----

Exhibit 10.1

 

**EMPLOYMENT AGREEMENT**

**AGREEMENT** made and entered into as ofJuly 14, 2005, by and between SEITEL INC., a Delaware corporation (togetherwith its successors and assigns, the "Company"), and William Restrepo (the"Executive").

**W I T N E S S E T H**

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

**NOW, THEREFORE**, in consideration of thepremises and mutual covenants contained herein and for other good and valuableconsideration, the receipt of which is mutually acknowledged, the Company andthe Executive (individually a "Party" and together the "Parties") agree asfollows:

1.                 Definitions.

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

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

(c)               "Beneficial Owner" shall have the meaning ascribed to such term in Rule13d-3 under the Securities Exchange Act of 1934 and any successor to suchRule.  

(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 theperformance of his duties under this Agreement; 

(ii)                 breach of a this Agreement by the Executive, which, if curable, is notsubstantially cured to the satisfaction of the Company determined by theCompany in its sole discretion within ten (10) days after Executive's receiptof written notice from the Company of such breach;

(iii)                failure by the Executive to perform his duties, if not cured to thesatisfaction of the Company determined by the Company within ten (10) daysafter 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 BusinessConduct or the Company's policies or procedures; or

(v)               conviction of the Executive 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.

(f)                "Change in Control."  A "Change in Control" shall be deemed to haveoccurred upon the occurrence of any of the following events:

(i)                 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 sixty (60)-dayperiod referred to in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Company representing 50% or more of thecombined voting power of the Company's then outstanding securities (except thatan acquisition of original issue securities directly from the Company shall notbe deemed an acquisition for purposes of this clause (i));

(ii)               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 (i), (iii), or (iv) 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 14Apromulgated under the Exchange Act) or other actual or threatened solicitationof 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 anyother entity, other than (i) amerger or consolidation which would result in the voting securities of theCompany outstanding immediately prior thereto continuing to represent (eitherby remaining outstanding or by being converted into voting securities of thesurviving or resulting entity) more than 50% of the combined voting power ofthe surviving or resulting entity outstanding immediately after such merger orconsolidation or (ii) a merger orconsolidation in which no premium is intended to be paid to any shareholderparticipating in the merger or consolidation;

(iv)               the stockholders of the Company approve a plan or agreement for the saleor disposition of all or substantially all of the consolidated assets of theCompany (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 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 July 25, 2005.

(h)               "Date of Termination" shall mean:

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

(ii)               if the Executive voluntarily resigns his employment, the date the Companyreceives notice from the Executive that Executive is terminating hisemployment;

(iii)                if the Executive's employment is terminated by reason of death, the dateof death; or

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

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

(j)                "Good Reason" shall mean the occurrence of any of the following duringthe Term without the Executive's consent: 

(i)                 a material diminution in the Executive's title and duties asnormally-associated with the position of CFO of the Company (as defined in thefirst sentence of Section 3 below) without regard to the additional duties andpositions to which he may be assigned from time to time with respect toaffiliates or subsidiaries as described in the second sentence of Section 3below;

(ii)                 a reduction in the Executive's Base Salary; 

(iii)                a change in reporting structure so that the Executive  reports tosomeone other than the President of the Company; or

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

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

(k)               "Initial Term" shall mean the period beginning on the Commencement Dateand ending at the close of business on the day before the second anniversary ofthe 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 employmenthereunder shall begin on the Commencement Date and end at the close of businesson the day before the second anniversary of the Commencement Date (the "InitialTerm"); provided, however, that the Initial Term shall thereafter beautomatically extended for additional one-year periods (the Initial Term andany one-year extension of employment hereunder shall each be referred toas the "Term") unless either the Company or the Executive gives the otherwritten notice at least thirty (30) days prior to the then-scheduled expirationof the Term that such Party is electing not to so extend the Term.Notwithstanding the foregoing, the Term shall end on the date on which theExecutive's employment is terminated by either Party in accordance with theprovisions herein.  The period from the Commencement Date through the Date ofTermination shall be the "Employment Period."

