**Exhibit 10.11****ORION MARINE GROUP, INC.****LONG TERM INCENTIVE PLAN**
 

 
**TABLE OF CONTENTS**     **1. Purpose**  **1**      **2. Definitions**  **1**      **3. Administration**  **5** (a) Authority of the Committee  5 (b) Manner of Exercise of Committee Authority  6 (c) Limitation of Liability  6      **4. Stock Subject to Plan**  **7** (a) Overall Number of Shares Available for Delivery  7 (b) Application of Limitation to Grants of Awards  7 (c) Availability of Shares Not Issued under Awards  7 (d) Stock Offered  7      **5. Eligibility; Per Person Award Limitations**  **7**      **6. Specific Terms of Awards.**  **8** (a) General  8 (b) Options  8 (c) Stock Appreciation Rights  9 (d) Restricted Stock  10 (e) Restricted Stock Units  11 (f) Bonus Stock and Awards in Lieu of Obligations  11 (g) Dividend Equivalents  12 (h) Other Stock-Based Awards  12      **7. Certain Provisions Applicable to Awards**  **12** (a) Termination of Employment  12 (b) Stand-Alone, Additional, Tandem, and Substitute Awards  12 (c) Term of Awards  13 (d) Form and Timing of Payment under Awards; Deferrals  13 (e) Exemptions from Section 16(b) Liability  13 (f) Non-Competition Agreement  13      **8. Performance and Annual Incentive Awards**  **13** (a) Performance Conditions  13 (b) Performance Awards Granted to Designated Covered Employees  14 (c) Annual Incentive Awards Granted to Designated Covered Employees  15 (d) Written Determinations  16 (e) Status of Subsection 8(b) and Subsection 8(c) Awards under Section 162(m) of the Code  16      **9. Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization**  **17** (a) Existence of Plans and Awards  17 
 

 
     (b) Subdivision or Consolidation of Shares  17 (c) Corporate Recapitalization.  18 (d) Additional Issuances  18 (e) Change in Control  19 (f) Change in Control Price  19      **10. General Provisions**  **20** (a) Transferability.  20 (b) Taxes  21 (c) Changes to this Plan and Awards  21 (d) Limitation on Rights Conferred under Plan  21 (e) Unfunded Status of Awards  22 (f) Nonexclusivity of this Plan  22 (g) Fractional Shares  22 (h) Severability  22 (i) Governing Law  22 (j) Conditions to Delivery of Stock  23 (k) Plan Effective Date  23 
 

 
**ORION MARINE GROUP, INC.****Long Term Incentive Plan**     1. **Purpose**. The purpose of the Orion Marine Group, Inc. Long Term Incentive Plan (the “Plan”)is to provide a means through which Orion Marine Group, Inc., a Delaware corporation (the“Company”), and its Subsidiaries may attract and retain able persons as employees, directors andconsultants of the Company, and its Subsidiaries, and to provide a means whereby those persons uponwhom the responsibilities of the successful administration and management of the Company, and itsSubsidiaries, rest, and whose present and potential contributions to the welfare of the Company,and its Subsidiaries, are of importance, can acquire and maintain stock ownership, or awards thevalue of which is tied to the performance of the Company, thereby strengthening their concern forthe welfare of the Company, and its Subsidiaries, and their desire to remain employed. A furtherpurpose of this Plan is to provide such employees, directors and consultants with additionalincentive and reward opportunities designed to enhance the profitable growth of the Company.Accordingly, this Plan primarily provides for the granting of Incentive Stock Options, optionswhich do not constitute Incentive Stock Options, Restricted Stock Awards, Restricted Stock Units,Stock Appreciation Rights or any combination of the foregoing, as is best suited to thecircumstances of the particular individual as provided herein.     2. **Definitions**. For purposes of this Plan, the following terms shall be defined as set forthbelow, in addition to such terms defined in Section 1 hereof:          (a) “Annual Incentive Award” means a conditional right granted to a Participant underSubsection 8(c) hereof to receive a cash payment, Stock or other Award, unless otherwise determinedby the Committee, after the end of a specified year.          (b) “Award” means any Option, SAR, Restricted Stock Award, Restricted Stock Unit, Bonus Stock,Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual Incentive Award, togetherwith any other right or interest granted to a Participant under this Plan.          (c) “Beneficiary” means one or more persons, trusts or other entities which have beendesignated by a Participant, in his or her most recent written beneficiary designation filed withthe Committee, to receive the benefits specified under this Plan upon such Participant’s death orto which Awards or other rights are transferred if and to the extent permitted under Subsection10(a) hereof. If, upon a Participant’s death, there is no designated Beneficiary or survivingdesignated Beneficiary, then the term Beneficiary means the persons, trusts or other entitiesentitled by will or the laws of descent and distribution to receive such benefits.          (d) “Board” means the Company’s Board of Directors.
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          (e) “Business Day” means any day other than a Saturday, a Sunday, or a day on which bankinginstitutions in the state of Texas are authorized or obligated by law or executive order to close.          (f) “Change in Control” means the occurrence of any of the following events:               (i) A “change in the ownership of the Company” which shall occur on the date that any oneperson, or more than one person acting as a group, acquires ownership of stock in the Company that,together with stock held by such person or group, constitutes more than 50% of the total fairmarket value or total voting power of the stock of the Company; however, if any one person or morethan one person acting as a group, is considered to own more than 50% of the total fair marketvalue or total voting power of the stock of the Company, the acquisition of additional stock by thesame person or persons will not be considered a “change in the ownership of the Company” (or tocause a “change in the effective control of the Company” within the meaning of Subsection 2(f)(ii)below) and an increase of the effective percentage of stock owned by any one person, or personsacting as a group, as a result of a transaction in which the Company acquires its stock in exchangefor property will be treated as an acquisition of stock for purposes of this paragraph; provided,further, however, that for purposes of this Subsection 2(f)(i), the following acquisitions shallnot constitute a Change in Control: (A) any acquisition by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any entity controlled by the Company, or (B) anyacquisition by investors (immediately prior to such acquisition) in the Company for financingpurposes, as determined by the Committee in its sole discretion. This Subsection 2(f)(i) appliesonly when there is a transfer of the stock of the Company (or issuance of stock) and stock in theCompany remains outstanding after the transaction.               (ii) A “change in the effective control of the Company” which shall occur on the date thateither (A) any one person, or more than one person acting as a group, acquires (or has acquiredduring the twelve month period ending on the date of the most recent acquisition by such person orpersons) ownership of stock of the Company possessing 35% or more of the total voting power of thestock of the Company, except for (1) any acquisition by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any entity controlled by the Company, or (2) anyacquisition by investors (immediately prior to such acquisition) in the Company for financingpurposes, as determined by the Committee in its sole discretion; or (B) a majority of the membersof the Board are replaced during any twelve-month period by directors whose appointment or electionis not endorsed by a majority of the members of the Board prior to the date of the appointment orelection. For purposes of a “change in the effective control of the Company,” if any one person,or more than one person acting as a group, is considered to effectively control the Company withinthe meaning of this Subsection 2(f)(ii), the acquisition of additional control of the Company bythe same person or persons is not considered a “change in the effective control of the Company,” orto cause a “change in the ownership of the Company” within the meaning of Subsection 2(f)(i) above.               (iii) A “change in the ownership of a substantial portion of the Company’s assets” which shalloccur on the date that any one person, or more than one person acting as a group, acquires (or hasacquired during the twelve month period ending on the date of the most recent acquisition by suchperson or persons) assets of the Company that have a total
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gross fair market value equal to or more than 40% of the total gross fair market value of allthe assets of the Company immediately prior to such acquisition or acquisitions. For this purpose,gross fair market value means the value of the assets of the Company, or the value of the assetsbeing disposed of, determined without regard to any liabilities associated with such assets. Anytransfer of assets to an entity that is controlled by the shareholders of the Company immediatelyafter the transfer, as provided in guidance issued pursuant to the Nonqualified DeferredCompensation Rules, shall not constitute a Change in Control.          For purposes of this Subsection 2(f), the provisions of section 318(a) of the Code regardingthe constructive ownership of stock will apply to determine stock ownership; provided, that, stockunderlying unvested options (including options exercisable for stock that is not substantiallyvested) will not be treated as owned by the individual who holds the option. In addition, forpurposes of this Subsection 2(f) and except as otherwise provided in an Award agreement, “Company”includes (x) the Company, (y) the entity for whom a Participant performs the services for which anAward is granted, and (z) an entity that is a stockholder owning more than 50% of the total fairmarket value and total voting power (a “Majority Shareholder”) of the Company or the entityidentified in (y) above, or any entity in a chain of entities in which each entity is a MajorityShareholder of another entity in the chain, ending in the Company or the entity identified in (y)above.          (g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, includingregulations thereunder and successor provisions and regulations thereto.          (h) “Committee” means a committee of two or more directors designated by the Board toadminister this Plan; provided, however, that, unless otherwise determined by theBoard, the Committee shall consist solely of two or more directors, each of whom shall be (i) a“nonemployee director” within the meaning of Rule 16b-3, and (ii) an “outside director” as definedunder section 162(m) of the Code unless administration of this Plan by “outside directors” is notthen required in order to qualify for tax deductibility under section 162(m) of the Code.          (i) “Covered Employee” means an Eligible Person who is a Covered Employee as specified inSubsection 8(e) of this Plan.          (j) “Dividend Equivalent” means a right, granted to a Participant under Subsection 6(g), toreceive cash, Stock, other Awards or other property equal in value to dividends paid with respectto a specified number of shares of Stock, or other periodic payments.          (k) “Effective Date” means the day the stockholders of the Company approve the Plan.          (l) “Eligible Person” means all officers and employees of the Company or of any Subsidiary,and other persons who provide services to the Company or any of its Subsidiaries, includingdirectors of the Company. An employee on leave of absence may be considered as still in the employof the Company or a Subsidiary for purposes of eligibility for participation in this Plan.
