**Exhibit 10.1****SUPERIOR OFFSHORE INTERNATIONAL, INC.****2007 STOCK INCENTIVE PLAN**SECTION 1. PURPOSE; DEFINITIONS     The purpose of the Plan is to give the Company a competitive advantage in attracting,retaining and motivating officers, employees, directors and/or consultants and to provide theCompany and its Subsidiaries and Affiliates with a stock plan providing incentives directly relatedto increases in Company shareholder value.     Certain terms used herein have definitions given to them in the first place in which they areused. In addition, for purposes of the Plan, the following terms are defined as set forth below:     (a) “Affiliate” means a corporation or other entity controlled by, controlling or under commoncontrol with the Company.     (b) “Award” means a Stock Appreciation Right, Stock Option, Restricted Stock, PerformanceUnit, or other stock-based award granted pursuant to the terms of the Plan.     (c) “Award Agreement” means any written agreement, contract or other instrument or documentevidencing the grant of an Award.     (d) “Award Cycle” means a period of consecutive fiscal years or portions thereof designated bythe Committee over which Performance Units are to be earned.     (e) “Board” means the Board of Directors of the Company.     (f) “Cause” means, unless otherwise provided by the Committee in an Award Agreement, (i)“Cause” as defined in any Individual Agreement to which the Participant is a party, or (ii) ifthere is no such Individual Agreement or if it does not define Cause: (A) conviction of theParticipant for committing a felony under federal law or the law of the state in which such actionoccurred, (B) dishonesty in the course of fulfilling the Participant’s employment duties, or (C)willful and deliberate failure on the part of the Participant to perform his or her employmentduties in any material respect. The Committee shall, unless otherwise provided in an IndividualAgreement with the Participant, have the sole discretion to determine whether “Cause” exists, andits determination shall be final.     (g) “Change in Control” and “Change in Control Price” have the meanings set forth in Sections11(b) and (c), respectively.     (h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and anysuccessor thereto.     (i) “Commission” means the Securities and Exchange Commission or any successor agency.
 

 
     (j) “Committee” means the Committee referred to in Section 2.     (k) “Common Stock” means common stock, par value $0.01 per share, of the Company.     (l) “Company” means Superior Offshore International, Inc., a Delaware corporation.     (m) “Covered Employee” means a Participant designated prior to the grant of Restricted Stockor Performance Units by the Committee who is or may be a “covered employee” within the meaning ofSection 162(m)(3) of the Code in the year in which Restricted Stock or Performance Units areexpected to be taxable to such Participant.     (n) “Disability” means, unless otherwise provided by the Committee, (i) “Disability” asdefined in any Individual Agreement to which the Participant is a party, or (ii) if there is nosuch Individual Agreement or it does not define “Disability,” permanent and total disability asdetermined under the Company’s Long Term Disability Plan applicable to the Participant.     (o) “Early Retirement” means retirement from active employment with the Company or aSubsidiary of the Company pursuant to the early retirement provisions of the applicable pensionplan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, asamended) of such employer, if any.     (p) “Effective Date” shall have the meaning set forth in Section 16.     (q) “Eligible Individuals” means directors, officers, employees and consultants of the Companyor any of its Subsidiaries or Affiliates, and prospective employees and consultants who haveaccepted offers of employment or consultancy from the Company or its Subsidiaries or Affiliates,who are or will be responsible for or contribute to the management, growth or profitability of thebusiness of the Company or its Subsidiaries or Affiliates.     (r) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,and any successor thereto.     (s) “Fair Market Value” means, except as otherwise provided by the Committee, as of any givendate, the closing reported sales price for a share of Common Stock traded on a national securitiesmarket or exchange as may at the time be the principal market for the Common Stock, or if theshares were not traded on such national securities market or exchange on such date, then on thenext preceding date on which such shares of Common Stock were traded, all as reported by suchsource as the Committee may select. In the event the Common Stock is not traded on a nationalsecurities market or exchange at the time a determination of its value is required to be madehereunder, the determination of its fair market value shall be made by the Committee in such manneras it deems appropriate, consistent with Treasury regulations and other formal Internal RevenueService guidance under Section 409A of the Code so that options granted under this Plan shall notconstitute deferred compensation subject to Section 409A of the Code.     (t) “Incentive Stock Option” means any Stock Option designated as, and qualified as, an“incentive stock option” within the meaning of Section 422(b) of the Code.
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     (u) “Individual Agreement” means an employment, consulting or similar written agreementbetween a Participant and the Company or one of its Subsidiaries or Affiliates.     (v) “Involuntary Termination” means a Termination of Employment by reason of an InvoluntaryTermination as defined in an Individual Agreement to which the Participant is a party that is thenin effect. If a Participant is not party to an Individual Agreement, or if it does not define“Involuntary Termination,” no Termination of Employment of that Participant shall be considered tobe an Involuntary Termination.     (w) “NonQualified Stock Option” means any Stock Option that is not an Incentive Stock Option.     (x) “Normal Retirement” means retirement from active employment with the Company or aSubsidiary of the Company at or after age 65 or such other age as may be established by theCommittee.     (y) Option Price” shall have the meaning set forth in Section 5(d)(i).     (z) “Outside Director” means a director who meets any applicable independence requirements ofthe national stock exchange on which Common Stock is listed, if any, and who qualifies as an“outside director” within the meaning of Section 162(m) of the Code and as a “non-employeedirector” within the meaning of Rule 16b-3 promulgated under the Exchange Act.     (aa) “Participant” means an Eligible Individual to whom an Award has been made.     (bb) “Performance Goals” means the performance goals established by the Committee inconnection with the grant of Restricted Stock or Performance Units. In the case of QualifiedPerformance-Based Awards, (i) such goals shall be based on the attainment of specified levels ofone or more of the following measures with respect to the Company or such subsidiary, division ordepartment of the Company for or within which the participant performs services: stock price,market share, sales, asset quality, non-performing assets, cost, operating income, market spendingefficiency, revenue growth; earnings before interest, taxes, depreciation, and amortization;earnings before interest and taxes; operating income; pre or after-tax income; earnings per share;cash flow; cash flow per share; return on equity; return on invested capital; return on assets;economic value added (or an equivalent metric); share price performance; total shareholder return;improvement in or attainment of expense levels; and/or improvement in or attainment of workingcapital levels and (ii) such Performance Goals shall be set by the Committee within the time periodprescribed by Section 162(m) of the Code and related regulations. Such Performance Goals also maybe based upon the attaining of specified levels of Company performance under one or more of themeasures described above relative to the performance of other corporations.     (cc) “Performance Units” means an Award granted under Section 8.     (dd) “Plan” means the Superior Offshore International, Inc. 2007 Stock Incentive Plan, as setforth herein and as hereinafter amended from time to time.