3.                 Position; Duties and Responsibilities.

During the Term, the Executive shall beemployed as the Chief Financial Officer ("CFO") of the Company and shallperform other duties and responsibilities as reasonably determined by thePresident of the Company consistent with the duties and responsibilitiesnormally associated with such position in the Company.  In addition, Executivefrom time to time may be assigned duties and hold positions or offices withsubsidiaries or affiliates of the Company as the President of the Companyand/or the Board may determine in their sole discretion.  The Executive, incarrying out his duties under this Agreement, shall report to the President ofthe Company.  The Executive shall devote all of his business time, energy andbest efforts to the business and affairs of the Company. Anything herein to thecontrary notwithstanding, nothing shall preclude the Executive from (i) subjectto the reasonable approval of the Board, serving on the boards of directors of tradeassociations and/or charitable organizations, (ii) engaging in charitableactivities and community affairs and (iii) managing his personal investmentsand affairs, provided that the activities described in the preceding clauses(i) through (iii) do not interfere with the proper performance of his dutiesand 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 paidan annualized Base Salary of $240,000 payable in accordance with the regularpayroll practices of the Company. During the Term, the Base Salary may beincreased, but not decreased, from time to time by the Board or itsCompensation Committee. The Executive shall not be entitled to any compensationfor service as a member of the Board or for service as an officer or member ofany board of directors of any Affiliate.

5.                 Bonus.

Beginning in calendar year 2005, the "Cash Bonus" forExecutive shall be determined under the annual incentive plan or program of theCompany ("Annual Incentive Plan") and subject to the goals, terms andconditions of such plan or program as determined by the Board or CompensationCommittee of the Board (the "Compensation Committee") in its sole discretion ona calendar year basis during the Term. During the Initial Term, Executive willbe eligible to receive up to 100% of his Base Salary amount as a Cash Bonus.The Cash Bonus will be payable when bonuses are paid under Company policies andprocedures or as determined by the Board or Compensation Committee. 

6.                 Stock Options and Other Equity Compensation.

During the Term, Executive shall receive underthe terms of the Annual Incentive Plan for each calendar year an award of stockoptions or other equity-based compensation in an amount equal to 50% of hisBase Salary (the "Guaranteed Equity-Based Award").  If Executive meets thegoals, terms and conditions to receive a Cash Bonus, he shall receive anadditional award of stock options or other equity-based awards for suchcalendar year under the Plan in an amount equal to 50% of the Cash Bonus (the"Incentive Equity-Based Award").  For calendar year 2005, Executive willreceive (a) a pro rata portion of the Guaranteed Equity-Based Award based on thenumber of days from the Commencement Date through December 31, 2005, divided by365, and (b) a pro rata portion of any Incentive Equity-Based Award, with suchproration determined by the Compensation Committee in its sole discretion.

As an inducement to join the Company, as soonas administratively possible after the Commencement Date, the Company shallgrant Executive a "Restricted Stock Grant" for 90,000 shares of Company commonstock as restricted stock, which shall vest as to 33.3% of such shares one yearfrom date of grant and an additional 33.3% of such shares two years from dateof grant, and Executive shall be 100% vested in such shares three years fromthe date of grant.  

All awards under Sections 5 and 6 shall besubject to the terms of the Company's 2004 Stock Option Plan, or any successorthereto (the "Plan") and the award agreements granting such awards asdetermined by the Compensation Committee in its sole discretion.

7.                 Employee Benefit Programs.

During the Term, the Executive shall beentitled to participate in all employee savings and welfare benefit plans andother employee programs made available to the Company's senior-levelexecutives, as such plans or programs may be amended and as may be in effectfrom time to time, including, without limitation, savings and other retirementplans or programs, medical, dental, hospitalization, short-term and long-termdisability and life insurance plans, accidental death and dismembermentprotection, travel accident insurance, and any deferred compensation plans orprograms, provided that Executive's eligibility and participation shall besubject to and governed by the terms and conditions of the applicable plan orprogram.  Notwithstanding the foregoing, nothing contained herein shall requirethe 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 andnecessary business expenses in carrying out his duties and responsibilitiesunder this Agreement and the Company shall promptly reimburse him for suchexpenses 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 peryear.

9.                 Benefits Upon Termination of Employment.

(a)               Termination Without Cause by the Company or Resignation for Good Reasonprior to a Change in Control.

In the event theExecutive's employment is terminated without Cause by the Company (other thanupon death or Disability) or the Executive resigns for Good Reason prior to aChange 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 yearpreceding the Date of Termination and payable when bonuses for such year arepaid to other Company executives subject to the terms or requirements of suchbonus as may be established by the Board or Compensation Committee; 

(iii)                an amount equal to two times the Executive's annual Base Salary as ineffect on the Date of Termination to be paid pro rata over a period oftwenty-four months, the first payment of which shall commence in the firstmonth following the Date of Termination in accordance with the Company'spayroll practices;

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

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

(vi)               any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8; and

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

(b)              Termination upon Death. 

