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EXHIBIT 10.1




SEVERANCE AGREEMENT BY AND BETWEEN JORGE MACHNIZH AND INPUT/OUTPUT, INC.,

DATED AS OF APRIL 29, 2005 AND EFFECTIVE AS OF MAY 7, 2005.




AGREEMENT AND RELEASE OF ALL CLAIMS




     This Agreement, entered into as of the date written by Employee’s signature below, is by and
between Input/Output, Inc. (“Input/Output”), a Delaware corporation, and Jorge Machnizh
(“Employee”). As used in this Agreement, the term “Input/Output” includes Input/Output, Inc., and
all of its subsidiary and affiliated companies.



Input/Output and Employee agree as follows:




     Section 1. Within five business days after the Separation Date, as defined in Section
3 below, and whether or not Employee executes and returns this Agreement, Input/Output will pay
Employee the following amounts:




	 	o  	Employee’s regular base salary prorated through the Separation Date;
	 
	 	o  	Employee’s vacation pay accrued as of the Separation Date; and
	 
	 	o  	any expense reimbursement submitted and owed to Employee under Input/Output policy.





     All of the above amounts will be reduced by applicable taxes and withholding.



     Section 2. During the eighteen months following the Separation Date, Employer shall,
subject in all respects to the terms of the Employment Agreement between Employer and Employee
dated April 23, 2003 (herein referred to as the “Employment Agreement”), pay to Employee an
aggregate amount (the “Severance Payment”) equal to one and one-half times (1.5x) Employee’s Base
Salary (as defined in the Employment Agreement) at the highest annual rate in effect on or before
the Separation Date (but prior to giving effect to any reduction therein which precipitated such
termination), which Severance Payment will be paid to Employee in equal installments in accordance
with Input/Output’s normal payroll process every two weeks during such 18-month period (subject to
the terms of the Employment Agreement). All amounts so paid will be reduced by applicable taxes
and withholding.



     In addition, Employer will pay or provide for Employee’s medical, dental, health, and hospital
coverage for such 18-month period, in accordance with Section 6(d)(4) of the Employment Agreement.
Employer will also allow Employee to keep his personal computer and cellular phone (including phone
number).



     Section 3. Employee’s termination from employment will be effective at the close of
business on the Separation Date. The “Separation Date,” as used in this Agreement, means May 7,
2005.



     Section 4. Employee agrees to release Input/Output from any claims he has or may have
against Input/Output as of the date he signs this Agreement. The claims he is releasing include all
of the following:




	 	o  	any claims under any bonus or incentive plans;
	 
	 	o  	any claims for tortious action or inaction of any sort (“tortious action or
inaction” means, among other things, claims for such things as negligence, fraud, libel,
or slander);
	 
	 	o  	any claims arising under the Age Discrimination in Employment Act of 1967 as
amended (29 U.S.C. Section 621, et seq.) (the Age Discrimination in Employment Act of
1967 prohibits, in general, discrimination against employees on the basis of age);




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	 	o  	any claims arising under Title VII of the Civil Rights Act of 1964 as amended (42
U.S.C. Section 2000e, et seq.), or the Texas Commission on Human Rights Act (Texas Labor
Code Section 21.001, et seq.) (both of these statutes, in general, prohibit
discrimination in employment on the basis of race, religion, national origin or gender);
	 
	 	o  	any claims arising under the Americans with Disabilities Act of 1990, as amended
(42 U.S.C. Section 12101, et seq.) (the Americans with Disabilities Act of 1990
prohibits, in general, discrimination in employment on the basis of an employee’s or
applicant’s disability);
	 
	 	o  	any claims arising under Texas Labor Code Sections 451.001, et seq. for
retaliation or discrimination in connection with a claim for workers’ compensation
benefits; and
	 
	 	o  	any claims for breach of contract, wrongful discharge, constructive discharge,
retaliation, or conspiracy.





     The release contained in this Section 4 will not affect any of the following:




	 	o  	Employee’s rights or benefits under Input/Output’s 401(k) retirement savings
plan, Input/Output’s Employee Stock Purchase Plan, or any pension or retirement plan in
which Employee is a participant on the Separation Date (Employee’s rights and benefits
will be determined by the applicable plan documents);
	 
	 	o  	Employee’s right to elect continued health and/or dental benefits under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”);
	 
	 	o  	Employee’s right to exercise any options to purchase Input/Output common stock in
accordance with the terms of the applicable stock option grant;
	 
	 	o  	Employee’s rights under any restricted stock agreement between Employee and
Input/Output under the terms of which Employee has been granted Input/Output restricted
stock;
	 
	 	o  	Any other benefit to which Employee may be entitled under any other health or
benefit plan in accordance with the applicable plan documents; or
	 
	 	o  	Employee’s rights under any workers’ compensation statue; the Jones Act, 46
U.S.C. Appx. Section 688, as amended; general maritime law or similar laws; and any
other right Employee may have with respect to bodily injury.





     Section 5. Input/Output and Employee agree that this Agreement is a binding contract.
The purpose of the Agreement is to compromise doubtful or disputed claims, avoid litigation, and
buy peace. Employee agrees that although Input/Output is making payment to Employee in exchange for
a release of claims, Input/Output does not admit any wrongdoing of any kind.



