**Exhibit 10.1****SEPARATION AGREEMENT AND RELEASE**     THIS AGREEMENT AND RELEASE is by and between Michael Pugh (“Mr. Pugh”), a resident of Spring,Texas, and Mitcham Industries, Inc. (“Mitcham”), a Texas corporation, having its principal place ofbusiness in Huntsville, Texas.WITNESSETH:     Mr. Pugh is presently Executive Vice President-Finance and Chief Financial Officer (“CFO”) forMitcham;     Mr. Pugh is resigning his employment with Mitcham and all Mitcham subsidiaries effective June23, 2006;     Mr. Pugh and Mitcham desire to define their respective rights and obligations for the futureand avoid the expense, delay and uncertainty attendant to disputes, if any, which may arise fromMr. Pugh’s employment or resignation of employment;     Now, therefore, for and in consideration of the mutual covenants and promises hereinafter setforth, and for other good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, Mr. Pugh and Mitcham agree:     1. Resignation. Mr. Pugh has resigned his employment and appointment as an officerwith Mitcham and its subsidiaries effective June 23, 2006 and Mitcham has accepted hisresignation. Mr. Pugh agrees and acknowledges that after June 23, 2006 he has no authority to andwill not act as an employee or officer of Mitcham or its subsidiaries.     2. Salary and Benefits. In lieu of notice, Mitcham shall pay Mr. Pugh’s salary andprovide medical benefits according to the terms and conditions of its medical benefit plans untilJune 30, 2006. Payments under this paragraph shall be made in accord with Mitcham’s regularpayroll practice with customary withholding for taxes and applicable deductions. Mr. Pughacknowledges that such payments are in full satisfaction of all wages, benefits, and thecompensation owed by Mitcham to Mr. Pugh for employment or service with Mitcham or itssubsidiaries.     3. Separation Benefits. Mitcham thereafter agrees to continue to pay Mr. Pugh anamount equal to his current base salary ($13,333.32 per month) for a period of three months inaccord with Mitcham’s regular practice and with customary withholding for taxes and applicabledeductions. During the period of salary continuation, and provided Mr. Pugh elects continuationcoverage, Mr. Pugh shall continue to participate in Mitcham’s medical plan on the same terms asapplicable to such participation for active employees. Mitcham reserves the right to amend,change or terminate the medical plan at its discretion. In the event of Mr. Pugh’s materialbreach of this Agreement, Mr. Pugh shall repay all amounts paid by Mitcham within ten (10) daysupon receiving a written demand from Mitcham.
 

 
     4. Stock Options. Mitcham agrees to accelerate vesting of all options granted March31, 2006 (which the parties agree are options for 5,000 shares) to vest fully such options as ofthe effective date of his resignation. Pugh’s vested stock options, including the options vestedas of the effective date of resignation and which the parties agree are options for 25,000 shares,shall be exercised in accordance with the terms and conditions of the (i) Amended and Restated1998 Stock Awards Plan of Mitcham Industries, Inc., (ii) Mitcham Industries, Inc. Incentive StockOption Agreement (1998) Stock Awards Plan), (iii) Mitcham Industries, Inc. 2000 Stock Option Plan,and (iv) Mitcham Industries, Inc. Incentive Stock Option Agreement, as applicable to such vestedoptions, based on his date of termination, June 23, 2006; provided, however, with respect to thestock options grant for 5,000 shares granted March 31, 2006 for which vesting has been acceleratedaccording to this section, Mitcham shall cause the applicable plan and agreement to be amended toprovide that Mr. Pugh shall have until December 31, 2006 to exercise these options for 5,000shares. Such amendment shall not change the exercise date as to Mr. Pugh’s stock options for20,000 shares granted December 8, 2004. Mr. Pugh shall have no further rights to any Award assuch term is defined in such Plans and Agreements.     5. Restricted Stock. Mitcham agrees as to all Restricted Stock subject to ForfeitureRestrictions as of June 23, 2006 (which the parties agree are 500 Restricted Shares), that suchrestrictions shall expire as of the date of resignation.     6. Prior Rights and Obligations. This Agreement and Release otherwise extinguishesall rights, if any, which Mr. Pugh may have, and obligations, if any, which Mitcham may have,contractual or otherwise, relating to the employment or termination of employment of Mr. Pugh withMitcham.     7. Mitcham Assets. Mr. Pugh hereby represents and warrants that he has no claim orright, title or interest in any property owned by Mitcham including without limitation theproperty designated on Mitcham’s books as the property or assets of Mitcham and that he willdeliver to Mitcham on or before the effective date of his termination to Mitcham all Mitchamproperty including without limitation Company credit cards and computer and electronic deviceswhich were in his possession, custody or control.     8. Proprietary and Confidential Information. In accordance with Mr. Pugh’s existingand continuing obligations, Mr. Pugh agrees and acknowledges that the various Mitcham Entitieshave developed and own valuable “Proprietary and Confidential Information” which constitutesvaluable and unique property including, without limitation, concepts, ideas, plans, strategies,analyses, surveys, research and development materials, and proprietary information related to thepast, present or anticipated business of the various Mitcham Parties. Except as required by law,Mr. Pugh agrees that he will not at any time disclose to others, permit to be disclosed, use,permit to be used, copy or permit to be copied, any such Proprietary and Confidential Information(whether or not developed by Mr. Pugh or developed by others under his direction or while employedwith or assisting Mitcham) without Mitcham’s prior written consent. Mr. Pugh further agrees tomaintain in confidence any Proprietary and Confidential Information of third parties received orof which he has knowledge as a result of his employment. Mr. Pugh agrees that in the event of anactual breach by Mr. Pugh of the provisions of this paragraph, Mitcham shall be entitled to informall potential or new
