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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31,
    2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission file number 1-12691
 ION Geophysical
    Corporation
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other Jurisdiction
    of Incorporation or Organization)

22-2286646(I.R.S. Employer
    Identification No.)   2105
    CityWest Blvd
    Suite 400
    Houston, Texas
    77042-2839 (Address
    of Principal Executive Offices, Including Zip
    Code)
  (281) 933-3339 (Registrants
    Telephone Number, Including Area Code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value


New York Stock ExchangeRights to Purchase Series A Junior Participating Preferred
    Stock


New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-T o o
  *
    
    The registrant has not yet been phased into the interactive data
    requirements.  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o  (Do not check if a smaller
    reporting company)
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Document

Parts Into Which IncorporatedPortions of the Proxy Statement for the Annual Meeting of
    Stockholders to be held May 27, 2011

Part III




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##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


3Item 1A.

Risk Factors


17Item 1B.

Unresolved Staff Comments


33Item 2.

Properties


33Item 3.

Legal Proceedings


33Item 4.

(Removed and Reserved)


36PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


36Item 6.

Selected Financial Data


37Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


39Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


60Item 8.

Financial Statements and Supplementary Data


61Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


61Item 9A.

Controls and Procedures


61Item 9B.

Other Information


64PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


64Item 11.

Executive Compensation


64Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


64Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


64Item 14.

Principal Accountant Fees and Services


64PART IVItem 15.

Exhibits and Financial Statement Schedules


64Signatures


70Index to Consolidated Financial Statements


F-1EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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PART I  Preliminary Note: This Annual Report on
    Form 10-K
    contains forward-looking statements as that term is
    defined in the Private Securities Litigation Reform Act of 1995.
    Forward-looking statements should be read in conjunction with
    the cautionary statements and other important factors included
    in this
    Form 10-K.
    See Item 1A. Risk Factorsfor a
    description of important factors which could cause actual
    results to differ materially from those contained in the
    forward-looking statements.
  Form 10-K, Form 10-K Business 
    Intellectual Property
  Item 1.
    Business        
    Land seismic data acquisition equipment (principally through our
    49% ownership in INOVA Geophysical),
    Marine seismic data acquisition equipment,
    Navigation, command & control, and data management
    software products,
    Planning services for survey design and optimization,
    Seismic data processing and reservoir imaging services, and
    Seismic data libraries.  and/or
 3




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
    Systems towed streamer and redeployable ocean
    bottom cable seismic data acquisition systems and shipboard
    recorders, streamer positioning and control systems and energy
    sources (such as air guns and air gun controllers) and analog
    geophone sensors.
    Software software systems and related
    services for navigation and data management involving towed
    marine streamer and seabed operations.
    Solutions advanced seismic data processing
    services for marine and land environments, reservoir solutions,
    onboard processing and quality control, seismic data libraries,
    and Integrated Seismic Solutions (ISS) services.
    INOVA Geophysical through our interest in
    INOVA Geophysical, cable-based, cableless and radio-controlled
    seismic data acquisition systems, digital sensors, vibroseis
    vehicles (i.e. vibrator trucks) and source controllers for
    detonator and energy sources business lines.  77042-2839. (281) 933-3339. www.iongeo.com Form 10-K.
  Form 10-K, Form 10-K, Form 10-Q, Form 8-K,
  www.sec.gov
  Seismic
    Industry Overview
     4




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2-D, 2-D 2-D 2-D (3-D)
  3-D 3-D 3-D 3-D
  3-D 2-D 3-D 3-D
  3-D
 5




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ION
    Geophysicals Business Strategy
  Factors
    Affecting Long-Term Demand
    
    Demand for both crude oil and natural gas should continue to
    increase as the financial health of developed countries
    continues to improve, and higher demand continues in high-growth
    emerging markets such as China and India;
    The clear potential for large undiscovered or underdeveloped
    reservoirs in offshore locations should continue to drive demand
    by E&P companies and seismic contractors for improvements
    in marine equipment technology and offshore seismic data
    libraries; and
    E&P companies are focusing more on hydrocarbon reservoirs
    that are located in deeper waters or deeper in the geologic
    column, which should increase demand for newer and more
    efficient imaging processing and equipment technology solutions.     6




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Becoming
    a Broad-Based Seismic Provider
    
    Our acquisition of Concept Systems Holdings Limited (Concept
    Systems) and its integrated planning, navigation,
    command & control, and data management software and
    solutions for towed streamer and seabed operations; and
    Our acquisition of GX Technology Corporation (GXT), and its
    advanced seismic data imaging solutions services and seismic
    data libraries for the marine environment.      case-by-case
    tm ® Products and
    Services
    
    Continuing to manage our cost structure to reflect current
    market and economic conditions while keeping key strategic
    technology programs progressing with an overall goal of enabling
    E&P companies to solve their complex reservoir problems
    most efficiently and effectively; 7




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
    Expanding our Solutions business in new regions with new
    customers and new land and marine service offerings, including
    proprietary services for E&P producers;
    Globalizing our Solutions data processing business by opening
    advanced imaging centers in strategic locations, and expanding
    our presence in the land seismic processing segment, with
    emphasis on serving the national oil companies;
    Developing and introducing our next generation of marine towed
    streamer products, with a goal of developing markets beyond the
    new vessel market;
    Expanding our seabed imaging solutions business using our
    VectorSeis®

    Ocean (VSO) acquisition system platform and derivative products
    to obtain technical and market leadership in what we continue to
    believe is a very important and expanding market; and
    Through our investment in INOVA Geophysical, increasing market
    share and profitability in land acquisition systems and
    furthering the commercialization of FireFly, as well as other
    land equipment technologies.
    Also through our investment in INOVA Geophysical, we seek to
    leverage its land equipment business to design and deliver lower
    cost, more reliable land imaging systems to our worldwide
    customer base of land acquisition contractors while concurrently
    tapping into a broader set of global geophysical opportunities
    associated with the exploration, asset development, and
    production operations of BGPs parent, CNPC.  Full-Wave
    Digital
  2-D, 3-D, 4-D
        
    VectorSeis Ocean (VSO)  IONs redeployable ocean
    bottom cable system for the seabed; 8




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
    FireFly  INOVA Geophysicals cableless full-wave
    land acquisition system; and
    Scorpion® 

    INOVA Geophysicals cable-based land acquisition system.  Products
    and Services
  Systems
    Products
    Marine Acquisition Systems tm
    Marine Positioning Systems ® tm
  Source and Source Control Systems ® 4-D
  Geophones
 9




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tm
  Software
    Products and Services
    Marine Imaging 4-D ® 2-D, 3-D, 4-D
  Seabed Imaging ®
  Survey Design, Planning and Optimization
  Post-Survey Analysis Tools ® ®
  Solutions
    Services
    Seismic Data Processing Services
   10




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hard-to-image
    
    imaging services, including full-wave processing designed to
    remove source-generated or ambient noise from data acquired with
    single-point sensors and develop higher resolution images of the
    subsurface; and
    support services, such as data pre-conditioning for imaging and
    outsourced management of seismic data acquisition and image
    processing services;
    velocity modeling designed to build and analyze velocity models
    in structurally complex environments;
    preSDM solutions designed to convert data acquired in the time
    domain to an accurate, depth-based domain; and
    reservoir analysis and interpretation.  tm
    Integrated Seismic Solutions (ISS)
 11




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Seismic Data Libraries 2-D
  INOVA
    Geophysical
  Joint
    Venture
      case-by-case
  Products
    Land Acquisition Systems ®
 12




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®
        Vibrators and Energy Sources tm ®
  tm tm
  Product
    Research and Development
     13




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difficult-to-image Selected Financial Data
    Markets
    and Customers
              Notes to Consolidated Financial
    Statements
  Manufacturing
    Outsourcing and Suppliers
   14




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Competition
  product-by-product
    2-D 3-D
  Products and Services Solutions Services
   15




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Intellectual
    Property
    Legal Proceedings
  Form 10-K ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® tm tm tm tm tm tm tm tm
  Regulatory
    Matters
         16




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Employees
    Financial
    Information by Segment and Geographic Area
  Notes to Consolidated
    Financial Statements.
  Item 1A.
    Risk
    Factors    
    the effects of current and future worldwide economic conditions
    and demand for oil and natural gas and seismic equipment and
    services;
    the on-going effects and aftermath of the Deepwater Horizon
    disaster in the Gulf of Mexico on regulatory requirements
    affecting us and our customers and on demand for seismic
    equipment and services;
    future benefits to be derived from our INOVA Geophysical joint
    venture;
    a continuation in the future of increased capital expenditures
    for seismic spending;
    the expected outcome of litigation and other claims against us;
    the timing of anticipated sales;
    future levels of spending by our customers;
    future oil and gas commodity prices;
    expected net revenues, income from operations and net income;
    expected gross margins for our products and services;
    future benefits to our customers to be derived from new products
    and services;
    future growth rates for our products and services;
    the degree and rate of future market acceptance of our new
    products and services; 17




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
    our expectations regarding oil and gas exploration and
    production companies and contractor end-users purchasing our
    more technologically-advanced products and services;
    anticipated timing and success of commercialization and
    capabilities of products and services under development and
    start-up
    costs associated with their development;
    expected improved operational efficiencies from our full-wave
    digital products and services;
    future cash needs and future availability of cash to fund our
    operations and pay our obligations;
    potential future acquisitions;
    future levels of capital expenditures;
    our ability to maintain our costs at consistent percentages of
    our revenues in the future;
    future demand for seismic equipment and services;
    future seismic industry fundamentals;
    future opportunities for new products and projected research and
    development expenses;
    success in integrating our acquired businesses;
    sufficient future profits to fully utilize our net operating
    losses;
    future compliance with our debt financial covenants;
    expectations regarding realization of deferred tax
    assets; and
    anticipated results regarding accounting estimates we make.    Our
    INOVA Geophysical Joint Venture with BGP involves numerous
    risks.
       18




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
    increased costs associated with the integration and operation of
    the new business and new technologies and the management of
    geographically dispersed operations;
    risks associated with the assimilation of new technologies
    (including incorporating BGPs land seismic equipment with
    our existing land seismic imaging product lines that were
    contributed to the joint venture), operations, sites, and
    personnel;
    difficulties in retaining and integrating key technical, sales
    and marketing personnel and the possible loss of such employees
    and costs associated with their loss;
    difficulties associated with preserving relationships with our
    customers, partners and vendors;
    risks that any technology developed by the joint venture may not
    perform as well as we had anticipated;
    the diversion of managements attention and other resources
    from other business operations and related concerns;
    the potential inability to replicate operating efficiencies in
    the joint ventures operations;
    potential impairments of goodwill and intangible assets;
    the requirement to maintain uniform standards, controls and
    procedures;
    the impairment of relationships with employees and customers as
    a result of the integration of management personnel from
    different companies;
    the divergence of our interests from BGPs interests in the
    future, disagreements with BGP on ongoing manufacturing,
    research and development and operational activities, or the
    amount, timing or nature of further investments in the joint
    venture;
    the terms of our joint venture arrangements may turn out to be
    unfavorable to us;
    we currently own 49% of the total equity interests in INOVA
    Geophysical, so there are certain decisions affecting the
    business of the joint venture that we cannot control or
    influence;
    we may not be able to realize the operating efficiencies, cost
    savings or other benefits that we expect from the joint venture;
    the joint ventures cash flows may be inadequate to fund
    its capital requirements, thereby requiring additional
    contributions to the capital of the joint venture by us and by
    BGP;
    joint venture profits and cash flows may prove inadequate to
    fund cash dividends from the joint venture to the joint venture
    partners; and
    the joint venture may experience difficulties and delays in
    ramping up production of the joint ventures products.     19




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We are
    subject to intense competition, which could limit our ability to
    maintain or increase our market share or to maintain our prices
    at profitable levels.
  Business 
    Competition.
  We may
    be unable to obtain broad intellectual property protection for
    our current and future products and we may become involved in
    intellectual property disputes.
      Legal Proceedings
  Our
    stock price has been volatile from time to time. It declined
    precipitously during portions of 2008 through 2010, and could
    decline again.
   20




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
    operating results that vary from the expectations of securities
    analysts and investors;
    factors influencing the levels of global oil and natural gas
    exploration and exploitation activities, such as a decline in
    prices for natural gas in North America or disasters such as the
    Deepwater Horizon incident in the Gulf of Mexico in 2010;
    the operating and securities price performance of companies that
    investors or analysts consider comparable to us;
    announcements of strategic developments, acquisitions and other
    material events by us or our competitors; and
    changes in global financial markets and global economies and
    general market conditions, such as interest rates, commodity and
    equity prices and the value of financial assets.    The
    drilling moratorium in the U.S. Gulf of Mexico and the other
    regulatory initiatives undertaken in response to the Deepwater
    Horizon disaster and resulting oil spill in the U.S. Gulf of
    Mexico, has adversely affected, and could adversely affect in
    the future, our customers and our business.
     21




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If we,
    our option holders or stockholders holding registration rights
    sell additional shares of our common stock in the future, the
    market price of our common stock could decline. Additionally,
    our outstanding shares of Series D Preferred Stock are
    convertible into shares of our common stock. The conversion of
    the Series D Preferred Stock and exercise of our stock
    options could result in substantial dilution to our existing
    stockholders. Sales in the open market of the shares of common
    stock acquired upon such conversion or exercises may have the
    effect of reducing the then-current market price for our common
    stock.
    Series D-1 Series D-2
  Managements Discussion and Analysis of Financial
    Condition and Results of Operations Legal Proceedings
    A
    depressed economic and credit environment and lower natural gas
    prices could have an adverse effect on customer demand for
    certain of our products and services, which in turn would
    adversely affect our results of operations, our cash flows, our
    financial condition, our ability to borrow and our stock
    price.
   22




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If
    capital expenditures for E&P companies remain at reduced
    levels compared to prior periods, the demand for our products
    and services may remain weak and our results of operations will
    be adversely affected.
    
    the supply of and demand for oil and gas;
    the level of prices, and expectations about future prices, of
    oil and gas;
    the cost of exploring for, developing, producing and delivering
    oil and gas;
    the expected rates of declining current production;
    the discovery rates of new oil and gas reserves; 23




