SEITEL INC, DEF 14A, 1999-06-22

SEITEL INC
DEF 14A, 1999-06-22
OIL & GAS FIELD EXPLORATION SERVICES

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<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14a INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

SEITEL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2

SEITEL, INC.

---------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY
JULY 22, 1999

To Our Stockholders:

You are cordially invited to attend the Annual Meeting of Stockholders of
Seitel, Inc. (the "Company") to be held on Thursday, July 22, 1999, at 9:00 a.m.
at the Company's Headquarters, 50 Briar Hollow Lane, 7th Floor West, Houston,
Texas 77027, for the following purposes:

1. To elect nine directors to serve until the 2000 Annual Meeting;

2. To approve amendments to the Company's Non-Employee Directors' Stock
Option Plan;

3. To approve the appointment of Arthur Andersen LLP as independent
certified public accountants for the Company for the year ending
December 31, 1999; and

4. To transact such other business as may properly come before the
meeting or any adjournment of the meeting.

Only stockholders of record at the close of business on June 10, 1999, will
be entitled to notice of and to vote at the meeting.

Please sign, date and mail the enclosed proxy in the enclosed envelope,
which requires no postage if mailed in the United States, so that your shares
will be represented at the meeting.

By Order of the Board of Directors,

Debra D. Valice
Corporate Secretary

June 18, 1999
Houston, Texas
<PAGE> 3

SEITEL, INC.
50 BRIAR HOLLOW LANE, 7TH FLOOR WEST
HOUSTON, TX 77027
---------------------

PROXY STATEMENT
---------------------

The accompanying proxy is solicited on behalf of the Board of Directors of
the Company for use at the Annual Meeting of Stockholders to be held on
Thursday, July 22, 1999, and at any adjournment of the meeting. The proxy may be
revoked at any time before it is exercised by notice, in writing, to the
Secretary of the Company, or by a later dated proxy delivered to the Secretary
of the Company at any time before the voting, or by appearing at the meeting and
voting in person. The proxy, when properly executed and returned, will be voted
in accordance with the instructions contained therein. A proxy received by
management which does not withhold authority to vote or on which no
specifications have been indicated will be voted (i) in favor of the nominees
for members of the Board of Directors of the Company named in item 1 of the
proxy, (ii) in favor of the amendments to the Company's Non-Employee Directors'
Stock Option Plan and (iii) for approval of the appointment of Arthur Andersen
LLP as the Company's independent public accountants for the fiscal year ending
December 31, 1999.

The Board of Directors has fixed the close of business on June 10, 1999, as
the record date for the meeting. On that date, the Company had outstanding
24,254,071 shares of Common Stock. Only stockholders of record at the close of
business on that date will be entitled to vote at the meeting or at any
adjournment of the meeting. Each such stockholder will be entitled to one vote
for each share held and may vote in person or by proxy authorized in writing.

The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum. The election of directors will require the favorable vote
of the holders of a plurality of the shares of Common Stock present, in person
or by proxy, at the Annual Meeting and entitled to vote thereon. Approval of the
amendments to the Non-Employee Directors' Stock Option Plan and of the
appointment of Arthur Andersen LLP as the Company's independent public
accountants for the fiscal year ending December 31, 1999, will require the
favorable vote of the holders of a majority of the shares of Common Stock
present, in person or by proxy, at the Annual Meeting and entitled to vote
thereon. Under Delaware law and the Company's Certificate of Incorporation and
Bylaws, abstentions and broker non-votes have no effect on the election of
directors since directors are elected by a plurality vote. With respect to the
other proposals to be decided at the meeting, abstentions are counted as a vote
against a proposal, and broker non-votes (and other limited proxies), although
considered present for quorum purposes, are not considered part of the voting
power present at the meeting with respect to that proposal.

The principal executive offices of the Company are at 50 Briar Hollow Lane,
7th Floor West, Houston, Texas 77027. The proxy statement and form of proxy are
being sent to stockholders on or about June 22, 1999.
<PAGE> 4

ELECTION OF DIRECTORS

At the meeting, nine directors are to be elected to serve until the next
Annual Meeting of Stockholders or until their successors are elected and
qualified. The persons named in the enclosed form of proxy have advised that,
unless contrary instructions are received, they intend to vote for the nine
nominees named by the Board of Directors of the Company and listed below. If, by
reason of death or other unexpected occurrence, one or more of these nominees is
not available for election, the persons named in the form of proxy have advised
that they will vote for such substitute nominees as the Board of Directors of
the Company may propose.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH THE COMPANY DIRECTOR SINCE
- ---- --- ---------------------------- --------------
<S> <C> <C> <C>
Herbert M. Pearlman.................. 66 Chairman of the Board of Directors 1982
Paul A. Frame........................ 52 Chief Executive Officer, President and 1986
Director
Horace A. Calvert.................... 45 Chief Operating Officer, Executive Vice 1987
President and Director
David S. Lawi........................ 63 Chairman of the Executive Committee and 1982
Director
Debra D. Valice...................... 42 Chief Financial Officer, Executive Vice 1995
President of Finance, Treasurer,
Corporate Secretary and Director
Walter M. Craig, Jr. ................ 45 Director 1987
William Lerner....................... 65 Director 1985
John E. Stieglitz.................... 68 Director 1989
Fred S. Zeidman...................... 52 Director 1997
</TABLE>

Herbert M. Pearlman, a co-founder of Seitel, Inc., has been a director of
the Company since 1982, and Chairman of the Company's Board of Directors since
1987. Since March 1984, Mr. Pearlman has been Chairman of Intersystems, Inc.
("Intersystems"), an American Stock Exchange listed company engaged in providing
services to the thermoplastic resins industry. Since June 1990, Mr. Pearlman has
served as Chairman of Unapix Entertainment, Inc. ("Unapix Entertainment"), an
American Stock Exchange listed company engaged in multi-media entertainment, and
in February 1999, he became Chief Executive Officer of Unapix. He has served as
President, Chief Executive Officer and a Director of Helm Resources, Inc.
("Helm"), a publicly-traded company with equity interests in diverse businesses,
since 1980, and in June 1984, he became Helm's Chairman of the Board.

Paul A. Frame has been Chief Executive Officer of the Company since July
1992 and President since January 1987. He was Executive Vice President of the
Company from January 1985 until his appointment as President. He was hired by
the Company in August 1984 as Vice President of Marketing. From December 1996 to
March 1999, Mr. Frame was a Director of Eagle Geophysical, Inc. ("Eagle"), a
NASDAQ listed company engaged in providing seismic data acquisition services to
the oil and gas industry, and from August 1997 to March 1999, he was Chairman of
the Executive Committee of Eagle's board of directors.

Horace A. Calvert has been Chief Operating Officer of the Company since
July 1992 and Executive Vice President since January 1987. In March 1993, Mr.
Calvert was appointed President of DDD Energy, Inc., a wholly-owned subsidiary
of the Company engaged in the exploration and development of oil and gas
reserves. From January 1985 until his appointment as Vice President in May 1986,
he was the Company's Chief Geophysicist.

David S. Lawi has been Chairman of the Company's Executive Committee since
March 1987. He also was Assistant Secretary of the Company from May 1986 until
June 1987 and from June 1989 until July 1993. Since March 1984, Mr. Lawi has
been a Director of Intersystems and, since 1985, he has been Chairman of
Intersystems' Executive Committee. Since June 1990, Mr. Lawi has been a Director
of Unapix Entertainment and, since January 1993, Chairman of its Executive
Committee, Mr. Lawi has been a Director of Helm since 1980, and Chairman of the
Executive Committee since 1997.

2
<PAGE> 5

Debra D. Valice, CPA, is the Company's Chief Financial Officer, Executive
Vice President of Finance, Treasurer and Corporate Secretary. Ms. Valice has
been the Company's Chief Financial Officer since February 1987, and was the
Company's Chief Accounting Officer from March 1986 until February 1987. Ms.
Valice was elected as a director of the Company in November 1995.

Walter M. Craig, Jr. provided legal and business advice to the Company,
from time to time, from 1984 through 1998. Since 1993, he has been President of
both the Mezzanine Financial Fund, L.P., and Core Capital, Inc. Both enterprises
are engaged in making capital available to small and mid-market companies based
on the value of their assets. He has served as Executive Vice President and
Chief Operating Officer of Helm since August 1992. From 1984 to 1992, he was
Senior Vice President of Business and Legal Affairs of Helm. Since April 1993,
Mr. Craig has been a Director of Unapix Entertainment.

William Lerner is Chairman of the Company's Audit Committee and Co-Chairman
of the Company's Compensation and Stock Option Committee. Since January 1990,
Mr. Lerner has been engaged in the private practice of law. From May 1990 until
December 1990, he was General Counsel to Hon Development Company, a California
real estate development company. From June 1986 until December 1989, Mr. Lerner
was Vice President and General Counsel of The Geneva Companies, Inc., a
financial services company engaged in counseling privately owned middle-market
companies. Since 1985, he has been a Director of Helm. Mr. Lerner is also a
Director of Rent-Way, Inc., a New York Stock Exchange listed company
headquartered in Pennsylvania that operates the second-largest chain of
rental-purchase stores in the United States, and Micros-to-Mainframes, Inc., a
NASDAQ listed company headquartered in New York that provides advanced
technology communications products and systems integration and internet services
to Fortune 2000 companies.

John E. Stieglitz is Co-Chairman of the Company's Compensation and Stock
Option Committee and a member of the Company's Audit Committee. He is Chairman
Emeritus of Conspectus, Inc., a privately held company, formed in 1976, engaged
in providing services in the area of executive recruitment. He served as
President of Conspectus, Inc. from 1976 to 1996. Mr. Stieglitz is also a
Director of Helm and Intersystems.

Fred S. Zeidman is a member of the Company's Audit Committee and
Compensation and Stock Option Committee. Mr. Zeidman has served as President,
Chief Executive Officer, and a Director of Intersystems since July 1993. He also
served as President of Interpak Terminals, Inc., a wholly-owned subsidiary of
Helm engaged in the packaging and distribution of thermoplastic resins, from
July 1993 until its sale in July 1997. Mr. Zeidman served as Chairman of Unibar
Energy Services Corporation, one of the largest independent drilling fluids
companies in the United States, from 1985 to 1991. From April 1992 to July 1993,
Mr. Zeidman served as President of Service Enterprises, Inc., which is primarily
engaged in plumbing, heating, air conditioning and electrical installation and
repair. From 1983 to 1993, Mr. Zeidman served as President of Enterprise Capital
Corporation, a federally licensed small business investment company specializing
in venture capital financing. Mr. Zeidman also serves as a Director of Heritage
Bank.

EXECUTIVE OFFICERS

All of the Company's executive officers are also directors. Officers serve
at the discretion of the Board.

BOARD OF DIRECTORS, COMMITTEES AND ATTENDANCE AT MEETINGS

During 1998, the Company's Board of Directors held three meetings. All of
the directors of the Company attended at least 75% of the total number of
meetings of the Board of Directors and of meetings held by all committees of the
Board on which he served during 1998.

The Board of Directors has a standing Audit Committee, Compensation and
Stock Option Committee, and Executive Committee. The Board of Directors does not
have a Nominating Committee.

During 1998, the Audit Committee was comprised of Messrs. Stieglitz, Lerner
and Zeidman. The Audit Committee held one meeting during 1998. The functions of
the Audit Committee are to select the independent public accountants of the
Company, to review with them the Company's financial statements, to
3
<PAGE> 6

review the Company's financial systems and controls and to oversee other matters
relating to the integrity of the Company's finances and financial statements as
the Committee may consider appropriate.

During 1998, Messrs. Pearlman, Frame, Calvert and Lawi acted as the
Executive Committee. The function of the Executive Committee is to act on an
interim basis for the full Board. The Executive Committee did not meet
officially separately from the entire Board of Directors during 1998.

During 1998, the Compensation and Stock Option Committee ("Compensation
Committee") was comprised of Messrs. Stieglitz, Lerner and Zeidman. The
Compensation Committee reviews and recommends to the Board of Directors the
compensation, promotion and employment agreements of officers of the Company,
the terms of any proposed employee benefit arrangements, and the granting of
awards under such arrangements. The Compensation Committee held three meetings
during 1998.

BENEFICIAL OWNERSHIP

The following table sets forth certain information regarding the beneficial
ownership of the common stock, as of June 8, 1999, by (i) persons known to the
Company to be beneficial owners of more than 5% of the common stock, (ii) each
of the Company's directors, (iii) each of the named executive officers, and (iv)
all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) PERCENTAGE OF CLASS
- ------------------------------------ -------------------------- -------------------
<S> <C> <C>
Paul A. Frame, Jr. ........................... 1,570,640(3) 6.2%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Horace A. Calvert............................. 1,511,750(4) 6.0%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Driehaus Capital Management, Inc. ............ 1,241,170 5.1%
25 East Erie Street
Chicago, IL 60611
Herbert M. Pearlman........................... 1,037,241(5) 4.2%
537 Steamboat Road
Greenwich, CT 06830
David S. Lawi................................. 690,287(6) 2.8%
537 Steamboat Road
Greenwich, CT 06830
Debra D. Valice............................... 371,785(7) 1.5%
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027
Walter M. Craig, Jr. ......................... 74,820(8) *
1011 HWY 7
Spring Lake, NJ 07762
William Lerner................................ 47,170(9) *
423 East Beau Street
Washington, PA 15301
John E. Stieglitz............................. 46,085(9) *
Conspectus, Inc.
222 Purchase Street
Rye, NY 10580
</TABLE>

4
<PAGE> 7

- ---------------

* Less than 1%

(1) Except as otherwise noted, each named holder has, to the best of the
Company's knowledge, sole voting and investment power with respect to the
shares indicated.

(2) Includes shares that may be acquired within 60 days by any of the named
persons upon exercise of any right.

(3) Includes 1,255,798 shares which may be acquired from the Company within 60
days upon exercise of options and common stock purchase warrants. The
exercise prices of the options and warrants range from $11.75 to $16.50 per
share.

(4) Includes 983,822 shares which may be acquired from the Company within 60
days upon exercise of options and common stock purchase warrants. The
exercise prices of the options and warrants range from $2.78 to $13.94 per
share.

(5) Includes 660,582 shares which may be acquired from the Company within 60
days upon exercise of options and common stock purchase warrants. The
exercise prices of the options and warrants range from $11.75 to $13.94.

(6) Includes 475,726 shares which may be acquired from the Company within 60
days upon exercise of options and common stock purchase warrants. The
exercise prices of the options and warrants range from $12.00 to $13.94.

(7) Includes 241,539 shares which may be acquired from the Company within 60
days upon exercise of options and common stock purchase warrants. The
exercise prices of the options and warrants range from $11.75 to $13.94 per
share.

(8) Includes 67,554 shares which may be acquired from the Company within 60
days upon exercise of common stock purchase warrants. The exercise prices
of the common stock purchase warrants range from $11.75 to $16.00 per
share.