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     (ee) “Qualified Performance-Based Award” means an Award of Restricted Stock or PerformanceUnits designated as such by the Committee at the time of grant, based upon a determination that (i)the recipient is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Codein the year in which the Company would expect to be able to claim a tax deduction with respect tosuch Restricted Stock or Performance Units and (ii) the Committee wishes such Award to qualify forthe Section 162(m) Exemption.     (ff) “Restricted Stock” means an Award granted under Section 7.     (gg) “Retirement” means Normal or Early Retirement.     (hh) “Rule 16b-3” means Rule 16b-3, as promulgated by the Commission under Section 16(b) ofthe Exchange Act, as amended from time to time.     (ii) “Section 162(m) Exemption” means the exemption from the limitation on deductibilityimposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.     (jj) “Stock Appreciation Right” means an Award granted under Section 6.     (kk) “Stock Option” means an Award granted under Section 5.     (ll) “Subsidiary” means any corporation, partnership, joint venture or other entity during anyperiod in which at least a 50% voting or profits interest is owned, directly or indirectly, by theCompany or any successor to the Company.     (mm) “Termination of Employment” means the termination of the Participant’s employment with,or performance of services for, the Company and any of its Subsidiaries or Affiliates. AParticipant employed by, or performing services for, a Subsidiary or an Affiliate shall also bedeemed to incur a Termination of Employment if the Subsidiary or Affiliate ceases to be such aSubsidiary or an Affiliate, as the case may be, and the Participant does not immediately thereafterbecome an employee of, or service-provider for, the Company or another Subsidiary or Affiliate.Temporary absences from employment because of illness, vacation or leave of absence and transfersamong the Company and its Subsidiaries and Affiliates shall not be considered Terminations ofEmployment.SECTION 2. ADMINISTRATION     (a) The Plan shall be administered by the Compensation Committee or such other committee ofthe Board as the Board may from time to time designate (the “Committee”), which shall be composedof not less than three Outside Directors, and shall be appointed by and serve at the pleasure ofthe Board.     (b) The Committee shall have plenary authority to grant Awards pursuant to the terms of thePlan to Participants.     (c) Among other things, the Committee shall have the authority, subject to the terms of thePlan:
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          (i) To select the Participants to whom Awards may from time to time be granted;          (ii) To determine whether and to what extent any type of Award is to be granted hereunder;          (iii) To determine the number of shares of Common Stock to be covered by each Award grantedhereunder;          (iv) To determine the terms and conditions of any Award granted hereunder (including, but notlimited to, the Option Price (subject to Section 5(d)(i)), any vesting condition, restriction orlimitation (which may be related to the performance of the Participant, the Company or anySubsidiary or Affiliate) and any vesting acceleration or forfeiture waiver regarding any Award andthe shares of Common Stock relating thereto, based on such factors as the Committee shalldetermine;          (v) Subject to the terms of the Plan, including without limitation Section 13, to modify,amend or adjust the terms and conditions of any Award, at any time or from time to time, includingbut not limited to Performance Goals; provided, however, that the Committee may not adjust upwardsthe amount payable to a Covered Employee with respect to a Qualified Performance-Based Award orwaive or alter the Performance Goals associated therewith in a manner that would violate Section162(m) of the Code; and          (vi) To determine under what circumstances an Award may be settled in cash or Common Stockunder Sections 5(k), 5(l), 6(b)(ii), 6(c)(xi) and 8(b)(iv).     (d) The Committee shall have the authority to adopt, alter and repeal such administrativerules, guidelines and practices governing the Plan as it shall from time to time deem advisable, tointerpret the terms and provisions of the Plan and any Award issued under the Plan (and anyagreement relating thereto) and to otherwise supervise the administration of the Plan.     (e) The Committee may act only by a majority of its members then in office. Except to theextent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may(i) allocate all or any portion of its responsibilities and powers to any one or more of itsmembers and (ii) delegate all or any part of its responsibilities and powers to any person orpersons selected by it, provided that no such delegation may be made that would cause Awards orother transactions under the Plan to become subject to (or lose an exemption under) the short-swingprofit recovery provisions of Section 16(b) of the Exchange Act or cause an Award designated as aQualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section162(m) Exemption. Any such allocation or delegation may be revoked by the Committee at any time.     (f) Any determination made by the Committee with respect to any Award shall be made in thesole discretion of the Committee at the time of the grant of the Award or, unless incontravention of any express term of the Plan, at any time thereafter. All decisions made bythe Committee or any appropriately delegated officer pursuant to the provisions of the Plan shallbe
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final and binding on all persons, including the Company, its Affiliates, Subsidiaries,shareholders and Participants.     (g) Any authority granted to the Committee may also be exercised by the full Board, except tothe extent that the grant or exercise of such authority would cause any Award or transaction tobecome subject to (or lose an exemption under) the short-swing profit recovery provisions ofSection 16(b) of the Exchange Act or cause an Award designated as a Qualified Performance-BasedAward not to qualify for, or to cease to qualify for, the Section 162(m) Exemption. To the extentthat any permitted action taken by the Board conflicts with action taken by the Committee, theBoard action shall control.SECTION 3. COMMON STOCK SUBJECT TO PLAN     (a) The maximum number of shares of Common Stock that may be delivered to Participants andtheir beneficiaries under the Plan shall be 4,000,000. No Participant may be granted Stock Optionscovering in excess of 4,000,000 shares of Common Stock in any calendar year and Stock AppreciationRights covering in excess of 4,000,000 shares of Common Stock in any calendar year. Shares subjectto an Award under the Plan may be authorized and unissued shares or may be treasury shares. No morethan 4,000,000 shares of Restricted Stock may be issued during the term of the Plan, and no morethan 4,000,000 may be issued in any calendar year.     (b) If any Award is forfeited, or if any Stock Option (or Stock Appreciation Right, if any)terminates, expires or lapses without being exercised, or if any Stock Appreciation Right isexercised for cash, shares of Common Stock subject to such Awards shall again be available fordistribution in connection with Awards under the Plan. If the Option Price of any Stock Option orthe Strike Price (as defined in Section 6(c)(ii)) of any Stock Appreciation Right is satisfied bydelivering shares of Common Stock to the Company (by either actual delivery or by attestation),only the number of shares of Common Stock delivered to the Participant net of the shares of CommonStock delivered to the Company or attested to shall be deemed delivered for purposes of determiningthe maximum numbers of shares of Common Stock available for delivery under the Plan. To the extentany shares of Common Stock subject to an Award are not delivered to a Participant because suchshares are used to satisfy an applicable tax-withholding obligation, such shares shall not bedeemed to have been delivered for purposes of determining the maximum number of shares of CommonStock available for delivery under the Plan. The maximum number of shares of Common Stock that maybe issued pursuant to Stock Options intended to be Incentive Stock Options shall be 4,000,000shares.     (c) In the event of any change in corporate capitalization (including, but not limited to, achange in the number of shares of Common Stock outstanding), such as a stock split or a corporatetransaction, such as any merger, consolidation, separation, including a spin-off, or otherdistribution of stock or property of the Company (including any extraordinary cash or stockdividend), any reorganization (whether or not such reorganization comes within the definition ofsuch term in Section 368 of the Code) or any partial or complete liquidation of the Company, theCommittee or Board shall make such substitution or adjustments in the aggregate number andkind of shares reserved for issuance under the Plan, and the maximum limitation upon StockOptions and Stock Appreciation Rights and other Awards to be granted to any Participant, in the
