SEITEL, INC. FIRST AMENDED AND RESTATED RESTRICTED STOCK AWARD AGREEMENT
Exhibit 10.4
SEITEL, INC.
FIRST AMENDED AND RESTATED
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered into by and between Seitel, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Grantee"), the Chief Executive Officer of the Company, effective as of the grant date shown in Appendix A attached hereto pursuant to the Seitel, Inc. 2004 Stock Option Plan (the "Plan") and amended and restated as of March 22, 2005. The Plan is incorporated by reference herein in its entirety. Capitalized terms not otherwise defined in this Agreement shall have the meaning given such terms as defined in the Plan.
WHEREAS, effective December 15, 2004, Grantee entered into an employment agreement with the Company to serve as the Chief Executive Officer (the "CEO") of the Company, and in connection with such employment, the Committee on behalf of the Company has authorized a grant to Grantee a number of restricted shares of the Company's Stock, par value $.01 per share (the "Common Stock"), effective December 15, 2004, in the amount indicated on Appendix A and which is pursuant to and shall be subject to the terms and conditions of this Agreement and the Plan, with a view to increasing Grantee's interest in the Company's welfare and growth; and
WHEREAS, Grantee desires to receive shares of the Common Stock as Restricted Stock pursuant to this Agreement in connection with his employment.
NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Grant of Common Stock. Subject to the restrictions, forfeiture provisions and other terms and conditions set forth herein (a) the Company hereby grants to Grantee the number of shares of Common Stock ("Restricted Shares") as set out in Appendix A hereto, and (b) subject to the terms hereof, Grantee shall have and may exercise rights and privileges of ownership of such Restricted Shares, including, without limitation, the voting rights of such shares and the right to receive dividends declared in respect thereof. This Agreement and the grant of Restricted Shares are subject to administration by and the rules and procedures established by the 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 accordance with the Vesting Dates set out in Appendix A. Further, even after such Restricted Shares becomes vested, such vested Restricted Shares may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws or other applicable law, rules of any exchange on which the Company's securities are traded or listed, or Company rules or policies as determined by Company in its sole discretion. Restricted Shares shall vest as of each of the Vesting Dates set out in Appendix A provided that Grantee remains employed with the Company through the Vesting Date, except as may otherwise be provided herein.
(b) Dividends, etc. If the Company (i) declares a dividend or makes a distribution on Common Stock in shares of Common Stock or (ii) subdivides or reclassifies outstanding shares of Common Stock into a greater number of shares of Common Stock or (iii) combines or reclassifies outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the number of shares of Grantee's Common Stock subject to the transfer restrictions in this Agreement shall be proportionally increased or reduced as to prevent enlargement or dilution of Grantee's rights and duties hereunder. The determination of the Company's Board of Directors regarding such adjustment should be final and binding.
(b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c), or (d) of this paragraph) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of 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;
(c) the consummation of a merger or consolidation of the Company with any other entity, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation in which no premium is intended to be paid to any shareholder participating in the merger or consolidation;
(e) any other event occurs which the Board determines, in its discretion, would materially alter the structure of the Company or its ownership.
(f) "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.
(g) "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a "group" as defined in Section 13(d) thereof.
For the purposes of this Agreement, "Cause" shall mean:
(i) willful misconduct or gross negligence by the Grantee in the performance of his duties under the employment agreement between the Grantee and the Company dated December 15, 2004 (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 the Company in its sole discretion within ten (10) days after Grantee's receipt of written notice from the Company of such breach;
(iii) failure by the Grantee to perform his duties, if not cured to the satisfaction of the Company determined by the Company within ten (10) days after Grantee's receipt of written notice from the Company of such breach, other than a failure resulting from Grantee's incapacity due to Disability (as defined below);
(iv) a material violation by the Grantee of the Company's code of business conduct or the Company's policies or procedures; or
(v) conviction of the Grantee of, or a plea of nolo contrendere to, a felony, or his engagement in fraud or other willful misconduct which is injurious 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 as normally-associated with the position of CEO of the Company;
(ii) a reduction in the Grantee's Base Salary as provided in the Employment Agreement;
(iii) a change in reporting structure so that the Grantee reports to someone other than Board of Directors of the Company; or
(iv) the relocation of the Grantee's principal place of employment to a location more than fifty (50) miles from his principal place of employment with the Company on December 15, 2004.
