SEITEL, INC.
2000 STOCK OPTION PLAN
Adopted July 26, 2000
1. Purpose. The Plan is established as a compensatory plan to attract,
retain and provide equity incentives to selected persons to promote the
financial success of the Company.
2. Definitions. As used herein, unless the context requires otherwise,
the following terms shall have the meanings indicated below:
(a) "Affiliate", means (i) any corporation, partnership or other entity
which owns, directly or indirectly, a majority of the voting equity securities
of the Company, (ii) any corporation, partnership or other entity of which a
majority of the voting equity securities or equity interest is owned, directly
or indirectly, by the Company, and (iii) any other entity that is consolidated
in the Company's financial statements.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
(d) "Common Stock" means the Common Stock, $.01 par value per share, of
the Company or the common stock that the Company may in the future be authorized
to issue (as long as the common stock varies from that currently authorized, if
at all, only in amount of par value).
(e) "Company" means Seitel, Inc., a Delaware corporation.
(f) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Affiliate to render consulting
or advisory services to the Company or such Affiliate.
(g) "Continuous Service" means that the provision of services to the
Company or an Affiliate in the capacity of Employee, Director or Consultant is
not interrupted or terminated. Except as otherwise provided in the Option
Agreement, service shall not be considered interrupted or terminated for this
purpose in the case of (i) any approved leave of absence, (ii) transfers among
the Company, any Affiliate, or any successor, in the capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or an Affiliate in any capacity of
Employee, Director or Consultant. An approved leave of absence shall include
sick leave, military leave, or any other authorized personal leave. Solely for
purposes of determining the exercise period during which an Optionee may
exercise an option following termination of the Optionee's Continuous Service,
service shall not be considered interrupted or terminated during the period that
the Optionee continues as a Director immediately following his termination as an
Employee, or during the period that the Optionee continues as an Employee
immediately following his termination as a Director.
(h) "Director" means a member of the Board or the board of directors
of an Affiliate.
(i) "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
(j) "Employee" means any person, including an Officer or Director, who
is an employee, whether full-time or part-time, of the Company or an Affiliate.
The Company's or an Affiliate's providing compensation to a Director solely with
respect to rendering services in the capacity of a Director, however, shall not
be sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Reference in the Plan to any section of the Exchange Act shall be
deemed to include any amendments or successor provisions to such section and any
rules and regulations relating to such section.
(l) "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or
traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the day of determination, as reported in The
Wall Street Journal or such other source as the Board deems reliable.
(ii) In the absence of any such established markets for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board.
(m) "Non-Qualified Stock Option" means an Option not intended to meet
the requirements of Section 422 of theCode.
(n) "Officer" means a person who is an "officer" of the Company within
the meaning of Section 16 of the Exchange Act (whether or not the Company is
subject to the requirements of the Exchange Act).
(o) "Option" means a Non-Qualified Stock Option granted pursuant to the
Plan to purchase a specified number of shares of Common Stock.
(p) "Option Agreement" means the written agreement evidencing the grant
of an Option executed by the Company and the Optionee, including any amendments
thereto.
(q) "Optionee" means an individual to whom an Option has been granted
under the Plan.
(r) "Plan" means this Seitel, Inc. 2000 Stock Option Plan, as set
forth herein and as it may be amended from time to time.
(s) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
as it may be amended from time to time, and any successor to Rule 16b-3.
(t) "Section" means a Section of the Plan unless otherwise stated or
the context otherwise requires.
(u) "Securities Act" means the Securities Act of 1933, as amended.
Reference in the Plan to any section of the Securities Act shall be deemed to
include any amendments or successor provisions to such section and any rules and
regulations relating to such section.
3. Types of Options and Shares. Options granted under this Plan shall
be Non-Qualified Stock Options. The shares of stock that may be purchased upon
exercise of Options granted under this Plan are shares of Common Stock.
4. Shares Subject to Plan. The aggregate number of shares that may be
issued pursuant to Options granted under this Plan is 750,000 shares and the
maximum number of shares of Common Stock that may be granted to any one person
under Options granted under this Plan may not exceed 200,000 shares, subject in
each case to adjustment as provided in Section 11(a). If any Option expires or
is terminated without being exercised in whole or in part, the unexercised or
released shares of Common Stock from such Options will be available for future
grant and purchase under this Plan. At all times during the term of this Plan,
the Company will reserve and keep available such number of shares of Common
Stock as will be required to satisfy the requirements of outstanding Options
under this Plan.