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number, kind and Option Price and Strike Price of shares subject to outstanding Stock Options andStock Appreciation Rights, in the number and kind of shares subject to other outstanding Awardsgranted under the Plan and/or such other equitable substitution or adjustments as it may determineto be appropriate in its sole discretion (including, without limitation, an amount in cashtherefor); provided, however, that the number of shares subject to any Award shall always be awhole number. Such adjusted Option Price shall also be used to determine the amount payable by theCompany upon the exercise of any Stock Appreciation Right associated with any Stock Option.SECTION 4. ELIGIBILITY     Awards may be granted under the Plan to Eligible Individuals.SECTION 5. STOCK OPTIONS     (a) Stock Options may be granted alone or in addition to other Awards granted under the Planand may be of two types: Incentive Stock Options and NonQualified Stock Options. Any Stock Optiongranted under the Plan shall be in such form as the Committee may from time to time approve.     (b) The Committee shall have the authority to grant any Participant Incentive Stock Options,NonQualified Stock Options or both types of Stock Options; provided, however, that grants hereunderare subject to the limits on grants set forth in Section 3. Incentive Stock Options may be grantedonly to employees of the Company and its subsidiaries or parent corporation (within the meaning ofSection 424(f) of the Code). To the extent that any Stock Option is not designated as an IncentiveStock Option or even if so designated does not qualify as an Incentive Stock Option on orsubsequent to its grant date, it shall constitute a NonQualified Stock Option.     (c) Stock Options shall be evidenced by Award Agreements, the terms and provisions of whichmay differ. An Award Agreement shall indicate on its face whether it is intended to be an agreementfor an Incentive Stock Option or a NonQualified Stock Option; provided that Stock Options intendedto be Incentive Stock Options shall comply with paragraph (d)(v) hereunder and any other provisionsto qualify as an Incentive Stock Option under the Code. The grant of a Stock Option shall occur onthe date the Committee by resolution selects a Participant to receive a grant of a Stock Option,determines the number of shares of Common Stock to be subject to such Stock Option to be granted tosuch Participant and specifies the terms and provisions of the Stock Option. The Company shallnotify a Participant of any grant of a Stock Option, and a written Award Agreement shall be dulyexecuted and delivered by the Company to the Participant. Such agreement or agreements shall becomeeffective upon execution by the Company and the Participant.     (d) Stock Options granted under the Plan shall be subject to the following terms andconditions and shall contain such additional terms and conditions as the Committee shall deemdesirable:          (i) Option Price. The Committee shall determine the option price per share of CommonStock purchasable under a Stock Option (the “Option Price”). The Option Price per share of CommonStock subject to a Stock Option shall not be less than the Fair Market Value of
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the Common Stocksubject to such Stock Option on the date of grant. Except for adjustments pursuant to Section3(c), in no event may any Stock Option granted under this Plan be amended to decrease the OptionPrice thereof, cancelled in conjunction with the grant of any new Stock Option with a lower OptionPrice, or otherwise be subject to any action that would be treated, for accounting purposes, as a“repricing” of such Stock Option, unless such amendment, cancellation, or action is approved by theCompany’s shareholders in accordance with applicable law and stock exchange rules.          (ii) Option Term. The term of each Stock Option shall be fixed by the Committee, butno Incentive Stock Option shall be exercisable more than 10 years after the date the Stock Optionis granted.          (iii) Exercisability. Except as otherwise provided herein, Stock Options shall beexercisable at such time or times and subject to such terms and conditions as shall be determinedby the Committee. If the Committee provides that any Stock Option is exercisable only ininstallments, the Committee may at any time waive such installment exercise provisions, in whole orin part, based on such factors as the Committee may determine. In addition, the Committee may atany time accelerate the exercisability of any Stock Option.          (iv) Method of Exercise. Subject to the provisions of this Section 5, Stock Optionsmay be exercised, in whole or in part, at any time during the option term by giving written noticeof exercise to the Company specifying the number of shares of Common Stock subject to the StockOption to be purchased. Such notice shall be accompanied by payment in full of the Option Price bycertified or bank check or such other instrument as the Company may accept. If approved by theCommittee, payment, in full or in part, may also be made in the form of unrestricted Common Stock(by delivery of such shares or by attestation) already owned by the Participant of the same classas the Common Stock subject to the Stock Option (based on the Fair Market Value of the Common Stockon the date the Stock Option is exercised); provided, however, that, in the case of an IncentiveStock Option, the right to make a payment in the form of already owned shares of Common Stock ofthe same class as the Common Stock subject to the Stock Option may be authorized only at the timethe Stock Option is granted and provided, further, that such already owned shares have been held bythe Participant for at least six months at the time of exercise or had been purchased on the openmarket. If approved by the Committee, to the extent permitted by applicable law, payment in full orin part may also be made by delivering a properly executed exercise notice to the Company, togetherwith a copy of irrevocable instructions to a broker to deliver promptly to the Company the amountof sale or loan proceeds necessary to pay the Option Price, and, if requested, the amount of anyfederal, state, local or foreign withholding taxes. To facilitate the foregoing, the Company mayenter into agreements for coordinated procedures with one or more brokerage firms. No shares ofCommon Stock shall be delivered until full payment therefor has been made. A Participant shallhave all of the rights of a shareholder of the Company holding the class or series of Common Stockthat is subject to such Stock Option (including, if applicable, the right to vote the shares andthe right to receive dividends), when the Participant has given written notice of exercise, haspaid in fullfor such shares and, if requested by the Company, has given the representation described inSection 15(a).
