Exhibit 10.11


 


OMEGA NAVIGATION ENTERPRISES, INC.

2006 STOCK INCENTIVE PLAN


 


ARTICLE I.


General


 


1.1.         Purpose


 


The Omega Navigation Enterprises, Inc. 2006 Stock
Incentive Plan (the “Plan”) is designed to provide certain key persons, on
whose initiative and efforts the successful conduct of the business of Omega
Navigation Enterprises, Inc. (the “Company”) depends, with incentives to: (a) enter
into and remain in the service of the Company (b) acquire a proprietary
interest in the success of the Company, (c) maximize their performance and
(d) enhance the long-term performance of the Company.


 


1.2.         Administration


 


(a)           Administration
by Board of Directors.  The Plan
shall be administered by the Company’s Board of Directors (the “Administrator”).  The Administrator shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan and any Award Agreements executed pursuant to Section 2.1
in its sole discretion with all such determination being final, binding and
conclusive, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules governing its own
operations, (iv) to make all determinations necessary or advisable in
administering the Plan, and (v) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan.


 


(b)           Administrator
Action.  Actions of the Administrator
shall be taken by the vote of a majority of its members.  Any action may be taken by a written
instrument signed by a majority of the Administrator members, and action so
taken shall be fully as effective as if it had been taken by a vote at a
meeting.  Except to the extent prohibited
by applicable law or the applicable rules of a stock exchange, the
Administrator may allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities to any person or persons selected by it, and may revoke
any such allocation or delegation at any time.


 


1.3.         Persons
Eligible for Awards


 


The persons eligible to receive awards under the Plan
are those officers, directors, and executive, managerial, administrative and
professional employees of the Company, (collectively, “key persons”) as the
Administrator in its sole discretion shall select, taking into account the
duties of the respective employees, their present and potential contributions
to the success of the Company, and such other factors as the Administrator
shall deem relevant in connection with accomplishing the purpose of the
Plan.  The Administrator may from time to
time, in its sole discretion, determine that any key person shall be ineligible
to receive awards under the Plan.


 


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1.4.         Types
of Awards Under Plan


 


Awards may be made under the Plan in the form of (a) incentive
stock options, (b) non-qualified stock options, (c) stock
appreciation rights, (d) dividend equivalent rights, (e) restricted
stock, (f) unrestricted stock, (g) restricted stock units, and (h) performance
shares, all as more fully set forth in Article II.  The term “award” means any of the
foregoing.  No incentive stock option may
be granted to a person who is not an employee of the Company on the date of
grant. Notwithstanding any provision of the Plan, to the extent any Award would
be subject to Section 409A of the Code, no such Award may be granted if it
would fail to comply with the requirements set forth in Section 409A of
the Code.


 


1.5.         Shares
Available for Awards


 


(a)           Subject
to the provisions of Section 1.5(b), the aggregate number of shares of Class A
common stock of the Company (“Class A Common Stock”) with respect to which
options or restricted shares may at any time be granted under the Plan are [        ]
shares of Class A Common Stock.


 


(b)           Shares
issued pursuant to the Plan may be authorized but unissued Class A Common
Stock.  The Administrator may direct that
any stock certificate evidencing shares issued pursuant to the Plan shall bear
a legend setting forth such restrictions on transferability as may apply to
such shares.


 


(c)           Adjustment
Upon Changes in Class A Common Stock. 
Upon certain changes in Class A Common Stock, the number of shares
of Class A Common Stock available for issuance with respect to awards that
may be granted under the Plan pursuant to Section 1.5(a), shall be
adjusted pursuant to Section 3.7(a).


 


(d)           Certain
Shares to Become Available Again. 
The following shares of Class A Common Stock shall again become
available for awards under the Plan: any shares that are subject to an award
under the Plan and that remain unissued upon the cancellation or termination of
such award for any reason whatsoever; any shares of restricted stock forfeited
pursuant to Section 2.7(e), provided that any dividends paid on such
shares are also forfeited pursuant to such Section 2.7(e); and any shares
in respect of which a stock appreciation right or performance share award is
settled for cash.


 


(e)           Individual
Limit.  Except for the limits set
forth in this Section 1.5(d) and 2.2(i), no provision of this Plan
shall be deemed to limit the number or value of shares with respect to which
the Administrator may make awards to any eligible person.  Subject to adjustment as provided in Section 3.7(a),
the total number of shares of Class A Common Stock with respect to which
awards may be granted to any one employee of the Company during any one
calendar year shall not exceed [       ]
shares.  Stock options and stock
appreciation rights granted and subsequently canceled or deemed to be canceled
in a calendar year count against this limit even after their cancellation.  The provisions of this Section 1.5(e) shall
not apply in any circumstance with respect to which the Committee determines
that compliance with Section 162(m) of the Code is not necessary.


 


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1.6.         Definitions
of Certain Terms


 


(a)           The “Fair Market Value” of a share of Class A Common Stock on any
day shall be the closing price on the Nasdaq National Market as reported for
such day in The Wall Street Journal or, if no such price is reported for such
day, the average of the high bid and low asked price of Class A Common
Stock as reported for such day.  If no
quotation is made for the applicable day, the Fair Market Value of a share of Class A
Common Stock on such day shall be determined in the manner set forth in the
preceding sentence using quotations for the next preceding day for which there
were quotations, provided that such quotations shall have been made within the
ten (10) business days preceding the applicable day.  Notwithstanding the foregoing, if deemed
necessary or appropriate by the Administrator, the Fair Market Value of a share
of Class A Common Stock on any day shall be determined by the
Administrator.  In no event shall the
Fair Market Value of any share of Class A Common Stock be less than its
par value.


 


(b)           The
term “incentive stock option” means an option that is intended to qualify for
special federal income tax treatment pursuant to sections 421 and 422 of the
Code as now constituted or subsequently amended, or pursuant to a successor
provision of the Code, and which is so designated in the applicable Grant
Certificate.  Any option that is not
specifically designated as an incentive stock option shall under no
circumstances be considered an incentive stock option.  Any option that is not an incentive stock
option is referred to herein as a “non-qualified stock option.”