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
    weather conditions, including hurricanes, that can affect oil
    and gas operations over a wide area, as well as less severe
    inclement weather that can preclude or delay seismic data
    acquisition;
    domestic and worldwide economic conditions;
    political instability in oil and gas producing countries;
    technical advances affecting energy consumption;
    government policies regarding the exploration, production and
    development of oil and gas reserves;
    the ability of oil and gas producers to raise equity capital and
    debt financing; and
    merger and divestiture activity among oil and gas companies and
    seismic contractors.      We
    derive a substantial amount of our revenues from foreign
    operations and sales, which pose additional risks.
      
    disruption of oil and natural gas E&P activities;
    restriction of the movement and exchange of funds;
    inhibition of our ability to collect receivables;
    enactment of additional or stricter U.S. government or
    international sanctions;
    limitation of our access to markets for periods of time;
    expropriation and nationalization of assets of our company or
    those of our customers;
    political and economic instability, which may include armed
    conflict and civil disturbance;
    currency fluctuations, devaluations, and conversion restrictions;
    confiscatory taxation or other adverse tax policies; and
    governmental actions that may result in the deprivation of our
    contractual rights. 24




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and/or
  Our
    operating results may fluctuate from period to period, and we
    are subject to seasonality factors.
      We
    invest significant sums of money in acquiring and processing
    seismic data for our Solutions multi-client data
    library.
   25




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
    We may not fully recover our costs of acquiring and processing
    seismic data through future sales. The ultimate amounts involved
    in these data sales are uncertain and depend on a variety of
    factors, many of which are beyond our control.
    The timing of these sales is unpredictable and can vary greatly
    from period to period. The costs of each survey are capitalized
    and then amortized as a percentage of sales
    and/or over
    the expected useful life of the data. This amortization will
    affect our earnings and, when combined with the sporadic nature
    of sales, will result in increased earnings volatility.
    Regulatory changes that affect companies ability to drill,
    either generally or in a specific location where we have
    acquired seismic data, could materially adversely affect the
    value of the seismic data contained in our library. Technology
    changes could also make existing data sets obsolete.
    Additionally, each of our individual surveys has a limited book
    life based on its location and oil and gas companies
    interest in prospecting for reserves in such location, so a
    particular survey may be subject to a significant decline in
    value beyond our initial estimates.
    The value of our multi-client data could be significantly
    adversely affected if any material adverse change occurs in the
    general prospects for oil and gas exploration, development and
    production activities.
    The cost estimates upon which we base our pre-commitments of
    funding could be wrong. The result could be losses that have a
    material adverse effect on our financial condition and results
    of operations. These pre-commitments of funding are subject to
    the creditworthiness of our clients. In the event that a client
    refuses or is unable to pay its commitment, we could incur a
    substantial loss on that project.
    As part of our asset-light strategy, we routinely charter
    vessels from third-party vendors to acquire seismic data for our
    multi-client business. As a result, our cost to acquire our
    multi-client data could significantly increase if vessel charter
    prices rise materially.    Goodwill
    and intangible assets that we have recorded in connection with
    our acquisitions are subject to impairment evaluations and, as a
    result, we could be required to write-off additional goodwill
    and intangible assets, which may adversely affect our financial
    condition and results of operations.
  Goodwill and Other
    Intangible Assets
  Due to
    the international scope of our business activities, our results
    of operations may be significantly affected by currency
    fluctuations.
   26




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As a
    technology-focused company, we are continually exposed to risks
    related to complex, highly technical products and
    services.
        
    future competition from more established companies entering the
    market;
    technology obsolescence;
    dependence upon continued growth of the market for seismic data
    processing; 27




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
    the rate of change in the markets for these segments
    technology and services;
    research and development efforts not proving sufficient to keep
    up with changing market demands;
    dependence on third-party software for inclusion in these
    segments products and services;
    misappropriation of these segments technology by other
    companies;
    alleged or actual infringement of intellectual property rights
    that could result in substantial additional costs;
    difficulties inherent in forecasting sales for newly developed
    technologies or advancements in technologies;
    recruiting, training, and retaining technically skilled
    personnel that could increase the costs for these segments, or
    limit their growth; and
    the ability to maintain traditional margins for certain of their
    technology or services.  We are
    exposed to risks relating to the effectiveness of our internal
    controls.
      We
    rely on highly skilled personnel in our businesses, and if we
    are unable to retain or motivate key personnel or hire qualified
    personnel, we may not be able to grow effectively.
    If we
    do not effectively manage our transition into new products and
    services, our revenues may suffer.
   28




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Technological
    change in the seismic industry requires us to make substantial
    research and development expenditures.
    The
    loss of any significant customer could materially and adversely
    affect our results of operations and financial
    condition.
      Certain
    of our facilities could be damaged by hurricanes and other
    natural disasters, which could have an adverse effect on our
    results of operations and financial condition.
   29




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Climate
    change regulations or legislation could result in increased
    operating costs and reduced demand for the oil and gas our
    clients intend to produce.
        cap-and-trade
   30




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Increased
    regulation of hydraulic fracturing could result in reductions or
    delays in drilling and completing new oil and natural gas wells,
    which could adversely impact our revenues by decreasing the
    demand for our seismic acquisition services.
    We
    have outsourcing arrangements with third parties to manufacture
    some of our products. If these third party suppliers fail to
    deliver quality products or components at reasonable prices on a
    timely basis, we may alienate some of our customers and our
    revenues, profitability, and cash flow may decline.
    Additionally, current global economic conditions could have a
    negative impact on our suppliers, causing a disruption in our
    vendor supplies. A disruption in vendor supplies may adversely
    affect our results of operations.
        agreed-upon
 31




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Our
    operations, and the operations of our customers, are subject to
    numerous government regulations, which could adversely limit our
    operating flexibility.
    Our
    certificate of incorporation and bylaws, Delaware law, our
    stockholders rights plan, the terms of our Series D
    Preferred Stock and contractual requirements under our
    agreements with Fletcher and BGP contain provisions that could
    discourage another company from acquiring us.
    
    authorizing the issuance of blank check preferred
    stock without any need for action by stockholders;
    providing for a dividend on our common stock, commonly referred
    to as a poison pill, which can be triggered after a
    person or group acquires, obtains the right to acquire or
    commences a tender or exchange offer to acquire, 20% or more of
    our outstanding common stock;
    providing for a classified board of directors with staggered
    terms;
    requiring supermajority stockholder voting to effect certain
    amendments to our certificate of incorporation and by-laws;
    eliminating the ability of stockholders to call special meetings
    of stockholders;
    prohibiting stockholder action by written consent;
    establishing advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted on by stockholders at stockholder meetings; and
    requiring an acquiring party to assume all of our obligations
    under our agreement with Fletcher and the terms of the
    Series D Preferred Stock set forth in our certificates of
    rights and designations for those series, including the
    dividend, liquidation, conversion, voting and share registration
    provisions.   32




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Note:The foregoing factors pursuant to the
    Private Securities Litigation Reform Act of 1995 should not be
    construed as exhaustive. In addition to the foregoing, we wish
    to refer readers to other factors discussed elsewhere in this
    report as well as other filings and reports with the SEC for a
    further discussion of risks and uncertainties that could cause
    actual results to differ materially from those contained in
    forward-looking statements. We undertake no obligation to
    publicly release the result of any revisions to any such
    forward-looking statements, which may be made to reflect the
    events or circumstances after the date hereof or to reflect the
    occurrence of unanticipated events.
  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    SquareOperating Facilities

Footage


SegmentHouston, Texas


116,000


Global Headquarters and SolutionsHarahan, Louisiana


93,000


SystemsLacombe, Louisiana


87,000


SystemsStafford, Texas


41,000


SystemsJebel Ali, Dubai, United Arab Emirates


33,000


International Sales Headquarters and SystemsDenver, Colorado


29,000


SolutionsVoorschoten, The Netherlands


29,000


SystemsEdinburgh, Scotland


9,000


SoftwareCalgary, Canada


5,000


Solutions442,000   Notes to Consolidated Financial Statements.
    Item 3.
    Legal
    Proceedings  WesternGeco
  WesternGeco
    L.L.C. v. ION Geophysical Corporation
 33




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Fletcher
    65-day ION Geophysical Corporation v. Fletcher
    International, Ltd.,
  Fletcher International, Ltd. v.
    ION Geophysical Corporation, f/k/a Input/Output, Inc., ION
    International S.à r.l., James M. Lapeyre, Bruce S.
    Appelbaum, Theodore H. Elliott, Jr., Franklin Myers, S.
    James Nelson, Jr., Robert P. Peebler, John Seitz, G. Thomas
    Marsh And Nicholas G. Vlahakis,
 34




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Greatbatch
  Input/Output,
    Inc. and I/O Marine Systems, Inc. v. Wilson Greatbatch
    Technologies, Inc., Wilson Greatbatch, Ltd. d/b/a Electrochem
    Lithium Batteries, and WGL Intermediate Holdings, Inc., Civil
    Action
    No. 578-881,
    Division A, ®
  Sercel
  Input/Output, Inc. et al v. Sercel,
    Inc., (5-06-cv-00236)
 35




---



##### Table of Contents



Other
    Item 4.
    (Removed
    and Reserved) PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    Price RangePeriod

High

LowYear ended December 31, 2010:Fourth Quarter

$
8.71


$
4.71Third Quarter


5.14



3.42Second Quarter


6.35



3.48First Quarter


6.90



4.26Year ended December 31, 2009:Fourth Quarter

$
6.56


$
3.07Third Quarter


3.76



1.88Second Quarter


3.51



1.53First Quarter


4.60



0.83      36




---



##### Table of Contents



(d) Maximum Number(or ApproximateDollar(c) Total Number of

Value) of SharesShares Purchased as

That(a)

(b)

Part of Publicly

May Yet Be PurchasedTotal Number of

Average Price

Announced Plans or

Under the Plans orPeriod

Shares Acquired

Paid Per Share

Program

ProgramOctober 1, 2010 to October 31, 2010










Not applicable



Not applicableNovember 1, 2010 to November 30, 2010










Not applicable



Not applicableDecember 1, 2010 to December 31, 2010


57,262


$
7.66



Not applicable



Not applicableTotal


57,262


$
7.66   Item 6.
    Selected
    Financial Data      
    The loss on disposition of our land division in 2010 totaling
    $38.1 million;
    The equity in losses of INOVA Geophysical in 2010 totaling
    $23.7 million;
    The gain on a legal settlement in 2010 totaling
    $24.5 million;
    The fair value adjustments of the warrant in 2010 and 2009
    totaling $12.8 million and ($29.4) million,
    respectively;
    The write-off of deferred financing charges, including
    amortization of non-cash debt discounts, totaling
    $18.8 million and $6.7 million, in 2010 and 2009,
    respectively;
    The impairment of our goodwill and intangible assets in 2009 and
    2008 totaling $38.0 million and $252.3 million,
    respectively; and
    The beneficial conversion charge of $68.8 million
    associated with our outstanding convertible preferred stock for
    2008.  Managements Discussion and Analysis
    of Financial Condition and Results of Operations Form 10-K.
 37




---



##### Table of Contents



Years Ended December 31,2010


2009


2008


2007


2006(In thousands, except for per share data)Statement of Operations Data:Product revenues

$
165,202


$
237,664


$
417,511


$
537,691


$
354,258Service revenues


279,120



182,117



262,012



175,420



149,298Net revenues


444,322



419,781



679,523



713,111



503,556Cost of products


94,658



165,923



289,795



386,849



252,647Cost of services


183,931



121,720



181,980



119,679



91,592Gross profit


165,733



132,138



207,748



206,583



159,317Operating expenses:Research, development and engineering


25,227



44,855



49,541



49,965



37,853Marketing and sales


30,405



34,945



47,854



43,877



40,651General and administrative


57,254



72,510



70,893



48,847



40,865Impairment of goodwill and intangible assets






38,044



252,283







Total operating expenses


112,886



190,354



420,571



142,689



119,369Income (loss) from operations


52,847



(58,216
)


(212,823
)


63,894



39,948Interest expense, net


(30,770
)


(33,950
)


(11,284
)


(4,435
)


(3,730
)Loss on disposition of land division


(38,115
)














Fair value adjustment of warrant


12,788



(29,401
)










Equity in losses of INOVA Geophysical


(23,724
)














Gain on legal settlement


24,500















Impairment of cost method investments


(7,650
)


(4,454
)










Other income (expense)


228



(4,023
)


4,200



(3,992
)


(2,161
)Income (loss) before income taxes and change in accounting
    principle


(9,896
)


(130,044
)


(219,907
)


55,467



34,057Income tax expense (benefit)


26,942



(19,985
)


1,131



12,823



5,114Net income (loss) before change in accounting principle


(36,838
)


(110,059
)


(221,038
)


42,644



28,943Cumulative effect of change in accounting principle


















398Net income (loss)


(36,838
)


(110,059
)


(221,038
)


42,644



29,341Preferred stock dividends and accretion


1,936



3,500



3,889



2,388



2,429Preferred stock beneficial conversion charge










68,786







Net income (loss) applicable to common shares

$
(38,774
)

$
(113,559
)

$
(293,713
)

$
40,256


$
26,912Net income (loss) per basic share before change in accounting
    principle

$
(0.27
)

$
(1.03
)

$
(3.06
)

$
0.49


$
0.33Cumulative effect of change in accounting principle


















0.01Net income (loss) per basic share

$
(0.27
)

$
(1.03
)

$
(3.06
)

$
0.49


$
0.34Net income (loss) per diluted share before change in accounting
    principle

$
(0.27
)

$
(1.03
)

$
(3.06
)

$
0.45


$
0.32Cumulative effect of change in accounting principle


















0.01Net income (loss) per diluted share

$
(0.27
)

$
(1.03
)

$
(3.06
)

$
0.45


$
0.33Weighted average number of common shares outstanding


144,278



110,516



95,887



81,941



79,497Weighted average number of diluted shares outstanding


144,278



110,516



95,887



97,321



95,182 38




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##### Table of Contents



Years Ended December 31,2010


2009


2008


2007


2006(In thousands, except for per share data)Balance Sheet Data (end of year):Working capital(1)

$
179,266


$
(59,018
)

$
267,155


$
220,522


$
170,342Total assets


624,442



748,186



861,431



709,149



655,136Notes payable and long-term debt


108,660



277,381



291,909



24,713



77,540Stockholders equity


380,447



282,468



325,070



476,240



369,668Other Data:Capital expenditures

$
7,372


$
2,966


$
17,539


$
11,375


$
13,704Investment in multi-client library


64,426



89,635



110,362



64,279



39,087Depreciation and amortization (other than multi-client library)