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          (v) No Incentive Stock Option shall be granted to an individual if, at the time the StockOption is granted, such individual owns stock possessing more than 10% of the total combined votingpower of all classes of stock of the Company or of its parent or subsidiary corporation, within themeaning of section 422(b)(6) of the Code, unless (i) at the time such Stock Option is granted, theStock Option price is at least 110% of the Fair Market Value of the Common Stock subject to theStock Option and (ii) such Stock Option by its terms is not exercisable after the expiration offive years from the date of grant.     (e) Nontransferability of Stock Options. No Stock Option shall be transferable by theParticipant other than (i) by will or by the laws of descent and distribution or any othertestamentary distribution; or (ii) in the case of a NonQualified Stock Option, unless otherwisedetermined by the Committee, to such Participant’s children or family members, whether directly orindirectly or by means of a trust or partnership or otherwise. For purposes of this Plan, unlessotherwise determined by the Committee, “family member” shall have the meaning given to such term inGeneral Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933 as amended, or anysuccessor thereto. All Stock Options shall be exercisable, subject to the terms of this Plan, onlyby the Participant, the guardian or legal representative of the Participant, or any person to whomsuch option is transferred pursuant to this paragraph, it being understood that the term “holder”and “Participant” include such guardian, legal representative and other transferee; provided,however, that Termination of Employment shall continue to refer to the Termination of Employment ofthe original Participant.     (f) Termination by Reason of Death, Disability, or Retirement. Unless otherwisedetermined by the Committee at the time of grant and as set forth in an Award Agreement, if aParticipant incurs a Termination of Employment by reason of death, Disability or Retirement anyStock Option held by such Participant may thereafter be exercised, to the extent then exercisable,or on such accelerated basis as the Committee may determine, until the expiration of the statedterm of such Stock Option. In the event of Termination of Employment by reason of death,Disability, or Retirement, if an Incentive Stock Option is exercised after expiration of theexercise periods that apply for purposes of Section 422 of the Code, such Stock Option willthereafter be treated as a NonQualified Stock Option.     (g) Other Termination. Unless otherwise determined by the Committee at the time ofgrant and as set forth in an Award Agreement: (A) if a Participant incurs a Termination ofEmployment for Cause, all Stock Options held by such Participant shall thereupon terminate whetherthey are exercisable or not; and (B) if a Participant incurs a Termination of Employment for anyreason other than death, Disability, Retirement or for Cause, any Stock Option held by suchParticipant, to the extent it was then exercisable at the time of termination, or on suchaccelerated basis as the Committee may determine, may be exercised for the balance of such StockOption’s term. In the event of Termination of Employment for any reason other than death,Disability, Retirement or for Cause, if an Incentive Stock Option is exercised after the expirationof the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option willthereafter be treated as a NonQualified Stock Option.     (h) Cashing Out of Stock Option. On receipt of written notice of exercise, theCommittee may elect to cash out all or part of the portion of the shares of Common Stock for whicha Stock Option is being exercised by paying the Participant an amount, in cash or
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Common Stock,equal to the excess of the Fair Market Value of the Common Stock over the Option Price times thenumber of shares of Common Stock for which the Option is being exercised on the effective date ofsuch cash-out.SECTION 6. STOCK APPRECIATION RIGHTS     (a) Grant. Stock Appreciation Rights may be granted alone or in addition to otherAwards granted under the Plan.     (b) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shallbe subject to such terms and conditions as shall be determined by the Committee, including thefollowing:          (i) Term. The Committee shall determine the stated term of each Stock AppreciationRight granted under this Plan.          (ii) Strike Price. Unless provided otherwise by the Committee, the strike price (the“Strike Price”) per share of Common Stock subject to a Stock Appreciation Right shall be the FairMarket Value of the Common Stock on the date of grant. Except for adjustments pursuant to Section3(c), in no event may any Stock Appreciation Right granted under this Plan be amended to decreasethe Strike Price thereof, cancelled in conjunction with the grant of any new Stock AppreciationRight with a lower Strike Price, or otherwise be subject to any action that would be treated, foraccounting purposes, as a “repricing” of such Stock Appreciation Right, unless such amendment,cancellation, or action is approved by the Company’s shareholders in accordance with applicable lawand stock exchange rules.          (iii) Exercisability. Except as otherwise provided herein, Share Appreciation Rightsshall be exercisable at such time or times and subject to such terms and conditions as shall bedetermined by the Committee, and the Committee may at any time accelerate the exercisability of anyStock Appreciation Right. If the Committee provides that any Stock Appreciation Right isexercisable only in installments, the Committee may at any time waive such installment exerciseprovisions, in whole or in part, based on such factors as the Committee may determine.          (iv) Settlement. Upon the exercise of a Stock Appreciation Right, a Participant shallbe entitled to receive an amount in cash, shares of Common Stock or a combination of cash andshares, equal to (A) the excess of the Fair Market Value of one share of Common Stock over theapplicable Strike Price multiplied by (B) the number of shares of Common Stock in respect of whichthe Stock Appreciation Right shall have been exercised, with the Committee having the right todetermine the form of payment.          (v) Nontransferability. No Stock Appreciation Right shall be transferable by aParticipant other than by will or by the laws of descent and distribution or as otherwise expresslypermitted by the Committee, including, if so permitted, pursuant to a transfer to suchParticipant’s children or family members, whether directly or indirectly or by means of a trust orpartnership or otherwise. For purposes of this Plan, unless otherwise determined by theCommittee, “family member” shall have the meaning given to such term in General InstructionsA.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.
