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<SEC-DOCUMENT>0000950129-04-004921.txt : 20040716
<SEC-HEADER>0000950129-04-004921.hdr.sgml : 20040716
<ACCEPTANCE-DATETIME>20040716151638
ACCESSION NUMBER:		0000950129-04-004921
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040901
FILED AS OF DATE:		20040716
EFFECTIVENESS DATE:		20040716

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MITCHAM INDUSTRIES INC
		CENTRAL INDEX KEY:			0000926423
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359]
		IRS NUMBER:				760210849
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25142
		FILM NUMBER:		04918038

	BUSINESS ADDRESS:	
		STREET 1:		8141 SH 75 SOUTH
		STREET 2:		PO BOX 1175
		CITY:			HUNTSVILLE
		STATE:			TX
		ZIP:			77342
		BUSINESS PHONE:		9362912277

	MAIL ADDRESS:	
		STREET 1:		P O BOX 1175
		CITY:			HUNTSVILLE
		STATE:			TX
		ZIP:			77342
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>h16824ddef14a.htm
<DESCRIPTION>MITCHAM INDUSTRIES, INC.
<TEXT>
<HTML>
<HEAD>
<TITLE>def14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="70%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="13%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3" nowrap align="center"><FONT size="2">OMB APPROVAL</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3" nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
OMB Number:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">3235-0059</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Expires:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

<TD nowrap align="right" valign="top"><FONT size="2">February&nbsp;28, 2006</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" nowrap align="left" valign="top"><FONT size="2">Estimated average burden<br>hours per

response</FONT></TD>

        <TD align="right" valign="bottom"><FONT size="2">12.75</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><font size="2"><B>UNITED STATES<BR>SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</B>
</font>

<P align="center"><FONT size="2"><B>SCHEDULE 14A</B>
</FONT>


<P align="center"><FONT size="2">Proxy Statement Pursuant to Section 14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)
</FONT>

<P>
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<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">Filed by the Registrant
&nbsp;&nbsp;<FONT face="wingdings">&#120;</FONT></FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">Filed by a Party other than the Registrant &nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT></FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">Check the appropriate box:</FONT></TD>
</TR>
</TABLE>
<p>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Preliminary Proxy Statement</FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;
<B>Confidential, for Use of the Commission Only (as permitted by
Rule&nbsp;14a-6(e)(2))</B></FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#120;</FONT>&nbsp;&nbsp; Definitive Proxy Statement</FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Definitive Additional Materials</FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;
Soliciting Material Pursuant to &#167;240.14a-12</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">Mitcham Industries, Inc.</FONT>
<center>
<DIV align="center"><FONT size="2"><HR size="1" noshade>
(Name of Registrant as Specified In Its Charter)
</FONT></DIV>
</center>
<p>
<center>
<P align="center"><FONT size="2"><HR size="1" noshade>(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
</FONT>
</center>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of Filing Fee (Check the appropriate box):
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#120;</FONT>&nbsp;&nbsp; No fee required.</FONT></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;
Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(4) and
0-11.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1)&nbsp;Title of each class of securities to which transaction applies:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2)&nbsp;Aggregate number of securities to which transaction applies:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3)&nbsp;Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4)&nbsp;Proposed maximum aggregate value of transaction:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5)&nbsp;Total fee paid:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Fee paid previously with preliminary materials.</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp; Check box if any part of the fee is offset as provided by Exchange Act
Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1)&nbsp;Amount Previously Paid:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2)&nbsp;Form, Schedule or Registration Statement No.:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3)&nbsp;Filing Party:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4)&nbsp;Date Filed:</FONT></TD>
</TR>
</TABLE>
<HR size="1" noshade>

<p>
<center>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="20%"></TD>
        <TD width="80%"></TD>
</TR>
<TR valign="top">
        <TD valign="bottom"><font size="2">SEC 1913 (02-02)</font></TD>
        <TD><font size="2"><b>Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number.</b></font></TD>
</TR>
</TABLE>
</center>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>MITCHAM INDUSTRIES, INC.<BR>
8141 SH 75 South<BR>
P.O. Box 1175<BR>
Huntsville, Texas 77342</B>



<P align="center" style="font-size: 10pt"><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>
To be Held September 1, 2004</B>



<P align="left" style="font-size: 10pt">To our Shareholders:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will hold the Annual Meeting of Shareholders of Mitcham Industries,
Inc., a Texas corporation, on September&nbsp;1, 2004, at the Houston Marriott North,
225 North Sam Houston Parkway East, Houston, Texas at 10:00&nbsp;a.m., local time,
for the following purposes:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The election of five individuals to serve on our Board of Directors
until the next annual meeting of shareholders or until their respective
successors are elected and qualified.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;To amend and restate our 1998 Stock Awards Plan to (i)&nbsp;increase the
aggregate number of shares of Common Stock authorized and reserved for option
and other stock awards under such plan by 400,000, (ii)&nbsp;allow grants of awards
to directors and to consultants (in addition to employees), and (iii)&nbsp;allow the
Compensation Committee greater flexibility in determining to what extent
granted awards will terminate after an employee, director or consultant leaves
his employment, directorship or consultancy, as applicable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;To ratify the selection of the Audit Committee of our Board of
Directors of Hein &#038; Associates LLP as our independent auditors for the fiscal
year ending January&nbsp;31, 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;The transaction of such other business as may properly come before the
meeting and any adjournment thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has established the close of business on July&nbsp;9,
2004, as the record date for determining the shareholders entitled to notice of
and to vote at the Annual Meeting of Shareholders to be held September&nbsp;1, 2004,
and any adjournment or postponement thereof.


<P align="left" style="font-size: 10pt"><B>YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. TO ASSURE YOUR
REPRESENTATION AT THE ANNUAL MEETING OF SHAREHOLDERS, EVEN IF YOU PLAN TO
ATTEND, PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE IN THE ACCOMPANYING ENVELOPE.</B>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3">Sincerely,<BR>
<BR>
<BR>
Billy F. Mitcham, Jr.<BR>
<I>President and Chief Executive Officer</I><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">July&nbsp;26, 2004



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>_______________________________________________</B>



<P align="center" style="font-size: 10pt"><B>MITCHAM INDUSTRIES, INC.<BR>
8141 SH 75 South<BR>
P.O. Box 1175<BR>
Huntsville, Texas 77342</B>



<P align="center" style="font-size: 10pt"><B>_______________________________________________</B>



<P align="center" style="font-size: 10pt"><B>PROXY STATEMENT<BR>
FOR<BR>
ANNUAL MEETING OF SHAREHOLDERS<BR>
To be Held September&nbsp;1, 2004</B>



<P align="center" style="font-size: 10pt"><B>__________________________________________</B>



<P align="center" style="font-size: 10pt"><B>SOLICITATION OF PROXIES</B>




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mitcham Industries, Inc., a Texas corporation, of
proxies from the holders of record of our common stock, par value $.01 per
share (&#147;Common Stock&#148;), at the close of business on July&nbsp;9, 2004, for use in
voting at the Annual Meeting of Shareholders (the &#147;Annual Meeting&#148;) to be held
at the Houston Marriott North, 225 North Sam Houston Parkway East, Houston,
Texas at 10:00&nbsp;a.m., local time, on September&nbsp;1, 2004, and any adjournment or
postponement thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement, the attached proxy card and our Annual Report for
the fiscal year ended January&nbsp;31, 2004 are being mailed together on or about
July&nbsp;26, 2004, to each of our shareholders entitled to notice of and to vote at
the Annual Meeting. Our principal place of business is located at 8141 SH 75
South, P.O. Box 1175, Huntsville, Texas 77342.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Properly executed proxies will be voted as directed. If no direction is
indicated therein, proxies received in response to this solicitation will be
voted <B>FOR</B>: (i)&nbsp;the election of each of the five individuals nominated for
election as directors; (ii)&nbsp;the amendment and restatement of our 1998 Stock
Awards Plan; (iii)&nbsp;the ratification of the selection of Hein &#038; Associates LLP
as our independent auditors for the fiscal year ending
January&nbsp;31, 2005; and
(iv)&nbsp;as recommended by our Board of Directors with regard to any other matters,
or if no recommendation is given, at the discretion of the appointed proxies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any proxy given on the enclosed proxy card may be revoked by the
applicable shareholder at any time before it is voted by (i)&nbsp;providing us with
a written revocation notice or another proxy card or other form of proxy
bearing a later date (in each case, delivered to our principal place of
business at 8141 SH 75 South, P.O. Box 1175, Huntsville, Texas 77342, marked
&#147;Proxy Information Enclosed, Attention: Corporate Secretary&#148;) or (ii)&nbsp;by
attending and voting in person at the Annual Meeting. Attendance at the Annual
Meeting will not, in itself, constitute revocation of a completed and delivered
proxy card.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The solicitation of proxies will be conducted by mail and we will bear all
costs associated with such solicitation, which we anticipate will cost
approximately $10,000. In addition to the direct expenses of preparing and
mailing the solicitation materials in connection with the Annual Meeting, we
will reimburse brokerage houses, custodians, nominees and fiduciaries for all
reasonable out-of-pocket expenses incurred in connection with the forwarding of
our solicitation materials to the beneficial owners of Common Stock. In
addition, we may conduct further solicitations of proxies in person or by
telephone through our directors, officers and employees, none of whom will
receive any additional salary or compensation for assisting in the solicitation
of proxies.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>VOTING OF SECURITIES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has fixed the close of business on July&nbsp;9, 2004, as
the record date for determining the holders of shares of Common Stock entitled
to notice of and to vote at the Annual Meeting. As of the close of business on
July&nbsp;9, 2004, there were 8,787,994 issued and outstanding shares of Common
Stock, each of which is entitled to one vote on each item of business to be
conducted at the Annual Meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Second Amended and Restated Bylaws provide that the presence at the
Annual Meeting, either in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock will constitute a quorum for the
transaction of business. Assuming such a majority is present, the election of
directors will require a plurality of the votes cast at the Annual Meeting.
The approval of the amendment and restatement of our 1998 Stock Awards Plan and
the ratification of the selected independent auditors will require the
affirmative vote of a majority of the total shares of Common Stock voting for
or against or expressly abstaining at the Annual Meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All votes will be tabulated by the inspector of elections appointed for
the Annual Meeting, who will separately tabulate votes for and against,
abstentions and broker non-votes. Abstentions from and broker non-votes on the
proposal to elect directors will be counted for purposes of determining the
presence of a quorum, but will not be included in the total shares voted for or
against any nominee. A broker non-vote occurs if a broker or other nominee
holding shares of Common Stock for a beneficial owner does not vote on a
proposal because the broker or nominee does not have discretionary authority to
vote the applicable shares of Common Stock and has not received instructions
from the beneficial owner with respect to how to vote such shares of Common
Stock on the particular item of business. Abstentions from any item of
business other than the election of directors will have the same legal effect
as a vote against the applicable proposal, but a broker non-vote will not be
counted for purposes of determining whether a majority vote is achieved with
respect to the amendment and restatement of our 1998 Stock Awards Plan, the
ratification of the selected independent auditors or any other item of business
properly coming before the Annual Meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a period of 10&nbsp;days prior to the Annual Meeting, a list of the
shareholders entitled to vote at the Annual Meeting will be available for
inspection during normal business hours at our principal place of business,
which is located at 8141 SH 75 South, P.O. Box 1175, Huntsville, Texas 77342.


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>PRINCIPAL HOLDERS OF SECURITIES AND SECURITY OWNERSHIP<BR>
OF MANAGEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Principal Holders of Securities. </I></B>The following table sets forth the
beneficial ownership of the outstanding shares of Common Stock as of July&nbsp;9,
2004, with respect to each person we know to be the beneficial owner of 5% or
more of the outstanding shares of Common Stock. All persons listed have sole
disposition and voting power with respect to the indicated shares except as
otherwise indicated in the footnotes below the table.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5"><B>Common Stock</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and Address</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5"><B>Beneficially Owned</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>of Beneficial Owner</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Number of Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent of Class</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Billy F. Mitcham, Jr.<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">P. O. Box 1175<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Huntsville, Texas 77342
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">713,800<sup>(1)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7.9</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">R. Chaney &#038; Partners IV L.P.<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">909 Fannin, Suite&nbsp;1275<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Two Houston Center<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Houston, Texas 77010
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">804,800<sup>(2)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9.2</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dimensional Fund Advisors, Inc.<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1299 Ocean Avenue, 11th Floor<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Santa Monica, California 90401
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">555,300<sup>(3)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6.3</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stuart Sternberg<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">c/o Spear Leeds &#038; Kellogg<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">120 Broadway<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">New York, New York 10271
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">874,500<sup>(4)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.0</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">First Wilshire Securities Management, Inc.<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">600 South Lake Street, Suite&nbsp;100<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pasadena, California 91106
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">923,120<sup>(5)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.6</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 293,000 shares of Common Stock owned directly by Billy F.
Mitcham, Jr. and an aggregate of 134,634 shares owned by Billy F.
Mitcham, Sr. (77,040 shares) and Mr.&nbsp;Mitcham, Jr.&#146;s children (57,594
shares), as to which Mr.&nbsp;Mitcham, Jr. has sole voting rights under a
Voting Agreement. Also includes shares underlying currently
exercisable options, and options that will become exercisable within 60
days of July&nbsp;9, 2004, to purchase an aggregate of 286,166 shares of
Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of March&nbsp;3, 2004, based upon information contained in a Form&nbsp;4,
dated March&nbsp;4, 2004, filed jointly by R. Chaney &#038; Partners IV L.P.
(&#147;Fund IV&#148;) and R. Chaney &#038; Partners III L.P. (&#147;Fund III&#148;) with the
United States Securities and Exchange Commission (the &#147;SEC&#148;).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of December&nbsp;31, 2003, based upon information contained in a
Schedule&nbsp;13G/A, dated February&nbsp;6, 2004, filed with the SEC by
Dimensional Fund Advisors, Inc. (&#147;Dimensional&#148;). All securities
reported in the Schedule&nbsp;13G/A filed by Dimensional are owned by
certain of its clients, none of which is known by Dimensional to own
more than 5% of the outstanding shares of Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of January&nbsp;28, 2004, based upon information contained in a Form
4, dated February&nbsp;2, 2004, filed with the SEC by Stuart Sternberg.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of April&nbsp;30, 2004, based upon information contained in two Forms
3, each dated May&nbsp;3, 2004, filed with the SEC by First Wilshire
Securities Management, Inc.</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