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          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,including rules thereunder and successor provisions and rules thereto.          (n) “Fair Market Value” means, as of any specified date, (i) the mean of the high and lowsales prices of the Common Stock either (A) if the Stock is traded on the National Market System ofthe NASDAQ, as reported on the National Market System of NASDAQ on that date (or if no sales occuron that date, on the last preceding date on which such sales of the Stock are so reported), or (B)if the Stock is listed on a national securities exchange, as reported on the stock exchangecomposite tape on that date (or if no sales occur on that date, on the last preceding date on whichsuch sales of the Stock are so reported); (ii) if the Stock is not traded on the National MarketSystem of the NASDAQ or a national securities exchange but is traded over the counter at the time adetermination of its fair market value is required to be made under the Plan, the average betweenthe reported high and low or closing bid and asked prices of Stock on the most recent date on whichStock was publicly traded; (iii) in the event Stock is not publicly traded at the time adetermination of its value is required to be made under the Plan, the amount determined by theCommittee in its discretion in such manner as it deems appropriate; or (iv) on the date of aninitial public offering of Stock, the offering price under such initial public offering.          (o) “Incentive Stock Option” or “ISO” means any Option intended to be and designated as anincentive stock option within the meaning of section 422 of the Code or any successor provisionthereto.          (p) “Nonqualified Deferred Compensation Rules” means the limitations or requirements ofsection 409A of the Code and the regulations promulgated thereunder.          (q) “Option” means a right, granted to a Participant under Subsection 6(b) hereof, to purchaseStock or other Awards at a specified price during specified time periods.          (r) “Other Stock-Based Awards” means Awards granted to a Participant under Subsection 6(h)hereof.          (s) “Participant” means a person who has been granted an Award under this Plan which remainsoutstanding, including a person who is no longer an Eligible Person.          (t) “Performance Unit” means a right, granted to a Participant under Section 8 hereof, toreceive Awards based upon performance criteria specified by the Committee.          (u) “Person” means any person or entity of any nature whatsoever, specifically including anindividual, a firm, a company, a corporation, a partnership, a limited liability company, a trustor other entity; a Person, together with that Person’s Affiliates and Associates (as those termsare defined in Rule 12b-2 under the Exchange Act), and any Persons acting as a partnership, limitedpartnership, joint venture, association, syndicate or other group (whether or not formallyorganized), or otherwise acting jointly or in concert or in a coordinated or consciously parallelmanner (whether or not pursuant to any express agreement), for the purpose of acquiring, holding,voting or disposing of securities of the Company with such Person, shall be deemed a single“Person.”
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          (v) “Qualifying Public Offering” shall mean a firm commitment underwritten public offering ofStock for cash where the shares of Stock registered under the Securities Act are listed on anational securities exchange or the NASDAQ National Market System.          (w) “Qualified Member” means a member of the Committee who is a “nonemployee Director” withinthe meaning of Rule 16b-3(b)(3) and an “outside director” within the meaning of Treasury Regulation1.162-27 under section 162(m) of the Code.          (x) “Restricted Stock” means Stock granted to a Participant under Subsection 6(d) hereof, thatis subject to certain restrictions and to a risk of forfeiture.          (y) “Restricted Stock Unit” means a right, granted to a Participant under Subsection 6(e)hereof, to receive Stock, cash or a combination thereof at the end of a specified deferral period.          (z) “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange Commission undersection 16 of the Exchange Act, as from time to time in effect and applicable to this Plan andParticipants.          (aa) “Securities Act” means the Securities Act of 1933 and the rules and regulationspromulgated thereunder, or any successor law, as it may be amended from time to time.          (bb) “Stock” means the Company’s Common Stock, par value $.0001 per share, and such othersecurities as may be substituted (or resubstituted) for Stock pursuant to Section 9.          (cc) “Stock Appreciation Rights” or “SAR” means a right granted to a Participant underSubsection 6(c) hereof.          (dd) “Subsidiary” means with respect to the Company, any corporation or other entity of whicha majority of the voting power of the voting equity securities or equity interest is owned,directly or indirectly, by the Company.     3. **Administration**.          (a) Authority of the Committee. This Plan shall be administered by the Committeeexcept to the extent the Board elects to administer this Plan, in which case references herein tothe “Committee” shall be deemed to include references to the “Board.” Subject to the expressprovisions of the Plan and Rule 16b-3, the Committee shall have the authority, in its sole andabsolute discretion, to (i) adopt, amend, and rescind administrative and interpretive rules andregulations relating to the Plan; (ii) determine the Eligible Persons to whom, and the time ortimes at which, Awards shall be granted; (iii) determine the amount of cash and the number ofshares of Stock, Stock Appreciation Rights, Restricted Stock Units or Restricted Stock Awards, orany combination thereof, that shall be the subject of each Award; (iv) determine the terms andprovisions of each Award agreement (which need not be identical), including provisions defining orotherwise relating to (A) the term and the period or periods and extent of exercisability of theOptions, (B) the extent to which the transferability of shares of Stock issued or transferred
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pursuant to any Award is restricted, (C) except as otherwise provided herein, the effect oftermination of employment, or the service relationship with the Company, of a Participant on theAward, and (D) the effect of approved leaves of absence (consistent with any applicable regulationsof the Internal Revenue Service); (v) accelerate the time of exercisability of any Award that hasbeen granted; (vi) construe the respective Award agreements and the Plan; (vii) make determinationsof the Fair Market Value of the Stock pursuant to the Plan; (viii) delegate its duties under thePlan to such agents as it may appoint from time to time, provided that the Committee may notdelegate its duties with respect to making Awards to, or otherwise with respect to Awards grantedto, Eligible Persons who are subject to section 16(b) of the Exchange Act or section 162(m) of theCode; and (ix) make all other determinations, perform all other acts, and exercise all other powersand authority necessary or advisable for administering the Plan, including the delegation of thoseministerial acts and responsibilities as the Committee deems appropriate. Subject to Rule 16b-3and section 162(m) of the Code, the Committee may correct any defect, supply any omission, orreconcile any inconsistency in the Plan, in any Award, or in any Award agreement in the manner andto the extent it deems necessary or desirable to carry the Plan into effect, and the Committeeshall be the sole and final judge of that necessity or desirability. The determinations of theCommittee on the matters referred to in this Subsection 3(a) shall be final and conclusive.          (b) Manner of Exercise of Committee Authority. At any time that a member of theCommittee is not a Qualified Member, any action of the Committee relating to an Award granted or tobe granted to a Participant who is then subject to section 16 of the Exchange Act in respect of theCompany, or relating to an Award intended by the Committee to qualify as “performance-basedcompensation” within the meaning of section 162(m) of the Code and regulations thereunder, may betaken either (i) by a subcommittee, designated by the Committee, composed solely of two or moreQualified Members, or (ii) by the Committee but with each such member who is not a Qualified Memberabstaining or recusing himself or herself from such action; provided, however,that, upon such abstention or recusal, the Committee remains composed solely of two or moreQualified Members. Such action, authorized by such a subcommittee or by the Committee upon theabstention or recusal of such non-Qualified Member(s), shall be the action of the Committee forpurposes of this Plan. Any action of the Committee shall be final, conclusive and binding on allpersons, including the Company, its Subsidiaries, stockholders, Participants, Beneficiaries, andtransferees under Subsection 10(a) hereof or other persons claiming rights from or through aParticipant. The express grant of any specific power to the Committee, and the taking of anyaction by the Committee, shall not be construed as limiting any power or authority of theCommittee. The Committee may delegate to officers or managers of the Company or any Subsidiary, orcommittees thereof, the authority, subject to such terms as the Committee shall determine, toperform such functions, including administrative functions, as the Committee may determine, to theextent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) forAwards granted to Participants subject to section 16 of the Exchange Act in respect of the Companyand will not cause Awards intended to qualify as “performance-based compensation” under section162(m) of the Code to fail to so qualify.          (c) Limitation of Liability. The Committee and each member thereof shall be entitledto, in good faith, rely or act upon any report or other information furnished to him or her by anyofficer or employee of the Company or a Subsidiary, the Company’s legal counsel,
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independent auditors, consultants or any other agents assisting in the administration of thisPlan. Members of the Committee and any officer or employee of the Company or a Subsidiary actingat the direction or on behalf of the Committee shall not be personally liable for any action ordetermination taken or made in good faith with respect to this Plan, and shall, to the fullestextent permitted by law, be indemnified and held harmless by the Company with respect to any suchaction or determination.     4. **Stock Subject to Plan**.          (a) Overall Number of Shares Available for Delivery. Subject to adjustment in amanner consistent with any adjustment made pursuant to Section 9, the total number of shares ofStock reserved and available for issuance in connection with Awards under this Plan shall notexceed 4,500,000 shares, and the maximum number of shares that may be issued under both this Planand the Company’s 2005 Stock Incentive Plan shall be limited to 6,565,000.          (b) Application of Limitation to Grants of Awards. No Award may be granted if thenumber of shares of Stock to be delivered in connection with such Award exceeds the number ofshares of Stock remaining available under this Plan minus the number of shares of Stock issuable insettlement of or relating to then-outstanding Awards. The Committee may adopt reasonable countingprocedures to ensure appropriate counting, avoid double counting (as, for example, in the case oftandem or substitute awards) and make adjustments if the number of shares of Stock actuallydelivered differs from the number of shares previously counted in connection with an Award.          (c) Availability of Shares Not Issued under Awards. Shares of Stock subject to anAward under this Plan that expire or are canceled, forfeited, settled in cash or otherwiseterminated without an issuance of shares to the Participant, including (i) the number of shareswithheld in payment of any exercise or purchase price of an Award or taxes relating to Awards, and(ii) the number of shares surrendered in payment of any exercise or purchase price of an Award ortaxes relating to any Award, will again be available for Awards under this Plan, except that if anysuch shares could not again be available for Awards to a particular Participant under anyapplicable law or regulation, such shares shall be available exclusively for Awards to Participantswho are not subject to such limitation.          (d) Stock Offered. The shares to be delivered under the Plan shall be made availablefrom (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company,or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased onthe open market.     5. **Eligibility; Per Person Award Limitations**. Awards may be granted under this Plan only toPersons who are Eligible Persons at the time of grant thereof or in connection with the severanceor retirement of Eligible Individuals. In each calendar year, during any part of which this Planis in effect, a Covered Employee may not be granted (a) Awards (other than Awards designated to bepaid only in cash or the settlement of which is not based on a number of shares of Stock) relatingto more than 2,000,000 shares of Stock, subject to adjustment in a manner consistent with anyadjustment made pursuant to Section 9 and (b) Awards designated to
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be paid only in cash, or the settlement of which is not based on a number of shares of Stock,having a value determined on the date of grant in excess of $5,000,000.00.     6. **Specific Terms of Awards**.          (a) General. Awards may be granted on the terms and conditions set forth in thisSection 6. In addition, the Committee may impose on any Award or the exercise thereof, at the dateof grant or thereafter (subject to Subsection 10(c)), such additional terms and conditions, notinconsistent with the provisions of this Plan, as the Committee shall determine, including termsrequiring forfeiture of Awards in the event of termination of employment by the Participant, ortermination of the Participant’s service relationship with the Company, and terms permitting aParticipant to make elections relating to his or her Award. The Committee shall retain full powerand discretion to accelerate, waive or modify, at any time, any term or condition of an Award thatis not mandatory under this Plan; provided, however, that the Committee shall nothave any discretion to accelerate, waive or modify any term or condition of an Award that isintended to qualify as “performance-based compensation” for purposes of section 162(m) of the Codeif such discretion would cause the Award to not so qualify.          (b) Options. The Committee is authorized to grant Options to Participants on thefollowing terms and conditions:               (i) Exercise Price. Each Option agreement shall state the exercise price per share ofStock (the “Exercise Price”); provided, however, that the Exercise Price per shareof Stock subject to an ISO shall not be less than the greater of (A) the par value per share of theStock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of theOption (or in the case of an individual who owns stock possessing more than 10 percent of the totalcombined voting power of all classes of stock of the Company or its parent or any subsidiary, 110%of the Fair Market Value per share of the Stock on the date of grant.               (ii) Time and Method of Exercise. The Committee shall determine the time or times atwhich or the circumstances under which an Option may be exercised in whole or in part (includingbased on achievement of performance goals and/or future service requirements), the methods by whichsuch exercise price may be paid or deemed to be paid, the form of such payment, including withoutlimitation cash, Stock, other Awards or awards granted under other plans of the Company or anySubsidiary, or other property (including notes or other contractual obligations of Participants tomake payment on a deferred basis), and the methods by or forms in which Stock will be delivered ordeemed to be delivered to Participants, including, but not limited to, the delivery of RestrictedStock subject to Subsection 6(d). In the case of an exercise whereby the Exercise Price is paidwith Stock, such Stock shall be valued as of the date of exercise.               (iii) ISOs. The terms of any ISO granted under this Plan shall comply in all respectswith the provisions of section 422 of the Code. Anything in this Plan to the contrarynotwithstanding, no term of this Plan relating to ISOs (including any SAR in tandem therewith)shall be interpreted, amended or altered, nor shall any discretion or authority granted under thisPlan be exercised, so as to disqualify either this Plan or any ISO under section 422 of the Code,unless the Participant has first requested the change that will result in such
