UNIT CORPORATION

Long Term Incentive Plan

1.Purpose. The purpose of the Unit Corporation Long Term Incentive Plan (the
“Plan”) is to provide a means through which (a) Unit Corporation, a Delaware
corporation (the “Company”), and its Affiliates may attract, retain and motivate
qualified persons as employees, directors and consultants, thereby enhancing the
profitable growth of the Company and its Affiliates and (b) persons upon whom
the responsibilities of the successful administration and management of the
Company and its Affiliates rest, and whose present and potential contributions
to the welfare of the Company and its Affiliates are of importance, can acquire
and maintain stock ownership or awards the value of which is tied to the
performance of the Company, thereby strengthening their concern for the welfare
of the Company and its Affiliates. Accordingly, the Plan provides for the grant
of Options, SARs, Restricted Stock, Restricted Stock Units, Stock Awards,
Dividend Equivalents, Other Stock-Based Awards, Cash Awards, Performance Awards,
Substitute Awards, or any combination of the foregoing, as determined by the
Committee in its sole discretion.
2.Definitions. For purposes of the Plan, the following terms shall be defined as
set forth below:
(a) “Affiliate” means any Person that, 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
Person, shall mean the possession, directly or indirectly, of the power (i) to
vote more than 50% of the securities having ordinary voting power for the
election of directors of such Person or (ii) to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract, or otherwise.
(b)“ASC Topic 718” means the Financial Accounting Standards Board Accounting
Standards Codification Topic 718, Compensation – Stock Compensation, as amended
or any successor accounting standard.
(c)“Award” means any Option, SAR, Restricted Stock, Restricted Stock Unit, Stock
Award, Dividend Equivalent, Other Stock-Based Award, Cash Award, Performance
Award or Substitute Award, or any combination of the foregoing, together with
any other right or interest, granted under the Plan.
(d)“Award Agreement” means any written instrument (including any employment,
severance or change in control agreement) that sets forth the terms, conditions,
restrictions and/or limitations applicable to an Award which may, in the
discretion of the Company, be transmitted electronically to any Participant.
Each Award Agreement shall be subject to the terms and conditions of the Plan.
(e)“Board” means the Board of Directors of the Company.
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(f)“Cash Award” means an Award denominated in cash granted under Section 6(i).
(g)“Change in Control” means, except as otherwise provided in an Award
Agreement, the occurrence of any of the following events after the Effective
Date:
(i)A “change in the ownership” of the Company within the meaning of Treasury
Regulation § 1.409A-3(i)(5)(v), whereby any one person, or more than one person
acting as a “group” (for purposes of this Section 2(g)(i), as such term is
defined in Treasury Regulation § 1.409A-3(i)(5)(v)(B)), acquires ownership of
stock in the Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power
of the stock of the Company;
(ii)A “change in the effective control” of the Company within the meaning of
Treasury Regulation § 1.409A-3(i)(5)(vi), whereby either (A) any one person, or
more than one person acting as a “group” (for purposes of this Section 2(g)(ii),
as such term is defined in Treasury Regulation § 1.409A-3(i)(5)(vi)(D)),
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the stock of the
Company; or (B) a majority of the members of the Board are replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or
election; or
(iii)A “change in the ownership of a substantial portion” of the Company’s
assets within the meaning of Treasury Regulation § 1.409A-3(i)(5)(vii), whereby
any one person, or more than one person acting as a “group” (for purposes of
this Section 2(g)(iii), as such term is defined in Treasury Regulation §
1.409A-3(i)(5)(vii)(C)), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets of the Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all the assets of the Company
immediately prior to such acquisition or acquisitions.
The preceding provisions of this Section 2(g) are intended to merely summarize
the provisions of Treasury Regulation § 1.409A-3(i)(5) and, to the extent that
the preceding provisions of this Section 2(g) do not incorporate fully all of
the provisions (or are otherwise inconsistent with the provisions) of Treasury
Regulation § 1.409A-3(i)(5), then the relevant provisions of such Treasury
Regulation shall control.

(h)“Change in Control Price” means the amount determined in the following clause
(i), (ii), (iii), (iv) or (v), whichever the Committee determines is applicable,
as follows: (i) the price per share offered to stockholders of the Company in
any merger or consolidation; (ii) the per share Fair Market Value of the Stock
immediately before the Change in Control or other event without regard to assets
sold in the Change in Control or other event and assuming the Company has
received the consideration paid for the assets in the case of a sale of the
assets; (iii) the amount distributed per share of Stock in a dissolution
transaction; (iv) the price per share offered to stockholders of the Company in
any tender offer or exchange offer whereby a Change in Control or other event
takes place; or (v) if such Change in Control or other
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event occurs other than pursuant to a transaction described in clauses (i),
(ii), (iii), or (iv) of this Section 2(h), the value per share of the Stock that
may otherwise be obtained with respect to such Awards or to which such Awards
track, as determined by the Committee as of the date determined by the Committee
to be the date of cancellation and surrender of such Awards. In the event that
the consideration offered to stockholders of the Company in any transaction
described in this Section 2(h) or in Section 8(e) consists of anything other
than cash, the Committee shall determine the fair cash equivalent of the portion
of the consideration offered which is other than cash and such determination
shall be binding on all affected Participants to the extent applicable to Awards
held by such Participants.