 


(c)           The
term “cause” in connection with a termination of employment or Board membership
by reason of a dismissal for cause shall mean:


 


(i)            to
the extent that there is an employment, severance or other agreement governing
the relationship between the grantee and the Company, a Company subsidiary or a
Company joint venture, which agreement contains a definition of “cause,” cause
shall consist of those acts or omissions that would constitute “cause” under
such agreement; and otherwise,


 


(ii)           the
grantee’s termination of employment or Board membership by the Company or an
affiliate on account of any one or more of the following:


 


(A)          any
failure by the grantee substantially to perform the grantee’s employment or
Board membership duties;


 


(B)           any
excessive unauthorized absenteeism by the grantee;


 


(C)           any
refusal by the grantee to obey the lawful orders of the Board or any other
person or Administrator to whom the grantee reports;


 


(D)          any
act or omission by the grantee that is or may be injurious to the Company,
monetarily or otherwise;


 


(E)           any
act by the grantee that is inconsistent with the best interests of the Company;


 


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(F)           the
grantee’s material violation of any of the Company’s policies, including,
without limitation, those policies relating to discrimination or sexual
harassment;


 


(G)           the
grantee’s unauthorized (a) removal from the premises of the Company or an
affiliate of any document (in any medium or form) relating to the Company or an
affiliate or the customers or clients of the Company or an affiliate or (b) disclosure
to any person or entity of any of the Company’s, or its affiliates’
confidential or proprietary information;


 


(H)          the
grantee’s commission of any felony, or any other crime involving moral
turpitude; and


 


(I)            the
grantee’s commission of any act involving dishonesty or fraud.


 


Any rights the Company may have hereunder in respect
of the events giving rise to cause shall be in addition to the rights the
Company may have under any other agreement with a grantee or at law or in
equity.  Any determination of whether a
grantee’s employment or Board membership is (or is deemed to have been)
terminated for cause shall be made by the Administrator in its discretion,
which determination shall be final, binding and conclusive on all parties.  If, subsequent to a grantee’s voluntary
termination of employment or involuntary termination of employment without
cause, it is discovered that the grantee’s employment could have been
terminated for cause, the Administrator may deem such grantee’s employment or
Board membership to have been terminated for cause.  A grantee’s termination of employment or
Board membership for cause shall be effective as of the date of the occurrence
of the event giving rise to cause, regardless of when the determination of
cause is made.


 


(d)           The
term “Code” means the Internal Revenue Code of 1986, as amended.


 


ARTICLE II.

Awards Under The Plan


 


2.1.         Agreements
Evidencing Awards


 


Each award granted under the Plan (except an award of
unrestricted stock) shall be evidenced by a written certificate (“Award Agreement”)
which shall contain such provisions as the Administrator may, in its sole
discretion, deem necessary or desirable. 
By executing an Award Agreement pursuant to the Plan, a grantee thereby
agrees that the award shall be subject to all of the terms and provisions of
the Plan and the applicable Award Agreement.


 


2.2.         Grant
of Stock Options, Stock Appreciation Rights, Restricted Stock Units and
Dividend Equivalent Rights


 


(a)           Stock
Option Grants.  The Administrator may
grant incentive stock options and non-qualified stock options (“options”) to
purchase shares of Class A Common Stock from the Company, to such key
persons, and in such amounts and subject to such vesting and forfeiture
provisions and other terms and conditions, as the Administrator shall determine,
in its sole 


 


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discretion, subject to the
provisions of the Plan.  The
Administrator may not grant incentive stock options to non-employee directors.


 


(b)           Stock
Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock
appreciation rights to such key persons, and in such amounts and subject to
such vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall determine, in its sole discretion, subject to the
provisions of the Plan.  The terms of a
stock appreciation right may provide that it shall be automatically exercised
for a cash payment upon the happening of a specified event that is outside the
control of the grantee, and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in
connection with all or any part of, or independently of, any option granted
under the Plan.  A stock appreciation
right granted in connection with an option may be granted at or after the time
of grant of such option.


 


(c)           Nature
of Stock Appreciation Rights.  The
grantee of a stock appreciation right shall have the right, subject to the
terms of the Plan and the applicable Award Agreement, to receive from the
Company an amount equal to (i) the excess of the Fair Market Value of a
share of Class A Common Stock on the date of exercise of the stock
appreciation right over the Fair Market Value of a share of Class A Common
Stock on the date of grant (or over the option exercise price if the stock
appreciation right is granted in connection with an option), multiplied by (ii) the
number of shares with respect to which the stock appreciation right is
exercised.  Payment upon exercise of a
stock appreciation right shall be in cash or in shares of Class A Common
Stock (valued at their Fair Market Value on the date of exercise of the stock
appreciation right) or both, all as the Administrator shall determine in its
sole discretion; provided, however, that a Stock Appreciation Right settled in
cash shall be exercisable only to the extent that such exercise complies with Section 409A
of the Code.  Upon the exercise of a
stock appreciation right granted in connection with an option, the number of
shares subject to the option shall be reduced by the number of shares with
respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection
with which a stock appreciation right has been granted, the number of shares
subject to the stock appreciation right shall be reduced by the number of
shares with respect to which the option is exercised.


 


(d)           Option
Exercise Price.  Each Award Agreement
with respect to an option shall set forth the amount (the “option exercise
price”) payable by the grantee to the Company upon exercise of the option
evidenced thereby.  The option exercise
price per share shall be determined by the Administrator in its sole
discretion; provided, however, that the option exercise price of an incentive
stock option shall be at least 100% of the Fair Market Value of a share of Class A
Common Stock on the date the option is granted, and provided further that in no
event shall the option exercise price be less than the par value of a share of Class A
Common Stock.


 


(e)           Exercise
Period.  Each Award Agreement with
respect to an option or stock appreciation right shall set forth the periods
during which the award evidenced thereby shall be exercisable, whether in whole
or in part.  Such periods shall be determined
by the Administrator in its sole discretion; provided, however, that no option
or a stock appreciation right shall be exercisable more than 10 years after the
date of grant, and provided further that, except as and to the extent that the
Administrator may otherwise provide pursuant to Sections 2.5, 3.7 or 3.8, no
option or stock appreciation right shall be exercisable prior to the first
anniversary of the date of grant. (See the default exercise period provided for
under Sections 2.3(a) and (b).)


 


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(f)            Reload
Options.  The Administrator may, in
its sole discretion, include in any Award Agreement with respect to an option
(the “original option”) a provision that an additional option (the “reload
option”) shall be granted to any grantee who, pursuant to Section 2.3(e)(ii),
delivers shares of Class A Common Stock in partial or full payment of the
exercise price of the original option. 
The reload option shall be for a number of shares of Class A Common
Stock equal to the number thus delivered, shall have an exercise price equal to
the Fair Market Value of a share of Class A Common Stock on the date of
exercise of the original option, and shall have an expiration date no later
than the expiration date of the original option.  In the event that a Award Agreement provides
for the grant of a reload option, such Agreement shall also provide that the
exercise price of the original option be no less than the Fair Market Value of
a share of Class A Common Stock on its date of grant, and that any shares
that are delivered pursuant to Section 2.3 (e) (ii) in payment
of such exercise price shall have been held for at least six months.


