Document:

(00000107).DOC

Exhibit 10.1

AMENDED AND RESTATED

CAL DIVE INTERNATIONAL, INC.

2006 LONG TERM INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT, PURPOSE AND DURATION

1.1

Establishment.  The Company hereby establishes an incentive compensation plan, to be known as “Cal Dive International, Inc. 2006 Long Term Incentive Plan,” as set forth in this document.  The Plan permits the grant of Options, Restricted Stock and Restricted Stock  Units.

1.2

Purpose of the Plan.  The purpose of the Plan is to provide incentives to directors, corporate officers and other employees of the Company and its Affiliates by enabling them to acquire shares of common stock of the Company and to receive other compensation based on the increase in value of the common stock of the Company or certain other performance measures.  The Plan is intended to advance the best interests of the Company, its Affiliates and its stockholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional performance incentives and an opportunity to obtain or increase their proprietary interest in the Company, thereby encouraging them to continue in their employment with the Company and its Affiliates.

1.3

Duration of Authority to Make Grants Under the Plan.  No Awards may be granted under the Plan on or after December 9, 2016.  The applicable provisions of the Plan will continue in effect with respect to an Award granted under the Plan for as long as such Award remains outstanding.

ARTICLE II

DEFINITIONS

The words and phrases defined in this Article shall have the meaning set out below throughout the Plan, unless the context in which any such word or phrase appears reasonably requires a broader, narrower or different meaning.

2.1

“Affiliate” means any corporation, partnership, limited liability company or association, trust or other entity or organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company.  For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (a) to vote more than 50 percent (50%) of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or (b) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.

As amended through May 7, 2007

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2.2

“Award” means, individually or collectively, a grant under the Plan of Options, Restricted Stock and Restricted Stock Units in each case subject to the terms and provisions of the Plan.

2.3

“Award Agreement” means an agreement, including an employment, change of control or severance agreement with an Employee, that sets forth the terms and conditions applicable to an Award granted under the Plan.

2.4

“Board” means the board of directors of the Company.

2.5

“Change of Control”  shall mean:

(a)

the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 30% of the outstanding shares of the Stock; provided, however, that for purposes of this subsection (a), the following events shall not constitute a Change of Control: 

(i)

The continuing ownership by Helix Energy Solutions Group, Inc. (“Helix”)  of that number of shares of the Stock that Helix did own at the completion of the initial public offering of the Stock, provided that Helix does not thereafter increase its percentage ownership of the outstanding shares of Company Common Stock (except as otherwise permitted hereby);

(ii)

 any acquisition of Stock by a Person directly from the Company; 

(iii)

any acquisition of Stock by the Company; 

(iv)

any acquisition of Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company; or 

(v)

any acquisition of Stock by any entity pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2.5; or

(b)

individuals who, as of the date this Amended and Restated Plan is approved by the Board (the “Approval Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a director after the Approval Date through an election, or a nomination for election by the Company’s stockholders, approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or 

(c)

consummation of a reorganization, merger or consolidation, or sale or other similar disposition of all of substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, 

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(i)

Persons who were the beneficial owners of the Company’s outstanding common stock and any other securities of the Company entitled to vote generally in the election of directors immediately prior to such Business Combination continue to have collectively the direct or indirect beneficial ownership, respectively, of 50% or more of the then outstanding shares of common stock, and 50% or more of the Voting Power of the then outstanding voting securities of the corporation resulting from such Business Combination (which, for purposes of this paragraph (i) and paragraphs (ii) and (iii), shall include a corporation which as a result of such transaction controls the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries); and

(ii)

except to the extent that such ownership in the Company existed prior to the Business Combination, no Person (excluding, for the purpose of this clause, any corporation resulting from such Business Combination or any employee benefit plan or related trust of the Company or the corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 20% or more of the combined Voting Power of the then outstanding voting securities of such corporation; and 

(iii)

at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Business Combination, or, in the absence of an agreement, of the action taken by the Board approving such Business Combination; or

(d)

approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

2.6

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

2.7

“Committee” means a committee of at least two persons, who are members of the Compensation Committee of the Board and are appointed by the Compensation Committee of the Board, or, to the extent it chooses to operate as the Committee, either the Compensation Committee of the Board or the full Board.  Each member of the Committee in respect of his or her participation in any decision with respect to an Award intended to satisfy the requirements of section 162(m) of the Code must satisfy the requirements of “outside director” status within the meaning of section 162(m) of the Code; provided, however, that the failure to satisfy such requirement shall not affect the validity of the action of any committee otherwise duly authorized and acting in the matter.  As to Awards, grants or other transactions that are authorized by the  Committee and that are intended to be exempt under Rule 16b-3 under the Exchange Act, the requirements of Rule 16b-3(d)(1) under the Exchange Act with respect to committee action must also be satisfied.  For all purposes under the Plan and for so long as he is a member of the Board, the Chief Executive Officer of the Company shall be deemed to be the “Committee” with respect to Options, Restricted Stock or Restricted Stock Units granted by him pursuant to Section 4.1.

2.8

“Company” means Cal Dive International, Inc., a Delaware corporation, or any successor (by reincorporation, merger or otherwise).

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2.9

“Corporate Change” shall have the meaning ascribed to that term in Section 4.5(c).

2.10

“Disability” means as determined by the Committee in its discretion exercised in good faith, a physical or mental condition of the Holder that would entitle him to payment of disability income payments under the Company’s long term disability insurance policy or plan for employees as then in effect; or in the event that the Holder is not covered, for whatever reason under the Company’s long term disability insurance policy or plan for employees or in the event the Company does not maintain such a long term disability insurance policy, “Disability” means a permanent and total disability as defined in section 22(e)(3) of the Code.  A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Holder shall submit to an examination by such physician upon request by the Committee.

2.11

“Employee” means (a) a person employed by the Company or any Affiliate as a common law employee or (b) a person who has agreed to become a common law employee of the Company or any Affiliate and is expected to become such within six (6) months from the date of a determination made for purposes of the Plan.

2.12

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

2.13

“Fair Market Value” of the Stock as of any particular date means (1) if the Stock is traded on a stock exchange, the closing sale price of the Stock on that date as reported on the principal securities exchange on which the Stock is traded, or (2) if the Stock is traded in the over-the-counter market, the average between the high bid and low asked price on that date as reported in such over-the-counter market; provided that (a) if the Stock is not so traded, (b) if no closing price or bid and asked prices for the stock was so reported on that date or (c) if, in the discretion of the Committee, another means of determining the fair market value of a share of Stock at such date shall be necessary or advisable, the Committee may provide for another means for determining such fair market value.

2.14

“Fiscal Year” means the Company’s fiscal year.

2.15

“Holder” means a person who has been granted an Award or any person who is entitled to receive Shares under an Award.

2.16

“Minimum Statutory Tax Withholding Obligation” means the amount the Company or an Affiliate is required to withhold for federal, state and local taxes based upon the applicable minimum statutory withholding rates required by the relevant tax authorities.

2.17

“Option” means an option to purchase Stock granted pursuant to Article V.

2.18

“Option Price” shall have the meaning ascribed to that term in Section 5.4.

2.19

“Optionee” means a person who is granted an Option under the Plan.

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2.20

“Option Agreement” means a written contract, including an employment, change of control or severance agreement with an Employee, setting forth the terms and conditions of an Option.

2.21

“Period of Restriction” means the period during which Restricted Stock is subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, in its discretion), as provided in Article VI.

2.22

“Plan” means Cal Dive International, Inc. 2006 Long Term Incentive Plan, as set forth in this document and as it may be amended from time to time.

2.23

“Restricted Stock” means shares of restricted Stock issued or granted under the Plan pursuant to Article VI.

2.24

“Restricted Stock Award” means an award of restricted Stock to a Holder authorized by the Committee.

2.25

Restricted Stock Unit” means a unit credited to a Holder’s ledger account maintained by the Company pursuant to Article VII.

2.26

“Restricted Stock Unit Award” means an Award granted pursuant to Article VII.

2.27

“Retirement” means retirement in accordance with the terms of a retirement plan that is qualified under section 401(a) of the Code and maintained by the Company or an Affiliate in which the Holder is a participant.

2.28

“Section 409A” means section 409A of the Code and Department of Treasury rules and regulations issued thereunder.

2.29

“Stock” means the common stock of the Company, $.01 par value per share (or such other par value as may thereafter be stated in the Company’s certificate of incorporation).

2.30

“Substantial Risk of Forfeiture” shall have the meaning ascribed to that term in section 409A of the Code and Department of Treasury guidance issued thereunder.

2.31

“Termination of Employment” means the termination of the Award recipient’s employment relationship with the Company and all Affiliates.

2.32

“Voting Power” means the rights vested, by law or the Company’s certificate of incorporation, in the stockholders, or in one or more classes of stockholders, to vote with respect to the election of directors.

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ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1

Eligibility.  The persons who are eligible to receive Awards under the Plan are Employees and directors of the Company.  The Company will issue Awards directly to a non-employee director’s employer rather than to the director, if so instructed in writing by the non-employee director and the director’s employer.