</TABLE>
<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Security Ownership of Management. </I></B>The following table sets forth the
beneficial ownership of Common Stock as of July&nbsp;9, 2004, by (i)&nbsp;each executive
officer whose total annual salary and bonus exceeded $100,000 in the fiscal
year ended January&nbsp;31, 2004; (ii)&nbsp;each director and nominee; and (iii)&nbsp;all
directors and executive officers as a group. All persons listed have sole
disposition and voting power with respect to the indicated shares except as
otherwise indicated in the footnotes below the table.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Common Stock</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Beneficially Owned</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name of Beneficial Owner</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent of Class</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Billy F. Mitcham, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">713,800<sup>(1)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7.9</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">P. Blake Dupuis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">185,000<sup>(2)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Christopher C. Siffert
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">&nbsp;&nbsp;81,666<sup>(3)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Paul Guy Rogers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">&nbsp;&nbsp;34,998<sup>(4)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">R. Dean Lewis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">&nbsp;&nbsp;92,000<sup>(5)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.0</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John F. Schwalbe
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">&nbsp;&nbsp;94,000<sup>(5)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter H. Blum
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">324,879<sup>(6)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.7</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert P. Capps
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">All directors and executive officers as a group</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;(8 persons)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">1,526,343<sup>(7)</sup>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15.8</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Less than 1%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 293,000 shares of Common Stock owned directly by Billy F.
Mitcham, Jr. and an aggregate of 134,634 shares owned by Billy F.
Mitcham, Sr. (77,040 shares) and Mr.&nbsp;Mitcham Jr.&#146;s children (57,594
shares), as to which Mr.&nbsp;Mitcham, Jr. has sole voting rights under a
Voting Agreement. Also includes shares underlying currently
exercisable options, and options that will become exercisable within 60
days of July&nbsp;9, 2004, to purchase an aggregate of 286,166 shares of
Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes shares underlying currently exercisable options to
purchase an aggregate of 175,000 shares of Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes shares underlying currently exercisable options, and
options that will become exercisable within 60&nbsp;days of July&nbsp;9, 2004, to
purchase an aggregate of 74,166 shares of Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes shares underlying currently exercisable options, and
options that will become exercisable within 60&nbsp;days of July&nbsp;9, 2004, to
purchase an aggregate of 27,498 shares of Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents shares underlying currently exercisable options, and
options that will become exercisable within 60&nbsp;days of July&nbsp;9, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes shares underlying currently exercisable options, and
options that will become exercisable within 60&nbsp;days of July&nbsp;9, 2004, to
purchase an aggregate of 80,000 shares of Common Stock, 22,624 shares
underlying currently exercisable warrants, 2,000 shares owned by Mr.
Blum&#146;s spouse&#146;s IRA, and 3,500 shares owned by Mr.&nbsp;Blum&#146;s minor son.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes: (a)&nbsp;shares underlying currently exercisable options and
warrants, and options that will become exercisable within 60&nbsp;days of
July&nbsp;9, 2004, to purchase an aggregate of 851,454 shares of Common
Stock, as follows: the 286,166 shares referred to in footnote (1)
above, and an aggregate of 565,288 shares attributable to P. Blake
Dupuis (175,000 shares), Christopher C. Siffert (74,166 shares), Paul
Guy Rogers (27,498 shares), R. Dean Lewis (92,000 shares), John F.
Schwalbe (94,000 shares) and Peter H. Blum (80,000 shares &#151; options;
and 22,624 shares &#151; warrants).</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

</TABLE>
<P align="center" style="font-size: 10pt">4
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>

<P align="center" style="font-size: 10pt"><B>PROPOSAL 1<BR>
ELECTION OF DIRECTORS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Five individuals will be elected at the Annual Meeting to serve as
directors until the next annual meeting or until their respective successors
are elected and qualified. Shares or proxies may not be voted for more than
five director nominees. All of the director nominees are currently serving on
our Board of Directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;P. Blake Dupuis, a member of our Board of Directors since 2000,
resigned as a director effective as of May&nbsp;12, 2004. See &#147;Certain Transactions
and Relationships &#151; Resignation of P. Blake Dupuis.&#148; On July&nbsp;8, 2004, the
remaining members of the Board of Directors elected Mr.&nbsp;Robert P. Capps to fill
the vacancy resulting from Mr.&nbsp;Dupuis&#146; resignation.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The persons appointed as proxies in the enclosed proxy card will vote such
proxy &#147;FOR&#148; the persons nominated for election to our Board of Directors,
except to the extent authority to vote is expressly withheld with respect to
one or more nominees. If any nominee is unable to serve as a director for any
reason, all shares represented by proxies pursuant to the enclosed proxy card,
absent contrary instructions, will be voted for any substitute nominee
designated by our Board of Directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our Board of Directors recommends a vote &#147;FOR&#148; the election of each of the
director nominees identified below.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Information About Nominees for Director and Executive Officers. </I></B>The
following table sets forth the names and ages of our current directors, each of
whom is a director nominee, and our executive officers. Our directors are
elected annually and serve one-year terms and until their successors are
elected. Our executive officers are elected annually by the Board of Directors
and serve one-year terms or until their death, resignation or removal by the
Board of Directors. There are no family relationships between any of our
directors and executive officers. In addition, there are no arrangements or
understandings between any of our executive officers and any other person
pursuant to which any person was selected as an executive officer.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Positions Held</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Director Since</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Billy F. Mitcham, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">56</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">President and Chief Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1987</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter H. Blum
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-Executive Chairman of the Board
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">R. Dean Lewis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1995</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John F. Schwalbe
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">59</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1994</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert P. Capps
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">50</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Christopher C. Siffert
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President and
Corporate Controller
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">N/A</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Paul Guy Rogers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President of
Business Development
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">N/A</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">5
</DIV>


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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt"><B>Business Experience of Our Directors and Executive Officers</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Billy F. Mitcham, Jr. is President and Chief Executive Officer. Mr.
Mitcham has more than 25&nbsp;years of experience in the geophysical industry. From
1979 to 1987, he served in various management capacities with Mitcham
Associates, an unrelated equipment leasing company. From 1975 to 1979, Mr.
Mitcham served in various capacities with Halliburton Services, primarily in
oilfield services.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter H. Blum was elected Non-Executive Chairman of the Board on July&nbsp;8,
2004. Mr.&nbsp;Blum is Senior Managing Director of Ladenberg Thalmann &#038; Co., Inc.
Since November&nbsp;1998, Mr.&nbsp;Blum has been President of Bear Ridge Capital, L.L.C.,
a private investment banking firm. From June&nbsp;1998 until March&nbsp;2003, Mr.&nbsp;Blum
served as Director, and from September&nbsp;2001 until March&nbsp;2003, as Executive Vice
President, of Mallon Resources Corporation, an oil and gas exploration and
production company that merged with Black Hills Corporation on March&nbsp;10, 2003.
Prior to 1998, Mr.&nbsp;Blum was a senior investment banker with various Wall Street
firms. Mr.&nbsp;Blum started his career with Arthur Young &#038; Co. and is a Certified
Public Accountant.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R.&nbsp;Dean Lewis is the Dean of the Business School at Sam Houston State
University and has served in this capacity since October&nbsp;1995. From 1987 to
October&nbsp;1995, Dr.&nbsp;Lewis was the Associate Dean and Professor of Marketing at
Sam Houston State University. Prior to 1987, Dr.&nbsp;Lewis held a number of
executive positions in the banking and finance industries.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;John F. Schwalbe has been a Certified Public Accountant in private
practice since 1978, with primary emphasis on tax planning, consultation and
compliance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert P. Capps has been the Executive Vice President and Chief Financial
Officer of TeraForce Technology Corporation, a publicly-held provider of
defense electronics products, since July&nbsp;1999. From 1996 to 1999, Mr.&nbsp;Capps
was Executive Vice President and Chief Financial Officer of Dynamex Inc., a
NASDAQ-listed supplier of same-day transportation services. Prior to his
employment with Dynamex, Mr.&nbsp;Capps was Executive Vice President and Chief
Financial Officer of Hadson Corporation, a NYSE-listed energy company. Mr.
Capps is a Certified Public Accountant and was formerly with Arthur Young &#038; Co.
Mr.&nbsp;Capps holds a Bachelor of Accountancy degree form the University of
Oklahoma.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Christopher C. Siffert is a Vice President and our Corporate Controller.
From November&nbsp;1994 to January&nbsp;1998, Mr.&nbsp;Siffert served as Internal Audit
Manager for Houston Cellular Telephone Company and from July&nbsp;1990 to November
1994 he was employed by Arthur Andersen LLP as a Senior Audit Supervisor. Mr.
Siffert is a Certified Public Accountant.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paul Guy Rogers is Vice President of Business Development. Mr.&nbsp;Rogers has
10&nbsp;years experience in the geophysical industry. Prior to joining Mitcham,
Mr.&nbsp;Rogers was employed by Geo Space LP, a worldwide manufacturer of
geophysical equipment, with responsibilities for sales in the United States and
Latin America.


<P align="left" style="font-size: 10pt"><B>Determination of Director Independence</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has determined that each of John F. Schwalbe, R.
Dean Lewis, Robert P. Capps and Peter H. Blum is an independent director, as
that term is defined in the listing standards of The NASDAQ Stock Market, Inc.
(the &#147;Listing Standards&#148;). Messrs.&nbsp;Schwalbe, Lewis, Capps and Blum constitute
a majority of the members of our Board of Directors.


<P align="center" style="font-size: 10pt">6
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Attendance at Board and Committee Meetings</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended January&nbsp;31, 2004, our Board of Directors held
four meetings. Each individual serving as a director during such period
attended all meetings of the Board and all meetings of the committees on which
such individual served.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a policy to encourage our directors to attend the annual meetings
of our shareholders. All nominees who are currently serving as directors
attended the annual meeting of shareholders in July&nbsp;2003, other
than Mr.&nbsp;Capps,
who was not a member of the Board of Directors at the time of the meeting.


<P align="left" style="font-size: 10pt"><B>Committees of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this proxy statement, our Board of Directors has
standing Audit, Compensation and Nominating Committees.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Committee</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended January&nbsp;31, 2004, the Audit Committee, which
was comprised of Messrs.&nbsp;Schwalbe (Chairman), Lewis and Blum during such
period, held five meetings. On July&nbsp;8, 2004, Mr.&nbsp;Blum resigned as a member of
the Audit Committee in connection with his election as Non-Executive Chairman
of the Board, and Robert P. Capps replaced Mr.&nbsp;Blum on the Audit Committee as
of such date. Our Board of Directors has determined that each of Messrs.
Schwalbe, Lewis and Capps is an independent director, as that term is defined
in Rule&nbsp;4350 of the Nasdaq Marketplace Rules, and meets the criteria for
independence set forth in Rule&nbsp;10A-3 promulgated under the Exchange Act. In
addition, our Board of Directors has determined that Mr.&nbsp;Schwalbe has the
financial experience required by the Nasdaq Marketplace Rules and is an &#147;audit
committee financial expert&#148; as defined by applicable SEC regulations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation Committee</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended January&nbsp;31, 2004, the Compensation Committee
held two meetings. The Compensation Committee currently consists of Messrs.
Schwalbe, Lewis and Blum (Chairman). The functions of the Compensation
Committee are to: (1)&nbsp;review our general compensation strategy; (2)&nbsp;recommend
the salaries and bonuses of our executive officers; and (3)&nbsp;review and
administer our stock option plans. For more information regarding the
Compensation Committee, see &#147;Compensation Committee Report on Executive
Compensation.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominating Committee</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee, which was designated by our Board of Directors
on January&nbsp;15, 2004, did not hold any meetings during the fiscal year ended
January&nbsp;31, 2004. The Nominating Committee currently consists of Messrs.
Schwalbe, Lewis and Blum (Chairman).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee will accept for consideration shareholders&#146;
nominations for directors if made in writing. The nominee&#146;s written consent to
the nomination and sufficient background information on the candidate must be
included to enable the Committee to make proper assessments as to his or her
qualifications. Nominations must be addressed to the Secretary at the address
appearing on the first page of this Proxy Statement. The Nominating Committee
may also conduct its own search for potential candidates that may include
candidates identified directly by a variety of means as deemed appropriate by
the members of the Nominating Committee. Irrespective of how a candidate may
be brought to the Nominating Committee&#146;s attention, at the appropriate time,
qualified candidates may be asked to conduct one or more personal interviews
with appropriate members of our Board of Directors.


<P align="center" style="font-size: 10pt">7
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Chosen candidates are extended an invitation to join the Board of
Directors and, if the candidate accepts, is formally nominated.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has empowered the Nominating Committee to develop
and maintain criteria and procedures for the identification and recruitment of
candidates for election to serve as directors, including consideration of the
performance of incumbent directors in determining whether to nominate them for
reelection. The Nominating Committee is directed to make appropriate
recommendations to our Board of Directors with respect to individuals to be
included among management&#146;s nominees, and, as appropriate, to our shareholders
with respect to the election of directors. The Nominating Committee does not
have a charter beyond the resolution adopted by our Board of Directors granting
to the Nominating Committee the duties and powers described above, although
consideration is being given to developing such a charter. The Nominating
Committee has not specified criteria for persons to be recommended to our Board
of Directors as nominees. The Nominating Committee would consider nominees
proposed by shareholders, but has not specified any guidelines or policies for
such consideration.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has not adopted a set of corporate governance
guidelines establishing general principles with respect to, among other things,
director qualifications and responsibility or term limits for service as a
director. In general, it is expected that each director will have the highest
personal and professional ethics, integrity and values and will consistently
exercise sound and objective business judgment. In addition, it is expected
that our Board of Directors as a whole will be made up of individuals with
significant senior management and leadership experience, a long-term and
strategic perspective and the ability to advance constructive debate.


<P align="left" style="font-size: 10pt"><B>Shareholder Communication with Our Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any shareholder who wishes to speak with our Board of Directors or
specified individual directors, may do so by contacting the Secretary at the
address appearing on the first page of this proxy statement or via e-mail
through our website at www.mitchamindustries.com. Each such communication
shall (i)&nbsp;identify the applicable shareholder(s), (ii)&nbsp;identify the applicable
director(s) and (iii)&nbsp;contain the information necessary to enable such
director(s) to contact such shareholder(s). The Secretary will relay such
information to the applicable director(s) and request that the shareholder be
contacted as soon as possible.


<P align="left" style="font-size: 10pt"><B>Independence of Non-Employee Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has determined that all of its non-employee
directors are &#147;independent directors,&#148; as defined in the Listing Standards.


<P align="left" style="font-size: 10pt"><B>Code of Ethics</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has adopted a Code of Ethics that applies to all of
our employees, including our Chief Executive Officer and our Corporate
Controller, to ensure that our business is conducted in a legal and ethical
manner. Copies of the Code of Ethics may be obtained without charge by
contacting our Secretary by mail at Mitcham Industries, Inc., 8141 SH 75 South,
P.O. Box 1175, Huntsville, Texas 77342, Attention: Secretary, or by telephone
(936)&nbsp;291-2277. The Audit Committee has adopted separate policies and
procedures for handling reports of suspected wrongdoing related to accounting
and audit matters.