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

(i)                 Base Salary through the Date of Termination;

(ii)                 any unpaid Cash Bonus earned and accrued with respect to any yearpreceding the Date of Termination and payable when bonuses for such year arepaid to other Company executives subject to the terms and requirements of suchbonus as may be established by the Board or Compensation Committee;

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

(iv)                any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8 above; and

(v)                 any other payment and benefit in accordance with applicable plans orprograms 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)                 Base Salary and the Cash Bonus continued to be paid in accordance withthe Company's normal payroll practices through the earlier of the end ofthe Term or one year from the Date of Termination to be reduced by any ofdisability insurance payments payable to Executive from any policy, plan orprogram sponsored by the Company or its Affiliates;

(ii)               any unpaid Cash Bonus earned and accrued with respect to any yearpreceding the Date of Termination and payable when bonuses for such year arepaid to other Company executives subject to the terms and requirements of suchbonus as may be established by the Board or Compensation Committee;

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

(iv)             any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8 above; and

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

(d)               Termination by the Company for Cause or a Voluntary Resignation by theExecutive. 

In the event the Company terminates the Executive's employmentfor Cause or the Executive voluntarily resigns, the Executive shall be entitledto:

(i)                 Base Salary through the Date of Termination;

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

(iii)              any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8 above; and

(iv)                any other payment and benefit in accordance with the applicable plans orprograms of the Company.

(e)               Termination as a Result of an Election by Company Not to Extend theTerm.

In the event the Company electsnot to extend the Term pursuant to Section 2 hereof, and the Executivecontinues to be employed with the Company to the end of the Term, at the end ofthe 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 yearpreceding the Date of Termination and payable when bonuses for such year arepaid to other Company executives subject to the terms and requirements of suchbonus as may be established by the Board or Compensation Committee;

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

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

(v)               any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8 above;

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

(vii)               a severance payment equal to one times the Executive's annual BaseSalary, as in effect on the Date of Termination, to be paid pro rata over aperiod of twelve (12) months, the first payment of which shall commence in thefirst month following the Date of Termination in accordance with the Company'spayroll practices.

(f)                 Termination After a Change in Control.  In the event Executive'semployment  is terminated, without Cause, voluntarily or involuntarily after aChange 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 yearpreceding the Date of Termination and payable when bonuses for such year arepaid to other Company executives subject to the terms and requirements of suchbonus as may be established by the Board or Compensation Committee; 

(iii)              an amount equal to two times the Base Salary, as in effect on the Dateof Termination, to be paid in a lump sum as soon as administratively feasibleafter Executive's Date of Termination;

(iv)               outstanding stock options, equity and performance awards shall be vestedand exercised in accordance with the terms of the applicable plan and awardagreements;

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

(vi)               any amounts earned, accrued or owing to the Executive but not yet paidunder Section 8; and

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

(g)               If any amount is payable to Executive under any one subsection ofSection 9(a) though (f), no amounts shall be payable under any othersubsection of this Section 9; for example, if any amount is payable toExecutive 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 anyother severance-type payments under any other severance program of the Companyor its Affiliates.  IN ORDER TO BE ENTITLED TO THE PAYMENTS, RIGHTS ANDOTHER ENTITLEMENTS IN SECTION 9(a), (c), (e) OR (f), THE EXECUTIVE SHALL BEREQUIRED TO EXECUTE AND DELIVER A GENERAL RELEASE OF CLAIMS AGAINST THE COMPANYAND ITS AFFILIATES AND THEIR OFFICERS, DIRECTORS AND EMPLOYEES AND THEIRSUCCESSORS AND ASSIGNS INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS UNDER THE AGEDISCRIMINATION ACT, IN THE FORM AND SUBJECT TO SUCH TERMS AS PROVIDED TO HIM BYTHE COMPANY AND EXECUTIVE MUST EXECUTE THE RELEASE AND NOT REVOKE SUCH GENERALRELEASE WITHIN THE APPLICABLE TIME PERIODS THEREIN.

(i)                 No Mitigation.  

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

(j)                Resignation. 

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

(k)               Limitation on Amounts Payable.

If all or any portion of the amount of any payment orcontinuation of benefits made on account of this Agreement or otherwise wouldnot be deductible for federal income tax purposes by the Company or its federalincome tax affiliates (or other person who made or is required to make suchpayment under this Agreement) by reason of the application of Section 280G ofthe Internal Revenue Code of 1986, as amended (the "Code") and the regulationsthereunder, the aggregate amount of such payment shall be reduced until (i) no portion of the total amount of all payments and continuation of benefits underthis Agreement is not deductible by a Company or its tax affiliates (or otherperson who made or is required to make such payment) by reason of theapplication of that section or (ii) the aggregate amount of such payment and continuationof benefits is reduced to zero as determined by the Company's independent taxcounsel.