 


(g)           Dividend
Equivalent Rights.  The Administrator
may, in its sole discretion, include in any Award Agreement with respect to an
option, stock appreciation right or performance shares, a dividend equivalent
right entitling the grantee to receive amounts equal to the ordinary dividends
that would be paid, during the time such award is outstanding and unexercised,
on the shares of Class A Common Stock covered by such award if such shares
were then outstanding.  In the event such
a provision is included in a Award Agreement, the Administrator shall determine
whether such payments shall be made in cash or in shares of Class A Common
Stock, whether they shall be conditioned upon the exercise of the award to
which they relate, the time or times at which they shall be made, and such
other vesting and forfeiture provisions and other terms and conditions as the
Administrator shall deem appropriate.


 


(h)           Restricted Stock Units.  The
Administrator may, in its sole discretion, grant stock restricted stock units
to such key persons, and in such amounts and subject to such vesting and
forfeiture provisions and other terms and conditions, as the Administrator
shall determine, in its sole discretion, subject to the provisions of the
Plan.  A restricted stock unit granted
under the Plan shall confer upon the grantee a right to receive from the
Company, upon the occurrence of an event specified in the Award Agreement, such
grantee’s vested restricted stock units multiplied by the Fair Market Value of
a share of Class A Common Stock. 
Restricted stock units may be granted in connection with all or any part
of, or independently of, any award granted under the Plan.  A restricted stock unit granted in connection
with another award may be granted at or after the time of grant of such award.


 


(i)            Incentive
Stock Option Limitation: Exercisability. 
To the extent that the aggregate Fair Market Value (determined as of the
time the option is granted) of the stock with respect to which incentive stock
options are first exercisable by any employee during any calendar year shall
exceed $100,000, or such higher amount as may be permitted from time to time
under section 422 of the Code, such options shall be treated as
non-qualified stock options.


 


(j)            Incentive
Stock Option Limitation; 10% Owners. 
Notwithstanding the provisions of paragraphs (d) and (e) of
this Section 2.2, an incentive stock option may not be granted under the
Plan to an individual who, at the time the option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of his employer corporation or of its parent or subsidiary corporations
(as such ownership may be determined for purposes of section 422(b) (6) of
the Code) unless (i) at the time such incentive stock option is granted
the option exercise price is at least 110% of the Fair Market Value of the 


 


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shares subject thereto and (ii) the
incentive stock option by its terms is not exercisable after the expiration of
5 years from the date it is granted.


 


2.3.         Exercise
of Options, Stock Appreciation Rights and Restricted Stock Units


 


Subject to the other provisions of this Article II,
each option, stock appreciation right and restricted stock unit granted under
the Plan shall be exercisable as follows:


 


(a)           Timing
and Extent of Exercise.  Options,
stock appreciation rights and restricted stock units shall be exercisable at
such times and under such conditions as set forth in the corresponding Award
Agreement, but in no event shall any such award be exercisable prior to the
first anniversary or subsequent to the tenth anniversary of the date on which
such award was granted.  Unless the
applicable Award Agreement otherwise provides, an option, stock appreciation
right or restricted stock unit may be exercised from time to time as to all or
part of the shares or units as to which such award is then exercisable.  A stock appreciation right granted in
connection with an option may be exercised at any time when, and to the same
extent that, the related option may be exercised.


 


(b)           Notice
of Exercise.  An option, stock
appreciation right or restricted stock unit shall be exercised by the filing of
a written notice with the Company or the Company’s designated exchange agent
(the “exchange agent”), on such form and in such manner as the Administrator
shall in its sole discretion prescribe.


 


(c)           Payment
of Exercise Price.  Any written
notice of exercise of an option shall be accompanied by payment for the shares
being purchased.  Such payment shall be
made: (i) by certified or official bank check (or the equivalent thereof
acceptable to the Company or its exchange agent) for the full option exercise
price; or (ii) with the consent of the Administrator, by delivery of
shares of Class A Common Stock having a Fair Market Value (determined as
of the exercise date) equal to all or part of the option exercise price and a
certified or official bank check (or the equivalent thereof acceptable to the
Company or its exchange agent) for any remaining portion of the full option
exercise price; or (iii) at the discretion of the Administrator and to the
extent permitted by law, by such other provision, consistent with the terms of
the Plan, as the Administrator may from time to time prescribe (whether
directly or indirectly through the exchange agent).


 


(d)           Delivery
of Certificates Upon Exercise. 
Subject to the provision of section 2.3(e), promptly after
receiving payment of the full option exercise price, or after receiving notice
of the exercise of a stock appreciation right for which payment will be made
partly or entirely in shares, the Company or its exchange agent shall, subject
to the provisions of Section 3.2, deliver to the grantee or to such other
person as may then have the right to exercise the award, a certificate or
certificates for the shares of Class A Common Stock for which the award
has been exercised.  If the method of
payment employed upon option exercise so requires, and if applicable law
permits, an optionee may direct the Company or its exchange agent, as the case
may be, to deliver the stock certificate(s) to the optionee’s stockbroker.


 


(e)           Investment
Purpose and Legal Requirements. 
Notwithstanding the foregoing, at the time of the exercise of any
option, the Company may, if it shall deem it necessary or advisable for any
reason, require the holder of such option (i) to represent in writing to
the Company that it is the optionee’s then intention to acquire the Shares with
respect to which the 


 


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option is to be exercised for
investment and not with a view to the distribution thereof, or (ii) to
postpone the date of exercise until such time as the Company has available for
delivery to the optionee a prospectus meeting the requirements of all
applicable securities laws; and no shares shall be
issued or transferred upon the exercise of any option unless and until all
legal requirements applicable to the issuance or transfer of such Shares have
been complied with to the satisfaction of the Company.  The Company shall have the right to condition
any issuance of shares to any optionee hereunder on such optionee’s undertaking
in writing to comply with such restrictions on the subsequent transfer of such
shares as the Company shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may contain a legend to reflect any such restrictions.


 


(f)            No
Stockholder Rights.  No grantee of an
option, stock appreciation right or restricted stock unit (or other person
having the right to exercise such award) shall have any of the rights of a
stockholder of the Company with respect to shares subject to such award until
the issuance of a stock certificate to such person for such shares.  Except as otherwise provided in Section 1.5(b),
no adjustment shall be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash, securities or other
property) for which the record date is prior to the date such stock certificate
is issued.