3.2

Participation.  Subject to the terms and provisions of the Plan, the Committee, or the Chief Executive Officer as provided in Section 4.1, may, from time to time, select the Employees to whom Awards shall be granted and shall determine the nature and amount of each Award.

ARTICLE IV

GENERAL PROVISIONS RELATING TO AWARDS

4.1

Authority to Grant Awards.  The Committee may grant Awards to those Employees and directors as the Committee shall from time to time determine, under the terms and conditions of the Plan.  Subject only to any applicable limitations set out in the Plan, the number of shares of Stock or other value to be covered by any Award to be granted under the Plan shall be as determined by the Committee in its sole discretion.  However, the Chief Executive Officer of the Company (who also serves as a member of the Board and who, in this respect, functions as a single-member committee of the Board) is authorized to grant Options, Restricted Stock or Restricted Stock Units, with respect to no more than 100,000 shares of Stock per Fiscal Year, as a result of promotions of Employees and as inducements to hire prospective Employees, who will in each case not be officers of the Company subject to the provisions of Section 16 of the Exchange Act.

4.2

Dedicated Shares; Maximum Awards.  The aggregate number of shares of Stock with respect to which Awards may be granted under the Plan is 9,000,000.  The maximum number of shares of Stock with respect to which Options may be granted to an Employee during a Fiscal Year is 500,000.  The maximum number of shares of Stock with respect to which Restricted Stock Awards may be granted to an Employee during a Fiscal Year is 300,000.  The maximum number of shares of Stock with respect to which Restricted Stock Unit Awards may be granted to an Employee during a Fiscal Year may not exceed in value the Fair Market Value of 300,000 shares of Stock determined as of the date of grant.  Each of the foregoing numerical limits stated in this Section 4.2 shall be subject to adjustment in accordance with the provisions of Section 4.5.   If shares of Stock are withheld from payment of an Award to satisfy tax obligations with respect to the Award, such shares of Stock will count against the aggregate number of shares of Stock with respect to which Awards may be granted under the Plan.  If Shares are tendered in payment of an Option Price of an Option, such shares of Stock will not be added to the aggregate number of shares of Stock with respect to which Awards may be granted under the Plan.  To the extent that any outstanding Award is forfeited or cancelled for any reason prior to the issuance of Stock in payment of the Award or is settled in cash in lieu of shares of 

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Stock, the shares of Stock allocable to such portion of the Award may again be subject to an Award granted under the Plan.

4.3

Non-Transferability.  Except as specified in the applicable Award Agreements, in domestic relations court orders or as permitted in Section 5.8 hereof, Awards shall not be transferable by the Holder other than by will or under the laws of descent and distribution, and shall be exercisable, during the Holder’s lifetime, only by the Holder.  In the discretion of the Committee, any attempt to transfer an Award other than under the terms of the Plan and the applicable Award Agreement may terminate the Award.

4.4

Requirements of Law.  The Company shall not be required to sell or issue any shares of Stock under any Award if issuing those shares of Stock would constitute or result in a violation by the Holder or the Company of any provision of any law, statute or regulation of any governmental authority.  Specifically, in connection with any applicable statute or regulation relating to the registration of securities, upon exercise of any Option or pursuant to any other Award, the Company shall not be required to issue any shares of Stock unless the Committee has received evidence satisfactory to it to the effect that the Holder will not transfer the shares of Stock except in accordance with applicable law, including receipt of an opinion of counsel satisfactory to the Company to the effect that any proposed transfer complies with applicable law.  The determination by the Committee on this matter shall be final, binding and conclusive. The Company may, but shall in no event be obligated to, register any shares of Stock covered by the Plan pursuant to applicable securities laws of any country or any political subdivision.  In the event the shares of Stock issuable on exercise of an Option or pursuant to any other Award are not registered, the Company may imprint on the certificate evidencing the shares of Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law, or, should the shares of Stock be represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law.  The Company shall not be obligated to take any other affirmative action in order to cause or enable the exercise of an Option or any other Award, or the issuance of shares of Stock pursuant thereto, to comply with any law or regulation of any governmental authority.

4.5

Changes in the Company’s Capital Structure.  

(a)

The existence of outstanding Awards shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference shares ahead of or affecting the Stock or Stock rights, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its assets or business or any other corporate act or proceeding, whether of a similar character or otherwise.

(b)

If the Company shall effect a subdivision or consolidation of Stock or other capital readjustment, the payment of a Stock dividend, or other increase or reduction of the number of shares of Stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class or series and per share 

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price of Stock subject to outstanding Options or other Awards under the Plan shall be appropriately adjusted in such a manner as to entitle a Holder to receive upon exercise of an Option or other Award, for the same aggregate cash consideration, the equivalent total number and class or series of Stock the Holder would have received had the Holder exercised his or her Option or other Award in full immediately prior to the event requiring the adjustment, and (2) the number and class or series of Stock then reserved to be issued under the Plan shall be adjusted by substituting for the total number and class or series of Stock then reserved, that number and class or series of Stock that would have been received by the owner of an equal number of outstanding shares of Stock of each class or series of Stock as the result of the event requiring the adjustment.

(c)

If while unexercised Options or other Awards remain outstanding under the Plan (1) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than an entity that was wholly-owned by the Company immediately prior to such merger, consolidation or other reorganization), (2) there is a Change of Control of the Company or (3) the Company is a party to any other corporate transaction (as defined under section 424(a) of the Code and applicable Department of Treasury regulations) that is not described in clauses (1) or (2) of this sentence (each such event is referred to herein as a “Corporate Change”), then, except as otherwise provided in an Award Agreement (provided that such exceptions shall not apply in the case of a reincorporation merger), or as a result of the Committee’s effectuation of one or more of the alternatives described below, there shall be no acceleration of the time at which any Award then outstanding may be exercised or shall vest, and no later than thirty days after the approval by the Board of the Company of such Corporate Change or if such Corporate Change did not involve Board approval, then no later than thirty days after such Corporate Change, the Committee, acting in its sole and absolute discretion without the consent or approval of any Holder, shall act to effect one or more of the following alternatives, which may vary among individual Holders and which may vary among Awards held by any individual Holder (provided that, with respect to a reincorporation merger in which Holders of the Company’s ordinary shares will receive one ordinary share of the successor corporation for each ordinary share of the Company, none of such alternatives shall apply and, without Committee action, each Award shall automatically convert into a similar award of the successor corporation exercisable for the same number of ordinary shares of the successor as the Award was exercisable for ordinary shares of Stock of the Company and, provided further that no such actions are required to be taken by the Compensation Committee with respect to a Change of Control described in Section 2.5(a) or (b) hereof):

(i)

accelerate the time at which some or all of the Awards then outstanding may be exercised so that such Awards may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all such Awards that remain unexercised and all rights of Holders thereunder shall terminate;

(ii)

require the mandatory surrender to the Company by all or selected Holders of some or all of the then outstanding Awards held by such Holders (irrespective of whether such Awards are then exercisable under the provisions of 

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the Plan or the applicable Award Agreement evidencing such Award) as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Award and the Company shall pay to each such Holder an amount of cash per share equal to the excess, if any, of the per share price offered to stockholders of the Company in connection with such Corporate Change over the exercise prices under such Award for such shares or in lieu of such cash payment, the issuance of Stock or securities of an acquiring entity having a value equal to such excess;

(iii)

with respect to all or selected Holders, have some or all of their then outstanding Awards (whether vested or unvested) assumed or have a new award of a similar nature substituted for some or all of their then outstanding Awards under the Plan (whether vested or unvested) by an entity which is a party to the transaction resulting in such Corporate Change and which is then employing such Holder or which is affiliated or associated with such Holder in the same or a substantially similar manner as the Company prior to the Corporate Change, or a parent or subsidiary of such entity, provided that (A) such assumption or substitution is on a basis where the excess of the aggregate fair market value of the Stock subject to the Award immediately after the assumption or substitution over the aggregate exercise price of such Stock is equal to the excess of the aggregate fair market value of all Stock subject to the Award immediately before such assumption or substitution over the aggregate exercise price of such Stock, and (B) the assumed rights under such existing Award or the substituted rights under such new Award as the case may be will have the same terms and conditions as the rights under the existing Award assumed or substituted for, as the case may be;

(iv)

provide that the number and class or series of Stock covered by an Award (whether vested or unvested) theretofore granted shall be adjusted so that such Award when exercised shall thereafter cover the number and class or series of Stock or other securities or property (including, without limitation, cash) to which the Holder would have been entitled pursuant to the terms of the agreement or plan relating to such Corporate Change if, immediately prior to such Corporate Change, the Holder had been the holder of record of the number of shares of Stock then covered by such Award; or

(v)

make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole and absolute discretion that no such adjustment is necessary).

In effecting one or more of the alternatives immediately above, and except as otherwise may be provided in an Award Agreement, the Committee, in its sole and absolute discretion and without the consent or approval of any Holder, may accelerate the time at which some or all Awards then outstanding may be exercised.

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(d)

In the event of changes in the outstanding Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 4.5, any outstanding Award and any Award Agreements evidencing such Award shall be subject to adjustment by the Committee in its sole and absolute discretion as to the number and price of Stock or other consideration subject to such Award.  In the event of any such change in the outstanding Stock, the aggregate number of shares of Stock available under the Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive.