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disqualification. ISOs shall not be granted more than ten years after the earlier of theadoption of this Plan or the approval of this Plan by the Company’s stockholders. Notwithstandingthe foregoing, the Fair Market Value of shares of Stock subject to an ISO and the aggregate FairMarket Value of shares of stock of any parent or Subsidiary corporation (within the meaning ofsections 424(e) and (f) of the Code) subject to any other ISO (within the meaning of section 422 ofthe Code)) of the Company or a parent or Subsidiary corporation (within the meaning of sections424(e) and (f) of the Code) that first becomes purchasable by a Participant in any calendar yearmay not (with respect to that Participant) exceed $100,000, or such other amount as may beprescribed under section 422 of the Code or applicable regulations or rulings from time to time.As used in the previous sentence, Fair Market Value shall be determined as of the date the ISOs aregranted. Failure to comply with this provision shall not impair the enforceability orexercisability of any Option, but shall cause the excess amount of shares to be reclassified inaccordance with the Code.          (c) Stock Appreciation Rights. The Committee is authorized to grant SARs toParticipants on the following terms and conditions:               (i) Right to Payment. An SAR shall confer on the Participant to whom it is granted aright to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share ofStock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.               (ii) Rights Related to Options. An SAR granted in connection with an Option shallentitle a Participant, upon exercise, to surrender that Option or any portion thereof, to theextent unexercised, and to receive payment of an amount computed pursuant to Subsection6(c)(ii)(B). That Option shall then cease to be exercisable to the extent surrendered. SARsgranted in connection with an Option shall be subject to the terms of the Award agreement governingthe Option, which shall comply with the following provisions in addition to those applicable toOptions:                    (A) An SAR granted in connection with an Option shall be exercisable only at such time ortimes and only to the extent that the related Option is exercisable.                    (B) Upon the exercise of an SAR related to an Option, a Participant shall be entitled toreceive payment from the Company of an amount determined by multiplying:                         (1) the difference obtained by subtracting the exercise price of a share of Stock specified inthe related Option from the Fair Market Value of a share of Stock on the date of exercise of theSAR, by                         (2) the number of shares as to which that SAR has been exercised.               (iii) Right Without Option. An SAR granted independent of an Option shall beexercisable as determined by the Committee and set forth in the Award agreement governing the SAR,which Award agreement shall comply with the following provisions:
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                    (A) Each Award agreement shall state the total number of shares of Stock to which the SARrelates.                    (B) Each Award agreement shall state the time or periods in which the right to exercise theSAR or a portion thereof shall vest and the number of shares of Stock for which the right toexercise the SAR shall vest at each such time or period.                    (C) Each Award agreement shall state the date at which the SARs shall expire if not previouslyexercised.                    (D) Each SAR shall entitle a participant, upon exercise thereof, to receive payment of anamount determined by multiplying:                         (1) the difference obtained by subtracting the Fair Market Value of a share of Stock on thedate of grant of the SAR from the Fair Market Value of a share of Stock on the date of exercise ofthat SAR, by                         (2) the number of shares as to which the SAR has been exercised.               (iv) Terms. Except as otherwise provided herein, the Committee shall determine at thedate of grant or thereafter, the time or times at which and the circumstances under which an SARmay be exercised in whole or in part (including based on achievement of performance goals and/orfuture service requirements), the method of exercise, method of settlement, form of considerationpayable in settlement, method by or forms in which Stock will be delivered or deemed to bedelivered to Participants, whether or not an SAR shall be in tandem or in combination with anyother Award, and any other terms and conditions of any SAR. SARs may be either freestanding or intandem with other Awards.          (d) Restricted Stock. The Committee is authorized to grant Restricted Stock toParticipants on the following terms and conditions:               (i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions ontransferability, risk of forfeiture and other restrictions, if any, as the Committee may impose,which restrictions may lapse separately or in combination at such times, under such circumstances(including based on achievement of performance goals and/or future service requirements), in suchinstallments or otherwise, as the Committee may determine at the date of grant or thereafter.During the restricted period applicable to the Restricted Stock, the Restricted Stock may not besold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.               (ii) Certificates for Stock. Restricted Stock granted under this Plan may beevidenced in such manner as the Committee shall determine. If certificates representing RestrictedStock are registered in the name of the Participant, the Committee may require that suchcertificates bear an appropriate legend referring to the terms, conditions and restrictionsapplicable to such Restricted Stock, that the Company retain physical possession of thecertificates, and that the Participant deliver a stock power to the Company, endorsed in blank,relating to the Restricted Stock.
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               (iii) Dividends and Splits. As a condition to the grant of an Award of RestrictedStock, the Committee may require or permit a Participant to elect that any cash dividends paid on ashare of Restricted Stock be automatically reinvested in additional shares of Restricted Stock orapplied to the purchase of additional Awards under this Plan. Unless otherwise determined by theCommittee, Stock distributed in connection with a Stock split or Stock dividend, and other propertydistributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the sameextent as the Restricted Stock with respect to which such Stock or other property has beendistributed.          (e) Restricted Stock Units. The Committee is authorized to grant Restricted StockUnits to Participants, which are rights to receive Stock or cash, as determined by the Committee,at the end of a specified deferral period, subject to the following terms and conditions:               (i) Award and Restrictions. Settlement of an Award of Restricted Stock Units shalloccur upon expiration of the deferral period specified for such Restricted Stock Unit by theCommittee (or, if permitted by the Committee, as elected by the Participant). In addition,Restricted Stock Units shall be subject to such restrictions (which may include a risk offorfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration ofthe deferral period or at earlier specified times (including based on achievement of performancegoals and/or future service requirements), separately or in combination, in installments orotherwise, as the Committee may determine. Restricted Stock Units shall be satisfied by thedelivery of cash or Stock in the amount equal to the Fair Market Value of the specified number ofshares of Stock covered by the Restricted Stock Units, or a combination thereof, as determined bythe Committee at the date of grant or thereafter.               (ii) Dividend Equivalents. Unless otherwise determined by the Committee at date ofgrant, Dividend Equivalents on the specified number of shares of Stock covered by an Award ofRestricted Stock Units shall be either (A) paid with respect to such Restricted Stock Units on thedividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equalto the amount of such dividends, or (B) deferred with respect to such Restricted Stock Units andthe amount or value thereof automatically deemed reinvested in additional Restricted Stock Units,other Awards or other investment vehicles, as the Committee shall determine or permit theParticipant to elect.          (f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized togrant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations to pay cash ordeliver other property under this Plan or under other plans or compensatory arrangements, providedthat, in the case of Participants subject to section 16 of the Exchange Act, the amount of suchgrants remains within the discretion of the Committee to the extent necessary to ensure thatacquisitions of Stock or other Awards are exempt from liability under section 16(b) of the ExchangeAct. Stock or Awards granted hereunder shall be subject to such other terms as shall be determinedby the Committee. In the case of any grant of Stock to an officer of the Company or a Subsidiaryin lieu of salary or other cash compensation, the number of shares granted in place of suchcompensation shall be reasonable, as determined by the Committee.