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AllStock Appreciation Rights shall be exercisable, subject to the terms of this Plan, only by theParticipant, the guardian or legal representative of the Participant, or any person to whom suchStock Appreciation Right is transferred pursuant to this paragraph, it being understood that theterms “holder” and “Participant” include such guardian, legal representative and other transferee;provided, however, that the term “Termination of Employment” shall continue to refer to theTermination of Employment of the original Participant.          (vi) Termination by Reason of Death, Disability, or Retirement. Unless otherwisedetermined by the Committee at the time of grant and as set forth in an Award Agreement, if aParticipant incurs a Termination of Employment by reason of death, Disability, or Retirement, anyStock Appreciation Right held by such Participant may thereafter be exercised, to the extent thenexercisable, or on such accelerated basis as the Committee may determine, until the expiration ofthe stated term of such Stock Appreciation Right.          (vii) Other Termination. Unless otherwise determined by the Committee at the time ofgrant and as set forth in an Award Agreement: (A) if a Participant incurs a Termination ofEmployment for Cause, all Stock Appreciation Rights held by such Participant shall thereuponterminate whether they are exercisable or not; and (B) if a Participant incurs a Termination ofEmployment for any reason other than death, Disability, Retirement or for Cause, any StockAppreciation Right held by such Participant, to the extent it was then exercisable at the time oftermination, or on such accelerated basis as the Committee may determine, may be exercised for thebalance of such Stock Appreciation Right’s term.SECTION 7. RESTRICTED STOCK     (a) Administration. Shares of Restricted Stock may be awarded either alone or inaddition to other Awards granted under the Plan. The Committee shall determine the Participants towhom and the time or times at which grants of Restricted Stock will be awarded, the number ofshares to be awarded to any Participant, the conditions for vesting, the time or times within whichsuch Awards may be subject to forfeiture and any other terms and conditions of the Awards, inaddition to those contained in Section 7(c).     (b) Awards and Certificates. Shares of Restricted Stock shall be evidenced in suchmanner as the Committee may deem appropriate, including book-entry registration or issuance of oneor more stock certificates. Any certificate issued in respect of shares of Restricted Stock shallbe registered in the name of such Participant and shall bear an appropriate legend referring to theterms, conditions, and restrictions applicable to such Award, substantially in the following form:“THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTEDHEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THESUPERIOR OFFSHORE INTERNATIONAL, INC. 2007 STOCK INCENTIVE PLAN AND AN AWARDAGREEMENT. COPIES OFSUCH PLAN AND AGREEMENT ARE ON FILE AT THE OFFICES OF SUPERIOR OFFSHOREINTERNATIONAL, INC., 900 S. COLLEGE ROAD, SUITE 301, LAFAYETTE, LOUISIANA.”
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The Committee may require that the certificates evidencing such shares be held in custody by theCompany until the restrictions thereon shall have lapsed and that, as a condition of any Award ofRestricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relatingto the Common Stock covered by such Award.     (c) Terms and Conditions. Shares of Restricted Stock shall be subject to the followingterms and conditions:          (i) The Committee may, prior to or at the time of grant, designate an Award of RestrictedStock as a Qualified Performance-Based Award, in which event it shall condition the grant orvesting, as applicable, of such Restricted Stock upon the attainment of Performance Goals. If theCommittee does not designate an Award of Restricted Stock as a Qualified Performance-Based Award,it may also condition the grant or vesting thereof upon the attainment of Performance Goals.Regardless of whether an Award of Restricted Stock is a Qualified Performance-Based Award, theCommittee may also condition the grant or vesting thereof upon the continued service of theParticipant. The conditions for grant or vesting and the other provisions of Restricted StockAwards (including without limitation any applicable Performance Goals) need not be the same withrespect to each recipient. The Committee may at any time, in its sole discretion, accelerate orwaive, in whole or in part, any of the foregoing restrictions; provided, however, that in the caseof Restricted Stock that is a Qualified Performance-Based Award, the applicable Performance Goalsmust have been satisfied.          (ii) Subject to the provisions of the Plan and the Award Agreement referred to in Section7(c)(vi), during the period, if any, set by the Committee, commencing with the date of such Awardfor which such Participant’s continued service is required (the “Restriction Period”), and untilthe later of (A) the expiration of the Restriction Period and (B) the date the applicablePerformance Goals (if any) are satisfied, the Participant shall not be permitted to sell, assign,transfer, pledge or otherwise encumber shares of Restricted Stock.          (iii) Except as provided in this paragraph (iii) and Sections 7(c)(i) and 7(c)(ii) and theAward Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all ofthe rights of a shareholder of the Company holding the class or series of Common Stock that is thesubject of the Restricted Stock, including, if applicable, the right to vote the shares and theright to receive any cash dividends. If so determined by the Committee in the applicable AwardAgreement and subject to Section 15(e) of the Plan, (A) cash dividends on the class or series ofCommon Stock that is the subject of the Restricted Stock Award shall be automatically deferred andreinvested in additional Restricted Stock, held subject to the vesting of the underlying RestrictedStock, or held subject to meeting Performance Goals applicable only to dividends, and (B) dividendspayable in Common Stock shall be paid in the form of Restricted Stock of the same class as theCommon Stock with which such dividend was paid, held subject to the vesting of the underlyingRestricted Stock, or held subject to meeting Performance Goals applicable only to dividends.          (iv) Except to the extent otherwise provided in the applicable Award Agreement or Section7(c)(i), 7(c)(ii), 7(c)(v) or 10(a)(ii), upon a Participant’s Termination of Employment for anyreason during the Restriction Period or before the applicable Performance Goals are satisfied, allshares still subject to restriction shall be forfeited by the Participant;