<P align="center" style="font-size: 10pt">8
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Compensation of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cash Compensation</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We pay each of our non-employee directors an annual fee of $25,000 for
their services as directors, and our Non-Executive Chairman of the Board
receives an additional annual fee of $25,000. Members of the Audit Committee
and the Compensation Committee receive an additional annual fee of $5,000 and
$2,000, respectively, for their service on such committees. The Chairman of
the Audit Committee and the Chairman of the Compensation Committee receive an
additional annual fee of $3,000 and $2,000, respectively, for their service in
such capacity. Additionally, we reimburse all of our directors for their
reasonable out-of-pocket expenses incurred in connection with their attendance
at board and committee meetings.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Options</I>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to cash compensation, our non-employee directors are eligible,
at the discretion of our full Board of Directors, to receive discretionary
grants of stock options under our stock option plans. For the fiscal year
ending January&nbsp;31, 2004, each of our non-employee directors was awarded options
to purchase 30,000 shares of Common Stock, which options vested in full on July
17, 2004 (the first anniversary of the grant date).


<P align="left" style="font-size: 10pt"><B>Compensation Committee Interlocks and Insider Participation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No member of the Compensation Committee is now, or at any time has been,
employed by or served as an officer of Mitcham or any of its subsidiaries or
had any substantial business dealings with Mitcham or any of its subsidiaries.
No executive officer of Mitcham is now, or at any time has been, a member of
the compensation committee or board of directors of another entity, one of
whose executive officers has been a member of the Compensation Committee or the
Board of Directors.


<P align="center" style="font-size: 10pt">9
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXECUTIVE COMPENSATION" -->

<P align="center" style="font-size: 10pt"><B>EXECUTIVE COMPENSATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows all compensation earned for services rendered
during the fiscal years ended January&nbsp;31, 2002, 2003 and 2004 by our Chief
Executive Officer and each of our other executive officers (collectively, the
&#147;Named Executives&#148;).

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Annual Compensation</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Long Term Compensation</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fiscal Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Restricted</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and </B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Principal Position </B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>January 31,</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Salary ($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Bonus ($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Award(s) ($)<sup>(1)</sup></B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options (#)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Billy F. Mitcham, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Chairman of the Board,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">253,223</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">34,020</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">30,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">President and Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">245,931</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">85,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">228,098</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">80,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">P. Blake Dupuis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Chief Operating Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">192,707</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22,680</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">and Chief Financial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">160,833</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">144,295</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">30,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Christopher C. Siffert</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">111,207</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14,175</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12,500</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Vice President &#151;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">100,417</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Corporate Controller</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">95,779</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Paul Guy Rogers<sup>(2)</sup></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">122,919</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14,175</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12,500</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Vice President &#151;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">110,607</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Business Development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27,397</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><HR size="1" noshade width="12%" align="left">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The value of each restricted stock award was determined by
multiplying the closing price of the Common Stock as of the date of
grant, July&nbsp;17, 2003 in all instances, by the number of shares awarded
to the particular Named Executives (18,000 shares for Mr.&nbsp;Mitcham;
12,000 shares for Mr.&nbsp;Dupuis; and 7,500 shares for each of Messrs.
Siffert and Rogers) and then subtracting the consideration paid by the
Named Executives for such shares ($0.01 per share in all instances).
The forfeiture provisions relating to the shares of restricted stock
expire ratably over a period of three years). As of January&nbsp;30, 2004,
the last trading day of the fiscal year ended January&nbsp;31, 2004, and
using the fair market value of the Common Stock as of such date
(closing price of $3.73), the number and value of aggregate restricted
stock award holdings were as follows: 18,000 shares ($67,140) by Mr.
Mitcham; 12,000 shares ($44,760) by Mr.&nbsp;Dupuis; and 7,500 shares
($27,975) for each of Messrs.&nbsp;Siffert and Rogers).</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Rogers joined us on October&nbsp;23, 2001.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Option Grants in Last Fiscal Year</I></B>. The following table sets forth
information concerning stock option grants made in the fiscal year ended
January&nbsp;31, 2004 to the Named Executives. There were no grants of stock
appreciation rights to the Named Executives during the fiscal year ended
January&nbsp;31, 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Individual Grants</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of<BR>Securities<BR>Underlying<BR>Options<BR>Granted</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of Total<BR>Options<BR>Granted to<BR>Employees in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise or<BR>Base Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Potential Realizable<BR>Value at Assumed<BR>Annual Rate of Stock<BR>Price Appreciation<BR>for Option Term<sup>(2)</sup></B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)<sup>(1)</sup></B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fiscal Year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($/Sh)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>5% ($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>10% ($)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Billy F. Mitcham, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/17/13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,843</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">P. Blake Dupuis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/17/13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,562</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Christopher C. Siffert</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/17/13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,851</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Paul Guy Rogers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/17/13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,851</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The options terminate on the earlier of their expiration date, 10
years after grant or three months after termination of employment,
subject to certain exceptions. The options become exercisable in three
equal annual installments beginning one year after the grant date, but
vesting may be accelerated on the consummation of a specified change of
control.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The indicated 5% and 10% rates of appreciation are provided to
comply with SEC regulations and do not necessarily reflect our views as
to the likely trend in our stock price. Actual gains, if any, on stock
option exercises and the sale of Common Stock holdings will depend on,
among other things, the future performance of our Common Stock and
overall stock market conditions.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The vesting dates of the 20,000 options granted to Mr.&nbsp;Dupuis
during the fiscal year ended January&nbsp;31, 2004, were accelerated in
connection with his resignation. See &#147;Certain Transactions and
Relationships &#151; Resignation of P. Blake Dupuis.&#148;</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Option Exercises and Year-End Option Values. </I></B>The following table provides
information as to options exercised by the Named Executives in the 2004 fiscal
year and year-end value of unexercised options held by the Named Executives.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Aggregate Option Exercises in 2004 Fiscal Year and January&nbsp;31, 2004 Option
Values</B>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercised</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>In-the-Money</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>January 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>January 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004 (#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004 ($)</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Shares Acquired</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercisable/</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercisable/</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>On Exercise (#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Realized ($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercisable</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercisable<SUP>(1)</SUP></B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Billy F. Mitcham, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">266,915 / 113,335</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;61,284 / 153,501</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">P. Blake Dupuis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">150,500 /  &nbsp;&nbsp;60,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;27,885 /  &nbsp;&nbsp;88,800</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Christopher C. Siffert</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;60,000 /  &nbsp;&nbsp;27,500</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;10,400 /  &nbsp;&nbsp;40,275</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Paul Guy Rogers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">0</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;16,666 /  &nbsp;&nbsp;25,834</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;&nbsp;11,599 /  &nbsp;&nbsp;46,076</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><HR size="1" noshade width="12%" align="left">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Value is based on the $3.73 per share closing price of Common Stock
on January&nbsp;30, 2004, the last day of trading prior to the end of the
fiscal year, less the exercise price.</TD>
</TR>

</TABLE>
<P align="center" style="font-size: 10pt">11
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employment Agreement. </I></B>In January&nbsp;1997, we entered into an employment
agreement with Billy F. Mitcham, Jr., our President and Chief Executive
Officer. The term of the agreement, which was originally for a period of five
years, is automatically extended for successive one-year periods unless either
party gives written notice of termination at least 30&nbsp;days prior to the end of
the then-current term. The agreement provides for an annual salary and a bonus
at the discretion of our Board of Directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Mitcham&#146;s employment agreement may be terminated prior to the end of
any extension period: upon his death; if it is determined that he has become
disabled (as defined in the agreement); if he provides three months prior
notice of his desire to resign; or if we provide him with notice of termination
without cause (as defined in the agreement). In addition, Mr.&nbsp;Mitcham&#146;s
employment agreement may be terminated before the end of the then-current term
if our Board of Directors determines that he has: breached the agreement in any
material respect; misappropriated a material business opportunity available to
us; engaged in fraud or dishonesty with respect to our business; or been
convicted of, or indicted for, any felony criminal offense or any crime
punishable by imprisonment. If Mr.&nbsp;Mitcham terminates his employment within 60
days following (i)&nbsp;a material reduction in his duties and responsibilities
occurring without his consent or (ii)&nbsp;a reduction in, or our failure to pay
when due, any portion of his salary, Mr.&nbsp;Mitcham will be entitled to payments
equal to $450,000, payable ratably over the 24&nbsp;months following his termination
of his employment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a period of two years after the termination of the agreement, Mr.
Mitcham is prohibited from engaging in any business activities which are
competitive with our business and from diverting any of our customers to a
competitor. We have not entered into employment agreements with any of our
other executive officers.


<P align="center" style="font-size: 10pt">12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our executive compensation program is designed to attract, motivate and
retain talented management personnel and to reward management for our
successful financial performance and for increasing shareholder value. Our
executive compensation has three components: base salaries, annual performance
bonuses and long-term incentive stock-based awards.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Base Salaries. </I></B>We determine the salary ranges for our executive officers
based upon their responsibilities and the salary levels of similarly positioned
officers in comparable companies. Our philosophy has been to establish base
salaries in the median area of the range of such salaries at comparable
companies, because we consider long-term stock-based compensation to be more
important than annual base salaries in aligning the executive&#146;s financial
rewards to the shareholders&#146; financial interests for the long term. The
Compensation Committee&#146;s practice has been to review the base salaries of our
officers at the regular July meeting of the Board of Directors. At our July
2003 meeting, we determined not to increase Mr.&nbsp;Mitcham&#146;s base salary of
$250,000. We also determined not to increase the base salary of any other
Named Executive, except for Mr.&nbsp;Rogers, whose base salary was increased by 9%.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Annual Performance Bonuses. </I></B>Annual bonuses are awarded using a
qualitative analysis. In making our determination of whether to award an
annual bonus and the amount of the bonus, we consider several factors,
including our financial performance in relation to planned expectations and
level of responsibility or duties, successful completion of particular projects
or acquisition and implementation of new technical knowledge. For fiscal 2004,
we determined that uncertain future industry condition precluded us from
granting discretionary bonus awards.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Long-Term Stock-Based Compensation. </I></B>We believe that a substantial
percentage of executive compensation should be tied to equity-based plans and
thereby directly related to improvement in shareholder value over the long
term. In determining stock-based compensation, we make a subjective
determination based on the same factors as we do in determining bonuses. For
fiscal 2004, we approved the grant to executive officers of the options and
restricted stock shown in the Summary Compensation Table for that fiscal year,
which vest ratably over three years.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Compensation Committee</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John F. Schwalbe</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">R. Dean Lewis</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter H. Blum</DIV></TD>
</TR>

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</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">13
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "PERFORMANCE GRAPH &#151; CUMULATIVE TOTAL RETURN" -->

<P align="center" style="font-size: 10pt"><B>PERFORMANCE GRAPH &#151; CUMULATIVE TOTAL RETURN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following graph compares our Common Stock&#146;s cumulative total return
for the period beginning January&nbsp;31, 1999, through January&nbsp;31, 2004, to the
cumulative total return on (i)&nbsp;the S&#038;P&#146;s Smallcap 600 stock index and (ii)&nbsp;an
index of peer companies we selected. The cumulative total return assumes that the value of an
investment in our Common Stock and each index was $100 at January&nbsp;31, 1999, and
that all dividends were reinvested.


<P align="center" style="font-size: 10pt"><IMG src="h16824dh168241eo1.gif" alt="(PERFORMANCE GRAPH)">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/99</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/00</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/01</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/02</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/03</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1/31/04</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Mitcham Industries, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">100.00</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">89.23</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">132.31</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">104.62</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">35.45</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">91.82</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">S&#038;P Smallcap 600</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">100.00</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">110.31</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">132.72</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">136.77</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">111.77</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">165.30</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Peer Company Index</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">100.00</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">109.08</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">162.05</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">98.25</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">45.51</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">90.60</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The index of peer companies consists of: Compagnie Generale de Geophysique
(NYSE: GGY), Dawson Geophysical Company (NASDAQ: DWSN), Input/Output, Inc.
(NYSE: IO), Omni Energy Services Corp. (NASDAQ: OMNI) and Veritas DGC, Inc.
(NYSE: VTS).

<!-- link1 "CERTAIN TRANSACTIONS AND RELATIONSHIPS" -->

<P align="center" style="font-size: 10pt"><B>CERTAIN TRANSACTIONS AND RELATIONSHIPS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Voting Agreement</I></B>. Effective September&nbsp;20, 1993, we entered into a Voting
Agreement (the &#147;Voting Agreement&#148;) with Billy F. Mitcham, Jr., Billy F.
Mitcham, Sr., Paul C. Mitcham and the Mitcham Children&#146;s Trusts. Under the
Voting Agreement, Mr.&nbsp;Mitcham, Jr. has the authority to vote all shares of
Common Stock held by the parties to the agreement, which, as of July&nbsp;9, 2004
includes 293,000 shares owned directly by Mr.&nbsp;Mitcham Jr. and an additional
134,634 shares owned by the other parties, representing 3.3% and 1.5%,
respectively (for an aggregate of 4.8%), of the shares of Common Stock
outstanding on such date. The Voting Agreement will terminate on the first to
occur of (i)&nbsp;the agreement of the parties, (ii)&nbsp;the transfer by the parties
thereto of their shares or (iii)&nbsp;the expiration of 25&nbsp;years.


<P align="center" style="font-size: 10pt">14
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Resignation of P. Blake Dupuis</I></B>. P. Blake Dupuis resigned his directorship
on May&nbsp;12, 2004, and resigned as an executive officer and employee effective
May&nbsp;14, 2004. In connection with Mr.&nbsp;Dupuis&#146; separation from employment, we
entered into an agreement with Mr.&nbsp;Dupuis pursuant to which we: (i)&nbsp;paid Mr.
Dupuis a severance payment equivalent to three months of his base salary (an
aggregate of $47,500); (ii)&nbsp;engaged Mr.&nbsp;Dupuis as a consultant for the period
from May&nbsp;17, 2004 through April&nbsp;14, 2005, at a cost of $15,833 per month, which
is substantially equivalent to his base salary at the time of his resignation;
(iii)&nbsp;agreed to pay the continuation coverage premium for Mr.&nbsp;Dupuis and his
spouse for the nine-month period from June&nbsp;1, 2004 through February&nbsp;28, 2004;
and (iv)&nbsp;agreed to pay to Mr.&nbsp;Dupuis, for each of the months of March, April
and May&nbsp;2005, an additional amount of $710.12 per month, which represents the
premium cost for group medical coverage for Mr.&nbsp;Dupuis and his spouse under our
group medical plan at the time of his resignation. In addition, we: (i)&nbsp;agreed
to accelerate the vesting of certain options previously granted to Mr.&nbsp;Dupuis
under (a)&nbsp;the 2000 Stock Option Plan (on August&nbsp;15, 2002, we granted Mr.&nbsp;Dupuis
an option to purchase up to 45,000 shares of Common Stock at a purchase price
of $1.99 per share, the right to purchase up to 30,000 shares of which had not
vested at the time of his resignation) and (b)&nbsp;the 1994 Stock Option Plan (on
July&nbsp;17, 2003, we granted Mr.&nbsp;Dupuis an option to purchase up to 20,000 shares
of Common Stock at a purchase price of $1.90 per share, none of which had
vested at the time of his resignation), all of which must be exercised, if at
all, within 90&nbsp;days after the date of his resignation; (ii)&nbsp;cancelled all other
options granted to Mr.&nbsp;Dupuis prior to the date of his resignation; and (iii)
granted Mr.&nbsp;Dupuis an option under the 2000 Plan to purchase up to 110,000
shares of Common Stock at a purchase price of $4.50 per share. In accordance
with the terms of the 1998 Stock Awards Plan, all 12,000 shares of restricted
stock awarded to Mr.&nbsp;Dupuis prior to his resignation were forfeited as of the
date of his resignation.