 


2.4.         Compensation
in Lieu of Exercise of an Option


 


Upon written application of the grantee of an option,
the Administrator may in its sole discretion determine to substitute, for the
exercise of such option, compensation to the grantee not in excess of the
difference between the option exercise price and the Fair Market Value of the
shares covered by such written application on the date of such
application.  Such compensation may be in
cash, in shares of Class A Common Stock, or both, and the payment thereof
may be subject to conditions, all as the Administrator shall determine in its
sole discretion.  In the event
compensation is substituted pursuant to this Section 2.4 for the exercise,
in whole or in part, of an option, the number of shares subject to the option
shall be reduced by the number of shares for which such compensation is
substituted.


 


2.5.         Termination
of Employment; Death Subsequent to a Termination of Employment


 


(a)           General
Rule.  Except to the extent otherwise
provided in paragraphs (b), (c), (d) or (e) of this Section 2.5
or Section 3.8(b)(iii), a grantee who incurs a termination of employment
may exercise any outstanding option or stock appreciation right on the
following terms and conditions: (i) exercise may be made only to the
extent that the grantee was entitled to exercise the award on the termination
of employment date; and (ii) exercise must occur within three months after
termination of employment but in no event after the original expiration date of
the award.


 


(b)           Dismissal
for Cause; Resignation.  If a grantee
incurs a termination of employment as the result of a dismissal for cause or
resignation without the Company’s prior consent, as applicable, all options and
stock appreciation rights not theretofore exercised shall terminate upon the
grantee’s termination of employment.


 


(c)           Retirement.  If a grantee incurs a termination of
employment as the result of his retirement, then any outstanding option, stock
appreciation right or restricted stock unit shall be exercisable pursuant to
its terms.  For this purpose “retirement”
shall mean a grantee’s 


 


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termination of employment,
under circumstances other than those described in paragraph (b) above, on
or after: (x) his 65th birthday, (y) the date on which he has attained age 60
and completed at least five years of service with the Company, as applicable,
(using any method of calculation the Administrator deems appropriate) or (z) if
approved by the Administrator, on or after he has completed at least 20 years
of service.


 


(d)           Disability.  If a grantee incurs a termination of
employment by reason of a disability (as defined below), then any outstanding
option, stock appreciation right or restricted stock unit shall be exercisable
pursuant to its terms.  For this purpose “disability”
shall mean, except in connection any physical or mental condition that would
qualify a grantee for a disability benefit under the long-term disability plan
maintained by the Company, if there is no such plan, a physical or mental
condition that prevents the grantee from performing the essential functions of
the grantee’s position (with or without reasonable accommodation) for a period
of six consecutive months.  The existence
of a disability shall be determined by the Administrator in its sole and
absolute discretion.


 


(e)           Death.


 


(i)            Termination of Employment as a Result of Grantee’s Death.  If a grantee incurs a termination of
employment as the result of his death, then any outstanding option, stock
appreciation right or restricted stock unit shall be exercisable pursuant to its
terms.


 


(ii)           Restrictions on Exercise Following Death.  Any such exercise of an award following a
grantee’s death shall be made only by the grantee’s executor or administrator
or other duly appointed representative reasonably acceptable to the Administrator,
unless the grantee’s will specifically disposes of such award, in which case
such exercise shall be made only by the recipient of such specific
disposition.  If a grantee’s personal
representative or the recipient of a specific disposition under the grantee’s
will shall be entitled to exercise any award pursuant to the preceding
sentence, such representative or recipient shall be bound by all the terms and
conditions of the Plan and the applicable Award Agreement which would have
applied to the grantee including, without limitation, the provisions of
Sections 3.2 and 3.5 hereof.


 


(f)            Special
Rules for Incentive Stock Options. 
No option that remains exercisable for more than three months following
a grantee’s termination of employment for any reason other than death or
disability, or for more than one year following a grantee’s termination of
employment as the result of his becoming disabled, may be treated as an
incentive stock option.


 


(g)           Administrator
Discretion.  The Administrator, in
the applicable Award Agreement, may waive or modify the application of the
foregoing provisions of this Section 2.5.


 


2.6.          Transferability
of Options, Stock Appreciation Rights and Restricted Stock Units


 


Except as otherwise provided in an applicable Award
Agreement evidencing an option, stock appreciation right or restricted stock
unit, during the lifetime of a grantee, each such award granted to a grantee
shall be exercisable only by the grantee and no such award shall be assignable
or transferable otherwise than by will or by the laws of descent and
distribution.  The Administrator may, in
any applicable Award Agreement evidencing an option (other than an incentive
stock option to the extent inconsistent with the requirements of section 422
of the 


 


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Code applicable to incentive
stock options), permit a grantee to transfer all or some of the options to (A) the
grantee’s spouse, children or grandchildren (“Immediate Family Members”), (B) a
trust or trusts for the exclusive benefit of such Immediate Family Members, or (C) other
parties approved by the Administrator in its sole and absolute discretion.  Following any such transfer, any transferred
options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to the transfer.


 


2.7.         Grant
of Restricted Stock


 


(a)           Restricted
Stock Grants.  The Administrator may
grant restricted shares of Class A Common Stock to such key persons, in
such amounts, and subject to such vesting and forfeiture provisions and other
terms and conditions as the Administrator shall determine in its sole
discretion, subject to the provisions of the Plan.  Restricted stock awards may be made
independently of or in connection with any other award under the Plan.  A grantee of a restricted stock award shall
have no rights with respect to such award unless such grantee accepts the award
within such period as the Administrator shall specify by accepting delivery of
a restricted stock agreement in such form as the Administrator shall determine
and, in the event the restricted shares are newly issued by the Company, makes
payment to the Company its exchange agent by certified or official bank check
(or the equivalent thereof acceptable to the Company) in an amount at least
equal to the par value of the shares covered by the award.


 


(b)           Issuance
of Stock Certificate(s).  Promptly
after a grantee accepts a restricted stock award, the Company or its exchange
agent shall issue to the grantee a stock certificate or stock certificates for
the shares of Class A Common Stock covered by the award or shall establish
an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock
certificate(s), or establishment of such account, the grantee shall have the
rights of a stockholder with respect to the restricted stock, subject to: (i) the
nontransferability restrictions and forfeiture provision described in
paragraphs (d) and (e) of this Section 2.7; (ii) in the
Administrator’s discretion, to a requirement that any dividends paid on such
shares shall be held in escrow until all restrictions on such shares have
lapsed; and (iii) any other restrictions and conditions contained in the
applicable restricted stock agreement.


 


(c)           Custody
of Stock Certificate(s).  Unless the
Administrator shall otherwise determine, any stock certificates issued
evidencing shares of restricted stock shall remain in the possession of the
Company until such shares are free of any restrictions specified in the
applicable restricted stock agreement. 
The Administrator may direct that such stock certificate(s) bear a
legend setting forth the applicable restrictions on transferability.