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provided, however, thatthe Committee shall have the discretion to waive, in whole or in part, any or all remainingrestrictions (other than, in the case of Restricted Stock with respect to which a Participant is aCovered Employee, satisfaction of the applicable Performance Goals) with respect to any or all ofsuch Participant’s shares of Restricted Stock.          (v) If and when any applicable Performance Goals are satisfied and the Restriction Periodexpires without a prior forfeiture of the Restricted Stock, unlegended certificates for such sharesshall be delivered to the Participant upon surrender of the legended certificates.          (vi) Each Award shall be confirmed by, and be subject to, the terms of an Award Agreement.SECTION 8. PERFORMANCE UNITS     (a) Administration. Performance Units may be awarded either alone or in addition toother Awards granted under the Plan. The Committee shall determine the Participants to whom and thetime or times at which Performance Units shall be awarded, the number of Performance Units to beawarded to any Participant), the duration of the Award Cycle and any other terms and conditions ofthe Award, in addition to those contained in Section 8(b).     (b) Terms and Conditions. Performance Units Awards shall be subject to the followingterms and conditions:          (i) The Committee may, prior to or at the time of the grant, designate Performance Units asQualified Performance-Based Awards, in which event it shall condition the settlement thereof uponthe attainment of Performance Goals. If the Committee does not designate Performance Units asQualified Performance-Based Awards, it may also condition the settlement thereof upon theattainment of Performance Goals. Regardless of whether Performance Units are QualifiedPerformance-Based Awards, the Committee may also condition the settlement thereof upon thecontinued service of the Participant. The provisions of such Awards (including without limitationany applicable Performance Goals) need not be the same with respect to each recipient. Subject tothe provisions of the Plan and the Award Agreement referred to in Section 8(b)(v), PerformanceUnits may not be sold, assigned, transferred, pledged or otherwise encumbered during the AwardCycle. No more than 4,000,000 shares of Common Stock may be subject to Qualified Performance BasedAwards granted to any Eligible Individual in any calendar year.          (ii) Except to the extent otherwise provided in the applicable Award Agreement or Section8(b)(ii) or 10(a)(iii), upon a Participant’s Termination of Employment for any reason during theAward Cycle or before any applicable Performance Goals are satisfied, all rights to receive cash orstock in settlement of the Performance Units shall be forfeited by the Participant; provided,however, that the Committee shall have the discretion to waive, in wholeor in part, any or all remaining payment limitations (other than, in the case of PerformanceUnits that are Qualified Performance-Based Awards), with respect to any or all of suchParticipant’s Performance Units.
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          (iii) A Participant may elect to further defer receipt of cash or shares in settlement ofPerformance Units for a specified period or until a specified event, subject in each case to theCommittee’s approval and to such terms as are determined by the Committee. Such election must bemade prior to commencement of the Award Cycle for the Performance Units in question.          (iv) At the expiration of the Award Cycle, the Committee shall evaluate the Company’sperformance in light of any Performance Goals for such Award, and shall determine the number ofPerformance Units granted to the Participant which have been earned, and the Committee shall thencause to be delivered (A) a number of shares of Common Stock equal to the number of PerformanceUnits determined by the Committee to have been earned, or (B) cash equal to the Fair Market Valueof such number of shares of Common Stock to the Participant, as the Committee shall elect.          (v) Each Award shall be confirmed by, and be subject to, the terms of an Award Agreement.SECTION 9. OTHER STOCK-BASED AWARDS     Other Awards of Common Stock and other Awards that are valued in whole or in part by referenceto, or are otherwise based upon, Common Stock, including (without limitation) phantom stock,dividend equivalents and convertible debentures, may be granted either alone or in conjunction withother Awards granted under the Plan; provided that no such Awards can be granted with respect tomore than 4,000,000 shares of Common Stock in any calendar year.SECTION 10. CHANGE IN CONTROL PROVISIONS     (a) Impact of Event. Notwithstanding any other provision of the Plan to the contrary,unless otherwise provided by the Committee in any Award Agreement, in the event of a Change inControl:          (i) The Committee, in its discretion, shall act to effect one or more of the followingalternatives with respect to outstanding Stock Options, which may vary among individualParticipants and which may vary among Stock Options held by any individual Participant: (1)determine a limited period of time for the exercise of such Stock Options in a manner determined bythe Committee (notwithstanding the provisions set forth in Section 5 with respect to the exerciseof such Stock Options) on or before a specified date (before or after such Change in Control) afterwhich specified date all unexercised Stock Options and all rights of Participants thereunder shallterminate, (2) require the mandatory surrender to the Company by selected Participants of some orall of the outstanding Stock Options held by such Participants (irrespective of whether such StockOptions are then exercisable under the provisions of the Plan) as of a date, before or after suchChange in Control, specified by the Committee, in which event the Committee shall thereupon cancelsuch Stock Options and the Company shall pay to each Participant an amount of cash and otherconsideration, as determined by the Committee inits sole discretion, where the total cash and other consideration paid or delivered per shareis equal to the excess, if any, of the Change in Control Price of the shares subject to such StockOption over the Option Price(s) under such Stock Options for such shares, (3) make such
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adjustmentsto Stock Options then outstanding as the Committee deems appropriate to reflect such Change inControl (provided, however, that the Committee may determine in its sole discretion that noadjustment is necessary to Stock Options then outstanding) or (4) provide that thereafter upon anyexercise of a Stock Option theretofore granted the Participant shall be entitled to purchase undersuch Stock Option, in lieu of the number of shares of Common Stock then covered by such StockOption, the number and class of shares of stock or other securities or property (including, withoutlimitation, cash) to which the Participant would have been entitled pursuant to the terms of theagreement of merger, consolidation or sale of assets and dissolution if, immediately prior to suchmerger, consolidation or sale of assets and dissolution, the Participant has been the Participantof record of the number of shares of Common Stock then covered by such Stock Option.          (ii) Stock Appreciation Rights outstanding as of the date of such Change in Control, and whichare not then exercisable and vested, shall become fully exercisable and vested.          (iii) The restrictions and deferral limitations applicable to any Restricted Stock shalllapse, and such Restricted Stock shall become free of all restrictions and become fully vested.          (iv) All Performance Units shall be considered to be earned and payable in full, and anydeferral or other restriction shall lapse and such Performance Units shall be settled in cash orshares of Common Stock, as determined by the Committee, as promptly as is practicable.          (v) Any other Awards of Common Stock as set forth in Section 10 shall be considered earned andpayable in full and shall be settled in cash or shares of Common Stock, as determined by theCommittee, as promptly as practicable.     (b) Definition of Change in Control. For purposes of the Plan, a “Change in Control”shall mean the happening of any of the following events:          (i) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule13d-3 promulgated under the Exchange Act) of 30% or more of either (1) the then outstanding sharesof common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined votingpower of the then outstanding voting securities of the Company entitled to vote generally in theelection of directors (the “Outstanding Company Voting Securities”); excluding, however, thefollowing: (1) Any acquisition directly from the Company, other than an acquisition by virtue ofthe exercise of a conversion privilege unless the security being so converted was itself acquireddirectly from the Company, (2) Any acquisition by the Company, (3) Any acquisition by any employeebenefit plan (or related trust) sponsored or maintained by the Company or any entity controlled bythe Company, (4) Any acquisition by Louis E. Schaefer, Jr. (or any entity controlled by him) orSchaefer Holdings, LP, or (5) Anyacquisition pursuant to a transaction which complies with clauses (1), (2) and (3) ofsubsection (iii) of this Section 10(b); or