(i)“Code” means the Internal Revenue Code of 1986, as amended from time to time,
including the guidance and regulations promulgated thereunder and successor
provisions, guidance and regulations thereto.
(j)“Committee” means a committee of two or more directors designated by the
Board to administer the Plan, unless no such committee exists, in which case,
“Committee” shall refer to the Board.
(k)“Dividend Equivalent” means a right, granted to an Eligible Person under
Section 6(g), to receive cash, Stock, other Awards or other property equal in
value to dividends paid with respect to a specified number of shares of Stock,
or other periodic payments.
(l)“Effective Date” means September 3, 2020.
(m)“Eligible Person” means any individual who, as of the date of grant of an
Award, is an officer or employee of the Company or of any of its Affiliates, and
any other individual who provides services to the Company or any of its
Affiliates, including directors of the Company. An employee on leave of absence
may be an Eligible Person.
(n)“Fair Market Value” of a share of Stock means, as of any specified date, the
amount determined by the Committee in its discretion in such manner as it deems
appropriate, taking into account all factors the Committee deems appropriate,
including the Nonqualified Deferred Compensation Rules. Notwithstanding this
definition of Fair Market Value, with respect to one or more Award types, or for
any other purpose for which the Committee must determine the Fair Market Value
under the Plan, the Committee may elect to choose a different measurement date
or methodology for determining Fair Market Value so long as the determination is
consistent with the Nonqualified Deferred Compensation Rules and all other
applicable laws and regulations.
(o)“ISO” means an Option intended to be and designated as an “incentive stock
option” within the meaning of Section 422 of the Code.
(p)“Nonqualified Deferred Compensation Rules” means the limitations or
requirements of Section 409A of the Code, as amended from time to time,
including the guidance and regulations promulgated thereunder and successor
statutes, guidance and regulations thereto.
(q)“Nonstatutory Option” means an Option that is not an ISO.
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(r)“Option” means a right, granted to an Eligible Person under Section 6(b), to
purchase Stock at a specified price during specified time periods, which may
either be an ISO or a Nonstatutory Option.
(s)“Other Stock-Based Award” means an Award granted to an Eligible Person under
Section 6(h).
(t)“Participant” means an individual who has been granted an Award under the
Plan that remains outstanding, including an individual who is no longer an
Eligible Person.
(u)“Performance Award” means a right granted under Section 6(k) hereof to
receive an Award based upon performance conditions specified by the Committee.
(v)“Person” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
governmental entity or other entity.
(w)“Qualifying Public Offering” shall mean the first firm commitment
underwritten public offering of Stock for cash where the shares of Stock
registered under the Securities Act are listed on a national securities
exchange.
(x)“Restricted Stock” means Stock granted to an Eligible Person under Section
6(d) that is subject to certain restrictions and to a risk of forfeiture.
(y)“Restricted Stock Unit” means a right, granted to an Eligible Person under
Section 6(e), to receive Stock, cash or a combination thereof at the end of a
specified period.
(z)“SAR” means a stock appreciation right granted to an Eligible Person under
Section 6(c).
(aa)“Securities Act” means the Securities Act of 1933, as amended from time to
time, including the guidance, rules and regulations promulgated thereunder and
successor statutes, guidance, rules and regulations thereto.
(bb) “Stock” means the Company’s common stock, par value $0.20 per share, and
such other securities as may be substituted (or re-substituted) for Stock
pursuant to Section 8.
(cc) “Stock Award” means unrestricted shares of Stock granted to an Eligible
Person under Section 6(f).
(dd) “Substitute Award” means an Award granted under Section 6(j).
3.Administration.
(a)Authority of the Committee. The Plan shall be administered by the Committee
except to the extent the Board elects to administer the Plan, in which case
references herein to the “Committee” shall be deemed to include references to
the “Board.” Subject to the
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express provisions of the Plan and other applicable laws, the Committee shall
have the authority, in its sole and absolute discretion, to:
(i)designate Eligible Persons as Participants;
(ii)determine the type or types of Awards to be granted to an Eligible Person;
(iii)determine the number of shares of Stock or amount of cash to be covered by
Awards;
(iv)determine the terms and conditions of any Award, including whether, to what
extent and under what circumstances Awards may be vested, settled, exercised,
cancelled or forfeited (including conditions based on continued employment or
service requirements or the achievement of one or more performance goals);
(v)modify, waive or adjust any term or condition of an Award that has been
granted, which may include the acceleration of vesting, waiver of forfeiture
restrictions, modification of the form of settlement of the Award (for example,
from cash to Stock or vice versa), early termination of a performance period, or
modification of any other condition or limitation regarding an Award;
(vi)determine the treatment of an Award upon a termination of employment or
other service relationship;
(vii)impose a holding period with respect to an Award or the shares of Stock
received in connection with an Award;
(viii)interpret and administer the Plan and any Award Agreement;
(ix)correct any defect, supply any omission or reconcile any inconsistency in
the Plan, in any Award, or in any Award Agreement;
(x)provide that the payment of any Award or benefit hereunder is made in full
compliance with the Nonqualified Deferred Compensation Rules, to the extent
applicable; and
(xi)make any other determination and take any other action that the Committee
deems necessary or desirable for the administration of the Plan.