5. Broadly-Based Plan; Eligibility. The Plan will be administered by
the Board as a "broadly-based" plan pursuant to the requirements of New York
Stock Exchange Rule 312.03. As such, all of the Company's full time employees in
the United States, who are "exempt employees," as defined under the Fair Labor
Standards Act of 1938, are eligible to receive Options under this Plan, and at
least a majority of the shares of Common Stock underlying Options granted under
this Plan, during the three year period commencing on the date this Plan is
adopted by the Company, shall be awarded to Employees who are not Officers or
Directors of the Company. Options may be granted hereunder to Employees,
Officers, Directors, and Consultants. Subject to the requirements of the
preceding sentences, the Board in its sole discretion will select the recipients
of Options. An Optionee may be granted more than one Option under this Plan.
6. Terms and Conditions of Options. The Board will determine the
provisions, terms and conditions of each Option including, but not limited to,
the vesting schedule, the number of shares of Common Stock subject to the
Option, the exercise price of the Option, the period during which the Option may
be exercised, repurchase provisions, rights of first refusal, forfeiture
provisions, methods of payment, and all other terms and conditions of the
Option, subject to the following:
(a) Form of Option Grant. Each Option granted under the Plan will be
evidenced by a written Option Agreement in such form (which need not be the same
for each Optionee) as the Board from time to time approves.
(b) Date of Grant. The date of grant of an Option will be the date on
which the Board makes the determination to grant such Option unless otherwise
specified by the Board. The Option Agreement evidencing the Option will be
delivered to the Optionee with a copy of the Plan and other relevant Option
documents, within a reasonable time after the date of grant.
(c) Exercise Price. The exercise price of a Non-Qualified Stock Option
will be not less than 100% of the Fair Market Value of the shares of Common
Stock on the date of grant of the Option.
(d) Exercise Period. Options will be exercisable within the time or
times or upon the event or events determined by the Board and set forth in the
Option Agreement; provided, however, that no Option will be exercisable after
the expiration of ten (10) years from the date of grant of the Option.
(e) Transferability of Options. Options granted under the Plan, and any
interest therein, will not be transferable or assignable by the Optionee, and
may not be made subject to execution, attachment or similar process, otherwise
than by will or by the laws of descent and distribution, and will be exercisable
during the lifetime of the Optionee only by the Optionee, or by the Optionee's
guardian or legal representative if the Optionee is legally incompetent;
provided, that the Optionee may, however, designate persons who or which may
exercise the Optionee's Options following the Optionee's death. Notwithstanding
the preceding sentence, Options held by an Optionee may be transferred to such
family members, family trusts and family partnerships as the Board, in its sole
discretion, may approve at the time of the grant of such Option and as provided
for in the Optionee's Option Agreement.
(f) Acquisitions and Other Transactions. The Board may, from time to
time, assume outstanding options granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (i)
granting an Option under the Plan in replacement of the option assumed by the
Company, or (ii) treating the assumed option as if it had been granted under the
Plan if the terms of such assumed option could be applied to an Option granted
under the Plan. Such assumption will be permissible if the holder of the assumed
option would have been eligible to be granted an Option hereunder if the other
company had applied the rules of this Plan to such grant. The Board also may
grant Options under the Plan in settlement of or substitution for, outstanding
options or obligations to grant future options in connection with the Company or
an Affiliate acquiring another entity, an interest in another entity or an
additional interest in an Affiliate whether by merger, stock purchase, asset
purchase or other form of transaction. Notwithstanding the foregoing provisions
of Section 6(c), in the case of an Option issued or assumed pursuant to this
Section 6(g), the exercise price for the Option shall be determined in
accordance with the principles of Section 424(a) of the Code.
7. Exercise of Options.
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(a) Notice. Options may be exercised only by delivery to the Company of
a written exercise agreement approved by the Board (which need not be the same
for each Optionee), stating the number of shares of Common Stock being
purchased, the restrictions imposed on the shares of Common Stock, if any, and
such representations and agreements regarding the Optionee's investment intent
and access to information and other matters, if any, as may be required by the
Company to comply with applicable securities laws, or as may be deemed
appropriate by the Company in connection with the issuance of shares of Common
Stock upon exercise of the Option, together with payment in full of the exercise
price for the number of shares of Common Stock being purchased.
(b) Payment. Payment for the shares of Common Stock to be exercised
under an Option may be made in cash (by check) or, where approved by the Board
in its sole discretion at the time of grant and where permitted by law: (i) if a
public market for the Common Stock exists, through a "same day sale" commitment
from the Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the Optionee
irrevocably elects to exercise the Option and to sell a portion of the shares of
Common Stock so purchased to pay for the exercise price and whereby the NASD
Dealer irrevocably commits upon receipt of such shares of Common Stock to
forward the exercise price directly to the Company; (ii) if a public market for
the Common Stock exists, through a "margin" commitment from the Optionee and an
NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and
to pledge the shares of Common Stock so purchase to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of
such shares of Common Stock to forward the exercise price directly to the
Company; or (iii) by any combination of the foregoing.