(e)

After a merger of one or more corporations into the Company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each Holder shall be entitled to have his Restricted Stock appropriately adjusted based on the manner in which the shares of Stock were adjusted under the terms of the agreement of merger or consolidation.

(f)

The issuance by the Company of stock of any class or series, or securities convertible into, or exchangeable for, stock of any class or series, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe for them, or upon conversion or exchange of stock or obligations of the Company convertible into, or exchangeable for, stock or other securities, shall not affect, and no adjustment by reason of such issuance shall be made with respect to, the number, class or series, or price of shares of Stock then subject to outstanding Options or other Awards.

4.6

Election Under Section 83(b) of the Code.  No Holder shall exercise the election permitted under section 83(b) of the Code with respect to any Award without the written approval of the Chief Financial Officer of the Company.  Any Holder who makes an election under section 83(b) of the Code with respect to any Award without the written approval of the Chief Financial Officer of the Company may, in the discretion of the Committee, forfeit any or all Awards granted to him or her under the Plan.

4.7

Forfeiture for Cause.  Notwithstanding any other provision of the Plan or an Award Agreement, if the Committee finds by a majority vote that a Holder, before or after his Termination of Employment (a) committed a fraud, embezzlement, theft, felony or an act of dishonesty in the course of his employment by the Company or an Affiliate which conduct damaged the Company or an Affiliate or (b) disclosed trade secrets of the Company or an Affiliate, then as of the date the Committee makes its finding, any Awards awarded to the Holder that have not been exercised by the Holder (including all Awards that have not yet vested) will be forfeited to the Company.  The findings and decision of the Committee with respect to such matter, including those regarding the acts of the Holder and the damage done to the Company, will be final for all purposes.  No decision of the Committee, however, will affect the finality of the discharge of the individual by the Company or an Affiliate.

4.8

Forfeiture Events.  The Committee may specify in an Award Agreement that the Holder’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in 

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addition to any otherwise applicable vesting or performance conditions of an Award.  Such events may include, but shall not be limited to, Termination of Employment for cause, termination of the Holder’s provision of services to the Company or its Affiliates, violation of material policies of the Company and its Affiliates, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Holder, or other conduct by the Holder that is detrimental to the business or reputation of the Company and its Affiliates.

4.9

Performance Goals for Section 162(m) Awards.  To the extent that shares of Restricted Stock or Restricted Stock Units granted under the Plan are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the vesting, grant or payment of such Awards shall be conditioned on the achievement of one or more performance goals and must satisfy the other requirements of Section 162(m) of the Code.  The performance goals pursuant to which such Awards shall vest, be granted or be paid out shall be any or a combination of the following performance measures applied to the Company, a division or a subsidiary: earnings per share; return on assets; an economic value added measure; shareholder return; earnings or earnings before interest, taxes and amortization; stock price; total shareholder return; return on equity; return on total capital; return on assets or net assets; revenue; reduction of expenses; free cash flow; income or net income; operating income or net operating income; gross profit; operating profit or net operating profit; operating margin or profit margin; return on operating revenue; return on invested capital; market segment share; customer satisfaction; or safety.  For any performance period, such performance objectives may be measured on an absolute basis or relative to a group of peer companies selected by the Committee, relative to internal goals or relative to levels attained in prior years.  The performance goals may be subject to such adjustments as are specified in advance by the Committee in accordance with Section 162(m) of the Code.

ARTICLE V

OPTIONS

5.1

Authority to Grant Options.  Subject to the terms and provisions of the Plan, the Committee (or the Chief Executive Officer to the extent provided in Section 4.1), at any time, and from time to time, may grant Options under the Plan to eligible persons in such number and upon such terms as the Committee shall determine.  

5.2

Type of Options Available.  All options granted under the Plan shall be nonqualified stock options that are not intended to satisfy the requirements of section 422 of the Code.

5.3

Option Agreement.  Each Option grant under the Plan shall be evidenced by an Option Agreement that shall specify (a)  the Option Price, (b) the duration of the Option, (c) the number of shares of Stock to which the Option pertains, (d) the exercise restrictions applicable to the Option, and (e) such other provisions as the Committee shall determine that are not inconsistent with the terms and provisions of the Plan.

5.4

Option Price.  The price at which shares of Stock may be purchased under an Option (the “Option Price”) shall not be less than 100 percent (100%) of the Fair Market Value 

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of the shares of Stock on the date the Option is granted.  Any Options granted by the Chief Executive Officer as permitted in Section 4.1 shall have a per share exercise price that is equal to the Fair Market Value of a share of Stock on the date the Option is granted.  Subject to the limitation set forth in the preceding sentences of this Section 5.4, the Committee shall determine the Option Price for each grant of an Option under the Plan.  Except as provided in Section 4.5, the Committee shall not directly or indirectly lower the Option Price of a previously granted Option.

5.5

Duration of Options.  An Option shall not be exercisable after the earlier of (i) the general term of the Option specified in Section 5.5(a), or (ii) the period of time specified herein that follows the Optionee’s death, Disability, Retirement or other Termination of Employment.  Unless the Optionee’s applicable Option Agreement specifies otherwise, an Option shall not continue to vest after the Optionee’s Termination of Employment for any reason other than the death or Disability of the Optionee.

(a)

General Term of Option.  Unless the Option Agreement specifies a shorter general term, an Option shall expire on the tenth anniversary of the date the Option is granted.

(b)

Early Termination of Option Due to Termination of Employment Other Than for Death, Disability or Retirement.  Except as may be otherwise expressly provided by the Committee in an Option Agreement, an Option shall terminate on the earlier of (1) the date of the expiration of the general term of the Option or (2) the date that is 60 days after the date of the Optionee’s Termination of Employment, whether with or without cause, for any reason other than the death, Disability or Retirement of the Optionee, during which period the Optionee shall be entitled to exercise the Option in respect of the number of shares of Stock that the Optionee would have been entitled to purchase had the Optionee exercised the Option on the date of such Termination of Employment.  The Committee shall determine whether an authorized leave of absence, absence on military or government service, or any other absence from service shall constitute a Termination of Employment.

(c)

Early Termination of Option Due to Death.  Unless the Committee specifies otherwise in the applicable Option Agreement, in the event of the Optionee’s Termination of Employment due to death before the date of expiration of the general term of the Option, the Optionee’s Option shall terminate on the earlier of the date of expiration of the general term of the Option or the first anniversary of the date of the Optionee’s death, during which period the Optionee’s executors or administrators or such persons to whom such Options were transferred by will or by the laws of descent and distribution, shall be entitled to exercise the Option in respect of the number of shares of Stock that the Optionee would have been entitled to purchase had the Optionee exercised the Option on the date of his death.

(d)

Early Termination of Option Due to Disability. Unless the Committee specifies otherwise in the applicable Option Agreement, in the event of the Termination of Employment due to Disability before the date of the expiration of the general term of the Option, the Optionee’s Option shall terminate on the earlier of the expiration of the 

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general term of the Option or the first anniversary of the date of the Termination of Employment due to Disability, during which period the Optionee shall be entitled to exercise the Option in respect of the number of shares of Stock that the Optionee would have been entitled to purchase had the Optionee exercised the Option on the date of such Termination of Employment.

(e)

Early Termination of Option Due to Retirement. Unless the Committee specifies otherwise in the applicable Option Agreement, in the event of the Optionee’s Termination of Employment due to Retirement before the date of the expiration of the general term of the Option, the Optionee’s Option shall terminate on the earlier of the expiration of the general term of the Option or the first anniversary of the date of the Termination of Employment due to Retirement, during which period the Optionee shall be entitled to exercise the Option in respect of the number of shares of Stock that the Optionee would have been entitled to purchase had the Optionee exercised the Option on the date of such Termination of Employment.

After the death of the Optionee, the Optionee’s executors, administrators or any person or persons to whom the Optionee’s Option may be transferred by will or by the laws of descent and distribution, shall have the right, at any time prior to the termination of the Option to exercise the Option, in respect to the number of all of the remaining unexercised and unexpired shares of Stock subject to the Option.

5.6

Amount Exercisable.  Each Option may be exercised at the time, in the manner and subject to the conditions the Committee specifies in the Option Agreement in its sole discretion.  An Option Agreement may specify that an Option becomes fully vested and exercisable upon a Change in Control.  Unless the Committee specifies otherwise in an applicable Option Agreement, an Option Agreement shall set forth the following terms regarding the exercise of the Option covered by the Option Agreement:

(a)

No Option granted under the Plan may be exercised until an Optionee has completed one year of continuous employment with the Company or any subsidiary of the Company following the date of grant;

(b)

Beginning on the day after the first anniversary of the date of grant, an Option may be exercised for up to 20 percent of the shares subject to the Option;

(c)

After the expiration of each succeeding anniversary date of the date of grant, the Option may be exercised for up to an additional 20 percent of the shares initially subject to the Option, so that after the expiration of the fifth anniversary of the date of grant, the Option shall be exercisable in full;

(d)

To the extent not exercised, installments shall be cumulative and may be exercised in whole or in part until the Option expires on the tenth anniversary of the date of grant.

