EXHIBIT 10.28

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is made and entered into by
and between Input/Output, Inc., a Delaware corporation (hereinafter referred to
as “Employer”), and Jorge Machnizh, an individual currently resident in Harris
County, Texas (hereinafter referred to as “Employee”), effective as of April 23,
2003 (the “Effective Date”).

WITNESSETH:

     WHEREAS, attendant to Employee’s employment by Employer, Employer and
Employee wish for there to be a complete understanding and agreement between
Employer and Employee with respect to, among other terms, Employee’s duties and
responsibilities to Employer; the compensation and benefits owed to Employee;
the fiduciary duties owed by Employee to Employer; Employee’s obligation to
avoid conflicts of interest, disclose pertinent information to Employer, and
refrain from using or disclosing Employer’s information;

     WHEREAS, Employer considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing its best
interests and the best interests of its stockholders;

     WHEREAS, the Board of Directors of Employer (the “Board”) has determined
that appropriate steps should be taken to encourage the continued attention and
dedication of members of Employer’s management; and

     WHEREAS, Employer and Employee wish to enter into this Agreement;

     NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Employer and Employee agree as follows:

Section 1. General Duties of Employer and Employee.

     (a)  Employer agrees to employ Employee and Employee agrees to accept
employment by Employer and to serve Employer in an executive capacity as its
Executive Vice President and Chief Operating Officer. At the commencement of
this Agreement, Employee will report to the Chief Executive Officer of Employer.
The powers, duties and responsibilities of Employee as Executive Vice President
and Chief Operating Officer include those duties that are the usual and
customary powers, duties and responsibilities of such office, including those
powers, duties and responsibilities specified in Employer’s Bylaws, and such
other and further duties appropriate to such position as may from time to time
be assigned to Employee by the Chief Executive Officer of Employer or the Board.

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     (b)  While employed hereunder, Employee will devote substantially all
reasonable and necessary time, efforts, skills and attention for the benefit of
and with Employee’s primary attention to the affairs of Employer in order that
he or she may faithfully perform his or her duties and obligations. The
preceding sentence will not, however, be deemed to restrict Employee from
attending to matters or engaging in activities not directly related to the
business of Employer, provided that (i) such activities or matters are
reasonable in scope and time commitment and not otherwise in violation of this
Agreement, and (ii) Employee will not become a director or officer of (or hold
any substantially similar responsibility with) any corporation or other entity
(excluding charitable or other non-profit organizations) without prior written
disclosure to, and consent of, Employer.

     (c)  At the commencement of Employee’s employment by Employer, Employee
will be based at Employer’s corporate headquarters located at 12300 Parc Crest
Drive, Stafford, Texas 77008 (the “Place of Employment”).

     (d)  Employee agrees and acknowledges that as an officer and employee of
Employer, and consistent with the terms hereof, he or she owes a fiduciary duty
of loyalty, fidelity and allegiance to act at all times in the best interests of
Employer and to do no act knowingly which would injure Employer’s business, its
interests or its reputation.

Section 2. Compensation and Benefits.

     (a)  Employer will pay to Employee during the term of this Agreement a base
salary at the rate of $265,000 per annum (such base salary as increased by the
Compensation Committee of the Board as hereinafter provided is referred to
herein as the “Base Salary”). The Compensation Committee of the Board will
review the Base Salary from time to time and, during the term of this Agreement,
may increase, but may not decrease, the Base Salary. The Base Salary will be
paid to Employee in equal installments every two weeks or on such other schedule
as Employer may establish from time to time for its management personnel.

     (b)  Employee will be eligible to participate in Employer’s Incentive
Compensation Plan for the fiscal year 2003 with a target of 65% and a maximum of
100% of Employee’s Base Salary. Any such bonus paid to Employee will not be
prorated for the portion of fiscal year 2003 actually worked by Employee. There
will be a minimum bonus of $60,000 for the fiscal year 2003. During each
subsequent fiscal year during the term of this Agreement, Employee will be
eligible, in the Board’s sole discretion, to participate in that year’s
Incentive Compensation Plan or other replacement incentive or bonus plan
Employer establishes for its key executives.

     (c) Employee will be eligible for option grants to purchase shares of
Employer’s common stock, $.01 par value (“Common Stock”), or other equity
securities of Employer as provided under Employer’s 2000 Long-Term Incentive
Plan (or other stock option plan or plans Employer establishes for its key
executives); such grants to be made in the sole discretion of the Board or a
duly authorized committee of the Board.

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     (d)  Employee will be eligible to participate in Employer’s Deferred
Compensation Plan (or any replacement deferred compensation plan Employer
establishes for its key executives).

     (e)  Effective on the date hereof, without any requirement to accrue,
Employee will be entitled to paid vacation of not less than three (3) weeks each
year. Vacation may be taken by Employee at the time and for such periods as may
be mutually agreed upon between Employer and Employee.

