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Exhibit 4.1




EXECUTION COPY




INPUT/OUTPUT, INC.




Employment Inducement Stock Option Agreement




     THIS EMPLOYMENT INDUCEMENT STOCK OPTION AGREEMENT (the “Agreement”) is made
effective as of the 14th day of June, 2004 (the “Date of Grant”) by and between Input/Output, Inc.,
a Delaware corporation (the “Company”), and Optionee (the “Optionee”).



     WHEREAS, the Company has entered into that certain Stock Purchase Agreement between
the Company, GX Technology Corporation (“GXT”) and the Sellers (as defined therein), dated as of
May 7, 2004, relating to the sale and purchase of the capital stock of GXT.



WHEREAS, the Optionee is an employee of GXT;




     WHEREAS, as a material inducement to the Optionee’s agreement to be hired as a new employee of
a subsidiary within the Company’s corporate group, the Company believes that its interests will be
served and advanced by granting the Optionee an option to purchase shares of common stock, $0.01
par value, of the Company.



     NOW, THEREFORE, IT IS AGREED AS FOLLOWS:



     1. Except as defined elsewhere herein, the words and phrases defined in this Section
1 shall have the meaning set out in these definitions throughout this Agreement, unless the context
in which any such word or phrase appears reasonably requires a broader, narrower, or different
meaning.




     (a) “Affiliate” means any parent corporation and any subsidiary corporation.
The term “parent corporation” means any corporation or other entity (other than the Company)
in an unbroken chain of corporations or entities ending with the Company if, at the time of
the action or transaction, each of the corporations or entities other than the Company owns
stock or voting equity possessing 50 percent (50%) or more of the total combined voting
power of all classes of stock or voting equity in one of the other corporations or entities
in the chain. The term “subsidiary corporation” means any corporation or other entity
(other than the Company) in an unbroken chain of corporations or entities beginning with the
Company if, at the time of the action or transaction, each of the corporations or entities
other than the last corporation or entity in the unbroken chain owns stock or voting equity
possessing 50 percent (50%) or more of the total combined voting power of all classes of
stock or voting equity in one of the other corporations or entities in the chain.




     (b) “Board” means the board of directors of the Company.



     “Change in Control” shall mean the occurrence of any of the following, after the Date of
Grant:




     (i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of forty percent (40%) or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Stock”) or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that the following acquisitions shall not constitute
a Change in Control: (i) any acquisition directly from the Company or any
Subsidiary, (ii) any acquisition by the Company or any Subsidiary or by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, or (iii) any acquisition by any corporation pursuant to a
reorganization, merger,



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consolidation or similar business combination involving the
Company (a “Merger”), if, following such Merger, the conditions described in clauses
(i) and (ii) of Section 5.7(c) below are satisfied;




     (ii) Individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (a solicitation by any person or group of persons for the
purpose of opposing a solicitation of proxies or consents by the Board with respect
to the election or removal of Directors at any annual or special meeting of
stockholders) or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board;




     (iii) Approval by the stockholders of the Company of a Merger, unless
immediately following such Merger, (i) substantially all of the holders of the
Outstanding Company Voting Securities immediately prior to such Merger beneficially
own, directly or indirectly, more than 50% of the common stock of the corporation
resulting from such Merger (or its parent corporation) in substantially the same
proportions as their ownership of Outstanding Company Voting Securities immediately
prior to such Merger and (ii) at least a majority of the members of the board of
directors of the corporation resulting from such Merger (or its parent corporation)
were members of the Incumbent Board at the time of the execution of the initial
agreement providing for such Merger;




     (iv) The sale or other disposition of all or substantially all of the
assets of the Company.




     (c) “Code” means the U.S. Internal Revenue Code of 1986, as amended.




     (d) “Committee” means the Compensation Committee of the Board or such other
committee designated by the Board.




     (e) “Company” has the meaning set forth in the preamble of this Agreement.




     (f) “Disability” means a mental or physical disability as determined under
the then-established policies of the Company.




     (g) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended
from time to time.




     (h) “Expiration Date” has the meaning set forth in Section 3 hereof.




     (i) “Fair Market Value” of a share of common Stock is the closing sales price
per share on the New York Stock Exchange, or such reporting service as the Committee may
select, on the date of grant, or in the absence of reported sales on such day, the most
recent previous day for which sales were reported.




     (j) “Mature Shares” means shares of Stock that Optionee has held for at least
six months.




