Exhibit 10.20

2005 INCENTIVE PLAN

OF

OCEANEERING INTERNATIONAL, INC.

1. Plan. This 2005 Incentive Plan of Oceaneering International, Inc. (the
“Plan”) was adopted by Oceaneering International, Inc. (the “Company”) to reward
certain corporate officers, directors and key employees of the Company by
enabling them to acquire shares of common stock of the Company and/or through
the provision of cash payments.

2. Objectives. This Plan is designed to attract and retain key employees of the
Company and its Subsidiaries, to attract and retain qualified directors of the
Company, to encourage the sense of proprietorship of such employees and
directors and to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries. These
objectives are to be accomplished by making Awards under this Plan and thereby
providing Participants with a proprietary interest in the growth and performance
of the Company and its Subsidiaries.

3. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:

“Authorized Officer” means the Chairman of the Board or the Chief Executive
Officer of the Company (or any other senior officer of the Company to whom
either of them shall delegate the authority to execute any Award Agreement).

“Award” means the grant of any Option, SAR, Stock Award, Performance Award or
Cash Award, whether granted singly, in combination or in tandem, to a
Participant pursuant to such applicable terms, conditions and limitations as the
Committee (or the Board, in the case of Awards to Nonemployee Directors) may
establish in order to fulfill the objectives of the Plan.

“Award Agreement” means any written agreement between the Company and a
Participant setting forth the terms, conditions and limitations applicable to an
Award.

“Board” means the Board of Directors of the Company.

“Cash Award” means an award denominated in cash.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Compensation Committee of the Board or such other
committee of the Board as is designated by the Board to administer the Plan.

“Common Stock” means the Common Stock, par value $0.25 per share, of the
Company.

“Company” means Oceaneering International, Inc., a Delaware corporation.

“Director” means an individual serving as a member of the Board.

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“Dividend Equivalents” means, with respect to shares of Restricted Stock or
Restricted Stock Units with respect to which shares are to be issued at the end
of the Restriction Period, an amount equal to all dividends and other
distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number of shares
of Common Stock.

“Employee” means an employee of the Company or any of its Subsidiaries and an
individual who has agreed to become an employee of the Company or any of its
Subsidiaries and actually becomes such an employee within the following six
months.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

“Fair Market Value” of a share of Common Stock means, as of a particular date,
(i) if shares of Common Stock are listed or quoted on a national securities
exchange, the closing price per share of Common Stock reported or quoted on the
consolidated transaction reporting system for the principal national securities
exchange on which shares of Common Stock are listed or quoted on that date, or,
if there shall have been no such sale so reported or quoted on that date, on the
last preceding date on which such a sale was so reported or quoted, (ii) if the
Common Stock is not so listed or quoted, the closing price on that date, or, if
there are no quotations available for such date, on the last preceding date on
which such quotations shall be available, as reported by the Nasdaq Stock
Market, Inc., or, if not reported by the Nasdaq Stock Market, Inc., by the
National Quotation Bureau Incorporated, or (iii) if shares of Common Stock are
not publicly traded, the most recent value determined by an independent
appraiser appointed by the Company for such purpose.

“Incentive Option” means an Option that is intended to comply with the
requirements set forth in Section 422 of the Code.

“Option” means a right to purchase a specified number of shares of Common Stock
at a specified price.

“Nonqualified Option” means an Option that is not intended to comply with the
requirements set forth in Section 422 of the Code.

“Participant” means an Employee or Director to whom an Award has been made under
this Plan.

“Performance Award” means an award made pursuant to this Plan to a Participant
who is an Employee which Award is subject to the attainment of one or more
Performance Goals. Performance Awards may be Stock Awards or Cash Awards.

“Performance Goal” means a standard established by the Committee, to determine
in whole or in part whether a Performance Award shall be earned.

“Restricted Stock” means any Common Stock that is restricted or subject to
forfeiture provisions.

 

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“Restricted Stock Unit” means a unit evidencing the right to receive one share
of Common Stock or equivalent value (as determined by the Committee) that is
restricted or subject to forfeiture provisions.

“Restriction Period” means a period of time beginning as of the date upon which
an Award of Restricted Stock or Restrcited Stock Units is made pursuant to this
Plan and ending as of the date upon which the Common Stock subject to such Award
is issued (if not previously issued), no longer restricted or subject to
forfeiture provisions.