     (f)  Employee will be reimbursed in accordance with Employer’s normal
expense reimbursement policy for all of the actual and reasonable costs and
expenses incurred by him or her in the performance of his or her services and
duties hereunder, including, but not limited to, travel and entertainment
expenses. Employee will furnish Employer with all invoices and vouchers
reflecting amounts for which Employee seeks Employer’s reimbursement.

     (g)  Employee will be entitled to participate in all insurance and
retirement plans, incentive compensation plans (at a level appropriate to his or
her position) and such other benefit plans or programs as may be in effect from
time to time for the key management employees of Employer including, without
limitation, those related to savings and thrift, retirement, welfare, medical,
dental, disability, salary continuance, accidental death, travel accident, life
insurance, incentive bonus, membership in business and professional
organizations, and reimbursement of business and entertainment expenses.
Specifically, Employee will be entitled to participate in the Input/Output, Inc.
Deferred Compensation Plan as long as it is made available to other key
management employees.

     (h)  Employer, during the term of this Agreement and thereafter without
limit of time, will indemnify Employee for claims and expenses to the extent
provided in Employer’s Certificate of Incorporation and Bylaws. Employer will
also provide Employee coverage under Employer’s policy or policies of directors’
and officers’ liability insurance to the same extent as other executive officers
of Employer during the term of this Agreement.

     (i)  All Base Salary, bonus and other payments made by Employer to Employee
pursuant to this Agreement will be subject to such payroll and withholding
deductions as may be required by law and other deductions applied generally to
employees of Employer for insurance and other employee benefit plans in which
Employee participates.

Section 3. Fiduciary Duty; Confidentiality.

     (a)  In keeping with Employee’s fiduciary duties to Employer, Employee
agrees that he or she will not knowingly take any action that would create a
conflict of interest with Employer, or upon discovery thereof, allow such a
conflict to continue. In the event that Employee discovers that such a conflict
exists, Employee agrees that he or she will disclose to the Board any facts
which might involve a conflict of interest that has not been approved by the
Board.

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     (b)  As part of Employee’s fiduciary duties to Employer, Employee agrees to
protect and safeguard Employer’s information, ideas, concepts, improvements,
discoveries, and inventions and any proprietary, confidential and other
information relating to Employer or its business (collectively, “Confidential
Information”) and, except as may be required by Employer, Employee will not
knowingly, either during his or her employment by Employer or thereafter,
directly or indirectly, use for his or her own benefit or for the benefit of
another, or disclose to another, any Confidential Information, except (i) with
the prior written consent of Employer; (ii) in the course of the proper
performance of Employee’s duties under this Agreement; (iii) for information
that becomes generally available to the public other than as a result of the
unauthorized disclosure by Employee; (iv) for information that becomes available
to Employee on a nonconfidential basis from a source other than Employer or its
affiliated companies who is not bound by a duty of confidentiality to Employer;
or (v) as may be required by any applicable law, rule, regulation or order.

     (c)  Upon termination of his or her employment with Employer, Employee will
immediately deliver to Employer all documents in Employee’s possession or under
his or her control which embody any of Employer’s Confidential Information.

     (d)  In addition to the foregoing provisions of this Section 3, and
effective as of the Effective Date, Employee reaffirms the duties imposed upon
Employee by that certain Employee Proprietary Information Agreement dated as of
April 23, 2003 by and between Employer and Employee.

     (e)  Employee will comply with Employer’s Code of Ethics issued on February
4, 2003, and any amendments or replacement policies adopted by the Board (the
“Code of Ethics”).

Section 4. Term of Agreement; At-Will Employment.

     The term of this Agreement will commence effective as of the Effective
Date, and, subject to the terms and conditions hereof, will continue for a
two-year period ending on May 12, 2006, and thereafter, the term will be
automatically extended for successive periods of one year unless prior to the
end of the original two-year period (or, if applicable, any such one-year
period), Employer gives Employee at least ninety (90) days prior written notice
that Employer has decided not to extend the term of this Agreement.
Notwithstanding any provision contained herein to the contrary, Employee
acknowledges that his or her employment with Employer is at will and that
Employer may terminate his or her employment at any time and for any reason or
for no reason at the discretion of Employer, but subject to any rights Employee
has under Sections 5, 6 and 8 of this Agreement.

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Section 5. Termination.

     (a)  Employee’s employment with Employer hereunder will terminate upon the
first to occur of the following:

       (1) The death or “Disability” (as defined in Section 5(b) hereof) of
Employee;          (2) Employer terminates such employment for “Cause” (as
defined in Section 5(c) hereof);          (3) Employee terminates such
employment for “Good Reason” (as defined in Section 5(d) hereof);    
     (4) Employer terminates such employment for any reason other than Cause, or
for no reason at all;          (5) Employee terminates such employment for any
reason other than Good Reason, or for no reason at all; or    
     (6) Employee’s sixty-fifth (65th) birthday, at which time Employee will
continue to be employed by Employer as an employee at will.