However, the Committee, in its discretion, may change the terms of exercise so that any Option may be exercised so long as it is valid and outstanding from time to time in part or as a 

13

whole in such manner and subject to such conditions as the Committee may set.  In addition, the Committee, in its discretion, may accelerate the time in which any outstanding Option may be exercised.  However, in no event shall any Option be exercisable after the tenth anniversary of the date of the grant of the Option.

5.7

Exercise of Options.

(a)

General Method of Exercise. Subject to the terms and provisions of the Plan and an Optionee’s Option Agreement, Options may be exercised in whole or in part from time to time by the delivery of written notice in the manner designated by the Committee stating (1) that the Optionee wishes to exercise such option on the date such notice is so delivered, (2) the number of shares of Stock with respect to which the Option is to be exercised and (3) the address to which the certificate representing such shares of Stock should be mailed.  Except in the case of exercise by a third party broker as provided below, in order for the notice to be effective the notice must be accompanied by payment of the Option Price by any combination of the following: (a) cash, certified check, bank draft or postal or express money order for an amount equal to the Option Price under the Option, (b) Stock with a Fair Market Value on the date of exercise equal to the Option Price under the Option, (c) an election to make a cashless exercise through a registered broker-dealer, (d)  if provided in the Option Agreement or otherwise approved by the Committee, through a net exercise procedure whereby the Optionee surrenders the Option in exchange for that number of shares of Stock with an Aggregate Fair Market Value equal to the difference between the aggregate exercise price of the Options being surrendered and the aggregate Fair Market Value of the shares of Stock subject to the Option, or (e) any other form of payment which is acceptable to the Committee.  If Stock is used for payment by the Optionee, the aggregate Fair Market Value of the shares of Stock tendered must be equal to or less than the aggregate Option Price of the shares of Stock being purchased upon exercise of the Option, and any difference must be paid by cash, certified check, bank draft or postal or express money order payable to the order of the Company.

Whenever an Option is exercised by exchanging shares of Stock owned by the Optionee, the Optionee shall attest to the ownership of (according to procedures established by the Company) or deliver to the Company or its delegate certificates registered in the name of the Optionee representing, a number of shares of Stock legally and beneficially owned by the Optionee, free of all liens, claims, and encumbrances of every kind, accompanied by stock powers duly endorsed in blank by the record holder of the shares represented by the certificates, (with signature guaranteed by a commercial bank or trust company or by a brokerage firm having a membership on a registered national stock exchange).  The delivery of certificates upon the exercise of an Option is subject to the condition that the person exercising the Option provide the Company with the information the Company might reasonably request pertaining to exercise, sale or other disposition of an Option.

(b)

Issuance of Shares.  Subject to Section 4.4 and Section 5.7(c), as promptly as practicable after receipt of written notification and payment, in the form permitted under Section 10.3, of an amount necessary to satisfy any withholding tax liability that 

14

may result from the exercise of such Option, the Company shall deliver to the Optionee certificates for the number of shares with respect to which the Option has been exercised, issued in the Optionee's name.  Delivery of the shares shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to the Optionee, at the address specified by the Optionee.

(c)

Limitations on Exercise Alternatives.  An Option may not be exercised for a fraction of a share of Stock.

5.8

Transferability of Options.  No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than i) by will, ii) by the laws of descent and distribution, iii) pursuant to a domestic relations order, as defined in the Code, or iv) if permitted by the Committee and so provided in the Award Agreement or an amendment thereto, (i) to Immediate Family Members, (ii) to a partnership in which the Optionee and/or Immediate Family Members, or entities in which the Optionee and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which the Optionee and/or Immediate Family Members, or entities in which the Optionee and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, or (iv) to a trust for the sole benefit of the Optionee and/or Immediate Family Members. “Immediate Family Members” shall be defined as the spouse and natural or adopted children or grandchildren of the Optionee and their spouses.  Any attempted assignment, transfer, pledge, hypothecation or other disposition of Options, or levy of attachment or similar process upon Options not specifically permitted herein, shall be null and void and without effect.

5.9

No Rights as Stockholder.  An Optionee shall not have any rights as a stockholder with respect to Stock covered by an Option until he exercises the Option; and, except as otherwise provided in Section 4.5, no adjustment for dividends, or otherwise, shall be made if the record date therefor is prior to the date of such exercise.

ARTICLE VI

RESTRICTED STOCK AWARDS

6.1

Restricted Stock Awards.  The Committee (or the Chief Executive Officer to the extent provided in Section 4.1) may make Awards of Restricted Stock to eligible persons selected by it.  The amount of, the vesting and the transferability restrictions applicable to any Restricted Stock Award shall be determined by the Committee in its sole discretion.  If the Committee imposes vesting or transferability restrictions on a Holder’s rights with respect to Restricted Stock, the Committee may issue such instructions to the Company’s share transfer agent in connection therewith as it deems appropriate.  The Committee may also cause the certificate for Shares issued pursuant to a Restricted Stock Award to be imprinted with any legend which counsel for the Company considers advisable with respect to the restrictions or, should the Shares be represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the Stock as counsel for the Company considers necessary or advisable to comply with applicable law.  Restricted Stock that is 

15

intended to qualify as performance-based compensation under Section 162(m) must be granted or vest based on the achievement of performance goals as described in Section 4.9 hereof and meet the other requirements of Section 162(m) of the Code.  

6.2

Restricted Stock Award Agreement.  Each Restricted Stock Award shall be evidenced by an Award Agreement that contains any vesting, transferability restrictions and other provisions not inconsistent with the Plan as the Committee may specify.

6.3

Holder’s Rights as Stockholder.  Subject to the terms and conditions of the Plan, each recipient of a Restricted Stock Award shall have all the rights of a stockholder with respect to the shares of Restricted Stock included in the Restricted Stock Award during the Period of Restriction established for the Restricted Stock Award.  Unless otherwise provided in the Award Agreement, dividends paid with respect to Restricted Stock in cash or property other than shares of Stock or rights to acquire shares of Stock shall be paid to the recipient of the Restricted Stock Award currently.  Dividends paid in shares of Stock or rights to acquire shares of Stock shall be added to and become a part of the Restricted Stock.  During the Period of Restriction, any certificates representing the Restricted Stock or book entry ownership shall be registered in the recipient’s name and bear a restrictive legend or notation to the effect that ownership of such Restricted Stock, and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms, and conditions provided in the Plan and the applicable Restricted Stock Award Agreement.  Any such certificates shall be deposited by the recipient with the Secretary of the Company or such other officer of the Company as may be designated by the Committee, together with all stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Stock which shall be forfeited in accordance with the Plan and the applicable Restricted Stock Award Agreement.

ARTICLE VII

RESTRICTED STOCK UNIT AWARDS

7.1

Authority to Grant Restricted Stock Unit Awards.  Subject to the terms and provisions of the Plan, the Committee (or the Chief Executive Officer to the extent provided in Section 4.1), at any time, and from time to time, may grant Restricted Stock Unit Awards under the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine.  The amount of, the vesting and the transferability restrictions applicable to any Restricted Stock Unit Award shall be determined by the Committee in its sole discretion.  The Committee shall maintain a bookkeeping ledger account which reflects the number of Restricted Stock Units credited under the Plan for the benefit of a Holder.  Restricted Stock Units that are intended to qualify as performance-based compensation under Section 162(m) must be granted or vest based on the achievement of performance goals as described in Section 4.9 hereof and meet the other requirements of Section 162(m) of the Code.

7.2

Restricted Stock Unit Awards.  A Restricted Stock Unit Award shall be similar in nature to Restricted Stock Award except that no shares of Stock are actually transferred to the Holder until a later date specified in the applicable Award Agreement.  Each Restricted Stock Unit shall have a value equal to the Fair Market Value of a share of Stock.

16

7.3

Restricted Stock Unit Award Agreement.  Each Restricted Stock Unit Award shall be evidenced by an Award Agreement that contains any Substantial Risk of Forfeiture, transferability restrictions, form and time of payment provisions and other provisions not inconsistent with the Plan as the Committee may specify.

7.4

Form of Payment Under Restricted Stock Unit Award.  Payment under a Restricted Stock Unit Award shall be made in either cash or shares of Stock as specified in the Holder’s Award Agreement.

7.5

Time of Payment Under Restricted Stock Unit Award.  A Holder’s payment under a Restricted Stock Unit Award shall be made at such time as is specified in the Holder’s Award Agreement.  The Award Agreement shall specify that the payment will be made (1) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the Fiscal Year in which the Restricted Stock Unit Award payment is no longer subject to a Substantial Risk of Forfeiture or (2) at a time that is permissible under Section 409A. 

7.6

Holder’s Rights as Stockholder.  A Holder of a  Restricted Stock Unit Award shall have no rights of a stockholder with respect to the Restricted Stock Unit Award.  A Holder shall have no voting rights with respect to any Restricted Stock Unit Award.  A Holder of a Restricted Stock Unit Award may be entitled to dividend equivalent rights, if provided in the Award Agreement.