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          (ii) A change in the composition of the Board such that the individuals who, as of theEffective Date, constitute the Board (such Board shall be hereinafter referred to as the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board; provided, however, forpurposes of this Section 10(b), that any individual who becomes a member of the Board subsequent tothe Effective Date, whose election, or nomination for election by the Company’s shareholders, wasapproved by a vote of at least a majority of those individuals who are members of the Board and whowere also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall beconsidered as though such individual were a member of the Incumbent Board; but, provided, further,that any such individual whose initial assumption of office occurs as a result of an actual orthreatened election contest with respect to the election or removal of directors or other actual orthreatened solicitation of proxies or consents by or on behalf of a Person other than the Boardshall not be so considered as a member of the Incumbent Board; or          (iii) Consummation of a reorganization, merger or consolidation or sale or other dispositionof all or substantially all of the assets of the Company (“Corporate Transaction”); excluding,however, such a Corporate Transaction pursuant to which (1) all or substantially all of theindividuals and entities who are the beneficial owners, respectively, of the Outstanding CompanyCommon Stock and Outstanding Company Voting Securities immediately prior to such CorporateTransaction will beneficially own, directly or indirectly, more than 50% of, respectively, theoutstanding shares of common stock, and the combined voting power of the then outstanding votingsecurities entitled to vote generally in the election of directors, as the case may be, of thecorporation resulting from such Corporate Transaction (including, without limitation, a corporationwhich as a result of such transaction owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantially the same proportionsas their ownership, immediately prior to such Corporate Transaction, of the Outstanding CompanyCommon Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (otherthan the Company, any employee benefit plan (or related trust) of the Company, Louis E. Schaefer,Jr. (or any entity controlled by him) or Schaefer Holdings, LP, or such corporation resulting fromsuch Corporate Transaction) will beneficially own, directly or indirectly, 30% or more of,respectively, the outstanding shares of common stock of the corporation resulting from suchCorporate Transaction or the combined voting power of the outstanding voting securities of suchcorporation entitled to vote generally in the election of directors except to the extent that suchownership existed prior to the Corporate Transaction, and (3) individuals who were members of theIncumbent Board will constitute at least a majority of the members of the board of directors of thecorporation resulting from such Corporate Transaction; or          (iv) The approval by the shareholders of the Company of a complete liquidation or dissolutionof the Company.     (c) Change in Control Price. For purposes of the Plan, “Change in Control Price” meansthe higher of (i) the highest reported sales price, regular way, of a share of Common Stock in anytransaction reported on the national securities market or exchange as may at the time bethe principal market for the Common Stock during the 60-day period prior to and including thedate of a Change in Control or (ii) if the Change in Control is the result of a tender or exchangeoffer or a Corporate Transaction, the highest price per share of Common Stock paid in such
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tenderor exchange offer or Corporate Transaction; provided, however, that in the case of Incentive StockOptions, the Change in Control Price shall be in all cases the Fair Market Value of the CommonStock on the date such Incentive Stock Option or Tandem Stock Appreciation Right is exercised. Tothe extent that the consideration paid in any such transaction described above consists all or inpart of securities or other noncash consideration, the value of such securities or other noncashconsideration shall be determined in the sole discretion of the Board.SECTION 11. FORFEITURE OF AWARDS     Notwithstanding anything in the Plan to the contrary, the Committee shall have the authorityunder the Plan to provide in any Award Agreement that in the event of serious misconduct by aParticipant (including, without limitation, any misconduct prejudicial to or in conflict with theCompany or its Subsidiaries or Affiliates, or any Termination of Employment for Cause), or anyactivity of a Participant in competition with the business of the Company or any Subsidiary orAffiliate, any outstanding Award granted to such Participant shall be cancelled, in whole or inpart, whether or not vested or deferred. The determination of whether a Participant has engaged ina serious breach of conduct or any activity in competition with the business of the Company or anySubsidiary or Affiliate shall be determined by the Committee in good faith and in its solediscretion. This Section 11 shall have no application following a Change in Control.SECTION 12. TERM, AMENDMENT AND TERMINATION     The Plan will terminate on the tenth anniversary of the Effective Date. Under the Plan, Awardsoutstanding as of such date shall not be affected or impaired by the termination of the Plan.     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration ordiscontinuation shall be made which would impair the rights of a Participant under a Stock Optionor a recipient of a Stock Appreciation Right, Restricted Stock Award, Performance Unit Award orother Award theretofore granted without the Participant’s or recipient’s consent, except such anamendment made to comply with applicable law (including Section 409A of the Code), stock exchangerules or accounting rules. In addition, no such amendment shall be made without the approval of theCompany’s shareholders to the extent such approval is required by applicable law or stock exchangerules.     The Committee may amend the terms of any Stock Option or other Award theretofore granted,prospectively or retroactively, but no such amendment shall cause a Qualified Performance-BasedAward to cease to qualify for the Section 162(m) Exemption or impair the rights of any holderwithout the holder’s consent except such an amendment made to cause the Plan or Award to complywith applicable law (including Section 409A of the Code), stock exchange rules or accounting rules.     Subject to the above provisions, the Board shall have authority to amend the Plan to take intoaccount changes in law and tax and accounting rules as well as other developments, and to grantAwards which qualify for beneficial treatment under such rules without shareholder approval.