     (b)  As used in this Agreement, “Disability” means permanent and total
disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended (the “Code”), or any successor provision) which has existed
for at least 180 consecutive days.

     (c)  As used in this Agreement, “Cause” means:

       (1) the willful and continued failure by Employee to substantially
perform his or her obligations under this Agreement (other than any such failure
resulting from his or her Disability) after a written demand for substantial
performance has been delivered to him or her by the Board which specifically
identifies the manner in which the Board believes Employee has not substantially
performed such provisions and Employee has failed to remedy the situation within
ten (10) days after such demand or a willful and material violation of the
Employer’s Code of Ethics;          (2) Employee’s willfully engaging in conduct
materially and demonstrably injurious to the property or business of Employer,
including without limitation, fraud, misappropriation of funds or other property
of Employer, , gross negligence that is materially injurious to the property or
business of Employer, or conviction of a felony or any crime of moral turpitude;
or

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       (3) Employee’s material breach of this Agreement which breach has not
been remedied by Employee within ten (10) days after receipt by Employee of
written notice from Employer that he or she is in material breach of the
Agreement, specifying the particulars of such breach.

For purposes of this Agreement, no act, or failure to act, on the part of
Employee shall be deemed “willful” or engaged in “willfully” if it was due
primarily to an error in judgment or negligence, but shall be deemed “willful”
or engaged in “willfully” only if done, or omitted to be done, by Employee not
in good faith and without reasonable belief that his action or omission was in
the best interest of Employer. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated as a result of “Cause” hereunder unless and
until there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the Board
then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with his
or her counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board of Directors, Employee has committed an act set forth above
in this Section 5(c) and specifying the particulars thereof in detail. Nothing
herein shall limit the right of Employee or his or her legal representatives to
contest the validity or propriety of any such determination.

     (d)  As used in this Agreement, “Good Reason” means:

       (1) Employer’s failure to comply with any of the provisions of Section 2
of this Agreement (including, but not limited to, such a failure resulting from
any reduction in the Base Salary) which failure is not remedied within ten
(10) days after receipt of written notice from Employee specifying the
particulars of such breach;          (2) Employer’s breach of any other material
provision of this Agreement which is not remedied within ten (10) days after
receipt by Employer of written notice from Employee specifying the particulars
of such breach;          (3) the assignment to Employee of any duties materially
inconsistent with Employee’s position, duties, functions, responsibilities or
authority as contemplated by Section 1 of this Agreement; or          (4) the
relocation of Employee’s principal place of performance of his or her duties and
responsibilities under this Agreement to a location more than fifty miles
(50) miles from the Place of Employment;          (5) Any failure by Employer to
comply with Section 11(c); or          (6) Any purported termination of
Employee’s employment by Employer which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 5(e) hereof (and for purposes
of this Agreement, no such purported termination shall be effective).

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     (e)  Any termination by Employer or Employee of Employee’s employment with
Employer (other than any such termination occurring on Employee’s sixty-fifth
(65th) birthday) shall be communicated by written notice (a “Notice of
Termination”) to the other party that shall:

       (1) indicate the specific provision of this Agreement relied upon for
such termination;          (2) indicate the specific provision of this Agreement
pursuant to which Employee is to receive compensation and other benefits as a
result of such termination; and          (3) otherwise comply with the
provisions of this Section 5(e) and Section 13(a).

If a Notice of Termination states that Employee’s employment with Employer has
been terminated as a result of Employee’s Disability, the notice shall (i)
specifically describe the basis for the determination of Employee’s Disability,
and (ii) state the date of the determination of Employee’s Disability, which
date shall be not more than ten (10) days before the date such notice is given.
If the notice is from Employer and states that Employee’s employment with
Employer is terminated by Employer as a result of the occurrence of Cause, the
Notice of Termination shall specifically describe the action or inaction of
Employee that Employer believes constitutes Cause and shall be accompanied by a
copy of the resolution satisfying Section 5(c). If the Notice of Termination is
from Employee and states that Employee’s employment with Employer is terminated
by Employee as a result of the occurrence of Good Reason, the Notice of
Termination shall specifically describe the action or inaction of Employer that
Employee believes constitutes Good Reason. Any purported termination by Employer
of Employee’s employment with Employer shall be ineffective unless such
termination shall have been communicated by Employer to Employee by a Notice of
Termination that meets the requirements of this Section 5(e) and the provisions
of Section 13(a).