For the purposes of this Agreement, "Disability" shall mean the Grantee's inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities for a period of ninety (90) days during any twelve-month period as determined by the Company. The Grantee agrees to submit to any examination that is necessary for a determination of Disability and agrees to provide any information necessary for a determination of Disability, including any information that is protected by the Health Insurance Portability and Accountability Act.
(b) If Grantee's employment with the Company is terminated by the Company or Grantee for any reason, other than as provided in Section 4(a), then Grantee shall immediately forfeit all Restricted Shares which are unvested unless the Committee, in its sole discretion, determines that any or all of such unvested Restricted Shares shall not be so forfeited.
(c) Forfeited Shares. Any Restricted Shares forfeited under this Section 4 shall automatically revert to the Company and become canceled and such shares shall be again subject to the Plan as provided in Section 4 of the Plan. Any certificate(s) representing Restricted Shares which include forfeited shares shall only represent that number of Restricted Shares which have not been forfeited hereunder. Upon the Company's request, Grantee agrees for himself and any other holder(s) to tender to the Company any certificate(s) representing Restricted Shares which include forfeited shares for a new certificate representing the unforfeited number of Restricted Shares.
(a) The Company shall cause to be issued a stock certificate, registered in the name of the Grantee, evidencing the Restricted Shares upon receipt of a stock power duly endorsed in blank with respect to such shares. Each such stock certificate shall bear the following legend:
The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture and restrictions against transfer) contained in the restricted stock agreement entered into between the registered owner of such shares and Seitel, Inc. copies of the restricted stock agreement are on file in the office of the secretary of Seitel, Inc., located at 10811 S. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇. ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Such legend shall not be removed from the certificate evidencing Restricted Shares until such time as the restrictions thereon have lapsed.
(b) The certificate issued pursuant to this Section 5, together with the stock powers relating to the Restricted Shares evidenced by such certificate, shall be held by the Company. The Company may issue to the Grantee a receipt evidencing the certificates held by it which are registered in the name of the Grantee.
(a) Certain Transfers Void. Any purported transfer of Restricted Shares in breach of any provision of this Agreement shall be void and ineffectual, and shall not operate to transfer any interest or title in the purported transferee.
(b) No Fractional Shares. All provisions of this Agreement concern whole shares of Common Stock. If the application of any provision hereunder would yield a fractional share, the value of such fractional share shall be paid to the Grantee in cash.
(c) Not an Agreement for Continued Employment or Services. This Agreement shall not, and no provision of this Agreement shall be construed or interpreted to, create any right of Grantee to continue employment with or provide services to the Company, Company affiliates, parent, subsidiary or their affiliates.
(1) After a dispute or controversy arises, any party may, in a written notice delivered to the other parties to the dispute, demand such arbitration. Such notice shall designate the name of the arbitrator (who shall be an impartial person) appointed by such party demanding arbitration, together with a statement of the matter in controversy.
(2) Within 30 days after receipt of such demand, the other parties shall, 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 an arbitrator, then the second arbitrator shall be named by the American Arbitration Association (the "AAA"). The two arbitrators so selected shall name a third arbitrator (who shall be an impartial person) within 30 days, or in lieu of such agreement on a third arbitrator by the two arbitrators so appointed, the third arbitrator shall be appointed by the AAA. If any arbitrator appointed hereunder shall die, resign, refuse or become unable to act before an arbitration decision is rendered, then the vacancy shall be filled by the method set forth in this Section for the original appointment of such arbitrator.
(3) Each party shall bear its own arbitration costs and expenses. The arbitration hearing shall be held in Houston, Texas at a location designated by a majority of the arbitrators. The Commercial Arbitration Rules of the American Arbitration Association shall be incorporated by reference at such hearing and the substantive laws of the State of Texas (excluding conflict of laws provisions) shall apply.