(9) Includes 38,000 shares which may be acquired from the Company within 60
days upon exercise of options at exercise prices ranging from $13.75 to
$13.94 per share.

(10) Includes 12,000 shares which may be acquired from the Company within 60
days upon exercise of options at exercise prices ranging from $13.75 to
$13.94 per share.

(11) Includes an aggregate of 3,773,021 shares which may be acquired from the
Company within 60 days upon exercise of options and common stock purchase
warrants by the group of nine persons which comprises all executive
officers and directors. The exercise prices of the options and warrants
range from $2.78 to $16.50 per share.

5
<PAGE> 8

EXECUTIVE COMPENSATION

The following table sets forth certain summary information concerning the
compensation awarded to, earned by or paid to the Chief Executive Officer of the
Company and each of the four most highly compensated executive officers of the
Company other than the Chief Executive Officer (collectively, the "Named
Executive Officers") for the years indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------- AWARDS
OTHER ------------
EAGLE ANNUAL STOCK ALL OTHER
BONUS BONUS COMPENSATION OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) SARS (#) ($)
- --------------------------- ---- --------- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul A. Frame.................... 1998 $444,878 $1,809,077 -- $1,180,450 1,190,798 $104,001(4)
Chief Executive Officer 1997 $144,878 $ 905,099 $2,282,500 $1,301,809 932,160 $104,764
and President 1996 $141,898 $1,457,603 -- $1,204,334 148,600 $ 87,998
Horace A. Calvert................ 1998 $444,878 $1,809,077 -- $1,180,450 625,418 $104,001(4)
Chief Operating Officer and 1997 $144,878 $ 903,598 $1,455,811 $1,301,809 378,882 $104,764
Executive Vice President 1996 $141,898 $1,457,603 -- $1,205,834 136,498 $ 87,998
Herbert M. Pearlman.............. 1998 $428,437 $1,961,347 -- -- 690,582 $104,123(4)
Chairman of the 1997 $128,438 $1,183,947 $1,819,763 -- 393,874 $104,764
Board of Directors 1996 $124,818 $1,486,168 -- -- 124,582 $ 88,654
David S. Lawi.................... 1998 $214,219 $ 980,673 -- -- 505,726 $104,001(4)
Chairman of the Executive 1997 $ 64,892 $ 591,975 $ 909,881 -- 293,874 $104,764
Committee 1996 $ 60,588 $ 749,085 -- -- 124,582 $ 87,998
Debra D. Valice.................. 1998 $155,853 $ 437,064 -- -- 172,412 $ 69,449(4)
Executive Vice President of 1997 $138,583 $ 270,833 $ 502,713 -- 142,762 $ 70,816
Finance, Treasurer and 1996 $113,519 $ 358,332 -- -- 142,570 $ 58,861
Corporate Secretary
</TABLE>

- ---------------

(1) Includes bonuses based on the Company's pre-tax profits and includes a
discretionary bonus for Ms. Valice of $312,064 in 1998.

(2) Includes contractual bonuses based on the Company's pre-tax profits related
to the spin-off of Eagle in 1997 for Messrs. Frame, Calvert, Pearlman, and
Lawi, an additional bonus for Mr. Frame of $826,690 related to the spin-off
of Eagle, and a discretionary bonus for Ms. Valice of $502,713 related to
the spin-off of Eagle.

(3) Includes commissions based on sales.

(4) Includes amounts paid pursuant to a program (the "Incentive Compensation
Program") whereby between 2 1/2% and 5% of the revenue generated annually by
seismic creation programs that have fully recouped their direct costs is
distributed to certain officers and key employees, and amounts contributed
by the Company to its 401(k) Savings Plan (the "401(k) Plan") on behalf of
such named executive officers as discretionary and matching contributions.
Includes $101,623 contributed by the Company pursuant to its Incentive
Compensation Program for Messrs. Frame, Calvert, Pearlman and Lawi, and
$66,949 for Ms. Valice. Also includes 401(k) Plan matching contributions
made by the Company of $2,378 for Messrs. Frame, Calvert and Lawi and $2,500
for Mr. Pearlman and Ms. Valice.

6
<PAGE> 9

The following table sets forth certain information with respect to options
to purchase Common Stock granted during the year ended December 31, 1998 to each
of the Named Executive Officers.

OPTION/SAR GRANTS IN 1998

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE
SECURITIES TOTAL AT ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS/SARS EXERCISE STOCK PRICE APPRECIATION
OPTIONS/SARS GRANTED TO OR BASE FOR OPTION TERM(4)
GRANTED EMPLOYEES PRICE EXPIRATION ----------------------------------------------
NAME (#) IN 1998 ($/SH)(3) DATE 0 PERCENT ($) 5 PERCENT ($) 10 PERCENT ($)
- ---- ------------ ------------ --------------- ---------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul A. Frame........ 160,038(1) 3.40 $12.0000 04/11/00 $(100,023.75) $ 36,291.03 $ 175,758.37
6,106(2) 0.13 $13.9375 11/26/01 $ (12,208.94) $ (798.03) $ 11,741.60
3,242(2) 0.07 $13.9375 11/27/01 $ (6,482.37) $ (417.73) $ 6,247.67
22,042(2) 0.47 $13.9375 11/29/01 $ (44,072.97) $ (2,758.77) $ 42,659.87
30,442(2) 0.65 $13.9375 12/02/01 $ (60,868.77) $ (3,641.46) $ 59,295.82
30,774(2) 0.65 $13.9375 12/03/01 $ (61,532.60) $ (3,624.33) $ 60,070.17
5,994(2) 0.13 $13.9375 12/04/01 $ (11,984.99) $ (694.85) $ 11,725.03
57,400(2) 1.22 $13.9375 06/05/02 $(114,771.29) $ 12,992.27 $ 156,934.69
7,800(2) 0.17 $13.9375 06/05/02 $ (15,596.09) $ 1,765.50 $ 21,325.62
7,400(2) 0.16 $13.9375 06/05/02 $ (14,796.29) $ 1,674.96 $ 20,232.00
4,600(2) 0.10 $13.9375 06/06/02 $ (9,197.69) $ 1,049.90 $ 12,596.68
16,000(2) 0.34 $13.9375 06/09/02 $ (31,991.99) $ 3,742.74 $ 44,023.62
4,000(2) 0.09 $13.9375 06/09/02 $ (7,997.99) $ 935.69 $ 11,005.91
800(2) 0.02 $13.9375 06/09/02 $ (1,599.59) $ 187.14 $ 2,201.18
38,200(2) 0.81 $13.9375 06/10/02 $ (76,380.89) $ 9,008.16 $ 105,272.89
16,600(2) 0.35 $13.9375 06/10/02 $ (33,191.69) $ 3,914.54 $ 45,746.86
20,000(2) 0.43 $13.9375 06/11/02 $ (39,989.99) $ 4,754.21 $ 55,203.89
17,600(2) 0.37 $13.9375 06/11/02 $ (35,191.19) $ 4,183.71 $ 48,579.42
4,600(2) 0.10 $13.9375 06/11/02 $ (9,197.69) $ 1,093.47 $ 12,696.89
10,000(2) 0.21 $13.9375 06/12/02 $ (19,994.99) $ 2,396.05 $ 27,645.55
8,400(2) 0.18 $13.9375 06/12/02 $ (16,795.79) $ 2,012.69 $ 23,222.26
1,000(2) 0.02 $13.9375 06/12/02 $ (1,999.49) $ 239.61 $ 2,764.56
49,180(2) 1.05 $13.9375 06/13/02 $ (98,335.40) $ 11,877.00 $ 136,175.34
34,620(2) 0.74 $13.9375 06/13/02 $ (69,222.68) $ 8,360.75 $ 95,859.91
1,800(2) 0.04 $13.9375 06/13/02 $ (3,599.09) $ 434.70 $ 4,984.05
60,000(2) 1.28 $13.9375 06/16/02 $(119,969.99) $ 14,831.27 $ 166,920.57
20,000(2) 0.43 $13.9375 06/16/02 $ (39,989.99) $ 4,943.76 $ 55,640.19
19,600(2) 0.42 $13.9375 06/16/02 $ (39,190.19) $ 4,844.88 $ 54,527.38
17,800(2) 0.38 $13.9375 06/16/02 $ (35,591.09) $ 4,399.94 $ 49,519.77
13,000(2) 0.28 $13.9375 06/16/02 $ (25,993.49) $ 3,213.44 $ 36,166.12
300,000(2) 6.38 $13.9375 11/20/02 $(599,849.99) $164,405.93 $1,044,508.19
200,000(2) 4.26 $13.9375 11/20/02 $(399,899.99) $109,603.96 $ 696,338.79
1,760(2) 0.04 $13.9375 12/10/02 $ (3,519.11) $ 1,032.76 $ 6,288.31
Horace A. Calvert.... 160,038(1) 3.40 $12.0000 04/11/00 $(100,023.75) $ 36,291.03 $ 175,758.37
14,412(2) 0.31 $13.9375 11/29/01 $ (28,816.78) $ (1,803.80) $ 27,892.84
32,650(2) 0.69 $13.9375 12/02/01 $ (65,283.66) $ (3,905.58) $ 63,596.63
33,006(2) 0.70 $13.9375 12/03/01 $ (65,995.49) $ (3,887.20) $ 64,426.99
6,430(2) 0.14 $13.9375 12/04/01 $ (12,856.77) $ (745.39) $ 12,577.90
200,000(2) 4.26 $13.9375 11/20/02 $(399,899.99) $109,603.96 $ 696,338.79
71,082(2) 1.51 $13.9375 12/08/02 $(142,128.45) $ 41,434.78 $ 253,319.25
39,400(2) 0.84 $13.9375 12/08/02 $ (78,780.29) $ 22,966.86 $ 140,412.18
24,000(2) 0.51 $13.9375 12/08/02 $ (47,987.99) $ 13,989.97 $ 85,530.26
10,000(2) 0.21 $13.9375 12/08/02 $ (19,994.99) $ 5,829.15 $ 35,637.61
9,600(2) 0.20 $13.9375 12/08/02 $ (19,195.19) $ 5,595.99 $ 34,212.10
8,200(2) 0.17 $13.9375 12/08/02 $ (16,395.89) $ 4,779.90 $ 29,222.84
3,000(2) 0.06 $13.9375 12/08/02 $ (5,998.49) $ 1,748.75 $ 10,691.28
3,000(2) 0.06 $13.9375 12/08/02 $ (5,998.49) $ 1,748.75 $ 10,691.28
2,400(2) 0.05 $13.9375 12/08/02 $ (4,798.79) $ 1,399.00 $ 8,553.03
2,300(2) 0.05 $13.9375 12/08/02 $ (4,598.84) $ 1,340.70 $ 8,196.65
2,000(2) 0.04 $13.9375 12/08/02 $ (3,998.99) $ 1,165.83 $ 7,127.52
1,000(2) 0.02 $13.9375 12/08/02 $ (1,999.49) $ 582.92 $ 3,563.76
</TABLE>

7
<PAGE> 10

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE
SECURITIES TOTAL AT ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS/SARS EXERCISE STOCK PRICE APPRECIATION
OPTIONS/SARS GRANTED TO OR BASE FOR OPTION TERM(4)
GRANTED EMPLOYEES PRICE EXPIRATION ----------------------------------------------
NAME (#) IN 1998 ($/SH)(3) DATE 0 PERCENT ($) 5 PERCENT ($) 10 PERCENT ($)
- ---- ------------ ------------ --------------- ---------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Horace A. Calvert.... 1,000(2) 0.02 $13.9375 12/08/02 $ (1,999.49) $ 582.92 $ 3,563.76
(continued) 1,000(2) 0.02 $13.9375 12/08/02 $ (1,999.49) $ 582.92 $ 3,563.76
700(2) 0.01 $13.9375 12/08/02 $ (1,399.64) $ 408.04 $ 2,494.63
200(2) 0.00 $13.9375 12/08/02 $ (399.89) $ 116.58 $ 712.75
Herbert M. Pearlman.. 172,126(1) 3.67 $12.0000 04/11/00 $(107,578.75) $ 39,032.17 $ 189,033.77
80,000(2) 1.70 $13.9375 04/28/00 $(159,959.99) $(92,308.52) $ (23,346.71)
2,762(2) 0.06 $13.9375 11/26/01 $ (5,522.61) $ (360.98) $ 5,311.22
1,466(2) 0.03 $13.9375 11/27/01 $ (2,931.26) $ (188.89) $ 2,825.13
9,964(2) 0.21 $13.9375 11/29/01 $ (19,923.01) $ (1,247.08) $ 19,284.23
13,766(2) 0.29 $13.9375 12/02/01 $ (27,525.11) $ (1,646.68) $ 26,813.82
13,914(2) 0.30 $13.9375 12/03/01 $ (27,821.03) $ (1,638.68) $ 27,159.82
2,710(2) 0.06 $13.9375 12/04/01 $ (5,418.63) $ (314.15) $ 5,301.11
20,000(2) 0.43 $13.9375 07/17/02 $ (39,989.99) $ 6,121.77 $ 58,358.01
13,700(2) 0.29 $13.9375 07/17/02 $ (27,393.14) $ 4,193.41 $ 39,975.24
6,154(2) 0.13 $13.9375 07/17/02 $ (12,304.91) $ 1,883.67 $ 17,956.76
946(2) 0.02 $13.9375 07/17/02 $ (1,891.52) $ 289.56 $ 2,760.33
8,700(2) 0.19 $13.9375 07/22/02 $ (17,395.64) $ 2,745.82 $ 25,577.32
10,000(2) 0.21 $13.9375 07/23/02 $ (19,994.99) $ 3,175.17 $ 29,443.29
1,400(2) 0.03 $13.9375 07/23/02 $ (2,799.29) $ 444.52 $ 4,122.06
100(2) 0.00 $13.9375 07/23/02 $ (199.94) $ 31.75 $ 294.43
9,800(2) 0.21 $13.9375 07/29/02 $ (19,595.09) $ 3,223.75 $ 29,113.83
30,000(2) 0.64 $13.9375 07/30/02 $ (59,984.99) $ 9,925.85 $ 89,256.45
7,500(2) 0.16 $13.9375 08/22/02 $ (14,996.24) $ 2,810.97 $ 23,078.22
10,074(2) 0.21 $13.9375 08/25/02 $ (20,142.95) $ 3,833.53 $ 31,132.99
2,500(2) 0.05 $13.9375 08/25/02 $ (4,998.74) $ 951.34 $ 7,726.07
1,900(2) 0.04 $13.9375 08/25/02 $ (3,799.04) $ 723.02 $ 5,871.82
500(2) 0.01 $13.9375 08/26/02 $ (999.74) $ 191.23 $ 1,547.44
12,700(2) 0.27 $13.9375 08/28/02 $ (25,393.64) $ 4,905.76 $ 39,417.93
2,000(2) 0.04 $13.9375 08/29/02 $ (3,998.99) $ 776.39 $ 6,216.45
9,500(2) 0.20 $13.9375 09/02/02 $ (18,995.24) $ 3,760.64 $ 29,697.36
500(2) 0.01 $13.9375 09/02/02 $ (999.74) $ 197.93 $ 1,563.02
10,000(2) 0.21 $13.9375 09/03/02 $ (19,994.99) $ 3,977.73 $ 31,304.95
35,900(2) 0.76 $13.9375 09/04/02 $ (71,782.04) $ 14,348.84 $ 112,544.78
200,000(2) 4.26 $13.9375 11/20/02 $(399,899.99) $109,603.96 $ 696,338.79
David S. Lawi........ 87,270(1) 1.86 $12.0000 04/11/00 $ (54,543.75) $ 19,789.79 $ 95,842.45
80,000(2) 1.70 $13.9375 04/28/00 $(159,959.99) $(92,308.52) $ (23,346.71)
2,762(2) 0.06 $13.9375 11/26/01 $ (5,522.61) $ (360.98) $ 5,311.22
1,466(2) 0.03 $13.9375 11/27/01 $ (2,931.26) $ (188.89) $ 2,825.13
9,964(2) 0.21 $13.9375 11/29/01 $ (19,923.01) $ (1,247.08) $ 19,284.23
13,766(2) 0.29 $13.9375 12/02/01 $ (27,525.11) $ (1,646.68) $ 26,813.82
13,914(2) 0.30 $13.9375 12/03/01 $ (27,821.03) $ (1,638.68) $ 27,159.82
2,710(2) 0.06 $13.9375 12/04/01 $ (5,418.63) $ (314.15) $ 5,301.11
20,000(2) 0.43 $13.9375 07/17/02 $ (39,989.99) $ 6,121.77 $ 58,358.01
13,700(2) 0.29 $13.9375 07/17/02 $ (27,393.14) $ 4,193.41 $ 39,975.24
6,154(2) 0.13 $13.9375 07/17/02 $ (12,304.91) $ 1,883.67 $ 17,956.76
946(2) 0.02 $13.9375 07/17/02 $ (1,891.52) $ 289.56 $ 2,760.33
8,700(2) 0.19 $13.9375 07/22/02 $ (17,395.64) $ 2,745.82 $ 25,577.32
10,000(2) 0.21 $13.9375 07/23/02 $ (19,994.99) $ 3,175.17 $ 29,443.29
1,400(2) 0.03 $13.9375 07/23/02 $ (2,799.29) $ 444.52 $ 4,122.06
100(2) 0.00 $13.9375 07/23/02 $ (199.94) $ 31.75 $ 294.43
9,800(2) 0.21 $13.9375 07/29/02 $ (19,595.09) $ 3,223.75 $ 29,113.83
30,000(2) 0.64 $13.9375 07/30/02 $ (59,984.99) $ 9,925.85 $ 89,256.45
7,500(2) 0.16 $13.9375 08/22/02 $ (14,996.24) $ 2,810.97 $ 23,078.22
10,074(2) 0.21 $13.9375 08/25/02 $ (20,142.95) $ 3,833.53 $ 31,132.99
2,500(2) 0.05 $13.9375 08/25/02 $ (4,998.74) $ 951.34 $ 7,726.07
</TABLE>