24,795



47,911



33,052



26,767



22,036Amortization of multi-client library


85,940



48,449



80,532



37,662



25,011     (1)
    
    The negative working capital amount shown above as of
    December 31, 2009 was the result of the re-classification
    of the majority of our then outstanding long-term debt as
    current and as a result of the fair value of a warrant
    associated with our prior bridge financing arrangements.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Note: The following should be read in conjunction with our
    Consolidated Financial Statements and related Notes to
    Consolidated Financial Statements that appear elsewhere in this
    Annual Report on
    Form 10-K.
    References to Notes in the discussion below refer to
    the numbered Notes to Consolidated Financial Statements.
  Executive
    Summary
  Our
    Business
        
    Land seismic data acquisition equipment (principally through our
    49% ownership in INOVA Geophysical),
    Marine seismic data acquisition equipment,
    Navigation, command & control and data management
    software products,
    Planning services for survey design and optimization,
    Seismic data processing and reservoir imaging services, and
    Seismic data libraries. 39




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##### Table of Contents




    Systems  towed streamer and redeployable ocean bottom
    cable seismic data acquisition systems and shipboard recorders,
    streamer positioning and control systems and energy sources
    (such as air guns and air gun controllers) and analog geophone
    sensors.
    Software  software systems and related services for
    navigation and data management involving towed marine streamer
    and seabed operations.
    Solutions  advanced seismic data processing services
    for marine and land environments, seismic data libraries, and
    Integrated Seismic Solutions (ISS) services.
    INOVA Geophysical  cable-based, cableless and
    radio-controlled seismic data acquisition systems, digital
    sensors, vibroseis vehicles (i.e. vibrator trucks) and source
    controllers for detonator and energy sources business lines.  Economic
    Conditions
     40




---



##### Table of Contents



tm ® ®
     41




---



##### Table of Contents



Key
    Financial Metrics
    Years Ended December 31,2010


2009


2008Net revenues:Systems:Towed Streamer

$
83,567


$
83,398


$
123,785Ocean Bottom


1,876



4,948



42,483Other


28,783



39,943



72,657Total

$
114,226


$
128,289


$
238,925Software:Software Systems

$
34,465


$
31,601


$
34,308Services


2,166



2,132



2,932Total

$
36,631


$
33,733


$
37,240Solutions:Data Processing

$
107,997


$
82,330


$
59,550New Venture


81,293



71,135



116,706Data Library


87,664



26,520



82,824Total

$
276,954


$
179,985


$
259,080Legacy Land Systems (INOVA)

$
16,511


$
77,774


$
144,278Total

$
444,322


$
419,781


$
679,523Gross profit:Systems

$
48,557


$
52,934


$
90,795Software


24,356



21,998



24,656Solutions


93,804



59,844



78,245Legacy Land Systems (INOVA)


(984
)


(2,638
)


14,048Total

$
165,733


$
132,138


$
207,744Gross margin:Systems


43
%


41
%


38
%Software


66
%


65
%


66
%Solutions


34
%


33
%


30
%Legacy Land Systems (INOVA)


(6
)%


(3
)%


10
%Total


37
%


31
%


31
%Income (loss) from operations:Systems

$
27,749


$
31,209


$
62,157Software


21,936



19,970



22,298Solutions


60,632



27,746



40,534Legacy Land Systems (INOVA)


(9,623
)


(40,881
)


(23,430
)Corporate and other


(47,847
)


(58,216
)


(62,099
)Impairment of goodwill and intangible assets






(38,044
)


(252,283
)Total

$
52,847


$
(58,216
)

$
(212,823
)Net income (loss) applicable to common shares

$
(38,774
)

$
(113,559
)

$
(293,713
)Basic net income (loss) per common share

$
(0.27
)

$
(1.03
)

$
(3.06
)Diluted net income per (loss) common share

$
(0.27
)

$
(1.03
)

$
(3.06
)  42




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##### Table of Contents



Form 10-K.
    Form 10-K Form 10-K/A Regulation S-X.
  Risk Factors
  Results
    of Operations
  Year
    Ended December 31, 2010 Compared to Year Ended
    December 31, 2009
  Year Ended


Year EndedDecember 31, 2010


December 31, 2009As Reported


As Adjusted*


As Reported


As Adjusted*(In thousands)Net revenues

$
444,322


$
427,811


$
419,781


$
342,007Cost of sales


278,589



261,094



287,643



207,231Gross profit


165,733



166,717



132,138



134,776Gross margin


37
%


39
%


31
%


39
%Operating expenses:Research, development and engineering


25,227



21,046



44,855



23,496Marketing and sales


30,405



28,846



34,945



29,363General and administrative


57,254



54,355



72,510



61,208Impairment of intangible assets










38,044



Total operating expenses


112,886



104,247



190,354



114,067Income (loss) from operations

$
52,847


$
62,470


$
(58,216
)

$
20,709     *
    
    Excluding Legacy Land Systems (INOVA).    Net
    Revenues, Gross Profits and Gross Margins (excluding Legacy Land
    Systems)
  Systems
 43




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##### Table of Contents



Software
  Solutions
  Operating
    Expenses (excluding Legacy Land Systems)
  Research, Development and Engineering
  Marketing and Sales
  General and Administrative out-of-period
  Non-operating
    Items
  Interest Expense, net
 44




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##### Table of Contents



Liquidity and Capital Resources 
    Sources of Capital
  Loss on Disposition of Land Division Formation of INOVA Geophysical and Related
    Financing Transactions.
  Fair Value Adjustment of Warrant Formation of INOVA
    Geophysical and Related Financing Transactions.
  Equity in Losses of INOVA Geophysical
  Gain on Legal Settlement  Legal Matters.
  Impairment of Cost Method Investments other-than-temporary  Cost Method Investments.
  Other Income (Expense)
  Income Tax Expense (Benefit)
 45




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##### Table of Contents



Preferred Stock Dividends December 31, 2010.
  Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  Year Ended


Year EndedDecember 31, 2009


December 31, 2008As Reported


As Adjusted*


As Reported


As Adjusted*(In thousands)Net revenues

$
419,781


$
342,007


$
679,523


$
535,245Cost of sales


287,643



207,231



471,775



341,545Gross profit


132,138



134,776



207,748



193,700Gross margin


31
%


39
%


31
%


36
%Operating expenses:Research, development and engineering


44,855



23,496



49,541



25,498Marketing and sales


34,945



29,363



47,854



41,961General and administrative


72,510



61,208



70,893



63,351Impairment of goodwill and intangible assets


38,044







252,283



86,910Total operating expenses


190,354



114,067



420,571



217,720Income (loss) from operations

$
(58,216
)

$
20,709


$
(212,823
)

$
(24,020
)     *
    
    Excluding Legacy Land Systems (INOVA).    Net
    Revenues, Gross Profits and Gross Margins (excluding Legacy Land
    Systems)
  Systems
 46




---



##### Table of Contents



Software
  Solutions
  Operating
    Expenses (excluding Legacy Land Systems)
  Research, Development and Engineering
  Marketing and Sales
  General and Administrative out-of-period
  Impairment of Goodwill and Intangible Assets
 47




---



##### Table of Contents



Non-operating
    Items
  Interest Expense, net
  Fair Value Adjustment of Warrant Formation of INOVA
    Geophysical and Related Financing Transactions.
  Impairment of Cost Method Investment
  Other Income (Expense)
  Income Tax (Benefit) Expense
  Preferred Stock Dividends
  Liquidity
    and Capital Resources
  Sources
    of Capital
  Revolving
    Line of Credit and Term Loan Facility
 48




---



##### Table of Contents




    A revolving line of credit
    sub-facility
    providing for borrowings of up to $100.0 million (no
    borrowings were outstanding as of that date); and
    A $103.3 million remaining principal amount of a term loan
    sub-facility.  Revolving Line of Credit and Term Loan
    Facility
      sub-limit
      
    An alternate base rate equal to the sum of (i) the greatest
    of (a) the prime rate of CMB, (b) a federal funds
    effective rate plus 0.50%, or (c) an adjusted LIBOR-based
    rate plus 1.0%, and (ii) an applicable interest margin of
    2.5%; or
    For eurodollar borrowings and borrowings in Euros, Pounds
    Sterling or Canadian Dollars, the sum of (i) an adjusted
    LIBOR-based rate, and (ii) an applicable interest margin of
    3.5%.     49




---



##### Table of Contents




    Incurring additional indebtedness (including capital lease
    obligations), granting or incurring additional liens on our
    properties, pledging shares of our subsidiaries, entering into
    certain merger or other
    change-in-control
    transactions, entering into transactions with our affiliates,
    making certain sales or other dispositions of assets, making
    certain investments, acquiring other businesses and entering
    into sale-leaseback transactions with respect to our properties;
    Paying cash dividends on our common stock; and
    Repurchasing and acquiring our capital stock, unless there is no
    event of default under the Credit Agreement and the amount of
    such repurchases does not exceed an amount equal to (i) 25%
    of our consolidated net income for the prior fiscal year, less
    (ii) the amount of any cash dividends paid on our common
    stock.    
    Maintain a minimum fixed charge coverage ratio in an amount
    equal to at least 1.125 to 1;
    Not exceed a maximum leverage ratio of 3.25 to 1; and
    Maintain a minimum tangible net worth of at least 60% of
    IONs tangible net worth as of March 31, 2010, as
    defined.      Interest Rate Caps
 50




---



##### Table of Contents



 Notes Payable, Long-term Debt, Lease
    Obligations and Interest Rate Caps.
  Cumulative Convertible Preferred Stock Series D-1 Series D-2 Series D-3
  20-day 20-day
  65-day
 51




---



##### Table of Contents



Series D-1 Series D-3 Series D-1 Series D-2
  Legal Proceedings Risk Factors
  Meeting
    our Liquidity Requirements
      Cash
    Flow from Operations
     52




---



##### Table of Contents



Cash
    Flow from Investing Activities
      Cash
    Flow from Financing Activities
    Series D-1, Series D-2 Series D-3
  Inflation
    and Seasonality
   53




---



##### Table of Contents



Future
    Contractual Obligations
    Contractual Obligations

Total


Less than 1 Year


1-3 Years


3-5 Years


More than 5 YearsNotes payable and long-term debt

$
106,907


$
4,610


$
9,546


$
92,751


$
Interest on notes payable and long-term debt obligations


16,395



4,264



7,829



4,302



Equipment capital lease obligations


1,753



1,463



290







Operating leases


31,954



15,416



13,103



2,373



1,062Product warranty


784



784











Purchase obligations


22,032



21,542



490







Total

$
179,825


$
48,079


$
31,258


$
99,426


$
1,062        Liquidity and Capital Resources
  Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
  off-the-shelf
  Acquisition Systems and Other Seismic
    Equipment ASC 605-10 Revenue Recognition
 54




---



##### Table of Contents



Multi-Client Surveys, Data Libraries and Imaging
    Services and/or off-the-shelf
    Software ASC 985-605 Software Revenue Recognition.
    Multi-element Arrangements and/or ASC 605-25 Accounting for Multiple-Element Revenue
    Arrangement 605-25). ASC 605-25 2009-13, Revenue Arrangements with Multiple
    Deliverables ASC 985-605.
   55




---



##### Table of Contents



2009-14, Certain Arrangements That Include Software
    Elements
  Multi-Client
    Data Library
    and/or off-the-shelf
   56




---



##### Table of Contents



Accounting for the
    Impairment and Disposal of Long-Lived Assets
  Equity
    Method Investment
  Investments
  Reserve
    for Excess and Obsolete Inventories
    Goodwill
    and Other Intangible Assets
  Intangibles  Goodwill and Other
     57




---



##### Table of Contents



Stock-Based
    Compensation
  Share-Based Payment
      Recent
    Accounting Pronouncements
  Notes to Consolidated Financial
    Statements
  Credit
    and Sales Risks
   58




---



##### Table of Contents



Certain
    Relationships and Related Party Transactions
           59




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Indemnification
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk    Interest
    Rate Risk
    out-of-the-money.
 60




---



##### Table of Contents



Foreign
    Currency Exchange Rate Risk
      Item 8.
    Financial
    Statements and Supplementary Data  page F-1
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (a) Evaluation of Disclosure Controls and
    Procedures.
  Rule 13a-15(e)
  (b) Managements Report on Internal Control Over
    Financial Reporting. Rules 13a-15(f)
   61




---



##### Table of Contents



Internal Control  Integrated Framework
  Form 10-K
  (c) Changes in Internal Control over Financial
    Reporting.
 62




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  The Board of
    Directors and Stockholders of ION Geophysical Corporation and
    Subsidiaries
                  63




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Item 1 Election of Directors,
  Item 11.
    Executive
    Compensation  Executive Compensation,
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Item 1  Ownership of
    Equity Securities of ION Equity
    Compensation Plan Information,
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Item 1  Certain
    Transactions and Relationships,
  Item 14.
    Principal
    Accountant Fees and Services  Principal Auditor Fees and
    Services,
 PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  List of Documents Filed
  Financial Statements
  page F-1
  Financial Statement Schedules
  page F-1 Form 10-K:
   64




---



##### Table of Contents



(3)
    Exhibits  3
.1



Restated Certificate of Incorporation dated September 24,
    2007 filed on September 24, 2007 as Exhibit 3.4 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.3
.2



Amended and Restated Bylaws of ION Geophysical Corporation filed
    on September 24, 2007 as Exhibit 3.5 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.3
.3



Certificate of Ownership and Merger merging ION Geophysical
    Corporation with and into Input/Output, Inc. dated
    September 21, 2007, filed on September 24, 2007 as
    Exhibit 3.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.1



Certificate of Rights and Designations of
    Series D-1
    Cumulative Convertible Preferred Stock, dated February 16,
    2005 and filed on February 17, 2005 as Exhibit 3.1 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.2



Certificate of Elimination of Series B Preferred Stock
    dated September 24, 2007, filed on September 24, 2007
    as Exhibit 3.2 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.3



Certificate of Elimination of Series C Preferred Stock
    dated September 24, 2007, filed on September 24, 2007
    as Exhibit 3.3 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.4



Certificate of Designation of
    Series D-2
    Cumulative Convertible Preferred Stock dated December 6,
    2007, filed on December 6, 2007 as Exhibit 3.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.5