<!-- link1 "AUDIT COMMITTEE REPORT" -->

<P align="center" style="font-size: 10pt"><B>AUDIT COMMITTEE REPORT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary purpose of the Audit Committee is to assist our Board of
Directors in the general oversight of our financial reporting process. The
Audit Committee&#146;s purpose is more fully described in its written charter, a
copy of which is attached to this Proxy Statement as <B>Exhibit&nbsp;A</B>. The current
members of the Audit Committee are Messrs.&nbsp;Schwalbe, Lewis and Capps, all of
which have been determined by our Board of Directors to be independent
directors for purposes of the Listing Standards.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management is responsible for the preparation, presentation and integrity
of our financial statements and the internal controls and procedures relating
to the reporting process. Our independent auditors, Hein &#038; Associates LLP, are
responsible for auditing our consolidated financial statements and expressing
an opinion as to the conformity of those financial statements to generally
accepted accounting principles.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with its oversight function, the Audit Committee has:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reviewed and discussed our audited financial statements as of
and for the year ended January&nbsp;31, 2004, with our management;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>discussed with Hein &#038; Associates LLP the matters required to
be discussed by Statement on Auditing Standards No.&nbsp;61
(Communication with Audit Committees);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>considered whether and determined that the provision by Hein
&#038; Associates LLP of certain non-audit services during the year ended
January&nbsp;31, 2004 was compatible with maintaining the accountants&#146;
independence (See &#147;Fees and Expenses of Hein &#038; Associates LLP&#148;
below); and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>received the written disclosures and the letter from Hein &#038;
Associates LLP required by Independence Standards Board Standard
No.&nbsp;1 (Independence Discussions with Audit</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">15
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Committee), and has discussed with the accountants of Hein &#038; Associates
LLP the accountants&#146; independence.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the reviews and discussions referred to above, the Audit
Committee recommended to our Board of Directors that our audited financial
statements be included in our Annual Report on Form 10-K for the year ended
January&nbsp;31, 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Audit Committee</DIV></TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John F. Schwalbe</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">R. Dean Lewis</DIV></TD>
</TR>

<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter H. Blum*</DIV></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">*</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Blum was a member of the Audit Committee at the time this Audit
Committee Report was prepared, signed and delivered to the Board of
Directors.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><B>PROPOSAL 2<BR>
APPROVAL OF THE AMENDMENT AND RESTATEMENT<BR>
OF THE 1998 STOCK AWARDS PLAN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the approval of the shareholders at the Annual Meeting, the
Board of Directors has approved the Amended and Restated 1998 Stock Awards
Plan, a copy of which is attached hereto as <B>Exhibit&nbsp;B</B>. The Amended and
Restated 1998 Stock Awards Plan amends the 1998 Stock Awards Plan, which was
approved by the shareholders on July&nbsp;9, 1998, in three respects: (i)&nbsp;increases
the number of shares reserved for issuance under the plan from 350,000 to
750,000; (ii)&nbsp;allows grants of awards to non-employee directors and consultants
and (iii)&nbsp;allows the Compensation Committee greater flexibility in determining
to what extent granted awards will terminate after an employee, director or
consultant leaves his employment, directorship or consultancy, as applicable.
The Board of Directors believes that such amendments to the plan will
strengthen our ability to attract, retain and develop top-quality members of
our management and will further align the participants&#146; interests to the
profitability of our business.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A summary of the outstanding options, warrants and rights under our 1994
Stock Option Plan, 1994 Non-Employee Director Stock Option Plan (both of which
plans have expired, but both of which have outstanding options that were
granted pursuant to them), 1998 Stock Awards Plan and our 2000 Stock Option
Plan as of January&nbsp;31, 2004, as well as the number of securities remaining
available for future issuance under the 1998 and 2000 plans as of such date, is
included below, at &#147;Securities Authorized for Issuance Under Equity
Compensation Plans.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summary of the provisions of the Amended and Restated 1998
Stock Awards Plan (the &#147;Plan&#148;) is qualified in its entirety by the text of the
Plan and shareholders should refer to <B>Exhibit&nbsp;B </B>for a complete statement of its
terms and provisions.


<P align="left" style="font-size: 10pt"><B>Administration</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan will continue to be administered by the Compensation Committee,
which will have the power to determine which employees, directors and
consultants will receive an award, the time or times when such award will be
made, the type of the award and the number of shares of Common Stock to be
issued under the award or the value of the award. Only persons who at the time
of the award are our employees, directors or consultants or employees of our
subsidiaries are eligible to receive awards under the Plan.


<P align="center" style="font-size: 10pt">16
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Stock Subject to the Plan</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An aggregate of 350,000 shares of Common Stock are currently authorized to
be issued under the Plan. The proposed amendment, if approved, would increase
the total number of shares available for issuance to 750,000. If awards
granted under the Plan expire or otherwise terminate without being exercised
(or without becoming vested in the case of restricted stock awards), the Common
Stock not earned or purchased under such awards again become available for
issuance under the Plan.


<P align="left" style="font-size: 10pt"><B>Types of Awards</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan provides for the grant of stock options, restricted stock awards,
stock appreciation rights, and performance and phantom stock awards. Prior to
the grant of any award, the Compensation Committee may establish performance
goals that are based on the attainment of specified corporate objectives.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Options</I>. The Plan provides for two types of options: incentive stock
options (ISOs) and nonqualified stock options. The Compensation Committee will
designate the key employees, directors and consultants to receive the options,
the number of shares subject to the options, and the terms and conditions of
each option granted under the Plan. The term of any option granted under the
Plan shall be determined by the Compensation Committee, except that the term of
any ISO cannot exceed 10&nbsp;years from the date of the grant and any ISO granted
to an employee who possesses more than 10% of the total combined voting power
of the Common Stock will not be exercisable after the expiration of five years
from the date of grant. No option may be exercised sooner than six months from
the date of grant. The exercise price per share of Common Stock for options
granted under the Plan will be determined by the Compensation Committee, except
that the exercise price of an ISO cannot be less than the fair market value of
a share of Common Stock on the date the option is granted. Further, the
exercise price of any ISO granted to an employee who possesses more than 10% of
the total combined voting power of the Common Stock must be at least 110% of
the fair market value of the share at the time such option is granted. The
exercise price of options granted under the Plan will be paid in full in a
manner prescribed by the Compensation Committee. The Plan permits holders of
options, with approval of the Compensation Committee, to relinquish all or any
part of the unexercised portion thereof in exchange for replacement under
certain circumstances.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restricted Stock Awards</I>. Under a restricted stock award, Common Stock
will be issued or delivered to the holder at any time the award is made without
any cash payment to us, except to the extent otherwise provided by the
Compensation Committee or required by law. Shares will be subject to certain
restrictions on the disposition thereof and certain obligations to forfeit such
shares as the Compensation Committee determines in its discretion. The
restrictions on disposition may lapse based upon (a)&nbsp;our attainment of specific
performance targets established by the Compensation Committee that are based on
(i)&nbsp;the price of a share of Common Stock, (ii)&nbsp;our earnings per share, (iii)
our revenue, or (iv)&nbsp;our pre-tax cash flow from operations, (b)&nbsp;the grantee&#146;s
tenure with us, or (c)&nbsp;a combination of both factors. We will retain custody
of the Common Stock issued pursuant to a restricted stock award until the
disposition restrictions lapse. A restricted stock award recipient may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of such
shares until the expiration of the restriction period. However, upon the
issuance to the award recipient of Common Stock pursuant to a restricted share
award, except for the foregoing restrictions, such employee will have all the
rights of a shareholder with respect to such shares, including the right to
vote such shares and to receive all dividends and other distributions paid with
respect to such shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Appreciation Rights</I>. A stock appreciation right permits the holder
thereof to receive an amount (in cash, Common Stock, or a combination thereof)
equal to the number of stock appreciation rights exercised by the holder
multiplied by the excess of the fair market value of Common Stock on the


<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">exercise date over the stock appreciation rights&#146; exercise price. Stock
appreciation rights may or may not be granted in connection with the grant of
an option and no stock appreciation right may be exercised sooner than six
months from the date of grant. The exercise price of the stock appreciation
right may not be less than the fair market value of a share of Common Stock on
the date the stock appreciation right is granted (or 110% of such fair market
value if granted in connection with an ISO). A stock appreciation right may be
exercised in whole or in such installments and at such time as determined by
the Compensation Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Performance and Phantom Stock Awards</I>. The Plan will permit grants of
performance awards and phantom stock awards, which may be paid in cash, Common
Stock or a combination thereof, as determined by the Compensation Committee.
Performance awards granted under the Plan will have a maximum value established
by the Compensation Committee at the time of the grant. A grantee&#146;s receipt of
such amount will be contingent upon our satisfaction, or any subsidiary,
division or department of future performance conditions established by the
Compensation Committee prior to the beginning of the performance period. Such
performance awards, however, are subject to later revisions as the Compensation
Committee deems appropriate to reflect significant unforeseen events or
changes. A performance award will terminate if the grantee&#146;s employment with
us terminates during the applicable performance period, except as otherwise
provided by the Compensation Committee at the time of grant. Phantom stock
awards granted under the Plan are awards of Common Stock or rights to receive
amounts equal to stock appreciation over a specified period of time. Such
awards vest over a period of time or upon the occurrence of specific events
established by the Compensation Committee, without payment of any amounts by
the holder thereof (except to the extent required by law) or satisfaction of
any performance criteria or objectives. A phantom stock award will terminate
if the grantee&#146;s employment with us terminates during the applicable vesting
period or, if applicable, the occurrence of a specific event, except as
otherwise provided by the Compensation Committee at the time of grant. In
determining the value of performance awards or phantom stock awards, the
Compensation Committee must take into account the award recipient&#146;s
responsibility level, performance, potential, other awards under the Plan, and
other such consideration as it deems appropriate. Such payment may be made in
a lump sum or in installments as prescribed by the Compensation Committee. Any
payment made in Common Stock will be based upon the fair market value of the
Common Stock on the payment date.


<P align="left" style="font-size: 10pt"><B>Change of Control Provisions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If there is a &#147;Change of Control&#148; (as defined in the Plan), all
outstanding awards shall immediately vest and become exercisable or
satisfiable, as applicable. The Compensation Committee in its discretion may
determine that upon a Change of Control, each award (other than an option) shall
terminate within a specified number of days after notice to the holder, and
each holder shall receive cash in the amount equal to the excess of the &#147;Change
of Control Value&#148;, as defined in the Plan. With respect to options, the
Compensation Committee may effect any one of the following alternatives: (i)
determine a limited period of time on or before a specified date (before or
after the change in control) after which the specified date all unexercised
options shall terminate, (ii)&nbsp;require the mandatory surrender by the holders of
some or all of the outstanding options held by the holders as of the date of
the Change of Control specified by the Compensation Committee, in which case
the options shall be canceled and we shall pay the excess of the Change of
Control Value of the share subject to such option over the exercise prices
under such options for such shares, (iii)&nbsp;make such adjustments to options then
outstanding as the Compensation Committee deems appropriate to reflect such
Change of Control, or (iv)&nbsp;provided that thereafter upon any exercise of an
option the holder shall be entitled to purchase under such option, in lieu of
the number of shares of stock then covered by such option the number and class
of shares stock or other securities or property to which the holder would have
been entitled under the agreement of merger, consolidation, or sale of assets
and dissolution if, immediately prior to such merger, consolidation or sale of
assets and dissolution, the holder has been the holder of record of the number
of shares of stock then covered by such option.


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Federal Income Tax Consequences</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nonqualified Stock Options</I>. Nonqualified stock options granted under the
Plan are not taxable to an optionee when granted but result in taxation at
exercise, at which time the optionee will recognize ordinary income in an
amount equal to the difference between the option exercise price and the fair
market value of the shares on the exercise date. We will be entitled to deduct
a corresponding amount as a business expense in the year the optionee
recognizes this income.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Incentive Stock Options</I>. An employee will generally not recognize income
on receipt or exercise of an incentive stock option (&#147;ISO&#148;) so long as he or
she has been our employee or an employee of one of our subsidiaries from the
date the option was granted until three months before the date of exercise;
however, the amount by which the fair market value of the stock at the time of
exercise exceeds the option price is a required adjustment for purposes of the
alternative minimum tax applicable to the employee. If the employee holds the
stock received on exercise of the option for one year after exercise (and for
two years from the date of grant of the option), any difference between the
amount realized upon the disposition of the stock and the amount paid for the
stock will be treated as long-term capital gain (or loss, if applicable) to the
employee. If the employee exercises an ISO and satisfies these holding period
requirements, we may not deduct any amount in connection with the ISO.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In contrast, if an employee exercises an ISO but does not satisfy the
holding period requirements with respect to the stock acquired on exercise, the
employee generally will recognize ordinary income in the year of the
disposition equal to the excess, if any, of the fair market value of the stock
on the date of exercise over the option price; and any excess of the amount
realized on the disposition over the fair market value on the date of exercise
will be taxed as long- or short-term capital gain (as applicable). If,
however, the fair market value of the stock on the date of disposition is less
than on the date of exercise, the employee will recognize ordinary income equal
only to the difference between the amount realized on disposition and the
exercise price. In either event, we will be entitled to deduct an amount equal
to the amount constituting ordinary income to the employee in the year of the
premature disposition.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restricted Stock</I>. The federal income tax consequences of restricted stock
awards depend on the restrictions imposed on the stock. Generally, the fair
market value of the stock received will be includible in the employee&#146;s gross
income at receipt unless the property is subject to a substantial risk of
forfeiture (and is either nontransferable or after transfer remains subject to
such risk of forfeiture). In this case, taxation will be deferred until the
first taxable year the stock is no longer subject to substantial risk of
forfeiture. The employee may, however, make a tax election to include the
value of the stock in gross income in the year of receipt despite such
restrictions. Generally, we will be entitled to deduct the fair market value
of the stock transferred to the employee as a business expense in the year the
employee includes the compensation in income.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Appreciation Rights</I>. There are no immediate tax consequences to an
employee when a stock appreciation right is granted. When an employee
exercises the right to the appreciation in fair market value of stock
represented by a stock appreciation right, payments made, whether in cash or
stock, are includible in the employee&#146;s gross income. We will be entitled to
deduct the same amount as a business expense at the time. When payments are
made in stock, the includible amount and corresponding deduction are equal to
the fair market value of the stock on the date of exercise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Stock-Based Awards/Incentive Awards</I>. Any cash payments or the fair
market value of any Common Stock or other property an employee receives in
connection with other stock-based awards, incentive awards, or as unrestricted
payments equivalent to dividends on unfunded awards or on restricted stock are
includible in income in the year received or made available to the employee
without substantial limitations or restrictions. Generally, we will be
entitled to deduct the amount the employee includes in income as a business
expense in the year of payment. Section 162(m) of the Code places a $1,000,000


<P align="center" style="font-size: 10pt">19
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">annual limit on the deductible compensation of certain executives of
publicly traded corporations. The limit, however, does not apply to &#147;qualified
performance-based compensation.&#148; We believe that awards of options, SARs and
certain other &#147;performance-based compensation&#148; awards under the Plan will
qualify for the performance-based compensation exception to the deductibility
limit, assuming that the Plan is approved by shareholders. State tax
consequences may in some cases differ from those described above. Awards under
the Plan will in some instances be made to employees who are subject to tax in
jurisdictions other than the United States and may result in tax consequences
differing from those described above.