8
<PAGE> 11

- ---------------

(1) The expiration dates of the common stock purchase warrants listed were
extended from April 11, 1999 to April 11, 2000.

(2) On December 3, 1998, the Company's Board of Directors approved a repricing
of the Company's then outstanding options and warrants whereby all options
and warrants held by employees with an exercise price greater than $13.9375
($2 above the market price of the Company's common stock) were repriced to
$13.9375. The vesting terms and expiration dates of these options and
warrants were not amended.

(3) The exercise prices shown do not reflect adjustments made pursuant to the
terms of the options and warrants resulting from the June 10, 1999 payment
of the dividend of Eagle Geophysical, Inc. common stock, which adjusted each
exercise price to approximately 98.5% of the price listed in this table.

(4) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. The actual value an executive may realize
will depend on the extent to which the stock price exceeds the exercise
price of the options or warrants on the date the option or warrant is
exercised. Accordingly, the value, if any, realized by an executive will not
necessarily equal any of the amounts set forth in the table above. These
calculations are not intended to forecast possible future appreciation, if
any, of the price of the Company's common stock.

The following table sets forth certain information with respect to the
exercise of options during the year ended December 31, 1998, and unexercised
options held at December 31, 1998, and the value thereof, by each of the Named
Executive Officers.

AGGREGATED OPTION/SAR EXERCISES IN 1998
AND 12/31/98 OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ACQUIRED AT 12/31/98 (#) AT 12/31/98 ($)
ON VALUE --------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul A. Frame................. 0 $0 1,267,156 176,666 $ 392,127.87 $0
Horace A. Calvert............. 0 $0 967,156 176,666 $1,961,187.12 $0
Herbert M. Pearlman........... 0 $0 705,582 160,000 $ 126,867.63 $0
David S. Lawi................. 0 $0 550,726 80,000 $ 89,743.13 $0
Debra D. Valice............... 0 $0 241,539 56,666 $ 34,375.00 $0
</TABLE>

9
<PAGE> 12

EMPLOYMENT ARRANGEMENTS

Agreements with Messrs. Frame, Calvert, Pearlman and Lawi

On November 20, 1997, the stockholders approved the 1998 Executive
Compensation Plan. The Company has employment agreements with Herbert M.
Pearlman, Paul A. Frame, Horace A. Calvert and David S. Lawi (the "Executives"),
for service in their respective capacities set forth in the listing of directors
and executive officers, that provide for compensation in accordance with the
1998 Executive Compensation Plan. Messrs. Pearlman, Frame, Calvert and Lawi
receive an annual base salary of $428,437, $444,878, $444,878, and $214,219,
respectively, under these employment agreements.

The agreements also provide for the Executives to receive bonus payments
based on the annual Pre-Tax Profits (the "PTP") of the Company and its
majority-owned subsidiaries ("Subsidiaries"). The PTP must exceed $10 million
for fiscal 1998 and each of the four years thereafter, $12 million for fiscal
2003 and each of the four years thereafter, and $14 million for fiscal 2008 and
thereafter (the "PTP Threshold"). If the PTP exceeds the PTP Threshold, the
Executives will receive the following bonuses based on the annual PTP of the
Company and its Subsidiaries:

<TABLE>
<CAPTION>
PERCENTAGE UP TO PERCENTAGE ABOVE
$50 MILLION PTP $50 MILLION PTP
---------------- ----------------
<S> <C> <C>
Herbert M. Pearlman*............................ 5.0% 5.30%
Paul A. Frame................................... 4.0% 4.25%
Horace A. Calvert............................... 4.0% 4.25%
David S. Lawi*.................................. 2.5% 2.65%
</TABLE>

- ---------------

* The annual bonus payments to Messrs. Pearlman and Lawi will be reduced by
$300,000 and $150,000, respectively.

The agreements further provide for Messrs. Frame and Calvert to receive
annual bonuses equal to 1% of the annual sales of the Company and its
Subsidiaries in excess of $30 million, provided that the PTP exceeds the PTP
Threshold.

Each of the agreements with Messrs. Frame and Calvert provide that if at
any time during the term of such agreement, (i) the employment agreements of
Messrs. Pearlman or Lawi are terminated by the Company prior to the stated term
thereof, or (ii) Messrs. Pearlman and Lawi resign from the Company's Board of
Directors prior to the expiration of the term of their employment agreements, or
(iii) the majority of the members of the Company's Board of Directors is no
longer nominated and supported by a majority of Messrs. Frame, Calvert, Pearlman
and Lawi (each a "Change in Control"), the employee shall have the right to
terminate the agreement immediately and receive from the Company all
compensation required to be paid during the unexpired term thereof as well as
the severance payment described below without any obligation to perform
consulting services as described below. The Company believes that the Change in
Control provisions in these agreements may tend to discourage attempts to
acquire a controlling interest in the Company and may also tend to make the
removal of management more difficult.

Each agreement is for a term of five years, renewable each year for an
additional year unless either party to the agreement gives notice to the
contrary. Each agreement provides that if it is not renewed, the Company will
pay the employee for two additional years' compensation including his then
current base salary plus the average of all bonuses paid to the employee for the
then prior three years. The severance payments are contingent upon the employee
remaining available to perform consulting services for the benefit of the
Company. Each agreement also provides for monthly salary continuation payments
for one year upon the employee's death, so long as the agreement is in full
force and effect at the time of the employee's death. The annual salary
continuation amount will equal the employee's base salary at his date of death
plus an average of the bonuses paid for the three previous calendar years.

Each agreement provides for certain noncompetition and nondisclosure
covenants of the employee and for certain Company-paid fringe benefits such as
an automobile allowance, disability insurance and inclusion
10
<PAGE> 13

in pension, deferred compensation, profit sharing, stock purchase, savings,
hospitalization and other benefit plans in effect from time to time.

Agreement with Ms. Valice

Effective as of January 1, 1993, the Company entered into an employment
agreement with Ms. Valice for service in her capacities set forth in the listing
of directors and executive officers. In 1998, Ms. Valice received an annual
salary base of $155,853 under her employment agreement. The agreement also
provides for an annual bonus of 2% of the Company's pre-tax profits up to
$125,000, plus an additional amount as determined by the Board of Directors of
the Company.

The agreement includes the same Change in Control provision as described
above for the Frame and Calvert agreements, and is for a term of five years,
renewable each year for an additional year unless either party to the agreement
gives notice to the contrary. The agreement provides that if it is not renewed,
the Company will pay Ms. Valice for two additional years' compensation including
her then current base salary plus the average of all bonuses paid to her for the
then prior three years. The severance payments are contingent upon Ms. Valice
remaining available to perform consulting services for the benefit of the
Company. The agreement also provides for monthly salary continuation payments
for one year upon Ms. Valice's death, so long as the agreement is in full force
and effect at the time of her death. The annual salary continuation amount will
equal Ms. Valice's base salary at her date of death plus an average of the
bonuses paid for the three previous calendar years.

The agreement provides for certain noncompetition and nondisclosure
covenants of Ms. Valice and for certain Company-paid fringe benefits such as an
automobile allowance, disability insurance and inclusion in pension, deferred
compensation, profit sharing, stock purchase, savings, hospitalization and other
benefit plans in effect from time to time.

Option Repricing Upon Change in Control

In December 1998, the Board of Directors approved the repricing of all
employee options and warrants with an exercise price above $13.9375 per share to
$13.9375 per share. Options and warrants held by the Named Executive Officers to
purchase an aggregate of 2,605,464 shares of Company common stock were included
in this repricing. The terms of this repricing also provided that if the Company
is acquired by another company these options and warrants will be repriced to an
exercise price of $11.9375 per share.

Directors Compensation

Outside directors receive an annual fee of $30,000 for serving on the board
and are reimbursed for out of pocket expenses for meeting attendance. No
additional fees are paid for serving on committees, except that committee chairs
receive an additional $5,000 annually or 10,000 options to purchase the
Company's common stock. On July 25, 1996, the Company's Board of Directors
adopted the Non-Employee Directors' Deferred Compensation Plan which permits
each non-employee director to elect to receive annual director fees in the form
of stock options and to defer receipt of any directors' fees in a deferred cash
account or as deferred shares. As of June 8, 1999, 60,000 shares have been
reserved for issuance under this plan and directors (including former directors)
have accumulated 1,643 deferred shares in their accounts of which 656 shares
have been distributed and 987 will be distributed in annual equal installments
from January 2000 to January 2002. Directors who are also employees receive no
separate compensation for their services as directors.

Non-employee directors also participate in the Non-Employee Directors'
Stock Option Plan (the "Plan"), which was approved by Company Shareholders at
the 1994 annual meeting. Under the terms of the Plan, each non-employee director
receives on the date of each annual meeting during the term of the Plan an
option to purchase 2,000 shares of common stock at an exercise price equal to
the fair market value of the common stock on the date of grant. In addition,
each non-employee director who is elected or appointed to the Board of Directors
for the first time is granted on the date of such election or appointment an
option to purchase 10,000 shares of common stock at an exercise price equal to
the fair market value of the common stock on the date of grant. A non-employee
director receives an option to purchase an additional 10,000 shares
11
<PAGE> 14

of common stock at an exercise price equal to the fair market value of the
common stock on the date of grant upon his or her election as chairman of a
committee of the Board of Directors if he or she elects to forgo the additional
cash compensation attributable to acting as chairman of such committee. Options
granted under the Plan become exercisable one year after the date of grant. All
options expire at the earlier of five years after the date of grant, twelve
months after the optionee ceases to serve as a director due to death,
disability, or retirement at or after age 65, or sixty days after the optionee
otherwise ceases to serve as a director of the Company. If a director ceases to
serve as such for any reason other than death, disability, or retirement at or
after age 65, the option may be exercised only if it was exercisable at the date
of such cessation of service. During 1998, William Lerner and John E. Stieglitz
were granted 12,000 options each (including 10,000 for chairing a board
committee), at an exercise price of $13.75. In addition, Fred S. Zeidman
received 2,000 options at an exercise price of $13.75.

In December 1998, the Board of Directors adopted amendments to the Plan to
expand the circumstances under which grants of options can be made to
non-employee directors by permitting discretionary grants and to expand the
terms relating to previous grants of options. The amendments are subject to
stockholder approval at the Annual Meeting.

Following the adoption of these amendments, the Board of Directors approved
option grants to Messrs. Craig, Lerner, Stieglitz and Zeidman, non-employee
directors, to purchase 20,000, 20,000, 20,000 and 15,000 shares of the Company's
common stock, respectively. These options have an exercise price of $11.9375 per
share, which was equal to or greater than the closing price for the shares on
the date of grant, vest on December 3, 1999 and expire December 3, 2003. The
Board of Directors also authorized a new exercise price of $13.9375 per share
for outstanding options for 26,000, 26,000 and 10,000 options previously granted
under the Plan to Messrs. Lerner, Stieglitz and Zeidman, respectively, and
extended by two years the expiration date of 38,000, 38,000 and 12,000 options
previously granted under the Plan to Messrs. Lerner, Stieglitz and Zeidman,
respectively.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Compensation and Stock Option Committee is composed of
William Lerner, John E. Stieglitz and Fred S. Zeidman.