The express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. Any action of the Committee shall be final,
conclusive and binding on all Persons, including the Company, its Affiliates,
stockholders, Participants, beneficiaries, and permitted transferees under
Section 7(a) or other Persons claiming rights from or through a Participant.
(b)Delegation of Authority. The Committee may delegate any or all of its powers
and duties under the Plan to a subcommittee of directors or to any officer of
the Company, including the power to perform administrative functions and grant
Awards; provided, however, that such delegation does not violate state or
corporate law. Upon any such delegation,
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all references in the Plan to the “Committee,” other than in Section 8, shall be
deemed to include any subcommittee or officer of the Company to whom such powers
have been delegated by the Committee. Any such delegation shall not limit the
right of such subcommittee members or such an officer to receive Awards;
provided, however, that such subcommittee members and any such officer may not
grant Awards to himself or herself or a member of the Board, or take any action
with respect to any Award previously granted to himself or herself or a member
of the Board. The Committee may also appoint agents who are not executive
officers of the Company or members of the Board to assist in administering the
Plan.
(c)Limitation of Liability. The Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the Company or any of its
Affiliates, the Company’s legal counsel, independent auditors, consultants or
any other agents assisting in the administration of the Plan. Members of the
Committee and any officer or employee of the Company or any of its Affiliates
acting at the direction or on behalf of the Committee shall not be personally
liable for any action or determination taken or made in good faith with respect
to the Plan, and shall, to the fullest extent permitted by law, be indemnified
and held harmless by the Company with respect to any such action or
determination.
(d)Participants in Non-U.S. Jurisdictions. Notwithstanding any provision of the
Plan to the contrary, to comply with applicable laws in countries other than the
United States in which the Company or any of its Affiliates operates or has
employees, directors or other service providers from time to time, the
Committee, in its sole discretion, shall have the power and authority to: (i)
determine which of the Company’s Affiliates shall be covered by the Plan; (ii)
determine which Eligible Persons outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to Eligible Persons outside the United States to comply with applicable
foreign laws; (iv) establish sub-plans and modify exercise procedures and other
terms and procedures, to the extent such actions may be necessary or advisable
(any such sub-plans and/or modifications shall be attached to the Plan as
appendices), provided, however, that no such sub-plans and/or modifications
shall increase the share limitations contained in Section 4(a); and (v) take any
action, before or after an Award is granted, that it deems advisable to comply
with any applicable governmental regulatory exemptions or approval.
4.Stock Subject to Plan.
(a)Number of Shares Available for Delivery. Subject to adjustment in a manner
consistent with Section 8, 903,226 shares of Stock are reserved and available
for delivery with respect to Awards, and such total shall be available for the
issuance of shares upon the exercise of ISOs.
(b)Application of Limitation to Grants of Awards. Subject to Section 4(c), no
Award may be granted if the number of shares of Stock that may be delivered in
connection with such Award exceeds the number of shares of Stock remaining
available under the Plan minus the number of shares of Stock issuable in
settlement of or relating to then-outstanding Awards. The Committee may adopt
reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or Substitute Awards)
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and make adjustments if the number of shares of Stock actually delivered differs
from the number of shares previously counted in connection with an Award.
(c)Availability of Shares Not Delivered under Awards. If all or any portion of
an Award expires or is cancelled, forfeited, exchanged, settled in cash or
otherwise terminated, the shares of Stock subject to such Award (including (i)
shares forfeited with respect to Restricted Stock; (ii) the number of shares
withheld or surrendered to the Company in payment of any exercise or purchase
price of an Award or taxes relating to Awards; and (iii) shares that were
subject to an Option or SAR but were not issued or delivered as a result of net
settlement or net exercise of such Option or SAR) shall not be considered
“delivered shares” under the Plan, shall be available for delivery with respect
to Awards, and shall no longer be considered issuable or related to outstanding
Awards for purposes of Section 4(b). If an Award may be settled only in cash,
such Award need not be counted against any share limit under this Section 4.
(d)Stock Offered. The shares of Stock to be delivered under the Plan shall be
made available from (i) authorized but unissued shares of Stock; (ii) Stock held
in the treasury of the Company; or (iii) previously issued shares of Stock
reacquired by the Company.
5.Eligibility. Awards may be granted under the Plan only to Eligible Persons.
6.Specific Terms of Awards.
(a)General. Awards may be granted on the terms and conditions set forth in this
Section 6. Awards granted under the Plan may, in the discretion of the
Committee, be granted either alone, in addition to, or in tandem with any other
Award. In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section 10), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine. To the extent provided in an Award
Agreement, the Committee may exercise its discretion to reduce or increase the
amounts payable under any Award.
(b)Options. The Committee is authorized to grant Options, which may be
designated as either ISOs or Nonstatutory Options, to Eligible Persons on the
following terms and conditions:
(i)Exercise Price. Each Award Agreement evidencing an Option shall state the
exercise price per share of Stock (the “Exercise Price”) established by the
Committee; provided, however, that except as provided in Section 6(j) or in
Section 8, the Exercise Price of an Option shall not be less than the greater of
(A) the par value per share of the Stock or (B) 100% of the Fair Market Value
per share of the Stock as of the date of grant of the Option (or in the case of
an ISO granted to an individual who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or its parent
or any of its subsidiaries, 110% of the Fair Market Value per share of the Stock
on the date of grant).
