each of the Vesting Dates set out inAppendix A provided that Grantee remains employed with the Company through theVesting Date, except as may otherwise be provided herein.

*(b)              Dividends, etc.*  If the Company (i) declares a dividendor makes a distribution on Common Stock in shares of Common Stock or(ii) subdivides or reclassifies outstanding shares of Common Stock into agreater number of shares of Common Stock or (iii) combines or reclassifiesoutstanding shares of Common Stock into a smaller number of shares of CommonStock, then the number of shares of Grantee's Common Stock subject to thetransfer restrictions in this Agreement shall be proportionally increased orreduced as to prevent enlargement or dilution of Grantee's rights and dutieshereunder.  The determination of the Company's Board of Directors regardingsuch adjustment should be final and binding.

**3.                  Vesting on Change in Control**.  Notwithstandingthe provisions in Section 2, on the date immediately preceding the date ofa Change in Control (as defined below), the Restricted Shares shall be 100%vested.  For purposes of this Agreement, a "**Change in Control**" shallmean the occurrence of any of the following events:

*(a)              *any Person (other than the Company, any trustee or other fiduciaryholding securities under any employee benefit plan of the Company, or anycompany owned, directly or indirectly, by the stockholders of the Companyimmediately prior to the occurrence with respect to which the evaluation isbeing made in substantially the same proportions as their ownership of thecommon stock of the Company) acquires securities of the Company and immediatelythereafter is the Beneficial Owner (except that a Person shall be deemed to bethe Beneficial Owner of all shares that any such Person has the right toacquire pursuant to any agreement or arrangement or upon exercise of conversionrights, warrants or options or otherwise, without regard to the 60-day periodreferred to in Rule 13d-3 under the Securities Exchange Act of 1934 (the"Exchange Act"), directly or indirectly, of securities of the Companyrepresenting 50% or more of the combined voting power of the Company's thenoutstanding securities (except that an acquisition of original issue securitiesdirectly from the Company shall not be deemed an acquisition for purposes ofthis clause (a));

*(b)              *during any period of two consecutive years, individuals who at thebeginning of such period constitute the Board, and any new director (other thana director designated by a person who has entered into an agreement with theCompany to effect a transaction described in clause (a), (c), or (d) of thisparagraph) whose election by the Board or nomination for election by theCompany's stockholders was approved by a vote of at least two thirds of thedirectors then still in office who either were directors at the beginning ofthe two-year period or whose election or nomination for election was previouslyso approved but excluding for this purpose any such new director whose initialassumption of office occurs as a result of either an actual or threatenedelection contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgatedunder the Exchange Act) or other actual or threatened solicitation of proxiesor consents by or on behalf of an individual, corporation, partnership, group,associate or other entity or Person other than the Board, cease for any reasonto constitute at least a majority of the Board; 

*(c)               *the consummation of a merger or consolidation of the Company withany other entity, other than (i) a merger or consolidation which wouldresult in the voting securities of the Company outstanding immediately priorthereto continuing to represent (either by remaining outstanding or by beingconverted into voting securities of the surviving or resulting entity) morethan 50% of the combined voting power of the surviving or resulting entityoutstanding immediately after such merger or consolidation or (ii) a merger or consolidation in which no premium is intended to be paid to anyshareholder participating in the merger or consolidation;

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

*(e)               *any other event occurs which the Board determines, in itsdiscretion, would materially alter the structure of the Company or itsownership.

*(f)                *"Beneficial Owner" shall have the meaning ascribed to such term inRule 13d-3 under the Exchange Act and any successor to such Rule.

*(g)              *"Person" shall have the meaning ascribed to such term in Section3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, andshall include a "group" as defined in Section 13(d) thereof.

**4.                   Forfeiture**.

*(a)              Termination of Service.*  Notwithstanding the provisions inSection 2 hereof, if the Grantee's employment with the Company isterminated:  (i) by the Company without Cause (as defined below); (ii) onaccount of the Company's election to not extend the term of the EmploymentAgreement (as defined below); (iii) by the Grantee for Good Reason (as definedbelow); or (iv) on account of Grantee's death or Disability (as defined below)the Restricted Shares shall be 100% vested on the effective date of suchtermination of employment.  