(c) Withholding Taxes. Prior to issuance of the shares of Common Stock
upon exercise of an Option, the Optionee will pay or make adequate provision
acceptable to the Board for the satisfaction of the statutory minimum prescribed
amount of any federal or state income or other tax withholding obligations of
the Company, if applicable. Upon exercise of an Option, the Company shall
withhold or collect from the Optionee an amount sufficient to satisfy such tax
withholding obligations.
(d) Exercise of Option Following Termination of Continuous Service.
(i) An Option may not be exercised after the expiration date of such
Option set forth in the Option Agreement and may be exercised following the
termination of an Optionee's Continuous Service only to the extent provided in
the Option Agreement.
(ii) Where the Option Agreement permits an Optionee to exercise an
Option following the termination of the Optionee's Continuous Service for a
specified period, the Option shall terminate to the extent not exercised on the
last day of the specified period or the last day of the original term of the
Option, whichever occurs first.
(iii) The Board will have discretion to determine whether the
Continuous Service of an Optionee has terminated and the effective date on which
such Continuous Service terminates and whether the Optionee's Continuous Service
terminated as a result of the Disability of the Optionee.
(e) Limitations on Exercise.
(i) The Board may specify a reasonable minimum number of shares of
Common Stock or a percentage of the shares subject to an Option that may be
purchased on any exercise of an Option; provided, that such minimum number will
not prevent Optionee from exercising the full number of shares of Common Stock
as to which the Option is then exercisable.
(ii) The obligation of the Company to issue any shares of Common Stock
pursuant to the exercise of any Option will be subject to the condition that
such exercise and the issuance and delivery of such shares pursuant thereto
comply with the Securities Act, all applicable state securities laws and the
requirements of any stock exchange or national market system upon which the
shares of Common Stock may then be listed or quoted, as in effect on the date of
exercise. The Company will be under no obligation to register any resale of
shares of Common Stock with the Securities and Exchange Commission or to effect
compliance with the registration, qualification or listing requirements of any
state securities laws or stock exchange or national market system with respect
to any such resale of the shares of Common Stock, and the Company will have no
liability for any inability or failure to do so.
8. Modification, Extension And Renewal of Options . The Board will have
the power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefor, provided that any such action may
not, without the written consent of any Optionee, impair any rights under any
Option previously granted to such Optionee.
9. Privileges of Stock Ownership. No Optionee will have any of the
rights of a stockholder with respect to any shares of Common Stock subject to an
Option until such Option is properly exercised and the shares are issued and
delivered to the Optionee, as evidenced by an appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company. No adjustment
will be made for dividends or distributions or other rights for which the record
date is prior to such date of issuance and delivery, except as provided in the
Plan.
10. Adjustment Upon Changes in Capitalization and Corporate Events.
(a) Capital Adjustments. The number of shares of Common Stock covered
by each outstanding Option granted under the Plan and the Option price may be
adjusted to reflect, as deemed appropriate by the Board, any increase or
decrease in the number of shares of Common Stock resulting from a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without receipt of
consideration, subject to any required action by the Board or the stockholders
of the Company and compliance with applicable securities laws; provided,
however, that a fractional share will not be issued upon exercise of any Option,
and either any fraction of a share of Common Stock that would have resulted will
be cashed out at Fair Market Value or the number of shares of Common Stock
issuable under the Option will be rounded up to the nearest whole number, as
determined by the Board.
(b) Dissolution or Liquidation. The Board shall notify the Optionee at
least twenty (20) days prior to any proposed dissolution or liquidation of the
Company. Unless provided otherwise in an individual Option Agreement, to the
extent that an Option has not been previously exercised, such Option shall
terminate immediately prior to consummation of such dissolution or liquidation.
(c) Merger, Asset Sale and Change in Control. If, during the
effectiveness of the Plan (i) the Company consummates a merger, consolidation,
share exchange, or reorganization with another corporation or other legal entity
and, as a result of such merger, consolidation, share exchange, or
reorganization, less than a majority of the combined voting power of the
outstanding securities of the surviving entity (whether the Company or another
entity) immediately after such transaction is held in the aggregate by the
holders of securities of the Company that were entitled to vote generally in the
election of directors of the Company (or its successor) ("Voting Stock")
immediately before such transaction, or (ii) when pursuant to a tender offer or
exchange offer for securities of the Company, or in any other manner, any person
or group within the meaning of the Exchange Act, as amended (excluding any
employee benefit plan, or related trust, sponsored or maintained by the Company
or any of its affiliates), acquires beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the Voting
Stock (the surviving corporation or purchaser described in this Section 10(c),
the "Purchaser", and any such event described in this Section 10(c) a "Change in
Control"), the Purchaser shall either assume the obligations of the Company
under the outstanding Options or convert the outstanding Options into options of
at least equal value as to stock of the Purchaser.