(ii)Time and Method of Exercise; Other Terms. The Committee shall determine the
methods by which the Exercise Price may be paid or deemed to be paid, the form
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of such payment, including cash or cash equivalents, Stock (including previously
owned shares or through a cashless exercise, i.e., “net settlement”, a
broker-assisted exercise, or other reduction of the amount of shares otherwise
issuable pursuant to the Option), other Awards or awards granted under other
plans of the Company or any Affiliate, other property, or any other legal
consideration the Committee deems appropriate (including notes or other
contractual obligations of Participants to make payment on a deferred basis),
the methods by or forms in which Stock will be delivered or deemed to be
delivered to Participants, including the delivery of Restricted Stock subject to
Section 6(d), and any other terms and conditions of any Option. In the case of
an exercise whereby the Exercise Price is paid with Stock, such Stock shall be
valued based on the Stock’s Fair Market Value as of the date of exercise. No
Option may be exercisable for a period of more than ten years following the date
of grant of the Option (or in the case of an ISO granted to an individual who
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its parent or any of its subsidiaries, for a
period of more than five years following the date of grant of the ISO).
(iii)ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code. ISOs may only be
granted to Eligible Persons who are employees of the Company or employees of a
parent or any subsidiary corporation of the Company. Except as otherwise
provided in Section 8, no term of the Plan relating to ISOs (including any SAR
in tandem therewith) shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to disqualify
either the Plan or any ISO under Section 422 of the Code, unless the Participant
has first requested the change that will result in such disqualification. ISOs
shall not be granted more than ten years after the earlier of the adoption of
the Plan or the approval of the Plan by the stockholders of the Company.
Notwithstanding the foregoing, to the extent that the aggregate Fair Market
Value of shares of Stock subject to an ISO and the aggregate Fair Market Value
of shares of stock of any parent or subsidiary corporation (within the meaning
of Sections 424(e) and (f) of the Code) of the Company subject to any other
incentive stock options of the Company or a parent or subsidiary corporation
(within the meaning of Sections 424(e) and (f) of the Code) of the Company that
are exercisable for the first time by a Participant during any calendar year
exceeds $100,000, or such other amount as may be prescribed under Section 422 of
the Code, such excess shall be treated as Nonstatutory Options in accordance
with the Code. As used in the previous sentence, Fair Market Value shall be
determined as of the date the ISO is granted. If a Participant shall make any
disposition of shares of Stock issued pursuant to an ISO under the circumstances
described in Section 421(b) of the Code (relating to disqualifying
dispositions), the Participant shall notify the Company of such disposition
within the time provided to do so in the applicable award agreement.
(c)SARs. The Committee is authorized to grant SARs to Eligible Persons on the
following terms and conditions:
(i)Right to Payment. An SAR is a right to receive, upon exercise thereof, an
amount equal to the product of (A) the excess of (1) the Fair Market Value of
one share of Stock on the date of exercise over (2) the grant price of the SAR
as determined by the Committee and (B) the number of shares of Stock subject to
the exercise of the SAR.
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(ii)Grant Price. Each Award Agreement evidencing an SAR shall state the grant
price per share of Stock established by the Committee; provided, however, that
except as provided in Section 6(j) or in Section 8, the grant price per share of
Stock subject to an SAR shall not be less than the greater of (A) the par value
per share of the Stock or (B) 100% of the Fair Market Value per share of the
Stock as of the date of grant of the SAR.
(iii)Method of Exercise and Settlement; Other Terms. The Committee shall
determine the form of consideration payable upon settlement, the method by or
forms in which Stock (if any), cash or a combination thereof, as determined by
the Committee in its sole discretion, will be delivered or deemed to be
delivered to Participants, and any other terms and conditions of any SAR. SARs
may be either free-standing or granted in tandem with other Awards; provided,
that SARs granted in tandem with an Incentive Stock Option shall be subject to
the limitations, if any, imposed by the Code with respect to Incentive Stock
Options. No SAR may be exercisable for a period of more than ten years following
the date of grant of the SAR
(iv)Rights Related to Options. An SAR granted in connection with an Option shall
entitle a Participant, upon exercise, to surrender that Option or any portion
thereof, to the extent unexercised, and to receive payment of an amount
determined by multiplying (A) the difference obtained by subtracting the
Exercise Price with respect to a share of Stock specified in the related Option
from the Fair Market Value of a share of Stock on the date of exercise of the
SAR, by (B) the number of shares as to which that SAR has been exercised. The
Option shall then cease to be exercisable to the extent surrendered. SARs
granted in connection with an Option shall be subject to the terms and
conditions of the Award Agreement governing the Option, which shall provide that
the SAR is exercisable only at such time or times and only to the extent that
the related Option is exercisable and shall not be transferable except to the
extent that the related Option is transferrable.
(d)Restricted Stock. The Committee is authorized to grant Restricted Stock to
Eligible Persons on the following terms and conditions:
(i)Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the
Committee may impose. Except as provided in Section 7(a)(iii) and Section
7(a)(iv), during the restricted period applicable to the Restricted Stock, the
Restricted Stock may not be sold, transferred, pledged, hedged, hypothecated,
margined or otherwise encumbered by the Participant.