7.7

Compliance With Section 409A.  Restricted Stock Unit Awards shall be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A.

ARTICLE VIII

ADMINISTRATION

8.1

Awards.  The Plan shall be administered by the Committee or, in the absence of the Committee, the Plan shall be administered by the Board.  The members of the Committee shall serve at the discretion of the Board.  The Committee shall have full and exclusive power and authority to administer the Plan and to take all actions that the Plan expressly contemplates or are necessary or appropriate in connection with the administration of the Plan with respect to Awards granted under the Plan.

8.2

Authority of the Committee.  The Committee shall have full and exclusive power to interpret and apply the terms and provisions of the Plan and Awards made under the Plan, and to adopt such rules, regulations and guidelines for implementing the Plan as the Committee may deem necessary or proper, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of the Plan.  A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the vote of a majority of those members present at any meeting shall decide any question brought before that meeting.  Any decision or determination reduced to writing and signed by a majority of the members shall be as effective as if it had been made by a majority vote at a meeting properly called and held.  All questions of interpretation and application of the Plan, or as to award 

17

granted under the Plan, shall be subject to the determination, which shall be final and binding, of a majority of the whole Committee.  No member of the Committee shall be liable for any act or omission of any other member of the Committee or for any act or omission on his own part, including but not limited to the exercise of any power or discretion given to him under the Plan, except those resulting from his own gross negligence or willful misconduct.  In carrying out its authority under the Plan, the Committee shall have full and final authority and discretion, including but not limited to the following rights, powers and authorities, to:

(a)

determine the persons to whom and the time or times at which Awards will be made;

(b)

determine the number and exercise price of shares of Stock covered in each Award, subject to the terms and provisions of the Plan;

(c)

determine the terms, provisions and conditions of each Award, which need not be identical and need not match the default terms set forth in the Plan;

(d)

accelerate the time at which any outstanding Award will vest;

(e)

prescribe, amend and rescind rules and regulations relating to administration of the Plan; and

(f)

make all other determinations and take all other actions deemed necessary, appropriate or advisable for the proper administration of the Plan.

The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award to a Holder in the manner and to the extent the Committee deems necessary or desirable to further the Plan's objectives. Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan.  As permitted by law and the terms and provisions of the Plan, the Committee may delegate its authority as identified in this Section 8.2.

The actions of the Committee in exercising all of the rights, powers, and authorities set out in this Article VIII and all other Articles of the Plan, when performed in good faith and in its sole judgment, shall be final, conclusive and binding on all persons.  The Committee may employ attorneys, consultants, accountants, agents, and other persons, any of whom may be an Employee, and the Committee, the Company, and its officers and Board shall be entitled to rely upon the advice, opinions, or valuations of any such persons.

8.3

Decisions Binding.  All determinations and decisions made by the Committee or the Board, as the case may be, pursuant to the provisions of the Plan and all related orders and resolutions of the Committee or the Board, as the case may be, shall be final, conclusive and binding on all persons, including the Company, its stockholders, Employees, Holders and the estates and beneficiaries of Employees and Holders.

8.4

No Liability.  Under no circumstances shall the Company, the Board or the Committee incur liability for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and 

18

regardless of the form of the act in which such a claim may be brought, with respect to the Plan or the Company's, the Committee’s or the Board’s roles in connection with the Plan.

ARTICLE IX

AMENDMENT OR TERMINATION OF PLAN

9.1

Amendment, Modification, Suspension, and Termination.  Subject to Section 9.2 the Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate the Plan and any Award Agreement in whole or in part; provided, however, that, without the prior approval of the Company’s stockholders and except as provided in Section 4.5, the Committee shall not directly or indirectly lower the Option Price of a previously granted Option, and no amendment of the Plan shall be made without stockholder approval if stockholder approval is required by applicable law or stock exchange rules.

9.2

Awards Previously Granted.  Notwithstanding any other provision of the Plan to the contrary, no termination, amendment, suspension, or modification of the Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Holder holding such Award.

ARTICLE X

MISCELLANEOUS

10.1

Unfunded Plan/No Establishment of a Trust Fund.  Holders shall have no right, title, or interest whatsoever in or to any investments that the Company or any of its Affiliates may make to aid in meeting obligations under the Plan.  Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Holder, beneficiary, legal representative, or any other person.  To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.  All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts, except as expressly set forth in the Plan.  No property shall be set aside nor shall a trust fund of any kind be established to secure the rights of any Holder under the Plan.  All Holders shall at all times rely solely upon the general credit of the Company for the payment of any benefit which becomes payable under the Plan.  The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

10.2

No Employment Obligation.  The granting of any Award shall not constitute an employment contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to employ, or utilize the services of, any Holder.  The right of the Company or any Affiliate to terminate the employment of any person shall not be diminished or affected by reason of the fact that an Award has been granted to him, and nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or its 

19

Affiliates to terminate any Holder’s employment at any time or for any reason not prohibited by law.

10.3

Tax Withholding.  The Company or any Affiliate shall be entitled to deduct from other compensation payable to each Holder any sums required by federal, state or local tax law to be withheld with respect to the vesting or exercise of an Award or lapse of restrictions on an Award.  In the alternative, the Company may require the Holder (or other person validly exercising the Award) to pay such sums for taxes directly to the Company or any Affiliate in cash or by check within one day after the date of vesting, exercise or lapse of restrictions. In the discretion of the Committee, and with the consent of the Holder, the Company may reduce the number of shares of Stock issued to the Holder upon such Holder’s exercise of an Option to satisfy the tax withholding obligations of the Company or an Affiliate; provided that the Fair Market Value of the shares of Stock held back shall not exceed the Company’s or the Affiliate’s Minimum Statutory Tax Withholding Obligation.  The Committee may, in its discretion, permit a Holder to satisfy any Minimum Statutory Tax Withholding Obligation arising upon the vesting of Restricted Stock or the payout of Restricted Stock Units by delivering to the Holder of the Restricted Stock Award or Restricted Stock Unit Award payable in Stock a reduced number of shares of Stock in the manner specified herein.  If permitted by the Committee and acceptable to the Holder, at the time of vesting of shares of Restricted Stock or payout of Restricted Stock Units, the Company shall (a) calculate the amount of the Company’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation on the assumption that all such shares or units are vested, (b) reduce the number of such shares of Stock made available for delivery so that the Fair Market Value of the shares of Stock withheld on the vesting date approximates the Company’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation and (c) in lieu of the withheld shares of Stock, remit cash to the United States Treasury and other applicable governmental authorities, on behalf of the Holder, in the amount of the Minimum Statutory Tax Withholding Obligation.  The Company shall withhold only whole shares of Stock to satisfy its Minimum Statutory Tax Withholding Obligation.  Where the Fair Market Value of the withheld shares of Stock does not equal the amount of the Minimum Statutory Tax Withholding Obligation, the Company shall withhold shares of Stock with a Fair Market Value slightly less than the amount of then Minimum Statutory Tax Withholding Obligation and the Holder must satisfy the remaining minimum withholding obligation in some other manner permitted under this Section 10.3.  The withheld shares of Stock not made available for delivery by the Company shall be retained as treasury shares or will be cancelled and, in either case, the Holder’s right, title and interest in such shares of Stock shall terminate.  The Company shall have no obligation upon vesting, exercise or payout of any Award or lapse of restrictions on Restricted Stock until the Company or an Affiliate has received payment sufficient to cover the Minimum Statutory Tax Withholding Obligation with respect to that vesting, payout, exercise or lapse of restrictions.  Neither the Company nor any Affiliate shall be obligated to advise a Holder of the existence of the tax or the amount which it will be required to withhold.

10.4

Written Agreement.  Each Award shall be embodied in a written agreement or statement which shall be subject to the terms and conditions of the Plan.  The Award Agreement shall be signed by a member of the Committee on behalf of the Committee and the Company or by an executive officer of the Company, other than the Holder, on behalf of the Company, and may be signed by the Holder to the extent required by the Committee.  The Award Agreement may specify the effect of a Change of Control on the Award.  The Award Agreement may 

20

contain any other provisions that the Committee in its discretion shall deem advisable which are not inconsistent with the terms and provisions of the Plan.

10.5

Indemnification of the Committee.  The Company shall indemnify each present and future member of the Committee against, and each member of the Committee shall be entitled without further action on his or her part to indemnity from the Company for, all expenses (including attorney’s fees, the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by such member in connection with or arising out of any action, suit or proceeding in which such member may be involved by reason of such member being or having been a member of the Committee, whether or not he or she continues to be a member of the Committee at the time of incurring the expenses, including, without limitation, matters as to which such member shall be finally adjudged in any action, suit or proceeding to have been negligent in the performance of such member’s duty as a member of the Committee.  However, this indemnity shall not include any expenses incurred by any member of the Committee in respect of matters as to which such member shall be finally adjudged in any action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his duty as a member of the Committee.  In addition, no right of indemnification under the Plan shall be available to or enforceable by any member of the Committee unless, within 60 days after institution of any action, suit or proceeding, such member shall have offered the Company, in writing, the opportunity to handle and defend same at its own expense.  This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Committee and shall be in addition to all other rights to which a member of the Committee may be entitled as a matter of law, contract or otherwise.