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employers of this Agreement and that such breach shall cause Mitcham immediate andirreparable harm for which damages will not be adequate.     9. Documents. Mr. Pugh represents, warrants, and agrees that he will leave in hisoffice or has delivered to Mitcham all analysis, computer files, correspondence, data orinformation, memoranda, models, notes, research in any form, records, or other documents,including charts and drawings, and all copies thereof, made, composed or received by Mr. Pugh,solely or jointly with others, and which are or were in Mr. Pugh’s possession, custody or controland which are related in any manner to the past, present or anticipated business of Mitcham upontermination of his employment. In this regard, Mr. Pugh hereby grants and conveys to Mitcham allright, title and interest in and to, including without limitation, the right to possess, print,copy, and sell or otherwise dispose of, any data, drawings, information, papers, photographs,records, reports, summaries, or other documents in writing, and copies, abstracts or summariesthereof, which may have been prepared by Mr. Pugh or under his direction or which may have comeinto his possession in any way during the term of his employment with Mitcham which relate in anymanner to past, present or anticipated business of Mitcham.     10. Cooperation. Mr. Pugh shall cooperate with and assist Mitcham to the extentrequired by Mitcham in all matters, including without limitation, matters relating to hisemployment or the winding up of his pending work and the orderly transfer of any pending work asdesignated by Mitcham. This obligation shall include, without limitation, assisting Mitcham andits counsel in preparing and defending against any claims which have been or may be broughtagainst any Mitcham entity or responding to any inquiry by any person or governmental agency.Mitcham’s requests for Mr. Pugh’s cooperation shall be commercially reasonable and Mr. Pugh agreesthat he shall be commercially reasonable in providing such cooperation, taking into account theneeds of Mitcham and the position he may have with another employer at the time such cooperationis required. Mr. Pugh shall take such further action and execute documents as may be reasonablynecessary or appropriate in order to carry out the provisions and purposes of this Agreement     11. No Solicitation. Mr. Pugh agrees for a period of one year from the effectivedate of this Agreement not to encourage, induce or solicit, directly or indirectly, or in concertwith others, any Mitcham employee to terminate their relationship with Mitcham.     12. Expenses. Mr. Pugh agrees that he has submitted or will submit within five daysall actual, reasonable and customary expenses incurred by him in the course of his employment,which Mitcham shall reimburse in accordance with Mitcham’s expense reimbursement policy.     13. Mr. Pugh’s Representation. Mr. Pugh represents, warrants and agrees that he hasnot filed any claims, appeals, complaints, charges or lawsuits against Mitcham, its subsidiarycompanies or their respective owners, directors, officers, employees, agents and representatives(such entities and individuals being collectively, including Mitcham, the “Mitcham Parties”) withany governmental agency or court and that he will not file or accept benefit from any claim,complaint or petition filed with any court by him or on his behalf at any time hereafter as tothose claims released herein; provided, however, this shall not limit Mr. Pugh from filing
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an action for the sole purpose of enforcing his rights under this Agreement. Further, Mr.Pugh represents and warrants that to his knowledge (i) no other person or entity has any interestor assignment in claims or causes of action, if any, he may have against any Mitcham Party andwhich he now releases in their entirety; (ii) there has been no act, event, or omission by anyMitcham Party which is unlawful or violates any governmental rule or regulation or any rule orregulation of any stock exchange (including the NASDAQ stock market), (iii) he has not committed,during his employment with Mitcham or any Mitcham subsidiary, any act which is unlawful or whichviolates any governmental rule or regulation or any rule or regulation of any stock exchange(including the NASDAQ stock market), (iv) he has not been requested by or requested any MitchamParty to commit any unlawful act or violate any governmental rule or regulation or any rule orregulation of any stock exchange (including the NASDAQ stock market), and (v) neither he nor anyother person employed by or contracting with any Mitcham Party has been subjected to any adverseaction because any such person refused to commit any unlawful act or violate any governmental ruleor regulation or any rule or regulation of any stock exchange (including the NASDAQ stock market).     14. Release. Mr. Pugh agrees to release, acquit and discharge and does herebyrelease, acquit and discharge Mitcham and all other Mitcham Parties, collectively andindividually, from any and all claims and from any and all causes of action against any of theMitcham Parties, of any kind or character, whether now known or not known, he may have against anysuch Mitcham Party, in their corporate, individual and representative capacities, including, butnot limited to, any claim for benefits, bonuses, compensation, costs, damages, expenses,remuneration, salary, or wages; and further including but not limited to all claims or causes ofaction arising from his employment, termination of employment, or any alleged unlawful employmentpractices, including claims under the Age Discrimination in Employment Act or Texas Commission onHuman Rights Act, and any and all claims or causes of action arising under any other federal,state or local laws; except that the parties agree that Mr. Pugh’s release, acquittal anddischarge shall not relieve Mitcham from its obligations under this Agreement. This release alsoapplies to any claims brought by any person or agency or class action under which Mr. Pugh mayhave a right or benefit.     