(ii)Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Committee will provide that any cash dividends paid on a share of
Restricted Stock be (A) automatically reinvested in additional shares of
Restricted Stock; (B) applied to the purchase of additional Awards; or (C)
deferred without interest to the date of vesting of the associated Award of
Restricted Stock. Stock distributed in connection with a Stock split or Stock
dividend, and other property (other than cash) distributed as a dividend, shall
be subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.
(e)Restricted Stock Units. The Committee is authorized to grant Restricted Stock
Units to Eligible Persons on the following terms and conditions:
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(i)Award and Restrictions. Restricted Stock Units shall be subject to such
restrictions (which may include a risk of forfeiture) as the Committee may
impose.
(ii)Settlement. Settlement of vested Restricted Stock Units shall occur upon
vesting or upon expiration of the deferral period specified for such Restricted
Stock Units by the Committee (or, if permitted by the Committee, as elected by
the Participant). Restricted Stock Units shall be settled by delivery of (A) a
number of shares of Stock equal to the number of Restricted Stock Units for
which settlement is due, or (B) cash in an amount equal to the Fair Market Value
of the specified number of shares of Stock equal to the number of Restricted
Stock Units for which settlement is due, or a combination thereof, as determined
by the Committee at the date of grant or thereafter.
(f)Stock Awards. The Committee is authorized to grant Stock Awards to Eligible
Persons as a bonus, as additional compensation, or in lieu of cash compensation
any such Eligible Person is otherwise entitled to receive, in such amounts and
subject to such other terms as the Committee in its discretion determines to be
appropriate.
(g)Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Persons, entitling any such Eligible Person to receive
cash, Stock, other Awards, or other property equal in value to dividends or
other distributions paid with respect to a specified number of shares of Stock.
Dividend Equivalents may be awarded on a free-standing basis or in connection
with another Award (other than an Award of Restricted Stock or a Stock Award).
The Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or at a later specified date and, if distributed at a later date,
may be deemed to have been reinvested in additional Stock, Awards, or other
investment vehicles or accrued in a bookkeeping account without interest, and
subject to such restrictions on transferability and risks of forfeiture, as the
Committee may specify. With respect to Dividend Equivalents granted in
connection with another Award, such Dividend Equivalents shall be subject to the
same restrictions and risk of forfeiture as the Award with respect to which the
dividends accrue and shall not be paid unless and until such Award has vested
and been earned.
(h)Other Stock-Based Awards. The Committee is authorized, subject to limitations
under applicable law, to grant to Eligible Persons such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock, as deemed by the Committee to be
consistent with the purposes of the Plan, including convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock, purchase
rights for Stock, Awards with value and payment contingent upon performance of
the Company or any other factors designated by the Committee, and Awards valued
by reference to the book value of Stock or the value of securities of, or the
performance of, specified Affiliates of the Company. The Committee shall
determine the terms and conditions of such Other Stock-Based Awards. Stock
delivered pursuant to an Other-Stock Based Award in the nature of a purchase
right granted under this Section 6(h) shall be purchased for such consideration,
paid for at such times, by such methods, and in such forms, including cash,
Stock, other Awards, or other property, as the Committee shall determine.
(i)Cash Awards. The Committee is authorized to grant Cash Awards, on a
free-standing basis or as an element of, a supplement to, or in lieu of any
other Award under the
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Plan to Eligible Persons in such amounts and subject to such other terms as the
Committee in its discretion determines to be appropriate.
(j)Substitute Awards. Awards may be granted in substitution or exchange for any
other Award granted under the Plan or under another plan of the Company or an
Affiliate or any other right of an Eligible Person to receive payment from the
Company or an Affiliate. Awards may also be granted under the Plan in
substitution for awards held by individuals who become Eligible Persons as a
result of a merger, consolidation or acquisition of another entity or the assets
of another entity by or with the Company or an Affiliate. Such Substitute Awards
referred to in the immediately preceding sentence that are Options or SARs may
have an exercise price that is less than the Fair Market Value of a share of
Stock on the date of the substitution if such substitution complies with the
Nonqualified Deferred Compensation Rules and other applicable laws.
(k)Performance Awards. The Committee is authorized to designate any of the
Awards granted under the foregoing provisions of this Section 6 as Performance
Awards.
(i)Performance Goals Generally. The performance conditions for such Performance
Awards shall consist of one or more business criteria or individual performance
criteria and a targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this Section 6(k).
The Committee may determine that such Performance Awards shall be granted,
exercised, vested and/or settled upon achievement of any one performance
condition or that two or more performance conditions must be achieved as a
condition to grant, exercise, vesting and/or settlement of such Performance
Awards. The Committee may establish any such performance conditions and goals
based on one or more business criteria for the Company, on a consolidated basis,
and/or for specified Affiliates of the Company or business or geographical units
of the Company, or other measures of performance, as determined to be
appropriate by the Committee in its discretion, which performance conditions and
goals may be determined on an absolute or relative basis or as compared to the
performance of a published or special index deemed applicable by the Committee
including, but not limited to, the Standard & Poor’s 500 Stock Index or a group
of comparable companies. Performance conditions may differ for Performance
Awards granted to any one Participant or to different Participants. If there
shall occur significant events which the Committee expects to have a substantial
effect on the applicable performance conditions, the Committee may revise such
performance conditions.