<P align="left" style="font-size: 10pt"><B>Plan Amendment and Termination</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may alter or amend the Plan from time to time but
no change in any award may be made which would impair the rights of the holder
without the consent of the holder and the Board of Directors may not, without
approval of the shareholders, amend the Plan to (a)&nbsp;increase the maximum number
of shares which may be issued on exercise or surrender of Award (except in
certain cases of Changes in Control as more fully set forth in the Plan), (b)
change the exercise price of an option, (c)&nbsp;change the class of employees
eligible to receive awards, (d)&nbsp;extend the maximum period during which awards
may be granted under the Plan, (e)&nbsp;materially modify the requirements as to
eligibility for participation in the Plan, or (f)&nbsp;decrease any authority
granted to the Compensation Committee in contravention of Rule&nbsp;16b-3 under the
Exchange Act. The Plan shall remain in effect until all awards granted have
been satisfied or expired.


<P align="left" style="font-size: 10pt"><B>Transfer and Resale Restrictions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The awards are not transferrable except in the event of the participant&#146;s
death or under a &#147;qualified domestic relations order&#148; as defined under
applicable law. Our key employees may not offer or resell shares acquired
under the Plan without registration under the Securities Act, or compliance
with Rule&nbsp;144.


<P align="left" style="font-size: 10pt"><B>Benefits to be Received Under the Amended and Restated Plan</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not possible to state the persons who will receive awards under the
Amended and Restated Plan in the future, or the amount of stock awards that
will be granted thereunder.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Securities Authorized for Issuance Under Equity Compensation Plans</I></B>. The
following table sets forth certain information with respect to our equity
compensation plans as of January&nbsp;31, 2004:

<!-- link1 "EQUITY COMPENSATION PLAN INFORMATION" -->

<P align="center" style="font-size: 10pt"><B>EQUITY COMPENSATION PLAN INFORMATION</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Weighted-Average</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Securities</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to be Issued Upon</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise Price of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Remaining Available</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>for Future Issuance</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding Options,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options, Warrants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Under Equity</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Plan Category</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Warrants and Rights</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>and Rights</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation Plans<SUP>(1)</SUP></B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>Equity compensation plans
approved by our stockholders<SUP>(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,394,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD>Equity compensation plans not
approved by our stockholders</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><HR size="1" noshade width="12%" align="left">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Excludes securities to be issued upon the exercise of outstanding
options, warrants and rights.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">20
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes options granted under the 1994 Stock Option Plan, 1994
Non-Employee Director Stock Option Plan, 1998 Stock Awards Plan and
2000 Stock Option Plan, each of which is further described in footnote
16 to our audited financial statements in our 2004 Annual Report.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our Board of Directors recommends a vote &#147;FOR&#148; the approval of the
amendment and restatement of the 1998 Stock Awards Plan.</B>

<!-- link1 "PROPOSAL 3<BR> RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS" -->

<P align="center" style="font-size: 10pt"><B>PROPOSAL 3<BR>
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hein &#038; Associates LLP has served as our independent auditors since 1993.
In accordance with the recommendation of the Audit Committee, our Board of
Directors has selected Hein &#038; Associates LLP as the independent auditors to
audit our books, records and accounts for the fiscal year ending January&nbsp;31,
2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One or more representatives of Hein &#038; Associates LLP are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they desire to do so. The representatives of Hein &#038; Associates LLP are
expected to be available to respond to appropriate questions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our Board of Directors recommends a vote &#147;FOR&#148; the ratification of the
selection of Hein &#038; Associates LLP as our independent auditors for the fiscal
year ending January&nbsp;31, 2005.</B>

<!-- link1 "FEES AND EXPENSES OF HEIN &#038; ASSOCIATES LLP" -->

<P align="center" style="font-size: 10pt"><B>FEES AND EXPENSES OF HEIN &#038; ASSOCIATES LLP</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the amount of audit fees, audit-related
fees and tax fees billed or expected to be billed by Hein &#038; Associates LLP, our
independent auditor, for the fiscal years ended January&nbsp;31, 2003 and January
31, 2004, respectively:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Audit Fees<SUP>(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">100,880</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Audit-Related Fees<SUP>(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Tax Fees<SUP>(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">All Other Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">165,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">156,486</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><HR size="1" noshade width="12%" align="left">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes the annual consolidated financial statement audit, review
of quarterly reports on Form 10-Q and other services associated with
the audit.</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During the indicated periods, our independent auditors did not
provide us with any information technology services relating to
financial information systems design and implementation.</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes fees and expenses for services primarily related to tax
compliance, tax advice and tax planning for certain acquisitions.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has pre-approved all audit services and permitted
non-audit services provided by the independent auditors, and the compensation,
fees and terms for such services, for the fiscal year ended January&nbsp;31, 2005.
The Committee also has approved a policy that requires Audit Committee
pre-approval of the compensation and terms of service for audit services and
any permitted non-audit services based on ranges of fees, and any changes in
terms, conditions and fees resulting from changes in audit scope or other
matters. Any proposed audit or non-audit services exceeding the pre-approved
fee ranges require additional pre-approval by the Audit Committee or its
Chairman.


<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "ANNUAL REPORT" -->

<P align="center" style="font-size: 10pt"><B>ANNUAL REPORT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Annual Report covering the fiscal year ended January&nbsp;31, 2004,
accompanies this Proxy Statement. Except for the financial statements included
in the Annual Report that are specifically incorporated by reference herein,
the Annual Report is not incorporated in this Proxy Statement and is not to be
deemed part of this proxy soliciting material. Additional copies of the Annual
Report are available upon request.

<!-- link1 "OTHER MATTERS" -->

<P align="center" style="font-size: 10pt"><B>OTHER MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Compliance With Section&nbsp;16(a) of the Exchange Act. </I></B>Section&nbsp;16(a) of the
Exchange Act requires our directors, executive officers and persons who own
more than 10% of our outstanding Common Stock to file initial reports of
ownership and changes in ownership of Common Stock with the SEC. Reporting
persons are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely on our review of the copies of
reports we received, we believe that all filings required to be made under
Section 16(a) were timely made, except as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>R. Dean Lewis, a director, failed to make a timely filing of
a statement of changes in beneficial ownership with respect to the
options granted to him on July&nbsp;17, 2003, the filing for which was
made four days late;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>R. Chaney &#038; Partners IV L.P., a shareholder who, acting with
R. Chaney &#038; Partners III L.P. as a &#147;group&#148; for purposes of Section
13(d) of the Securities Exchange Act of 1934, is a 10% owner of the
Common Stock, failed to make a timely filing of a statement of
changes in beneficial ownership with respect to its sale of shares
of Common Stock on each of January&nbsp;8, 2004 (filing was eight days
late), January&nbsp;12, 2004 (filing was six days late) and January&nbsp;13,
2004 (filing was five days late); and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>R. Chaney &#038; Partners III L.P., a shareholder who, acting with
R. Chaney &#038; Partners IV L.P. as a &#147;group&#148; for purposes of Section
13(d) of the Securities Exchange Act of 1934, is a 10% owner of the
Common Stock, failed to make a timely filing of a statement of
changes in beneficial ownership with respect to its sale of shares
of Common Stock on each of January&nbsp;8, 2004 (filing was 16&nbsp;days
late), January&nbsp;12, 2004 (filing was 14&nbsp;days late), January&nbsp;13, 2004
(filing was 13&nbsp;days late), January&nbsp;16, 2004 (filing was eight days
late), January&nbsp;20, 2004 (filing was six days late), January&nbsp;21, 2004
(filing was five days late), January&nbsp;22, 2004 (filing was two days
late) and January&nbsp;23, 2004 (filing was one day late).</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Matters. </I></B>As of July&nbsp;26, 2004, the Board of Directors knows of no
other business to be presented at the Annual Meeting. If any other matter
properly comes before the meeting, however, it is intended that the persons
named in the accompanying proxy will vote such proxy in accordance with the
discretion and instructions of our Board of Directors.

<!-- link1 "SUBMISSION OF SHAREHOLDER PROPOSALS" -->

<P align="center" style="font-size: 10pt"><B>SUBMISSION OF SHAREHOLDER PROPOSALS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders wishing to submit proposals for consideration by our Board of
Directors at our 2005 Annual Meeting of Shareholders should submit them to us
in writing (marked &#147;Shareholder Proposal, Attention: Corporate Secretary&#148;) no
later than February&nbsp;10, 2005, so that we may consider the proposal for
inclusion in our proxy statement and form of proxy for that meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A shareholder who wishes to make a proposal at the 2004 Annual Meeting of
Shareholders without complying with the requirements of Rule&nbsp;14a-8 (and
therefore without including the proposal in our proxy materials) must notify us
of the proposal by April&nbsp;28, 2005. If a shareholder fails to timely give
notice of a potential proposal, then the persons named as proxies in the proxy
cards solicited by our


<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Board of Directors for that meeting will be entitled to vote the proxy
cards held by them regarding that proposal, if properly raised at the meeting,
in their discretion or as directed by our management.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By Order of the Board of Directors,</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Billy F. Mitcham, Jr.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>President and Chief Executive Officer</I></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">July 26, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

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</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">23
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>EXHIBIT A</B>


<!-- link1 "AUDIT COMMITTEE CHARTER<BR> OF<BR> MITCHAM INDUSTRIES, INC." -->

<P align="center" style="font-size: 10pt"><B>AUDIT COMMITTEE CHARTER<BR>
OF<BR>
MITCHAM INDUSTRIES, INC.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors (the &#147;<I>Board</I>&#148;) of Mitcham Industries, Inc. (the
&#147;<I>Company</I>&#148;) approves and adopts the following Audit Committee Charter to specify
the purpose, composition and responsibilities of the Audit Committee (the
&#147;<I>Committee</I>&#148;).

<!-- link1 "I. PURPOSE" -->

<P align="center" style="font-size: 10pt"><B>I. PURPOSE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The function of the Committee is to assist the Board in fulfilling its
oversight responsibilities with respect to: (a)&nbsp;the integrity of the Company&#146;s
financial statements; (b)&nbsp;the Company&#146;s compliance with legal and regulatory
requirements; (c)&nbsp;the independent auditor&#146;s qualifications, independence and
performance; and (d)&nbsp;the effectiveness of the Company&#146;s system of internal
control over annual and interim financial reporting.

<!-- link1 "II. COMPOSITION" -->

<P align="center" style="font-size: 10pt"><B>II. COMPOSITION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall consist of not less than three members of the Board,
all of whom shall be as defined in the applicable rules of the Nasdaq Stock
Exchange and the Securities Exchange Commission (the &#147;<I>SEC</I>&#148;). Each member of
the Committee shall be able to read and understand fundamental financial
statements, including the Company&#146;s balance sheet, income statement and cash
flow statement, and at least one member of the Committee shall be an &#147;audit
committee financial expert&#148;, as defined by applicable SEC rules. Committee
members may enhance their familiarity with finance and accounting by
participating in educational programs. The members of the Committee and the
Chairman shall be selected annually by the Board and shall serve at the
pleasure of the Board. The Chairman of the Committee shall be designated by
the Board; however, if a Chairman is not designated by the Board or present at
a meeting, the Committee may designate a Chairman by majority vote of the
Committee members then in office.

<!-- link1 "III. AUTHORITY AND RESPONSIBILITIES" -->

<P align="center" style="font-size: 10pt"><B>III. AUTHORITY AND RESPONSIBILITIES</B>


<P align="left" style="font-size: 10pt">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Oversight Over Financial Reporting</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the filing of the Company&#146;s Annual Report on Form 10-K, review
and discuss with management and the independent auditor the annual audited
financial statements, including disclosure under &#147; Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations&#148; in such report, and
the results of the audit.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the filing of the Company&#146;s Quarterly Reports on Form 10-Q,
review and discuss with management and the independent auditor the interim
unaudited quarterly financial statements, including disclosure under
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148; in such reports, and the independent auditor&#146;s review of the
interim financial statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the release of quarterly and annual earnings, review and
discuss with management and the independent auditor all earnings press
releases.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Review and discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the
preparation of the Company&#146;s financial


<P align="center" style="font-size: 10pt">A-1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">statements, including any significant changes in the Company&#146;s selection
or application of accounting principles, any material issues as to the adequacy
of the Company&#146;s systems of internal control and any corrective actions or
special procedures adopted in light of material control deficiencies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discuss with management the Company&#146;s major financial risk exposures
and the steps management has taken to monitor and control such exposures,
including the Company&#146;s risk assessment and risk management policies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the review and discussions with management and independent
auditor contemplated by this Charter, determine whether to recommend to the
Board that the audited annual financial statements be included in the Company&#146;s
Annual Report on Form 10-K.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepare for inclusion in the Company&#146;s annual proxy statement the
report required by SEC rules.