     (f)  As used in this Agreement, “Date of Termination” means:

       (1) if Employee’s employment with Employer is terminated for Disability,
sixty (60) days after Notice of Termination is received by Employee or any later
date specified therein, provided that within such sixty (60) day period Employee
shall not have returned to full-time performance of Employee’s duties;    
     (2) if Employee’s employment with Employer is terminated as a result of
Employee’s death, the date of death of Employee;

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       (3) if Employee’s employment with Employer is terminated for Cause, the
date Notice of Termination, accompanied by a copy of the resolution satisfying
Section 5(c), is received by Employee or any later date specified therein,
provided that Employer may, in its discretion, condition Employee’s continued
employment upon such considerations or requirements as may be reasonable under
the circumstances and place a reasonable limitation upon the time within which
Employee will comply with such considerations or requirements;          (4) if
Employee’s employment with Employer is terminated upon the occurrence of
Employee’s sixty-fifth (65th) birthday, the date of such birthday, at which time
Employee will continue to be employed by Employer as an employee at will; or    
     (5) if Employee’s employment with Employer is terminated for any reason
other than Employee’s Disability, Employee’s death, Cause or the occurrence of
Employee’s sixty-fifth (65th) birthday, or for no reason, the date that is
fourteen (14) days after the date of receipt of the Notice of Termination.

Section 6. Effect of Termination of Employment.

     (a)  Upon termination of Employee’s employment by Employer for Cause, or by
Employee for no reason or any reason other than Good Reason, all compensation
and benefits will cease upon the Date of Termination other than: (i) those
benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Employee that are earned and
vested by the Date of Termination, (ii) as provided in Section 10, (iii)
Employee’s Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.

     (b) Upon termination of Employee’s employment due to the death of Employee
or upon termination by Employer due to the Disability of Employee, all
compensation and benefits will cease upon the Date of Termination other than:
(i) those benefits that are provided by retirement and benefit plans and
programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) as provided in Section 10,
(iii) Employee’s Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.

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     (c)  Upon termination of this Agreement due to Employee’s reaching his or
her sixty-fifth (65th) birthday, Employee will continue to be employed by
Employer as an employee at will.

     (d)  If Employee’s employment with Employer is terminated (i) by Employer
for no reason or for any reason other than Cause, the death or Disability of
Employee, or Employee’s reaching his or her sixty-fifth (65th) birthday, or
(ii) by Employee for Good Reason, the obligations of Employer and Employee under
Sections 1 and 2 will terminate as of the Date of Termination, and Employer will
pay or provide to Employee the following:

       (1) Employee’s Base Salary through the Date of Termination;    
     (2) incentive compensation due Employee, if any, under the terms of the
relevant incentive compensation arrangement, which, in the absence of any
agreement to the contrary, shall be the pro rata amount due to Employee based on
payments that would be due if Employee had remained employed by Employer for the
full fiscal year;          (3) during the eighteen-month period following the
Date of Termination, Employer shall pay to Employee an aggregate amount (the
“Severance Payment”) equal to (i) one and one/half times (1.5x) Employee’s Base
Salary at the highest annual rate in effect on or before the Date of Termination
(but prior to giving effect to any reduction therein which precipitated such
termination) plus (ii) Employee’s bonus payment, if any, made in the fiscal year
prior to the year in which the Date of Termination occurs, which Severance
Payment will be paid to Employee in eighteen (18) equal monthly installments
during such one-year period; and          (4) if immediately prior to the Date
of Termination, Employee (and, if applicable, his or her spouse and/or
dependents) was covered under Employer’s group medical, dental, health and
hospital plan in effect at such time, then Employer shall provide to Employee
for eighteen (18) months after the Date of Termination, and provided that
Employee has timely elected under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”), to continue coverage under such plan,
Employer will, at no greater cost or expense to Employee than was the case
immediately prior to the Date of Termination, maintain such continued coverage
in full force and effect.

Except as otherwise provided above and in Sections 7and 10, all other
compensation and benefits will cease upon the Date of Termination other than the
following: (i) those benefits that are provided by retirement and benefit plans
and programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) any rights Employee or his
survivors may have under any grants of options to purchase Employer’s

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Common Stock, restricted stock grants, performance share grants, or other
similar equity compensation plans; and (iii) medical and similar benefits the
continuation of which is required by applicable law or as provided by the
applicable benefit plan. As a condition to making the payments and providing the
benefits specified in this Section 6(d), Employer will require that Employee
execute a release of all claims Employee may have against Employer at the time
of Employee’s termination. Such release will be in substantially the same form
as Exhibit A attached hereto.

     (e)  If (i) a “Change in Control” (as defined in Section 6(f) hereof) shall
have occurred, the following shall occur immediately upon the occurrence of such
Change in Control:

       (1) each option to acquire Common Stock or other equity securities of
Employer held by Employee immediately prior to such Change in Control issued to
Employee in conjunction with or after Employee accepted employment with Employer
shall accelerate and become fully vested and exercisable, regardless of whether
or not the vesting conditions set forth in the relevant stock option agreement
have been satisfied, and shall remain fully exercisable for a one-year period
following the Date of Termination consistent with Section 5(e) hereof; and    
     (2) all restrictions on any restricted Common Stock or other equity
securities of Employer granted to Employee prior to such Change in Control shall
be removed and such Common Stock or other equity securities shall be freely
transferable (subject to applicable securities laws), regardless of whether the
conditions set forth in the relevant restricted stock agreements have been
satisfied in full.