In the event such Purchaser refuses to assume or substitute Options, as
provided above, pursuant to a Change in Control event, each Option which is at
the time outstanding under the Plan shall, (i) except as provided otherwise in
an individual Option Agreement, automatically become fully vested and
exercisable immediately prior to the specified effective date of such Change in
Control, for all of the shares of Common Stock at the time represented by such
Option, and (ii) notwithstanding any contrary terms in the Option Agreement,
expire on a date at least twenty (20) days after the Board gives written notice
to Optionees specifying the terms and conditions of such termination.
11. Administration. This Plan shall be administered by the Board. As
such, grants of Options hereunder are intended to qualify for the treatment
afforded by Rule 16b-3. The Board shall interpret the Plan and any Options
granted pursuant to the Plan and shall prescribe such rules and regulations in
connection with the operation of the Plan as it determines to be advisable for
the administration of the Plan. The Board may rescind and amend its rules and
regulations from time to time. The interpretation by the Board of any of the
provisions of this Plan or any Option granted under this Plan will be final and
binding upon the Company and all persons having an interest in any Option or any
shares of Common Stock purchased pursuant to an Option.
12. Effect of Plan. Neither the adoption of the Plan nor any action of
the Board shall be deemed to give any Employee any right to be granted an Option
to purchase Common Stock or any other rights except as may be evidenced by the
Option Agreement, or any amendment thereto, duly authorized by the Board and
executed on behalf of the Company, and then only to the extent and on the terms
and conditions expressly set forth therein. The existence of the Plan and the
Options granted hereunder shall not affect in any way the right of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, or shares of preferred stock ahead of or affecting the
Common Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale or transfer of all or any part of the Company's assets or
business, or any other corporate act or proceeding by or for the Company.
Nothing contained in the Plan or in any Option Agreement or in other
Option-related documents shall confer upon any Employee, Officer, Director or
Consultant any right with respect to such person's Continuous Service or
interfere or affect in any way with the right of the Company or an Affiliate to
terminate such person's Continuous Service at any time, with or without cause.
13. No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or an
Affiliate, Options shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or an
Affiliate, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
"Retirement Plan" or "Welfare Plan" under the Employee Retirement Income
Security Act of 1974, as amended.
14. Amendment or Termination of Plan. The Board in its discretion may
at any time terminate or amend the Plan in any respect, including amendment of
any form of Option Agreement, exercise agreement or instrument to be executed
pursuant to the Plan. No Option may be granted after termination of the Plan.
Any amendment or termination of the Plan shall not affect Options previously
granted, and such Options shall remain in full force and effect as if the Plan
had not been amended or terminated, unless mutually agreed otherwise in a
writing signed by the Optionee and the Company.
15. Effective Date and Term of Plan. The Plan shall become effective
upon its adoption by the Board. It shall continue in effect for a term of ten
(10) years from its adoption date, unless sooner terminated by action of the
Board. Subject to the terms and conditions of this Plan and applicable laws,
Options may be granted under the Plan upon its becoming effective.
16. Severability and Reformation. The Company intends all provisions of
the Plan to be enforced to the fullest extent permitted by law. Accordingly,
should a court of competent jurisdiction determine that the scope of any
provision of the Plan is too broad to be enforced as written, the court should
reform the provision to such narrower scope as it determines to be enforceable.
If, however, any provision of the Plan is held to be wholly illegal, invalid, or
unenforceable under present or future law, such provision shall be fully
severable and severed, and the Plan shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof, and the
remaining provisions of the Plan shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision or by its
severance.
17. Governing Law. The Plan shall be construed and interpreted in
accordance with the laws of the State of Delaware.
18. Interpretive Matters. Whenever required by the context, pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
or neuter, and the singular shall include the plural and visa versa. The term
"including" does not denote or imply any limitation. The captions and headings
used in the Plan are inserted for convenience and shall not be deemed a part of
the Plan for construction or interpretation.
<PAGE>
Award Number:
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SEITEL, INC. 2000 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Optionee:
Address:
Total Shares Subject to Option:
Exercise Price Per Share:
Date of Grant:
Post-Termination Exercise Period:
Expiration Date:
1. Grant of Option. Seitel, Inc., a Delaware corporation (the
"Company"), hereby grants to the Optionee named above an option (the "Option")
to purchase the total number of shares of Common Stock set forth above (the
"Shares") at the exercise price per share set forth above (the "Exercise
Price"), in accordance with this Option Agreement and subject to the terms and
conditions of the Seitel, Inc. 2000 Stock Option Plan, as amended from time to
time (the "Plan"), which are incorporated herein by reference. The Option is not
intended to qualify as an "incentive stock option" within the meaning of Section
422 of the Code. Unless otherwise defined herein, capitalized terms used herein
shall have the same meanings ascribed to them in the Plan.