No member of the Compensation Committee of the Board of Directors of the
Company was, during 1998, an officer or employee of the Company or any of its
subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries, or had any relationship requiring disclosure pursuant to
applicable rules and regulations of the Securities and Exchange Commission.
During 1998, no executive officer of the Company served as (i) a member of the
compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Compensation Committee of the Company, (ii) a director of another entity, one of
whose executive officers served on the Compensation Committee of the Company, or
(iii) a member of the compensation committee (or other board committee
performing equivalent functions) of another entity, one of whose executive
officers served as a director of the Company.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and persons who own
more than 10% of the Company's Common Stock to file reports of ownership and
changes in ownership concerning the Common Stock with the Securities and
Exchange Commission and to furnish the Company with copies of all Section 16(a)
forms they file. Based upon the Company's review of the Section 16(a) filings
that have been received by the Company, the Company believes that all filings
required to be made under Section 16(a) during 1998 were timely made.

12
<PAGE> 15

REPORT ON REPRICING OF OPTIONS

As of December 3, 1998, employees of the Company, including officers and
directors, held options or warrants with exercise prices in excess of $13.9375
to purchase 3,621,852 shares of Common Stock. The Named Executive Officers held
2,605,464 of these options. To reflect the importance that the Company places on
shareholder value and to provide a more effective incentive to the Company's
employees, the Board of Directors accepted the Compensation Committee's
recommendation at its December 3, 1998 meeting to reduce the exercise price of
all options and warrants held by employees with an exercise price greater than
$13.9375 per share ($2 above the market price of the Company's common stock on
that date) to $13.9375 per share. The terms of this repricing also provided that
if the Company is acquired by another company, these options and warrants will
be repriced to an exercise price of $11.9375 per share. Details of the repricing
for the Company's Named Executive Officers are set forth in the "Ten Year
Option/SAR Repricings" table below.

By the Compensation Committee,

William Lerner, Co-Chairman
John E. Stieglitz, Co-Chairman
Fred S. Zeidman

The following table sets forth certain information with respect to
repricing of options to purchase Common Stock and SARs during the ten years
ended December 31, 1998, for any executive officer.

TEN YEAR OPTION/SAR REPRICINGS

13
<PAGE> 16

<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OPTION TERM
UNDERLYING OF STOCK AT EXERCISE REMAINING
OPTIONS/SAR'S TIME OF PRICE AT TIME NEW AT DATE OF
REPRICED OR REPRICING OR OF REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT($) AMENDMENT($) PRICE($)(1) AMENDMENT
- ---- -------- ------------- ------------- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul A. Frame...................... 1/5/94(3) 160,038 $ 7.000 $ 6.065 $ 5.625 1.15 yrs.
(continued) 1/21/93(4) 265,380 $ 5.815 $ 8.360 $ 7.860 7.88 yrs.
1/21/93(3) 160,038 $ 5.815 $ 6.565 $ 6.065 2.10 yrs.
1/9/93(4) 265,380 $ 5.625 $ 8.860 $ 8.360 7.92 yrs.
1/9/93(3) 160,038 $ 5.625 $ 7.065 $ 6.565 2.13 yrs.
12/5/92(4) 265,380 $ 4.625 $ 9.360 $ 8.860 8.00 yrs.
12/5/92(3) 160,038 $ 4.625 $ 7.565 $ 7.065 2.25 yrs.
11/28/92(4) 265,380 $ 4.440 $ 9.860 $ 9.360 8.00 yrs.
11/28/92(3) 160,038 $ 4.440 $ 8.065 $ 7.565 2.25 yrs.
9/18/92(4) 265,380 $ 3.875 $10.360 $ 9.860 8.30 yrs.
9/18/92(3) 160,038 $ 3.875 $ 8.565 $ 8.065 2.45 yrs.
Horace A. Calvert.................. 12/3/98(2) 200,000 $11.938 $20.500 $13.938 3.96 yrs.
12/3/98(2) 73,082 $11.938 $19.563 $13.938 4.01 yrs.
12/3/98(2) 39,436 $11.938 $20.000 $13.938 3.00 yrs.
12/3/98(2) 39,400 $11.938 $17.250 $13.938 4.01 yrs.
12/3/98(2) 32,650 $11.938 $20.250 $13.938 3.00 yrs.
12/3/98(2) 24,000 $11.938 $17.188 $13.938 4.01 yrs.
12/3/98(2) 14,412 $11.938 $20.500 $13.938 2.99 yrs.
12/3/98(2) 10,000 $11.938 $17.563 $13.938 4.01 yrs.
12/3/98(2) 9,600 $11.938 $19.406 $13.938 4.01 yrs.
12/3/98(2) 8,200 $11.938 $19.500 $13.938 4.01 yrs.
12/3/98(2) 3,300 $11.938 $17.750 $13.938 4.01 yrs.
12/3/98(2) 3,000 $11.938 $17.781 $13.938 4.01 yrs.
12/3/98(2) 3,000 $11.938 $17.969 $13.938 4.01 yrs.
12/3/98(2) 2,400 $11.938 $17.906 $13.938 4.01 yrs.
12/3/98(2) 1,000 $11.938 $19.375 $13.938 4.01 yrs.
12/3/98(2) 1,000 $11.938 $17.531 $13.938 4.01 yrs.
12/3/98(2) 700 $11.938 $17.688 $13.938 4.01 yrs.
12/3/98(2) 200 $11.938 $17.844 $13.938 4.01 yrs.
1/27/94(4) 265,380 $ 7.500 $ 6.860 $ 6.525 6.87 yrs.
1/14/94(4) 265,380 $ 7.750 $ 7.360 $ 6.860 6.90 yrs.
1/5/94(4) 265,380 $ 7.000 $ 7.860 $ 7.360 6.93 yrs.
1/5/94(3) 160,038 $ 7.000 $ 6.065 $ 5.625 1.15 yrs.
1/21/93(4) 265,380 $ 5.815 $ 8.360 $ 7.860 7.88 yrs.
1/21/93(3) 160,038 $ 5.815 $ 6.565 $ 6.065 2.10 yrs.
1/9/93(4) 265,380 $ 5.625 $ 8.860 $ 8.360 7.92 yrs.
1/9/93(3) 160,038 $ 5.625 $ 7.065 $ 6.565 2.13 yrs.
12/5/92(4) 265,380 $ 4.625 $ 9.360 $ 8.860 8.00 yrs.
12/5/92(3) 160,038 $ 4.625 $ 7.565 $ 7.065 2.25 yrs.
11/28/92(4) 265,380 $ 4.440 $ 9.860 $ 9.360 8.00 yrs.
11/28/92(3) 160,038 $ 4.440 $ 8.065 $ 7.565 2.25 yrs.
9/18/92(4) 265,380 $ 3.875 $10.360 $ 9.860 8.30 yrs.
9/18/92(3) 160,038 $ 3.875 $ 8.565 $ 8.065 2.45 yrs.
Herbert M. Pearlman................ 12/3/98(2) 200,000 $11.938 $20.500 $13.938 3.96 yrs.
12/3/98(2) 80,000 $11.938 $16.000 $13.938 1.40 yrs.
12/3/98(2) 35,900 $11.938 $20.625 $13.938 3.75 yrs.
12/3/98(2) 30,000 $11.938 $20.531 $13.938 3.65 yrs.
12/3/98(2) 20,000 $11.938 $20.781 $13.938 3.62 yrs.
12/3/98(2) 19,500 $11.938 $20.344 $13.938 3.75 yrs.
12/3/98(2) 16,624 $11.938 $20.000 $13.938 3.00 yrs.
12/3/98(2) 13,766 $11.938 $20.250 $13.938 3.00 yrs.
12/3/98(2) 13,700 $11.938 $20.813 $13.938 3.62 yrs.
12/3/98(2) 12,700 $11.938 $20.313 $13.938 3.73 yrs.
12/3/98(2) 10,574 $11.938 $20.750 $13.938 3.73 yrs.
12/3/98(2) 10,000 $11.938 $20.313 $13.938 3.63 yrs.
12/3/98(2) 9,964 $11.938 $20.500 $13.938 2.99 yrs.
</TABLE>

14
<PAGE> 17

<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OPTION TERM
UNDERLYING OF STOCK AT EXERCISE REMAINING
OPTIONS/SAR'S TIME OF PRICE AT TIME NEW AT DATE OF
REPRICED OR REPRICING OR OF REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT($) AMENDMENT($) PRICE($)(1) AMENDMENT
- ---- -------- ------------- ------------- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Pearlman................ 12/3/98(2) 9,800 $11.938 $20.406 $13.938 3.65 yrs.
(continued) 12/3/98(2) 8,700 $11.938 $20.250 $13.938 3.63 yrs.
12/3/98(2) 7,500 $11.938 $20.719 $13.938 3.72 yrs.
12/3/98(2) 7,100 $11.938 $20.875 $13.938 3.62 yrs.
12/3/98(2) 2,762 $11.938 $21.500 $13.938 2.98 yrs.
12/3/98(2) 2,500 $11.938 $20.719 $13.938 3.73 yrs.
12/3/98(2) 2,000 $11.938 $20.250 $13.938 3.74 yrs.
12/3/98(2) 1,900 $11.938 $20.813 $13.938 3.73 yrs.
12/3/98(2) 1,466 $11.938 $20.813 $13.938 2.98 yrs.
12/3/98(2) 1,400 $11.938 $20.281 $13.938 3.63 yrs.
12/3/98(2) 500 $11.938 $20.375 $13.938 3.75 yrs.
12/3/98(2) 100 $11.938 $20.375 $13.938 3.63 yrs.
1/27/94(4) 159,228 $ 7.500 $ 6.860 $ 6.525 6.87 yrs.
1/14/94(4) 159,228 $ 7.750 $ 7.360 $ 6.860 6.90 yrs.
1/5/94(4) 159,228 $ 7.000 $ 7.860 $ 7.360 6.93 yrs.
1/5/94(3) 172,126 $ 7.000 $ 6.065 $ 5.625 1.15 yrs.
1/21/93(4) 159,228 $ 5.815 $ 8.360 $ 7.860 7.88 yrs.
1/21/93(3) 172,126 $ 5.815 $ 6.565 $ 6.065 2.10 yrs.
1/9/93(4) 159,228 $ 5.625 $ 8.860 $ 8.360 7.92 yrs.
1/9/93(3) 172,126 $ 5.625 $ 7.065 $ 6.656 2.13 yrs.
12/5/92(4) 159,228 $ 4.625 $ 9.360 $ 8.860 8.00 yrs.
12/5/92(3) 172,126 $ 4.625 $ 7.565 $ 7.065 2.25 yrs.
11/28/92(4) 159,228 $ 4.440 $ 9.860 $ 9.360 8.00 yrs.
11/28/92(3) 172,126 $ 4.440 $ 8.065 $ 7.565 2.25 yrs.
9/18/92(4) 159,228 $ 3.875 $10.360 $ 9.860 8.30 yrs.
9/18/92(3) 172,126 $ 3.875 $ 8.565 $ 8.065 2.45 yrs.
David S. Lawi...................... 12/3/98(2) 100,000 $11.938 $20.500 $13.938 3.96 yrs.
12/3/98(2) 80,000 $11.938 $16.000 $13.938 1.40 yrs.
12/3/98(2) 35,900 $11.938 $20.625 $13.938 3.75 yrs.
12/3/98(2) 30,000 $11.938 $20.531 $13.938 3.65 yrs.
12/3/98(2) 20,000 $11.938 $20.781 $13.938 3.62 yrs.
12/3/98(2) 19,500 $11.938 $20.344 $13.938 3.75 yrs.
12/3/98(2) 16,624 $11.938 $20.000 $13.938 3.00 yrs.
12/3/98(2) 13,766 $11.938 $20.250 $13.938 3.00 yrs.
12/3/98(2) 13,700 $11.938 $20.813 $13.938 3.62 yrs.
12/3/98(2) 12,700 $11.938 $20.313 $13.938 3.73 yrs.
12/3/98(2) 10,574 $11.938 $20.750 $13.938 3.73 yrs.
12/3/98(2) 10,000 $11.938 $20.313 $13.938 3.63 yrs.
12/3/98(2) 9,964 $11.938 $20.500 $13.938 2.99 yrs.
12/3/98(2) 9,800 $11.938 $20.406 $13.938 3.65 yrs.
12/3/98(2) 8,700 $11.938 $20.250 $13.938 3.63 yrs.
12/3/98(2) 7,500 $11.938 $20.719 $13.938 3.72 yrs.
12/3/98(2) 7,100 $11.938 $20.875 $13.938 3.62 yrs.
12/3/98(2) 2,762 $11.938 $21.500 $13.938 2.98 yrs.
12/3/98(2) 2,500 $11.938 $20.719 $13.938 3.73 yrs.
12/3/98(2) 2,000 $11.938 $20.250 $13.938 3.74 yrs.
12/3/98(2) 1,900 $11.938 $20.813 $13.938 3.73 yrs.
12/3/98(2) 1,466 $11.938 $20.813 $13.938 2.98 yrs.
12/3/98(2) 1,400 $11.938 $20.281 $13.938 3.63 yrs.
12/3/98(2) 500 $11.938 $20.375 $13.938 3.75 yrs.
12/3/98(2) 100 $11.938 $20.375 $13.938 3.63 yrs.
1/27/94(4) 159,228 $ 7.500 $ 6.860 $ 6.525 6.87 yrs.
1/14/94(4) 159,228 $ 7.750 $ 7.360 $ 6.860 6.90 yrs.
1/5/94(4) 159,228 $ 7.000 $ 7.860 $ 7.360 6.93 yrs.
1/5/94(3) 87,270 $ 7.000 $ 6.065 $ 5.625 1.15 yrs.
1/21/93(4) 159,228 $ 5.815 $ 8.360 $ 7.860 7.88 yrs.
1/21/93(3) 87,270 $ 5.815 $ 6.565 $ 6.065 2.10 yrs.
</TABLE>

15
<PAGE> 18

- ---------------

(1) The exercise prices shown do not reflect adjustments made pursuant to the
terms of the options and warrants resulting from the June 10, 1999 payment
of the dividend of Eagle Geophysical, Inc. common stock, which adjusted each
exercise price to approximately 98.5% of the price listed in this table.

(2) As described in the Report on Repricing of Options above, the Company
adopted a plan on December 3, 1998, to reduce the exercise price of all
employee options and warrants with an exercise price above $13.9375 per
share. Options and warrants held by the Named Executive Officers to purchase
an aggregate of 2,605,464 shares of Company common stock were included in
this repricing. The terms of this repricing provided that if the Company is
acquired by another company these options and warrants will be repriced to
an exercise price of $11.9375 per share. The original term of these options
and warrants was not changed with the repricing.

(3) These common stock purchase warrants were originally granted on February 27,
1990, with an exercise price of $8.565 per share and an expiration date of
February 27, 1995. The Company adopted a plan on July 21, 1992, to reduce
the exercise price of these warrants by $.50 for every $.50 increase in the
market price of the Company's Common Stock maintained for at least 30
consecutive days, until the exercise price of the warrants equaled the
target price of $5.625 per share established by the Compensation Committee.
This adjustment towards the target price caused three $.50 per share
decreases in the exercise price of these warrants as of December 31, 1992,
two additional $.50 per share decreases in the exercise price of these
warrants during the year ended December 31, 1993 and a $.44 decrease in the
exercise price of these warrants to the target price during the year ended
December 31, 1994. No further decreases in the exercise price of these
warrants can occur. The original term of these warrants was not changed with
the repricing.