For the purposes of this Agreement, "Cause"shall mean:

(i)                 willful misconduct or gross negligence by the Grantee in the performanceof his duties under the employment agreement between the Grantee and theCompany dated July 14, 2005 (the "Employment Agreement"); 

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

(iii)              failure by the Grantee to perform his duties, if not cured to thesatisfaction of the Company determined by the Company within ten (10) daysafter Grantee's receipt of written notice from the Company of such breach,other than a failure resulting from Grantee's incapacity due to Disability (asdefined below);

(iv)              a material violation by the Grantee of the Company's code of businessconduct or the Company's policies or procedures; or

(v)               conviction of the Grantee of, or a plea of nolo contrendere to, afelony, or his engagement in fraud or other willful misconduct which isinjurious to the business or reputation of the Company.

For purposes of this Agreement, "Good Reason"shall mean:

(i)                 a material diminution in the Grantee's title and duties asnormally-associated with the position of CFO of the Company, without regard tothe additional duties and positions to which he may be assigned from time totime with respect to affiliates or subsidiaries as described in the secondsentence of Section 3 of the Employment Agreement;

(ii)               a reduction in the Grantee's Base Salary as provided in the EmploymentAgreement; 

(iii)              a change in reporting structure so that the Grantee reports to someoneother than the President of the Company; or

(iv)             the relocation of the Grantee's principal place of employment to alocation more than fifty (50) miles from his principal place of employment withthe Company on July 25, 2005.

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

*(b)              *If Grantee's employment with the Company is terminated by theCompany or Grantee for any reason, other than as provided in Section 3 or 4(a),then Grantee shall immediately forfeit all Restricted Shares which are unvestedunless the Committee, in its sole discretion, determines that any or all ofsuch unvested Restricted Shares shall not be so forfeited.

*(c)               Forfeited Shares*.  Any Restricted Shares forfeited under thisSection 4 shall automatically revert to the Company and become canceled andsuch shares shall be again subject to the Plan as provided in Section 4 of thePlan.  Any certificate(s) representing Restricted Shares which includeforfeited shares shall only represent that number of Restricted Shares whichhave not been forfeited hereunder.  Upon the Company's request, Grantee agreesfor himself and any other holder(s) to tender to the Company any certificate(s)representing Restricted Shares which include forfeited shares for a newcertificate representing the unforfeited number of Restricted Shares.

**5.                   Issuance of Certificate**.

*(a)              *The Company shall cause to be issued a stock certificate, registeredin the name of the Grantee, evidencing the Restricted Shares upon receipt of astock power duly endorsed in blank with respect to such shares.  Each suchstock certificate shall bear the following legend:

Thetransferability of this certificate and the shares of stock represented herebyare subject to the restrictions, terms and conditions (including forfeiture andrestrictions against transfer) contained in the restricted stock agreemententered into between the registered owner of such shares and Seitel, Inc. copies of the restricted stock agreement are on file in the office of thesecretary of Seitel, Inc., located at 10811 S. Westview Circle Drive, Suite 100, Bldg. C, Houston,Texas  77043. 

Such legend shall not be removed from thecertificate evidencing Restricted Shares until such time as the restrictionsthereon have lapsed.

*(b)              *The certificate issued pursuant to this Section 5, together with thestock powers relating to the Restricted Shares evidenced by such certificate,shall be held by the Company.  The Company may issue to the Grantee a receiptevidencing the certificates held by it which are registered in the name of theGrantee.

**6.                   Miscellaneous**.

*(a)              Certain Transfers Void*.  Any purported transfer of RestrictedShares in breach of any provision of this Agreement shall be void andineffectual, and shall not operate to transfer any interest or title in thepurported transferee.

*(b)              No Fractional Shares*.  All provisions of this Agreementconcern whole shares of Common Stock.  If the application of any provisionhereunder would yield a fractional share, the value of such fractional shareshall be paid to the Grantee in cash.

*(c)               Not an Agreement for Continued Employment or Services*.  ThisAgreement shall not, and no provision of this Agreement shall be construed orinterpreted to, create any right of Grantee to continue employment with orprovide services to the Company, Company affiliates, parent, subsidiary ortheir affiliates.  

*(d)              Dispute Resolution*.