2. Vesting; Time of Exercise. Subject to the terms and conditions of
the Plan and this Option Agreement, the Option shall vest and become exercisable
in the following cumulative installments, as follows:
[(a) Up to one-third (1/3) of the Shares shall become
exercisable at any time on or after the first anniversary of the date of grant
set forth above (the "Date of Grant");
(b) Up to an additional one-third (1/3) of the Shares shall
become exercisable at any time on or after the second anniversary of the Date of
Grant; and
(c) The remaining Shares shall become exercisable at any time
on or after the third anniversary of the Date of Grant.]
If an installment covers a fractional Share, such installment will be rounded to
the next highest Share, except the final installment, which will be for the
balance of the total Shares; provided, that the Optionee shall in no event be
entitled under the Option to purchase a number of shares of the Common Stock
greater than the "Total Shares Subject to Option" indicated above.
Notwithstanding anything herein to the contrary, the Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the Expiration Date. If the Optionee's Continuous Service is terminated, the
Option will be exercisable only to the extent that the Optionee could have
exercised it on the date of his or her termination of Continuous Service.
Notwithstanding anything to the contrary herein, the Shares may become
exercisable earlier than the time stated above in connection with a Change in
Control. In addition, the Optionee may forfeit his or her right to exercise the
Option if Optionee's Continuous Service is terminated for Cause (as defined in
Section 6 of this Option Agreement).
3. Exercise of Option.
(a) Right to Exercise. The Option shall be exercisable in accordance
with the vesting provisions contained in Section 2 of this Option Agreement and
with the other applicable provisions of the Plan and this Option Agreement. The
Option shall be subject to the provisions of Section 10 of the Plan relating to
the exercisability or termination of the Option in the event of a Change in
Control or in the event of a dissolution or liquidation of the Company.
(b) Method of Exercise. The Option shall be exercisable only by
delivery to the Company of an executed Stock Option Exercise Agreement (the
"Exercise Agreement") in the form attached hereto as Exhibit A, or in such other
form approved by the Board, which shall state the Optionee's election to
exercise the Option, the whole number of Shares in respect of which the Option
is being exercised, and such other provisions as may be required by the Board.
The Exercise Agreement shall be signed by the Optionee and shall be delivered to
the Company in person or by courier, by certified mail, or by such other method
as may be permitted by the Board, accompanied (in any case) by payment of the
Exercise Price for each Share covered by the Exercise Agreement, as described in
Section 4 of this Option Agreement. The Option shall be deemed to be exercised
upon receipt by the Company of such written Exercise Agreement accompanied by
the Exercise Price.
(c) Issuance of Shares. If the Exercise Agreement and payment are in
form and substance satisfactory to counsel for the Company and Optionee or any
other person permitted to exercise the Option has complied with Section 5 of
this Option Agreement, the Company shall issue or cause the issuance of, in the
name of the Optionee or Optionee's legal representative, the Shares purchased by
such exercise of the Option.
4. Method of Payment. The Optionee's delivery of the signed Exercise
Agreement to exercise the Option (in whole or in part) shall be accompanied by
full payment of the Exercise Price for the Shares being purchased. Payment for
the Shares may be made in cash (by check) or, at the election of the Optionee
and where permitted by law: (i) if a public market for the Company's stock
exists, through a "same day sale" commitment from the Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby the Optionee irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the exercise
price and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the exercise price directly to the Company; (ii) if a public
market for the Company's stock exists, through a "margin" commitment from the
Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the exercise price directly to the Company; or (iii) by
any combination of the foregoing.
5. Tax Withholding Obligations. No Shares will be delivered to the
Optionee or any other person permitted to exercise the Option pursuant to the
exercise of the Option until the Optionee or such other person has made
arrangements acceptable to the Board for the satisfaction of the minimum
prescribed applicable income tax, employment tax, and social security tax
withholding obligations, including obligations incident to the receipt of
Shares. Upon exercise of the Option, the Company or the Optionee's employer may
offset or withhold (from any amount owed by the Company or the Optionee's
employer to the Optionee) or collect from the Optionee or obligations such other
person an amount sufficient to satisfy such tax obligations and/or the
employer's withholding obligations.
6. Termination or Change of Continuous Service.
(a) Post-Termination Exercise. Subject to the provisions of Sections 7
and 8 of this Option Agreement, if the Optionee's Continuous Service terminates,
other than as described in Section 6(b) of this Option Agreement, the Optionee
may, to the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise the Option during the Post-Termination Exercise
Period. Upon termination of the Optionee's Continuous Service as described in
Section 6(b) of this Option Agreement, the Optionee's right to exercise the
Option shall, except as otherwise determined by the Board, terminate
concurrently with the termination of the Optionee's Continuous Service. In no
event may the Option be exercised later than the Expiration Date set forth in
the Exercise Agreement. Except as provided in Sections 7 and 8 of this Option
Agreement, to the extent that the Optionee is not entitled to exercise the
Option on the Termination Date, or if the Optionee does not exercise the Option
within the Post-Termination Exercise Period, the Option shall terminate.