(4) These common stock purchase warrants were originally granted on December 10,
1990 with an exercise price of $10.36 per share and an expiration date of
December 10, 2000. The Company adopted a plan on

16
<PAGE> 19

July 21, 1992, to reduce the exercise price of these warrants by $.50 for
every $.50 increase in the market price of the Company's Common Stock
maintained for at least 30 consecutive days, until the exercise price of the
warrants equals the target price of $6.525 per share established by the
Compensation Committee. This adjustment towards the target price caused
three $.50 per share decreases in the exercise price of these warrants as of
December 31, 1992, two additional $.50 per share decreases in the exercise
price of these warrants during the year ended December 31, 1993, and two
additional $.50 per share decreases and a $.335 per share decrease in the
exercise price of these warrants to the target price during the year ended
December 31, 1994. No further decreases in the exercise price of these
warrants can occur. The original term of these warrants was not changed with
the repricing.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Company, which consists of three outside
directors, met separately and with the entire Board of Directors in December
1998 to review the Company's compensation policies and practices. Such a review
is intended to be conducted annually.

COMPENSATION PHILOSOPHY

Since January 1, 1998, the compensation of Messrs. Frame, Calvert, Pearlman
and Lawi has been governed by the Company's 1998 Executive Compensation Plan,
which was approved by stockholders in November 1997. The plan was submitted to
shareholders for approval in order to give shareholders the opportunity to
participate in the process for setting the executive compensation of Messrs.
Frame, Calvert, Pearlman and Lawi. This plan was intended to link a significant
portion of compensation to financial results and to permit the Company to
maximize the deductibility of the compensation paid to these executives under
section 162(m) of the Internal Revenue Code. Ms. Valice's compensation is
governed by her employment contract with the Company. The compensation of all of
these executives (the "Named Executive Officers") is based in large part on the
financial performance of the Company.

The Company's compensation philosophy is to pay a lower base salary and to
provide attractive incentives to earn additional income based on financial
results, plus the granting of stock options and warrants to reflect the
importance that the Company places on shareholder value. This compensation
philosophy also extends to all other officers and executives of the Company.

PERFORMANCE-BASED CASH COMPENSATION

As detailed under the Employment Arrangements section, Mr. Frame, the
Company's Chief Executive Officer, receives a base salary, a bonus based on
pre-tax profits if pre-tax profits exceed a threshold amount and a bonus based
on the Company's sales in excess of $30 million if pre-tax profits exceed a
threshold amount. Mr. Calvert receives a base salary, a bonus based on pre-tax
profits if pre-tax profits exceed a threshold amount and a bonus based on the
Company's sales in excess of $30 million if pre-tax profits exceed a threshold
amount. Messrs. Pearlman and Lawi each receive a base salary and a bonus based
on pre-tax profits if pre-tax profits exceed a threshold amount. Ms. Valice
receives a base salary, a bonus of up to $125,000 based on pre-tax profits and
an additional bonus in the Board's discretion.

For the year ended December 31, 1998, Mr. Frame's total cash compensation
decreased 25% as compared to the total cash compensation he received for the
year ended December 31, 1997, including a bonus in 1997 relating to the Eagle
Geophysical spin-off but excluding a bonus in 1997 based on the Company's stock
performance, deferred compensation, Company matching 401(k) income and other
fringe benefits. This decrease in CEO compensation resulted primarily from the
bonus in 1997 relating to the Eagle Geophysical spin-off, partially offset by
increased compensation under the 1998 Executive Compensation Plan due to higher
base salary and increased pre-tax profits for the Company in 1998. Similarly,
the total cash compensation for Messrs. Calvert, Pearlman and Lawi and Ms.
Valice decreased primarily because of the 1997 bonus relating to the financial
gain to the Company resulting from the Eagle Geophysical spin-off.

17
<PAGE> 20

STOCK OPTIONS AND COMMON STOCK PURCHASE WARRANTS

During 1998, the Company had only one stock option plan, the 1993 Option
Plan, under which options were available for granting to officers and employees
of the Company. Options granted under the 1993 Option Plan can be either
incentive stock options pursuant to Section 422 of the Code or non-qualified
stock options. Options granted under the 1993 Option Plan have a maximum term of
10 years, subject to certain events related to termination of employment. Mr.
Frame, as well as other executive officers, have been granted stock options
under previous non-qualified and incentive stock option plans.

The Company also issued common stock purchase warrants to Mr. Frame, as
well as to the other Named Executive Officers and most other employees. These
warrants are designed to serve as incentives to all employees as to the
importance of their productivity related to the Company's financial performance
and stockholder value. Certain of these warrants are subject to reloading upon
exercise under the Company's Warrant Reload Plan, which provides for the grant
of a like number of new warrants at an exercise price equal to the market price
of the Common Stock on the date of exercise of the reloaded warrant and expiring
on the later of five years from the date of grant or the expiration date of the
reloaded warrants. The new warrants granted to reload the exercised warrants are
not reloadable under the Warrant Reload Plan.

Since compensation upon the exercise of warrants and reload warrants did
not meet the deductibility requirements of Section 162(m), the Company proposed,
and the Stockholders approved at the annual meeting in November 1997, an
increase in the number of shares available for granting options under the 1993
Stock Option Plan to use for granting reload options rather than warrants under
the Warrant Reload Plan to the Named Executive Officers. Reload options are
intended to meet the deductibility requirements of Section 162(m).

Mr. Frame was not granted any new options in 1998. However, the expiration
date of certain of Mr. Frame's common stock purchase warrants was extended and
other options and warrants held by Mr. Frame were repriced during 1998, as
described in the Options/SAR Grants in 1998 table, the Ten Year Option/SAR
Repricings table and the Report on Repricing of Options. Similarly, certain
options and warrants held by the other Named Executive Officers were extended or
repriced in 1998. Options were also granted to other officers and key employees
of the Company under the 1993 Option Plan at various times throughout the year
to reward these officers and key employees for their efforts.

The Company's stock option plans and common stock purchase warrants are
designed to provide incentives based upon the Company's financial performance
and stockholder returns over time.

COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)

Section 162(m) of the Internal Revenue Code, enacted in 1993, imposes
certain limitations on the deductibility by the Company for federal income tax
purposes of compensation amounts exceeding $1,000,000 paid to the chief
executive officer and four other highest paid executive officers of a company.
Qualifying performance based compensation is not subject to the deduction limit
if certain requirements are met. The Compensation Committee attempts to
structure incentive awards to be deductible under Section 162(m) and intends,
whenever reasonably possible, to have compensation paid by the Company to the
chief executive officer and the four other highest paid executive officers
satisfy Section 162(m). Notwithstanding the efforts of the Compensation
Committee in this regard, no assurance can be given that the compensation
intended to satisfy the requirements under Section 162(m) does, in fact, do so.

By the Compensation Committee,

William Lerner, Co-Chairman
John E. Stieglitz, Co-Chairman
Fred S. Zeidman

18
<PAGE> 21

PERFORMANCE GRAPH

The following graph sets forth the cumulative total stockholder return for
the Company's Common Stock as compared to the Russell 2000 index, which covers a
broad cross-section of public companies including many which have relatively
small stock market capitalization and the Peer Group index, which represents
publicly traded oil-service companies.

COMPARATIVE TOTAL RETURNS*

SEITEL, INC., RUSSELL 2000, AND PEER GROUP
(Performance results through December 31, 1998)
[Performance Chart]

Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in SEI common stock, Russell
2000 Index, and Peer Group.
- ---------------

* Cumulative total return assumes reinvestment of dividends.

** Peer Group: Baker-Hughes Inc.; Daniel Industries, Inc.; Dresser Industries,
Inc. (until September 1998 when it ceased to be publicly traded); Enterra
Corporation (until October 1995 when it ceased to be publicly traded); Global
Marine Inc.; Halliburton Company, Helmerich & Payne, Inc.; Kaneb Services,
Inc.; McDermott International, Inc.; Parker Drilling Company; R&B Falcon
Corporation (formerly known as Reading & Bates Corporation); Rowan Companies,
Inc.; Smith International, Inc.; Schlumberger Limited; Tidewater Inc.; Varco
International, Inc.; Western Atlas Inc. (which began to be publicly traded in
March 1994 and ceased to be publicly traded in August 1998); and Western Co.
of North America (until April 1995 when it ceased to be publicly traded).

19
<PAGE> 22

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On July 21, 1992, the Company granted ten-year loans at an interest rate of
4% to most of its employees for the purchase of 800,000 shares of the Company's
common stock at the then market price of $2.6875 per share. Payments of 5% of
the original principal balance plus accrued interest are due annually on August
1, with a balloon payment of the remaining principal and accrued interest due
August 1, 2002. The Company recorded compensation expense due to the below
market interest rate on these loans of $40,000 in 1998. The stock certificates
are held by the Company as collateral until payment is received. Loans in excess
of $60,000 were made to Messrs. Frame and Calvert and Ms. Valice, amounting to
$537,500, $537,500 and $134,375, respectively. The largest aggregate amounts of
principal and interest outstanding on such loans during 1998 were approximately
$418,000, $418,000 and $105,000, respectively. As of June 8, 1999, the aggregate
amounts of principal and interest outstanding on such loans were approximately
$388,000, $388,000 and $97,000, respectively.

On October 2, 1998, the Company granted five-year loans at an interest rate
of 4% to most of its employees for the purchase from the Company of 794,300
shares of the Company's common stock and options to purchase a like number of
shares of the Company's common stock at an exercise price of $11.75 per share.
Payment of 60% of the loan amount plus accrued interest is being made in equal
monthly, quarterly or annual payments, as applicable, and a balloon payment of
the remaining 40% is due on October 2, 2003. The Company recorded compensation
expense due to the below market interest rate on these loans of $14,000 in 1998.
The stock certificates are held by the Company as collateral until payment is
received. Loans in excess of $60,000 were made to Messrs. Frame, Calvert,
Pearlman and Lawi amounting to $773,438 each and to Ms. Valice amounting to
$515,625. The largest aggregate amounts of principal and interest outstanding on
such loans during 1998 were approximately $781,000 for each of Messrs. Frame,
Calvert, Pearlman and Lawi and $521,000 for Ms. Valice. As of June 8, 1999, the
aggregate amounts of principal and interest outstanding on such loans were
approximately $758,000 for each of Messrs. Frame, Calvert, Pearlman and Lawi and
$506,000 for Ms. Valice.

The Company guarantees borrowings up to $750,000 made by Paul Frame under a
line of credit. The Company is only obligated to make payment in the event of
default by Mr. Frame. The Company has a contractual right of offset against any
salary, bonus, commission or other amounts due from the Company to Mr. Frame for
any amounts paid by the Company pursuant to this guaranty. The maximum amount
outstanding on this line of credit during 1998 was $600,000. The Company did not
make any payments under this guaranty during 1998. As of June 8, 1999, $700,000
was outstanding on this line of credit.

On August 11, 1997, the Company's wholly-owned seismic data acquisition
crew subsidiary, Eagle Geophysical, Inc., completed an initial public offering
("Offering") in which the Company sold 1,880,000 of its 3,400,000 shares of
Eagle common stock as a selling stockholder. The Company owed Eagle and its
subsidiaries $27,117,000 at December 31, 1998, for seismic data acquisition
services provided to the Company and its subsidiaries subsequent to the Offering
date. The Company incurred charges of $79,900,000 for these services for the
year ended December 31, 1998. Costs incurred for these services were based on
agreed upon contractual amounts and terms similar to contracts with third party
contractors. The Company declared a dividend of all of its remaining shares of
Eagle to the Company's stockholders of record as of May 18, 1999, with a payment
date of June 10, 1999.

Paul Frame, the Chief Executive Officer, President and Director of the
Company, was a Director of Eagle and Chairman of the Executive Committee of
Eagle's Board of Directors until March 1999. In addition to his duties as a
director of Eagle, Mr. Frame was responsible for strategic planning, marketing,
and domestic and international growth of Eagle's business pursuant to a bonus
agreement with Eagle, which was terminated in March 1999 when he resigned as a
director of Eagle. The Board of Directors of the Company had agreed to allow Mr.
Frame to devote 20% of his time to Eagle until December 31, 1999. Pursuant to
the bonus agreement, Eagle paid Mr. Frame a bonus of $206,979 attributable to
1998, along with annual director fees and meeting fees as an outside director of
Eagle.

Certain employees and directors of the Company and immediate family members
of employees and directors contributed cash to partnerships in 1994 through 1997
which invested in the exploration and
20
<PAGE> 23

development of oil and gas properties on a working interest basis along with DDD
Energy, Inc. ("DDD Energy"). Each partnership's working interest amounted to
2.5% of the total investment made by such partnership and DDD Energy for the
partnership formed in 1997, 3% for the partnership formed in 1996 and 5% for the
partnerships formed in 1995 and 1994. Effective October 1, 1998, DDD Energy
purchased the oil and gas interests owned by each of the partnerships in
exchange for shares of the Company's common stock, cash in lieu of fractional
shares and assumption of certain partnership liabilities. The purchase price for
the interests of each partnership was equal to the greater of (i) the present
value of future production of proved reserves based on the independent reserve
report dated January 1, 1998, adjusted by DDD Energy to the effective date of
the purchase to take into account production and other reserve changes, plus
100% of costs attributable to unevaluated prospects, or (ii) the partners'
original capital contributions to the partnership. This purchase price
determination was approved by an independent committee of the Board of Directors
of the Company consisting of Walter Craig, John Stieglitz and Fred Zeidman. DDD
Energy did not obtain a third-party appraisal of these properties. The purchase
prices for the assets of the 1994 partnership, the 1995 partnership, the 1996
partnership and the 1997 partnership were $1,102,306, $2,889,238, $842,767 and
$600,056, respectively, based on this purchase price determination. The 1996
partnership and the 1997 partnership had paid $899,389 and $355,031,
respectively, for its interests in the properties that were sold to DDD Energy.
Liabilities of the partnerships assumed by DDD Energy and outstanding advances
from DDD Energy on behalf of the partnerships, amounting to $774,382, $578,129
and $168,352 for the 1994 partnership, the 1995 partnership and the 1996
partnership, respectively, were deducted from these purchase prices. DDD Energy
paid the net purchase price to each partnership in shares of Company common
stock valued at $11.00 per share, plus cash for the fractional shares that would
have been distributed to the partners in the partnerships. When the Company
received its independent reserve report dated January 1, 1999, DDD Energy paid
additional cash consideration to the 1995 partnership, the 1996 partnership and
the 1997 partnership of $707,687, $115,668 and $610, respectively, based on the
estimated present values of future production from the properties as reflected
in this reserve report and as adjusted to October 1, 1998.