10.6

Gender and Number.  If the context requires, words of one gender when used in the Plan shall include the other and words used in the singular or plural shall include the other.

10.7

Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

10.8

Headings.  Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms and provisions of the Plan.

10.9

Other Compensation Plans.  The adoption of the Plan shall not affect any other option, incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive compensation arrangements for Employees.

10.10

Other Awards.  The grant of an Award shall not confer upon the Holder the right to receive any future or other Awards under the Plan, whether or not Awards may be granted to similarly situated Holders, or the right to receive future Awards upon the same terms or conditions as previously granted.

21

10.11

Successors.  All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

10.12

Law Limitations/Governmental Approvals.  The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

10.13

Delivery of Title.  The Company shall have no obligation to issue or deliver evidence of title for shares of Stock issued under the Plan prior to:

(a)

obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and

(b)

completion of any registration or other qualification of the Stock under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.

10.14

Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Stock hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such shares of Stock as to which such requisite authority shall not have been obtained.

10.15

No Fractional Shares.  No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash, additional Awards, or other property shall be issued or paid in lieu of fractional shares of Stock or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

10.16

Persons Based Outside of the United States.  Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Affiliates operate or have Employees, the Committee, in its sole discretion, shall have the power and authority to:

(a)

determine which Affiliates shall be covered by the Plan;

(b)

determine which persons employed outside the United States are eligible to participate in the Plan;

(c)

modify the terms and conditions of any Award granted to persons who are employed outside the United States to comply with applicable foreign laws;

(d)

establish subplans and modify exercise procedures and other terms and procedures to the extent such actions may be necessary or advisable.  Any subplans and modifications to Plan terms and procedures established under this Section 10.16 by the Committee shall be attached to the Plan document as Appendices; and

22

(e)

take any action, before or after an Award is granted, that it deems advisable to obtain or comply with any necessary local government regulatory exemptions or approvals.

Notwithstanding the above, the Committee may not take any actions hereunder, and no Award shall be granted, that would violate any securities law or governing statute or any other applicable law.  Any income derived under the Plan shall not be treated as a part of an Employee’s regular compensation or salary for purposes of computing statutorily mandated severance benefits or other statutorily mandated benefits in foreign jurisdictions.

10.17

Waiver of Jury. Each Award Agreement shall specify that the Award recipient and the Company shall both waive a trial by jury of any or all issues arising in any action or proceeding between the parties or their successors, heirs and assigns, under or connected with the Award, the Plan, or any of  the provisions of the Award Agreement or the Plan.

10.18

Governing Law. The provisions of the Plan and the rights of all persons claiming thereunder shall be construed, administered and governed under the laws of the State of Texas, without regard to principles of conflicts of law.

·

As amended and restated by the Cal Dive International, Inc. board of directors on March 27, 2007

·

As approved by the stockholders of Cal Dive International, Inc. on May 7, 2007

23(00000172).DOC

Exhibit 10.2

INDEMNITY AGREEMENT

This INDEMNITY AGREEMENT is made as of May 7, 2007 (the “Agreement Date”), by and between Cal Dive International, Inc., a Delaware corporation (the “Corporation”), and _____________(“Indemnitee”), a resident of the State of Texas. 

In consideration of Indemnitee’s continued service after the date hereof, the Corporation and Indemnitee agree as follows: 

1.

Definitions.  As used in this Agreement: 

(a)

The term “Board” shall mean the Board of Directors of the Corporation.

(b)

The term “Change of Control” shall mean:

(i)

the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 30% of the outstanding shares of the Corporation’s Common Stock, $.01 par value per share (the “Common Stock”); provided, however, that for purposes of this subsection (i), the following events shall not constitute a Change of Control: 

(A)

The continuing ownership by Helix Energy Solutions Group, Inc. (“Helix”)  of that number of shares of the  Common Stock that Helix owned as of the completion of the initial public offering of the Common Stock, provided that Helix does not thereafter increase its percentage ownership of the outstanding shares of Common Stock (except as otherwise permitted hereby);

(B)

 any acquisition of Common Stock by a Person directly from the Corporation; 

(C)

any acquisition of Common Stock by the Corporation; 

(D)

any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any entity controlled by the Corporation; or 

(E)

any acquisition of Common Stock by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) hereof; or

(ii)

the Incumbent Board ceases for any reason to constitute at least a majority of the Board; or 

(iii)

consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation (a “Business Combination”), in each case, unless, following such Business Combination, 

1

(A)

Persons who were the beneficial owners of the outstanding Common Stock and any other securities of the Corporation entitled to vote generally in the election of directors immediately prior to such Business Combination continue to have collectively the direct or indirect beneficial ownership, respectively, of 50% or more of the then outstanding shares of common stock, and 50% or more of the Voting Power of the then outstanding voting securities of the corporation resulting from such Business Combination (which, for purposes of this paragraph (A) and paragraphs (B) and (C), shall include a corporation which as a result of such transaction controls the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries); and

(B)

except to the extent that such ownership in the Corporation  existed prior to the Business Combination, no Person (excluding, for the purpose of this clause, any corporation resulting from such Business Combination or any employee benefit plan or related trust of the Corporation or the corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 20% or more of the combined Voting Power of the then outstanding voting securities of such corporation; and 

(C)

at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Business Combination, or, in the absence of an agreement, of the action taken by the Board approving such Business Combination; or

(iv)

approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

(c)

The term “Claim” shall mean a claim related to any threatened, pending or completed action, suit or proceeding, including appeals, whether civil, criminal, administrative, arbitrative or investigative and whether made judicially or extra-judicially, or any separate issue or matter therein, as the context requires, in which Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of his Corporate Status, provided that any such action, suit or proceeding which is brought by the Indemnitee against the Corporation or directors or officers of the Corporation, other than an action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a Claim without prior approval of a majority of the Impartial Directors. 

(d)

The term “Corporate Status” shall mean the status of a person as a (i) director or officer of the Corporation or any subsidiary of the Corporation, (ii) fiduciary with respect to any employee benefit plan of the Corporation or any subsidiary of the Corporation, or (iii) director, officer, partner, employee or agent of any other corporation, partnership, joint venture, trust or other for-profit or not-for-profit entity or enterprise, if such position is or was held at the request of the Corporation, in each case whether such position was held before or after the Agreement Date.

(e)

The term “Determining Body” shall mean (i) all Impartial Directors, as long as there is at least one Impartial Director, or (ii) if there are no Impartial Directors, if a 

2

Change of Control has occurred, or if the Independent Directors so direct (regardless of whether the directors voting on such appointment are Impartial Directors), independent legal counsel  (which may be the regular outside counsel of the Corporation) designated by the Impartial Directors or, if there are no Impartial Directors, the Independent Directors. 

(f)

The term “DGCL” shall mean the Delaware General Corporation Law.

(g)

The term “Disbursing Officer” shall mean the Chairman of the Board of the Corporation or, if the Chairman of the Board is a party to the  Claim for which indemnification is being sought, any officer who is not a party to such Claim who is designated by the Chairman of the Board to be the Disbursing Officer with respect to indemnification requests related to the Claim, which designation shall be made promptly after receipt of the initial request for indemnification with respect to such Claim.

(h)

The term “Expenses” shall mean any expenses or costs including, without limitation, reasonable attorney’s fees and retainers, court costs, transcript costs, fees of experts and witnesses, and other reasonable costs and expenses incurred by the Indemnitee in connection with prosecuting or defending, or preparing to prosecute or defend, or serving as a witness with respect to, a Claim. If any of the foregoing amounts paid on behalf of Indemnitee are includible within Indemnitee’s taxable income for federal or state income tax purposes, the Corporation will reimburse Indemnitee for any taxes incurred with respect thereto by paying to Indemnitee an amount which, after taking into account taxes on such amount, equals Indemnitee’s incremental tax liability. Expenses shall not be deemed to include judgments, penalties, fines or amounts paid in settlement by an Indemnitee, and shall be determined after taking into account any amounts that have already been paid directly to the Indemnitee, or to a third party at Indemnitee’s request, either (i) pursuant to the provisions of Section 3 hereof or (ii) by another entity or enterprise of a type described in clause (iii) of Section 1(d) that relate to such Claim.

(i)

The term “Impartial Directors” shall mean the directors who are not parties to a Claim for which indemnification is being sought.

(j)

The term “Incumbent Board” shall mean the Board as of the date of the Agreement Date, provided, however, that any individual who becomes a director after the  Agreement Date whose election or appointment by the Board or  nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.

(k)

The term “Indemnifiable Costs” shall mean Expenses, judgments, fines, penalties or amounts paid in settlement that are incurred or paid by Indemnitee in connection with prosecuting or defending, or preparing to prosecute or defend a Claim, or serving as a witness with respect to a Claim, but shall not include any amounts that have already been paid directly to the Indemnitee pursuant to the provisions of Section 3 hereof.