(ii)Performance Periods. The performance period applicable to any Performance
Award shall be set by the Committee in its discretion but shall not exceed ten
years.
(iii)Settlement. At or following the end of the applicable performance period,
the Committee shall determine the amount, if any, of the Performance Award that
will become vested, exercisable and/or settled and, unless otherwise specified
in an applicable Award Agreement, any such amounts shall be paid to the
Participant no later than March 15 of the year following the year that included
the last day of the applicable performance period. Settlement of such
Performance Awards shall be in cash, shares of Stock, other Awards or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce or increase the amount of vesting, exercisability and/or
settlement otherwise to be made in connection with such
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Performance Awards. The Committee shall specify the circumstances in which a
Performance Award shall be paid or forfeited in the event of termination of
employment or service by a Participant prior to the end of a performance period
or settlement of such Performance Award.
7.Certain Provisions Applicable to Awards.
(a)Limit on Transfer of Awards.
(i)Except as provided in Sections 7(a)(iii) and (iv), each Option and SAR shall
be exercisable only by the Participant during the Participant’s lifetime, or by
the Person to whom the Participant’s rights shall pass by will or the laws of
descent and distribution. Notwithstanding anything to the contrary in this
Section 7(a), an ISO shall not be transferable other than by will or the laws of
descent and distribution.
(ii)Except as provided in Sections 7(a)(i), (iii) and (iv), no Award, other than
a Stock Award, and no right under any such Award, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant
and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against the Company or
any Affiliate.
(iii)To the extent specifically provided by the Committee, an Award may be
transferred by a Participant without consideration to immediate family members
or related family trusts, limited partnerships or similar entities or on such
terms and conditions as the Committee may from time to time establish.
(iv)An Award may be transferred pursuant to a domestic relations order entered
or approved by a court of competent jurisdiction upon delivery to the Company of
a written request for such transfer and a certified copy of such order.
(b)Form and Timing of Payment under Awards; Deferrals. Subject to the terms of
the Plan and any applicable Award Agreement, payments to be made by the Company
or any of its Affiliates upon the exercise or settlement of an Award may be made
in such forms as the Committee shall determine in its discretion, including
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis (which may be required by
the Committee or permitted at the election of the Participant on terms and
conditions established by the Committee); provided, however, that any such
deferred or installment payments will be set forth in the Award Agreement.
Payments may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents or other amounts in respect of
installment or deferred payments denominated in Stock.
(c)Evidencing Stock. The Stock or other securities of the Company delivered
pursuant to an Award may be evidenced in any manner deemed appropriate by the
Committee in its sole discretion, including in the form of a certificate issued
in the name of the Participant or by book entry, electronic or otherwise, and
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or as may be required by any
applicable federal, state or other laws, and the Committee may cause a legend or
legends to be inscribed on any such certificates to make appropriate reference
to such restrictions. Further, if
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certificates representing Restricted Stock are registered in the name of the
Participant, the Company may retain physical possession of the certificates and
may require that the Participant deliver a stock power to the Company, endorsed
in blank, related to the Restricted Stock.
(d)Consideration for Grants. Awards may be granted for such consideration,
including services, as the Committee shall determine, but shall not be granted
for less than the minimum lawful consideration.
(e)Additional Agreements. Each Eligible Person to whom an Award is granted under
the Plan may be required to agree in writing, as a condition to the grant of
such Award or otherwise, to subject an Award that is exercised or settled
following such Eligible Person’s termination of employment or service to a
general release of claims and/or a noncompetition or other restricted covenant
agreement in favor of the Company and its Affiliates, with the terms and
conditions of such agreement(s) to be determined in good faith by the Committee.
8.Subdivision or Consolidation; Recapitalization; Change in Control;
Reorganization.
(a)Existence of Plans and Awards. The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Company,
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of debt or equity securities ahead of or affecting Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.
(b)Additional Issuances. Except as expressly provided herein, the issuance by
the Company of shares of stock of any class, including upon conversion of shares
or obligations of the Company convertible into such shares or other securities,
and in any case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Stock subject to Awards theretofore granted or the purchase price per share
of Stock, if applicable.
(c)Subdivision or Consolidation of Shares. The terms of an Award and the share
limitations under the Plan shall be subject to adjustment by the Committee from
time to time, in accordance with the following provisions:
(i)If at any time, or from time to time, the Company shall subdivide as a whole
(by reclassification, by a Stock split, by the issuance of a distribution on
Stock payable in Stock, or otherwise) the number of shares of Stock then
outstanding into a greater number of shares of Stock or in the event the Company
distributes an extraordinary cash dividend, then, as appropriate (A) the maximum
number of shares of Stock available for delivery with respect to Awards and
applicable limitations with respect to Awards provided in Section 4 and Section
5 (other than cash limits) shall be increased proportionately, and the kind of
shares or other securities available for the Plan shall be appropriately
adjusted; (B) the number of shares
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of Stock (or other kind of shares or securities) that may be acquired under any
then outstanding Award shall be increased proportionately; and (C) the price
(including the Exercise Price or grant price) for each share of Stock (or other
kind of shares or securities) subject to then outstanding Awards shall be
reduced proportionately, without changing the aggregate purchase price or value
as to which outstanding Awards remain exercisable or subject to restrictions;
provided, however, that in the case of an extraordinary cash dividend that is
not an Adjustment Event, the adjustment to the number of shares of Stock and the
Exercise Price or grant price, as applicable, with respect to an outstanding
Option or SAR may be made in such other manner as the Committee may determine
that is permitted pursuant to applicable tax and other laws, rules and
regulations.