Certificate of Designations of Series A Junior
    Participating Preferred Stock of ION Geophysical Corporation
    effective as of December 31, 2008, filed on January 5,
    2009 as Exhibit 3.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.6



Form of Senior Indenture, filed on December 19, 2008 as
    Exhibit 4.3 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.7



Form of Senior Note, filed on December 19, 2008 as
    Exhibit 4.4 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.8



Form of Subordinated Indenture, filed on December 19, 2008
    as Exhibit 4.5 to the Companys Registration Statement
    on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.9



Form of Subordinated Note, filed on December 19, 2008 as
    Exhibit 4.6 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.**10
.1



Amended and Restated 1990 Stock Option Plan, filed on
    June 9, 1999 as Exhibit 4.2 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-80299),
    and incorporated herein by reference.10
.2



Office and Industrial/Commercial Lease dated June 2005 by and
    between Stafford Office Park II, LP as Landlord and
    Input/Output, Inc. as Tenant, filed on March 31, 2006 as
    Exhibit 10.2 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, and incorporated
    herein by reference.10
.3



Office and Industrial/Commercial Lease dated June 2005 by and
    between Stafford Office Park District as Landlord and
    Input/Output, Inc. as Tenant, filed on March 31, 2006 as
    Exhibit 10.3 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, and incorporated
    herein by reference.**10
.4



Input/Output, Inc. Amended and Restated 1996 Non-Employee
    Director Stock Option Plan, filed on June 9, 1999 as
    Exhibit 4.3 to the Companys Registration Statement on
    Form S-8
    (Registration
    No. 333-80299),
    and incorporated herein by reference. 65




---



##### Table of Contents



**10
.5



Amendment No. 1 to the Input/Output, Inc. Amended and
    Restated 1996 Non-Employee Director Stock Option Plan dated
    September 13, 1999 filed on November 14, 1999 as
    Exhibit 10.4 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 1999 and
    incorporated herein by reference.**10
.6



Employment Agreement dated effective as of May 22, 2006
    between Input/Output, Inc. and R. Brian Hanson, filed on
    May 1, 2006 as Exhibit 10.1 to the Companys
    Form 8-K,
    and incorporated herein by reference.**10
.7



First Amendment to Employment Agreement dated as of
    August 20, 2007 between Input/Output, Inc. and R. Brian
    Hanson, filed on August 21, 2007 as Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.8



Second Amendment to Employment Agreement, dated as of
    December 1, 2008, between ION Geophysical Corporation and
    R. Brian Hanson, filed on January 29, 2009 as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.9



Input/Output, Inc. Employee Stock Purchase Plan, filed on
    March 28, 1997 as Exhibit 4.4 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-24125),
    and incorporated herein by reference.**10
.10



Fifth Amended and Restated  2004 Long-Term Incentive
    Plan, filed as Appendix A to the definitive proxy statement
    for the 2010 Annual Meeting of Stockholders of ION Geophysical
    Corporation, filed on April 21, 2010, and incorporated
    herein by reference.10
.11



Registration Rights Agreement dated as of November 16,
    1998, by and among the Company and The Laitram Corporation,
    filed on March 12, 2004 as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003, and incorporated
    herein by reference.**10
.12



Input/Output, Inc. 1998 Restricted Stock Plan dated as of
    June 1, 1998, filed on June 9, 1999 as
    Exhibit 4.7 to the Companys Registration Statement on
    S-8
    (Registration
    No. 333-80297),
    and incorporated herein by reference.**10
.13



Input/Output Inc. Non-qualified Deferred Compensation Plan,
    filed on April 1, 2002 as Exhibit 10.14 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001, and incorporated
    herein by reference.**10
.14



Input/Output, Inc. 2000 Restricted Stock Plan, effective as of
    March 13, 2000, filed on August 17, 2000 as
    Exhibit 10.27 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended May 31, 2000, and incorporated
    herein by reference.**10
.15



Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on
    November 6, 2000 as Exhibit 4.7 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-49382),
    and incorporated by reference herein.**10
.16



Employment Agreement dated effective as of March 31, 2003,
    by and between the Company and Robert P. Peebler, filed on
    March 31, 2003 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.17



First Amendment to Employment Agreement dated September 6,
    2006, between Input/Output, Inc. and Robert P. Peebler, filed on
    September 7, 2006, as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.18



Second Amendment to Employment Agreement dated February 16,
    2007, between Input/Output, Inc. and Robert P. Peebler, filed on
    February 16, 2007 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.19



Third Amendment to Employment Agreement dated as of
    August 20, 2007 between Input/Output, Inc. and Robert P.
    Peebler, filed on August 21, 2007 as Exhibit 10.2 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.20



Fourth Amendment to Employment Agreement, dated as of
    January 26, 2009, between ION Geophysical Corporation and
    Robert P. Peebler, filed on January 29, 2009 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.21



Employment Agreement dated effective as of June 15, 2004,
    by and between the Company and David L. Roland, filed on
    August 9, 2004 as Exhibit 10.5 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004, and
    incorporated herein by reference. 66




---



##### Table of Contents



**10
.22



Employment Agreement, dated as of December 1, 2008, between
    ION Geophysical Corporation and James R. Hollis, filed on
    January 29, 2009 as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.23



GX Technology Corporation Employee Stock Option Plan, filed on
    August 9, 2004 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004, and
    incorporated herein by reference.10
.24



Concept Systems Holdings Limited Share Acquisition Agreement
    dated February 23, 2004, filed on March 5, 2004 as
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.25



Registration Rights Agreement by and between ION Geophysical
    Corporation and 1236929 Alberta Ltd. dated September 18,
    2008, filed on November 7, 2008 as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q
    and incorporated herein by reference.**10
.26



Form of Employment Inducement Stock Option Agreement for the
    Input/Output, Inc.  Concept Systems Employment
    Inducement Stock Option Program, filed on July 27, 2004 as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8
    (Reg.
    No. 333-117716),
    and incorporated herein by reference.**10
.27



Form of Employee Stock Option Award Agreement for ARAM Systems
    Employee Inducement Stock Option Program, filed on
    November 14, 2008 as Exhibit 4.4 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-155378)
    and incorporated herein by reference.10
.28



Agreement dated as of February 15, 2005, between
    Input/Output, Inc. and Fletcher International, Ltd., filed on
    February 17, 2005 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.29



First Amendment to Agreement, dated as of May 6, 2005,
    between the Company and Fletcher International, Ltd., filed on
    May 10, 2005 as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.30



Input/Output, Inc. 2003 Stock Option Plan, dated March 27,
    2003, filed as Appendix B of the Companys definitive
    proxy statement filed with the SEC on April 30, 2003, and
    incorporated herein by reference.10
.31



Amended and Restated Credit Agreement dated as of July 3,
    2008, by and among ION Geophysical Corporation, ION
    International S.À R.L., HSBC Bank USA, N.A., as
    administrative agent, joint lead arranger and joint bookrunner,
    ABN AMRO Incorporated, as joint lead arranger and joint
    bookrunner, and CitiBank, N.A., as syndication agent, filed on
    July 8, 2008 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.32



First Amendment to Amended and Restated Credit Agreement and
    Domestic Security Agreement, dated as of September 17,
    2008, by and among ION Geophysical Corporation, ION
    International S.À R.L., HSBC Bank USA, N.A., as
    administrative agent, joint lead arranger and joint bookrunner,
    ABN AMRO Incorporated, as joint lead arranger and joint
    bookrunner, and CitiBank, N.A., as syndication agent, filed on
    September 23, 2008 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.33



Third Amendment to Amended and Restated Credit Agreement dated
    as of December 29, 2008, by and among ION Geophysical
    Corporation, ION International S.À R.L., the Guarantors and
    Lenders party thereto and HSBC Bank USA, N.A., as administrative
    agent, filed on January 5, 2009 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.34



Fourth Amendment to Amended and Restated Credit Agreement and
    Foreign Security Agreement, Limited Waiver and Release dated as
    of December 30, 2008, by and among ION Geophysical
    Corporation, ION International S.À R.L., the Guarantors and
    Lenders party thereto and HSBC Bank USA, N.A., as administrative
    agent, filed on January 5, 2009 as Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference. 67




---



##### Table of Contents



10
.35



Fifth Amendment to Amended and Restated Credit Agreement dated
    effective as of June 1, 2009 by and among ION Geophysical
    Corporation, ION International S.à r.l., certain other
    foreign and domestic subsidiaries of the ION Geophysical
    Corporation, HSBC Bank USA, N.A., as administrative agent, joint
    lead arranger and joint bookrunner, ABN AMRO Incorporated, as
    joint lead arranger and joint bookrunner, Citibank, N.A., as
    syndication agent, and the lenders party thereto, filed on
    August 6, 2009 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.36



Sixth Amendment and Waiver to Amended and Restated Credit
    Agreement dated effective as of October 23, 2009 by and
    among ION Geophysical Corporation, ION International S.À
    R.L., the Guarantors and Lenders party thereto and HSBC Bank
    USA, N.A., as administrative agent filed on March 1, 2010
    as Exhibit 10.36 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.**10
.37



Form of Employment Inducement Stock Option Agreement for the
    Input/Output, Inc.  GX Technology Corporation
    Employment Inducement Stock Option Program, filed on
    April 4, 2005 as Exhibit 4.1 to the Companys
    Registration Statement on
    Form S-8
    (Reg.
    No. 333-123831),
    and incorporated herein by reference.**10
.38



First Amendment to Consulting Services Agreement dated as of
    January 5, 2007, by and between GX Technology Corporation
    and Michael K. Lambert, filed on January 8, 2007 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.39



Letter agreement dated October 19, 2006, by and between the
    Company and Michael K. Lambert, filed on October 24, 2006
    as Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.40



Severance Agreement dated as of December 1, 2008, between
    ION Geophysical Corporation and Charles J. Ledet, filed on
    December 5, 2008 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.41



Consulting Agreement dated as of December 1, 2008, between
    ION Geophysical Corporation and Charles J. Ledet, filed on
    December 5, 2008 as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.42



Rights Agreement, dated as of December 30, 2008, between
    ION Geophysical Corporation and Computershare
    Trust Company, N.A., as Rights Agent, filed as
    Exhibit 4.1 to the Companys
    Form 8-A
    (Registration
    No. 001-12691)
    and incorporated herein by reference.**10
.43



ION Stock Appreciation Rights Plan dated November 17, 2008,
    filed as Exhibit 10.47 to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2008, and incorporated
    herein by reference.10
.44



Canadian Master Loan and Security Agreement dated as of
    June 29, 2009 by and among ICON ION, LLC, as lender, ION
    Geophysical Corporation and ARAM Rentals Corporation, a Nova
    Scotia corporation, filed on August 6, 2009 as
    Exhibit 10.3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.45



Master Loan and Security Agreement (U.S.) dated as of
    June 29, 2009 by and among ICON ION, LLC, as lender, ION
    Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas
    corporation, filed on August 6, 2009 as Exhibit 10.4
    to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.46



Term Sheet dated as of October 23, 2009 by and between ION
    Geophysical Corporation and BGP Inc., China National Petroleum
    Corporation filed on March 1, 2010 as Exhibit 10.52 to
    the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.10
.47



Warrant Issuance Agreement dated as of October 23, 2009 by
    and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation filed on March 1, 2010 as
    Exhibit 10.53 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.10
.48



Registration Rights Agreement dated as of October 23, 2009
    by and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation filed on March 1, 2010 as
    Exhibit 10.54 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference. 68




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##### Table of Contents



10
.49



Stock Purchase Agreement dated as of March 19, 2010, by and
    between ION Geophysical Corporation and BGP Inc., China National
    Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.50



Investor Rights Agreement dated as of March 25, 2010, by
    and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.51



Share Purchase Agreement dated as of March 24, 2010, by and
    among ION Geophysical Corporation, INOVA Geophysical Equipment
    Limited and BGP Inc., China National Petroleum Corporation,
    filed on March 31, 2010 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.52



Joint Venture Agreement dated as of March 24, 2010, by and
    between ION Geophysical Corporation and BGP Inc., China National
    Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.4 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.53



Credit Agreement dated as of March 25, 2010, by and among
    ION Geophysical Corporation, ION International S.À R.L. and
    China Merchants Bank Co., Ltd., New York Branch, as
    administrative agent and lender, filed on March 31, 2010 as
    Exhibit 10.5 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.54



Fifth Amendment to Employment Agreement dated June 1, 2010,
    between ION Geophysical Corporation and Robert P. Peebler, filed
    on June 1, 2010 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference.*21
.1



Subsidiaries of the Company.*23
.1



Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.*24
.1



The Power of Attorney is set forth on the signature page hereof.*31
.1



Certification of Chief Executive Officer Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).*31
.2



Certification of Chief Financial Officer Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).*32
.1



Certification of Chief Executive Officer Pursuant to
    18 U.S.C. §1350.*32
.2



Certification of Chief Financial Officer Pursuant to
    18 U.S.C. §1350.     *
    
    Filed herewith.**
    
    Management contract or compensatory plan or arrangement.  (b)
    
    Exhibits required by Item 601 of
    Regulation S-K.Reference is made to subparagraph (a) (3) of this
    Item 15, which is incorporated herein by reference.(c)
    
    Not applicable. 69




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##### Table of Contents



SIGNATURES      By
    /s/  R.
    Brian Hanson   Executive Vice President and Chief Financial Officer
  POWER OF
    ATTORNEY
  Form 10-K
  Form 10-K
  Name

Capacities

Date/s/  ROBERT
    P. PEEBLERRobert
    P. Peebler

Chief Executive Officer and Director (Principal Executive
    Officer)

February 24, 2011/s/  R.
    BRIAN HANSONR.
    Brian Hanson

Executive Vice President and Chief Financial Officer (Principal
    Financial Officer)

February 24, 2011/s/  MICHAEL
    L. MORRISONMichael
    L. Morrison

Vice President and Corporate Controller (Principal Accounting
    Officer)

February 24, 2011/s/  JAMES
    M. LAPEYRE, JR.James
    M. Lapeyre, Jr.

Chairman of the Board of Directors and Director

February 24, 2011/s/  DAVID
    H. BARRDavid
    H. Barr

Director

February 24, 2011 70




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##### Table of Contents



Name

Capacities

Date/s/  HAO
    HUIMINHao
    Huimin

Director

February 24, 2011/s/  MICHAEL
    C. JENNINGSMichael
    C. Jennings

Director

February 24, 2011/s/  FRANKLIN
    MYERSFranklin
    Myers

Director

February 24, 2011/s/  S.
    JAMES NELSON, JR.S.
    James Nelson, Jr.