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     (k) “Option” has the meaning set forth in Section 3(a) of this Agreement.




     (l) “Optionee” has the meaning set forth in the preamble of this Agreement.




     (m) “Retire” or “Retirement” means retirement in good standing from the
employ of the Company and all of its Affiliates for reason of age under then-established
policies of the Company and its Affiliates.




     (n) “Stock” means the common stock of the Company, $0.01 par value or, in the
event that the outstanding shares of common stock are later changed into or exchanged for a
different class of stock or securities of the Company or another corporation, that other
stock or security.



2. Grant; Vesting.





     (a) Subject to the terms and conditions of this Agreement, on this day, the
Date of Grant, the Company hereby grants to the Optionee an option (the “Option”) to
purchase         Number of Shares Options shares of the Stock of the Company, at an exercise of
$7.09 per share, subject to any adjustments provided for in this Agreement. The Option
shall vest and be exercisable according to the following schedule, but subject to Sections
3, 4 and 5 below:




     (i) On June 14, 2005, the Option shall vest and then be exercisable
with respect to 25% of the total number of shares subject to the Option;




     (ii) On June 14, 2006, the Option shall vest and then be exercisable
with respect to an additional 25% of the total number of shares subject to the
Option;




     (iii) On June 14, 2007, the Option shall vest and then be exercisable
with respect to an additional 25% of the total number of shares subject to the
Option;




     (iv) On June 14, 2008, the Option shall vest and then be exercisable
with respect to the remaining 25% of the total number of shares subject to the
Option.




     To the extent not previously exercised, installments of vested Options shall be
cumulative and may be exercised in whole or in part.




     Notwithstanding the foregoing, in the event of the termination of the Optionee’s
employment with GXT, the Company and any of the other Affiliates for any reason prior to the
Expiration Date, the Option shall not continue to vest after such termination of employment
and any unvested Options shall be forfeited effective as of such date of termination.




     (b) In addition, notwithstanding any provision contained in this Agreement to
the contrary, in the event of a Change in Control, this Option shall thereupon be fully
vested and shall be immediately exercisable in full.



     3. Expiration. The Option evidenced by this Agreement, to the extent such rights
with respect thereto shall not previously have been exercised or sooner terminated, shall expire
and be rendered null and void at 5:00 p.m., Houston, Texas time, on June 14, 2014 (the “Expiration
Date”).



4. Termination.





     (a) Death, Disability and Retirement. Upon the death or Disability of the
Optionee while in the employ of GXT, the Company or any Affiliate, or upon his Retirement,
the Optionee, or, if



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applicable, his executors, administrators or any person or persons to
whom his Option may be transferred by will or by the laws of descent and distribution, shall
have the right for one year following the date of such death, Disability, or Retirement of
the Optionee, but in any event, not later than the Expiration Date, to exercise the Option
to the extent it was vested at the date of such death, Disability, or Retirement.




     (b) Severance of Employment. Unless expressly provided otherwise in this
Agreement, Options shall (a) terminate six months after severance of employment with GXT,
the Company and all Affiliates for any reason other than for reasons of death, Retirement,
or Disability and (b) be exercisable only to the extent such Options are exercisable at the
time of the Optionee’s severance of employment; provided, however, that in no event will the
Option be exercisable after the Expiration Date. Whether authorized leave of absence or
absence on military or government service shall constitute severance of the employment of
the Optionee shall be determined by the Committee at that time.



     5. Forfeiture. Notwithstanding any other provisions of this Agreement, if any of
the following occur, the Optionee shall forfeit all outstanding Options, including all exercised
Options pursuant to which the Company has not yet delivered a stock certificate. : (i) the
conviction of the Optionee by a court of competent jurisdiction as to which no further appeal can
be taken of a crime involving moral turpitude or a felony; (ii) the proven commission by the
Optionee of a material act of fraud upon the Company or any Subsidiary, or any customer or supplier
thereof; (iii) the willful and proven misappropriation of any funds or property of the Company or
any Subsidiary, or any customer or supplier thereof; (iv) the willful, continued and unreasonable
failure by the Optionee to perform the material duties assigned to him which is not cured to the
reasonable satisfaction of the Company within 30 days after written notice of such failure is
provided to Optionee by the Board or by a designated officer of the Company or a Subsidiary; (v)
the knowing engagement by the Optionee in any direct and material conflict of interest with the
Company or any Subsidiary without compliance with the Company’s or Subsidiary’s conflict of
interest policy, if any, then in effect; or (vi) the knowing engagement by the Optionee, without
the written approval of the Board, in any material activity which competes with the business of the
Company or any Subsidiary or which would result in a material injury to the business, reputation or
goodwill of the Company or any Subsidiary; or (vii) the material breach by a Consultant of such
Optionee’s contract with the Company. The decision of the Committee as to the cause of the
Optionee’s discharge, and the damage done to GXT, the Company or an Affiliate, shall be final. No
decision of the Committee, however, shall affect the finality of the discharge of the Optionee by
GXT, the Company or such Affiliate in any manner.