10.                Confidentiality, Assignment of Rights, Non-Competition andNon-Solicitation.

(a)               Confidentiality

(i)                 Concurrent herewith and during the Employment Period, the Executive willcreate, receive and/or have access to trade secrets or proprietary orconfidential information of the Company and its Affiliates consisting ofwritten, oral, and visual material including, but not limited to, client lists,corporation and personal business contacts and relationships, corporation andpersonal business opportunities, memoranda, computer disks or files, rolodexcards or other lists of names, addresses or telephone numbers, financialinformation, projects, prospects, potential projects and prospects (includingideas and concepts for potential prospects) projects and prospects indevelopment, business strategies, contracts, releases, and other documents,materials or writings that belong to the Company or its Affiliates includingthose which are prepared or created by Executive or come into the possession ofExecutive by any means or manner and which relate directly or indirectly to oneor more of the parties which compromise Company or its Affiliates or any ofthem (all of the above collectively referred to herein as the "ConfidentialInformation" 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 andcontrolled by, the Company regardless whether said Confidential Information isin tangible or intangible form.

(iii)                Except to the extent required in connection with the performance of hisduties for the conduction of the business of the Company, Executive shall notmake copies of any Confidential Information, nor shall Executive remove anysuch Confidential Information from Company's office location without the priorexpress written consent of Company.  Any and all Confidential Information andany and all other property of Company that is in the possession or control ofExecutive shall be returned to Company forthwith upon the termination ofExecutive'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 anyperson, firm or entity with any of the Confidential Information or cause, orpermit, the same to be published, disseminated or disclosed (hereincollectively "Disclosure") to any person, firm or entity whatsoever including,but not limited to, Company's business associates or competitors (hereincollectively "Third Parties") and shall take any and all action possible topresent such Disclosure to any Third Parties except for the sole purpose toconduct the Company's business.

(v)               Except as authorized by the foregoing for the conduction of theCompany's business, Executive is aware that any Disclosure of ConfidentialInformation by Executive to Third Parties will be, and is, a breach ofExecutive's employment, a breach of trust and confidence, a breach of fiduciaryduty, invasion of privacy, a misappropriation of Company's trade secrets and/orexclusive property rights, and may constitute fraud and deceit.

(vi)                Except as authorized by the foregoing for the conduction of theCompany's business, Executive is aware that Disclosure of any of theConfidential Information to Third Parties could cause Company to suffer majoradverse economic consequences due to the fact that such disclosure could resultin (a) the diversion of Company's business opportunities, and (b) the dilutionor diminution in value of Company's business opportunities and (c) otheradverse consequences in addition to those set forth above.

(vii)               In the event that Executive is compelled by subpoena or other similarcompulsory means to testify or provide evidence in a manner that constitutesengaging in a prohibited Disclosure of Confidential Information, it shall bepresumed that no violation of this Agreement has occurred with respect to thatcompulsory prohibited Disclosure if, immediately upon first learning that suchprohibited Disclosure may be compelled, Executive notifies Company of all factsrelative thereto and makes every effort to assert Company's trade secretprivilege and all other privileges and rights of Company to keep theConfidential Information, including the prohibited Disclosure, secret andconfidential.  However, under no circumstances shall Executive volunteer toengage in any such prohibited communication or Disclosure.

(viii)              The Executive hereby sells, assigns and transfers to the Company all ofhis right, title and interest in and to all inventions, discoveries,improvements and copyrightable subject matter (the "rights") which during thecourse 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'sbusiness or arise out of any work he performs, or information he receivesregarding the business of the Company, while employed by the Company. TheExecutive shall fully disclose to the Company as promptly as available allinformation known or possessed by him concerning the rights referred to in thepreceding sentence, and upon request by the Company and without any furtherremuneration in any form to him by the Company, but at the expense of theCompany, execute all applications for patents and for copyright registration,assignments thereof and other instruments and do all things which the Companymay deem necessary to vest and maintain in it the entire right, title andinterest in and to all such rights.

(b)              Non-Competition.