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          (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalentsto a Participant, entitling the Participant to receive cash, Stock, other Awards, or other propertyequal in value to dividends paid with respect to a specified number of shares of Stock, or otherperiodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connectionwith another Award. The Committee may provide that Dividend Equivalents shall be paid ordistributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, orother investment vehicles, and subject to such restrictions on transferability and risks offorfeiture, as the Committee may specify.          (h) Other Stock-Based Awards. The Committee is authorized, subject to limitationsunder applicable law, to grant to Participants such other Awards that may be denominated or payablein, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, asdeemed by the Committee to be consistent with the purposes of this Plan, including withoutlimitation convertible or exchangeable debt securities, other rights convertible or exchangeableinto Stock, purchase rights for Stock, Awards with value and payment contingent upon performance ofthe Company or any other factors designated by the Committee, and Awards valued by reference to thebook value of Stock or the value of securities of or the performance of specified Subsidiaries.The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant toan Award in the nature of a purchase right granted under this Subsection 6(h) shall be purchasedfor such consideration, paid for at such times, by such methods, and in such forms, including,without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine.Cash awards, as an element of or supplement to any other Award under this Plan, may also begranted pursuant to this Subsection 6(h).     7. **Certain Provisions Applicable to Awards**.          (a) Termination of Employment. Except as provided herein, the treatment of an Awardupon a termination of employment or any other service relationship by and between a Participant andthe Company or any Subsidiary shall be specified in the agreement controlling such Award.          (b) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under thisPlan may, in the discretion of the Committee, be granted either alone or in addition to, in tandemwith, or in substitution or exchange for, any other Award or any award granted under another planof the Company, any Subsidiary, or any business entity to be acquired by the Company or aSubsidiary, or any other right of a Participant to receive payment from the Company or anySubsidiary. Such additional, tandem and substitute or exchange Awards may be granted at any time.If an Award is granted in substitution or exchange for another Award, the Committee shall requirethe surrender of such other Award in consideration for the grant of the new Award. In addition,Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable underother plans of the Company or any Subsidiary, in which the value of Stock subject to the Award isequivalent in value to the cash compensation, or in which the exercise price, grant price orpurchase price of the Award in the nature of a right that may be exercised is equal to the FairMarket Value of the underlying Stock minus the value of the cash compensation surrendered.
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          (c) Term of Awards. Except as specified herein, the term of each Award shall be forsuch period as may be determined by the Committee; provided, however, that in noevent shall the term of any Option or SAR exceed a period of ten years (or such shorter term as maybe required in respect of an ISO under section 422 of the Code).          (d) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of thisPlan and any applicable Award agreement, payments to be made by the Company or a Subsidiary uponthe exercise of an Option or other Award or settlement of an Award may be made in such forms as theCommittee shall determine, including without limitation cash, Stock, other Awards or otherproperty, and may be made in a single payment or transfer, in installments, or on a deferred basis.Except as otherwise provided herein, the settlement of any Award may be accelerated, and cash paidin lieu of Stock in connection with such settlement, in the discretion of the Committee or uponoccurrence of one or more specified events (in addition to a Change in Control). Installment ordeferred payments may be required by the Committee (subject to Subsection 10(c) of this Plan,including the consent provisions thereof in the case of any deferral of an outstanding Award notprovided for in the original Award agreement) or permitted at the election of the Participant onterms and conditions established by the Committee. Payments may include, without limitation,provisions for the payment or crediting of reasonable interest on installment or deferred paymentsor the grant or crediting of Dividend Equivalents or other amounts in respect of installment ordeferred payments denominated in Stock. Any deferral shall only be allowed as is provided in aseparate deferred compensation plan adopted by the Company. This Plan shall not constitute an“employee benefit plan” for purposes of section 3(3) of the Employee Retirement Income Security Actof 1974, as amended.          (e) Exemptions from Section 16(b) Liability. It is the intent of the Company that thegrant of any Awards to or other transaction by a Participant who is subject to section 16 of theExchange Act shall be exempt from such section pursuant to an applicable exemption (except fortransactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if anyprovision of this Plan or any Award agreement does not comply with the requirements of Rule 16b-3as then applicable to any such transaction, such provision shall be construed or deemed amended tothe extent necessary to conform to the applicable requirements of Rule 16b-3 so that suchParticipant shall avoid liability under section 16(b) of the Exchange Act.          (f) Non-Competition Agreement. Each Participant to whom an Award is granted underthis Plan may be required to agree in writing as a condition to the granting of such Award not toengage in conduct in competition with the Company or any of its Subsidiaries for a period after thetermination of such Participant’s employment with the Company and its Subsidiaries as determined bythe Committee.     8. **Performance and Annual Incentive Awards**.          (a) Performance Conditions. The right of a Participant to exercise or receive a grantor settlement of any Award, and the timing thereof, may be subject to such performance conditionsas may be specified by the Committee. The Committee may use such business criteria and othermeasures of performance as it may deem appropriate in establishing any performance conditions, andmay exercise its discretion to reduce or increase the amounts
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payable under any Award subject to performance conditions, except as limited under Subsections8(b) and 8(c) hereof in the case of a Performance Award or Annual Incentive Award intended toqualify under section 162(m) of the Code.          (b) Performance Awards Granted to Designated Covered Employees. If the Committeedetermines that a Performance Award to be granted to an Eligible Person who is designated by theCommittee as likely to be a Covered Employee should qualify as “performance-based compensation” forpurposes of section 162(m) of the Code, the grant, exercise and/or settlement of such PerformanceAward may be contingent upon achievement of preestablished performance goals and other terms setforth in this Subsection 8(b).               (i) Performance Goals Generally. The performance goals for such Performance Awardsshall consist of one or more business criteria or individual performance criteria and a targetedlevel or levels of performance with respect to each of such criteria, as specified by the Committeeconsistent with this Subsection 8(b). Performance goals shall be objective and shall otherwisemeet the requirements of section 162(m) of the Code and regulations thereunder (including TreasuryRegulation §1.162-27 and successor regulations thereto), including the requirement that the levelor levels of performance targeted by the Committee result in the achievement of performance goalsbeing “substantially uncertain.” The Committee may determine that such Performance Awards shall begranted, exercised, and/or settled upon achievement of any one performance goal or that two or moreof the performance goals must be achieved as a condition to grant, exercise and/or settlement ofsuch Performance Awards. Performance goals may differ for Performance Awards granted to any oneParticipant or to different Participants.               (ii) Business and Individual Performance Criteria                    (A) Business Criteria. One or more of the following business criteria for theCompany, on a consolidated basis, and/or for specified Subsidiaries or business or geographicalunits of the Company (except with respect to the total stockholder return criteria), shall be usedby the Committee in establishing performance goals for such Performance Awards: (1) earnings pershare; (2) revenues, (3) increase in revenues; (4) increase in cash flow; (5) increase in cash flowreturn; (6) return on net assets; (7) return on assets; (8) return on investment; (9) return oncapital; (10) return on equity; (11) economic value added; (12) operating margin; (13) contributionmargin; (14) net income before taxes; (15) net income after taxes; (16) pretax earnings; (17)pretax earnings before interest, depreciation and amortization; (18) pretax operating earningsafter interest expense and before incentives, service fees, and extraordinary or special items;(19) total stockholder return; (20) debt reduction; (21) market share; (22) change in the FairMarket Value of the Stock; and (23) any of the above goals determined on an absolute or relativebasis or as compared to the performance of a published or special index deemed applicable by theCommittee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group ofcomparable companies. One or more of the foregoing business criteria shall also be exclusivelyused in establishing performance goals for Annual Incentive Awards granted to a Covered Employeeunder Subsection 8(c) hereof.                    (B) Individual Performance Criteria. The grant, exercise and/or settlement ofPerformance Awards may also be contingent upon individual performance goals