(b) No Post-Termination Exercise. Unless the Board otherwise
determines, if the Optionee's Continuous Service is terminated either (i) by the
Company or an Affiliate for Cause, or (ii) by the Optionee without compliance
with, or without having any right to do so under, the terms of any
then-effective written employment agreement between the Optionee and the Company
or such Affiliate, then the Optionee's right to exercise the Option shall
immediately terminate. For purposes of this Option Agreement, the term "Cause"
for termination by the Company or an Affiliate of the Optionee's Continuous
Service shall have the meaning set forth in a then-effective written employment
agreement between the Optionee and the Company or such Affiliate or, in the
absence of such a definition in a then-effective written employment agreement
(in the determination of the Board), shall mean the Optionee's (i) willful and
continued failure to substantially perform his or her duties (other than as a
result of a total or partial incapacity due to physical or mental illness); (ii)
proven dishonesty in the performance of his or her duties; (iii) conviction or a
plea of guilty or nolo contendere to a felony or crime of moral turpitude; or
(iv) alcohol or drug abuse. The Board shall have discretion for the purposes of
this Option Agreement to determine whether any termination of Continuous Service
by the Optionee is in compliance with, or is in accordance with any right to
terminate, under the terms of a then-effective written employment agreement.
7. Disability of Optionee. If the Optionee's Continuous Service
terminates as a result of his or her Disability, the Optionee may, but only
within twenty-four (24) months from the Termination Date (and in no event later
than the Expiration Date), exercise the Option to the extent he or she was
otherwise entitled to exercise it on the Termination Date. To the extent that
the Optionee is not entitled to exercise the Option on the Termination Date, or
if the Optionee does not exercise the Option to the extent so entitled within
the time specified in this Section 7, the Option shall terminate.
8. Death of Optionee. In the event of the termination of the Optionee's
Continuous Service as a result of his or her death, or in the event of the
Optionee's death during the Post-Termination Exercise Period or during the
twenty-four (24)-month period following the Optionee's termination of Continuous
Service as a result of his or her Disability, the Optionee's estate, or a person
who acquired the right to exercise the Option by bequest or inheritance, may
exercise the Option, but only to the extent the Optionee could exercise the
Option at the date of his or her death, within twenty-four (24) months from the
date of death (but in no event later than the Expiration Date). To the extent
that the Optionee is not entitled to exercise the Option on the date of death,
or if the Option is not exercised to the extent so entitled within the time
specified in this Section 8, the Option shall terminate.
9. Nontransferability of Option. The Option may not be transferred in
any manner other than by will or by the law of descent and distribution and may
be exercised during the lifetime of the Optionee only by the Optionee, or by the
Optionee's guardian or legal representative if the Optionee is legally
incompetent; provided, that the Optionee may, however, designate persons who or
which may exercise the Option following the Optionee's death. [Insert for
Employees and Directors: In addition, the Optionee may transfer the Option
without consideration to a member or members of the Optionee's immediate family
and/or to a trust or partnership established for the benefit of an immediate
family member or members. For this purpose, the term "immediate family member"
means the Optionee's spouse, parents, children, stepchildren and grandchildren.]
10. Tax Consequences. Set forth below is a brief summary, as of the
date of the Option Agreement, of some of the federal tax consequences of
exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.
(a) Exercise of Non-Qualified Stock Option. There may be a regular
federal income tax liability upon the exercise of the Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. If the Optionee is an Employee
or former Employee, the Company will be required to withhold from the Optionee's
compensation or collect from the Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.
(b) Disposition of Shares. In the case of a Non-Qualified Stock Option,
if the Shares are held for at least one year before disposition, any gain on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.
11. Term of Option. The Option may be exercised no later than the
Expiration Date or such earlier date as otherwise provided in this Option
Agreement.
12. Entire Agreement; Governing Law. The Plan and the Option Agreement
(with the exercise Agreement, if the Option is exercised) constitute the entire
agreement of the Company and the Optionee (collectively the "Parties") with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Parties with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Parties. Nothing in the Plan and the Option
Agreement (except as expressly provided therein or herein) is intended to confer
any rights or remedies on any person other than the Parties. The Plan and the
Option Agreement are to be construed in accordance with and governed by the
internal laws of the State of Delaware without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the internal laws of the State of Delaware, to the rights and duties of the
Parties. Should any provision of the Plan or the Option Agreement be determined
by a court of law to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions shall
nevertheless remain effective and shall remain enforceable.
