MICHAEL BAKER CORPORATION 2008 INCENTIVE COMPENSATION PLAN

Exhibit 10.1

MICHAEL BAKER CORPORATION

2008 INCENTIVE COMPENSATION PLAN

      Section 1 . Purpose . The purpose of the Michael Baker Corporation 2008 Incentive Compensation Plan (the “ Plan ”) is to provide for an incentive payment opportunity to employees of Michael Baker Corporation (the “ Company ”) and its subsidiaries, which may be earned upon the achievement of established financial performance goals. By providing a payment based upon profitability, the Company will establish rewards based on the overall performance of the Company and the individual contribution of each employee.

      Section 2 . Effective Date . The effective date of this Plan is January 1, 2008. The Plan will remain in effect from year to year (each calendar year shall be referred to herein as a “ Plan Year ”) until formally amended or terminated in writing by the Company’s Board of Directors (the “ Board ”).

      Section 3 . Administration of the Plan .

           Section 3.01 . Committee . Full power and authority to administer, construe and interpret the Plan, and any incentive program described within the Plan (any “ Incentive Program ”) shall be vested in the Compensation Committee of the Board (the “ Committee ”). The Committee may delegate to any agent as it deems appropriate to assist it with the administration of the Plan. Any determination, action or records of the Committee shall be final, conclusive and binding on all Plan Participants, as defined in Section 3.04 of the Plan, and their beneficiaries, heirs, personal representatives, executors and administrators, and upon the Company and all other persons having or claiming to have any right or interest in or under the Plan.

           Section 3.02 . Rules and Regulations . The Committee may, from time to time, establish rules, forms and procedures of general application for the administration of the Plan and each Incentive Program. The Committee shall determine the Targets and Awards, as defined in Sections 5.01 and 5.02 of the Plan, designate the employees who are to participate in the Plan and determine the Group to which a Participant is assigned, as defined in Section 4.02 of the Plan.

           Section 3.03 . Quorum . A majority of the members of the Committee shall constitute a quorum for purposes of transacting business relating to the Plan. The acts of a majority of the members present (in person, or by conference telephone) at any meeting of the Committee at which there is a quorum, or acts reduced to and approved unanimously in writing by all of the Committee members, shall be valid acts of the Committee.

           Section 3.04 . Notice of Participation . Each employee shall receive notice informing the employee of the Plan and specifying the group in which the employee is designated to participate. Designation of participation does not guarantee a participant (a “ Participant ”) that an Incentive Award will be earned, or that such Participant will continue to participate in the same group for the current Plan Year (based upon the achievement of Group qualification metrics) or for future Plan Years.

      Section 4 . Eligibility, Groups and Incentive Programs .

           Section 4.01 . Eligibility . Any employee of the Company or any wholly-owned subsidiary of the Company shall be eligible to participate in the Plan upon written designation by the Committee as provided in Section 3.04, excluding employees who are covered under a foreign government regulated bonus plan.

           Section 4.02 . Designation of Groups . Any employee who is designated by the Committee as a Participant for a Plan Year shall be a member of one of the following Groups:

With respect to a Participant who moves to or from a Group during a Plan Year, such Participant shall be treated as a member of each Group for the period of time in that Group during the Plan Year, and the actual achievement of any Performance Goals, as defined in Section 5.03 of the Plan, established with respect to participation in each Group shall be used to calculate the pro-rated Incentive Award applicable for the period of time in each Group.

           Section 4.03 . Incentive Programs . The following Incentive Programs shall be administered under the Plan:

All Group 1 Participants shall participate in the Corporate Incentive Program or the Engineering Incentive Program. All Group 2 Participants shall participate in the Project Manager Incentive Plan. All Group 3 Participants shall participate in the Discretionary Incentive Program. All Group 4 Participants shall participate in the Energy Incentive Program. Notwithstanding the foregoing, the Committee may elect to offer the discretionary bonus program as provided in Section 5.06 hereof, in lieu of any or all of such Incentive Programs.

           Section 4.04 . Termination of Employment .

               (a) Except as provided in Section 4.05 of the Plan, a Participant whose employment with the Company and all subsidiaries is terminated, either voluntarily, by mutual agreement or by involuntary termination for cause following the end of a Plan Year but prior to the payment of an Incentive Award for such Plan Year will forfeit all right to such unpaid Incentive Awards, except as otherwise determined by the Committee or its delegate; provided further that a Participant whose employment is terminated by the Company and all subsidiaries involuntarily other than for cause following the end of a Plan Year shall not forfeit all right to such unpaid Incentive Awards.

               (b) Except as provided in Section 4.05 of the Plan, a Participant whose employment with the Company and all subsidiaries is terminated voluntarily, by mutual agreement or involuntarily for cause at any time during a Plan Year shall forfeit all rights to any

Incentive Awards for the Plan Year during which termination occurs. A Participant whose employment is terminated by the Company and all subsidiaries involuntarily other than for cause on or before June 30 of any Plan Year shall forfeit all rights to any Incentive Awards for the Plan Year during which termination occurs; provided further that a Participant whose employment is terminated by the Company and all subsidiaries involuntarily other than for cause after June 30 of a Plan Year shall be entitled to a pro-rated Incentive Award for the period of employment, subject to the other terms and conditions of the Plan and the achievement of the applicable Performance Goals.

               (c) All incentive awards that are forfeited as provided in Section 4.04 (a) and (b) above shall be allocated evenly to all remaining plan participants excluding the Company’s Chief Executive Officer and the next four highest paid officers that are included within Group 1 as defined in Section 4.02 of the Plan.

           Section 4.05 . Death, Disability or Retirement . If, during a Plan Year, a Participant dies or becomes disabled, within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, or retires after attainment of at least age 55 and with at least 10 years of service with the Company and/or its subsidiaries, the Committee may, in its discretion or under such rules as it may prescribe, make a partial or full Incentive Award to the Participant for the Plan Year provided that the applicable Performance Goals were achieved.

           Section 4.06 . New Participants . New employees of the Company or any wholly-owned subsidiary of the Company hired after June 30 of a Plan Year and designated for participation will become a Group 3 Participant during such Plan Year. New employees hired on or before June 30 and designated for participation may participate (on a pro-rated basis) in any Group during such Plan Year based upon achievement of Group qualification metrics.

      Section 5 . Incentive Targets, Incentive Awards and Performance Goals .

           Section 5.01 . Incentive Targets . Each Participant under the Plan shall be assigned an incentive payment target (an “ Incentive Target ”) that shall be determined based on market competitive levels, and which may be expressed as a percentage of the Participant’s base salary or a percentage of project profits, as related to the level of achievement attained. Incentive Targets shall be determined within 30 days after the commencement of each Plan Year and approved by the Committee. The Incentive Targets for the curren