“SAR” means a right to receive a payment, in cash or Common Stock, equal to the
excess of the Fair Market Value of a share of Common Stock on the date the right
is exercised over the Fair Market Value of a share of Common Stock on the date
of grant.

“Stock Award” means an award in the form of shares of Common Stock or units
denominated in shares of Common Stock.

“Subsidiary” means (i) in the case of a corporation, any corporation of which
the Company directly or indirectly owns shares representing 50% or more of the
combined voting power of the shares of all classes or series of capital stock of
such corporation which have the right to vote generally on matters submitted to
a vote of the stockholders of such corporation and (ii) in the case of a
partnership or other business entity not organized as a corporation, any such
business entity of which the Company directly or indirectly owns 50% or more of
the voting, capital or profits interests (whether in the form of partnership
interests, membership interests or otherwise).

4. Eligibility.

(a) Employees. Key Employees eligible for Awards under this Plan are those who
hold positions of responsibility and whose performance, in the judgment of the
Committee, can have a significant effect on the success of the Company and its
Subsidiaries.

(b) Directors. Directors eligible for Awards under this Plan are those who are
not employees of the Company or any of its Subsidiaries (“Nonemployee
Directors”).

5. Common Stock Available for Awards. Subject to the provisions of paragraph 15
hereof, there shall be available for Awards under this Plan granted wholly or
partly in Common Stock (including rights or options that may be exercised for or
settled in Common Stock) an aggregate of 1,200,000 shares of Common Stock. No
more than 600,000 shares of Common Stock shall be available under this Plan for
Incentive Options. No more than 600,000 shares of Common Stock shall be
available under this Plan for Awards other than Options or SARs. Shares of
Common Stock awarded pursuant to the 2002 Incentive Plan or the 2002
Non-Executive Incentive Plan (the “Prior Plans”) which are cancelled,
terminated, forfeited, expire unexercised, and, except for Awards of Options or
SARs, are settled in cash in lieu of Common Stock, or are exchanged for a
consideration that does not involve Common Stock shall immediately become
available for Awards under this Plan. Effective as of March 14, 2005, no further
awards shall be made under the Prior Plans. Additionally, the number of shares
of Common Stock that are the subject of Awards under this Plan, that are
forfeited or terminated,

 

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expire unexercised, and, except for Awards of Options or SARS are settled in
cash in lieu of Common Stock or in a manner such that all or some of the shares
covered by an Award are not issued to a Participant or are exchanged for Awards
that do not involve Common Stock, shall again immediately become available for
Awards hereunder. The number of Shares reserved for issuance under the Plan
shall be reduced only to the extent that Shares of Common Stock are actually
issued in connection with the exercise or settlement of an Award; provided,
however, that the number of Shares reserved for issuance shall be reduced by the
total number of Options or SARs exercised. The Committee may from time to time
adopt and observe such procedures concerning the counting of shares against the
Plan maximum as it may deem appropriate. The Board and the appropriate officers
of the Company shall from time to time take whatever actions are necessary to
file any required documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.

6. Administration.

(a) Authority of the Committee. This Plan shall be administered by the
Committee; provided, however, that with respect to Nonemployee Directors, the
Plan shal be administered by the full Board. Subject to the provisions hereof,
the Committee shall have full and exclusive power and authority to administer
this Plan and to take all actions that are specifically contemplated hereby or
are necessary or appropriate in connection with the administration hereof. The
Committee shall also have full and exclusive power to interpret this Plan and to
adopt such rules, regulations and guidelines for carrying out this Plan as it
may deem necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan.
Subject to paragraph 6(c) and paragraph 18 hereof, the Committee may, in its
discretion, provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate or make less
restrictive any restrictions contained in an Award, waive any restriction or
other provision of this Plan or an Award or otherwise amend or modify an Award
in any manner that is (i) not adverse to the Participant to whom such Award was
granted, (ii) consented to by such Participant or (iii) authorized by paragraph
15(c) hereof; provided, however, that no such action shall permit the term of
any Option to be greater than seven years from the applicable grant date. The
Committee may make an Award to an individual who it expects to become an
employee of the Company or any of its Subsidiaries within the next six months,
with such Award being subject to the individual’s actually becoming an employee
within such time period, and subject to such other terms and conditions as may
be established by the Committee. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable to further
the Plan purposes. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned.