 


(d)           Nontransferability.  Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
otherwise specifically provided in this Plan or the applicable restricted stock
agreement.  The Administrator at the time
of grant shall specify the date or dates (which may depend upon or be related to
the attainment of performance goals and other conditions) on which the
nontransferability of the restricted stock shall lapse.


 


(e)           Consequence
of Termination of Employment.  A
grantee’s termination of employment for any reason (including death) shall cause
the immediate forfeiture of all shares of restricted stock that have not yet
vested as of the date of such termination of employment.  All dividends paid on such shares also shall
be forfeited, whether by termination of any escrow 


 


10

















 


arrangement under which such
dividends are held, by the grantee’s repayment of dividends he received
directly, or otherwise.


 


2.8.         Grant
of Unrestricted Stock


 


The Administrator may grant (or sell at a purchase
price at least equal to par value) shares of Class A Common Stock free of
restrictions under the Plan, to such key persons and in such amounts and
subject to such forfeiture provisions as the Administrator shall determine in
its sole discretion.  Shares may be thus
granted or sold in respect of past services or other valid consideration.


 


2.9.         Grant
of Performance Shares


 


(a)           Performance
Share Grants.  The Administrator may
grant performance share awards to such key persons, and in such amounts and
subject to such vesting and forfeiture provisions and other terms and
conditions, as the Administrator shall in its sole discretion determine,
subject to the provisions of the Plan. 
Such an award shall entitle the grantee to acquire shares of Class A
Common Stock, or to be paid the value thereof in cash, as the Administrator
shall determine, if specified performance goals are met.  Performance shares may be awarded
independently of, or in connection with, any other award under the Plan.  A grantee shall have no rights with respect
to a performance share award unless such grantee accepts the award by accepting
delivery of a Award Agreement at such time and in such form as the
Administrator shall determine.


 


(b)           Stockholder
Rights.  The grantee of a performance
share award will have the rights of a stockholder only as to shares for which a
stock certificate has been issued pursuant to the award and not with respect to
any other shares subject to the award.


 


(c)           Consequence
of Termination of Employment.  Except
as may otherwise be provided by the Administrator at any time prior to a
grantee’s termination of employment, the rights of a grantee of a performance
share award shall automatically terminate upon the grantee’s termination of
employment by the Company or its subsidiaries for any reason (including death).


 


(d)           Exercise
Procedures; Automatic Exercise.  At
the discretion of the Administrator, the applicable Award Agreement may set out
the procedures to be followed in exercising a performance share award or it may
provide that such exercise shall be made automatically after satisfaction of
the applicable performance goals.


 


(e)           Tandem
Grants; Effect on Exercise.  Except
as otherwise specified by the Administrator, (i) a performance share award
granted in tandem with an option may be exercised only while the option is
exercisable, (ii) the exercise of a performance share award granted in
tandem with any other award shall reduce the number of shares subject to such
other award in the manner specified in the applicable Award Agreement, and (iii) the
exercise of any award granted in tandem with a performance share award shall
reduce the number of shares subject to the latter in the manner specified in
the applicable Award Agreement.


 


(f)            Nontransferability.  Performance shares may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall


 


11

















 


specify the date or dates
(which may depend upon or be related to the attainment of performance goals and
other conditions) on which the nontransferability of the performance shares
shall lapse.


 


ARTICLE III.


Miscellaneous


 


3.1.         Amendment
of the Plan; Modification of Awards


 


(a)           Amendment
of the Plan.  The Board may from time
to time suspend, discontinue, revise or amend the Plan in any respect
whatsoever, except that no such amendment shall materially impair any rights or
materially increase any obligations under any award theretofore made under the
Plan without the consent of the grantee (or, upon the grantee’s death, the
person having the right to exercise the award). 
For purposes of this Section 3.1, any action of the Board or the
Administrator that in any way alters or affects the tax treatment of any award
shall not be considered to materially impair any rights of any grantee.


 


(b)           Stockholder
Approval Requirement.  Stockholder
approval shall be required with respect to any amendment to the Plan that (i) increases
the aggregate number of shares that may be issued pursuant to incentive stock
options or changes the class of employees eligible to receive such options; or (ii) materially
increases the benefits under the Plan to persons whose transactions in Class A
Common Stock are subject to section 16(b) of the 1934 Act or
increases the benefits under the Plan to someone who is, materially increases
the number of shares which may be issued to such persons, or materially
modifies the eligibility requirements affecting such persons.


 


(c)           Modification
of Awards.  The Administrator may
cancel any award under the Plan.  The
Administrator also may amend any outstanding Award Agreement, including,
without limitation, by amendment which would: (i) accelerate the time or
times at which the award becomes unrestricted or may be exercised, provided
that, except as and to the extent that the Administrator may otherwise provide
pursuant to Section 2.5, 3.7 or 3.8, no option, stock appreciation right
or restricted stock unit shall be exercisable prior to the first anniversary of
its date of grant; (ii) waive or amend any goals, restrictions or
conditions set forth in the Agreement; or (iii) waive or amend the
operation of Section 2.5 with respect to the termination of the award upon
termination of employment.  However, any
such cancellation or amendment (other than an amendment pursuant to
Sections 3.7 or 3.8(b)) that materially impairs the rights or materially
increases the obligations of a grantee under an outstanding award shall be made
only with the consent of the grantee (or, upon the grantee’s death, the person
having the right to exercise the award).


 


3.2.         Consent
Requirement


 


(a)           No
Plan Action Without Required Consent. 
If the Administrator shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any award under the Plan, the issuance or
purchase of shares or other rights thereunder, or the taking of any other
action thereunder (each such action being hereinafter referred to as a “Plan
Action”), then such Plan Action shall not be taken, in whole or in part, unless
and until such Consent shall have been effected or obtained to the full
satisfaction of the Administrator.


 


12

















 


(b)           Consent
Defined.  The term “Consent” as used
herein with respect to any Plan Action means (i) any and all listings,
registrations or qualifications in respect thereof upon any securities exchange
or under any federal, state or local law, rule or regulation, (ii) any
and all written agreements and representations by the grantee with respect to
the disposition of shares, or with respect to any other matter, which the
Administrator shall deem necessary or desirable to comply with the terms of any
such listing, registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made and (iii) any
and all consents, clearances and approvals in respect of a Plan Action by any
governmental or other regulatory bodies.


 


3.3.         Nonassignability


 


Except as provided in Sections 2.5(e), 2.6, 2.7(d) and
2.9(f): (a) no award or right
granted to any person under the Plan or under any Award Agreement shall be
assignable or transferable other than by will or by the laws of descent and
distribution; and (b) all rights granted under the Plan or any Award
Agreement shall be exercisable during the life of the grantee only by the
grantee or the grantee’s legal representative.


