EXHIBIT 10.6

MITCHAM INDUSTRIES, INC.
STOCK APPRECIATION RIGHTS AGREEMENT
(1998 STOCK AWARDS PLAN)

     THIS STOCK APPRECIATION RIGHTS AGREEMENT (the “SAR Agreement”) is between
Mitcham Industries, Inc., a Texas corporation (the “Company”), and              
      (the “Employee”), which parties agree as follows:

     1. Introduction. The Company has adopted the Mitcham Industries, Inc. 1998
Stock Awards Plan (the “Plan”) to provide employees upon whom the
responsibilities of the successful administration and management of the Company
rest additional incentive and reward opportunities designed to advance the
Company’s profitable growth. The Company, acting through the Committee, has
determined that its interests will be advanced by issuing the Employee Stock
Appreciation Rights under the Plan. All capitalized terms in this SAR Agreement
not defined in this SAR Agreement will have the meanings given to them in the
Plan.

     2. Grant of Stock Appreciation Rights. The Company hereby irrevocably
grants to the Employee                     Stock Appreciation Rights under the
terms and conditions set forth herein and in the Plan. A “Stock Appreciation
Right” is the right to receive a payment from the Company in an amount equal to
the “Spread,” which is defined as the excess of the Fair Market Value of one
share of common stock, $.01, par value (the “Stock”) of the Company at the
Exercise Date (defined in Section 5) over a specified price (the “Award Price”)
fixed by the Committee which is not less than 100% of the Fair Market Value of
the Stock at the grant date of the Stock Appreciation Rights. If the Stock
Appreciation Rights are granted in tandem with an Option, the Employee’s
exercise of the Stock Appreciation Rights will result in his exercise of the
related option at the same time.

     3. Award Price. The Award Price of the Stock Appreciation Rights to the
Employee is $                    per Stock Appreciation Right.

     4. Stock Appreciation Right Period. The Employee may exercise the Stock
Appreciation Rights, in whole or in part, during a ten-year period beginning    
                                  ,                     (the “Date of Grant”)
(the “SAR Period”), except that they may not be exercised (a) at any time before
the expiration of the Date of Grant; or (b) for more than a percentage of the
aggregate number of Stock Appreciation Rights granted by this SAR Agreement
determined by the number of full years of the Employee’s employment with the
Company or its Affiliates from the Date of Grant to the Exercise Date (the
“Vested SARs”), as follows:

  Number of   Percentage Full Years

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  Exercisable

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Notwithstanding anything in this SAR Agreement to the contrary, the Committee,
in its sole discretion, may waive the foregoing schedule of vesting and
accelerate the earliest date or dates on which any of the Stock Appreciation
Rights are exercisable.

 

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     5. Procedure for Exercise. The Employee may exercise Vested SARs by
delivering written notice to the Secretary of the Company including the number
of Vested SARs being exercised and the date on which such exercise is to be
effective (“Exercise Date”). Upon the Employee’s exercise of Vested SARs under
this SAR Agreement, the Company shall pay the Employee, within thirty (30) days
of the Exercise Date, an amount equal to the product of (i) the number of Vested
SARs exercised, multiplied by (ii) the Spread. Such payment will be made, in the
Committee’s discretion, in (a) cash, (b) shares of Stock with a Fair Market
Value equal to the amount of the payment, or (c) a combination of cash and
shares of Stock.

     6. Termination of Employment. If the Employee ceases to be employed by the
Company or its Affiliates for any reason other than death or disability, all
Stock Appreciation Rights, whether vested or not, granted to the Employee shall
expire upon such termination of employment. However, the Committee may allow the
Employee to exercise all or a portion of the Employee’s Vested SARs for a period
of time after the Employee’s termination of employment hereunder.

     7. Death or Disability. If the Employee dies or is determined to be
disabled while employed by the Company or its Affiliates, then the Employee, the
guardian of the Employee’s estate, the executor or administrator of the
Employee’s estate or the person or persons to whom the Employee’s rights under
this SAR Agreement pass by will or the laws of descent and distribution, may
exercise all Vested SARs at any time and from time to time, within a one-year
period after such death or determination of disability. However, the Vested SARs
may not be exercised after the SAR Period. The Employee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, the
Employee incapable of performing for the Company services of the kind he was
performing at the time the disability occurred, due to any medically
determinable physical or mental impairment that can be expected to result in
death or to continue indefinitely. The date of determination of disability for
purposes hereof shall be the date of such physician’s determination.

     8. Expiration of Stock Appreciation Rights. Any Stock Appreciation Rights
exercised under this Agreement shall expire automatically as of the Exercise
Date. Stock Appreciation Rights shall also expire upon the Employee’s
termination of employment with the Company or its Affiliates in accordance with
Sections 6 and 7 above.