13. Interpretive Matters. Whenever required by the context, pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
or neuter, and the singular shall include the plural, and vice versa. The term
"include" or "including" does not denote or imply any limitation. The term
"business day" means any Monday through Friday other than such a day on which
banks are authorized to be closed in the State of Texas. The captions and
headings used in this Option Agreement are inserted for convenience and shall
not be deemed a part of the Option or this Option Agreement for construction or
interpretation.
14. Dispute Resolution. The provisions of this Section 14 shall be the
exclusive means of resolving disputes of the Parties (including any other
persons claiming any rights or having any obligations through the Company or the
Optionee) arising out of or relating to the Plan and this Option Agreement
(including the Exercise Agreement, if the Option is exercised). The Parties
shall attempt in good faith to resolve any disputes arising out of or relating
to the Plan and this Option Agreement (including the Exercise Agreement, if the
Option is exercised) by negotiation between individuals who have authority to
settle the controversy. Negotiations shall be commenced by either Party by a
written statement of the Party's position and the name and title of the
individual who will represent the Party. Within thirty (30) days of the written
notification, the Parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the
dispute. If the dispute has not been resolved by negotiation, the Parties agree
that any suit, action, or proceeding arising out of or relating to the Plan or
this Option Agreement shall be brought in the United States District Court for
the Southern District of Texas located in Houston, Texas (or should such court
lack jurisdiction to hear such action, suit or proceeding, in a Texas state
court in Harris County, Texas) and that the Parties shall submit to the
jurisdiction of such court. The Parties irrevocably waive, to the fullest extent
permitted by law, any objection a Party may have to the laying of venue for any
such suit, action or proceeding brought in such court. THE PARTIES ALSO
EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH
SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 14
shall for any reason be held invalid or unenforceable, it is the specific intent
of the Parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.
15. Notice. Any notice or other communication required or permitted
hereunder shall be given in writing and shall be deemed given, effective, and
received upon prepaid delivery in person or by courier or upon the earliest of
delivery or the third business day after deposit in the United States mail if
sent by certified mail, with postage and fees prepaid, addressed to the other
Party at its address as shown beneath its signature in this Option Agreement, or
to such other address as such Party may designate in writing from time to time
by notice to the other Party in accordance with this Section 15.
SEITEL, INC.
By:
Title:
Address:
THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE OPTIONEE'S CONTINUOUS SERVICE
(NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING
SHARES HEREUNDER). THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN
THIS OPTION AGREEMENT OR THE PLAN SHALL CONFER UPON THE OPTIONEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE OPTIONEE'S CONTINUOUS SERVICE,
NOR SHALL IT INTERFERE IN ANY WAY WITH THE OPTIONEE'S RIGHT OR THE RIGHT OF THE
OPTIONEE'S EMPLOYER TO TERMINATE OPTIONEE'S CONTINUOUS SERVICE, WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE. THE OPTIONEE ACKNOWLEDGES THAT UNLESS THE
OPTIONEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY,
THE OPTIONEE'S STATUS IS AT WILL.
The Optionee acknowledges receipt of a copy of the Plan, and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions hereof and thereof. The
Optionee has reviewed this Option Agreement, the Plan, and the Exercise
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement, and fully understands all
provisions of this Option Agreement, the Plan and the Exercise Agreement. The
Optionee hereby agrees that all disputes arising out of or relating to this
Option Agreement, the Plan and the Exercise Agreement shall be resolved in
accordance with Section 14 of this Option Agreement. The Optionee further agrees
to notify the Company upon any change in the residence address indicated in the
Option Agreement. If the Optionee is married, the Optionee understands that his
or her spouse must execute a consent in the form attached hereto as Exhibit B.
Dated:
-----------------------------------------------
Signed:
----------------------------------------------
Optionee
Address:
---------------------------------------------
<PAGE>
EXHIBIT A
SEITEL, INC. 2000 STOCK OPTION PLAN
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made this day of , 20 between Seitel, Inc.
(the "Company"), and the optionee named below ("Optionee") pursuant to the
Seitel, Inc. 2000 Stock Option Plan (the "Plan"). Unless otherwise defined
herein, the capitalized terms used in this Exercise Agreement shall have the
meaning ascribed to them in the Plan and in the Option Agreement to which this
Exercise Agreement relates.
Award Number:
Optionee:
Social Security Number:
Address:
Number of Shares Purchased:
Price Per Share:
Aggregate Purchase Price:
Date of Grant:
Optionee hereby delivers to the Company the Aggregate Purchase Price
set forth above, to the extent permitted in the Option Agreement, as follows (as
applicable, check and complete):
in cash in the amount of $ , receipt of
------- ------------------------
which is acknowledged by the Company;
through a "same-day-sale" commitment, delivered herewith,
------- from Optionee and the NASD Dealer named therein in the
amount of $ ;
--------------------------------------
through a "margin" commitment, delivered herewith, from
------- Optionee and the NASD Dealer named therein in the amount
of $ .