The following officers and directors of the Company and family members of
officers and directors received the number of shares and dollar amounts listed
below in connection with these transactions as a result of their partnership
interests in these partnerships: Paul A. Frame, 35,682 shares and $98,452;
Horace A. Calvert, 45,169 shares and $98,559; Herbert M. Pearlman, 48,249 shares
and $114,138; David S. Lawi, 36,135 shares and $78,851; Debra D. Valice, 29,804
shares and $73,654; Sheryl Pearlman (wife of Herbert Pearlman), 4,554 shares and
$4,159; Julia L. Pearlman, 4,515 shares and $9,877; Lee R. Pearlman, 4,515
shares and $9,877; Lawrence Marolda, 4,515 shares and $9,877; Nicole E. Lawi,
4,515 shares and $9,877; and Neil A. Lawi, 4,515 shares and $9,877.

PROPOSAL TO APPROVE AMENDMENTS TO THE NON-EMPLOYEE
DIRECTORS' STOCK OPTION PLAN

In 1994, the Board of Directors of the Company adopted, and the
stockholders approved, the Non-Employee Directors' Stock Option Plan (the
"Plan"). In 1997, the Board of Directors approved amendments to the Plan, which
the stockholders approved in 1998. The Plan is intended to promote ownership by
non-employee directors of a greater proprietary interest in the Company, thereby
aligning such directors' interests more closely with the interests of
stockholders of the Company, and to assist the Company in attracting and
retaining highly qualified persons to serve as non-employee directors. The Plan
provides for automatic grants of options to non-employee directors of the
Company upon their election and reelection to the Board of Directors, and to
non-employee directors of the Company who serve as the chairman of a committee
of the Board if they forego the additional cash compensation attributable to
serving as chairman of the committee.

In December 1998, the Board of Directors approved certain amendments to the
Plan, subject to stockholder approval. These amendments expand the circumstances
under which grants of options can be made to non-employee directors by
permitting discretionary grants of options and the modification of terms
relating to previous grants of options. The amendments to the Plan also allow
the Company to make restricted stock grants to non-employee directors and
increase the number of shares reserved for issuance under the Plan to 400,000.
Finally, the proposed amendments provide that the Company may loan the exercise
price for
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<PAGE> 24

options or the purchase price for restricted stock to non-employee directors and
remove the requirement that a non-employee director not have been an employee
for three months prior to any grant of options under the Plan. The plan and the
proposed amendments are summarized below. This summary is qualified in its
entirety by reference to the full text of the amended Plan, attached hereto as
Exhibit A.

The Plan provides for the automatic grant of an option to purchase 10,000
shares of Common Stock to a non-employee director at the time he or she is first
elected or appointed as a director of the Company. The Plan also provides for an
annual grant to each non-employee director of an option to purchase 2,000 shares
of Common Stock upon any subsequent reelection. Such grants are made
automatically on the date directors are elected or reelected at the Company's
annual meeting. Only one of these formula options may be granted to a
non-employee director in any calendar year, so that a director who is initially
elected or appointed during a calendar year and receives a 10,000-share option
grant at that time does not receive an additional option grant at the annual
meeting that year if the annual meeting follows his or her initial election or
appointment.

The Plan also provides that a non-employee director will be granted an
option for an additional 10,000 shares of Common Stock upon his or her election
as chairman of a committee of the Board of Directors, but only if the director
elects to forgo the additional cash compensation attributable to acting as
chairman of such committee.

The proposed amendments to the Plan will allow the Board of Directors to
make discretionary grants of options to non-employee directors and to modify the
terms of options that were previously granted under the Plan. These
modifications can include, but are not limited to, repricing previously granted
options and extending the expiration date of previously granted options.

The Plan currently defines a non-employee director as a director who, on an
option grant date, is not and has not been during the preceding three month
period an employee of the Company or any parent or subsidiary of the Company.
The proposed amendments change this definition to mean a director who, on an
option grant date, is not an employee of the Company or any parent or subsidiary
of the Company. Four of the Company's directors, Messrs. Lerner, Stieglitz,
Zeidman and Craig, qualify as non-employee directors under the Plan. Mr. Lerner
is currently chairman of the Company's Audit Committee and co-chairman of the
Company's Compensation and Stock Option Committee, and Mr. Stieglitz is
currently co-chairman of the Company's Compensation and Stock Option Committee.

Stock options granted under the Plan are non-qualified stock options having
an exercise price equal to 100% of the fair market value of the Common Stock at
the date of grant. Directors are not required to pay any cash consideration at
the time of grant of options. A director may pay the exercise price of an option
in cash or by surrendering previously acquired shares of Common Stock. The
proposed amendments will allow the Company to loan amounts to non-employee
directors to pay the exercise price of options under the Plan on such terms as
the Board may determine.

All options granted under the plan other than discretionary options become
exercisable one year after the date of grant. These options expire at the
earlier of five years after the date of grant, twelve months after the optionee
ceases to serve as a director due to death, disability, or retirement at or
after age 65, or sixty days after the optionee ceases to serve as a director of
the Company for any other reason. If a director ceases to serve as such for any
reason other than death, disability, or retirement at or after age 65, the
option may be exercised only if it was exercisable at the date of such cessation
of service. A director will not be treated as having ceased to serve as such if
he or she continues as an employee of the Company or any subsidiary. The
proposed amendments allow the Board of Directors to subsequently modify the
terms of these options.

Discretionary options granted under the proposed amendments to the Plan
will be non-qualified stock options and may have such terms as the Board of
Directors deems appropriate at the time of grant, provided that the exercise
price of the options will not be less than 100% of the fair market value of the
Common Stock at the date of grant.

Options are not transferable by the optionee otherwise than by will or by
the laws of descent and distribution or to a designated beneficiary in the event
of death, and are exercisable during the director's lifetime only by the
director.
22
<PAGE> 25

The proposed amendments also permit the Company to make restricted stock
grants to the non-employee directors. These grants may be made in such amounts
and on such terms as the Board of Directors deems appropriate. These terms may
include a purchase price, which may be less than fair market value, and which
may be loaned to the director, and may also include vesting and forfeiture
provisions.

Options to purchase a total of 163,000 shares of Common Stock have
previously been granted under the Plan, including discretionary grants made
subject to stockholder approval in December 1998 and February 1999. Currently, a
total of 250,000 shares of Common Stock are reserved and available for issuance
and delivery under the Plan. The proposed amendments to the Plan will increase
this to 400,000 shares. Such shares may be authorized and unissued shares or
treasury shares. If any option expires or terminates without having been
exercised in full, the shares remaining subject to such option will again be
available for option grants under the Plan. The number and kind of shares
issuable under the Plan will be appropriately adjusted by the Board in the event
of a recapitalization, reorganization, merger, consolidation, spin-off,
combination, repurchase, exchange of shares or other securities of the Company,
stock split or reverse split, liquidation, dissolution, certain extraordinary
dividends, or other similar corporate transaction or event in order to prevent
dilution or enlargement of directors' rights under the Plan.

The Plan is administered by the Board of Directors, provided that any
action by the Board shall be taken only if approved by vote of a majority of the
directors who are not then eligible to participate in the Plan. The Plan may be
amended, altered, suspended, discontinued, or terminated by the Board without
further stockholder approval, unless such approval is required by law or
regulation or under the rules of any stock exchange or automated quotation
system (such as the NASDAQ National Market System) on which the Common Stock is
then quoted or listed. Thus, stockholder approval will not necessarily be
required for amendments which might increase the cost of the Plan or broaden
eligibility. Stockholder approval will not be deemed to be required under laws
or regulations that condition favorable treatment of optionees on such approval,
although the Board may, in its discretion, seek stockholder approval in any
circumstance in which it deems such approval advisable.

The amendments to the Plan will become effective upon their approval by
stockholders. However, the discretionary grants under the proposed amendments in
December 1998 to Messrs. Lerner, Stieglitz and Zeidman of 20,000, 20,000 and
15,000 options, respectively, will be effective as of the date of grant of
December 3, 1998, if the proposed amendments are approved by Stockholders.
Similarly, the discretionary grant under the proposed amendments in February
1999 to Mr. Craig of 20,000 options will be effective as of February 8, 1999, if
the proposed amendments are approved by Stockholders. In addition, the
amendments to options that were previously granted to Messrs. Lerner, Stieglitz
and Zeidman that repriced 26,000, 26,000, and 10,000 previously granted options,
respectively, from exercise prices ranging from $14.56 to $20.63 to a new
exercise price of $13.9375, will be effective as of December 3, 1998, the date
of the Board of Director's approval of these amendments. Also, the amendments to
these repriced options and to an additional 12,000, 12,000 and 2,000 options
previously granted to Messrs. Lerner, Stieglitz and Zeidman, respectively, that
extended the expiration date of these options for two years will be effective as
of December 3, 1998. If the proposed amendments are not approved by
stockholders, these option grants and amendments will be void.

Unless earlier terminated by the Board, the Plan will terminate when no
shares remain available for further option grants and no previously granted
options remain outstanding.

The following table sets forth the number of options that were granted in
1998 to non-employee directors as a group under the Plan as it is proposed to be
amended, including the discretionary options granted to Messrs. Lerner,
Stieglitz and Zeidman and the options that were deemed to have been granted to
Messrs. Lerner, Stieglitz, and Zeidman upon amendment of existing options. The
number of options that will be granted under the Plan in 1999 is not
determinable.

23
<PAGE> 26

NEW PLAN BENEFITS
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS
- ----------------- -----------------
<S> <C>
Non-employee directors (3 in number in 1998)................ 143,000
</TABLE>

The closing price of the Company's Common Stock on June 8, 1999 was $17 per
share. On December 3, 1998, the date on which options were granted to Messrs.
Lerner, Stieglitz and Zeidman, subject to stockholder approval, to purchase
20,000, 20,000 and 15,000 shares of Common Stock, respectively, the reported
closing price of the Company's Common Stock by the New York Stock Exchange was
$11.9375 per share, which is the exercise price of these options. Also on that
date, options were deemed to have been granted to Messrs. Lerner, Stieglitz and
Zeidman to purchase 26,000, 26,000 and 10,000 shares of Common Stock,
respectively, as a result of amendments to existing options that reduced the
exercise price of these options. The exercise price of these repriced options is
$13.9375 per share, which is $2.00 greater than the closing price of the Common
Stock on the New York Stock Exchange on the date of the repricing. Also on that
date, an additional 12,000, 12,000 and 2,000 options were deemed to have been
granted to Messrs. Lerner, Stieglitz and Zeidman, respectively, as a result of a
two-year extension of the expiration date of these options. On February 8, 1999,
the date on which options were granted to Mr. Craig, subject to stockholder
approval, to purchase 20,000 shares of Common Stock at an exercise price of
$11.9375 per share, the reported closing price of the Company's Common Stock by
the New York Stock Exchange was $11.75 per share.

Federal Income Tax Consequences. The following is a brief description of
the federal income tax consequences generally arising with respect to options
and restricted stock that may be granted under the Plan. This discussion is
intended for the information of stockholders considering how to vote at the
Annual Meeting and not as tax guidance to optionees.

The grant of an option will create no tax consequences for the optionee or
the Company, provided that in the case of an option granted to a non-employee
director who is elected to serve as chairman of a committee, the optionee
irrevocably elects to receive the option prior to rendering the corresponding
services as chairman. Upon exercise of an option, the optionee must generally
recognize ordinary income equal to the fair market value of the Common Stock
acquired on the date of exercise minus the exercise price, and the Company will
be entitled to a deduction equal to the amount recognized as ordinary income by
the optionee. A disposition of shares acquired upon the exercise of an option
generally will result in short-term or long-term capital gain or loss measured
by the difference between the sale price and the participant's tax basis (i.e.,
the exercise price plus the amount recognized as ordinary income) in such
shares. Generally, there will be no tax consequences to the Company in
connection with a disposition of option shares.

A director who receives a grant of restricted stock will recognize
compensation taxed as ordinary income equal to the excess of the fair market
value of the restricted stock over the price paid for the restricted stock (a)
as of the date of grant, if an election is properly made by the director under
section 83(b) of the Internal Revenue Code, or (b) at the time the restrictions
lapse, absent a proper election by the director under section 83(b). If the
director makes a proper election under section 83(b), no additional income will
be recognized by the director when the restrictions lapse. If, however, the
shares of restricted stock are forfeited after a proper election under section
83(b) is made by the director, no loss may be recognized. Any compensation
income recognized by the director with respect to the restricted stock will be
added to the director's basis in the restricted stock. Gain or loss recognized
by a director upon a disposition of the shares of restricted stock will be
capital gain or loss, taxed as long-term capital gain or loss if the restricted
stock has been held by the director for more than one year. The one-year holding
period commences on the date the restrictions lapse or, if a proper election is
made by the director under section 83(b), when the restricted stock is granted.
The director must file any section 83(b) election with the Internal Revenue
Service not later than 30 days after the date of grant of the restricted stock.
Each director who receives a grant of restricted stock is urged to consult his
or her own tax advisor with respect to whether an election should be made under
section 83(b) and the manner of making a proper election. A grant of restricted
stock entitles the Company to

24
<PAGE> 27

a tax deduction for the year in which the compensation income is recognized by
the director in the same amount as is includible in the director's income.

BOARD RECOMMENDATION

The Board of Directors of the Company believes that providing outside
directors with stock options is a feasible and desirable way to compensate the
outside directors. The use of stock options to compensate the non-employee
directors also permits the Company to apply more cash to the Company's business
prospects by reducing the cash required to compensate these directors. The Board
of Directors also believes it appropriate and necessary to broaden and expand
the terms of the existing Non-Employee Directors Stock Option Plan in order to
provide adequate compensation to the outside directors who are helping and have
helped the Company and its management succeed in its goals.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.

INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has selected Arthur Andersen LLP as independent
auditors for the Company for the year ending December 31, 1999, which
appointment will be submitted for ratification at the meeting. Arthur Andersen
LLP has served as independent auditors to the Company since 1985. The Company
has been advised that representatives of Arthur Andersen LLP will attend the
Annual Meeting of Stockholders. They will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.

PROPOSALS BY STOCKHOLDERS

Proposals that stockholders wish to include in the Company's proxy
statement and form of proxy for presentation at the next Annual Meeting of
Stockholders to be held in 2000 must be received by the Company at 50 Briar
Hollow Lane, 7th Floor West, Houston, Texas 77027, Attention Debra D. Valice, no
later than March 24, 2000.

MISCELLANEOUS

The Board of Directors knows of no other matters that are to be brought
before the meeting. However, if any other matters do come before the meeting,
the persons named on the enclosed form of proxy or their substitutes will vote
in accordance with their judgment in those matters.