     6. Changes in the Company’s Capital Structure. The existence of outstanding Options
shall not affect in any way the right or power of the Company or its stockholders to make or
authorize any and all adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or
its rights, or the dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.



     If the Company shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money, services or
property, then the number, class, and per share price of shares of Stock subject to the Option
shall be appropriately adjusted in such a manner so as to entitle Optionee to receive upon exercise
of the Option, for the same aggregate cash consideration, the equivalent total number and class of
shares Optionee would have received had Optionee exercised his Option in full immediately prior to
the event requiring the adjustment.



     If while the Option remains outstanding and unexercised (i) the Company shall not be the
surviving entity in any merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other



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than an entity that was directly or indirectly wholly-owned by the
Company immediately prior to such merger, consolidation or other reorganization), (ii) the Company
sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity (other than an entity that is wholly-owned by the Company),
(iii) the Company is to be dissolved, or (iv) the Company is a party to any other corporate
transaction (as defined under section 424(a) of the Code and applicable U.S. Treasury Regulations)
that is not described in clauses (i), (ii) or (iii) of this sentence (each such event is referred
to herein as a “Corporate Change”), then (x) except as otherwise expressly provided in this
Agreement or as a result of the effectuation of one or more of the alternatives described below,
there shall be no acceleration of the time at which the Option then outstanding may be exercised,
and (y) no later than ten (10) days after the approval by the stockholders of the Company of such
Corporate Change, the Board or the Committee, acting in their sole and absolute discretion without
the consent or approval of Optionee, shall act to effect one or more of the following alternatives:




     (i) accelerate the time at which the Option then outstanding may be
exercised so that the Option may be exercised in full for a limited period of time on
or before a specified date (before or after such Corporate Change) fixed by the
Committee or the Board of Directors, after which specified date the Option then
remaining unexercised and all rights of Optionee thereunder shall terminate;




     (ii) require the mandatory surrender to the Company by Optionee of the
Option (regardless of whether the Option is then exercisable under the provisions of
this Agreement) as of a date, before or after such Corporate Change, specified by the
Committee or the Board of Directors, in which event the Committee or the Board shall
thereupon cancel such Option and the Company shall pay to Optionee an amount of cash
per share equal to the excess, if any, of the per share price offered to stockholders
of the Company in connection with such Corporate Change over the exercise price under
this Option for such shares;




     (iii) with respect to Optionee, have some or all of this Option
(whether vested or unvested) assumed or have a new option substituted for some or all
of this Option (whether vested or unvested) by an entity that is a party to the
transaction resulting in such Corporate Change and that is then employing him, or a
parent or subsidiary of such entity, provided that (A) such assumption or
substitution is on a basis in which the excess of the aggregate fair market value of
the shares subject to such new option immediately after the assumption or
substitution over the aggregate exercise price of such shares hereunder is equal to
the excess of the aggregate fair market value of all shares subject to the Option
immediately before such assumption or substitution over the aggregate exercise price
of such shares, and (B) the assumed rights under the existing Option or the
substituted rights under such new option, as the case may be, will have the same
terms and conditions as the rights under the existing Option assumed or substituted
for, as the case may be;




     (iv) provide that the number and class of shares of Stock covered by
the Option (whether vested or unvested) theretofore granted shall be adjusted so that
the Option when exercised shall thereafter cover the number and class of shares of
stock or other securities or property (including, without limitation, cash) to which
the Optionee would have been entitled pursuant to the terms of the agreement or plan
(or both) relating to such Corporate Change if, immediately prior to such Corporate
Change, the Optionee had been the holder of record of the number of shares of Stock
then covered by the Option; or




     (v) make such adjustments to this Option, if any, as the Committee or
the Board deems appropriate to reflect such Corporate Change.