(ii)If at any time, or from time to time, the Company shall consolidate as a
whole (by reclassification, by reverse Stock split, or otherwise) the number of
shares of Stock then outstanding into a lesser number of shares of Stock, then,
as appropriate (A) the maximum number of shares of Stock available for delivery
with respect to Awards and applicable limitations with respect to Awards
provided in Section 4 and Section 5 (other than cash limits) shall be decreased
proportionately, and the kind of shares or other securities available for the
Plan shall be appropriately adjusted; (B) the number of shares of Stock (or
other kind of shares or securities) that may be acquired under any then
outstanding Award shall be decreased proportionately; and (C) the price
(including the Exercise Price or grant price) for each share of Stock (or other
kind of shares or securities) subject to then outstanding Awards shall be
increased proportionately, without changing the aggregate purchase price or
value as to which outstanding Awards remain exercisable or subject to
restrictions.
(d)Recapitalization. In the event of any change in the capital structure or
business of the Company or other corporate transaction or event that would be
considered an “equity restructuring” within the meaning of ASC Topic 718 and, in
each case, that would result in an additional compensation expense to the
Company pursuant to the provisions of ASC Topic 718, if adjustments to Awards
with respect to such event were discretionary or otherwise not required (each
such an event, an “Adjustment Event”), then the Committee shall equitably adjust
(i) the aggregate number or kind of shares that thereafter may be delivered
under the Plan; (ii) the number or kind of shares or other property (including
cash) subject to an Award; (iii) the terms and conditions of Awards, including
the purchase price or Exercise Price of Awards and performance goals, as
applicable; and (iv) the applicable limitations with respect to Awards provided
in Section 4 and Section 5 (other than cash limits) to equitably reflect such
Adjustment Event (“Equitable Adjustments”). In the event of any change in the
capital structure or business of the Company or other corporate transaction or
event that would not be considered an Adjustment Event, and is not otherwise
addressed in this Section 8, the Committee shall have complete discretion to
make Equitable Adjustments (if any) in such manner as it deems appropriate with
respect to such other event.
(e)Change in Control and Other Events. Except to the extent otherwise provided
in any applicable Award Agreement, vesting of any Award shall not occur solely
upon the occurrence of a Change in Control and, in the event of a Change in
Control or other changes in the Company or the outstanding Stock by reason of a
recapitalization, reorganization, merger, consolidation, combination, exchange
or other relevant change occurring after the date of the grant of any Award, the
Committee, acting in its sole discretion without the consent or approval of any
holder, may exercise any power enumerated in Section 3 (including the power to
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accelerate vesting, waive any forfeiture conditions or otherwise modify or
adjust any other condition or limitation regarding an Award) and may also 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:
(i)accelerate the time of exercisability of an Award so that such Award may be
exercised in full or in part for a limited period of time on or before a date
specified by the Committee, after which specified date all unexercised Awards
and all rights of holders thereunder shall terminate;
(ii)redeem in whole or in part outstanding Awards by requiring the mandatory
surrender to the Company by selected holders of some or all of the outstanding
Awards held by such holders (irrespective of whether such Awards are then vested
or exercisable) as of a date, specified by the Committee, in which event the
Committee shall thereupon cancel such Awards and pay to each holder an amount of
cash or other consideration per Award (other than a Dividend Equivalent or Cash
Award, which the Committee may separately require to be surrendered in exchange
for cash or other consideration determined by the Committee in its discretion)
equal to the Change in Control Price, less the Exercise Price with respect to an
Option and less the grant price with respect to an SAR, as applicable to such
Awards; provided, however, that to the extent the Exercise Price of an Option or
the grant price of an SAR exceeds the Change in Control Price, such Award may be
cancelled for no consideration;
(iii)cancel Awards that remain subject to a restricted period as of the date of
a Change in Control or other such event without payment of any consideration to
the Participant for such Awards; or
(iv)make such adjustments to Awards then outstanding as the Committee deems
appropriate to reflect such Change in Control or other such event (including the
substitution, assumption, or continuation of Awards by the successor company or
a parent or subsidiary thereof);
provided, however, that so long as the event is not an Adjustment Event, the
Committee may determine in its sole discretion that no adjustment is necessary
to Awards then outstanding. If an Adjustment Event occurs, this Section 8(e)
shall only apply to the extent it is not in conflict with Section 8(d).
9.General Provisions.