     (f)  For purposes of this Agreement, a “Change in Control” shall mean the
occurrence of any of the following after the Effective Date:

       (1) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended from time to time (the “Exchange Act”), or any successor statute) (a
“Covered Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 40% or more of either (i) the then
outstanding shares of Common Stock (the “Outstanding Company Common Stock”), or
(ii) the combined voting power of the then outstanding voting securities of
Employer entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes
of this Section 6(f)(1), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from Employer or any subsidiary
of Employer, (ii) any acquisition by Employer or any subsidiary of Employer,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Employer or any entity controlled by Employer, or (iv) any

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  acquisition by any corporation pursuant to a reorganization, merger,
consolidation or similar business combination involving Employer (a “Merger”),
if, following such Merger, the conditions described in Section 6(f)(3)(i)
and(ii) are satisfied; or

       (2) individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the Effective Date whose election, or nomination for election by Employer’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (a solicitation by any person
or group of persons for the purpose of opposing a solicitation of proxies or
consents by the Board with respect to the election or removal of Directors at
any annual or special meetings of stockholders) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Covered Person other
than the Board; or          (3) Approval by the stockholders of Employer of a
Merger, unless immediately following such Merger, (i) substantially all of the
holders of the Outstanding Company Voting Securities immediately prior to the
Merger beneficially own, directly or indirectly, more than 50% of the common
stock of the corporation resulting from such Merger (or its parent corporation)
in substantially the same proportion as their ownership of Outstanding Company
Voting Securities immediately prior to such Merger and (ii) at least a majority
of the members of the board of directors of the corporation resulting from such
Merger (or its parent corporation) were members of the Incumbent Board at the
time of the execution of the initial agreement providing for such Merger; or    
     (4) the sale or other disposition of all or substantially all of the assets
of Employer.

Section 7. Excise Tax.

     (a)  Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by, or benefit
from, Employer or any of its affiliates to or for the benefit of Employee,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (any such payments, distributions or benefits being
individually referred to herein as a “Payment,” and any two or more of such
payments, distributions or benefits being referred to herein as “Payments”),
would be subject to the excise tax imposed by Section 4999 of the Code (such
excise tax, together with any interest thereon, any penalties, additions to tax,
or additional amounts with respect to such excise tax, and any interest in
respect of such penalties, additions to tax or additional amounts, being

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collectively referred herein to as the “Excise Tax”), then Employee shall be
entitled to receive an additional payment or payments (individually referred to
herein as a “Gross-Up Payment” and any two or more of such additional payments
being referred to herein as “Gross-Up Payments”) in an amount such that after
payment by Employee of all taxes (as defined in Section 7(i)) imposed upon the
Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.

     (b)  Subject to the provisions of Section 7(c) through (i), any
determination (individually, a “Determination”) required to be made under this
Section 7(b), including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall initially be made, at Employer’s expense, by
nationally recognized tax counsel selected by Employer (“Tax Counsel”). Tax
Counsel shall provide detailed supporting legal authorities, calculations, and
documentation both to Employer and Employee within 15 business days of the
termination of Employee’s employment, if applicable, or such other time or times
as is reasonably requested by Employer or Employee. If Tax Counsel makes the
initial Determination that no Excise Tax is payable by Employee with respect to
a Payment or Payments, it shall furnish Employee with an opinion reasonably
acceptable to Employee that no Excise Tax will be imposed with respect to any
such Payment or Payments. Employee shall have the right to dispute any
Determination (a “Dispute”). The Gross-Up Payment, if any, as determined
pursuant to such Determination shall, at Employer’s expense, be paid by Employer
to or for the benefit of Employee within five business days of Employee’s
receipt of such Determination. The existence of a Dispute shall not in any way
affect Employee’s right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon Employer and Employee, subject in all respects,
however, to the provisions of Section 7(c) through (i) below. As a result of the
uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that Gross-Up Payments (or portions thereof) which will not have been
made by Employer should have been made (“Underpayment”), and if upon any
reasonable written request from Employee or Employer to Tax Counsel, or upon Tax
Counsel’s own initiative, Tax Counsel, at Employer’s expense, thereafter
determines that Employee is required to make a payment of any Excise Tax or any
additional Excise Tax, as the case may be, Tax Counsel shall, at Employer’s
expense, determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Employee.

     (c)  Employer shall defend, hold harmless, and indemnify Employee on a
fully grossed-up after tax basis from and against any and all claims, losses,
liabilities, obligations, damages, impositions, assessments, demands, judgments,
settlements, costs and expenses (including reasonable attorneys’, accountants’,
and experts’ fees and expenses) with respect to any tax liability of Employee
resulting from any Final Determination (as defined in Section 7(h)) that any
Payment is subject to the Excise Tax.