Director

February 24, 2011/s/  JOHN
    N. SEITZJohn
    N. Seitz

Director

February 24, 2011  71




---



##### 



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIESINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
   
 PageION Geophysical Corporation and Subsidiaries:Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets 
    December 31, 2010 and 2009


F-3Consolidated Statements of Operations 
    Years ended December 31, 2010, 2009, and 2008


F-4Consolidated Statements of Cash Flows 
    Years ended December 31, 2010, 2009, and 2008


F-5Consolidated Statements of Stockholders
    Equity and Comprehensive Income (Loss)  Years ended
    December 2010, 2009, and 2008


F-6Notes to Consolidated Financial Statements


F-7Schedule II  Valuation and
    Qualifying Accounts


S-1     F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                F-2




---



##### Table of Contents



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS  December 31,2010


2009(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
84,419


$
16,217Accounts receivable, net


77,576



111,046Unbilled receivables


70,590



21,655Current portion notes receivable, net






13,367Inventories


66,882



202,601Deferred income tax asset






6,001Prepaid expenses and other current assets


13,165



24,614Total current assets


312,632



395,501Deferred income tax asset


8,998



26,422Property, plant and equipment, net


20,145



78,555Multi-client data library, net


112,620



130,705Investment in INOVA Geophysical


95,173



Goodwill


51,333



52,052Intangible assets, net


20,317



61,766Other assets


3,224



3,185Total assets

$
624,442


$
748,186LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Notes payable and current maturities of long-term debt

$
6,073


$
271,132Accounts payable


30,940



40,189Accrued expenses


54,799



65,893Accrued multi-client data library royalties


18,667



18,714Fair value of warrant






44,789Deferred revenue


22,887



13,802Total current liabilities


133,366



454,519Long-term debt, net of current maturities


102,587



6,249Non-current deferred income tax liability


688



1,262Other long-term liabilities


7,354



3,688Total liabilities


243,995



465,718Commitments and contingenciesStockholders equity:Cumulative convertible preferred stock


27,000



68,786Common stock, $0.01 par value; authorized
    200,000,000 shares; outstanding 152,870,679 and
    118,688,702 shares at December 31, 2010 and 2009,
    respectively, net of treasury stock


1,529



1,187Additional paid-in capital


822,399



666,928Accumulated deficit


(448,386
)


(411,548
)Accumulated other comprehensive income (loss)


(15,530
)


(36,320
)Treasury stock, at cost, 849,539 shares at both
    December 31, 2010 and 2009


(6,565
)


(6,565
)Total stockholders equity


380,447



282,468Total liabilities and stockholders equity

$
624,442


$
748,186    F-3




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##### Table of Contents



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS  Years Ended December 31,2010


2009


2008(In thousands, except per share data)Product revenues

$
165,202


$
237,664


$
417,511Service revenues


279,120



182,117



262,012Total net revenues


444,322



419,781



679,523Cost of products


94,658



165,923



289,795Cost of services


183,931



121,720



181,980Gross profit


165,733



132,138



207,748Operating expenses:Research, development and engineering


25,227



44,855



49,541Marketing and sales


30,405



34,945



47,854General and administrative


57,254



72,510



70,893Impairment of goodwill and intangible assets






38,044



252,283Total operating expenses


112,886



190,354



420,571Income (loss) from operations


52,847



(58,216
)


(212,823
)Interest expense, net, including an $18.8 million write-off
    of debt discount and debt issuance costs in 2010


(30,770
)


(33,950
)


(11,284
)Loss on disposition of land division


(38,115
)






Fair value adjustment of warrant


12,788



(29,401
)


Equity in losses of INOVA Geophysical


(23,724
)






Gain on legal settlement


24,500







Impairment of cost method investments


(7,650
)


(4,454
)


Other income (expense)


228



(4,023
)


4,200Income (loss) before income taxes


(9,896
)


(130,044
)


(219,907
)Income tax expense (benefit)


26,942



(19,985
)


1,131Net loss


(36,838
)


(110,059
)


(221,038
)Preferred stock dividends


1,936



3,500



3,889Preferred stock beneficial conversion charge










68,786Net loss applicable to common shares

$
(38,774
)

$
(113,559
)

$
(293,713
)Net loss per share:Basic

$
(0.27
)

$
(1.03
)

$
(3.06
)Diluted

$
(0.27
)

$
(1.03
)

$
(3.06
)Weighted average number of common shares outstanding:Basic


144,278



110,516



95,887Diluted


144,278



110,516



95,887    F-4




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##### Table of Contents



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS  Years Ended December 312010


2009


2008(In thousands)Cash flows from operating activities:Net loss

$
(36,838
)

$
(110,059
)

$
(221,038
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Depreciation and amortization (other than multi-client library)


24,795



47,911



33,052Amortization of multi-client data library


85,940



48,449



80,532Stock-based compensation expense related to stock options,
    nonvested stock, and employee stock purchases


8,147



12,671



8,306Bad debt expense


1,689



3,528



4,852Amortization of debt discount


8,656



6,732



816Write-off of unamortized debt issuance costs


10,121







Fair value adjustment of warrant


(12,788
)


29,401



Loss on disposition of land division


38,115







Equity in losses of INOVA Geophysical


23,724







Impairment of goodwill and intangible assets






38,044



252,283Impairment of cost method investments


7,650



4,454



Deferred income tax


22,207



(38,150
)


(17,549
)Profit on sale of rental assets






(524
)


(3,190
)Change in operating assets and liabilities:Accounts and notes receivable


7,826



41,936



37,673Unbilled receivables


(48,935
)


14,817



(14,084
)Inventories


(16,138
)


18,582



(89,998
)Accounts payable, accrued expenses and accrued royalties


9,550



(72,140
)


46,160Deferred revenue


7,281



(4,188
)


(6,088
)Other assets and liabilities


(7,634
)


10,522



(12
)Net cash provided by operating activities


133,368



51,986



111,715Cash flows from investing activities:Purchase of property, plant and equipment


(7,372
)


(2,966
)


(17,539
)Investment in multi-client data library


(64,426
)


(89,635
)


(110,362
)Proceeds from disposition of land division, net of fees paid


99,790







Business acquisition, net of cash of acquired business










(232,158
)Proceeds from the sale of fixed assets and rental equipment






1,972



5,434Other investing activities


(500
)


(1,009
)


Net cash provided by (used in) investing activities


27,492



(91,638
)


(354,625
)Cash flows from financing activities:Borrowings under revolving line of credit


104,000



77,000



235,000Repayments under revolving line of credit


(193,429
)


(25,000
)


(169,000
)Net proceeds from issuance of debt


105,695



19,218



160,308Net proceeds from issuance of stock


38,039



38,220



Payments on notes payable and long-term debt


(145,558
)


(81,517
)


(18,082
)Costs associated with debt amendments






(4,630
)


Issuance of preferred stock










35,000Payment of preferred dividends


(1,936
)


(3,500
)


(3,889
)Proceeds from employee stock purchases and exercise of stock
    options


1,071



283



6,284Restricted stock cancelled for employee minimum income taxes


(612
)


(345
)


(1,660
)Other financing activities










328Net cash (used in) provided by financing activities


(92,730
)


19,729



244,289Effect of change in foreign currency exchange rates on cash and
    cash equivalents


72



968



(2,616
)Net increase (decrease) in cash and cash equivalents


68,202



(18,955
)


(1,237
)Cash and cash equivalents at beginning of period


16,217



35,172



36,409Cash and cash equivalents at end of period

$
84,419


$
16,217


$
35,172Non-cash items from investing and financing activities:Expiration of BGP Warrant

$
32,001


$



$
Conversion of BGP Domestic Convertible Note to equity


28,571







Investment in INOVA Geophysical


119,000







Exchange of Reservoir Exploration Technology receivables into
    shares


9,516







Investment in multi-client data library financed through trade
    payables


3,429







Transfer of inventory to rental equipment


3,606



48,560



Issuance of stock for ARAM acquisition










48,958Issuance of seller notes for ARAM acquisition










45,000Supplemental disclosure of cash flow information:Interest paid

$
11,798


$
24,051


$
5,251Income taxes paid


7,263



22,184



14,894    F-5




---



##### Table of Contents



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME (LOSS)  AccumulatedOtherCumulative Convertible








Additional





Comprehensive





TotalPreferred Stock


Common Stock


Paid - In


Accumulated


Income


Treasury


StockholdersShares


Amount


Shares


Amount


Capital


Deficit


(Loss)


Stock


EquityBalance at January 1, 2008





$




93,847,608


$
948


$
556,867


$
(80,451
)

$
5,460


$
(6,584
)

$
476,240Comprehensive income (loss):Net loss






















(221,038
)










(221,038
)Translation adjustment


























(61,319
)






(61,319
)Total comprehensive loss


































(282,357
)Preferred stock dividends


















(3,889
)














(3,889
)Reclassification of preferred stock to equity


70,000



68,786



























68,786Stock-based compensation expense


















8,306















8,306Purchase of treasury stock










(2,745
)


















(39
)


(39
)Issuance of stock for ARAM acquisition










3,629,211



36



48,922















48,958Exercise of stock options










656,166



6



4,842















4,848Vesting of restricted stock units/awards










550,083



5



(5
)














Restricted stock cancelled for employee minimum income taxes










(101,991
)






(1,660
)














(1,660
)Issuance of stock for the ESPP










109,943



1



1,474















1,475Conversion of 5.5% convertible senior notes










925,926



9



3,996















4,005Tax benefits from stock-based compensation


















271















271Issuance of treasury stock










7,725







65











61



126Other equity adjustments














(9
)


9















Balance at December 31, 2008


70,000



68,786



99,621,926



996



619,198



(301,489
)


(55,859
)


(6,562
)


325,070Comprehensive income (loss):Net loss






















(110,059
)










(110,059
)Translation adjustment


























19,539







19,539Total comprehensive loss


































(90,520
)Preferred stock dividends


















(3,500
)














(3,500
)Stock-based compensation expense


















12,671















12,671Purchase of treasury stock










(1,117
)


















(3
)


(3
)Issuance of stock










18,500,000



185



38,035















38,220Exercise of stock options










9,837







21















21Vesting of restricted stock units/awards










528,284



5



(5
)














Restricted stock cancelled for employee minimum income taxes










(79,878
)






(99
)














(99
)Issuance of stock for the ESPP










109,650



1



263















264Tax benefits from stock-based compensation


















344















344Balance at December 31, 2009


70,000



68,786



118,688,702



1,187



666,928



(411,548
)


(36,320
)


(6,565
)


282,468Comprehensive income (loss):Net loss






















(36,838
)










(36,838
)Translation adjustment


























(266
)






(266
)Change in fair value of effective cash flow hedges (net of taxes)


























(60
)






(60
)Equity interest in INOVA Geophysicals other comprehensive
    income


























(103
)






(103
)Total comprehensive loss


































(37,267
)Accumulated translation adjustments recognized through earnings
    upon disposition of land division


























21,219







21,219Preferred stock dividends


















(1,936
)














(1,936
)Stock-based compensation expense


















8,147















8,147Modification of stock awards (disposed of land division)


















1,713















1,713Issuance of stock to BGP










23,789,536



238



105,406















105,644Exercise of stock options










323,610



3



1,068















1,071Vesting of restricted stock units/awards










486,168



5



(5
)














Restricted stock cancelled for employee minimum income taxes










(76,568
)


(1
)


(611
)














(612
)Conversion of cumulative convertible preferred stock


(43,000
)


(41,786
)


9,659,231



97



41,689















Balance at December 31, 2010


27,000


$
27,000



152,870,679


$
1,529


$
822,399


$
(448,386
)

$
(15,530
)

$
(6,565
)

$
380,447    F-6




---



##### Table of Contents



ION
    GEOPHYSICAL CORPORATION AND SUBSIDIARIES



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  (1)
    Summary
    of Significant Accounting Policies  General
    Description and Principles of Consolidation
    Overview
    of Joint Venture with BGP
  Form 10-K. Investments  Equity Method Investment
    in INOVA Geophysical.
  Use of
    Estimates
    Cash
    and Cash Equivalents
   F-7




---



##### Table of Contents



Accounts
    and Unbilled Receivables
    Inventories
  first-in,
  Property,
    Plant and Equipment
    YearsMachinery and equipment


3-7Buildings


5-25Rental equipment


2-5Leased equipment and other


1-10       Multi-Client
    Data Library
    December 31,2010


2009Gross costs of multi-client data creation

$
405,371


$
337,516Less accumulated amortization


(292,751
)


(206,811
)Total

$
112,620


$
130,705  F-8




---



##### Table of Contents



and/or off-the-shelf
  Accounting
    for the Impairment and Disposal of Long-Lived Assets,
  Computer
    Software
  available-for-sale
  Cost
    Method Investments
  available-for-sale other-than-temporary. Cost Method Investments.
  Equity
    Method Investments
   F-9




---



##### Table of Contents



 Equity
    Method Investment in INOVA Geophysical.
  Financial
    Instruments
  Notes Payable, Long-term debt, Lease
    Obligations and Interest Rate Caps,
  Derivative
    Instruments (Interest Rate Caps)
       Notes Payable, Long-term Debt,
    Lease Obligations and Interest Rate Caps.
    Goodwill
    and Other Intangible Assets
  Intangibles Goodwill and Other,
   F-10




---



##### Table of Contents



 Goodwill.
   Intangible
    Assets.
    Estimated Useful Life(Years)Proprietary technology


4-7Patents


5-20Trade names


5Intellectual property rights


5   15-year 15-year
  Fair
    Value Measurements
  820-10, Fair Value Measurements,
  Investment in INOVA Geophysical
  Goodwill and Intangible Assets
 F-11




---



##### Table of Contents



 Goodwill  Intangible Assets.
  Cost Method Investments available-for-sale  Cost Method Investments.
  Interest Rate Caps
  Warrant  Formation of
    INOVA Geophysical and Related Financing Transactions.
  Revenue
    Recognition
  off-the-shelf
  Acquisition Systems and Other Seismic
    Equipment ASC 605-10 Revenue Recognition
  Multi-Client Surveys, Data Libraries and Imaging
    Services and/or off-the-shelf
   F-12