(i)                 Executive agrees in consideration of (x) Executive's employment as the CFO pursuant to this Agreement of the Company****and the Executive's receiptof, access to and exposure to Confidential Information or Trade Secretsherewith and (y) during the Employment Period Executive's receipt of, access toand exposure to Confidential Information or Trade Secrets and the Company'sprovision of specialized training to Executive that during the EmploymentPeriod and for a period of one year following Executive's Date of Terminationwith Company for any reason, Executive shall not (1) compete or engage in anybusiness, directly or indirectly, with Company or its Affiliates in the seismicor similar business of the Company or of its Affiliates in any geographicalarea where the Company or its Affiliates have or solicited any business or atany time during the two (2) years had any business preceding Date ofTermination (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 theforegoing, solicit or negotiate, or manage, supervise or direct others in thesolicitation or negotiation of, any contract or agreement that constitutes orwould constitute engaging in competition with the seismic business in theportions of  the Area of No-Compete, or (3) solicit, take away, attempt tosolicit or take away, or do any act the foreseeable consequences of which wouldlead to the solicitation or taking away of any marketing prospects, projects orcustomers of Company's business in the Area of No-Compete.

(ii)               For a period of one year following the Executive's Date of Terminationwith Company for any reason, Executive shall not, directly or indirectly,solicit for employment, employ or be in business in any form with, directly orindirectly, in the seismic or business of the Company, any employee (i)employed by Company or Affiliates or who was so employed within the two-yearperiod immediately prior to such termination, or (ii) knowingly solicit orencourage 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 ofTermination he will not solicit or encourage any customer of the Company or anyof its Affiliates to reduce or cease its business with the Company or any suchAffiliate or otherwise knowingly interfere with the relationship of the Companyor 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 reasonableand necessary to protect the Company's legitimate business interests, includingbut not limited to, the business, goodwill, Confidential Information or TradeSecrets and prospects of Company.

(ii)                 Executive specifically agrees that the actual or threatened breach byExecutive of the provisions in Section 10 of this Agreement will causeirreparable harm to Company causing damages and injuries that are notmeasurable or susceptible to calculation.  In the event of any breach orthreatened breach of this Section 10 by the Executive, the Company shall beentitled to extraordinary or emergency relief, including, but not limited to,obtaining an *ex parte* restraining order, preliminary injunction andpermanent injunction and to recover the Company's attorney's fees, costs andexpenses related to Executive's breach or threatened breach.  Nothing containedin this Agreement shall be construed as prohibiting the Company from pursuingany other remedies available to it for breach or threatened breach byExecutive, 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 thisSection 10 is overly restrictive and unenforceable in any court proceeding, thecourt may reduce or modify such restrictions, but only to the extent necessary,to those which it deems reasonable and enforceable under the circumstances andthe parties agree that the restrictions of this Section 10 will beenforced as reduced or modified

(iv)                Executive further agrees that, in the event any provision of thisSection 10 is held to be invalid, overbroad, void, or against publicpolicy, the remaining provisions of this Section 10 and all other provisions ofthis Agreement shall not be affected thereby, and that the provision heldinvalid shall be reformed to the minimum extent necessary to validate suchprovision, consistent with the purpose and intent of this Agreement.

(v)               If the Company believes that Executive has violated any of theprovisions of this Section 10, all benefits and payments payable under thisAgreement shall cease and the non-competition period shall be suspended andwill not run in favor of the Executive from the time of the commencement ofsuch breach until the time when the Executive cures the breach to the Company'ssatisfaction.  If the Executive does not cure the violation to the satisfactionof the Company, no further benefits or payments will be made and all rights ofExecutive to such payments lapse and become void and the Company may pursue anyother remedies provided herein.

(d)              Return of Materials.

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

11.              Cooperation.

Following the Date of Termination, uponreasonable request by the Company, the Executive shall cooperate with theCompany with respect to any litigation or other dispute relating to any matterin which he was involved or had knowledge during his employment with theCompany. The Company shall reimburse the Executive for all reasonable andnecessary out-of-pocket costs, such as travel, hotel and meal expenses,incurred by the Executive in providing any cooperation pursuant to this Section11.

12.               Assignability; Binding Nature.

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

13.               Entire Agreement.

This Agreement contains the entireunderstanding and agreement between the Parties concerning the subject matterhereof and supersedes all prior agreements, understandings, discussions,negotiations and undertakings, whether written or oral, between the Partieswith respect thereto. In the event of any inconsistency between any provisionof this Agreement and any other provision of any other plan, policy or programof, or other agreement with, the Company, the provisions of this Agreementshall control

14.               Amendment or Waiver.

No provision in this Agreement may be amendedunless such amendment is agreed to in writing and signed by the Executive andan authorized officer of the Company. No waiver by either Party of any breachby the other Party of any condition or provision contained in this Agreement tobe performed by such other Party shall be deemed a waiver of a similar ordissimilar 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 beingenforced (either the Executive or an authorized officer of the Company, as thecase may be).