     (d)  If a party hereto receives any written or oral communication with
respect to any question, adjustment, assessment or pending or threatened audit,
examination,

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investigation or administrative, court or other proceeding which, if pursued
successfully, could result in or give rise to a claim by Employee against
Employer under this Section 7 (“Claim”), including, but not limited to, a claim
for indemnification of Employee by Employer under Section 7(c), then such party
shall promptly notify the other party hereto in writing of such Claim (“Tax
Claim Notice”).

     (e)  If a Claim is asserted against Employee (“Employee Claim”), Employee
shall take or cause to be taken such action in connection with contesting such
Employee Claim as Employer shall reasonably request in writing from time to
time, including the retention of counsel and experts as are reasonably
designated by Employer (it being understood and agreed by the parties hereto
that the terms of any such retention shall expressly provide that Employer shall
be solely responsible for the payment of any and all fees and disbursements of
such counsel and any experts) and the execution of powers of attorney.

     (f)  Employer shall have the right to defend or prosecute, at the sole
cost, expense and risk of Employer, such Employee Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
Employer to a Final Determination; provided, however, that (i) Employer shall
not, without Employee’s prior written consent, enter into any compromise or
settlement of such Employee Claim that would adversely affect Employee, (ii) any
request from Employer to Employee regarding any extension of the statute of
limitations relating to assessment, payment, or collection of taxes for the
taxable year of Employee with respect to which the contested issues involved in,
and amount of, Employee Claim relate is limited solely to such contested issues
and amount, and (iii) Employer’s control of any contest or proceeding shall be
limited to issues with respect to Employee Claim and Employee shall be entitled
to settle or contest, in his sole and absolute discretion, any other issue
raised by the Internal Revenue Service or any other taxing authority. So long as
Employer is diligently defending or prosecuting such Employee Claim, Employee
shall provide or cause to be provided to Employer any information reasonably
requested by Employer that relates to such Employee Claim, and shall otherwise
cooperate with Employer and its representatives in good faith in order to
contest effectively such Employee Claim. Employer shall keep Employee informed
of all developments and events relating to any such Employee Claim (including,
without limitation, providing to Employee copies of all written materials
pertaining to any such Employee Claim), and Employee or his authorized
representatives shall be entitled, at Employee’s expense, to participate in all
conferences, meetings and proceedings relating to any such Employee Claim.

     (g)  In the case of any Employee Claim that is defended or prosecuted to a
Final Determination pursuant to the terms of this Section 7(g), Employer shall
pay, on a fully grossed-up after tax basis, to Employee in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Employee Claim that have not theretofore been paid by
Employer to Employee, together with the costs and expenses, on a fully
grossed-up after tax basis, incurred in connection therewith that have not
theretofore been paid by Employer to Employee, within ten calendar days after
such Final Determination. In the case

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of any Employee Claim not covered by the preceding sentence, Employer shall pay,
on a fully grossed-up after tax basis, to Employee in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Employee Claim at least ten calendar days before the date
payment of such taxes is due from Employee, except where payment of such taxes
is sooner required under the provisions of this Section 7(g), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 7(g)) shall be
made within the time and in the manner otherwise provided in this Section 7(g).

     (h)  For purposes of this Agreement, the term “Final Determination” shall
mean (A) a decision, judgment, decree or other order by a court or other
tribunal with appropriate jurisdiction, which has become final and
non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.

     (i)  For purposes of this Agreement, the terms “tax” and “taxes” mean any
and all taxes of any kind whatsoever (including, but not limited to, any and all
Excise Taxes, income taxes, and employment taxes), together with any interest
thereon, any penalties, additions to tax, or additional amounts with respect to
such taxes and any interest in respect of such penalties, additions to tax, or
additional amounts.

Section 8. Expenses of Enforcement.

     Upon demand by Employee made to Employer, Employer shall reimburse Employee
for the reasonable expenses (including attorneys’ fees and expenses) incurred by
Employee after a Change in Control in enforcing or seeking to enforce the
payment of any amount or other benefit to which Employee shall have become
entitled under this Agreement as a result of the termination of Employee’s
employment with Employer within two (2) years after the Employee’s Date of
Termination, including, but not limited to, those incurred in connection with
any arbitration concerning same initiated pursuant to Section 14 (regardless of
the outcome of such arbitration). To the extent that any such reimbursement
would be subject to the Excise Tax, then Employee shall be entitled to receive
Gross-Up Payments in an amount such that after payment by Employee of all taxes
imposed on such Gross-Up Payments, Employee retains an amount equal to the
Excise Tax imposed upon the reimbursement, and the other provisions of Section 7
hereof shall also apply to such circumstance unless the context thereof
otherwise indicates.