---



##### Table of Contents



Software ASC 985-605 Software Revenue Recognition.
    Multi-element Arrangements and/or ASC 605-25 Accounting for Multiple-Element Revenue
    Arrangement 605-25). ASC 605-25 2009-13, Revenue Arrangements with Multiple
    Deliverables ASC 985-605.
       F-13




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##### Table of Contents



2009-14, Certain Arrangements That Include Software
    Elements
  Product Warranty
  Research,
    Development and Engineering
    Income
    Taxes
   Income Taxes
  Comprehensive
    Net Income (Loss)
  available-for-sale available-for-sale
  Foreign
    Currency Gains and Losses
   F-14




---



##### Table of Contents



Concentration
    of Credit and Foreign Sales Risks
      Stock-Based
    Compensation
  Share-Based
    Payment
    Recent
    Accounting Pronouncements
  No. 2010-02, Consolidation (Topic 810): Accounting and Reporting for
    Decreases in Ownership of a Subsidiary  a Scope
    Clarification 2010-02). 2010-02 ASC 810-10 Consolidation  Overall 810-10) ASC 810-10. 2010-02 ASC 810-10 810-10. 2010-02 2010-02
 F-15




---



##### Table of Contents



No. 2010-06, Fair Value Measurements and Disclosures (Topic 820):
    Improving Disclosures about Fair Value Measurements 2010-06). 2010-06 2010-06 2010-06
  (2)
    Formation
    of INOVA Geophysical and Related Financing
    Transactions    
    A Stock Purchase Agreement with BGP dated as of March 19,
    2010 (the Stock Purchase Agreement), under which ION
    agreed to sell 23,789,536 shares of IONs common stock
    to BGP; and
    A Share Purchase Agreement with BGP dated as of March 24,
    2010 (the Share Purchase Agreement), under which ION
    agreed to sell to BGP a 51% equity interest in INOVA
    Geophysical, thereby forming the joint venture with BGP.    Proceeds
    from the Sales of ION Common Stock and Equity Interests in INOVA
    Geophysical
         F-16




---



##### Table of Contents



Formation of ION
    Geophysical
    
    for so long as BGP owns as least 10% of the Companys
    outstanding shares of common stock, BGP will have the right to
    nominate one director to serve on the Board of Directors;
    subject to customary exceptions, BGP will have certain
    pre-emptive rights to subscribe for a number of shares of the
    Companys common stock or other securities that the Company
    is then offering as may be necessary to retain BGPs
    proportionate ownership of common stock that exists before that
    issuance; and
    BGP will have certain demand and piggyback registration rights
    with respect to resales of its shares.  Formation
    of INOVA Geophysical
       F-17




---



##### Table of Contents



back-up
  Accounting
    Impact to the Formation of INOVA Geophysical and Related
    Financing Transactions
    
    The Company received cash proceeds from BGP of
    $99.8 million, net of $5.6 million of transaction and
    professional fees and $3.1 million of cash balances, which
    were part of the disposed land divisions contributed to INOVA
    Geophysical.
    The Company retained a 49% interest in INOVA Geophysical, which
    was recorded at its fair value of $119.0 million.
    The Company deconsolidated $221.7 million of net assets
    associated with its land division.
    The Company recognized $21.2 million of accumulated foreign
    currency translation losses, primarily related to its Canada
    land operations.
    The Company recognized $7.0 million of expense resulting
    from the sale of ION common stock to BGP at a discount to market
    under BGPs equity purchase commitment as an inducement for
    BGP to enter into the transaction.
    The Company recognized $5.0 million of expense related to
    its permanently ceasing the use of certain leased facilities
    previously occupied by its land division. See further discussion
    at Note 20  Restructuring
    Activities.
    The Company recognized $2.0 million of other expenses
    associated with the formation of INOVA Geophysical.    
    The Company recorded a non-cash fair value adjustment of
    $12.8 million, reflecting the decrease in the fair value of
    the Warrant issued to BGP in October 2009, from January 1,
    2010 through March 25, 2010, the date of the formation of
    INOVA Geophysical. At that date, the remaining
    $32.0 million liability representing the Warrants
    fair value was reclassified to additional
    paid-in-capital.
    The Company recognized in interest expense the remaining
    non-cash debt discount of $8.7 million, which was
    associated with the Companys execution and delivery of the
    Convertible Notes to BGP in October 2009.
    As part of the repayment of the previous revolving line of
    credit and term loan, the Company wrote-off to interest expense,
    $10.1 million of unamortized debt issuance costs.    
    At issuance of the Warrant to BGP in October 2009, the Company
    determined that the Warrant was not considered indexed to the
    Companys own stock and was required to be accounted for as
    a liability at its fair value. As a result, the Company recorded
    a $15.4 million non-cash discount on the Convertible Notes.
    This non-cash discount was associated with the day-one fair
    value of the Warrant, which was being amortized over the
    expected term of the Convertible Notes (March 2010).
    Approximately $6.7 million of the non-cash debt discount
    was recognized to interest expense during the fourth quarter of
    2009. The Company also recorded a subsequent non-cash fair value
    adjustment of $29.4 million, reflecting the increase in the
    fair value of the Warrant from its issuance through
    December 31, 2009. F-18




---



##### Table of Contents



(3)
    Equity
    Method Investment in INOVA Geophysical    September 30, 2010Current assets

$
132,438Non-current assets


124,665Current liabilities


35,231Non-current liabilities


28,869Equity

$
193,003   March 26, 2010throughSeptember 30, 2010Total net revenues

$
47,609Gross profit (loss)

$
(21,574
)(A)Loss from operations

$
(45,423
)Net loss

$
(48,416
)     (A)
    
    Includes approximately $19.3 million of excess inventory
    reserve reflected in the third quarter of 2010.  (4)
    Segment
    and Geographic Information   F-19




---



##### Table of Contents



Years Ended December 31,2010


2009


2008Net revenues:Systems:Towed Streamer

$
83,567


$
83,398


$
123,785Ocean Bottom


1,876



4,948



42,483Other


28,783



39,943



72,657Total

$
114,226


$
128,289


$
238,925Software:Software Systems

$
34,465


$
31,601


$
34,308Services


2,166



2,132



2,932Total

$
36,631


$
33,733


$
37,240Solutions:Data Processing

$
107,997


$
82,330


$
59,550New Venture


81,293



71,135



116,706Data Library


87,664



26,520



82,824Total

$
276,954


$
179,985


$
259,080Legacy Land Systems (INOVA)

$
16,511


$
77,774


$
144,278Total

$
444,322


$
419,781


$
679,523Gross profit:Systems

$
48,557


$
52,934


$
90,795Software


24,356



21,998



24,656Solutions


93,804



59,844



78,245Legacy Land Systems (INOVA)


(984
)


(2,638
)


14,048Total

$
165,733


$
132,138


$
207,744Gross margin:Systems


43
%


41
%


38
%Software


66
%


65
%


66
%Solutions


34
%


33
%


30
%Legacy Land Systems (INOVA)


(6
)%


(3
)%


10
%Total


37
%


31
%


31
%Income (loss) from operations:Systems

$
27,749


$
31,209


$
62,157Software


21,936



19,970



22,298Solutions


60,632



27,746



40,534Legacy Land Systems (INOVA)


(9,623
)


(40,881
)


(23,430
)Corporate and other


(47,847
)


(58,216
)


(62,099
)Impairment of goodwill and intangible assets






(38,044
)


(252,283
)Total

$
52,847


$
(58,216
)

$
(212,823
)Depreciation and amortization (including multi-client data
    library):Systems

$
2,992


$
2,572


$
2,457Software


2,461



2,665



3,145Solutions


96,271



62,930



96,995Legacy Land Systems (INOVA)


6,367



25,136



8,244Corporate and other


2,644



3,057



2,743Total

$
110,735


$
96,360


$
113,584   F-20




---



##### Table of Contents



December 31,2010


2009Total assets:Systems

$
139,844


$
126,252Software


41,888



40,133Solutions


255,528



221,596Legacy Land Systems (INOVA)






259,476Corporate and other


187,182



100,729Total

$
624,442


$
748,186   December 31,2010


2009Total assets by geographic area:North America

$
440,600


$
520,454Europe


56,507



56,413Middle East


75,351



111,056Latin America


43,363



50,374Other


8,621



9,889Total

$
624,442


$
748,186       Years Ended December 31,2010


2009


2008North America

$
177,480


$
152,995


$
272,567Europe


136,846



92,760



202,170Asia Pacific


51,496



67,199



57,470Latin America


45,954



34,250



52,700Africa


18,417



25,435



31,693Middle East


10,536



42,403



32,872Commonwealth of Independent States (CIS)


3,593



4,739



30,051Total

$
444,322


$
419,781


$
679,523     (5)
    Net Loss
    per Common Share   F-21




---



##### Table of Contents



Cumulative Convertible Preferred
    Stock Legal
    Matters.
   Formation of INOVA Geophysical and Related
    Financing Transactions.
  (6)
    Accounts
    Receivable    December 31,2010


2009Accounts receivable, principally trade

$
78,421


$
116,720Less allowance for doubtful accounts


(845
)


(5,674
)Accounts receivable, net

$
77,576


$
111,046   (7)
    Inventories    December 31,2010


2009Raw materials and subassemblies

$
39,412


$
111,022Work-in-process


4,605



10,129Finished goods


35,741



112,068Reserve for excess and obsolete inventories


(12,876
)


(30,618
)Total

$
66,882


$
202,601    F-22




---



##### Table of Contents



(8)
    Property,
    Plant and Equipment    December 31,2010


2009Land

$



$
25Buildings


13,963



15,710Machinery and equipment


73,663



90,656Lease and seismic rental equipment


3,721



65,856Furniture and fixtures


3,810



4,735Other


738



1,187Total


95,895



178,169Less accumulated depreciation


(75,750
)


(99,614
)Property, plant and equipment, net

$
20,145


$
78,555     (9)
    Cost
    Method Investments  available-for-sale. other-than-temporary,
    (10)
    Goodwill        Systems


Software


TotalBalance at January 1, 2009

$
26,984


$
22,788


$
49,772Impact of foreign currency translation adjustments






2,280



2,280Balance at December 31, 2009


26,984



25,068



52,052Impact of foreign currency translation adjustments






(719
)


(719
)Balance at December 31, 2010

$
26,984


$
24,349


$
51,333  F-23




---



##### Table of Contents



(11)
    Intangible
    Assets    December 31, 2010Gross


AccumulatedAmount


Amortization


NetProprietary technology

$
14,242


$
(13,384
)

$
858Customer relationships


40,211



(22,115
)


18,096Trade names


4,043



(4,043
)


Patents


702



(702
)


Intellectual property rights


3,350



(1,987
)


1,363Total

$
62,548


$
(42,231
)

$
20,317   December 31, 2009Gross


AccumulatedAmount


Amortization


Impairments


NetProprietary technology

$
84,864


$
(19,907
)

$
(33,311
)

$
31,646Customer relationships


45,415



(18,833
)


(4,733
)


21,849Trade names


11,389



(6,164
)






5,225Patents


3,689



(2,964
)






725Intellectual property rights


4,550



(2,871
)






1,679Non-compete agreements


919



(277
)






642Total

$
150,826


$
(51,016
)

$
(38,044
)

$
61,766         Years Ended December 31,2011

$
4,9462012

$
3,3312013

$
2,8792014

$
2,3732015

$
1,964  F-24




---



##### Table of Contents



(12)
    Accrued
    Expenses    December 31,2010


2009Compensation, including compensation-related taxes and
    commissions

$
28,024


$
20,144Accrued multi-client data library acquisition costs


15,434



13,890Accrued taxes (primarily income taxes)


3,238



11,159Product warranty


784



5,088Other


7,319



15,612Total accrued expenses

$
54,799


$
65,893     Years Ended December 31,2010


2009


2008Balance at beginning of period

$
5,088


$
10,526


$
13,439Reduction of warranties for disposal of land division


(3,821
)






Opening balance for accruals for warranties for acquired entity










845Accruals (expirations) for warranties issued/expired during the
    period


443



(2,121
)


4,624Settlements made (in cash or in kind) during the period


(926
)


(3,317
)


(8,382
)Balance at end of period

$
784


$
5,088


$
10,526   (13)
    Notes
    Payable, Long-term Debt, Lease Obligations and Interest Rate
    Caps  December 31,Obligations (In thousands)

2010


2009$100.0 million revolving line of credit

$



$
118,000Term loan facility


103,250



101,563Secured equipment financing






19,080Amended and restated subordinated seller note






35,000Facility lease obligation


3,657



4,174Equipment capital leases and other notes payable


1,753



8,220Unamortized non-cash debt discount






(8,656
)Total


108,660



277,381Current portion of notes payable, long-term debt and lease
    obligations


(6,073
)


(271,132
)Non-current portion of notes payable, long-term debt and lease
    obligations

$
102,587


$
6,249  F-25




---



##### Table of Contents



Revolving
    Line of Credit and Term Loan Facility
        sub-limit
      
    An alternate base rate equal to the sum of (i) the greatest
    of (a) the prime rate of CMB, (b) a federal funds
    effective rate plus 0.50%, or (c) an adjusted LIBOR-based
    rate plus 1.0%, and (ii) an applicable interest margin of
    2.5%; or
    For eurodollar borrowings and borrowings in Euros, Pounds
    Sterling or Canadian Dollars, the sum of (i) an adjusted
    LIBOR-based rate, and (ii) an applicable interest margin of
    3.5%.     F-26




---



##### Table of Contents




    Incurring additional indebtedness (including capital lease
    obligations), granting or incurring additional liens on
    IONs properties, pledging shares of IONs
    subsidiaries, entering into certain merger or other
    change-in-control
    transactions, entering into transactions with IONs
    affiliates, making certain sales or other dispositions of
    assets, making certain investments, acquiring other businesses
    and entering into sale-leaseback transactions with respect to
    IONs properties;
    Paying cash dividends on IONs common stock; and
    Repurchasing and acquiring ION capital stock, unless there is no
    event of default under the Credit Agreement and the amount of
    such repurchases does not exceed an amount equal to (i) 25%
    of IONs consolidated net income for the prior fiscal year,
    less (ii) the amount of any cash dividends paid on
    IONs common stock.    
    Maintain a minimum fixed charge coverage ratio in an amount
    equal to at least 1.125 to 1;
    Not exceed a maximum leverage ratio of 3.25 to 1; and
    Maintain a minimum tangible net worth of at least 60% of
    IONs tangible net worth as of March 31, 2010, as
    defined.      Interest
    Rate Caps
   F-27