15. ADEA Rights. Mr. Pugh acknowledges and agrees:     (a) that he has had at least twenty-one (21) days to consider this Agreementand Release before accepting;     (b) that he has been advised in writing to consult with an attorney regardingthe terms of this Agreement and Release before accepting;     (c) that, if he accepts this Agreement and Release, that he has seven daysfollowing the execution of this Agreement and Release to revoke this Agreement andRelease.     (d) that this Agreement and Release shall not become effective or enforceableuntil the revocation period has expired;
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     (e) that he is receiving, pursuant to this Agreement and Release, considerationin addition to anything of value to which he is already entitled; and     (f) that he does not waive any claims or rights that may arise after the datehe executes this Agreement and Release.     16. No Derogatory Comments. Mr. Pugh acknowledges and agrees that he has noknowledge of any act or omission by any Mitcham Party which would credibly give rise to anyderogatory comment and, therefore, agrees to refrain from making public or private commentsrelating to any Mitcham Party, corporate or individual, which are derogatory or which may tend toinjure any such party in its or their business, public or private affairs.     17. No Admissions. The parties expressly understand and agree that the terms of thisAgreement and Release are contractual and not merely recitals and that the agreements herein andconsideration paid are to compromise doubtful and disputed claims, avoid litigation, and buypeace, and that no statement or consideration given shall be construed as an admission of anyclaim by either party, such admissions being expressly denied.     18. Enforcement of Agreement and Release. No waiver or non-action with respect toany breach by the other party of any provision of this Agreement and Release, nor the waiver ornon-action with respect to any breach of the provisions of similar agreements with other employeesshall be construed to be a waiver of any succeeding breach of such provision, or as a waiver ofthe provision itself. Should any provision of this Agreement and Release be held to be invalid orwholly or partially unenforceable, such holdings shall not invalidate or void the remainder ofthis Agreement and Release, and those portions held to be invalid or unenforceable shall berevised and reduced in scope so as to be valid and enforceable, or, if such is not possible, thensuch portion shall be deemed to have been wholly excluded with the same force and effect as ifthey had never been included herein.     19. Choice of Law. This Agreement shall be governed by and construed and enforced,in all respects, in accordance with the law of the State of Texas without regard to conflict oflaw principles unless preempted by federal law, in which case federal law shall govern.     20. Merger. This Agreement and Release supersedes, replaces and merges all previousagreements and discussions relating to the same or similar subject matters between Mr. Pugh andMitcham and constitutes the entire agreement between Mr. Pugh and Mitcham with respect to thesubject matter of this Agreement. This Agreement may not be changed or terminated orally, and nochange, termination or waiver of this Agreement or any of the provisions herein contained shall bebinding unless made in writing and signed by all parties, and in the case of Mitcham, by anauthorized executive officer.     21. Confidentiality. Mr. Pugh agrees that he has not disclosed and will not disclosethe terms of this Agreement or the consideration received from Mitcham to any other person, excepthis attorney or financial advisors and only on the condition that they keep such informationstrictly confidential; provided, however, that the foregoing obligation of
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confidence shall not apply to information that is required to be disclosed as a result of anyapplicable law, rule or regulation of any governmental authority or any court.     22. Agreement and Release Voluntary. Mr. Pugh acknowledges and agrees that he hascarefully read this Agreement and understands that, except as expressly reserved herein, it is arelease of all claims, known and unknown, past or present. He further agrees that he has enteredinto this Agreement for the above stated consideration. He warrants that he is fully competent toexecute this Agreement and Release which he understands to be contractual. He furtheracknowledges that he executes this Agreement and Release of his own free will, after having areasonable period of time to review, study and deliberate regarding its meaning and effect, andafter being advised to consult an attorney, and without reliance on any representation of any kindor character not expressly set forth herein. Finally, he executes this Agreement fully knowingits effect and voluntarily for the consideration stated above.     23. Headings. The section headings contained herein are for the purpose ofconvenience only and are not intended to define or limit the contents of such sections.     24. Notices. Any notices required or permitted to be given under this Agreement andRelease shall be properly made if delivered in the case of Mitcham to:Mitcham Industries, Inc.