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Section 9. No Obligation to Mitigate; No Rights of Offset.

     (a)  Employee shall not be required to mitigate the amount of any payment
or other benefit required to be paid to Employee pursuant to this Agreement,
whether by seeking other employment or otherwise, nor shall the amount of any
such payment or other benefit be reduced on account of any compensation earned
by Employee as a result of employment by another person.

     (b)  Employer’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which Employer may have against Employee or others.

Section 10. No Effect on Other Rights.

     Nothing in this Agreement shall prevent or limit Employee’s continuing or
future participation in any plan, program, policy or practice of or provided by
Employer or any of its affiliates and for which Employee may qualify, nor shall
anything herein limit or otherwise affect such rights as Employee may have under
any stock option or other agreements with Employer or any of its affiliates.
Amounts which are vested benefits or which Employee is otherwise entitled to
receive under any plan, program, policy or practice of or provided by, or any
other contract or agreement with, Employer or any of its affiliates at or
subsequent to the Date of Termination shall be payable or otherwise provided in
accordance with such plan, program, policy or practice or contract or agreement
except as explicitly modified by this Agreement.

Section 11. Successors; Binding Agreement.

     (a)  This Agreement is personal to Employee and without the prior written
consent of Employer shall not be assignable by Employee otherwise than by will
or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

     (b)  This Agreement shall inure to the benefit of and be binding upon
Employer and its successors and assigns.

     (c)  Employer will require any successor (whether direct or indirect, by
purchase, merger, amalgamation, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Employer would be required to perform it if no such succession had taken place.
As used in this Agreement, “Employer” shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by execution and delivery of the
agreement provided for in this Section 11(c) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law or otherwise.

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Section 12. Non-Competition; Non-Solicitation; No Hire.

     (a)  Employee agrees that, effective as of the Effective Date and for a
period of eighteen (18) months after the Date of Termination (such applicable
period being referred to herein as the “Non-Compete Period”), Employee shall
not, without the prior written consent of Employer, directly or indirectly,
anywhere in the world, engage, invest, own any interest, or participate in,
consult with, render services to, or be employed by any business, person, firm
or entity that is in competition with the “Business” (as defined in Section
12(d)) of Employer or any of its subsidiaries or affiliates, except for the
account of Employer and its subsidiaries and affiliates; provided, however, that
during the Non-Compete Period Employee may acquire, solely as a passive
investment, not more than five percent (5%) of the outstanding shares or other
units of any security of any entity subject to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended. Employee acknowledges
that a remedy at law for any breach or attempted breach of this covenant not to
compete will be inadequate and further agrees that any breach of this covenant
not to compete will result in irreparable harm to Employer, and, accordingly,
Employer shall, in addition to any other remedy that may be available to it, be
entitled to specific performance and temporary and permanent injunctive and
other equitable relief (without proof of actual damage or inadequacy of legal
remedy) in case of any such breach or attempted breach. Employee acknowledges
that this covenant not to compete is being provided as an inducement to Employer
to enter into this Agreement and that this covenant not to compete contains
reasonable limitations as to time, geographical area and scope of activity to be
restrained that do not impose a greater restraint than is necessary to protect
the goodwill or other business interest of Employer. Whenever possible, each
provision of this covenant not to compete shall be interpreted in such a manner
as to be effective and valid under applicable law but if any provision of this
covenant not to compete shall be prohibited by or invalid under applicable law,
such provision of this covenant not to compete shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
covenant not to compete. If any provision of this covenant not to compete shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this covenant not to compete but shall be confined in its operation
to the provision of this covenant not to compete directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this covenant not to compete should ever be deemed to exceed
the time or geographic limitations permitted by applicable laws, then such
provision shall be reformed to the maximum time or geographic limitations
permitted by applicable law.

     (b)  In addition to the restrictions set forth in Section 12(a), Employee
agrees that, during the Non-Compete Period, Employee will not, either directly
or indirectly, (i) make known to any person, firm or entity that is in
competition with the Business of Employer or any of its subsidiaries or
affiliates the names and addresses of any of the suppliers or customers of

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Employer or any of its subsidiaries or affiliates, potential customers of
Employer or any of its subsidiaries or affiliates upon whom Employer or any of
its subsidiaries or affiliates has called upon in the last twelve (12) months or
contacts of Employer or any of its subsidiaries or affiliates or any other
information pertaining to such persons, or (ii) call on, solicit, or take away,
or attempt to call on, solicit or take away any of the suppliers or customers of
Employer or any of its subsidiaries or affiliates, whether for Employee or for
any other person, firm or entity.

     (c)  Regardless of the reason for any termination of Employee’s employment,
effective as of the Effective Date and for eighteen (18) months following the
Date of Termination, Employee will not, either on his or her own account or for
any other person, firm, partnership, corporation, or other entity (i) solicit
any employee of Employer or any of its subsidiaries or affiliates to leave such
employment; or (ii) induce or attempt to induce any such employee to breach her
or his employment agreement with Employer or any of its subsidiaries or
affiliates.