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SECTION 13. UNFUNDED STATUS OF PLAN     It is presently intended that the Plan constitute an “unfunded” plan for incentive anddeferred compensation. The Committee may authorize the creation of trusts or other arrangements tomeet the obligations created under the Plan to deliver Common Stock or make payments; provided,however, that unless the Committee otherwise determines, the existence of such trusts or otherarrangements is consistent with the “unfunded” status of the Plan.SECTION 14. GENERAL PROVISIONS     (a) Representation. The Committee may require each person purchasing or receivingshares pursuant to an Award to represent to and agree with the Company in writing that such personis acquiring the shares without a view to the distribution thereof. The certificates for suchshares may include any legend which the Committee deems appropriate to reflect any restrictions ontransfer. Notwithstanding any other provision of the Plan or agreements made pursuant thereto, theCompany shall not be required to issue or deliver any certificate or certificates for shares ofCommon Stock under the Plan prior to fulfillment of all of the following conditions:          (i) Listing or approval for listing upon notice of issuance, of such shares on such securitiesexchange as may at the time be the principal market for the Common Stock;          (ii) Any registration or other qualification of such shares of the Company under any state orfederal law or regulation, or the maintaining in effect of any such registration or otherqualification which the Committee shall, in its absolute discretion upon the advice of counsel,deem necessary or advisable; and          (iii) Obtaining any other consent, approval, or permit from any state or federal governmentalagency which the Committee shall, in its absolute discretion after receiving the advice of counsel,determine to be necessary or advisable.     (b) No Limit of Other Arrangements. Nothing contained in the Plan shall prevent theCompany or any Subsidiary or Affiliate from adopting other or additional compensation arrangementsfor its employees.     (c) No Contract of Employment. Neither the Plan nor any Award shall constitute acontract of employment. Neither the adoption of the Plan nor the grant of an Award shall conferupon any employee any right to continued employment, nor shall either interfere in any way with theright of the Company or any Subsidiary or Affiliate to terminate the employment of any employee atany time.     (d) Tax Withholding. No later than the date as of which an amount first becomesincludible in the gross income of the Participant for federal income tax purposes with respect toany Award under the Plan, the Participant shall pay to the Company, or make arrangementssatisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes ofany kind required by law to be withheld with respect to such amount. Unless otherwise determined bythe Company, withholding obligations may be settled with Common Stock,
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including Common Stock thatis part of the Award that gives rise to the withholding requirement; provided, that not more thanthe legally required minimum withholding may be settled with Common Stock. The obligations of theCompany under the Plan shall be conditional on such payment or arrangements, and the Company andits Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes fromany payment otherwise due to the Participant. The Committee may establish such procedures as itdeems appropriate, including making irrevocable elections, for the settlement of withholdingobligations with Common Stock.     (e) Dividends. Reinvestment of dividends in additional Restricted Stock at the time ofany dividend payment shall only be permissible if sufficient shares of Common Stock are availableunder Section 3 for such reinvestment (taking into account then outstanding Stock Options and otherAwards).     (f) Death Beneficiary. The Committee shall establish such procedures as it deemsappropriate for a Participant to designate a beneficiary to whom any amounts payable in the eventof the Participant’s death are to be paid or by whom any rights of the Participant, after theParticipant’s death, may be exercised.     (g) Subsidiary Employees. In the case of a grant of an Award to any employee of aSubsidiary of the Company, the Company may, if the Committee so directs, issue or transfer theshares of Common Stock, if any, covered by the Award to the Subsidiary, for such lawfulconsideration as the Committee may specify, upon the condition or understanding that the Subsidiarywill transfer the shares of Common Stock to the employee in accordance with the terms of the Awardspecified by the Committee pursuant to the provisions of the Plan. All shares of Common Stockunderlying Awards that are forfeited or canceled should revert to the Company.     (h) Governing Law. The Plan and all Awards made and actions taken thereunder shall begoverned by and construed in accordance with the laws of the State of Delaware, without referenceto principles of conflict of laws.     (i) Nontransferability. Except as otherwise provided in Section 5(e) or 6(b)(v) or bythe Committee, Awards under the Plan are not transferable except by will or by laws of descent anddistribution.     (j) Code Section 409A. It is intended that any grant of an Award to which Section409A of the Code is applicable shall satisfy all of the requirements of such Code section.SECTION 15. EFFECTIVE DATE OF PLAN     The Plan shall be effective as of the date (the “Effective Date”) it is adopted by the Board,provided that it is approved by the stockholders of the Company in accordance with allapplicable laws, regulations and stock exchange rules and listing standards.
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