The cost of solicitation of proxies, including expenses in connection with
preparing, assembling and mailing this proxy statement, will be borne by the
Company. The solicitation will be made by mail and may also be made by officers
or regular employees of the Company personally or by telephone or telegram. The
Company may reimburse brokers, custodians and nominees for their expenses in
sending proxies and proxy material to beneficial owners.

June 18, 1999
Houston, Texas

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<PAGE> 28

EXHIBIT A

Seitel, Inc.

Amended and Restated Non-Employee Directors' Stock Option Plan

[Deletions are shown in square brackets and additions are shown in
Upper Case text]

1. Purpose. The purpose of this Non-Employee Directors' Stock Option Plan
(the "Plan") of Seitel, Inc. (the "Company") is to promote ownership by
non-employee Directors of a greater proprietary interest in the Company, thereby
aligning such Directors' interests more closely with the interests of
stockholders of the Company, and to assist the Company in attracting and
retaining qualified persons to serve as non-employee Directors.

2. Definitions. In addition to terms defined elsewhere in the Plan, the
following are defined terms under the Plan:

(a) "Code" means the Internal Revenue Code of 1986, as amended.
References to any provision of the Code include regulations thereunder and
successor provisions and regulations.

(B) "DISCRETIONARY OPTION" MEANS THE RIGHT, GRANTED TO A PARTICIPANT
UNDER SECTION 7, TO PURCHASE STOCK AT THE EXERCISE PRICE AND ON SUCH OTHER
TERMS AS THE BOARD OF DIRECTORS SHALL APPROVE IN MAKING SUCH GRANT, IN
ACCORDANCE WITH THE PROVISIONS OF THE PLAN.

([b]C) "Exchange Act" means the Securities Exchange Act of 1934, as
amended. References to any provision of the Exchange Act include rules
thereunder and successor provisions and rules.

([c]D) "Fair Market Value" of Stock means the closing price of the
Stock on the date on which such value is to be determined, as reported for
such day by the New York Stock Exchange.

([d]E) "FORMULA Option" means the right, granted to a Participant
under Section 6, to purchase Stock at the specified exercise price for a
specified period of time under the Plan.

(F) "OPTION" MEANS A DISCRETIONARY OPTION OR A FORMULA OPTION.

([e]G) "Participant" means a Director who is eligible to receive and
is granted Options under the Plan.

(H) "RESTRICTED STOCK" MEANS A GRANT OR SALE OF SHARES OF STOCK TO A
PARTICIPANT, SUBJECT TO VARIOUS RESTRICTIONS AS SET FORTH IN SUCH GRANT,
UNDER SECTION 8.

([f]I) "Stock" means the Common Stock, $.01 par value, of the Company
and such other securities as may be substituted for Stock or such other
securities pursuant to Section [7] 9.

3. Shares Available Under the Plan. The total number of shares of Stock
reserved and available for delivery under the Plan is [250,000] 400,000, subject
to adjustment as provided in Section [7] 9 below. Such shares may be authorized
but unissued shares or treasury shares. If any Option expires or terminates for
any reason without having been exercised in full OR ANY RESTRICTED STOCK IS
FORFEITED BY A PARTICIPANT, the shares [remaining] THAT REMAIN subject to such
Option OR THAT WERE FORFEITED will again be available for delivery under the
Plan.

4. Administration of the Plan. The Plan will be administered by the Board
of Directors of the Company, provided that any action by the Board of Directors
relating to the Plan will be taken only if, in addition to any other required
vote, approved by the affirmative vote of the majority of the Directors who are
not then eligible to participate under the Plan.

5. Eligibility. Each Director of the Company who, on any date on which an
Option OR RESTRICTED STOCK is to be granted hereunder, is not[, and has not been
during the preceding three months,] an employee of the Company or any parent or
subsidiary of the Company will be eligible to receive a grant of an Option OR

A-1
<PAGE> 29

Restricted Stock at such date. No person other than those specified in this
Section 5 will participate in the Plan.

6. [Stock] FORMULA Options. An Option to purchase 10,000 shares of Stock
will be granted under the Plan to each person who is an existing non-employee
Director of the Company on the effective date of the Plan. Additionally, an
Option to purchase 10,000 shares of Stock will be granted under the Plan to each
person who, after the effective date of the Plan, is first elected or appointed
to serve as a Director of the Company, such grant to be effective at the date of
such first election or appointment, if such Director is then eligible to receive
an Option grant. Also, an Option to purchase 2,000 shares of Stock will be
granted each year to each Director of the Company who is then eligible to
receive an Option grant at the close of business on the day of the Company's
annual meeting of stockholders at which Directors (or a class of Directors if
the Company then has a classified Board of Directors) are elected or reelected
by the Company's stockholders. The foregoing notwithstanding, no Director may be
granted [an] A FORMULA Option more than once during any one calendar year under
the foregoing sentences. In addition, any non-employee director who is elected
as a chairman of a committee of the Board of Directors shall be granted an
Option to purchase 10,000 shares of Stock if such Director elects to forego any
additional directors fees that are attributable to serving as chairman of such
committee. Options granted under [the Plan] THIS SECTION 6 will be non-qualified
stock options which will be subject to the following terms and conditions:

(a) Exercise Price. The exercise price per share of Stock purchasable
under [an] A FORMULA Option will be equal to 100% of the Fair Market Value
of Stock on the date of grant of the Option.

(b) Option Term. Each FORMULA Option will expire at the earlier of (i)
five years after the date of grant, (ii) twelve months after the
Participant ceases to serve as a Director of the Company due to death,
disability, or retirement at or after age 65, or (iii) sixty days after the
Participant ceases to serve as a Director of the Company for any reason
other than death, disability, or retirement at or after age 65.

(c) Exercisability. Each FORMULA Option will become fully exercisable
beginning one year after the date of grant, and will thereafter remain
exercisable until the Option expires; provided, however, that an Option
previously granted to a Participant will be exercisable after the
Participant ceases to serve as a Director of the Company for any reason
other than death, disability, or retirement at or after age 65 only if the
Option was exercisable at the date of such cessation of service.

(d) Method of Exercise. Each Option may be exercised, in whole or in
part, at such time as it is exercisable and prior to its expiration by
giving written notice of exercise to the Company specifying the Option to
be exercised and the number of shares to be purchased, and accompanied by
payment in full of the exercise price in cash (including by check) or by
surrender of shares of Stock of the Company acquired by the Participant at
least six months prior to the exercise date and having a Fair Market Value
at the time of exercise equal to the exercise price, OR BY A LOAN OF THE
EXERCISE PRICE TO THE PARTICIPANT ON SUCH TERMS AS MAY BE OFFERED TO THE
PARTICIPANT BY THE BOARD OF DIRECTORS, or a combination of a cash payment
[and], A surrender of such Stock AND/OR A LOAN.

7. DISCRETIONARY OPTIONS. SUBJECT TO THE PROVISIONS OF THE PLAN, THE BOARD
OF DIRECTORS SHALL DETERMINE THE TERMS AND CONDITIONS OF EACH DISCRETIONARY
OPTION GRANTED UNDER THE PLAN, INCLUDING THE NUMBER OF SHARES OF STOCK COVERED
BY THE OPTION. NOTHING CONTAINED IN THE PLAN OR IN ANY RESOLUTION ADOPTED OR TO
BE ADOPTED BY THE BOARD OF DIRECTORS OR THE STOCKHOLDERS OF THE COMPANY SHALL
CONSTITUTE THE GRANTING OF ANY DISCRETIONARY OPTION. THE GRANTING OF A
DISCRETIONARY OPTION SHALL TAKE PLACE ONLY WHEN A WRITTEN OPTION AGREEMENT SHALL
HAVE BEEN DULY EXECUTED AND DELIVERED BY OR ON BEHALF OF THE COMPANY AND THE
PARTICIPANT TO WHOM SUCH DISCRETIONARY OPTION HAS BEEN GRANTED. SO LONG AS
CONSISTENT WITH THE PROVISIONS OF THE PLAN, THE TERMS AND CONDITIONS OF ANY
DISCRETIONARY OPTION NEED NOT BE THE SAME AS THE TERMS AND CONDITIONS OF ANY
OTHER OPTION. DISCRETIONARY OPTIONS GRANTED UNDER THIS SECTION 7 WILL BE
NON-QUALIFIED STOCK OPTIONS WHICH WILL BE SUBJECT TO THE FOLLOWING TERMS AND
CONDITIONS:

(A) EXERCISE PRICE. THE EXERCISE PRICE PER SHARE OF STOCK PURCHASABLE
UNDER A DISCRETIONARY OPTION SHALL BE DETERMINED BY THE BOARD OF DIRECTORS
AT THE TIME OF GRANT, BUT SHALL IN NO EVENT BE LESS THAN ONE

A-2
<PAGE> 30

HUNDRED PERCENT (100%) OF THE FAIR MARKET VALUE PER SHARE OF STOCK ON THE
DATE THE DISCRETIONARY OPTION IS GRANTED.

(B) OPTION TERM. EACH DISCRETIONARY OPTION WILL EXPIRE AT THE EARLIER
OF (I) SUCH DATE (NOT TO EXCEED TEN YEARS) AFTER THE DATE OF GRANT AS
DETERMINED BY THE BOARD OF DIRECTORS, (II) TWELVE MONTHS AFTER THE
PARTICIPANT CEASES TO SERVE AS A DIRECTOR OF THE COMPANY DUE TO DEATH,
DISABILITY, OR RETIREMENT AT OR AFTER AGE 65, OR (III) SIXTY DAYS AFTER THE
PARTICIPANT CEASES TO SERVE AS A DIRECTOR OF THE COMPANY FOR ANY REASON
OTHER THAN DEATH, DISABILITY, OR RETIREMENT AT OR AFTER AGE 65.

(C) EXERCISABILITY. THE BOARD OF DIRECTORS MAY PROVIDE THAT A
DISCRETIONARY OPTION SHALL NOT BE EXERCISABLE FOR A DESIGNATED PERIOD OF
TIME AFTER GRANT OR UNTIL AFTER THE SATISFACTION OF ANY OTHER OBJECTIVE
CRITERIA ESTABLISHED BY THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS MAY
PROVIDE THAT FAILURE TO EXERCISE A DISCRETIONARY OPTION AS TO THE
EXERCISABLE PORTION OF THE OPTION DURING A SPECIFIC TIME SHALL CONSTITUTE A
FORFEITURE OF THE RIGHT TO EXERCISE SUCH OPTION AFTER TERMINATION OF THAT
TIME PERIOD.

(D) METHOD OF EXERCISE. EACH OPTION MAY BE EXERCISED, IN WHOLE OR IN
PART, AT SUCH TIME AS IT IS EXERCISABLE AND PRIOR TO ITS EXPIRATION BY
GIVING WRITTEN NOTICE OF EXERCISE TO THE COMPANY SPECIFYING THE OPTION TO
BE EXERCISED AND THE NUMBER OF SHARES TO BE PURCHASED, AND ACCOMPANIED BY
PAYMENT IN FULL OF THE EXERCISE PRICE IN CASH (INCLUDING BY CHECK) OR BY
SURRENDER OF SHARES OF STOCK OF THE COMPANY ACQUIRED BY THE PARTICIPANT AT
LEAST SIX MONTHS PRIOR TO THE EXERCISE DATE AND HAVING A FAIR MARKET VALUE
AT THE TIME OF EXERCISE EQUAL TO THE EXERCISE PRICE, OR BY A LOAN OF THE
EXERCISE PRICE TO THE PARTICIPANT ON SUCH TERMS AS MAY BE OFFERED TO THE
PARTICIPANT BY THE BOARD OF DIRECTORS, OR A COMBINATION OF A CASH PAYMENT,
A SURRENDER OF SUCH STOCK AND/OR A LOAN.

8. RESTRICTED STOCK. IF RESTRICTED STOCK IS GRANTED TO A PARTICIPANT UNDER
THE PLAN, THE BOARD OF DIRECTORS SHALL SET FORTH IN THE RELATED RESTRICTED STOCK
AGREEMENT: (I) THE NUMBER OF SHARES OF STOCK AWARDED, (II) THE PRICE, IF ANY, TO
BE PAID BY THE PARTICIPANT FOR SUCH RESTRICTED STOCK, AND THE MANNER OF PAYMENT
OF ANY SUCH PURCHASE PRICE (WHICH PURCHASE PRICE MAY BE IN THE FORM OF A LOAN
FROM THE COMPANY ON SUCH TERMS AS THE BOARD OF DIRECTORS MAY DETERMINE), (III)
THE TIME OR TIMES, IF ANY, WITHIN WHICH SUCH RESTRICTED STOCK MAY BE SUBJECT TO
FORFEITURE, (IV) ANY SPECIFIED PERFORMANCE GOALS OF THE COMPANY, A SUBSIDIARY,
ANY DIVISION THEREOF OR ANY GROUP OF EMPLOYEES OF THE COMPANY, OR OTHER
CRITERIA, WHICH THE BOARD OF DIRECTORS DETERMINES MUST BE MET IN ORDER TO REMOVE
ANY RESTRICTIONS (INCLUDING VESTING) ON SUCH RESTRICTED STOCK, AND (V) ALL OTHER
TERMS, LIMITATIONS, RESTRICTIONS, AND CONDITIONS OF THE RESTRICTED STOCK, WHICH
SHALL BE CONSISTENT WITH THIS PLAN. THE PROVISIONS OF RESTRICTED STOCK NEED NOT
BE THE SAME WITH RESPECT TO EACH PARTICIPANT.

(A) LEGEND ON SHARES. EACH PARTICIPANT WHO IS AWARDED RESTRICTED STOCK
SHALL BE ISSUED A STOCK CERTIFICATE OR CERTIFICATES IN RESPECT OF SUCH
SHARES OF STOCK. SUCH CERTIFICATE(S) SHALL BE REGISTERED IN THE NAME OF THE
PARTICIPANT, AND SHALL BEAR AN APPROPRIATE LEGEND REFERRING TO THE TERMS,
CONDITIONS, AND RESTRICTIONS APPLICABLE TO SUCH RESTRICTED STOCK. THE BOARD
OF DIRECTORS MAY REQUIRE THAT THE STOCK CERTIFICATES EVIDENCING SHARES OF
RESTRICTED STOCK BE HELD IN CUSTODY BY THE COMPANY UNTIL THE RESTRICTIONS
THEREON SHALL HAVE LAPSED, AND THAT THE PARTICIPANT DELIVER TO THE COMPANY
A STOCK POWER OR STOCK POWERS, ENDORSED IN BLANK, RELATING TO THE SHARES OF
RESTRICTED STOCK.