     (d)  As used in this Agreement, “Business” means the business of design,
manufacture, marketing and sale of equipment for seismic acquisition, processing
and interpretation.

     (e)  In the event that Employee breaches or violates any of the terms and
conditions of this Section 12 during the Non-Compete Period, then in addition to
the other rights and remedies available to Employer hereunder and under
Section 14 hereof, Employer’s obligations to pay to Employee any remaining
installments of the Severance Payment otherwise due and owing pursuant to
Section 6(d)(3) hereof, shall cease and terminate.

Section 13. Miscellaneous.

     (a)  All notices and other communications required or permitted hereunder
or necessary or convenient in connection herewith will be in writing and will be
delivered by hand or by registered or certified mail, return receipt requested
to the addresses set forth below in this Section 13(a):

          If to Employer, to:           Input/Output, Inc.     12300 Parc Crest
Drive     Stafford, TX 77477     Attention: General Counsel           If to
Employee, to:     Jorge Machnizh

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or to such other names or addresses as Employer or Employee, as the case may be,
designate by notice to the other party hereto in the manner specified in this
Section.

     (b)  This Agreement (including the Exhibit(s) attached hereto) supersedes,
replaces and merges all previous agreements and discussions relating to the same
or similar subject matters between Employee and Employer and constitutes the
entire agreement between Employee and Employer with respect to the subject
matter of this Agreement, except for (i) the Employee Proprietary Information
Agreement referred to in Section 3(d) hereof, and (ii) the stock option,
restricted stock award and other agreements of the nature contemplated under
Section 8 hereof, each of which shall remain in full force and effect. This
Agreement may not be modified in any respect by any verbal statement,
representation or agreement made by any employee, officer, or representative of
Employer or by any written agreement unless signed by an officer of Employer who
is expressly authorized by the Board to execute such document.

     (c)  If any provision of this Agreement or application thereof to any one
or under any circumstances should be determined to be invalid or unenforceable,
such invalidity or unenforceability will not affect any other provisions or
applications of this Agreement which can be given effect without the invalid or
unenforceable provision or application. In addition, if any provision of this
Agreement is held by an arbitration panel or a court of competent jurisdiction
to be invalid, unenforceable, unreasonable, unduly restrictive or overly broad,
the parties intend that such arbitration panel or court modify said provision so
as to render it valid, enforceable, reasonable and not unduly restrictive or
overly broad.

     (d)  The internal laws of the State of Texas will govern the
interpretation, validity, enforcement and effect of this Agreement without
regard to the place of execution or the place for performance thereof.

     (e)  The covenants, agreements, rights and obligations of Employer under
this Agreement, and the covenants, agreements, rights and obligations of
Employee under this Agreement, shall survive the termination of this Agreement
for any reason including, but not limited to, the termination of Employee’s
employment with Employer. All covenants, agreements, indemnities, warranties,
rights and obligations contained herein shall continue for so long as necessary
in order for Employer and Employee to enforce their rights hereunder.

Section 14. Arbitration.

     (a)  Employer and Employee agree to submit to final and binding arbitration
any and all disputes or disagreements concerning the interpretation or
application of this Agreement. Any such dispute or disagreement will be resolved
by arbitration in accordance with

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the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (the “AAA Rules”). Arbitration will take place in
Houston, Texas, unless the parties mutually agree to a different location.
Within 30 calendar days of the initiation of arbitration hereunder, each party
will designate an arbitrator. The appointed arbitrators will then appoint a
third arbitrator. Employee and Employer agree that the decision of the
arbitrators will be final and binding on both parties. Any court having
jurisdiction may enter a judgment upon the award rendered by the arbitrators. In
the event the arbitration is decided in whole or in part in favor of Employee,
Employer will reimburse Employee for his or her reasonable costs and expenses of
the arbitration (including reasonable attorneys’ fees).

     (b)  Notwithstanding the provisions of Section 14(a), Employer may, if it
so chooses, bring an action in any court of competent jurisdiction for
injunctive relief to enforce Employee’s obligations under Sections 3(b), 3(c),
3(d), 3(e) and 12 hereof.

Section 15. Additional Agreements.

     Employer and Employee shall enter into that certain Restricted Stock Award
Agreement in the form attached hereto as Exhibit A and that certain Incentive
Agreement for Nonstatutory Stock Option in the form attached hereto as Exhibit B
on Employee’s first date of employment with Employer.

SIGNATURES TO FOLLOW ON NEXT PAGE

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     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as to be effective as of the Effective Date.

          EMPLOYER:           INPUT/OUTPUT, INC.           By: /s/ Robert P.
Peebler    

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    Chief Executive Officer           EMPLOYEE:           JORGE MACHNIZH        
  /s/ Jorge Machnizh    

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