     In effecting one or more of alternatives (3), (4) or (5) above, and except as otherwise may be
provided



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in this Agreement, the Committee or the Board of Directors, in their sole and absolute
discretion and without the consent or approval of the Optionee, may accelerate the time at which
some or all Options then outstanding may be exercised.



     If changes occur in the outstanding Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges or other changes in capitalization occurring after
the Date of Grant and not otherwise provided for by this Section 6, then the Option and this
Agreement shall be subject to adjustment by the Committee or the Board in their sole and absolute
discretion as to the number and price of shares of stock or other consideration subject to this
Option.



7. Forms of Consideration Authorized.





     (a) The exercise of the Option shall be made only by a written notice
delivered in person, by telecopy or by mail to the Secretary of the Company at the Company’s
principal executive office, specifying the number of shares of Stock to be purchased and
accompanied by payment therefor. The exercise price for any shares of Stock to be purchased
pursuant to the exercise of the Option shall be paid in full upon such exercise by any one
or a combination of the following: (i) by payment in cash (in U.S. Dollars), certified
check, bank draft or postal or express money order payable to the order of the Company for
an amount equal to the exercise price under the Option, (ii) by tender to the Company of
Mature Shares having a Fair Market Value on the date of exercise equal to the exercise price
under the Option, (iii) by delivery of a properly executed notice of exercise together with
irrevocable instructions to a broker or dealer providing for the assignment to the Company
of the proceeds of a sale or loan arranged by the Optionee with respect to some or all of
the shares being acquired upon the exercise of the Option (a “Cashless Exercise”), or (iv)
by such other terms and conditions as may be approved by the Committee to the extent
permitted by applicable law.




     (b) Limitations on Forms of Consideration.




     (i) General Restrictions. The Committee shall not permit an Optionee
to pay his exercise price upon the exercise of an Option by having the Company reduce
the number of shares of Stock that will be delivered to the Optionee pursuant to the
exercise of the Option. In addition, the Committee shall not permit an Optionee to
pay his exercise price upon the exercise of an Option by using shares of Stock other
than Mature Shares. No fractional shares of Stock (or cash in lieu thereof) shall be
issued upon exercise of an Option and the number of shares that may be purchased upon
exercise shall be rounded to the nearest number of whole shares.




     (ii) Mature Shares. If Mature Shares are used for payment by the
Optionee, the aggregate Fair Market Value of the Mature Shares tendered must be equal
to or less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash (in U.S. Dollars),
certified check, bank draft or postal or express money order payable to the order of
the Company. Delivery of the shares shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Optionee at the address specified by the
Optionee.




     Whenever this Option is exercised by exchanging Mature Shares owned by the Optionee,
the Optionee shall deliver to the Company certificates registered in the name of the
Optionee representing a number of shares of Stock legally and beneficially owned by the
Optionee, free of all liens, claims and encumbrances of every kind, accompanied by stock
powers duly endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank
or trust company or by a brokerage firm having a membership on a registered national
stock



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exchange). The delivery of certificates upon the exercise of Options is subject to
the condition that the person exercising the Option provide the Company with the information
the Company might reasonably request pertaining to exercise, sale or other disposition. If
requested by the Secretary of the Company, the Optionee shall deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Optionee.



     8. Non-Events. The issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property, or for labor or
services either upon direct sale or upon the exercise of rights or warrants to subscribe for them,
or upon conversion of shares or obligations of the Company convertible into shares or other
securities, shall not affect, and no adjustment by reason of such issuance shall be made with
respect to, the number, class, or price of shares of Stock then subject to this Option.



     9. Tax Withholding.




     (a) GXT, the Company or any Affiliate shall be entitled to deduct from other
compensation payable to Optionee any sums required by any applicable law to be withheld with
respect to the grant or exercise of the Option. In the alternative, GXT or the Company may
require the Optionee (or other person exercising the Option) to pay the sum directly to the
employer. If the Optionee is required to pay the sum directly, payment in cash or by check
of such sums for taxes shall be delivered within ten days after the date of grant or
exercise, as the case may be. In satisfaction of the payment of such sum to the Company or
Affiliate, the Optionee may make a written election, which may be accepted or rejected in
the discretion of the Chief Financial Officer of the Company, to have withheld a portion of
the shares of Stock issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date of exercise, equal to or less than the amount required to be
withheld, provided that the Fair Market Value of the shares held back shall not exceed the
Company’s or Affiliate’s minimum statutory withholding tax obligations.