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established by the Committee. If required for compliance with section 162(m) of the Code,such criteria shall be approved by the stockholders of the Company.               (iii) Performance Period; Timing for Establishing Performance Goals. Achievement ofperformance goals in respect of such Performance Awards shall be measured over a performance periodof up to ten years, as specified by the Committee. Performance goals shall be established notlater than 90 days after the beginning of any performance period applicable to such PerformanceAwards, or at such other date as may be required or permitted for “performance-based compensation”under section 162(m) of the Code.               (iv) Performance Award Pool. The Committee may establish a Performance Award pool,which shall be an unfunded pool, for purposes of measuring performance of the Company in connectionwith Performance Awards. The amount of such Performance Award pool shall be based upon theachievement of a performance goal or goals based on one or more of the criteria set forth inSubsection 8(b)(ii) hereof during the given performance period, as specified by the Committee inaccordance with Subsection 8(b)(iii) hereof. The Committee may specify the amount of thePerformance Award pool as a percentage of any of such criteria, a percentage thereof in excess of athreshold amount, or as another amount which need not bear a strictly mathematical relationship tosuch criteria.               (v) Settlement of Performance Awards; Other Terms. After the end of each performanceperiod, the Committee shall determine the amount, if any, of (A) the Performance Award pool, andthe maximum amount of the potential Performance Award payable to each Participant in thePerformance Award pool, or (B) the amount of the potential Performance Award otherwise payable toeach Participant. Settlement of such Performance Awards shall be in cash, Stock, other Awards orother property, in the discretion of the Committee. The Committee may, in its discretion, reducethe amount of a settlement otherwise to be made in connection with such Performance Awards, but maynot exercise discretion to increase any such amount payable to a Covered Employee in respect of aPerformance Award subject to this Subsection 8(b). The Committee shall specify the circumstancesin which such Performance Awards shall be paid or forfeited in the event of termination ofemployment by the Participant prior to the end of a performance period or settlement of PerformanceAwards.          (c) Annual Incentive Awards Granted to Designated Covered Employees. If the Committeedetermines that an Annual Incentive Award to be granted to an Eligible Person who is designated bythe Committee as likely to be a Covered Employee should qualify as “performance-based compensation”for purposes of section 162(m) of the Code, the grant, exercise and/or settlement of such AnnualIncentive Award shall be contingent upon achievement of preestablished performance goals and otherterms set forth in this Subsection 8(c).               (i) Potential Annual Incentive Awards. Not later than the end of the 90th day of eachapplicable year, or at such other date as may be required or permitted in the case of Awardsintended to be “performance-based compensation” under section 162(m) of the Code, the Committeeshall determine the Eligible Persons who will potentially receive Annual Incentive Awards, and theamounts potentially payable thereunder, for that fiscal year, either out of an Annual IncentiveAward pool established by such date under Subsection 8(c)(i) hereof or
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as individual Annual Incentive Awards. The amount potentially payable, with respect to AnnualIncentive Awards, shall be based upon the achievement of a performance goal or goals based on oneor more of the business criteria set forth in Subsection 8(b)(ii) hereof in the given performanceyear, as specified by the Committee.               (ii) Annual Incentive Award Pool. The Committee may establish an Annual IncentiveAward pool, which shall be an unfunded pool, for purposes of measuring performance of the Companyin connection with Annual Incentive Awards. The amount of such Annual Incentive Award pool shallbe based upon the achievement of a performance goal or goals based on one or more of the businesscriteria set forth in Subsection 8(b)(ii) hereof during the given performance period, as specifiedby the Committee in accordance with Subsection 8(b)(iii) hereof. The Committee may specify theamount of the Annual Incentive Award pool as a percentage of any of such business criteria, apercentage thereof in excess of a threshold amount, or as another amount which need not bear astrictly mathematical relationship to such business criteria.               (iii) Payout of Annual Incentive Awards. After the end of each applicable year, theCommittee shall determine the amount, if any, of (A) the Annual Incentive Award pool, and themaximum amount of the potential Annual Incentive Award payable to each Participant in the AnnualIncentive Award pool, or (A) the amount of the potential Annual Incentive Award otherwise payableto each Participant. The Committee may, in its discretion, determine that the amount payable toany Participant as a final Annual Incentive Award shall be reduced from the amount of his or herpotential Annual Incentive Award, including a determination to make no final Award whatsoever, butmay not exercise discretion to increase any such amount in the case of an Annual Incentive Awardintended to qualify under section 162(m) of the Code. The Committee shall specify thecircumstances in which an Annual Incentive Award shall be paid or forfeited in the event oftermination of employment by the Participant prior to the end of the applicable year or settlementof such Annual Incentive Award.          (d) Written Determinations. All determinations by the Committee as to theestablishment of performance goals, the amount of any Performance Award pool or potentialindividual Performance Awards, the achievement of performance goals relating to Performance Awardsunder Subsection 8(b), the amount of any Annual Incentive Award pool or potential individual AnnualIncentive Awards, the achievement of performance goals relating to Annual Incentive Awards underSubsection 8(c) shall be made in writing in the case of any Award intended to qualify under section162(m) of the Code. The Committee may not delegate any responsibility relating to such PerformanceAwards or Annual Incentive Awards.          (e) Status of Subsection 8(b) and Subsection 8(c) Awards under Section 162(m) of theCode. It is the intent of the Company that Performance Awards and Annual Incentive Awardsunder Subsections 8(b) and 8(c) hereof granted to persons who are designated by the Committee aslikely to be Covered Employees within the meaning of section 162(m) of the Code and regulationsthereunder (including Treasury Regulation §1.162-27 and successor regulations thereto) shall, if sodesignated by the Committee, constitute “performance-based compensation” within the meaning ofsection 162(m) of the Code and regulations thereunder. Accordingly, the terms of Subsections 8(b),(c), (d) and (e), including the definitions of Covered Employee and other terms used therein, shallbe interpreted in a manner consistent with section
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162(m) of the Code and regulations thereunder. The foregoing notwithstanding, because theCommittee cannot determine with certainty whether a given Participant will be a Covered Employeewith respect to a fiscal year that has not yet been completed, the term Covered Employee as usedherein shall mean only a person designated by the Committee, at the time of grant of PerformanceAwards or an Annual Incentive Award, who is likely to be a Covered Employee with respect to thatfiscal year. If any provision of this Plan as in effect on the date of adoption or any agreementsrelating to Performance Awards or Annual Incentive Awards that are designated as intended to complywith section 162(m) of the Code does not comply or is inconsistent with the requirements of section162(m) of the Code or regulations thereunder, such provision shall be construed or deemed amendedto the extent necessary to conform to such requirements.     9. **Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization**.          (a) Existence of Plans and Awards. The existence of this Plan and the Awards grantedhereunder shall not affect in any way the right or power of the Board or the stockholders of theCompany to make or authorize any adjustment, recapitalization, reorganization or other change inthe Company’s capital structure or its business, any merger or consolidation of the Company, anyissue of debt or equity securities ahead of or affecting Stock or the rights thereof, thedissolution or liquidation of the Company or any sale, lease, exchange or other disposition of allor any part of its assets or business or any other corporate act or proceeding.          (b) Subdivision or Consolidation of Shares. The terms of an Award and the number ofshares of Stock authorized pursuant to Section 4 for issuance under the Plan shall be subject toadjustment from time to time, in accordance with the following provisions:               (i) If at any time, or from time to time, the Company shall subdivide as a whole (by a Stocksplit, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number ofshares of Stock then outstanding into a greater number of shares of Stock, then (A) the maximumnumber of shares of Stock available in connection with the Plan or Awards as provided in Sections 4and 5 shall be increased proportionately, and the kind of shares or other securities available forthe Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind ofshares or securities) that may be acquired under any Award shall be increased proportionately, and(C) the price (including the exercise price) for each share of Stock (or other kind of shares orsecurities) subject to then outstanding Awards shall be reduced proportionately, without changingthe aggregate purchase price or value as to which outstanding Awards remain exercisable or subjectto restrictions.               (ii) If at any time, or from time to time, the Company shall consolidate as a whole (byreverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lessernumber of shares of Stock, (A) the maximum number of shares of Stock available in connection withthe Plan or Awards as provided in Sections 4 and 5 shall be decreased proportionately, and the kindof shares or other securities available for the Plan shall be appropriately adjusted, (B) thenumber of shares of Stock (or other kind of shares or securities) that may be acquired under anyAward shall be decreased proportionately, and (C) the price