(4) The arbitration hearing shall be concluded within ten (10) days unless otherwise ordered by the arbitrators and the written award thereon shall be made within fifteen (15) days after the close of submission of evidence. An award rendered by a majority of the arbitrators appointed pursuant to this Agreement shall be final and binding on all parties to the proceeding, shall resolve the question of costs of the arbitrators and all related matters, and judgment on such award may be entered and enforced by either party in any court of competent jurisdiction.
(5) Except as set forth in Section 6(e)(d)(ii), the parties stipulate that 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 before any administrative tribunal with respect to any controversy or dispute arising out of this Agreement or the transactions described herein. The arbitration provisions hereof shall, with respect to such controversy or dispute, survive the termination or expiration of this Agreement.
No party to an arbitration may disclose the existence or results of any arbitration hereunder without the prior written consent of the other parties; nor will any party to an arbitration disclose to any third party any confidential information disclosed by any other party to an arbitration in the course of an arbitration hereunder without the prior written consent of such other party.
(f) Amendment and Waiver. This Agreement may be amended, modified or superseded only by written instrument executed by the Company and Grantee. Any waiver of the terms or conditions hereof shall be made only by a written instrument executed and delivered by the party waiving compliance. Any amendment or waiver agreed to by the Company shall be effective only if executed 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 provisions hereof shall in no manner effect the right to enforce the same. No waiver by any party of any term or condition in this Agreement, or breach thereof, in one or more instances shall be deemed a continuing waiver of any such condition or breach, a waiver of any other condition, or the breach of any other term or condition.
(g) Independent Legal and Tax Advice. The Grantee has been advised and Grantee hereby acknowledges that he has been advised to obtain independent legal and tax advice regarding this grant of the Restricted Shares and the disposition of such shares, including, without limitation, the election available under Section 83(b) of the Internal Revenue Code.
(h) Governing Law and Severability. This Agreement shall be governed 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 other provision of this Agreement which shall remain in full force and effect.
(i) Successors and Assigns. Subject to the limitations which this Agreement imposes upon transferability of Restricted Shares, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and Grantee, and, upon his death, on his estate and beneficiaries thereof (whether by will or the laws of descent and distribution).
(j) Community Property. Each spouse individually is bound by, and such spouse's interest, if any, in any shares is subject to, the terms of this Agreement. Nothing in this Agreement shall create a community property interest where none otherwise exists.
(k) Entire Agreement. This Agreement supersedes any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement and that any agreement, statement or promise that is not contained in this Agreement 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 to all applicable federal and state laws, rules, regulations and applicable rules and regulations of any exchanges on which such securities are traded or listed, and Company rules or policies. Any determination in this connection by the Committee shall be final, binding and conclusive on the parties hereto and on any third parties, including any individual or entity.
(m) Tax Requirements.
(i) Tax Withholding. This grant under this Agreement is subject to and the Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan and this Agreement.
(ii) Share Withholding. With respect to tax withholding required upon any taxable event arising as a result of this Agreement, Grantee may elect, subject to the approval of the Committee in its discretion, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares of Stock having a Fair Market Value on the date the tax is to be determined equal to the statutory total tax which could be imposed on the transaction. All such elections shall be made in writing, signed by the Grantee, and shall be subject to any restrictions or limitations that the Committee, in its discretion, deems appropriate. Any fraction of a share of Stock required to satisfy such obligation shall be disregarded and the amount due shall instead be paid in cash by the Grantee.
(n) Grantee's Address.
Grantee's address of record is: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Grantee shall be responsible to notify the Company of any changes to his address.
[Signature page follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on March 22, 2005.
COMPANY:
SEITEL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman of the Board
Address: Seitel, Inc.
10811 S. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇. ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Secretary
GRANTEE:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Printed Name
APPENDIX A TO
RESTRICTED STOCK AGREEMENT
Grantee's Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
Grant Date: |
Number of Restricted Shares Granted |
|
December 15, 2004 |
1,000,000 |
Vesting Dates:
|
Date |
Number of Restricted Shares Granted |
|
December 15, 2005 |
33.3% |
|
December 15, 2006 |
33.3% |
|
December 15, 2007 |
33.4% |
Note: All vesting is subject to the terms and conditions of the Agreement.