     (b) The Company and its Affiliates shall have no obligation upon exercise of
the Option to issue any shares of Stock until the Company has received payment sufficient to
cover all sums due with respect to that exercise. The Company and its Affiliates shall not
be obligated to advise Optionee of the existence of the tax or the amount which the employer
will be required to withhold.



     10. Requirements of Law. The Company shall not be required to sell or issue any
Stock under the Option if issuing that Stock would constitute or result in a violation by the
Optionee or the Company of any provision of any law, statute, or regulation of any governmental
authority. Specifically, in connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of the Option, the Company shall not be required to issue
any Stock unless the Committee has received evidence satisfactory to it to the effect that the
holder of the Option will not transfer the Stock except in accordance with applicable law,
including receipt of an opinion of counsel satisfactory to the Company to the effect that any
proposed transfer complies with applicable law. The determination by the Committee on this matter
shall be final, binding and conclusive. The Company may, but shall in no event be obligated to,
register any Stock issuable upon exercise of the Option pursuant to applicable securities laws of
any country or any political subdivision. In the event the Stock issuable on exercise of the Option
is not registered under applicable U.S. and foreign securities law, the Company may (i) require as
a condition to the issuance of the shares of Stock hereunder that Optionee make such
representations as may be required by law in order for the shares to be issued and sold to Optionee
in compliance with an applicable exemption from registration under the Securities Act of 1933, as
amended, and applicable state, foreign and local law, and (ii) imprint on the certificate
evidencing the Stock the following legend or any other legend that counsel for the Company
considers necessary or advisable to comply with applicable law:



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     The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of any
State and may not be sold or transferred except upon such registration or upon
receipt by the Corporation of an opinion of counsel satisfactory to the Corporation,
in form and substance satisfactory to the Corporation, that registration is not
required for such sale or transfer.



     11. Transferability. The Option granted to the Optionee under this Agreement shall
not be transferable or assignable by the Optionee other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee’s lifetime only by him.



     12. Amendment. This Agreement may not be changed or terminated orally but only by
an agreement in writing signed by the party against whom enforcement of any such change or
termination is sought.



     13. No Obligation to Retain Services. Neither GXT, the Company nor any Affiliate
thereof shall be deemed by the grant of this Option to be required to retain the services of the
Optionee for any period.



     14. Stockholder Rights. The Optionee shall not have any rights as a stockholder
with respect to any shares of Stock covered by the Option until the date of the issuance of the
stock certificate or certificates to him for such shares following his exercise of this Option
pursuant to the terms and conditions hereof and his payment for the shares. No adjustment shall be
made for dividends or other rights for which the record date is prior to the date such certificate
or certificates are issued.



     15. Interpretation. In the event of any difference of opinion concerning the
meaning or effect of this Agreement, such difference shall be resolved by the Committee.



     16. Governing Law. The validity, construction and performance of this agreement
shall be governed by the laws of the State of Texas. Any invalidity of any provision of this
Agreement shall not affect the validity of any other provision.



     17. Notices. All offers, notices, demands, requests, acceptances or other
communications hereunder shall be in writing and shall be deemed to have been duly made or given if
mailed by registered or certified mail, return receipt requested. Any such notice mailed to the
Company shall be addressed to its principal executive offices, and any notice mailed to the
Optionee shall be addressed to the Optionee’s residence address as it appears on the books and
records of the Company, or to such other address as either party may hereafter designate in writing
to the other.



     18. Successors. This Agreement shall, except as herein stated to the contrary,
inure to the benefit of and bind the legal representatives, heirs, successors and assigns of the
parties hereto.



     19. Nonqualified Option. The Option evidenced by this Agreement is a nonqualified
stock option which is not intended to be governed by Section 422 of the Code.



     20. Gender. If the context requires, words of one gender when used in this
Agreement shall include the others, and words used in the singular or plural shall include the
other.



     21. Headings. Headings of Sections are included for convenience of reference only
and do not constitute part of this Agreement and shall not be used in construing the terms of this
Agreement.



Signatures on Following Page




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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of
the Date of Grant.



	 	 	 
	

	 	INPUT/OUTPUT, INC.
	 
	 	 
	

	 	 
	 

	 	David Roland

Vice President — General Counsel
	 
	 	 
	

	 	OPTIONEE
	 
	 	 
	

	 	 
	

	 	Optionee







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