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(including the exercise price) for each share of Stock (or other kind of shares or securities)subject to then outstanding Awards shall be increased proportionately, without changing theaggregate purchase price or value as to which outstanding Awards remain exercisable or subject torestrictions.               (iii) Whenever the number of shares of Stock subject to outstanding Awards and the price foreach share of Stock subject to outstanding Awards are required to be adjusted as provided in thisSubsection 9(b), the Committee shall promptly prepare, and deliver to each Participant, a noticesetting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment,the method by which such adjustment was calculated, and the change in price and the number ofshares of Stock, other securities, cash, or property purchasable subject to each Award after givingeffect to the adjustments.               (iv) Adjustments under Subsections 9(b)(i) and (ii) shall be made by the Committee, and itsdetermination as to what adjustments shall be made and the extent thereof shall be final, binding,and conclusive. No fractional interest shall be issued under the Plan on account of any suchadjustments.          (c) Corporate Recapitalization.               (i) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes itscapital structure (a “recapitalization”), the number and class of shares of Stock covered by anOption or an SAR theretofore granted shall be adjusted so that such Option or SAR shall thereaftercover the number and class of shares of stock and securities to which the holder would have beenentitled pursuant to the terms of the recapitalization if, immediately prior to therecapitalization, the holder had been the holder of record of the number of shares of Stock thencovered by such Option or SAR and the share limitations provided in Sections 4 and 5 shall beadjusted in a manner consistent with the recapitalization.               (ii) In the event of changes in the outstanding Stock by reason of recapitalization,reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes incapitalization occurring after the date of the grant of any Award and not otherwise provided for bythis Section 9, any outstanding Awards and any agreements evidencing such Awards shall be subjectto adjustment by the Committee at its discretion as to the number and price of shares of Stock orother consideration subject to such Awards. In the event of any such change in the outstandingStock, the share limitations provided in Sections 4 and 5 may be appropriately adjusted by theCommittee, whose determination shall be conclusive.          (d) Additional Issuances. Except as hereinbefore expressly provided, the issuance bythe Company of shares of stock of any class or securities convertible into shares of stock of anyclass, for cash, property, labor or services, upon direct sale, upon the exercise of rights orwarrants to subscribe therefor, or upon conversion of shares or obligations of the Companyconvertible into such shares or other securities, and in any case whether or not for fair value,shall not affect, and no adjustment by reason thereof shall be made with respect to, the number ofshares of Stock subject to Awards theretofore granted or the purchase price per share, ifapplicable.
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          (e) Change in Control. Upon a Change in Control the Committee, acting in its solediscretion without the consent or approval of any holder, shall affect one or more of the followingalternatives, which may vary among individual holders and which may vary among Options or SARs(collectively “Grants”) held by any individual holder: (i) accelerate the time at which Grants thenoutstanding may be exercised so that such Grants may be exercised in full for a limited period oftime on or before a specified date (before or after such Change in Control) fixed by the Committee,after which specified date all unexercised Grants and all rights of holders thereunder shallterminate, (ii) require the mandatory surrender to the Company by selected holders of some or allof the outstanding Grants held by such holders (irrespective of whether such Grants are thenexercisable under the provisions of this Plan) as of a date, before or after such Change inControl, specified by the Committee, in which event the Committee shall thereupon cancel suchGrants and pay to each holder an amount of cash per share equal to the excess, if any, of theamount calculated in Subsection 9(f) (the “Change in Control Price”) of the shares subject to suchGrants over the exercise price(s) under such Grants for such shares, or (iii) make such adjustmentsto Grants then outstanding as the Committee deems appropriate to reflect such Change in Control;provided, however, that the Committee may determine in its sole discretion that noadjustment is necessary to Grants then outstanding; provided, further,however, that the right to make such adjustments shall include, but not be limited to, themodification of Grants such that the holder of the Grant shall be entitled to purchase or receive(in lieu of the total shares or other consideration that the holder would otherwise be entitled topurchase or receive under the Grant (the “Total Consideration”)), the number of shares of stock,other securities, cash or property to which the Total Consideration would have been entitled to inconnection with the Change in Control (A) (in the case of Options), at an aggregate exercise priceequal to the exercise price that would have been payable if the total shares had been purchasedupon the exercise of the Grant immediately before the consummation of the Change in Control and (B)(in the case of SARs) if the SARs had been exercised immediately before the consummation of theChange in Control.          (f) Change in Control Price. The “Change in Control Price” shall equal the amountdetermined in clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) theper share price offered to holders of Stock in any merger or consolidation, (ii) the per sharevalue of the Stock immediately before the Change in Control without regard to assets sold in theChange in Control and assuming the Company has received the consideration paid for the assets inthe case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolutiontransaction, (iv) the price per share offered to holders of Stock in any tender offer or exchangeoffer whereby a Change in Control takes place, or (v) if such Change in Control occurs other thanpursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Subsection 9(f),the Fair Market Value per share of the shares that may otherwise be obtained with respect to suchGrants or to which such Grants track, as determined by the Committee as of the date determined bythe Committee to be the date of cancellation and surrender of such Grants. In the event that theconsideration offered to stockholders of the Company in any transaction described in thisSubsection 9(f) or Subsection 9(e) consists of anything other than cash, the Committee shalldetermine the fair cash equivalent of the portion of the consideration offered which is other thancash.
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     10. **General Provisions**.          (a) Transferability.               (i) Permitted Transferees. The Committee may, in its discretion, permit a Participantto transfer all or any portion of an Option, or authorize all or a portion of an Option to begranted to an Eligible Person to be on terms which permit transfer by such Participant; providedthat, in either case the transferee or transferees must be any child, stepchild, grandchild,parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptiverelationships, in each case with respect to the Participant, any person sharing the Participant’shousehold (other than a tenant or employee of the Company), a trust in which these persons havemore than fifty percent of the beneficial interest, a foundation in which these persons (or theParticipant) control the management of assets, or any other entity in which these persons (or theParticipant) own more than fifty percent of the voting interests (collectively, “PermittedTransferees”); provided further that, (X) there may be no consideration for any such transfer and(Y) subsequent transfers of Options transferred as provided above shall be prohibited exceptsubsequent transfers back to the original holder of the Option and transfers to other PermittedTransferees of the original holder. Agreements evidencing Options with respect to which suchtransferability is authorized at the time of grant must be approved by the Committee, and mustexpressly provide for transferability in a manner consistent with this Subsection 10(a)(i).               (ii) Qualified Domestic Relations Orders. An Option, Stock Appreciation Right,Restricted Stock Unit Award, Restricted Stock Award or other Award may be transferred, to aPermitted Transferee, pursuant to a domestic relations order entered or approved by a court ofcompetent jurisdiction upon delivery to the Company of written notice of such transfer and acertified copy of such order.               (iii) Other Transfers. Except as expressly permitted by Subsections 10(a)(i) and10(a)(ii), Awards shall not be transferable other than by will or the laws of descent anddistribution. Notwithstanding anything to the contrary in this Section 10, an Incentive StockOption shall not be transferable other than by will or the laws of descent and distribution.               (iv) Effect of Transfer. Following the transfer of any Award as contemplated bySubsections 10(a)(i), 10(a)(ii) and 10(a)(iii), (A) such Award shall continue to be subject to thesame terms and conditions as were applicable immediately prior to transfer, provided that the term“Participant” shall be deemed to refer to the Permitted Transferee, the recipient under a qualifieddomestic relations order, or the estate or heirs of a deceased Participant, as applicable, to theextent appropriate to enable the Participant to exercise the transferred Award in accordance withthe terms of this Plan and applicable law and (B) the provisions of the Award relating toexercisability shall continue to be applied with respect to the original Participant and, followingthe occurrence of any applicable events described therein the Awards shall be exercisable by thePermitted Transferee, the recipient under a qualified domestic relations order, or the estate orheirs of a deceased Participant, as applicable, only to the extent and for the periods that wouldhave been applicable in the absence of the transfer.