(i)                 *Arbitration*. All disputes and controversies of every kind andnature between any parties hereto arising out of or in connection with thisAgreement 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 followingprocedures:

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

(2)              Within 30 days after receipt of such demand, the other parties shall, ina 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 ArbitrationAssociation (the "**AAA**"). The two arbitrators so selected shall name athird arbitrator (who shall be an impartial person) within 30 days, or in lieuof such agreement on a third arbitrator by the two arbitrators so appointed,the third arbitrator shall be appointed by the AAA. If any arbitrator appointedhereunder shall die, resign, refuse or become unable to act before anarbitration decision is rendered, then the vacancy shall be filled by themethod set forth in this Section for the original appointment of sucharbitrator.

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

(4)              The arbitration hearing shall be concluded within ten (10) days unlessotherwise ordered by the arbitrators and the written award thereon shall bemade within fifteen (15) days after the close of submission of evidence. Anaward rendered by a majority of the arbitrators appointed pursuant to thisAgreement shall be final and binding on all parties to the proceeding, shallresolve the question of costs of the arbitrators and all related matters, andjudgment on such award may be entered and enforced by either party in any courtof competent jurisdiction.

(5)              Except as set forth in Section 6(e)(d)(ii), the parties stipulatethat 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 beforeany administrative tribunal with respect to any controversy or dispute arisingout of this Agreement or the transactions described herein. The arbitrationprovisions hereof shall, with respect to such controversy or dispute, survivethe termination or expiration of this Agreement.

No party to an arbitration may disclose the existence orresults of any arbitration hereunder without the prior written consent of theother parties; nor will any party to an arbitration disclose to any third partyany confidential information disclosed by any other party to an arbitration inthe course of an arbitration hereunder without the prior written consent ofsuch other party.

(ii)               *Emergency Relief*. Notwithstanding anything in this Section 6(d)to the contrary, any party may seek from a court any provisional remedy thatmay be necessary to protect any rights or property of such party pending theestablishment of the arbitral tribunal or its determination of the merits ofthe controversy or to enforce a party's rights under Section 6(d).

*(e)               Notices*.  Any notice, instruction, authorization, request ordemand required hereunder shall be in writing, and shall be delivered either bypersonal in-hand delivery, by telecopy or similar facsimile means, by certifiedor registered mail, return receipt requested, or by courier or delivery service,addressed to the Company at the address indicated beneath its signature on theexecution page of this Agreement, and to Grantee at his address indicatedherewith, or at such other address and number as a party shall have previouslydesignated by written notice given to the other party in the manner herein setforth.  Notices shall be deemed given when received, if sent by facsimile means(confirmation of such receipt by confirmed facsimile transmission being deemedreceipt of communications sent by facsimile means), and when delivered andreceipted for (or upon the date of attempted delivery where delivery isrefused), if hand-delivered, sent by express courier or delivery service, orsent by certified or registered mail, return receipt requested.

*(f)                Amendment and Waiver*.  This Agreement may be amended,modified or superseded only by written instrument executed by the Company andGrantee.  Any waiver of the terms or conditions hereof shall be made only by awritten instrument executed and delivered by the party waiving compliance.  Anyamendment or waiver agreed to by the Company shall be effective only ifexecuted and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisionshereof shall in no manner effect the right to enforce the same.  No waiver byany party of any term or condition in this Agreement, or breach thereof, in oneor more instances shall be deemed a continuing waiver of any such condition orbreach, a waiver of any other condition, or the breach of any other term orcondition.

*(g)              Independent Legal and Tax Advice*.  The Grantee has beenadvised and Grantee hereby acknowledges that he has been advised to obtainindependent legal and tax advice regarding this grant of the Restricted Sharesand the disposition of such shares, including, without limitation, the electionavailable under Section 83(b) of the Internal Revenue Code.

*(h)              Governing Law and Severability*.  This Agreement shall begoverned by the internal laws, and not the laws of conflict, of the State of Delaware.  The invalidity of any provision of this Agreement shall not affect any otherprovision of this Agreement which shall remain in full force and effect.

*(i)                 Successors and Assigns*.  Subject to the limitations whichthis Agreement imposes upon transferability of Restricted Shares, thisAgreement shall bind, be enforceable by and inure to the benefit of the Companyand its successors and assigns, and Grantee, and, upon his death, on his estateand beneficiaries thereof (whether by will or the laws of descent anddistribution).