(b) Indemnity. No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of
paragraph 7 of this Plan shall be liable for anything done or omitted to be done
by him or her, by any member of the Committee or by any officer of the Company
in connection with the performance of any duties under this Plan, except for his
or her own willful misconduct or as expressly provided by statute.

 

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(c) Prohibition on Repricing of Awards. No Award may be repriced, replaced,
regranted through cancellation or modified without shareholder approval (except
in connection with a change in the Company’s capitalization), if the effect
would be to reduce the exercise price for the shares underlying such Award.

7. Delegation of Authority. The Committee may delegate to the Chief Executive
Officer and to other senior officers of the Company its duties under this Plan
pursuant to such conditions or limitations as the Committee may establish.

8. Awards. (a) Except as otherwise provided in paragraph 9 hereof pertaining to
Awards to Directors, the Committee shall determine the type or types of Awards
to be made under this Plan and shall designate from time to time the
Participants who are to be the recipients of such Awards. Each Award shall be
embodied in an Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole discretion and
shall be signed by the Participant to whom the Award is made and by an
Authorized Officer for and on behalf of the Company. Awards may consist of those
listed in this paragraph 8(a) hereof and may be granted singly, in combination
or in tandem. Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this Plan or any
other plan of the Company or any of its Subsidiaries, including the plan of any
acquired entity; provided that, except as contemplated in paragraph 15 hereof,
no Option may be issued in exchange for the cancellation of an Option with a
higher exercise price nor may the exercise price of any Option be reduced. All
or part of an Award may be subject to conditions established by the Committee,
which may include, but are not limited to, continuous service with the Company
and its Subsidiaries, achievement of specific business objectives, increases in
specified indices, attainment of specified growth rates and other comparable
measurements of performance. Upon the termination of employment by a Participant
who is an Employee, any unexercised, deferred, unvested or unpaid Awards shall
be treated as set forth in the applicable Award Agreement.

(i) Option. An Award may be in the form of an Option. An Option awarded pursuant
to this Plan may consist of an Incentive Option or a Nonqualified Option. The
price at which shares of Common Stock may be purchased upon the exercise of an
Option shall be not less than the Fair Market Value of the Common Stock on the
date of grant. The term of an Option shall not exceed seven years from the date
of grant. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Options awarded pursuant to this Plan, including
the term of any Options and the date or dates upon which they become
exercisable, shall be determined by the Committee.

(ii) Stock Appreciation Right. An Award may be in the form of a SAR. The strike
price for a SAR shall not be less than the Fair Market Value of the Common Stock
on the date on which the SAR is granted. The term of a SAR shall not exceed
seven years from the date of grant. Subject to the foregoing limitations, the
terms, conditions and limitations applicable to any SARs awarded pursuant to
this Plan, including the term

 

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of any SARs and the date or dates upon which they become exercisable, shall be
determined by the Committee. As of the date of grant of a SAR, the Committee may
specifically designate that the Award will be paid (a) only in cash, (b) only in
Common Stock, or (c) in such other form or combination of forms as the Committee
may elect or permit at the time of exercise.

(iii) Stock Award. An Award may be in the form of a Stock Award. The terms,
conditions and limitations applicable to any Stock Awards granted pursuant to
this Plan shall be determined by the Committee, subject to the limitations
specified below. Any Stock Award which is not a Performance Award shall have a
minimum Restriction Period of one year from the date of grant, provided that
(i) the Committee may provide for earlier vesting following a change in control
of the Company or upon an Employee’s termination of employment by reason of
death, disability or retirement, (ii) such one-year minimum Restricted Period
shall not apply to a Stock Award that is granted in lieu of salary or bonus, and
(iii) vesting of a Stock Award may occur incrementally over the one-year minimum
Restricted Period.

(iv) Cash Award. An Award may be in the form of a Cash Award. The terms,
conditions and limitations applicable to any Cash Awards granted pursuant to
this Plan shall be determined by the Committee.