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               (v) Procedures and Restrictions. Any Participant desiring to transfer an Award aspermitted under Subsections 10(a)(i), 10(a)(ii) or 10(a)(iii) shall make application therefor inthe manner and time specified by the Committee and shall comply with such other requirements as theCommittee may require to assure compliance with all applicable securities laws. The Committeeshall not give permission for such a transfer if (A) it would give rise to short swing liabilityunder section 16(b) of the Exchange Act or (B) it may not be made in compliance with all applicablefederal, state and foreign securities laws.               (vi) Registration. To the extent the issuance to any Permitted Transferee of anyshares of Stock issuable pursuant to Awards transferred as permitted in this Subsection 10(a) isnot registered pursuant to the effective registration statement of the Company generally coveringthe shares to be issued pursuant to this Plan to initial holders of Awards, the Company shall nothave any obligation to register the issuance of any such shares of Stock to any such transferee.          (b) Taxes. The Company and any Subsidiary is authorized to withhold from any Awardgranted, or any payment relating to an Award under this Plan, including from a distribution ofStock, amounts of withholding and other taxes due or potentially payable in connection with anytransaction involving an Award, and to take such other action as the Committee may deem advisableto enable the Company and Participants to satisfy obligations for the payment of withholding taxesand other tax obligations relating to any Award. This authority shall include authority towithhold or receive Stock or other property and to make cash payments in respect thereof insatisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in thediscretion of the Committee.          (c) Changes to this Plan and Awards. The Board may amend, alter, suspend, discontinueor terminate this Plan or the Committee’s authority to grant Awards under this Plan without theconsent of stockholders or Participants, except that any amendment or alteration to this Plan,including any increase in any share limitation, shall be subject to the approval of the Company’sstockholders not later than the annual meeting next following such Board action if such stockholderapproval is required by any federal or state law or regulation or the rules of any stock exchangeor automated quotation system on which the Stock may then be listed or quoted, and the Board mayotherwise, in its discretion, determine to submit other such changes to this Plan to stockholdersfor approval; provided, however, that, without the consent of an affectedParticipant, no such Board action may materially and adversely affect the rights of suchParticipant under any previously granted and outstanding Award. The Committee may waive anyconditions or rights under, or amend, alter, suspend, discontinue or terminate any Awardtheretofore granted and any Award agreement relating thereto, except as otherwise provided in thisPlan; provided, however, that, without the consent of an affected Participant, nosuch Committee action may materially and adversely affect the rights of such Participant under suchAward.          (d) Limitation on Rights Conferred under Plan. Neither this Plan nor any action takenhereunder shall be construed as (i) giving any Eligible Person or Participant the right to continueas an Eligible Person or Participant or in the employ or service of the Company or a Subsidiary,(ii) interfering in any way with the right of the Company or a Subsidiary to terminate any EligiblePerson’s or Participant’s employment or service relationship at any time,
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(iii) giving an Eligible Person or Participant any claim to be granted any Award under thisPlan or to be treated uniformly with other Participants or employees or other service providers, or(iv) conferring on a Participant any of the rights of a stockholder of the Company unless and untilthe Participant is duly issued or transferred shares of Stock in accordance with the terms of anAward.          (e) Unfunded Status of Awards. This Plan is intended to constitute an “unfunded” planfor certain incentive awards.          (f) Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board norits submission to the stockholders of the Company for approval shall be construed as creating anylimitations on the power of the Board or a committee thereof to adopt such other incentivearrangements as it may deem desirable, including incentive arrangements and awards which do notqualify under section 162(m) of the Code. Nothing contained in this Plan shall be construed toprevent the Company or any Subsidiary from taking any corporate action which is deemed by theCompany or such Subsidiary to be appropriate or in its best interest, whether or not such actionwould have an adverse effect on this Plan or any Award made under this Plan. No employee,beneficiary or other person shall have any claim against the Company or any Subsidiary as a resultof any such action.          (g) Fractional Shares. No fractional shares of Stock shall be issued or deliveredpursuant to this Plan or any Award. The Committee shall determine whether cash, other Awards orother property shall be issued or paid in lieu of such fractional shares or whether such fractionalshares or any rights thereto shall be forfeited or otherwise eliminated.          (h) Severability. If any provision of this Plan is held to be illegal or invalid forany reason, the illegality or invalidity shall not affect the remaining provisions hereof, but suchprovision shall be fully severable and the Plan shall be construed and enforced as if the illegalor invalid provision had never been included herein. If any of the terms or provisions of thisPlan or any Award agreement conflict with the requirements of Rule 16b-3 (as those terms orprovisions are applied to Eligible Persons who are subject to section 16(b) of the Exchange Act) orsection 422 of the Code (with respect to Incentive Stock Options), then those conflicting terms orprovisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule16b-3 (unless the Board or the Committee, as appropriate, has expressly determined that the Plan orsuch Award should not comply with Rule 16b-3) or section 422 of the Code. With respect toIncentive Stock Options, if this Plan does not contain any provision required to be included hereinunder section 422 of the Code, that provision shall be deemed to be incorporated herein with thesame force and effect as if that provision had been set out at length herein; provided, further,that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot soqualify, that Option (to that extent) shall be deemed an Option not subject to section 422 of theCode for all purposes of the Plan.          (i) Governing Law. All questions arising with respect to the provisions of the Planand Awards shall be determined by application of the laws of the State of Delaware, without givingeffect to any conflict of law provisions thereof, except to the extent Delaware law is preempted byfederal law. The obligation of the Company to sell and deliver Stock hereunder
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is subject to applicable federal and state laws and to the approval of any governmentalauthority required in connection with the authorization, issuance, sale, or delivery of such Stock.          (j) Conditions to Delivery of Stock. Nothing herein or in any Award granted hereunderor any Award agreement shall require the Company to issue any shares with respect to any Award ifthat issuance would, in the opinion of counsel for the Company, constitute a violation of theSecurities Act or any similar or superseding statute or statutes, any other applicable statute orregulation, or the rules of any applicable securities exchange or securities association, as thenin effect. At the time of any exercise of an Option or Stock Appreciation Right, or at the time ofany grant of a Restricted Stock Award, Restricted Stock Unit, or other Award the Company may, as acondition precedent to the exercise of such Option or Stock Appreciation Right or settlement of anyRestricted Stock Award, Restricted Stock Unit or other Award, require from the Participant (or inthe event of his or her death, his or her legal representatives, heirs, legatees, or distributees)such written representations, if any, concerning the holder’s intentions with regard to theretention or disposition of the shares of Stock being acquired pursuant to the Award and suchwritten covenants and agreements, if any, as to the manner of disposal of such shares as, in theopinion of counsel to the Company, may be necessary to ensure that any disposition by that holder(or in the event of the holder’s death, his or her legal representatives, heirs, legatees, ordistributees) will not involve a violation of the Securities Act or any similar or supersedingstatute or statutes, any other applicable state or federal statute or regulation, or any rule ofany applicable securities exchange or securities association, as then in effect.          (k) Plan Effective Date. This Plan has been adopted by the Board and will becomeeffective upon approval of the stockholders of the Company.
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     Executed this 22nd day of March, 2007.         **ORION MARINE GROUP, INC.**           By:  /s/ Mark R. Stauffer    Name:  Mark R. Stauffer    Title:  CFO         
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