     Section 6. Employee agrees to assist Input/Output in defending any legal proceedings
against Input/Output arising out of matters which occurred on or prior to the Separation Date.
Input/Output agrees to reimburse Employee for his time and expense or costs he may incur in that
regard.



     Section 7. Employee confirms that after the Effective Date he remains subject to and agrees to comply with:




	 	o  	those obligations of confidentiality contained in Section 3(b) and 3(c) of the Employment Agreement;
	 
	 	o  	the provisions relating to competition with Employer contained in Section 12 of the Employment Agreement;
	 
	 	o  	the provisions relating to solicitation or hiring of Employer’s employees
contained in Section 12 of the Employment Agreement; and
	 
	 	o  	the terms of the Employee Confidentiality and Intellectual Property Agreement
with Employer which Employee signed upon commencing employment with Input/Output.




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     Section 8. This Agreement has been delivered to Employee on April 18, 2005.




	 	o  	Employee will have 45 calendar days from April 18, 2005, or until the close of
business on June 2, 2005, to decide whether to sign and return this Agreement and be
bound by its terms. In the event Employee has not signed and returned this Agreement to
Input/Output on or before June 2, 2005, this Agreement will become null and void.
	 
	 	o  	Input/Output and Employee agree that if they agree to change the terms of this
Agreement in any manner after it is delivered to Employee, even if the changes are
material, the 45-day period specified in the previous paragraph will not restart or be
extended.
	 
	 	o  	After signing this Agreement, Employee will have the right to revoke the
Agreement for a period of seven calendar days after signing it by (a) notifying
Input/Output in writing that Employee revokes the Agreement and (b) returning to
Input/Output any consideration paid Employee under Section 2 above. In the event
Employee revokes the Agreement, it will become null and void.





     Section 9. Employee acknowledges that he has read this Agreement. He understands
that, except for the exceptions set out in Section 4 above, this Agreement will have the effect of
waiving any claim he may pursue against Input/Output.



     Section 10. Employee acknowledges that he makes this Agreement knowingly and
voluntarily.



     Section 11. This Agreement constitutes the entire understanding between Input/Output
and Employee with respect to the subject matter hereof.



     Section 12. This Agreement will benefit and be binding upon Input/Output and its
successors and assigns and Employee and his successors and legal representatives. Employee will not
assign or attempt to assign any of his rights under this Agreement.



     Section 13. If a court determines that any provision of this Agreement is invalid,
the other provisions will remain in effect.



     Section 14. This Agreement will be governed by, construed under, and enforced in
accordance with the laws of the State of Texas, not including, however, its conflicts of law rules
that might otherwise refer to the law of another forum or jurisdiction.



     Section 15. This Agreement will become effective and enforceable only after a period
of seven days has expired following Employee’s execution and delivery of this Agreement to
Input/Output (this date is referred to in this Agreement as the “Effective Date”).



THIS AGREEMENT IS SUBJECT TO ARBITRATION IN

ACCORDANCE WITH THE FOLLOWING SECTION




     Section 16. Employer and Employee agree to submit to final and binding arbitration
any and all disputes or disagreements concerning the interpretation or application of this
Agreement. Any such dispute or disagreement will be resolved by arbitration in accordance with the
National Rules for the Resolution of Employment Disputes of the American Arbitration Association
(the “AAA Rules”). Arbitration will take place in Houston, Texas, unless the parties mutually
agree to a different location. Within 30 calendar days of the initiation of arbitration hereunder,
the parties will select a neutral qualified arbitrator from a panel of potential arbitrators
delivered by the AAA. Employee and Employer agree that the decision of the arbitrator will be final
and binding on both parties. Any court having jurisdiction may enter a judgment upon the award
rendered by the arbitrator. In the event the arbitration is decided in whole or in part in favor of
Employee, Employer will reimburse Employee for his reasonable costs and expenses of the arbitration
(including reasonable attorneys’ fees).



     Notwithstanding the provisions of the previous paragraph, Employer may, if it so chooses,
bring an action in any court of competent jurisdiction for injunctive relief to enforce Employee’s
obligations under Section 7 of this Agreement.



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     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Effective
Date.



	 	 	 	 	 	 	 
	 	 	INPUT/OUTPUT (on its own behalf and on behalf

of its subsidiary and affiliated companies)	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ David L. Roland	 	 
	

	 	 	 	 	 	 
	

	 	 	 	David L. Roland	 	 
	

	 	 	 	Vice President and General Counsel	 	 






NOTICE TO EMPLOYEE



BY SIGNING THIS DOCUMENT, YOU MAY BE GIVING UP IMPORTANT LEGAL RIGHTS. YOU ARE ADVISED TO CONSULT
WITH AN ATTORNEY PRIOR TO SIGNING AND RETURNING THIS DOCUMENT TO INPUT/OUTPUT.




	 	 	 	 	 	 	 
	

	 	 	 	EMPLOYEE:
	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	/s/ Jorge Machnizh	 	 
	

	 	 	 	 	 	 






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