     9. Extraordinary Corporate Transactions. Solely for purposes of the Plan
and this SAR Agreement, each Stock Appreciation Right has been equated with one
share of Stock as constituted on the execution date of this SAR Agreement. If,
after the execution of this SAR Agreement, the Company is recapitalized or
otherwise changes its capital structure or the number of issued and outstanding
shares of Stock as a result of a share dividend or a subdivision or
consolidation of shares without receipt of consideration by the Company, the
number of Stock Appreciation Rights previously granted to the Employee shall be
appropriately adjusted as provided under the Plan. If there is a “Change of
Control” all Stock Appreciation Rights shall immediately vest and be fully
exercisable.

     10. Requirements of Law. The granting of Stock Appreciation Rights shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.

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     11. Withholding of Tax. To the extent that the exercise or disposition of
the Stock Appreciation Rights results in compensation income to the Employee for
federal or state income tax purposes, the Employee shall pay to the Company at
the time of such exercise or disposition such amount of money as the Company may
require to meet its obligations under applicable tax laws or regulations. If the
Employee fails to do so, the Company is authorized to withhold any such tax from
any cash remuneration then or thereafter payable to the Employee, or may
otherwise refuse to issue or transfer any shares otherwise required to be issued
or transferred under this SAR Agreement.

     12. No Right to Employment. The Employee shall be considered to be in the
employment of the Company or its Affiliates as long as he remains employed on a
full-time basis by the Company or its Affiliates, or any corporation to which
substantially all of the assets and business of the Company are transferred. The
Committee shall determine whether and when there has been a termination of the
Employee’s employment and the cause of such termination, and its determination
shall be final. Nothing in this SAR Agreement or the granting of Stock
Appreciation Rights shall confer on the Employee the right to continued
employment by the Company or its Affiliates or affect in any way the right of
the Company or its Affiliates to terminate such employment at any time.

     13. Resolution of Disputes. As a condition of the granting of the Stock
Appreciation Rights, the Employee and his heirs and successors agree that the
Committee shall determine and resolve in its sole discretion and judgment, any
dispute or disagreement that arises hereunder, and that any such determination
and any resolution of the terms of this SAR Agreement shall be final, binding
and conclusive upon the Company, the Employee, his heirs and personal
representatives.

     14. Prohibition Against Assignment or Encumbrance. Except as provided in
Sections 7 and 15, no right, title, interest or benefit hereunder shall ever be
transferable or liable for or charged with any of the torts or obligations of
the Employee or any person claiming under the Employee, or be subject to seizure
by any creditor of the Employee or any person claiming under the Employee. The
Employee shall not nor any person claiming under the Employee anticipate or
dispose of any right, title, interest or benefit hereunder in any manner until
the same shall have been actually distributed free and clear under the terms of
this SAR Agreement.

     15. Beneficiary Designation. The Employee may name, from time to time, any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under this SAR Agreement is to be paid in the case of the death
of the Employee before he receives any or all of such benefit. Each designation
will revoke all prior designations by the Employee, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Employee in writing with the Committee during his lifetime. In the absence of
any such designation, benefits remaining unpaid at the Employee’s death shall be
paid to his estate.

     16. Notices. Every notice hereunder shall be in writing and shall be given
by registered or certified mail. All notices of the exercise of any Stock
Appreciation Rights hereunder shall be directed to Mitcham Industries, Inc.,
44000 Highway 75 South, P. O. Box 1175, Huntsville, Texas 77342. Attention:
Secretary. Any notice given by the Company to the Employee directed to him at
his address on file with the Company shall be effective to bind him

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and any other person who shall acquire rights hereunder. The Company has no
obligation to advise the Employee of the existence, maturity or termination of
any of the Employee’s rights hereunder. The Employee shall be deemed to have
familiarized himself or herself with all matters contained in this SAR Agreement
and in the Plan that may affect any of the Employee’s rights or privileges
hereunder.

     17. SAR Agreement Subject to Plan. This SAR Agreement is subject to the
Plan. The terms and provisions of the Plan (including any amendments thereto)
are hereby incorporated in this SAR Agreement by reference thereto. If there is
a conflict between any term or provision contained in this SAR Agreement and a
term or provision of the Plan, the terms and provisions of the Plan will govern
and prevail.

     18. Binding Effect. This SAR Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under the Employee.

     19. Employee Rights Unsecured. The right of the Employee to receive payment
under this SAR Agreement shall be an unsecured claim against the general assets
of the Company. The Employee shall have no right in or against any assets of the
Company.

     20. Governing Law. This SAR Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

DATED                                       ,                    .

     

  MITCHAM INDUSTRIES, INC.
 
   

  By:
 
 

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  Name:
 
 

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  Title:
 
 

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  THE EMPLOYEE
 
   
 
 

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