(v) Performance Award. Without limiting the type or number of Awards that may be
made under the other provisions of this Plan, an Award may be in the form of a
Performance Award. The terms, conditions and limitations applicable to any
Performance Awards granted to Participants pursuant to this Plan shall be
determined by the Committee, subject to the limitations specified below. Any
Stock Award which is a Performance Award shall have a minimum Restriction Period
of one year from the date of grant, provided that the Committee may provide for
earlier vesting following a change of control of the Company, or upon a
termination of employment by reason of death, disability or retirement. The
Committee shall set Performance Goals in its discretion which, depending on the
extent to which they are met, will determine the value and/or amount of
Performance Awards that will be paid out to the Participant and/or the portion
of an Award that may be exercised.

(A) Nonqualified Performance Awards. Performance Awards granted to Employees or
Directors that are not intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be based on achievement of
such Performance Goals and be subject to such terms, conditions and restrictions
as the Committee or its delegate shall determine.

(B) Qualified Performance Awards. Performance Awards granted to Employees under
the Plan that are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be paid, vested or otherwise
deliverable solely on account of the attainment of one or more pre-established,
objective Performance Goals established by the Committee prior to the earlier to
occur of (x) 90 days after the commencement of the period of service to which
the Performance Goal relates and (y) the lapse of 25% of the period of service
(as scheduled in good faith at the

 

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time the goal is established), and in any event while the outcome is
substantially uncertain. A Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the goal is met. Such a
Performance Goal may be based on one or more business criteria that apply to the
Employee, one or more business units, divisions or sectors of the Company, or
the Company as a whole, and if so desired by the Committee, by comparison with a
peer group of companies. A Performance Goal may include one or more of the
following: revenue, cash flow, net income, stock price, credit rating, market
share, earnings per share, or return on equity; controlling or reducing various
costs of doing business; maintaining appropriate levels of debt and interest
expense. Unless otherwise stated, such a Performance Goal need not be based upon
an increase or positive result under a particular business criterion and could
include, for example, maintaining the status quo or limiting economic losses
(measured, in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals and Qualified
Performance Awards, it is the intent of the Plan to conform with the standards
of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), as to
grants to those Employees whose compensation is, or is likely to be, subject to
Section 162(m) of the Code, and the Committee in establishing such goals and
interpreting the Plan shall be guided by such provisions. Prior to the payment
of any compensation based on the achievement of Performance Goals applicable to
Qualified Performance Awards, the Committee must certify in writing that
applicable Performance Goals and any of the material terms thereof were, in
fact, satisfied. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Qualified Performance Awards made pursuant to this
Plan shall be determined by the Committee.

(b) Notwithstanding anything to the contrary contained in this Plan, the
following limitations shall apply to any Awards made hereunder:

(i) no Participant may be granted, during any one-year period, Awards consisting
of Options or SARs that are exercisable for more than 500,000 shares of Common
Stock;

(ii) no Participant may be granted, during any one-year period, Stock Awards
covering or relating to more than 500,000 shares of Common Stock (the limitation
set forth in this clause (ii), together with the limitation set forth in clause
(i) above, being hereinafter collectively referred to as the “Stock Based Awards
Limitations”); and

(iii) no Participant may be granted Awards consisting of cash or in any other
form permitted under this Plan (other than Awards consisting of Options or SARs
or otherwise consisting of shares of Common Stock or units denominated in such
shares) in respect of any one-year period having a value determined on the date
of grant in excess of $5,000,000.

9. Awards to Directors. The Board may grant a Nonemployee Director of the
Company one or more Awards and establish the terms thereof in accordance with
paragraph

 

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8 and consistent with the provisions therein for the granting of Awards to
Employees by the Committee. Any such Award shall be subject to the applicable
terms, conditions and limitations set forth in this Plan and the applicable
Award Agreement.

10. Award Payment; Dividends; Substitution.

(a) General. Payment of Awards may be made in the form of cash or Common Stock,
or a combination thereof, and may include such restrictions as the Committee
shall determine, including, in the case of Common Stock, restrictions on
transfer and forfeiture provisions. If payment of an Award is made in the form
of Restricted Stock, the applicable Award Agreement relating to such shares
shall specify whether they are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are to be
issued at the beginning of the Restriction Period, the certificates evidencing
such shares (to the extent that such shares are so evidenced) shall contain
appropriate legends and restrictions that describe the terms and conditions of
the restrictions applicable thereto. In the event that shares of Restricted
Stock are to be issued at the end of the Restricted Period, the right to receive
such shares shall be evidenced by book entry registration or in such other
manner as the Committee may determine.