 


3.4.         Requirement
of Notification of Election Under Section 83(b) of the Code


 


If any grantee shall, in connection with the
acquisition of shares of Class A Common Stock under the Plan, make the
election permitted under section 83(b) of the Code (i.e., an election
to include in gross income in the year of transfer the amounts specified in section 83(b)),
such grantee shall notify the Company of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition to any
filing and notification required pursuant to regulations issued under the
authority of Code section 83(b).


 


3.5.         Requirement
of Notification Upon Disqualifying Disposition Under Section 421(b) of
the Code


 


Each Award Agreement with respect to an incentive
stock option shall require the grantee to notify the Company of any disposition
of shares of Class A Common Stock issued pursuant to the exercise of such
option under the circumstances described in section 421(b) of the
Code (relating to certain disqualifying dispositions), within 10 days of such
disposition.


 


3.6.         Withholding
Taxes


 


(a)           With
Respect to Cash Payments.  Whenever
cash is to be paid pursuant to an award under the Plan, the Company shall be
entitled to deduct therefrom an amount sufficient in its opinion to satisfy all
federal, state and other governmental tax withholding requirements related to
such payment.


 


(b)           With
Respect to Delivery of Class A Common Stock.  Whenever shares of Class A Common Stock
are to be delivered pursuant to an award under the Plan, the Company shall be
entitled to require as a condition of delivery that the grantee remit to the
Company an amount sufficient in the opinion of the Company to satisfy all
federal, state and other governmental tax withholding requirements related
thereto.  With the approval of the
Administrator, which the Administrator shall have sole discretion whether or
not to give, the grantee may satisfy the foregoing condition by electing to
have the Company withhold from delivery shares having a value equal to the
amount of tax to be withheld. Such shares shall be valued at their Fair Market 


 


13

















 


Value as of the date on which
the amount of tax to be withheld is determined. Fractional share amounts shall
be settled in cash.  Such a withholding
election may be made with respect to all or any portion of the shares to be
delivered pursuant to an award.


 


3.7.         Adjustment
Upon Changes in Class A Common Stock


 


(a)           Shares
Available for Grants.  In the event
of any change in the number of shares of Class A Common Stock outstanding
by reason of any stock dividend or split, reverse stock split,
recapitalization, merger, consolidation, combination or exchange of shares or
similar corporate change, the maximum number of shares of Class A Common
Stock with respect to which the Administrator may grant awards under Article II
hereof, as described in Section 1.5(a), and the individual annual limit
described in Section 1.5(d), shall be appropriately adjusted by the
Administrator.  In the event of any
change in the number of shares of Class A Common Stock outstanding by
reason of any other event or transaction, the Administrator may, but need not,
make such adjustments in the number and class of shares of Class A Common
Stock with respect to which awards: (i) may be granted under Article II
hereof and (ii) granted to any one employee of the Company or a subsidiary
during any one calendar year, in each case as the Administrator may deem
appropriate.


 


(b)           Outstanding
Restricted Stock and Performance Shares. 
Unless the Administrator in its sole and absolute discretion otherwise
determines, any securities or other property (including dividends paid in cash)
received by a grantee with respect to a share of restricted stock, the issue
date with respect to which occurs prior to such event, but which has not vested
as of the date of such event, as a result of any dividend, stock split, reverse
stock split, recapitalization, merger, consolidation, combination, exchange of
shares or otherwise will not vest until such share of restricted stock vests,
and shall be promptly deposited with the Company or other custodian designated
pursuant to Section 2.7(c) hereof.


 


The Administrator may, in its absolute discretion,
adjust any grant of shares of restricted stock, the issue date with respect to
which has not occurred as of the date of the occurrence of any of the following
events, or any grant of performance shares, to reflect any dividend, stock
split, reverse stock split, recapitalization, merger, consolidation,
combination, exchange of shares or similar corporate change as the
Administrator may deem appropriate to prevent the enlargement or dilution of
rights of grantees.


 


(c)           Outstanding
Options, Stock Appreciation Rights and Dividend Equivalent Rights—Increase or
Decrease in Issued Shares Without Consideration.   Subject to any required action by the
stockholders of the Company, in the event of any increase or decrease in the
number of issued shares of Class A Common Stock resulting from a
subdivision or consolidation of shares of Class A Common Stock or the
payment of a stock dividend (but only on the shares of Class A Common
Stock), or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Company, the Administrator shall
proportionally adjust the number of shares of Class A Common Stock subject
to each outstanding option and stock appreciation right, and the exercise
price-per-share of Class A Common Stock of each such option and stock
appreciation right and the number of any related dividend equivalent rights.


 


(d)           Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights—Certain Mergers. 
Subject to any required action by the


 


14

















 


stockholders of the Company, in
the event that the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the
holders of shares of Class A Common Stock receive securities of another
corporation), each option, stock appreciation right and dividend equivalent
right outstanding on the date of such merger or consolidation shall pertain to
and apply to the securities which a holder of the number of shares of Class A
Common Stock subject to such option, stock appreciation right, restricted stock
unit or dividend equivalent right would have received in such merger or
consolidation.


 


(e)           Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights — Certain Other Transactions. In the event of (i) a
dissolution or liquidation of the Company, (ii) a sale of all or substantially
all of the Company’s assets, (iii) a merger or consolidation involving the
Company in which the Company is not the surviving corporation or (iv) a merger
or consolidation involving the Company in which the Company is the surviving
corporation but the holders of shares of Class A Common Stock receive
securities of another corporation and/or other property, including cash, the
Administrator shall, in its absolute discretion, have the power to:


 


(i)            cancel,
effective immediately prior to the occurrence of such event, each option, stock
appreciation right and restricted stock unit (including each dividend
equivalent right related thereto) outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the grantee to whom such option or stock appreciation right
was granted an amount in cash, for each share of Class A Common Stock subject
to such option or stock appreciation right, respectively, equal to the excess
of (x) the value, as determined by the Administrator in its absolute
discretion, of the property (including cash) received by the holder of a share
of Class A Common Stock as a result of such event over (y) the exercise price
of such option or stock appreciation right; or


 


(ii)           provide
for the exchange of each option, stock appreciation right and restricted stock
unit (including any related dividend equivalent right) outstanding immediately
prior to such event (whether or not then exercisable) for an option on, stock
appreciation right, restricted stock unit and dividend equivalent right with
respect to, as appropriate, some or all of the property which a holder of the
number of shares of Class A Common Stock subject to such option, stock
appreciation right or restricted stock unit would have received and, incident
thereto, make an equitable adjustment as determined by the Administrator in its
absolute discretion in the exercise price of the option, stock appreciation
right or restricted stock unit, or the number of shares or amount of property
subject to the option, stock appreciation right, restricted stock unit or
dividend equivalent right or, if appropriate, provide for a cash payment to the
grantee to whom such option, stock appreciation right or restricted stock unit
was granted in partial consideration for the exchange of the option, stock
appreciation right or restricted stock unit.