*(j)                Community Property*.  Each spouse individually is bound by,and such spouse's interest, if any, in any shares is subject to, the terms ofthis Agreement. Nothing in this Agreement shall create a community propertyinterest where none otherwise exists.

*(k)              Entire Agreement*.  This Agreement supersedes any and allother prior understandings and agreements, either oral or in writing, betweenthe parties with respect to the subject matter hereof and constitute the soleand only agreements between the parties with respect to the said subjectmatter. All prior negotiations and agreements between the parties with respectto the subject matter hereof are merged into this Agreement. Each party to thisAgreement acknowledges that no representations, inducements, promises, oragreements, orally or otherwise, have been made by any party or by anyoneacting on behalf of any party, which are not embodied in this Agreement andthat any agreement, statement or promise that is not contained in thisAgreement shall not be valid or binding or of any force or effect.

*(l)                Compliance with Other Laws and Regulations*.  This Agreement,the grant of Restricted Shares and issuance of Common Stock shall be subject toall applicable federal and state laws, rules, regulations and applicable rulesand regulations of any exchanges on which such securities are traded or listed,and Company rules or policies.  Any determination in this connection by theCommittee shall be final, binding and conclusive on the parties hereto and onany third parties, including any individual or entity.

*(m)            Tax Requirements.*

(i)                 *Tax Withholding*.  This grant under this Agreement is subject toand the Company shall have the power and the right to deduct or withhold, orrequire the Grantee to remit to the Company, an amount sufficient to satisfyfederal, state, and local taxes, domestic or foreign, required by law orregulation to be withheld with respect to any taxable event arising as a resultof the Plan and this Agreement.

(ii)               *Share Withholding*.  With respect to tax withholding required uponany taxable event arising as a result of this Agreement, Grantee may elect,subject to the approval of the Committee in its discretion, to satisfy thewithholding requirement, in whole or in part, by having the Company withholdshares of Stock having a Fair Market Value on the date the tax is to bedetermined equal to the statutory total tax which could be imposed on thetransaction.  All such elections shall be made in writing, signed by theGrantee, and shall be subject to any restrictions or limitations that theCommittee, in its discretion, deems appropriate.  Any fraction of a share ofStock required to satisfy such obligation shall be disregarded and the amountdue shall instead be paid in cash by the Grantee.

*(n)              Grantee's Address*.  

            Grantee'saddress of record is:                          William Restrepo

                                                                                    3219 Oakmont Drive

                                                                                    Sugar Land,   Texas 77479

Grantee shall be responsible to notify theCompany of any changes to his address.

**[Signature page follows]**

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IN WITNESSWHEREOF, the parties have caused this Agreement to be executed on the datefirst above written.

 

                                                                               **COMPANY:**

 

                                                                               SEITEL,INC.

                                                                               

                                                                               By:     /s/Marcia H. Kendrick                                            

                                                                               Name:    Marcia H. Kendrick                                            

                                                                               Title:    ChiefAccounting Officer                                         

 

 

                                                                               Address:     Seitel,Inc.

                                                                                                  10811 S. Westview Circle Drive, 

                                                                                                  Suite 100, Bldg. C

                                                                                                  Houston, TX   77043

                                                                                                  Facsimile: (713) 881-2815

                                                                                                  Attention:Secretary

 

                                                                               **GRANTEE:**

 

                                                                                   /s/William Restrepo                                          

                                                                               Signature

 

 

                                                                               WilliamRestrepo                                                   

                                                                               PrintedName

 

 

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**APPENDIX A TO**

**RESTRICTED STOCKAGREEMENT**

 

**Grantee's Name:      **William Restrepo                      

 
| **Grant  Date:** | **Number  of**

**Restricted  Shares Granted** |
|------------------|------------------------------------------------|
| July 25, 2005    | 90,000                                         |

**Vesting Dates:**
| **Date**      | **Number  of**

**Restricted  Shares Granted** |
|---------------|------------------------------------------------|
| July 25, 2006 | 33.3%                                          |
| July 25, 2007 | 33.3%                                          |
| July 25, 2008 | 33.4%                                          |

Note:  All vesting is subject to the terms andconditions of the Agreement.****

 

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