<P align="left" style="font-size: 10pt">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Oversight of the Independent Auditor</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Be directly responsible for the appointment, oversight and compensation
and when necessary, termination of the independent auditor, including
resolution of disagreements with management and the independent auditor
regarding financial reporting for the purpose of preparing or issuing an audit
report or related work.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At least annually, assess the independence of the independent auditor
by requiring that the independent auditor submit to the Committee on a periodic
basis a formal written statement delineating all relationships between the
independent auditor and the Company (including the disclosures required by
Independence Standards Board Standard No.&nbsp;1), and by actively engaging in a
dialogue with the independent auditor with respect to any disclosed
relationships or services that may impact their objectivity and independence.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obtain and review the reports required to be made by the independent
auditor under paragraph (k)&nbsp;of Section&nbsp;10A of the Securities Exchange Act of
1934, regarding: (a)&nbsp;critical accounting policies and practices; (b)
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with Company management,
ramifications of the use of such alternative disclosures and treatments and the
treatment preferred by the independent auditor; and (c)&nbsp;other material written
communications between the independent auditor and the Company&#146;s management,
such as any management letter.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discuss with the independent auditor the matters required to be
discussed by Statement of Auditing Standards No.&nbsp;61, as amended, relating to
the conduct of the audit, including any difficulties encountered in the course
of the audit work, any restrictions on the scope of activities or access to
requested information, and any significant disagreements with management.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obtain and review at least annually a report by the independent auditor
describing the firm&#146;s internal quality-control procedures, any material issues
raised within the preceding five years by the most recent internal-quality
control review, or peer review, of the firm, or by any inquiry or investigation
by governmental or other authority relating to any audit conducted by the firm,
and any steps taken to deal with any such identified material issues.


<P align="center" style="font-size: 10pt">A-2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Establish policies and procedures for the pre-approval, as appropriate,
of all audit services and all permitted non-audit services to be performed for
the Company by the independent auditor, subject only to the de minimis
exceptions for permitted non-audit services.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meet with the independent auditor in executive session to, among other
matters, help evaluate the fullness and accuracy of the Company&#146;s financial
accounting and reporting.

<P align="left" style="font-size: 10pt">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Responsibilities</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Establish procedures for (a)&nbsp;the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls, or auditing matters, and (b)&nbsp;the confidential, anonymous submission
by employees of the Company, regarding questionable accounting or auditing
matters.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Review and reassess the adequacy of this Charter at least annually, and
make recommendations of any proposed changes to this Charter to the Board for
its approval.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submit this Charter to the Board for approval, and cause the Company to
have the Charter published at least every three years in accordance with the
rules of the SEC from time to time in effect.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regularly update the Board about Committee activities.

<P align="left" style="font-size: 10pt">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Authority</I></B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall have the authority to:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conduct any investigation with respect to the Company&#146;s operations that
is appropriate to fulfilling its responsibilities, and shall have direct access
to the independent auditor as well as anyone in the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retain and determine funding for such independent legal, accounting and
such other advisors as deems necessary or appropriate to fulfill its
responsibilities. The Committee is empowered, without further action of the
Board of Directors, to cause the Company to pay the compensation of such
advisors as the Committee shall so engage.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delegate to its Chairman or any of its members the responsibility for
any particular matters, or one or more subcommittees (including a subcommittee
consisting of a single member), as it deems appropriate from time to time under
the circumstances.

<!-- link1 "IV. MEETINGS" -->

<P align="center" style="font-size: 10pt"><B>IV. MEETINGS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall meet at least four times annually and may meet more
frequently as circumstances dictate; at least two of such annual meetings shall
be in executive session (without management present). Meetings of the Committee
may be in person, by conference call or by unanimous written consent, in
accordance with the Bylaws of the Company. Meetings of the Committee shall be
held at such time and place, and upon such notice, as the Chairman of the
Committee may from time to time determine. The Committee shall keep such
records of its meetings as it deems appropriate.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Chairman of the Committee shall develop the agenda for each meeting
and in doing so may consult with management, the independent auditor and legal
counsel.


<P align="center" style="font-size: 10pt">A-3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of the members of the Committee shall constitute a quorum.
Concurrence of a majority of the quorum (or, if the quorum consists of two
members of the Committee, both members present) shall be required to take
formal action of the Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Members of the Committee may conduct informal inquiries without the
necessity of formal meetings.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as specifically provided in this Charter, the provisions of the
Bylaws of the Company with respect to committees of the Board shall apply to
the Committee.



<P align="center" style="font-size: 10pt">A-4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>EXHIBIT B</B>



<P align="center" style="font-size: 10pt"><B>AMENDED AND RESTATED<BR>1998 STOCK AWARDS PLAN<BR>OF MITCHAM INDUSTRIES, INC.</B>



<P align="center" style="font-size: 10pt"><B>I. PURPOSE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the <B>MITCHAM INDUSTRIES, INC. AMENDED AND RESTATED
1998 STOCK AWARDS PLAN </B>(the &#147;Plan&#148;) is to provide a means through which
Mitcham Industries, Inc., a Texas corporation (the &#147;Company&#148;), and its
subsidiaries, may attract able persons as Employees, Directors and Consultants
of the Company and to provide a means whereby those employees, directors and
consultants upon whom the responsibilities of the successful administration and
management of the Company rest, and whose present and potential contributions
to the welfare of the Company are of importance, can acquire and maintain stock
ownership, thereby strengthening their concern for the welfare of the Company.
A further purpose of the Plan is to provide employees with additional incentive
and rewards opportunities designed to enhance the profitable growth of the
Company. Therefore, the Plan provides for granting ISOs, options which do not
constitute ISOs, Stock Appreciation Rights, Restricted Stock Awards,
Performance Awards, Phantom Stock Awards, or any combination of the foregoing,
as is best suited to the circumstances of the particular Employee, Director or
Consultant as provided herein.


<P align="center" style="font-size: 10pt"><B>II. DEFINITIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Affiliates&#148; </B>means any Parent corporation of the Company and any
&#147;subsidiary&#148; of the Company within the meaning of Code Section 424(e) and
(f), respectively.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Award&#148; </B>means, individually or collectively, any Option,
Restricted Stock Award, Phantom Stock Award, Performance Award or Stock
Appreciation Right.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Award Agreement&#148; </B>means any Option Agreement, Restricted Stock
Agreement, Phantom Stock Award Agreement, Performance Award Agreement or
Stock Appreciation Rights Agreement.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Board&#148; </B>means the Board of Directors of the Company.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Change of Control&#148; </B>means the occurrence of any of the following
events:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Company is not the surviving entity in any merger,
consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company),



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Company sells, leases or exchanges all or
substantially all of its assets to any other person or entity
(other than a wholly-owned subsidiary of the Company),



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Company is dissolved and liquidated,




<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any person or entity, including a &#147;group&#148; as contemplated by
Section&nbsp;13(d)(3) of the 1934 Act, provides or gains ownership or
control (including, without


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<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;limitation, power to vote) or more than 50% of the outstanding
shares of the Company&#146;s voting stock (based upon voting power), or



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; as a result of or in connection with a contested election
of directors, the persons who were directors of the Company before
such election cease to constitute a majority of the Board.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Change of Control Value&#148; </B>means:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the per share price offered to shareholders of the Company
in any such merger, consolidation, reorganization, sale of assets
or dissolution transaction,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the price per share offered to shareholders of the
Company in any tender offer or exchange offer whereby a Change of
Control takes place, or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if such Change of Control occurs other than pursuant to a tender or
exchange offer, the fair market value per share of the shares into which Awards
are exercisable, as determined by the Committee, whichever is applicable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the consideration offered to shareholders of the Company consists of
anything other than cash, the Committee shall determine the fair cash
equivalent of the portion of the consideration offered which is other than
cash.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Code&#148; </B>means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to any section and any
regulations under such section.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Committee&#148; </B>means the Compensation Committee of the Board, which
shall be (i)&nbsp;constituted so as to permit the Plan to comply with Rule
16b-3 and (ii)&nbsp;constituted solely of &#147;outside directors,&#148; within the
meaning of section 162(m) of the Code and applicable interpretive
authority thereunder.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Company&#148; </B>means Mitcham Industries, Inc. and any of its
Affiliates.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Consultant&#148; </B>means any person engaged by the Company to render
consulting services and who is compensated for such services.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Continuous Status as an Employee, Director or Consultant&#148;</B>
means, for an Employee, the absence of any interruption or termination of
the employment relationship by the Company or any Subsidiary, for a
Director or Consultant, the absence of any interruption or termination of
service as a Director or Consultant, as the case may be. Continuous
Status as an Employee, Director or Consultant shall not be considered
interrupted in the case of: (i)&nbsp;any leave of absence approved by the
Board, including sick leave, military leave, or any other personal leave;
provided, however, that for purposes of ISOs, such leave is for a period
of not more than 90&nbsp;days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
under Company policy adopted from time to time; or (ii)&nbsp;in the case of
transfers between locations of the Company or between the Company, its
subsidiaries or its successor.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Director&#148; </B>means an individual elected to the Board by the
shareholders of the Company or by the Board under applicable corporate
law who is serving on the Board on the date the Plan is adopted by the
Board or is elected to the Board after that date.


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<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Employee&#148; </B>means any person (including an officer or a Director)
in an employment relationship with the Company or any parent or
subsidiary corporation (as defined in Section&nbsp;424 of the Code).



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;1934 Act&#148; </B>means the Securities Exchange Act of 1934, as
amended.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Fair Market Value&#148; </B>means, as of any specified date, the mean of
the high and low sales prices of the Stock (i)&nbsp;reported by the any
interdealer quotation system on which the Stock is quoted on that date or
(ii)&nbsp;if the Stock is listed on a national stock exchange, reported on the
stock exchange composite tape on that date; or, in either case, if no
prices are reported on that date, on the last preceding date on which
such prices of the Stock are so reported. If the Stock is traded over
the counter at the time a determination of its fair market value is
required to be made hereunder, its fair market value shall be deemed to
be equal to the average between the reported high and low or closing bid
and asked prices of Stock on the most recent date on which Stock was
publicly traded. If Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in
the manner as it deems appropriate.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Holder&#148; </B>means an Employee, Director or Consultant to whom an
Award other than an Option has been made under this Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Incentive Stock Option&#148; </B>means an incentive stock option within
the meaning of Section 422(b) of the Code.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Non-Employee Director</B>&#148; means a Director who either (i)&nbsp;is not a
current Employee of the Company or any Subsidiary; or (ii)&nbsp;is otherwise
considered a &#147;non-employee director&#148; for purposes of Rule&nbsp;16b-3.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Nonqualified Stock Option&#148; </B>means an option granted under
Paragraph&nbsp;VII of the Plan to purchase Stock that is not an Incentive
Stock Option.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Option&#148; </B>means an Award granted under Paragraph&nbsp;VII of the Plan
and includes both Incentive Stock Options to purchase Stock and
Nonqualified Stock Options to purchase Stock.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Option Agreement&#148; </B>means a written agreement between the Company
and an Optionee with respect to an Option.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Optionee&#148; </B>means a person to whom an Option is granted under
this Plan, or if applicable, such other person who holds an outstanding
Option under this Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Performance Award&#148; </B>means an Award granted under Paragraph&nbsp;X of
the Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Performance Award Agreement&#148; </B>means a written agreement between
the Company and a Holder with respect to a Performance Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Phantom Stock Award&#148; </B>means an Award granted under Paragraph&nbsp;XI
of the Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Phantom Stock Award Agreement&#148; </B>means a written agreement
between the Company and a Holder with respect to a Phantom Stock Award.


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<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Plan&#148; </B>means the Mitcham Industries, Inc. Amended and Restated
1998 Stock Awards Plan, as may be further amended from time to time.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Restricted Stock Agreement&#148; </B>means a written agreement between
the Company and a Holder with respect to a Restricted Stock Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Restricted Stock Award&#148; </B>means an Award granted under Paragraph
IX of the Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Rule&nbsp;16b-3&#148; </B>means SEC Rule&nbsp;16b-3 promulgated under the 1934
Act, as such may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or a similar function.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Spread&#148; </B>means, in the case of a Stock Appreciation Right, an
amount equal to the excess, if any, of the Fair Market Value of a share
of Stock on the date such right is exercised over the exercise price of
such Stock Appreciation Right.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Stock&#148; </B>means the common stock, $0.01 par value, of the
Company.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Stock Appreciation Right&#148; </B>means an Award granted under
Paragraph&nbsp;VIII of the Plan.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Stock Appreciation Rights Agreement&#148; </B>means a written agreement
between the Company and a Holder with respect to an Award of Stock
Appreciation Rights.


<P align="center" style="font-size: 10pt"><B>III. EFFECTIVE DATE AND DURATION OF THE PLAN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall be effective upon the date of its adoption by the Board,
provided that the Plan is approved by the shareholders of the Company within 12
months thereafter. No further Awards may be granted under the Plan after the
expiration of 10&nbsp;years from the date of its adoption by the Board. The Plan
shall remain in effect until all Awards granted under the Plan have been
satisfied or expired.


<P align="center" style="font-size: 10pt"><B>IV. ADMINISTRATION</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Committee. </B>The Plan shall be administered by the Committee.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Powers. </B>Subject to the provisions of the Plan, the Committee
shall have sole authority, in its discretion, to determine which
Employees, Directors or Consultants shall receive an Award, the time or
times when such Award shall be made, whether an Incentive Stock Option,
Nonqualified Option or Stock Appreciation Right shall be granted, the
number of shares of Stock which may be issued under each Option, Stock
Appreciation Right or Restricted Stock Award, and the value of each
Performance Award and Phantom Stock Award. In making such
determinations, the Committee may take into account the nature of the
services rendered by the respective Employees, Directors and Consultants,
their present and potential contributions to the Company&#146;s success and
such other factors as the Committee in its discretion shall deem
relevant.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Additional Powers. </B>The Committee shall have such additional powers
as are delegated to it by the other provisions of the Plan. Subject to
the express provisions of the Plan, the Committee is authorized to
construe the Plan and the respective agreements executed thereunder, to
prescribe such rules and regulations relating to the Plan as it may deem
advisable to carry out the Plan, and to determine the terms, restrictions
and provisions of each Award, including such terms, restrictions and
provisions as shall be requisite in the judgment of the Committee to
cause designated Options to qualify as Incentive Stock Options, and to
make all

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<P align="left" style="margin-left:3%; font-size: 10pt">other determinations necessary or advisable for administering the
Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the
manner and to the extent it shall deem expedient to carry it into effect.
The determinations of the Committee on the matters referred to in this
Article&nbsp;IV shall be conclusive.


<P align="center" style="font-size: 10pt"><B>V. GRANT OF OPTIONS,
STOCK APPRECIATION RIGHTS,<br>RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS AND
<br>PHANTOM STOCK AWARDS; SHARES SUBJECT TO THE PLAN</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Stock Grant and Award Limits. </B>The Committee may from time to
grant Awards to one or more Employees, Directors or Consultants
determined by it to be eligible for participation in the Plan in
accordance with the provisions of Paragraph&nbsp;VI. Subject to Paragraph
XII, the aggregate number of shares of Stock that may be issued under the
Plan shall not exceed 750,000 shares. Shares of Stock shall be deemed to
have been issued under the Plan only to the extent actually issued and
delivered pursuant to an Award. To the extent that an Award lapses or
the rights of its Holder terminate or the Award is paid in cash, any
shares of Stock subject to such Award shall again be available for the
grant of an Award. Separate stock certificates shall be issued by the
Company for those shares acquired pursuant the exercise of an Incentive
Stock Option and for those shares acquired pursuant to the exercise of a
Nonqualified Stock Option.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Stock Offered. </B>The stock to be offered pursuant to the grant of
an Award may be authorized but unissued Stock or Stock previously issued
and outstanding and reacquired by the Company.