(B) RESTRICTIONS AND CONDITION. SHARES OF RESTRICTED STOCK SHALL BE
SUBJECT TO THE FOLLOWING RESTRICTIONS AND CONDITIONS:

(I) SUBJECT TO THE OTHER PROVISIONS OF THIS PLAN AND THE TERMS OF
THE PARTICULAR RESTRICTED STOCK AGREEMENTS, DURING SUCH PERIOD (IF ANY)
AS MAY BE DETERMINED BY THE BOARD OF DIRECTORS COMMENCING ON THE DATE OF
GRANT (THE "RESTRICTION PERIOD"), THE PARTICIPANT SHALL NOT BE PERMITTED
TO SELL, TRANSFER, PLEDGE, OR ASSIGN SHARES OF RESTRICTED STOCK. THE
BOARD OF DIRECTORS MAY IN ITS SOLE DISCRETION, REMOVE ANY OR ALL OF THE
RESTRICTIONS ON SUCH RESTRICTED STOCK WHENEVER IT MAY DETERMINE THAT, BY
REASON OF CHANGES IN APPLICABLE LAWS OR ANY OTHER CHANGE IN
CIRCUMSTANCES ARISING AFTER THE DATE OF THE AWARD OF SUCH RESTRICTED
STOCK, SUCH ACTION IS APPROPRIATE.

(II) EXCEPT AS PROVIDED IN SUB-PARAGRAPH (I) ABOVE, THE PARTICIPANT
SHALL HAVE, WITH RESPECT TO HIS RESTRICTED STOCK, ALL OF THE RIGHTS OF A
STOCKHOLDER OF THE COMPANY, INCLUDING THE RIGHT TO VOTE THE

A-3
<PAGE> 31

SHARES, AND THE RIGHT TO RECEIVE ANY DIVIDENDS THEREON. CERTIFICATES FOR
SHARES OF STOCK FREE OF RESTRICTION UNDER THIS PLAN SHALL BE DELIVERED
TO THE PARTICIPANT PROMPTLY AFTER, AND ONLY AFTER, THE RESTRICTION
PERIOD SHALL EXPIRE WITHOUT FORFEITURE IN RESPECT OF SUCH SHARES OF
STOCK. CERTIFICATES FOR THE SHARES OF STOCK FORFEITED UNDER THE
PROVISIONS OF THE PLAN AND THE APPLICABLE RESTRICTED STOCK AGREEMENT
SHALL BE PROMPTLY RETURNED TO THE COMPANY BY THE FORFEITING PARTICIPANT.
EACH RESTRICTED STOCK AGREEMENT SHALL REQUIRE THAT (X) EACH PARTICIPANT,
BY HIS ACCEPTANCE OF RESTRICTED STOCK, SHALL IRREVOCABLY GRANT TO THE
COMPANY A POWER OF ATTORNEY TO TRANSFER ANY SHARES SO FORFEITED TO THE
COMPANY AND AGREES TO EXECUTE ANY DOCUMENTS REQUESTED BY THE COMPANY IN
CONNECTION WITH SUCH FORFEITURE AND TRANSFER, AND (Y) SUCH PROVISIONS
REGARDING RETURNS AND TRANSFERS OF STOCK CERTIFICATES WITH RESPECT TO
FORFEITED SHARES OF STOCK SHALL BE SPECIFICALLY PERFORMABLE BY THE
COMPANY IN A COURT OF EQUITY OR LAW.

(III) THE RESTRICTION PERIOD OF RESTRICTED STOCK SHALL COMMENCE ON
THE DATE OF GRANT AND, UNLESS OTHERWISE ESTABLISHED BY THE BOARD OF
DIRECTORS IN THE RESTRICTED STOCK AGREEMENT SETTING FORTH THE TERMS OF
THE RESTRICTED STOCK, SHALL EXPIRE UPON SATISFACTION OF THE CONDITIONS
SET FORTH IN THE RESTRICTED STOCK AGREEMENT; SUCH CONDITIONS MAY PROVIDE
FOR VESTING BASED ON (I) LENGTH OF CONTINUOUS SERVICE, (II) ACHIEVEMENT
OF SPECIFIC BUSINESS OBJECTIVES, (III) INCREASES IN SPECIFIED INDICES,
(IV) ATTAINMENT OF SPECIFIED GROWTH RATES, OR (V) OTHER COMPARABLE
MEASUREMENTS OF COMPANY PERFORMANCE, AS MAY BE DETERMINED BY THE BOARD
OF DIRECTORS IN ITS SOLE DISCRETION.

(IV) SUBJECT TO THE PROVISIONS OF THE PARTICULAR RESTRICTED STOCK
AGREEMENT, UPON THE PARTICIPANT CEASING TO SERVE AS A DIRECTOR OF THE
COMPANY FOR ANY REASON OTHER THAN DEATH OR DISABILITY DURING THE
RESTRICTION PERIOD, THE NONVESTED SHARES OF RESTRICTED STOCK SHALL BE
FORFEITED BY THE PARTICIPANT. IN THE EVENT A PARTICIPANT HAS PAID ANY
CONSIDERATION TO THE COMPANY FOR SUCH FORFEITED RESTRICTED STOCK, THE
COMPANY SHALL, AS SOON AS PRACTICABLE AFTER THE EVENT CAUSING FORFEITURE
(BUT IN ANY EVENT WITHIN 5 BUSINESS DAYS), PAY TO THE PARTICIPANT, IN
CASH, AN AMOUNT EQUAL TO THE TOTAL CONSIDERATION PAID BY THE PARTICIPANT
FOR SUCH FORFEITED SHARES, AND IF THE PARTICIPANT OWES THE COMPANY ANY
AMOUNTS UNDER A LOAN FOR SUCH FORFEITED SHARES, THE COMPANY SHALL
FORGIVE SUCH INDEBTEDNESS RELATED TO THE FORFEITED SHARES. UPON ANY
FORFEITURE, ALL RIGHTS OF A PARTICIPANT WITH RESPECT TO THE FORFEITED
SHARES OF THE RESTRICTED STOCK SHALL CEASE AND TERMINATE, WITHOUT ANY
FURTHER OBLIGATION ON THE PART OF THE COMPANY.

[7.]9. Adjustment Provisions. In the event any recapitalization,
reorganization, merger, consolidation, spin-off, combination, repurchase,
exchange of shares or other securities of the Company, stock split or reverse
split, extraordinary dividend having a value in excess of 150% of the quarterly
dividends paid during the preceding twelve-month period, liquidation,
dissolution, or other similar corporation transaction or event affects Stock
such than an adjustment is determined by the Board of Directors to be
appropriate in order to prevent dilution or enlargement of Participants' rights
under the Plan, then the Board of Directors will, in a manner that is
proportionate to the change to the Stock and is otherwise equitable, adjust (i)
any or all of the number of kind of shares of Stock reserved for issuance and
delivery under the Plan, (ii) the number or kind of shares of Stock to be
subject to each [automatic] grant of FORMULA Options under Section 6, and (iii)
the number and kind of shares of Stock issuable or deliverable upon exercise of
outstanding Options, and/or the exercise price per share thereof (provided that
no fractional shares will be issued upon exercise of any Option). The foregoing
notwithstanding, no adjustment may be made hereunder except as shall be
necessary to preserve, without exceeding, the value of outstanding Options and
potential grants of Options. If at any date an insufficient number of shares are
available for the [automatic] grant of FORMULA Options at the date, FORMULA
Options will be automatically granted under Section 6 proportionately to
Participants to the extent shares are available.

[8.] 10. Changes to the Plan, OUTSTANDING OPTIONS OR RESTRICTED STOCK. The
Board of Directors may amend, alter, suspend, discontinue, or terminate the Plan
or authority to grant Options under the Plan OR THE TERMS OF ANY OUTSTANDING
OPTIONS, INCLUDING BUT NOT LIMITED TO FORMULA OPTIONS, OR OF ANY RESTRICTED
STOCK, without the consent of stockholders or Participants, except that any such
action will be subject to the approval of the Company's stockholders at the next
annual meeting of stockholders having a record date after the date such action
was taken if such stockholder approval is required by any federal or state law
or regulation or the
A-4
<PAGE> 32

rules of any automated quotation system or stock exchange on which the Stock may
then be quoted or listed, or if the Board of Directors determines in its
discretion to seek such stockholder approval; provided, however, that, without
the consent of an affected Participant, no such action may materially impair the
rights of such Participant with respect to any previously granted Option OR
RESTRICTED STOCK [; and provided further, that any Plan provision that specifies
the Directors who may receive grants of Options, the amount and price of
securities to be granted to such Directors, and the timing of grants to such
Directors, or is otherwise a "plan provision" referred to in Rule
16b-3(c)(2)(ii)(B) under the Exchange Act, shall not be amended more than once
every six months, other than to comport with changes in the Code or the rules
thereunder.]

[9.] 11. General Provisions.

(a) Consideration for Grants; Agreements. Options AND RESTRICTED STOCK
will be granted under the Plan in consideration of the services of the
Participants and, except for the payment of the Option exercise price upon
exercise of the options OR ANY PURCHASE PRICE FOR RESTRICTED STOCK, no
other consideration shall be required therefor. Grants of Options AND
RESTRICTED STOCK will be evidenced by agreements executed by the Company
and the Participant containing the terms and conditions set forth in the
Plan, AND, WITH RESPECT TO DISCRETIONARY OPTIONS AND RESTRICTED STOCK, THE
TERMS THEREOF AS DETERMINED BY THE BOARD OF DIRECTORS, together with such
other terms and conditions not inconsistent with the Plan as the Board of
Directors may from time to time approve.

(b) Compliance with Laws and Obligations. The Company will not be
obligated to issue or deliver Stock in connection with any Option OR
RESTRICTED STOCK GRANT in a transaction subject to the registration
requirements of the Securities Act of 1933, as amended, or any state
securities law, any requirement under any listing agreement between the
Company and any automated quotation system or national securities exchange,
or any other law, regulation or contractual obligation, until the Company
is satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing shares
of Stock delivered under the Plan will be subject to such stop-transfer
orders and other restrictions as may be applicable under such laws,
regulations, and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.

(c) Non-transferability. Options and any other right under the Plan
that may constitute a "derivative security" as generally defined in Rule
16a-1(c) under the Exchange Act will not be transferable by a Participant
except by will or the laws of descent and distribution (or to a designated
beneficiary in the event of a Participant's death), and will be exercisable
during the lifetime of a Participant only by such Participant or his or her
guardian or legal representative.

(d) Compliance with Rule 16b-3. It is the intent of the Company that
this Plan comply in all respects with applicable provisions of Rule 16b-3
under the Exchange Act in connection with any grant of Options OR
RESTRICTED STOCK to a Participant. Accordingly, the Board of Directors
hereby approves all grants of FORMULA Options under this Plan for purposes
of Rule 16b-3.

(e) Continued Service as an Employee. If a Participant ceases serving
as a Director and, immediately thereafter, he or she is employed by the
Company or any subsidiary, then solely for purposes of Sections 6(b) [and
(c)], 6(C), 7(B) AND 8(B)(IV) of the Plan, such Participant will not be
deemed to have ceased service as a Director at that time, and his or her
continued employment by the Company or any subsidiary will be deemed to be
continued service as a Director; provided, however, that such former
Director will not be eligible for additional grants of Options under the
Plan.

(f) No Right to Continue as a Director. Nothing contained in the Plan
or any agreement hereunder will confer upon any Participant any rights to
continue to serve as a Director of the Company.

(g) No Stockholder Rights Conferred. Nothing contained in the Plan or
any agreement hereunder will confer upon any Participant any rights of a
stockholder of the Company unless and until an Option is duly exercised
hereunder OR RESTRICTED STOCK IS ACQUIRED HEREUNDER.

(h) Governing Law. The Place of administration of the Plan shall be
conclusively deemed to be within the State of Texas; and the validity,
construction, interpretation and effect of the Plan and all

A-5
<PAGE> 33

rights of any of the persons having or claiming to have any interest in the
Plan shall be governed by the laws of the State of Texas.

[10.] 12. Effective Date and Duration of Plan. The Plan will be effective
at the time stockholders of the Company have approved it by the affirmative
votes of the holders of a majority of the shares of Stock present in person,
or represented by proxy, and entitled to vote at a meeting of the Company's
stockholders duly held in accordance with the Delaware General Corporation Law
or any adjournment thereof, and the amendments set forth herein shall be
effective upon approval of such vote of the stockholders, provided that options
granted on November 20, 1997 pursuant to the amendments to this Plan shall be
effective as of the date of grant. Unless earlier terminated by action of the
Board of Directors, the Plan will remain in effect until such time as no Stock
remains available for issuance or delivery under the Plan and the Company has no
further rights or obligations with respect to outstanding Options under the
Plan.

Adopted by the Board of Directors April 14, 1994, and amended as of November 20,
1997 AND DECEMBER 3, 1998.

A-6
<PAGE> 34

SEITEL, INC.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY
JULY 22, 1999

The undersigned hereby appoints HERBERT M. PEARLMAN
and PAUL A. FRAME, and each of them, with full power of
substitution, proxies to vote all stock of Seitel, Inc.
(the "Company") owned by the undersigned at the Annual
Meeting of Stockholders to be held on Thursday, July 22,
1999 at 9:00 a.m. at the Company's Headquarters, 50 Briar
Hollow Lane, 7th floor West, Houston, Texas 77027, and any
adjournment of the meeting, on the items of business set
forth on the reverse side and on such other business as may
properly come before the meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
IF THE UNDERSIGNED FAILS TO SPECIFY HOW THE PROXY IS TO BE
VOTED, IT WILL BE VOTED FOR THE ELECTION OF THESE DIRECTORS
AND FOR PROPOSALS 2, 3 AND 4.
-----------
(TO BE SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE
-----------

<PAGE> 35

PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF STOCKHOLDERS
SEITEL, INC.

JULY 22, 1999

- PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED -
- --------------------------------------------------------------------------------

A [ X ] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING MATTERS:

1. To elect nine directors to serve until the 2000 Annual Meeting.

FOR WITHHOLD
[ ] [ ]

NOMINEES: Herbert M. Pearlman, Paul A. Frame, Horace A Calvert,
David S. Lawi, Debra D. Valice, Walter M. Craig, Jr.,
John E. Stieglitz, Fred S. Zeidman

To withhold authority to vote for any nominee(s), print
name(s) below.

--------------------------------------------------------

2. To approve amendments to the Company's Non-Employee Directors' Stock
Option Plan:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To approve the appointment of Arthur Andersen LLP as the
independent certified public accountants for the Company for the
year ending December 31, 1999:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]
and

4. To transact such other business as may properly come before the
meeting or any adjournment of the meeting.

Only stockholders of record at the close of business on June 10,
1999, will be entitled to notice of and to vote at the meeting.

Please sign, date and mail the enclosed proxy in the enclosed
envelope, which requires no postage if mailed in the United States,
so that your shares will be represented at the meeting.

SIGNATURE(S) DATE
---------------------------------------- -----------------
NOTE: (Please sign your name exactly as it appears on the proxy. When signing
as attorney, agent, executor, administrator, trustee, guardian or
corporate officer, please give full title as such. Each joint owner
should sign this proxy.)