15.               Severability.

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

16.               Survivorship.

The respective rights and obligations of theParties hereunder, including, without limitation, Section 9 (termination ofemployment), 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 theExecutive's employment to the extent necessary to the intended preservation ofsuch rights and obligations.

17.               Beneficiaries/References.

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

18.               Governing Law.

This Agreement shall be governed by andconstrued and interpreted in accordance with the laws of Texas withoutreference to principles of conflicts of law, except as preempted by applicablefederal law.

19.                Resolution of Disputes.

(a)               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 thefollowing procedures:

(i)                 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.

(ii)               Within thirty (30) days after receipt of such demand, the other partiesshall, 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 anarbitrator, then the second arbitrator shall be named by the AmericanArbitration Association (the "AAA"). The two arbitrators so selected shall namea 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 soappointed, the third arbitrator shall be appointed by the AAA. If anyarbitrator appointed hereunder shall die, resign, refuse or become unable toact before an arbitration decision is rendered, then the vacancy shall befilled by the method set forth in this Section for the original appointment of sucharbitrator.

(iii)              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.

(iv)             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.

(v)               Except as set forth in Section 19(b) and (c), the parties stipulate thatthe provisions of this Section shall be a complete defense to any suit, actionor proceeding instituted in any federal, state or local court or before anyadministrative tribunal with respect to any controversy or dispute arising outof 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 anarbitration may disclose the existence or results of any arbitration hereunderwithout the prior written consent of the other parties; nor will any party toan arbitration disclose to any third party any confidential informationdisclosed by any other party to an arbitration in the course of an arbitrationhereunder 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 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 this Section 19.

(c)               Emergency or Extraordinary Relief Related to Section 10. Notwithstanding the foregoing, the Company shall have right to seek emergencyor extraordinary relief, including but not limited to, a temporary restrainingorder, injunctive relief or any relief described in Section 10, for Executive'sbreach or threatened breach of any provision in Section 10 of this Agreement.

20.               Notices.

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

            If tothe Company:                                            Seitel Inc.

                                                                                    10811 S. Westview Circle

                                                                                    Houston, Texas 77043

                                                                                    Attention:General Counsel

 

            If tothe Executive:                                            William Restrepo

                                                                                    3219 Oakmont Drive

                                                                                    Sugar Land,   Texas 77479

21.                Withholding.

The Company may withhold or deduct from anyand all amounts payable under this Agreement (a) such federal, state, local andother taxes or deductions as may be required to be withheld pursuant toapplicable law or regulation, (b) all other normal employee deductions madewith respect to the employee plans and programs in which Executiveparticipates.

22.               General Assets.

All payments to Executive provided for underthis Agreement shall be paid in cash from the Company and no special orseparate funds shall be established and no segregation of assets shall be madeto assure payment.  To the extent that any person acquires a right to receivepayments from the Company hereunder, such right shall be no greater than theright of an unsecured creditor of the Company.

23.               Executive Acknowledgment.

Executive acknowledges that (a) he is knowledgeable and sophisticated as to business matters, including the subject matters of thisAgreement, (b) he has read this Agreement, (c) he has been advised by the Company to consult an independent attorney and he has consulted with and beenadvised by his independent attorney, and (d) he understands the terms and conditions of this Agreement.  Executive represents that he is free to enterinto this Agreement and that he is not subject to another employment agreementwith the Company or covenant not to compete with the Company that wouldconflict with this Agreement.

24.               Headings.

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

25.               Certain Interpretive Matters.

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

26.               Code Section 409A.

The parties agree that this Agreement shall be operatedand amended at the Company's discretion to the extent necessary to comply withSection 409A of the Internal Revenue Code of 1986, as amended (the "Code"), andExecutive hereby consents to any such amendment.

27.               Counterparts.

This Agreementmay be executed in two or more counterparts.

**IN WITNESSWHEREOF**, the undersigned have executed this Agreement as of the date firstwritten above.

SEITEL INC.                                                                         THEEXECUTIVE

 

 

By:    /s/Robert D. Monson                                                    By:     /s/ William Restrepo                                 

                        Mr.Robert D. Monson                                                         Mr. William Restrepo

                                   President

 

 

----