<P align="center" style="font-size: 10pt"><B>VI. ELIGIBILITY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incentive Stock Options and Stock Appreciation Rights related thereto may
be granted only to Employees. Awards other than Incentive Stock Options may be
granted to Employees, Non-Employee Directors and Consultants. An Award may be
granted on more than one occasion to the same person, and, subject to the
limitations set forth in the Plan, such Award may include an Incentive Stock
Option or a Nonqualified Stock Option, a Stock Appreciation Right, a Restricted
Stock Award, a Performance Award, a Phantom Stock Award or any combination
thereof.


<P align="center" style="font-size: 10pt"><B>VII. STOCK OPTIONS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Option Period. </B>The term of each Option shall be as specified by
the Committee at the date of grant.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Limitations on Exercise of Option.</B> An Option shall be
exercisable in whole or in such installments and at such times as
determined by the Committee.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Special Limitations on Incentive Stock Options. </B>To the extent that
the aggregate Fair Market Value (determined at the time the respective
Incentive Stock Option is granted) of Stock with respect to which
Incentive Stock Options are exercisable for the first time by an
individual during any calendar year under all incentive stock option
plans of the Company and its parent and subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as Nonqualified
Stock Options as determined by the Committee. The Committee shall
determine, in accordance with applicable provisions of the Code, Treasury
Regulations and other administrative pronouncements, which of an
Optionee&#146;s Incentive Stock Options will not constitute Incentive Stock
Options because of such limitation and shall notify the Optionee of such
determination as soon as practicable after such determination. No
Incentive Stock Options


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<P align="left" style="margin-left:3%; font-size: 10pt">shall be granted to an individual if, at the time the Option is
granted, such individual owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of its
parent or subsidiary corporation, within the meaning of Section&nbsp;422(b)(6)
of the Code, unless (i)&nbsp;at the time such Option is granted the option
price is at least 110% of the Fair Market Value of the Stock subject to
the Option and (ii)&nbsp;such Option by its terms is not exercisable after the
expiration of five years from the date of grant.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Option Agreement. </B>Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent
with the provisions of the Plan as the Committee from time to time shall
approve, including, without limitation, provisions to qualify an
Incentive Stock Option under Section&nbsp;422 of the Code. An Option
Agreement may provide for the payment of the option price, in whole or in
part, by the delivery of a number of shares of Stock (plus cash if
necessary) having a Fair Market Value equal to such option price. Each
Option Agreement shall provide that the Option may not be exercised
earlier than six months from the date of grant and shall specify the
effect of termination of employment on the exercisability of the Option.
Moreover, an Option Agreement may provide for a &#147;cashless exercise&#148; of
the Option by establishing procedures whereby the Holder, by a
properly-executed written notice, directs:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; an immediate market sale or margin loan respecting all or
a part of the shares of Stock to which he is entitled upon exercise
pursuant to an extension of credit by the Company to the Holder of
the option price,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the delivery of the shares of Stock from the Company
directly to a brokerage firm, and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the delivery of the option price from the sale or margin
loan proceeds from the brokerage firm directly to the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such Option Agreement may also include, without limitation, provisions
relating to:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; vesting of Options, subject to the provisions hereof
accelerating such vesting on a Change of Control,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; tax matters (including provisions (y)&nbsp;permitting the
delivery of additional shares of Stock or the withholding of shares
of Stock from those acquired upon exercise to satisfy federal or
state income tax withholding requirements and (z)&nbsp;dealing with any
other applicable employee wage withholding requirements), and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole
discretion determine.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms and conditions of the respective Option Agreements need not be
identical.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Option Price and Payment.</B> The price at which a share of Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; such purchase price shall not be less than the Fair Market
Value of Stock subject to an Incentive Stock Option on the date
immediately preceding the date the Incentive Stock Option is
granted, and


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<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; such purchase price shall be subject to adjustment as
provided in Paragraph&nbsp;XII.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Option or portion thereof may be exercised by delivery of an
irrevocable notice of exercise to the Company. The purchase price of the
Option or portion thereof shall be paid in full in the manner prescribed by the
Committee.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Shareholder Rights and Privileges. </B>The Holder shall be entitled
to all the privileges and rights of a shareholder only with respect to
such shares of Stock as have been purchased under the Option and for
which certificates of stock have been registered in the Holder&#146;s name.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Options and Rights in Substitution for Stock Options Granted by
Other Corporations. </B>Options and Stock Appreciation Rights may be granted
under the Plan from time to time in substitution for stock options held
by individuals employed by corporations who become employees as a result
of a merger or consolidation of the employing corporation with the
Company or any subsidiary, or the acquisition by the Company or a
subsidiary of the assets of the employing corporation, or the acquisition
by the Company or a subsidiary of stock of the employing corporation with
the result that such employing corporation becomes a subsidiary.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Termination of Employment, Directorship or Consultancy.</B> In the
event of termination of an Optionee&#146;s Continuous Status as an Employee,
Director or Consultant (unless such termination as a Consultant is for
purposes of becoming an Employee), such Optionee may, but only within
ninety (90)&nbsp;days (or such other period of time as is determined by the
Board, but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the
extent that an Optionee was entitled to exercise it at the date of such
termination. To the extent that an Optionee was not entitled to exercise
the Option at the date of such termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.


<P align="center" style="font-size: 10pt"><B>VIII. STOCK APPRECIATION RIGHTS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Stock Appreciation Rights. </B>A Stock Appreciation Right is the
right to receive an amount equal to the Spread with respect to a share of
Stock upon the exercise of such Stock Appreciation Right. Stock
Appreciation Rights may be granted in connection with the grant of an
Option, in which case the Option Agreement will provide that exercise of
Stock Appreciation Rights will result in the surrender of the right to
purchase the shares under the Option as to which the Stock Appreciation
Rights were exercised. Alternatively, Stock Appreciation Rights may be
granted independently of Options in which case each Award of Stock
Appreciation Rights shall be evidenced by a Stock Appreciation Rights
Agreement which shall contain such terms and conditions as may be
approved by the Committee. The Spread with respect to a Stock
Appreciation Right may be payable either in cash, shares of Stock with a
Fair Market Value equal to the Spread or in a combination of cash and
shares of Stock. With respect to Stock Appreciation Rights that are
subject to Section&nbsp;16 of the 1934 Act, however, the Committee shall,
except as provided in Paragraph&nbsp;XII(c), retain sole discretion (i)&nbsp;to
determine the form in which payment of the Stock Appreciation Right will
be made (i.e., cash, securities or any combination thereof) or (ii)&nbsp;to
approve an election by a Holder to receive cash in full or partial
settlement of Stock Appreciation Rights. Each Stock Appreciation Rights
Agreement shall provide that the Stock Appreciation Rights may not be
exercised earlier than six months from the date of grant and shall
specify the effect of termination of employment on the exercisability of
the Stock Appreciation Rights.


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<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Other Terms and Conditions. </B>At the time of such Award, the
Committee, may in its sole discretion, prescribe additional terms,
conditions or restrictions relating to Stock Appreciation Rights,
including, but not limited to rules pertaining to termination of
employment (by retirement, disability, death or otherwise) of a Holder
prior to the expiration of such Stock Appreciation Rights. Such
additional terms, conditions or restrictions shall be set forth in the
Stock Appreciation Rights Agreement made in conjunction with the Award.
Such Stock Appreciation Rights Agreement may also include, without
limitation, provisions relating to:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; vesting of Awards, subject to the provisions hereof
accelerating vesting on a Change of Control,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; tax matters (including provisions covering applicable
wage withholding requirements), and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any other matters not inconsistent with the terms and
provisions of this Plan, that the Committee shall in its sole
discretion determine.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms and conditions of the respective Stock Appreciation Rights
Agreements need not be identical.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Exercise Price. </B>The exercise price of each Stock Appreciation
Right shall be determined by the Committee, but such exercise price:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shall not be less than the Fair Market Value of a share of
Stock on the date the Stock Appreciation Right is granted (or such
greater exercise price as may be required if such Stock
Appreciation Right is granted in connection with an Incentive Stock
Option that must have an exercise price equal to 110% of the Fair
Market Value of the Stock on the date of grant pursuant to
Paragraph&nbsp;VII(c)), and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shall be subject to adjustment as provided in Paragraph
XII.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Exercise Period.</B> The term of each Stock Appreciation Right
shall be as specified by the Committee at the date of grant.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Limitations on Exercise of Stock Appreciation Right.</B> A Stock
Appreciation Right shall be exercisable in whole or in such installments
and at such times as determined by the Committee.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Termination of Employment, Directorship or Consultancy.</B> In the
event of termination of a Holder&#146;s Continuous Status as an Employee,
Director or Consultant (unless such termination as a Consultant is for
purposes of becoming an Employee), such Holder may, but only within
ninety (90)&nbsp;days (or such other period of time as is determined by the
Board, but in no event later than the expiration date of the term of such
Award as set forth in the Stock Appreciation Rights Agreement), exercise
his Stock Appreciation Rights to the extent that a Holder was entitled to
exercise it at the date of such termination. To the extent that a Holder
was not entitled to exercise the Stock Appreciation Rights at the date of
such termination, or if such Holder does not exercise such Stock
Appreciation Rights to the extent so entitled within the time specified
herein, the Stock Appreciation Rights shall terminate.



<P align="center" style="font-size: 10pt">B-8
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<P align="center" style="font-size: 10pt"><B>IX. RESTRICTED STOCK AWARDS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Forfeiture Restrictions to be Established by the Committee.</B>
Shares of Stock that are the subject of a Restricted Stock Award shall be
subject to restrictions on disposition by the Holder and an obligation of
the Holder to forfeit and surrender the shares to the Company under
certain circumstances (the &#147;Forfeiture Restrictions&#148;). The Forfeiture
Restrictions shall be determined by the Committee in its sole discretion,
and the Committee may provide that the Forfeiture Restrictions shall
lapse upon:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the attainment of targets established by the Committee
that are based on (1)&nbsp;the price of a share of Stock, (2)&nbsp;the
Company&#146;s earnings per share, (3)&nbsp;the Company&#146;s revenue, or (4)&nbsp;the
Company&#146;s pre-tax cash flow from operations,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Holder&#146;s continued employment with the Company for a
specified period of time, or



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a combination of any two or more of the factors listed
in clauses (i)&nbsp;and (ii)&nbsp;of this sentence. Each Restricted Stock
Award may have different Forfeiture Restrictions, in the discretion
of the Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Forfeiture Restrictions applicable to a particular Restricted Stock
Award shall not be changed except as permitted by Paragraph&nbsp;IX(b) or Paragraph
XII.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Other Terms and Conditions. </B>Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate
registered in the name of the Holder of such Restricted Stock Award. The
Holder shall have the right to receive dividends with respect to Stock
subject to a Restricted Stock Award, to vote Stock subject thereto and to
enjoy all other shareholder rights, except that:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Holder shall not be entitled to delivery of the stock
certificate until the Forfeiture Restrictions shall have expired,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company shall retain custody of the Stock until the
Forfeiture Restrictions shall have expired,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture
Restrictions shall have expired, and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement, shall cause a
forfeiture of the Restricted Stock Award.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time of such Award, the Committee may, in its sole discretion,
prescribe additional terms, conditions or restrictions relating to Restricted
Stock Awards, including, but not limited to, rules pertaining to the
termination of employment (by retirement, disability, death or otherwise) of a
Holder prior to expiration of the Forfeiture Restrictions. Such additional
terms, conditions or restrictions shall be set forth in a Restricted Stock
Agreement made in conjunction with the Award. Such Restricted Stock Agreement
may also include, without limitation, provisions relating to:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; vesting of Awards, subject to the provisions hereof
accelerating vesting on a Change of Control,


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<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; tax matters (including provisions (y)&nbsp;covering any
applicable employee wage withholding requirements and (z)
prohibiting an election by the Holder under section 83(b) of the
Code), and



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other matters not inconsistent with the terms and
provisions of this Plan that the Committee in its sole discretion
shall determine.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Payment for Restricted Stock. </B>The Committee shall determine the
amount and form of any payment for Stock received pursuant to a
Restricted Stock Award, provided that in the absence of such a
determination, a Holder shall not be required to make any payment for
Stock received pursuant to a Restricted Stock Award, except to the extent
otherwise required by law.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Agreements. </B>At the time any Award is made under this Paragraph
IX, the Company and the Holder shall enter into a Restricted Stock
Agreement setting forth each of the matters as the Committee may
determine to be appropriate. The terms and provisions of the respective
Restricted Stock Agreements need not be identical.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Termination of Employment, Directorship or Consultancy.</B> In the
event of termination of a Holder&#146;s Continuous Status as an Employee,
Director or Consultant (unless such termination as a Consultant is for
purposes of becoming an Employee), the Company may repurchase or
otherwise reacquire any or all of the shares of Restricted Stock held by
that Holder that have not vested as of the date of termination, under the
terms of the Restricted Stock Agreement between the Company and such
Holder.

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<P align="center" style="font-size: 10pt"><B>X. PERFORMANCE AWARDS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Performance Period. </B>The Committee shall establish, with respect
to and at the time of each Performance Award, a performance period over
which the performance of the Holder shall be measured.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Performance Awards.</B> Each Performance Award shall have a maximum
value established by the Committee at the time of such Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Performance Measures. </B>A Performance Award shall be awarded to
an employee contingent upon future performance of the employee, the
Company or any subsidiary, division or department thereof by or in which
is he employed during the performance period. The Committee shall
establish the performance measures applicable to such performance prior
to the beginning of the performance period but subject to such later
revisions as the Committee shall deem appropriate to reflect significant,
unforeseen events or changes.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Awards Criteria. </B>In determining the value of Performance
Awards, the Committee shall take into account an employee&#146;s
responsibility level, performance, potential, other Awards and such other
considerations as it deems appropriate.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Payment. </B>Following the end of the performance period, the Holder of
a Performance Award shall be entitled to receive payment of an amount,
not exceeding the maximum value of the Performance Award, based on the
achievement of the performance measures for such performance period, as
determined by the Committee. Payment of a Performance Award may be made
in cash, Stock or a combination thereof, as determined by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by
the Committee. Any payment to be made in Stock shall be based on the
Fair Market Value of the


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<P align="left" style="margin-left:3%; font-size: 10pt">Stock on the payment date. If a payment of cash is to be made on a
deferred basis, the Committee shall establish whether interest shall be
credited, the rate thereof and any other terms and conditions applicable
thereto.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Termination of Employment, Directorship or Consultancy. </B>In the
event of termination of a Holder&#146;s Continuous Status as an Employee,
Director or Consultant (unless such termination as a Consultant is for
purposes of becoming an Employee), a Performance Award shall terminate,
except as may be determined by the Committee or as may otherwise be
provided in the Performance Award Agreement at the time granted.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Agreements.</B> At the time any Award is made under this Paragraph
X, the Company and the Holder shall enter into a Performance Award
Agreement setting forth each of the matters contemplated hereby, and, in
addition such matters are set forth in Paragraph&nbsp;IX(b) as the Committee
may determine to be appropriate. The terms and provisions of the
respective agreements need not be identical.