3

(l)

The term “Independent Directors” shall mean the members of the Board that are independent directors as defined by Section 303A of the New York Stock Exchange Listed Company Manual or successor provision, or, if the Common Stock is not then quoted on the NYSE, that qualify as independent, disinterested, or a similar term as defined in the rules of the principal securities exchange or inter-dealer quotation system on which the Common Stock is then listed or quoted.

(m)

The term “Insurance Policy” shall mean, collectively, the Primary Directors’ and Officers’ Liability Policy that the Corporation has obtained from Federal Insurance Company (Chubb) and the Excess Directors’ and Officers’ Liability Policy that the Corporation has obtained from U.S. Specialty Insurance Company (HCC Global), on behalf of its directors and officers, for the policy period commencing July 1, 2006 and ending July 1, 2007, or any successor directors’ and officers’ liability insurance policy that the Corporation from time to time maintains. 

(n)

The term “Person” shall mean any individual, entity or group(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

(o)

The term “Standard of Conduct” shall mean, with respect to any Claim that is asserted, conduct by the Indemnitee that was in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, the best interest of the Corporation, and, in the case of a Claim which is, or which is related to, a criminal action or proceeding, conduct that Indemnitee had no reasonable cause to believe was unlawful. The termination of any Claim by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet the Standard of Conduct

2.

Limitation of Liability.  To the fullest extent provided by Article IX of the Amended and Restated Certificate of Incorporation of the Corporation (as in effect on the date hereof), Indemnitee shall not be liable to the Corporation or its stockholders for any breach of his fiduciary duty. If and to the extent such provisions of the Amended and Restated Certificate of Incorporation are amended to permit further limitations of liability, Indemnitee shall not be liable for any breach of his fiduciary duty to the fullest extent permitted after taking into account any such amendment.

3.

Maintenance of Insurance.  (a)  The Corporation represents and warrants that it presently maintains in full force and effect the Insurance Policy, a copy of which it has provided to the Indemnitee. Subject to Section 3(b) hereof, the Corporation hereby agrees that, so long as Indemnitee shall continue to be a director or officer of the Corporation and for any period thereafter as the Indemnitee is subject to a Claim, the Corporation shall use commercially reasonable efforts to maintain in effect for the benefit of Indemnitee one or more valid and enforceable policies of directors and officers liability insurance providing, in all respects, coverage favorably comparing to that currently provided to Indemnitee under the Insurance Policy (a “Comparable Policy”).

(b)

The Corporation shall not be required to maintain the Insurance Policy or a Comparable Policy if, in the reasonable business judgment of a majority of Independent  

4

Directors of the Corporation, either (i) the premium cost for such insurance is excessive when compared to the amount and benefits of coverage provided, or (ii) the coverage provided by such insurance is so limited by exclusions, retentions, deductibles or otherwise that there is insufficient benefit to the Corporation or its directors and officers from such insurance. 

(c)

If the Corporation does not purchase and maintain in effect the Insurance Policy or a Comparable Policy, the Corporation agrees, to the extent permitted by law, to hold harmless and indemnify Indemnitee to the full extent of the coverage that would otherwise have been provided for the benefit of Indemnitee pursuant to the Insurance Policy.

4.

Indemnification of Indemnitee.  The Corporation agrees to hold harmless and indemnify the Indemnitee as follows:

(a)

Indemnity in Connection with Claims Other than Claims by or in the Right of the Corporation.  With respect to any Claim against the Indemnitee that is not by or in the right of the Corporation,  the Corporation shall indemnify and hold harmless Indemnitee against such Indemnifiable Costs as they are actually and reasonably incurred, if the Indemnitee has met the Standard of Conduct.

(b)

Indemnification for Proceedings by or in the Right of the Corporation.  With respect to any Claim by or in the right of the Corporation, the Corporation shall indemnify and hold harmless Indemnitee against any Expenses as they are actually and reasonably incurred, if the Indemnitee has met the Standard of Conduct; provided  that no indemnification shall be made with respect to any Claim as to which the Indemnitee shall have been adjudged to be liable to the Corporation unless and to the extent that a court of competent jurisdiction determines that such indemnification shall be made. 

(c)

Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding, and without limiting, any other provision of this Agreement, to the extent that the Indemnitee is successful in whole or in part in the defense of the Claim on the merits or otherwise, the Corporation shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by the Indemnitee with respect to the Claim to the fullest extent permitted by law. For purposes of this paragraph and without limitation, the termination of any Claim by dismissal, with or without prejudice, shall be deemed to be a successful result as to such Claim.

5.

Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 4 of this Agreement, the Company shall, to the fullest extent permitted by law, and hereby does agree to indemnify and hold harmless Indemnitee against all Indemnifiable Costs as they are actually and reasonably incurred by the Indemnitee, if, by reason of his Corporate Status, he is a party to any Claim (including a Claim by or in the right of the Corporation). The phrase “to the fullest extent permitted by law” shall include, but not be limited to, (a) to the fullest extent permitted by any provision of the DGCL that authorizes or permits additional indemnification by agreement, or the corresponding provision of any amendment or replacement of such provision of the DGCL, and (b) to the fullest extent authorized by any amendments to or replacements of provisions of the DGCL that expand the extent to which a corporation may indemnify its directors and officers. Any 

5

amendment or repeal of any provision of the DGCL that limits the rights of directors or officers to indemnification shall be deemed to have prospective effect only and shall not limit or eliminate the rights of the Indemnitee hereunder with respect to any Claim involving any act, occurrence or omission, or alleged act, occurrence or omission that took place prior to the date of such amendment or repeal. 

6.

Contribution.  (a)  If, because indemnification is prohibited by virtue of the federal securities laws or an applicable court decision, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement or other Indemnifiable Costs in connection with any Claim in any threatened, pending or completed action, suit or proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in such Claim), then the Corporation shall contribute to the amount of Indemnifiable Costs actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Corporation and all officers, directors or employees of the Corporation, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Claim), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Claim arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Corporation and all officers, directors or employees of the Corporation other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Claim), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Indemnifiable Costs as well as any other equitable considerations which the law may require to be considered.  The relative fault of the Corporation and all officers, directors or employees of the Corporation, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Claim), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive. The Corporation agrees that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or any other method of allocation that does not take into account the foregoing considerations. 

(b)

The Corporation hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Corporation, other than Indemnitee, who may be jointly liable with Indemnitee.

7.

Certain Procedures.  (a)  Promptly upon becoming aware of the existence of any Claim as to which Indemnitee may be indemnified for Expenses or Indemnifiable Costs and as to which Indemnitee desires to obtain indemnification, Indemnitee shall notify the Chairman of the Board of the Corporation, but the failure to promptly notify the Chairman of the Board shall not relieve the Corporation from any obligation hereunder, except and to the extent that such failure has materially and irrevocably harmed the Corporation’s ability to defend against such Claim pursuant to Section 7(d) hereof. Upon receipt of such request, accompanied by such documentation and information as is not privileged or otherwise protected from disclosure, is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification, the Chairman of the Board shall promptly advise the members of the Board of Directors of the request and that the establishment of a Determining 

6

Body with respect thereto will be a matter to be considered at the next regularly scheduled meeting of the Board. If a meeting of the Board of Directors is not regularly scheduled within 30 calendar days of the date the Chairman of the Board receives notice of the Claim, the Chairman of the Board shall cause a special meeting of the Board of Directors to be called within such period in accordance with the provisions of the Corporation’s By-laws. The Determining Body shall be established at such regularly scheduled meeting or special meeting, as the case may be.  After the Determining Body has been established, the Chairman of the Board shall inform Indemnitee of the constitution of the Determining Body. At any time after the Determining Body has been convened, it shall have the power, but not the obligation, to determine whether or not Indemnitee has met the Standard of Conduct and, at such time the determination is made, the Determining Body shall advise Indemnitee of its determination.  The Determining Body shall make its decision as to whether the Standard of Conduct has been met by the Indemnitee no later than 30 days following the date that a final judgment has been entered, or a settlement has been agreed, of the Claim (the “Determination Deadline Date”).  If Indemnitee shall have made a good faith effort to comply with any requests of the Determining Body for relevant information related to the Claim, including reasonable requests for additional information reasonably requested by the Determining Body, any failure of the Determining Body to make a determination by the Determination Deadline Date as to whether the Standard of Conduct was met shall be deemed to be a determination that the Standard of Conduct was met by Indemnitee. 

(b)

If at any time during the period prior to the Determination Deadline Date, Indemnitee becomes aware of any relevant facts or obtains possession of documents not theretofore provided by him to the Determining Body, which facts are not privileged or otherwise protected from disclosure, and are reasonably necessary to determine whether and to what extent Indemnitee is entitled to Indemnification, Indemnitee shall promptly inform the Determining Body of such facts or documents, unless the Determining Body has obtained such facts or documents from another source. 

(c)

The Determining Body shall have no power to revoke a determination that Indemnitee met the Standard of Conduct unless Indemnitee (i) has submitted fraudulent information to the Determining Body at any time prior to the Determination Deadline Date or (ii) fails to comply with the provisions of Sections 7(a) or 7(b) hereof, including without limitation Indemnitee’s obligation to submit information or documents relevant to the Claim reasonably requested by the Determining Body prior to the Determination Deadline Date. 