---



##### Table of Contents



Notional Amount


Payment Date

Cap Rate$
103,250


March 29, 2011


2.0
%$
92,025


June 29, 2011


2.0
%$
91,125


September 29, 2011


2.0
%$
90,225


December 29, 2011


2.0
%$
89,325


March 29, 2012


2.0
%$
68,775


June 29, 2012


2.0
%$
68,075


September 28, 2012


2.0
%$
67,375


December 31, 2012


2.0
%$
66,675


March 29, 2013


2.0
%   Derivatives and
    Hedging
  Facility
    Lease Obligation
      Equipment
    Capital Leases
   F-28




---



##### Table of Contents



Notes Payable and


Capital LeaseYears Ended December 31,

Long-Term Debt


Obligations2011

$
4,610


$
1,5132012


4,714



2032013


4,832



1012014


4,966



2015


87,785



2016 and thereafter






Total

$
106,907



1,817Imputed interest






(64
)Net present value of equipment capital lease obligations






1,753Current portion of equipment capital lease obligations






1,463Long-term portion of equipment capital lease obligations





$
290   (14)
    Cumulative
    Convertible Preferred Stock  Series D-1 (Series D-1 Series D-2 (Series D-2 Series D-3 (Series D-3 Series D-1 Series D-2 Series D-3
    20-day
  65-day
 F-29




---



##### Table of Contents



ION Geophysical Corporation v. Fletcher
    International, Ltd.,  Legal Matters.
  Series D-1 Series D-3 Series D-1 Series D-2
  (15)
    Stockholders
    Equity and Stock-Based Compensation  Stockholder
    Rights Plan
    Stock
    Option Plans
     F-30




---



##### Table of Contents



Option Price








Availableper Share


Outstanding


Vested


for GrantJanuary 1, 2008

$
1.73-$24.63



6,839,641



4,200,442



1,611,044Increase in shares authorized














1,000,000Granted


3.00-16.39



1,886,950







(1,886,950
)Vested










913,915



Exercised


1.73-13.52



(656,166
)


(656,166
)


Cancelled/forfeited


3.35-24.63



(587,150
)


(308,850
)


378,800Restricted stock granted out of option plans














(454,983
)Issuance of inducement stock options in acquisition


14.10



410,000







Restricted stock forfeited or cancelled for employee minimum
    income taxes and returned to the plans














187,496December 31, 2008


1.73-16.39



7,893,275



4,149,341



835,407Granted


1.07-5.44



635,750







(635,750
)Vested










1,089,478



Exercised


1.73-3.00



(9,837
)


(9,837
)


Cancelled/forfeited


3.00-16.39



(753,000
)


(186,300
)


564,950Restricted stock granted out of option plans














(568,874
)Restricted stock forfeited or cancelled for employee minimum
    income taxes and returned to the plans














215,140December 31, 2009


1.07-16.39



7,766,188



5,042,682



410,873Increase in shares authorized














2,500,000Granted


3.42-7.19



1,249,900







(1,249,900
)Vested










1,370,897



Exercised


1.07-7.31



(323,610
)


(323,610
)


Cancelled/forfeited


1.07-16.12



(970,686
)


(700,561
)


674,363Restricted stock granted out of option plans














(762,680
)Restricted stock forfeited or cancelled for employee minimum
    income taxes and returned to the plans














76,044December 31, 2010

$
2.49-$16.39



7,721,792



5,389,408



1,648,700     WeightedAverage Exercise


Weighted





WeightedPrice of


Average





Average ExerciseOutstanding


Remaining





Price of VestedOption Price per Share

Outstanding


Options


Contract Life


Vested


Options$2.49 - $3.85


1,557,517


$
2.99



6.6



883,142


$
2.974.11 - 6.42


2,316,250


$
5.63



4.6



1,741,813


$
5.796.75 - 10.50


2,449,725


$
8.11



6.5



1,551,825


$
8.6410.81 - 16.39


1,398,300


$
14.25



6.4



1,212,628


$
14.10Totals


7,721,792


$
7.44



6.1



5,389,408


$
8.01  F-31




---



##### Table of Contents



Weighted AverageWeighted Average


Remaining


AggregateNumber of


Weighted Average


Grant Date Fair


Contractual Life in


IntrinsicShares


Exercise Price


Value


Years


Value (000s)Total outstanding at January 1, 2010


7,766,188


$
7.65







6.3Options granted


1,249,900


$
6.41


$
3.81Options exercised


(323,610
)

$
3.31Options cancelled


(700,561
)

$
9.49Options forfeited


(270,125
)

$
8.30Total outstanding at December 31, 2010


7,721,792


$
7.44







6.1


$
17,144Options exercisable and vested at December 31, 2010


5,389,408


$
8.01







4.8


$
10,375     Restricted
    Stock and Restricted Stock Unit Plans
      Number of Shares/UnitsTotal nonvested at January 1, 2010


778,005Granted


772,680Vested


(490,961
)Forfeited


(82,546
)Total nonvested at December 31, 2010


977,178     Employee
    Stock Purchase Plan
   F-32




---



##### Table of Contents



Stock
    Appreciation Rights Plan
      Valuation
    Assumptions
    Years Ended December 312010

2009

2008Risk-free interest rates


1.5%  2.5%



1.6%  2.4%



1.5%  3.4%Expected lives (in years)


5.5



3.6  5.5



4.7  5.0Expected dividend yield


0%



0%



0%Expected volatility


67.4%  71.6%



75.0%  91.9%



44.7%  83.2%    F-33




---



##### Table of Contents



(16)
    Income
    Taxes    Years Ended December 31,2010


2009


2008Domestic

$
(55,547
)

$
(91,646
)

$
(82,811
)Foreign


45,651



(38,398
)


(137,096
)Total

$
(9,896
)

$
(130,044
)

$
(219,907
)     Years Ended December 31,2010


2009


2008Current:Federal

$
(3,489
)

$
526


$
58State and local


665



74



208Foreign


7,559



17,565



18,414Deferred (U.S. and foreign)


22,207



(38,150
)


(17,549
)Total income tax expense (benefit)

$
26,942


$
(19,985
)

$
1,131     Years Ended December 31,2010


2009


2008Expected income tax benefit at 35%

$
(3,464
)

$
(45,515
)

$
(76,967
)Alternate minimum tax provision


67



526



58Foreign taxes (tax rate differential and foreign tax differences)


(11,914
)


4,288



2,367Formation of INOVA Geophysical


10,507







Nondeductible financings


1,015



12,646



Nondeductible goodwill










84,756State and local taxes


665



74



269Nondeductible expenses


492



1,465



261Deferred tax asset valuation allowance:Deferred tax asset valuation allowance on formation of INOVA
    Geophysical


20,213







Deferred tax asset valuation allowance on equity in losses of
    INOVA Geophysical


8,303







Deferred tax asset valuation allowance on write-down of RXT
    shares


2,677







Deferred tax asset valuation allowance on operations


(1,619
)


6,531



(9,613
)Total income tax expense (benefit)

$
26,942


$
(19,985
)

$
1,131  F-34




---



##### Table of Contents



December 31,2010


2009Current deferred:Deferred income tax assets:Accrued expenses

$
8,600


$
5,428Allowance accounts


3,725



10,965Inventory


483



(257
)Total current deferred income tax asset


12,808



16,136Valuation allowance


(2,101
)


(5,405
)Net current deferred income tax asset


10,707



10,731Deferred income tax liabilities:Unbilled receivables


(15,723
)


(4,945
)Net current deferred income tax (liability) asset

$
(5,016
)

$
5,786Non-current deferred:Deferred income tax assets:Net operating loss carryforward

$
6,849


$
26,268Capital loss carryforward


19,005



520Equity method investment


25,407



Cost method investments


3,384



707Basis in research and development


2,804



26,087Basis in property, plant and equipment


2,271



3,492Tax credit carryforwards and other


9,770



10,609Total non-current deferred income tax asset


69,490



67,683Valuation allowance


(60,599
)


(27,721
)Net non-current deferred income tax asset


8,891



39,962Deferred income tax liabilities:Basis in identified intangibles


(601
)


(14,802
)Net non-current deferred income tax asset

$
8,290


$
25,160   ASC 740-10, Accounting for Income Taxes,
   F-35




---



##### Table of Contents



(17)
    Operating
    Leases  Lessee.
    Years Ended December 31,2011

$
15,4162012


9,6932013


3,4102014


1,2732015


1,100Total

$
30,892   (18)
    Benefit
    Plans  401(k)
    Supplemental
    executive retirement plan
   F-36




---



##### Table of Contents



(19)
    Legal
    Matters  WesternGeco
  WesternGeco
    L.L.C. v. ION Geophysical Corporation
      Fletcher
    65-day ION Geophysical
    Corporation v. Fletcher International, Ltd.,
 F-37




---



##### Table of Contents



Fletcher International,
    Ltd. v. ION Geophysical Corporation, f/k/a Input/Output,
    Inc., ION International S.à r.l., James M. Lapeyre, Bruce
    S. Appelbaum, Theodore H. Elliott, Jr., Franklin Myers, S.
    James Nelson, Jr., Robert P. Peebler, John Seitz, G. Thomas
    Marsh And Nicholas G. Vlahakis,
  Greatbatch
  Input/Output, Inc. and I/O Marine Systems, Inc. v.
    Wilson Greatbatch Technologies, Inc., Wilson Greatbatch, Ltd.
    d/b/a Electrochem Lithium Batteries, and WGL Intermediate
    Holdings, Inc., Civil Action
    No. 578-881,
    Division A, ®
  Sercel
   F-38




---



##### Table of Contents



Input/Output, Inc. et al v. Sercel, Inc.,
    (5-06-cv-00236) ® ® ® ®
  Other
    (20)
    Restructuring
    Activities   F-39




---



##### Table of Contents



(21)
    Selected
    Quarterly Information  (Unaudited)    Three Months EndedYear Ended December 31, 2010

March 31


June 30


September 30


December 31Product revenues

$
40,242


$
39,433


$
34,299


$
51,228Service revenues


48,477



35,953



87,295



107,395Total net revenues


88,719



75,386



121,594



158,623Gross profit


22,366



28,062



48,948



66,357Income (loss) from operations


(10,977
)


5,984



23,369



34,471Interest expense, net, including an $18.8 million write-off
    of debt discount and debt issuance costs in 1Q


(25,643
)


(1,373
)


(1,861
)


(1,893
)Loss on disposition of land division


(38,115
)










Fair value adjustment of warrant


12,788











Equity in losses of INOVA Geophysical






(179
)


(8,004
)


(15,541
)Gain on legal settlement














24,500Impairment of cost method investment














(7,650
)Other income (expense)


3,217



(799
)


(3,229
)


1,039Income tax expense (benefit)


12,160



2,174



(1,934
)


14,542Preferred stock dividends


875



385



338



338Net income (loss) applicable to common shares

$
(71,765
)

$
1,074


$
11,871


$
20,046Net income (loss) per share:Basic

$
(0.60
)

$
0.01


$
0.08


$
0.13Diluted

$
(0.60
)

$
0.01


$
0.08


$
0.13   Three Months EndedYear Ended December 31, 2009

March 31


June 30


September 30


December 31Product revenues

$
59,476


$
52,038


$
51,263


$
74,887Service revenues


47,414



37,219



51,107



46,377Total net revenues


106,890



89,257



102,370



121,264Gross profit


33,696



29,976



34,629



33,837Impairment of intangible assets


38,044











Income (loss) from operations


(44,576
)


(7,511
)


(1,559
)


(4,570
)Interest expense, net, including amortization of a non-cash debt
    discount in 4Q


(6,933
)


(6,349
)


(5,929
)


(14,739
)Fair value adjustment of warrant














(29,401
)Impairment of cost method investment














(4,454
)Other income (expense)


(22
)


(6,381
)


1,669



711Income tax expense (benefit)


(13,963
)


(4,510
)


131



(1,643
)Preferred stock dividends


875



875



875



875Net income (loss) applicable to common shares

$
(38,443
)

$
(16,606
)

$
(6,825
)

$
(51,865
)Net income (loss) per basic and diluted share

$
(0.39
)

$
(0.16
)

$
(0.06
)

$
(0.44
)  F-40




---



##### Table of Contents



(22)
    Certain
    Relationships and Related Party Transactions             F-41




---



##### Table of Contents



SCHEDULE IIION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
    VALUATION AND QUALIFYING ACCOUNTS
  Acquired

ChargedBalance at

Reserves

(Credited)Beginning

during the

to Costs and



Balance atYear Ended December 31, 2008

of Year

period

Expenses

Deductions

End of Year(In thousands)Allowances for doubtful accounts

$
2,675


$



$
4,852


$
(1,842
)

$
5,685Allowances for doubtful notes


3,351











(3,351
)


Warranty


13,439



845



4,624



(8,382
)


10,526Valuation allowance on deferred tax assets


37,413







(9,613
)


1,298



29,098   ChargedBalance at

(Credited)Beginning

to Costs and



Balance atYear Ended December 31, 2009

of Year

Expenses

Deductions

End of Year(In thousands)Allowances for doubtful accounts

$
5,685


$
3,457


$
(3,468
)

$
5,674Allowances for doubtful notes






71







71Warranty


10,526



(2,121
)


(3,317
)


5,088Valuation allowance on deferred tax assets


29,098



6,531



(2,503
)


33,126   Disposed

ChargedBalance at

Reserves

(Credited)Beginning

During the

to Costs and



Balance atYear Ended December 31, 2010

of Year

Period

Expenses

Deductions

End of Year(In thousands)Allowances for doubtful accounts

$
5,674


$
(4,273
)

$
1,689


$
(2,245
)

$
845Allowances for doubtful notes


71



(71
)










Warranty


5,088



(3,821
)


443



(926
)


784Valuation allowance on deferred tax assets


33,126



(15,897
)


45,471







62,700  S-1




---



##### Table of Contents



EXHIBIT INDEX
  3
.1



Restated Certificate of Incorporation dated September 24,
    2007 filed on September 24, 2007 as Exhibit 3.4 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.3
.2



Amended and Restated Bylaws of ION Geophysical Corporation filed
    on September 24, 2007 as Exhibit 3.5 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.3
.3