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<P align="center" style="font-size: 10pt"><B>XI. PHANTOM STOCK AWARDS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Phantom Stock Awards. </B>Phantom Stock Awards are rights to
receive shares of Stock (or cash in an amount equal to the Fair Market
Value thereof), or rights to receive an amount equal to any appreciation
in the Fair Market Value of Stock (or portion thereof) over a specified
period of time, which vest over a period of time or upon the occurrence
of an event (including without limitation a Change of Control) as
established by the Committee, without payment of any amounts by the
Holder thereof (except to the extent otherwise required by law) or
satisfaction of any performance criteria or objectives. Each Phantom
Stock Award shall have a maximum value established by the Committee at
the time of such Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Award Period.</B> The Committee shall establish, with respect to
and at the time of each Phantom Stock Award, a period over which or the
event upon which the Award shall vest with respect to the Holder.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Awards Criteria.</B> In determining the value of Phantom Stock
Awards, the Committee shall take into account an employee&#146;s
responsibility level, performance, potential, other Awards and such
other considerations as it deems appropriate.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Payment. </B>Following the end of the vesting period for a Phantom
Stock Award, the Holder of a Phantom Stock Award shall be entitled to
receive payment of an amount, not exceeding the maximum value of the
Phantom Stock Award, based on the then vested value of the Award.
Payment of a Phantom Stock Award may be made in cash, Stock or a
combination thereof as determined by the Committee. Payment shall be
made in a lump sum or in installments as prescribed by the Committee in
its sole discretion. Any payment to be made in Stock shall be based on
the Fair Market Value of the Stock on the payment date. Cash dividend
equivalents may be paid during or after the vesting period with respect
to a Phantom Stock Award, as determined by the Committee. If a payment
of cash is to be made on a deferred basis, the Committee shall establish
whether interest shall be credited, the rate thereof and any other terms
and conditions applicable thereto.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Termination of Employment, Directorship or Consultancy. </B>In the
event of termination of a Holder&#146;s Continuous Status as an Employee,
Director or Consultant (unless such termination as a Consultant is for
purposes of becoming an Employee), a Phantom Stock Award shall terminate,
except as may be determined by the Committee or as may otherwise be
provided in the Phantom Stock Award Agreement at the time granted.


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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Agreements. </B>At the time any Award is made under this Paragraph
XI, the Company and the Holder shall enter into a Phantom Stock Award
Agreement setting forth each of the matters contemplated hereby and, in
addition such matters as are set forth in Paragraph&nbsp;IX(b) as the
Committee may determine to be appropriate. The terms and provisions of
the respective agreements need not be identical.

<!-- link1 "XII. RECAPITALIZATION OR REORGANIZATION" -->

<P align="center" style="font-size: 10pt"><B>XII. RECAPITALIZATION OR REORGANIZATION</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares with respect to which Awards may be granted are
shares of Stock as presently constituted, but if and whenever, prior to
the expiration of an Award theretofore granted, the Company shall effect
a subdivision or consolidation, the number of shares of Stock with
respect to which such Award may thereafter be exercised or satisfied, as
applicable, (i)&nbsp;in the event of an increase in the number of outstanding
shares shall be proportionately increased, and the purchase price per
share shall be proportionately reduced, and (ii)&nbsp;in the event of a
reduction in the number of outstanding shares shall be proportionately
reduced, and the purchase price per share shall be proportionately
increased.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable,
of an Award theretofore granted the Holder shall be entitled to (or
entitled to purchase, if applicable) under such Award, in lieu of the
number of shares of Stock then covered by such Award, the number and
class of shares of stock and securities to which the Holder would have
been entitled pursuant to the terms of the recapitalization if,
immediately prior to such recapitalization, the Holder had been the
holder of record of the number of shares of Stock then covered by such
Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a Change of Control, all outstanding Awards
shall immediately vest and become exercisable or satisfiable, as
applicable. The Committee, in its discretion, may determine that upon
the occurrence of a Change of Control, each Award other than an Option
outstanding hereunder shall terminate within a specified number of days
after notice to the Holder, and such Holder shall receive, with respect
to each share of Stock subject to such Award, cash in an amount equal to
the excess, if any, of the Change of Control Value. Further, in the event
of a Change of Control, the Committee, in its discretion may act to
effect one or more of the following alternatives with respect to
outstanding Options, which may vary among individual Holders and which
may vary among Options held by any individual Holder:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;determine a limited period of time on or before a
specified date (before or after such Change of Control) after which
specified date all unexercised Options and all rights of Holders
thereunder shall terminate,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;require the mandatory surrender to the Company by
selected Holders of some or all of the outstanding Options held by
such Holders (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before
or after such Change of Control, specified by the Committee, in
which event the Committee shall thereupon cancel such Options and
the Company shall pay to each Holder an amount of cash per share
equal to the excess, if any, of the Change of Control Value of the
shares subject to such Option over the exercise price(s) under such
Options for such shares,



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Change of Control
(provided, however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Options then
outstanding), or


<P align="center" style="font-size: 10pt">B-12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provide that thereafter upon any exercise of an Option
theretofore granted the Holder shall be entitled to purchase under
such Option, in lieu of the number of shares of Stock then covered
by such Option the number and class of shares of stock or other
securities or property (including, without limitation, cash) to
which the Holder would have been entitled pursuant to the terms of
the agreement of merger, consolidation or sale of assets and
dissolution if, immediately prior to such merger, consolidation or
sale of assets and dissolution the Holder has been the holder of
record of the number of shares of Stock then covered by such
Option.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions contained in this paragraph shall be inapplicable to an
Award granted within six (6)&nbsp;months before the occurrence of a Change of
Control if the Holder of such Award is subject to the reporting requirements of
Section 16(a) of the 1934 Act. The provisions contained in this paragraph
shall not terminate any rights of the Holder to further payments pursuant to
any other agreements with the Company after a Change of Control.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If there are changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the
date of the grant of any Award and not otherwise provided for by this
Paragraph&nbsp;XII, any outstanding Awards and any agreements evidencing such
Awards shall be subject to adjustment by the Committee at its discretion
as to the number and price of shares of Stock or other consideration
subject to such Awards. If there is any change in the outstanding
Stock, the aggregate number of shares available under the Plan may be
appropriately adjusted by the Committee, whose determination shall be
conclusive.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The existence of the Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the shareholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company&#146;s capital structure or its
business, any merger or consolidation of the Company, any issue of debt
or equity securities ahead of or affecting Stock or the rights thereof
the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or
business or any other corporate act or proceeding.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment provided for in Subparagraphs (a), (b), (c)&nbsp;or
(d)&nbsp;above shall be subject to any required shareholder action.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares of obligations of the Company
convertible into such shares or other securities, and in any case whether
or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Stock
subject to Awards theretofore granted or the purchase price per share, if
applicable.

<!-- link1 "XIII. AMENDMENT AND TERMINATION OF THE PLAN" -->

<P align="center" style="font-size: 10pt"><B>XIII. AMENDMENT AND TERMINATION OF THE PLAN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change in any Award previously granted may be
made that would impair the rights of the Holder without the consent of the
Holder (unless such change is required in order to cause the benefits under the
Plan to qualify as performance-based compensation within the meaning of section
162(m) of the Code and applicable interpretive authority thereunder), and
provided, further, that the Board may not, without approval of the
shareholders, amend the Plan to:


<P align="center" style="font-size: 10pt">B-13
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;increase the maximum number of shares which may be issued on
exercise or surrender of an Award, except as provided in Paragraph&nbsp;XII,



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;change the Option price,



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;extend the maximum period during which Awards may be granted
under the Plan, or



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;decrease any authority granted to the Committee hereunder in
contravention of Rule&nbsp;16b-3.

<!-- link1 "XIV. MISCELLANEOUS" -->

<P align="center" style="font-size: 10pt"><B>XIV. MISCELLANEOUS</B>




<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Right to An Award. </B>Neither the adoption of the Plan by the
Company nor any action of the Board or the Committee shall be deemed to
give an employee any right to be granted an Award to purchase Stock, a
right to a Stock Appreciation Right, a Restricted Stock Award, a
Performance Award or a Phantom Stock Award or any of the rights hereunder
except as may be evidenced by an Award or by an Option Agreement, Stock
Appreciation Rights Agreement, Restricted Stock Agreement, Performance
Award Agreement or Phantom Stock Award Agreement on behalf of the
Company, and then only to the extent and on the terms and conditions
expressly set forth therein. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to
make any other segregation of funds or assure the payment of any Award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Employment Rights Conferred. </B>Nothing contained in the Plan
shall (i)&nbsp;confer upon any employee any right with respect to continuation
of employment with the Company or any subsidiary or (ii)&nbsp;interfere in any
way with the right of the Company or any subsidiary to terminate his or
her employment at any time.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Other Laws; Withholding. </B>The Company shall not be obligated to
issue any Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules or regulations available
for the issuance and sale of such shares. No fractional shares of Stock
shall be delivered, nor shall any cash in lieu of fractional shares be
paid. The Company shall have the right to deduct in connection with all
Awards any taxes required by law to be withheld and to require any
payments required to enable it to satisfy its withholding obligations.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Restriction on Corporate Action. </B>Nothing contained in the
Plan shall be construed to prevent the Company or any subsidiary from
taking any corporate action which is deemed by the Company or such
subsidiary to be appropriate or in its best interest, whether or not such
action would have an adverse effect on the Plan or any Award made under
the Plan. No employee, beneficiary or other person shall have any claim
against the Company or any subsidiary as a result of any such action.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Restrictions on Transfer. </B>An Award shall not be transferable
otherwise than by will or the laws of descent and distribution or
pursuant to a &#147;qualified domestic relations order&#148; as defined by the Code
or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder, and shall be exercisable during the
Holder&#146;s lifetime only by such Holder or the Holder&#146;s guardian or legal
representative.


<P align="center" style="font-size: 10pt">B-14
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Rule&nbsp;16b-3. </B>It is intended that the Plan and any grant of an
Award made to a person subject to Section&nbsp;16 of the 1934 Act meet all of
the requirements of Rule&nbsp;16b-3. If any provision of the Plan or any such
Award would disqualify the Plan or such Award under, or would otherwise
not comply with, Rule&nbsp;16b-3, such provision or Award shall be construed
or deemed amended to conform to Rule&nbsp;16b-3.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;162(m). </B>It is intended that the Plan comply fully with
and meet all the requirements of Section 162(m) of the Code so that
Options and Stock Appreciation Rights granted hereunder and, if
determined by the Committee, Restricted Stock Awards, shall constitute
&#147;performance-based&#148; compensation within the meaning of such section. If
any provision of the Plan would disqualify the Plan or would not
otherwise permit the Plan to comply with Section 162(m) as so intended,
such provision shall be construed or deemed amended to conform to the
requirements or provisions of Section&nbsp;162(m); provided that no such
construction or amendment shall have an adverse effect on the economic
value to a Holder of any Award previously granted hereunder.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Governing Law.</B> This Plan shall be construed in accordance with
the laws of the State of Texas.



<P align="center" style="font-size: 10pt">B-15
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P><HR size="5" noshade><P>

<DIV align="left">
<B><FONT size="5">P</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="5">R</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="5">O</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="5">X</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="5">Y</FONT></B>
</DIV>

<P><HR size="5" noshade><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B><FONT size="2">MITCHAM INDUSTRIES, INC.</FONT></B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B><FONT size="2">PROXY SOLICITED ON BEHALF OF THE BOARD OF
    DIRECTORS</FONT></B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B><FONT size="2">FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE
    HELD SEPTEMBER 1, 2004</FONT></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="94%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT size="2">The proxies appointed on the following page are
    directed to vote as specified below, and in their discretion, on
    all other matters coming before the meeting. If no instructions
    are given, the proxy will vote &#147;FOR&#148; all director
    nominees listed below and &#147;FOR&#148; the ratification of
    the selection of independent auditors. This proxy is solicited
    by the Board of Directors of Mitcham Industries,&nbsp;Inc.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">ELECTION OF DIRECTORS&nbsp;&#151; Billy&nbsp;F.
    Mitcham, Jr., R.&nbsp;Dean Lewis, John&nbsp;F. Schwalbe,
    Robert&nbsp;P. Capps and Peter&nbsp;H. Blum.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;Vote
    <B>FOR </B>all nominees listed above, except vote withheld from
    (to withhold authority to vote for any individual nominee, write
    in the names on the line below:)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;Vote
    <B>WITHHELD </B>from all nominees
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">TO AMEND AND RESTATE THE 1998 STOCK AWARDS PLAN.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;ABSTAIN
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">3.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;ABSTAIN
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;I
    plan to attend the meeting.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">PLEASE SIGN, DATE AND RETURN THE FOLLOWING
PROXY CARD</FONT></B>

<DIV align="center">
<B><FONT size="2">PROMPTLY, USING THE ENCLOSED
ENVELOPE.</FONT></B>
</DIV>

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<DIV align="center">
<B><FONT size="2">MITCHAM INDUSTRIES, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Proxy Solicited On Behalf Of The Board Of
Directors</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">For The Annual Meeting of Shareholders To Be
Held September&nbsp;1, 2004</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned hereby appoints Billy&nbsp;F.
Mitcham, Jr. and Peter&nbsp;H. Blum, and each of them, as
attorneys and proxies of the undersigned, with power of
substitution, to represent the undersigned at the Annual Meeting
of Shareholders of Mitcham Industries, Inc. to be held
September&nbsp;1, 2004, and at any adjournment or postponement
thereof, and to vote all shares of common stock which the
undersigned is entitled to vote on all matters coming before
said meeting.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Dated:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">,&nbsp;2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="5" align="center" valign="bottom">
    <FONT size="2">Signature
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="5" align="center" valign="bottom">
    <FONT size="2">Signature if held jointly
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <FONT size="2">THIS PROXY MUST BE SIGNED EXACTLY AS THE
    SHAREHOLDER&#146;S NAME APPEARS HEREON. Executors,
    administrators, trustees, etc., should give full title as such.
    If the shareholder is a corporation, please sign full corporate
    name by duly authorized officer. If shareholder is a
    partnership, please sign partnership name by authorized person.
    </FONT></TD>
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