 


(f)            Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights — Other Changes. In the event of any change in the
capitalization of the Company or a corporate change other than those
specifically referred to in Sections 3.7(c), (d) or (e) hereof, the
Administrator may, in its absolute discretion, make such adjustments in the
number and class of shares subject to options, stock appreciation rights,
restricted stock units and dividend equivalent rights outstanding on the date
on which such change occurs and in the per-share exercise price of each such
option, stock appreciation right and restricted stock unit as the


 


15

















 


Administrator may consider appropriate to prevent
dilution or enlargement of rights. In addition, if and to the extent the
Administrator determines it is appropriate, the Administrator may elect to
cancel each option, stock appreciation right and restricted stock unit
(including each dividend equivalent right related thereto) outstanding
immediately prior to such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the grantee to whom such option,
stock appreciation right or restricted stock unit was granted an amount in
cash, for each share of Class A Common Stock subject to such option, stock
appreciation right or restricted stock unit, respectively, equal to the excess
of (i) the Fair Market Value of Class A Common Stock on the date of such
cancellation over (ii) the exercise price of such option, stock appreciation
right or restricted stock unit.


 


(g)           No
Other Rights. Except as expressly provided in the Plan, no grantee shall
have any rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend, any increase or decrease in
the number of shares of stock of any class or any dissolution, liquidation,
merger or consolidation of the Company or any other corporation. Except as
expressly provided in the Plan, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Class A Common Stock subject to an award or the
exercise price of any option or stock appreciation right.


 


3.8.         Change
in Control


 


(a)           Change
in Control Defined. For purposes of this Section 3.8, “Change in Control”
shall mean the occurrence of any of the following:


 


(i)            any
person or “group” (within the meaning of Section 13(d)(3) of the 1934
Act), other than entities which the President of the Company directly or
indirectly controls (as defined in Rule 12b-2 under the 1934 Act), acquiring
“beneficial ownership” (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of fifty percent (50%) or more of the aggregate voting power of
the capital stock ordinarily entitled to elect directors of the Company;


 


(ii)           the
sale of all or substantially all of the Company’s assets in one or more related
transactions to a person other than such a sale to a subsidiary of the Company
which does not involve a change in the equity holdings of the Company or to an
entity which the President directly or indirectly controls; or


 


(iii)          any
merger, consolidation, reorganization or similar event of the Company or any of
its subsidiaries, as a result of which the holders of the voting stock of the
Company immediately prior to such merger, consolidation, reorganization or
similar event do not directly or indirectly hold at least fifty-one percent
(51%) of the aggregate voting power of the capital stock of the surviving
entity.


 


Notwithstanding the foregoing, for each award subject
to Section 409A of the Code, a Change in Control shall be deemed to occur under
this Plan with respect to such Award only if a change in the ownership or
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company shall also be deemed to have occurred
under Section 409A of the Code.


 


16

















 


(b)           Effect
of a Change in Control. Unless the Administrator provides otherwise in a
Award Agreement, upon the occurrence of a Change in Control:


 


(i)            notwithstanding
any other provision of this Plan, any award then outstanding shall become fully
vested and any award in the form of an option, stock appreciation right or
restricted stock unit shall be immediately exercisable;


 


(ii)           to
the extent permitted by law, the Administrator may, in its sole discretion,
amend any Award Agreement in such manner as it deems appropriate;


 


(iii)          a
grantee who incurs a termination of employment for any reason, other than a
dismissal for cause, concurrent with or within one year following the Change in
Control may exercise any outstanding option, stock appreciation right or
restricted stock unit, but only to the extent that the grantee was entitled to
exercise the award on his termination of employment date, until the earlier of
(A) the original expiration date of the award and (B) the later of (x) the date
provided for under the terms of Section 2.5 without reference to this Section
3.8(b)(iii) and (y) the first anniversary of the grantee’s termination of
employment.


 


(c)           Miscellaneous.
Whenever deemed appropriate by the Administrator, any action referred to in
paragraph (b)(ii) of this Section 3.8 may be made conditional upon the
consummation of the applicable Change in Control transaction.


 


3.9.         Right
of Discharge Reserved


 


Nothing in the Plan or in any Award Agreement shall confer upon any
grantee the right to continue his employment with the Company or affect any
right that the Company may have to terminate such employment.


 


3.10.       Non-Uniform
Determinations


 


The Administrator’s determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or who are
eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Administrator shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective Award
Agreements, as to (a) the persons to receive awards under the Plan, and (b) the
terms and provisions of awards under the Plan.


 


3.11.       Other
Payments or Awards


 


Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Company from making any award or payment to any person under any
other plan, arrangement or understanding, whether now existing or hereafter in
effect.


 


3.12.       Headings


 


Any section, subsection, paragraph or other subdivision headings
contained herein are for the purpose of convenience only and are not intended
to expand, limit or otherwise define the contents of such subdivisions.


 


17

















 


3.13.       Effective
Date and Term of Plan


 


(a)           Adoption;
Stockholder Approval. The Plan was adopted by the Board and although the
Company intends to obtain approval of the Plan by the Company’s stockholders
within the time period required to allow grants of options hereunder to qualify
as incentive stock options, awards under the Plan prior to such stockholder
approval may, but need not, be made subject to such approval.


 


(b)           Termination
of Plan. Unless sooner terminated by the Board or pursuant to Paragraph (a)
above, the provisions of the Plan respecting the grant of incentive stock
options shall terminate on the tenth anniversary of the adoption of the Plan by
the Board, and no incentive stock option awards shall thereafter be made under
the Plan. All such awards made under the Plan prior to its termination shall
remain in effect until such awards have been satisfied or terminated in
accordance with the terms and provisions of the Plan and the applicable Award
Agreements.


 


3.14.       Restriction
on Issuance of Stock Pursuant to Awards


 


The Company shall not permit any shares of Class A Common Stock to be
issued pursuant to Awards granted under the Plan unless such shares of Class A
Common Stock are fully paid and non-assessable under applicable law.


 


3.15.       Governing
Law


 


Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
New York, without giving effect to principles of conflict of laws.


 


3.16.       Compliance
with Section 409A of the Code


 


Notwithstanding anything to the contrary contained in the Plan or in
any Agreement, to the extent that the Committee determines that the Plan or any
Award is subject to Section 409A of the Code and fails to comply with the
requirements of Section 409A of the Code, the Committee reserves the right to
amend or terminate the Plan and/or amend, restructure, terminate or replace the
Award in order to cause the Award to either not be subject to Section 409A of
the Code or to comply with the applicable provisions of such section.