(d)

In the case of any Claim not involving any proposed, threatened or pending criminal proceeding, 

(i)

the Corporation may, except as otherwise provided in this subsection (i) or in subsection (iii) below, individually or jointly with any other indemnifying party similarly notified, assume the defense thereof with counsel satisfactory to Indemnitee. If the Corporation assumes the defense of the Claim, it shall keep Indemnitee informed as to the progress of such defense so that Indemnitee may make an informed decision as to the need for separate counsel. After notice from the Corporation that it is assuming the defense of the Claim, it will not, except as specifically provided in clause (iii) below, be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense other than reasonable costs of investigation or as otherwise provided below. 

7

Indemnitee shall have the right to employ its own counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after such notice from the Corporation of its assumption of the defense shall be at the expense of Indemnitee unless (A) the employment of counsel by Indemnitee has been authorized by the Determining Body, (B) Indemnitee shall have concluded reasonably that there may be a conflict of interest between the Corporation and Indemnitee in the conduct of the defense of such action or (C) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or in the right of the Corporation or as to which Indemnitee shall have made the conclusion provided for in (B) above; 

(ii)

the Corporation shall fairly consider any proposals by Indemnitee for settlement of the Claim. If the Corporation proposes a settlement of the Claim and such settlement is acceptable to the person asserting the Claim, or the Corporation believes a settlement proposed by the person asserting the Claim should be accepted, it shall inform Indemnitee of the terms of such proposed settlement and shall fix a reasonable date by which Indemnitee shall respond. If Indemnitee agrees to such terms, he shall execute such documents as shall be necessary to make final the settlement. If Indemnitee does not agree with such terms, Indemnitee may proceed with the defense of the Claim in any manner he chooses, provided that if Indemnitee is not successful on the merits or otherwise, the Corporation’s obligation to indemnify such Indemnitee as to any Expenses or Indemnifiable Costs incurred following his disagreement with the Corporation shall be limited to the lesser of (A) the total Expenses or Indemnifiable Costs incurred by Indemnitee following his decision not to agree to such proposed settlement or (B) the amount that the Corporation would have paid pursuant to the terms of the proposed settlement. If, however, the proposed settlement would impose upon Indemnitee any Indemnifiable Cost or other charge or penalty that is not fully indemnified hereunder or any requirement to act or refrain from acting that would materially interfere with the conduct of Indemnitee’s affairs, Indemnitee may refuse such settlement and continue his defense of the Claim, if he so desires, at the Corporation’s expense in accordance with the terms and conditions of this Agreement without regard to the limitations imposed by the immediately preceding sentence. In any event, the Corporation shall not be obligated to indemnify Indemnitee for any amount paid in a settlement that the Corporation has not approved; and

(iii)

following a Change of Control, if Indemnitee is an Independent Director, he, together with the other Independent Directors, shall be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from that chosen by Indemnitees who are not Independent Directors of the Corporation (including indemnified officers of the Corporation).  The principal counsel for the Independent Directors (“Principal Counsel”) shall be determined by majority vote of the Independent Directors, and the principal counsel for the Indemnitees who are not Independent Directors (“Separate Counsel”) shall be determined by majority vote of such Indemnitees, in each case subject to the consent of the Corporation (not to be unreasonably withheld or delayed).  The obligation of the Corporation to reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, except to the extent authorized by subsection (d)(i) above.

8

(e)

In the case of any Claim involving a proposed, threatened or pending criminal proceeding, Indemnitee shall be entitled to conduct the defense of the Claim with counsel of his choice and to make all decisions with respect thereto, provided, however, that the Corporation shall not be obliged to indemnify Indemnitee for any amount paid in settlement of such a Claim unless the Corporation has approved such settlement 

(f)

Any determination by the Corporation with respect to settlement of a Claim shall be made by the Determining Body. 

(g)

All determinations and judgments made by the Determining Body hereunder shall be made in good faith. 

8.

Advancement of Expenses.  (a)  Notwithstanding any other provision of this Agreement, the Disbursing Officer shall advance all Expenses incurred by or on behalf of Indemnitee in connection with the prosecution or defense of any Claim within 30 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of the Claim.  The Disbursing Officer shall advance the amount of Expenses requested without regard to the Indemnitee’s ability to repay.  Any request for advancement of Expenses submitted by Indemnitee shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay pursuant to this Section 8 shall be unsecured and interest free.

(b)

On and after the date the Determining Body determines that the Standard of Conduct has been met, for so long as and to the extent that the Corporation is required to indemnify Indemnitee under this Agreement, the provisions of Section 8(a) hereof shall continue to apply except that (i) no undertaking shall be required of Indemnitee and (ii) such provisions shall apply to all Indemnifiable Costs and any amount of indemnification ordered to be paid to him by a court. 

9.

Enforcement.  (a)  The rights provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction.  

(b)

If Indemnitee seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Corporation, and shall be indemnified by the Corporation against, any and all expenses actually and reasonably incurred by him in connection with such proceeding, but only if  it shall be determined, in whole or in part, that Corporation is or was in breach of this Agreement or if Indemnitee is successful in whole or in part on any claim Indemnitee asserts in such proceeding. Otherwise, the expenses incurred by Indemnitee in connection with such judicial adjudication shall be borne by the Indemnitee. 

(c)

In any judicial proceeding described in this Section 9, the Corporation shall bear the burden of proving that Indemnitee is not entitled to the relief sought. 

9

10.

Corporation Demand that Indemnitee make Claim for Indemnification from Other Entity.  If the Claim against Indemnitee relates to a Corporate Status that he holds for another entity or enterprise that is described in clause (iii) of Section 1(d), and if Indemnitee is or may be entitled to indemnification with respect to such Claim from such entity or enterprise, Indemnitee shall following a request from the Corporation that he do so, apply to such entity or enterprise for indemnification with respect to the Claim. 

11.

Saving Clause.  If any provision of this Agreement is determined by a court having jurisdiction over the matter to violate or conflict with applicable law, the court shall be empowered to modify or reform such provision so that, as modified or reformed, such provision provides the maximum indemnification permitted by law and such provision, as so modified or reformed, and the balance of this Agreement, shall be applied in accordance with their terms. Without limiting the generality of the foregoing, if any portion of this Agreement shall be invalidated on any ground, the Corporation shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by law with respect to that portion that has been invalidated. 

12.

Non-Exclusivity.  (a)  The indemnification and advancement of Expenses provided by or granted pursuant to this Agreement shall not be deemed exclusive of any other rights to which Indemnitee is or may become entitled under any statute, certificate of incorporation, by-law, authorization of stockholders or directors, agreement, or otherwise. 

(b)

It is the intent of the Corporation by this Agreement to indemnify and hold harmless Indemnitee to the fullest extent permitted by law, so that if applicable law would permit the Corporation to provide broader indemnification rights than are currently permitted, the Corporation shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law notwithstanding that the other terms of this Agreement would provide for lesser indemnification. 

13.

Confidentiality.  The Corporation and Indemnitee shall keep confidential to the extent permitted by law and their fiduciary obligations all information and determinations provided pursuant to or arising out of the operations of this Agreement and the Corporation and Indemnitee shall instruct its or his agents and employees to do likewise.

14.

Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall constitute an original but all of which taken together shall be deemed to constitute a single instrument 

15.

Applicable Law.  This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware. 

16.

Successors and Assigns.  This Agreement shall be binding upon Indemnitee and upon the Corporation, its successors and assigns, and shall inure to the benefit of Indemnitee’s heirs, personal representatives, and assigns and to the benefit of the Corporation, its successors and assigns. 

17.

Amendment.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless made in writing signed by the Corporation and Indemnitee.  

10

Notwithstanding any amendment, modification, termination or cancellation of this Agreement or any portion hereof, Indemnitee shall be entitled to indemnification in accordance with the provisions hereof with respect to any acts or omissions of Indemnitee which occur prior to such amendment, modification, termination or cancellation. 

18.

Gender.  All pronouns and variations thereof used in this Agreement shall be deemed to refer to the masculine, feminine or neuter gender, singular or plural, as the identity of the person, persons, entity or entities referred to may require.

19.

Acknowledgments.  (a)  The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Indemnitee to serve or continue to serve as a director or officer of the Corporation, and acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve or in continuing to serve as a director or officer of the Corporation.

(b)

Both the Corporation and Indemnitee acknowledge that in certain instances, Federal law or public policy may override applicable state law and prohibit the Corporation from indemnifying its directors and officers under this Agreement or otherwise. For example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Corporation has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Corporation’s right under public policy to indemnify Indemnitee.

20.

Exceptions.  Notwithstanding any other provision herein to the contrary, the Corporation shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee:

(a)

for expenses or the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute; or

(b)

in respect of remuneration paid to the Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law.

11

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of the date and year first above written. 

			
	 

	CAL DIVE INTERNATIONAL, INC.

	 

	 
	 

	 

	 
	 

	 

	By:

	 

	 

	 
	Quinn J. Hebert

President and Chief Executive Officer

		
	 

	 

	 

	 

	 

	 

	 

	 

	 

	_______________________

	 

	Indemnitee

12

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