Certificate of Ownership and Merger merging ION Geophysical
    Corporation with and into Input/Output, Inc. dated
    September 21, 2007, filed on September 24, 2007 as
    Exhibit 3.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.1



Certificate of Rights and Designations of
    Series D-1
    Cumulative Convertible Preferred Stock, dated February 16,
    2005 and filed on February 17, 2005 as Exhibit 3.1 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.2



Certificate of Elimination of Series B Preferred Stock
    dated September 24, 2007, filed on September 24, 2007
    as Exhibit 3.2 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.3



Certificate of Elimination of Series C Preferred Stock
    dated September 24, 2007, filed on September 24, 2007
    as Exhibit 3.3 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.4



Certificate of Designation of
    Series D-2
    Cumulative Convertible Preferred Stock dated December 6,
    2007, filed on December 6, 2007 as Exhibit 3.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.5



Certificate of Designations of Series A Junior
    Participating Preferred Stock of ION Geophysical Corporation
    effective as of December 31, 2008, filed on January 5,
    2009 as Exhibit 3.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.4
.6



Form of Senior Indenture, filed on December 19, 2008 as
    Exhibit 4.3 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.7



Form of Senior Note, filed on December 19, 2008 as
    Exhibit 4.4 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.8



Form of Subordinated Indenture, filed on December 19, 2008
    as Exhibit 4.5 to the Companys Registration Statement
    on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.4
.9



Form of Subordinated Note, filed on December 19, 2008 as
    Exhibit 4.6 to the Companys Registration Statement on
    Form S-3
    (Registration
    No. 333-156362)
    and incorporated herein by reference.**10
.1



Amended and Restated 1990 Stock Option Plan, filed on
    June 9, 1999 as Exhibit 4.2 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-80299),
    and incorporated herein by reference.10
.2



Office and Industrial/Commercial Lease dated June 2005 by and
    between Stafford Office Park II, LP as Landlord and
    Input/Output, Inc. as Tenant, filed on March 31, 2006 as
    Exhibit 10.2 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, and incorporated
    herein by reference.10
.3



Office and Industrial/Commercial Lease dated June 2005 by and
    between Stafford Office Park District as Landlord and
    Input/Output, Inc. as Tenant, filed on March 31, 2006 as
    Exhibit 10.3 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, and incorporated
    herein by reference.**10
.4



Input/Output, Inc. Amended and Restated 1996 Non-Employee
    Director Stock Option Plan, filed on June 9, 1999 as
    Exhibit 4.3 to the Companys Registration Statement on
    Form S-8
    (Registration
    No. 333-80299),
    and incorporated herein by reference.**10
.5



Amendment No. 1 to the Input/Output, Inc. Amended and
    Restated 1996 Non-Employee Director Stock Option Plan dated
    September 13, 1999 filed on November 14, 1999 as
    Exhibit 10.4 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 1999 and
    incorporated herein by reference.**10
.6



Employment Agreement dated effective as of May 22, 2006,
    between Input/Output, Inc. and R. Brian Hanson filed on
    May 1, 2006 as Exhibit 10.1 to the Companys
    Form 8-K,
    and incorporated herein by reference.




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##### Table of Contents



**10
.7



First Amendment to Employment Agreement dated as of
    August 20, 2007 between Input/Output, Inc. and R. Brian
    Hanson, filed on August 21, 2007 as Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.8



Second Amendment to Employment Agreement, dated as of
    December 1, 2008, between ION Geophysical Corporation and
    R. Brian Hanson, filed on January 29, 2009 as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.9



Input/Output, Inc. Employee Stock Purchase Plan, filed on
    March 28, 1997 as Exhibit 4.4 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-24125),
    and incorporated herein by reference.**10
.10



Fifth Amended and Restated 2004 Long-Term Incentive Plan, filed
    as Appendix A to the definitive proxy statement for the
    2010 Annual Meeting of Stockholders of ION Geophysical
    Corporation, filed on April 21, 2010, and incorporated
    herein by reference.10
.11



Registration Rights Agreement dated as of November 16,
    1998, by and among the Company and The Laitram Corporation,
    filed on March 12, 2004 as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003, and incorporated
    herein by reference.**10
.12



Input/Output, Inc. 1998 Restricted Stock Plan dated as of
    June 1, 1998, filed on June 9, 1999 as
    Exhibit 4.7 to the Companys Registration Statement on
    S-8
    (Registration
    No. 333-80297),
    and incorporated herein by reference.**10
.13



Input/Output Inc. Non-qualified Deferred Compensation Plan,
    filed on April 1, 2002 as Exhibit 10.14 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001, and incorporated
    herein by reference.**10
.14



Input/Output, Inc. 2000 Restricted Stock Plan, effective as of
    March 13, 2000, filed on August 17, 2000 as
    Exhibit 10.27 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended May 31, 2000, and incorporated
    herein by reference.**10
.15



Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on
    November 6, 2000 as Exhibit 4.7 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-49382),
    and incorporated by reference herein.**10
.16



Employment Agreement dated effective as of March 31, 2003,
    by and between the Company and Robert P. Peebler, filed on
    March 31, 2003, as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.17



First Amendment to Employment Agreement dated September 6,
    2006, between Input/Output, Inc. and Robert P. Peebler, filed on
    September 7, 2006, as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.18



Second Amendment to Employment Agreement dated February 16,
    2007, between Input/Output, Inc. and Robert P. Peebler, filed on
    February 16, 2007 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.19



Third Amendment to Employment Agreement dated as of
    August 20, 2007 between Input/Output, Inc. and Robert P.
    Peebler, filed on August 21, 2007 as Exhibit 10.2 to
    the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.20



Fourth Amendment to Employment Agreement, dated as of
    January 26, 2009, between ION Geophysical Corporation and
    Robert P. Peebler, filed on January 29, 2009 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.21



Employment Agreement dated effective as of June 15, 2004,
    by and between the Company and David L. Roland, filed on
    August 9, 2004 as Exhibit 10.5 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004, and
    incorporated herein by reference.**10
.22



Employment Agreement, dated as of December 1, 2008, between
    ION Geophysical Corporation and James R. Hollis, filed on
    January 29, 2009 as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.**10
.23



GX Technology Corporation Employee Stock Option Plan, filed on
    August 9, 2004 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004, and
    incorporated herein by reference.10
.24



Concept Systems Holdings Limited Share Acquisition Agreement
    dated February 23, 2004, filed on March 5, 2004 as
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.




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##### Table of Contents



10
.25



Registration Rights Agreement by and between ION Geophysical
    Corporation and 1236929 Alberta Ltd. dated September 18,
    2008, filed on November 7, 2008 as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q
    and incorporated herein by reference.**10
.26



Form of Employment Inducement Stock Option Agreement for the
    Input/Output, Inc.  Concept Systems Employment
    Inducement Stock Option Program, filed on July 27, 2004 as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8
    (Reg.
    No. 333-117716),
    and incorporated herein by reference.**10
.27



Form of Employee Stock Option Award Agreement for ARAM Systems
    Employee Inducement Stock Option Program, filed on
    November 14, 2008 as Exhibit 4.4 to the Companys
    Registration Statement on
    Form S-8
    (Registration
    No. 333-155378)
    and incorporated herein by reference.10
.28



Agreement dated as of February 15, 2005, between
    Input/Output, Inc. and Fletcher International, Ltd., filed on
    February 17, 2005 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.29



First Amendment to Agreement, dated as of May 6, 2005,
    between the Company and Fletcher International, Ltd., filed on
    May 10, 2005 as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.30



Input/Output, Inc. 2003 Stock Option Plan, dated March 27,
    2003, filed as Appendix B of the Companys definitive
    proxy statement filed with the SEC on April 30, 2003, and
    incorporated herein by reference.10
.31



Amended and Restated Credit Agreement dated as of July 3,
    2008, by and among ION Geophysical Corporation, ION
    International S.À R.L., HSBC Bank USA, N.A., as
    administrative agent, joint lead arranger and joint bookrunner,
    ABN AMRO Incorporated, as joint lead arranger and joint
    bookrunner, and CitiBank, N.A., as syndication agent, filed on
    July 8, 2008 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.32



First Amendment to Amended and Restated Credit Agreement and
    Domestic Security Agreement, dated as of September 17,
    2008, by and among ION Geophysical Corporation, ION
    International S.À R.L., HSBC Bank USA, N.A., as
    administrative agent, joint lead arranger and joint bookrunner,
    ABN AMRO Incorporated, as joint lead arranger and joint
    bookrunner, and CitiBank, N.A., as syndication agent, filed on
    September 23, 2008 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.33



Third Amendment to Amended and Restated Credit Agreement, dated
    as of December 29, 2008, by and among ION Geophysical
    Corporation, ION International S.À R.L., the Guarantors and
    Lenders party thereto and HSBC Bank USA, N.A., as administrative
    agent, filed on January 5, 2009 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.34



Fourth Amendment to Amended and Restated Credit Agreement and
    Foreign Security Agreement, Limited Waiver and Release dated as
    of December 30, 2008, by and among ION Geophysical
    Corporation, ION International S.À R.L., the Guarantors and
    Lenders party thereto and HSBC Bank USA, N.A., as administrative
    agent, filed on January 5, 2009 as Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference.10
.35



Fifth Amendment to Amended and Restated Credit Agreement dated
    effective as of June 1, 2009 by and among ION Geophysical
    Corporation, ION International S.à r.l., certain other
    foreign and domestic subsidiaries of the ION Geophysical
    Corporation, HSBC Bank USA, N.A., as administrative agent, joint
    lead arranger and joint bookrunner, ABN AMRO Incorporated, as
    joint lead arranger and joint bookrunner, Citibank, N.A., as
    syndication agent, and the lenders party thereto, filed on
    August 6, 2009 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.36



Sixth Amendment and Waiver to Amended and Restated Credit
    Agreement dated effective as of October 23, 2009 by and
    among ION Geophysical Corporation, ION International S.À
    R.L., the Guarantors and Lenders party thereto and HSBC Bank
    USA, N.A., as administrative agent filed on March 1, 2010
    as Exhibit 10.36 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.**10
.37



Form of Employment Inducement Stock Option Agreement for the
    Input/Output, Inc.  GX Technology Corporation
    Employment Inducement Stock Option Program, filed on
    April 4, 2005 as Exhibit 4.1 to the Companys
    Registration Statement on
    Form S-8
    (Reg.
    No. 333-123831),
    and incorporated herein by reference.




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##### Table of Contents



**10
.38



First Amendment to Consulting Services Agreement dated as of
    January 5, 2007, by and between GX Technology Corporation
    and Michael K. Lambert, filed on January 8, 2007 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.39



Letter agreement dated October 19, 2006, by and between the
    Company and Michael K. Lambert, filed on October 24, 2006
    as Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.**10
.40



Severance Agreement dated as of December 1, 2008, between
    ION Geophysical Corporation and Charles J. Ledet, filed on
    December 5, 2008 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.41



Consulting Agreement dated as of December 1, 2008, between
    ION Geophysical Corporation and Charles J. Ledet, filed on
    December 5, 2008 as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    and incorporated herein by reference.10
.42



Rights Agreement, dated as of December 30, 2008, between
    ION Geophysical Corporation and Computershare
    Trust Company, N.A., as Rights Agent, filed as
    Exhibit 4.1 to the Companys
    Form 8-A
    (Registration
    No. 001-12691)
    and incorporated herein by reference.**10
.43



ION Stock Appreciation Rights Plan dated November 17, 2008,
    filed as Exhibit 10.47 to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2008, and incorporated
    herein by reference.10
.44



Canadian Master Loan and Security Agreement dated as of
    June 29, 2009 by and among ICON ION, LLC, as lender, ION
    Geophysical Corporation and ARAM Rentals Corporation, a Nova
    Scotia corporation, filed on August 6, 2009 as
    Exhibit 10.3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.45



Master Loan and Security Agreement (U.S.) dated as of
    June 29, 2009 by and among ICON ION, LLC, as lender, ION
    Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas
    corporation, filed on August 6, 2009 as Exhibit 10.4
    to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2009, and
    incorporated herein by reference.10
.46



Term Sheet dated as of October 23, 2009 by and between ION
    Geophysical Corporation and BGP Inc., China National Petroleum
    Corporation filed on March 1, 2010 as Exhibit 10.52 to
    the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.10
.47



Warrant Issuance Agreement dated as of October 23, 2009 by
    and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation filed on March 1, 2010 as
    Exhibit 10.53 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.10
.48



Registration Rights Agreement dated as of October 23, 2009
    by and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation filed on March 1, 2010 as
    Exhibit 10.54 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009, and incorporated
    herein by reference.10
.49



Stock Purchase Agreement dated as of March 19, 2010, by and
    between ION Geophysical Corporation and BGP Inc., China National
    Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.50



Investor Rights Agreement dated as of March 25, 2010, by
    and between ION Geophysical Corporation and BGP Inc., China
    National Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.51



Share Purchase Agreement dated as of March 24, 2010, by and
    among ION Geophysical Corporation, INOVA Geophysical Equipment
    Limited and BGP Inc., China National Petroleum Corporation,
    filed on March 31, 2010 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.52



Joint Venture Agreement dated as of March 24, 2010, by and
    between ION Geophysical Corporation and BGP Inc., China National
    Petroleum Corporation, filed on March 31, 2010 as
    Exhibit 10.4 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.10
.53



Credit Agreement dated as of March 25, 2010, by and among
    ION Geophysical Corporation, ION International S.À R.L. and
    China Merchants Bank Co., Ltd., New York Branch, as
    administrative agent and lender, filed on March 31, 2010 as
    Exhibit 10.5 to the Companys Current Report on
    Form 8-K,
    and incorporated herein by reference.




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##### Table of Contents



**10
.54



Fifth Amendment to Employment Agreement dated June 1, 2010,
    between ION Geophysical Corporation and Robert P. Peebler, filed
    on June 1, 2010 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference.*21
.1



Subsidiaries of the Company.*23
.1



Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.*24
.1



The Power of Attorney is set forth on the signature page hereof.*31
.1



Certification of Chief Executive Officer Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).*31
.2



Certification of Chief Financial Officer Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).*32
.1



Certification of Chief Executive Officer Pursuant to
    18 U.S.C. §1350.*32
.2



Certification of Chief Financial Officer Pursuant to
    18 U.S.C. §1350.     *
    
    Filed herewith.**
    
    Management contract or compensatory plan or arrangement.