 


18

















 


EXHIBIT A


 


OMEGA NAVIGATION ENTERPRISES, INC.,

2006 STOCK INCENTIVE PLAN


 


OPTION AGREEMENT


 


THIS OPTION AGREEMENT made this [    ] day of [    ]
200[   ], between Omega Navigation Enterprises, Inc. (the
“Company”) and [                    ]
(the “Optionee”).


 


WHEREAS, the Company desires to carry out the purpose of the between
Omega Navigation Enterprises, Inc. 2006 Stock Incentive Plan (the “Plan”), a
copy of which is attached hereto as Exhibit A, by affording the Optionee an
opportunity to purchase its common stock;


 


WHEREAS, any terms defined in the Plan shall have the same meaning in
this Agreement;


 


NOW THEREFORE, under the Plan and in consideration of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:


 


1.     Grant
of Option. The Company hereby grants to the Optionee the right and option
(the “Option”) to purchase [    ] shares of Class A common
stock of the Company, par value $0.01 share (the “Shares”) on the terms and
conditions set forth under the Plan and this Agreement. The Options issued
pursuant to this Agreement shall constitute nonqualified stock options.


 


2.     Option
Price. Subject to Section 5 below, the purchase price of the Shares covered
by the Option shall be $[    ] per Share (equaling the
offer price per Share in the Company’s follow-on offering) which shall be paid
in full at the time of exercise. The Option Price is the purchase price per
Share times the number of Options to be exercised. The Option Price may be
adjusted by the Administrator as provided in Section 3.7 of the Plan.


 


3.     Method
of Exercise. Subject to the terms and conditions of the Plan and this
Agreement, the vested Options may be exercised upon notice to the Company on
the form provided by the Administrator and delivery of the Option Price
attributable to the optioned Shares to be purchased. 


 


4.     Time
and Method of Payment. The Option Price for the optioned Shares to be
purchase shall be paid in full at the time an Option is exercised. The Option
Price may be paid in a combination of cash and Shares having a Market Price
equal to the balance of the Option Price. A valid exercise requires that the
Optionee deliver the form of exercise and full payment for the optioned Shares
to be purchased to the Company.


 


5.     [Dividend
Equivalents. For any full calendar year following the date of grant in
which the dividends per share distributed to Company shareholders exceeds three
percent (3%) of the Option Price as of the grant date, the Option Price shall
be reduced by the amount of the dividends the Optionee would have received with
respect to the optioned Shares had the Optionee been a shareholder of record on
the record date with respect to such dividend distribution.]


 


1

















 


6.     Vesting
and Term of Option. The Options shall vest with respect to 25% of the
Options on [                    ]  and each of the three anniversaries
thereafter, conditioned upon the Optionee’s continued service as an employee of
the Company or an affiliate (an “Employee”) or as a director of the Company
from the date of this Agreement until the date such Options vest. In the event
the Optionee’s ceases to be a member of the Board or an Employee, as
applicable, for any reason, the Optionee shall forfeit all rights to the
non-vested Options. Except as otherwise permitted by the Administrator, this
Option shall not be exercisable to any extent prior to [                    ]
or after [                    ].


 


7.     Exercise.
During the term of the Option, a vested Option may be exercised in one or
more exercises in part or in whole at any time. The Administrator, as provided
in Section 3.1(c) of the Plan, may accelerate the exercisability of the Option
at such time and under such circumstances as the Administrator, in its sole
discretion, deems appropriate.


 


8.     Termination
of Employment or Board Membership. Upon the Optionee’s termination of
service as an Employee or as a member of the Board for any reason, any Options
not vested shall be forfeited. Except as provided in the case of the Optionee’s
termination of employment by reason of the Optionee’s death, Disability or
Retirement, each Option granted hereunder shall expire, to the extent vested
and not theretofore exercised, upon the earlier of the date the Optionee ceases
to be an Employee or a member of the Board, or when the Option would otherwise
expire.


 


9.     Death,
Disability or Retirement of Optionee. If an Optionee shall die or become
Disabled while an Employee or member of the Board, or Retire, all vested
Options theretofore granted to such Optionee may be exercised pursuant to their
terms. In the event of death or incapacity an Option shall be exercised by a
legal representative of an Optionee, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative to exercise such Option.


 


10.   Taxes.
If the Administrator shall so require, as a condition of exercise of an
Option, the Optionee shall agree that no later than the date of exercise, the
Optionee will pay to the Company or make arrangements satisfactory to the
Administrator regarding payment of any federal, state or local taxes of any
kind required by law to be withheld in connection with the exercise of an
Option.


 


11.   Nontransferability.
The Option is nontransferable other than by will or by the laws of descent
and distribution.


 


12.   Legal
Requirements. At the time of the exercise of any Option, the Company or the
Administrator may postpone the date of exercise until such time as the Company
has available for delivery to the Optionee a prospectus meeting the
requirements of all applicable securities laws, and no Shares shall be issued
or transferred upon the exercise of any Option unless and until all legal
requirements applicable to the issuance or transfer of Shares have been
complied with to the satisfaction of the Company.


 


13.   Representation
of Optionee. Prior to the issuance of any Shares pursuant to the exercise
of Options hereunder, at the request of the Administrator, the Optionee shall
represent in writing to the Company that it is the Optionee’s intention to
acquire the Shares with respect


 


2

















 


to which the Option is to be exercised for
investment and not with a view to the distribution thereof.


 


14.   Changes
in Capital Structure. As determined by the Administrator within the discretion
granted under Section 7 of the Plan, if any change described in Section 7 of
the Plan is made to the Shares, an appropriate adjustment in the number of
Shares for which Options which have been or may be granted under the Plan and
the Option Price will be made.


 


15.   Rights
as a Shareholder. An Optionee shall have no rights as a shareholder with
respect to any Shares covered by the Option until the date of the issuance of a
stock certificate for such Shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions of other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 5 above and
Section 7 of the Plan.


 


16.   Amendment
and Termination of the Plan. The Board at any time and from time to time
may suspend, terminate, modify or amend the Plan; provided, however, except as
provided in Section 7 of the Plan, no suspension, termination,
modification or amendment of the Plan may, without the express written consent
of the Optionee involved, adversely affect any Option previously granted to the
Optionee.


 


17.   Governing
Law. The Plan and this Agreement are governed by the internal substantive
laws but not the choice of law rules of New York.


 


IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS OPTION
AGREEMENT ON THE DATE FIRST WRITTEN ABOVE.


 


	
   

  	
  OMEGA NAVIGATION ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Title:

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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