(b) Dividends and Interest. Rights to dividends or Dividend Equivalents may be
extended to and made part of any Award consisting of shares of Common Stock or
units denominated in shares of Common Stock, subject to such terms, conditions
and restrictions as the Committee may establish. The Committee may also
establish rules and procedures for the crediting of interest on deferred cash
payments and Dividend Equivalents for Awards consisting of shares of Common
Stock or units denominated in shares of Common Stock.

11. Stock Option Exercise. The price at which shares of Common Stock may be
purchased under an Option shall be paid in full at the time of exercise in cash
or, if elected by the Participant, the Participant may purchase such shares by
means of tendering Common Stock or surrendering another Award, including
Restricted Stock, valued at Fair Market Value on the date of exercise, or any
combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards. The Committee may provide
for procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event
shares of Restricted Stock are tendered as consideration for the exercise of an
Option, a number of the shares issued upon the exercise of the Option, equal to
the number of shares of Restricted Stock used as consideration therefor, shall
be subject to the same restrictions as the Restricted Stock so submitted as well
as any additional restrictions that may be imposed by the Committee.

12. Taxes. The Company shall have the right to deduct applicable taxes from any
Award payment and withhold, at the time of delivery or vesting of cash or shares
of Common Stock under this Plan, an appropriate amount of cash or number of
shares of Common Stock or a combination thereof for payment of taxes required by
law or to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for withholding of

 

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such taxes. The Committee may also permit withholding to be satisfied by the
transfer to the Company of shares of Common Stock theretofore owned by the
holder of the Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.

13. Amendment, Modification, Suspension or Termination. The Board may amend,
modify, suspend or terminate this Plan for the purpose of meeting or addressing
any changes in legal requirements or for any other purpose permitted by law,
except that (i) no amendment or alteration that would adversely affect the
rights of any Participant under any Award previously granted to such Participant
shall be made without the consent of such Participant and (ii) no amendment or
alteration shall be effective prior to its approval by the stockholders of the
Company to the extent stockholder approval is otherwise required by applicable
legal requirements. Notwithstanding any provision in this Plan to the contrary,
this Plan shall not be amended or terminated in such manner that would cause
this Plan or any amounts or benefits payable hereunder to fail to comply with
the requirements of Section 409A of the Code, to the extent applicable, and any
such amendment or termination that may reasonably be expected to result in such
non-compliance shall be of no force or effect.

14. Assignability. Unless otherwise determined by the Committee and provided in
the Award Agreement, no Award or any other benefit under this Plan shall be
assignable or otherwise transferable. Any attempted assignment of an Award or
any other benefit under this Plan in violation of this paragraph 14 shall be
null and void.

15. Adjustments.

(a) The existence of outstanding Awards shall not affect in any manner the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the capital
stock of the Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the Common
Stock) or the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to that of the
acts or proceedings enumerated above.

(b) In the event of any subdivision or consolidation of outstanding shares of
Common Stock, declaration of a dividend payable in shares of Common Stock or
other stock split, then (i) the number of shares of Common Stock reserved under
this Plan, (ii) the number of shares of Common Stock covered by outstanding
Awards in the form of Common Stock or units denominated in Common Stock,
(iii) the exercise or other price in respect of such Awards, (iv) the Stock
Based Award Limitations described in paragraph 8(b) hereof, (v) the number of
shares of Common Stock covered by Awards to Directors granted pursuant to
paragraph 9 hereof, and (vi) the appropriate Fair Market Value and other price
determinations for such Awards shall each be proportionately adjusted by the
Board to reflect such transaction. In the event of any other recapitalization or
capital reorganization of the Company, any consolidation or merger of

 

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the Company with another corporation or entity, the adoption by the Company of
any plan of exchange affecting the Common Stock or any distribution to holders
of Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), the Board shall make appropriate adjustments
to (i) the number of shares of Common Stock covered by Awards in the form of
Common Stock or units denominated in Common Stock, (ii) the exercise or other
price in respect of such Awards, and (iii) the appropriate Fair Market Value and
other price determinations for such Awards, (iv) the number of shares of Common
Stock covered by Awards to Directors automatically granted pursuant to paragraph
9 hereof and (v) the Stock Based Award Limitations described in paragraph 8(b)
hereof, to give effect to such transaction shall each be proportionately
adjusted by the Board to reflect such transaction; provided that such
adjustments shall only be such as are necessary to maintain the proportionate
interest of the holders of the Awards and preserve, without exceeding, the value
of such Awards.