------------------------------------
The Company and Optionee hereby agree as follows:
1. Purchase of Shares. On this date and subject to the terms and
conditions of this Exercise Agreement, Optionee hereby exercises the Option
granted in the Option Agreement between the Company and Optionee dated as of the
Date of Grant set forth above, with respect to the Number of Shares Purchased
set forth above of the Common Stock (the "Shares") at the Aggregate Purchase
Price set forth above (the "Aggregate Purchase Price") equal to the Price Per
Share set forth above (the "Purchase Price Per Share") multiplied by the Number
of Shares Purchased set forth above. The term "Shares" refers to the Shares
purchased under this Agreement and includes all securities received (a) in
replacement of the Shares, and (b) as a result of stock dividends or stock
splits in respect of the Shares.
2. Representations of the Optionee. Optionee represents and warrants to
the Company that Optionee has received, read and understood the Plan, the Option
Agreement and this Exercise Agreement and agrees to abide by and be bound by
their terms and conditions.
3. Federal Restrictions on Transfer. Optionee understands that the
Company is under no obligation to register any resale of the Shares and that an
exemption may not be available or may not permit Optionee to resell or transfer
any of the Shares in the amounts or at the times proposed by Optionee.
4. Rights as Stockholder. Until the stock certificate evidencing the
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued.
5. Tax Withholding Obligations. The Optionee agrees to satisfy all
applicable federal, state and local income, employment and other tax withholding
obligations and herewith delivers to the Company the amount necessary, or has
made arrangements acceptable to the Company, to satisfy such obligations as
provided in the Plan and the Option Agreement.
6. Tax Consequences. Optionee understands that optionee may
suffer adverse tax consequences as a result of Optionee's purchase or
disposition of the shares. Optionee represents that Optionee has consulted with
any tax consultant(s) he or she deems advisable in connection with the purchase
or disposition of the shares and that Optionee is not relying on the Company for
any tax advice.
7. Successors and Assigns. The Company may assign any of its rights
under this Exercise Agreement, and this Exercise Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Exercise Agreement shall be
binding upon the Optionee and his or her heirs, executors, administrators,
successors and permitted assigns.
8. Interpretive Matters. Whenever required by the context, pronouns and
any variation thereof shall be deemed to refer to the masculine, feminine, or
neuter, and the singular shall include the plural, and vice versa. The term
"include" or "including" does not denote or imply any limitation. The captions
and headings used in this Exercise Agreement are inserted for convenience and
shall not be deemed a part of this Exercise Agreement for construction or
interpretation.
9. Dispute Resolution. The provisions of Section 14 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of or
relating to this Exercise Agreement.
10. Entire Agreement; Governing Law. This Exercise Agreement, with the
Plan and the Option Agreement, constitute the entire agreement of the Parties
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Parties with respect to the subject
matter hereof, and may not be modified adversely to the Optionee's interest
except by means of a writing signed by the Parties. Nothing in this Exercise
Agreement or in the Plan or the Option Agreement (except as expressly provided
herein or therein) is intended to confer any rights or remedies on any person
other than the Parties. This Exercise Agreement (like the Plan and the Option
Agreement) is to be construed in accordance with and governed by the internal
laws of the State of Delaware, without giving effect to any choice-of-law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of Delaware to the rights and duties of the Parties.
Should any provision of the Plan, the Option Agreement, or this Exercise
Agreement be determined by a court of law to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law, and the other
provisions shall nevertheless remain effective and shall remain enforceable.
11. Notice. Any notice or other communication required or permitted
hereunder shall be given in writing and shall be deemed given, effective, and
received upon prepaid delivery in person or by courier or upon the earlier of
delivery or the third business day after deposit in the United States mail if
sent by certified mail, with postage and fees prepaid, addressed to the other
Party at its address as shown beneath its signature in the Option Agreement, or
to such other address as such Party may designate in writing from time to time
by notice to the other Party in accordance with this Section 11.
12. Further Instruments. Each Party agrees to execute such further
instruments and to take such further action as may be necessary or reasonably
appropriate to carry out the purposes and intent of this Exercise Agreement.
Submitted by:
Accepted by:
OPTIONEE:
-----------------------------------------------
SEITEL, INC.
(print name)
By:
--------------------------------------------
(signature)
Its:
--------------------------------------------
Dated:
--------------------------------------------------
<PAGE>
2000ESOP.wpd
EXHIBIT B
CONSENT OF SPOUSE
I, , spouse of , have read and approve the foregoing Stock Option
Agreement (the "Agreement"). In consideration of the Company's grant to my
spouse of the right to purchase shares of Seitel, Inc., as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated: , 2000
Signature of Spouse
(Please print name)