(c) In the event of a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation, the Board may make such
adjustments to Awards or other provisions for the disposition of Awards as it
deems equitable, and shall be authorized, in its discretion, (i) to provide for
the substitution of a new Award or other arrangement (which, if applicable, may
be exercisable for such property or stock as the Board determines) for an Award
or the assumption of the Award, regardless of whether in a transaction to which
Section 424(a) of the Code applies, (ii) to provide, prior to the transaction,
for the acceleration of the vesting and exercisability of, or lapse of
restrictions with respect to, the Award and, if the transaction is a cash
merger, provide for the termination of any portion of the Award that remains
unexercised at the time of such transaction or (iii) to provide for the
acceleration of the vesting and exercisability of an Award and the cancellation
thereof in exchange for such payment as shall be mutually agreeable to the
Participant and the Board.

(d) No adjustment authorized by this paragraph 15 shall be made by the Company
in such manner that would cause or result in this Plan or any amounts or
benefits payable hereunder to fail to comply with the requirements of
Section 409A of the Code, to the extent applicable, and any such adjustment that
may reasonably be expected to result in such non-compliance shall be of no force
or effect.

16. Restrictions. No Common Stock or other form of payment shall be issued with
respect to any Award unless the Company shall be satisfied based on the advice
of its counsel that such issuance will be in compliance with applicable federal
and state securities laws. Certificates evidencing shares of Common Stock
delivered under this Plan (to the extent that such shares are so evidenced) may
be subject to such stop transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any securities exchange or transaction
reporting system upon which the Common Stock is then listed or to which it is
admitted for quotation and any applicable federal or state securities law. The
Committee may cause a legend or legends to be placed upon such certificates (if
any) to make appropriate reference to such restrictions.

 

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17. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or
rights thereto, this Plan shall be unfunded. Although bookkeeping accounts may
be established with respect to Participants who are entitled to cash, Common
Stock or rights thereto under this Plan, any such accounts shall be used merely
as a bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock or rights
thereto, nor shall this Plan be construed as providing for such segregation, nor
shall the Company, the Board or the Committee be deemed to be a trustee of any
cash, Common Stock or rights thereto to be granted under this Plan. Any
liability or obligation of the Company to any Participant with respect to an
Award of cash, Common Stock or rights thereto under this Plan shall be based
solely upon any contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board nor the Committee shall be required
to give any security or bond for the performance of any obligation that may be
created by this Plan.

18. Code Section 409A. Notwithstanding anything in this Plan to the contrary, if
any Plan provision or Award under this Plan would result in the imposition of an
additional tax under Code Section 409A and related regulations and Treasury
pronouncements (“Section 409A”), that Plan provision or Award will be reformed
to avoid imposition of the additional tax, including that any Award subject to
409A held by a specified employee that is settled upon termination of employment
(for reasons other than death) shall be delayed in payment until the expiration
of six months, and no action taken to comply with Section 409A shall be deemed
to adversely affect the Participant’s rights to an Award. Awards made under this
Plan are intended to comply with or be exempt from Section 409A, and ambiguous
provisions hereof, if any, shall be construed and interpreted in a manner
consistent with such intent. No payment, benefit or consideration shall be
substituted for an Award if such action would result in the imposition of taxes
under Section 409A.

19. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Delaware.

20, Effectiveness. This Plan shall be effective as of March 14, 2005 (the
“Effective Date”), as approved by the Board. Notwithstanding the foregoing, the
adoption of this Plan is expressly conditioned upon the approval by the holders
of a majority of shares of Common Stock present, or represented, and entitled to
vote at a meeting of the Company’s stockholders held on or before December 31,
2005. If the stockholders of the Company should fail to so approve this Plan
prior to such date, this Plan shall terminate and cease to be of any further
force or effect, and all grants of Awards hereunder shall be null and void.
Notwithstanding the foregoing, the Plan shall continue in effect for a term of
ten (10) years commencing on the date the Company’s stockholders approve the
Plan, unless sooner terminated by action of the Board.

 

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