(a)Restricted Securities. Stock and Awards shall not be issued under this Plan
unless the issuance and delivery of such Stock and any Awards comply with (or
are exempt from) all applicable requirements of law, including (without
limitation) the Securities Act, the rules and regulations promulgated
thereunder, state securities laws and regulations, and the regulations of any
stock exchange or other securities market on which the Company’s securities may
then be traded, if applicable. Prior to a Qualifying Public Offering, the Stock
to be issued under this Plan, which may be issued in reliance on any available
exemption under the Securities Act, shall be deemed to be “restricted
securities” as defined in Rule 144, promulgated by the
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Securities and Exchange Commission under the Securities Act as from time to time
in effect and applicable to the Plan and Participants. Resales of such Stock by
the holder thereof shall be in compliance with the Securities Act or an
exemption therefrom. Such Stock may bear a legend if determined necessary by the
Committee in substantially the following form:
“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE
SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE
DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE
COMPANY (WHICH, IN THE DISCRETION OF THE COMPANY, MAY INCLUDE AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR
OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.”
(b)Right of First Refusal. Except as otherwise expressly provided in any
particular Award Agreement, if any Participant (“Transferor”), regardless of
whether such Participant is the original holder of the Award contemplated in
this Section 9(b), proposes to sell, transfer, assign, hypothecate, make gifts
of or in any manner dispose of, encumber, or alienate (each individually
constituting a “Transfer”) to a transferee, any Stock, obtained in connection
with any Award held by such Transferor, either pursuant to a bona fide offer
(“Offer”) from a potential transferee (“Offeror”) or by effecting a gift of the
Stock (“Gift”) to a donee (“Donee”) without consideration, then the Transferor
must comply with the provisions of this Section 9(b), including, without
limitation, acknowledging and allowing the applicable time periods to lapse with
respect to the rights of the Company as provided herein, before accepting any
such Offer or otherwise affecting the Transfer of any Stock pursuant to such
Offer, or affecting any such Gift.
(i)Statement of Offer. Before accepting any Offer or affecting any Gift, the
Transferor shall obtain from the Offeror or Donee, as the case may be, a
statement (“Statement”) in writing addressed to the Transferor and signed by the
Offeror or Donee, setting forth: (A) the date of the Statement (the “Statement
Date”); (B) the number of shares of Stock covered by the Offer or Gift and, in
the case of an Offer, the price per share to be paid by the Offeror and the
terms of payment of such price; (C) the Offeror’s or Donee’s willingness to be
bound by the terms of this Section 9(b) and execute and deliver to the Company
such documentation as required under this Section 9(b); (D) the Offeror’s or
Donee’s name, address and telephone number; and (E) the Offeror’s or Donee’s
willingness to supply any additional information about himself or herself as may
be reasonably requested by the Company. Promptly upon receipt of a Statement,
and before accepting the Offer or affecting the Gift to which the Statement
relates, the Transferor shall deliver to the Company (1) a copy of the
Statement, and (2) in the case of an Offer, evidence reasonably satisfactory to
the Company as to the Offeror’s financial ability to consummate the proposed
purchase.
(ii)Company Rights. Subject to the provisions of Section 9(b)(i), upon receipt
of a copy of the Statement, the Company shall have the exclusive right and
option (the “Right”), but not the obligation, to purchase all of the shares of
Stock that the Offeror proposes to purchase from the Transferor or, in the case
of a Gift, that the Transferor proposes to give to the Donee (collectively,
“Subject Securities”) (A) in the case of an Offer, for the per share price
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and on the terms as set forth in the Statement; provided, however, that if the
purchase price is payable in whole or in part in property (which term shall
include the securities of any issuer other than the Company) other than cash,
the Company may pay, in lieu of such property, a sum of cash equal to the fair
market value of such property as determined by the Transferor and the Company in
good faith or, if the Transferor and the Company do not agree on the fair market
value of such property within five days after the Company delivers written
notice (as described below) of its intention to exercise the Right, then the
Transferor and the Company shall select one independent appraiser (with each of
the Transferor and the Company jointly bearing one-half of the expense of the
appraiser) to determine the fair market value of that property and the appraised
fair market value of that property as determined by such appraiser shall be
deemed the fair market value of that property for purposes of this Section
9(b)(ii), or (B) in the case of a Gift, the Fair Market Value of the Subject
Securities, as determined in good faith by the Company; provided that the
Transferor may elect to retain the Subject Securities rather than sell the
Subject Securities at the Fair Market Value as determined by the Company by
giving written notice thereof to the Company within five days after such
determination by the Company is received in writing by the Transferor. The
Company shall exercise the Right by giving written notice thereof to the
Transferor. Upon exercising the Right, the Company shall have the obligation, to
the extent it lawfully may do so, to purchase the Subject Securities within 30
days after the date of the Company’s receipt of its copy of the Statement on and
subject to the terms and conditions hereof. If the terms of the purchase include
the Transferor’s release of any pledge or encumbrance on the Subject Securities
and the Transferor shall have failed to obtain the release of the pledge or
encumbrance by the purchase date, at the Company’s option the purchase shall
occur on the scheduled date with the purchase price reduced to the extent of all
unpaid indebtedness for which the Subject Securities are then pledged or
encumbered. Failure by the Company to exercise the Right, or failure by the
Company to otherwise perform its obligations under this Section 9(b)(ii), within
the 30 day period herein prescribed shall be deemed an election by the Company
not to exercise the Right. If the Company exercises the Right and is unable for
any reason to perform its obligations thereunder in accordance with this Section
9(b), the Company may assign all or a portion of its rights under the Right to
any one or more of the Company’s stockholders (other than the Transferor)
(“Assignee Stockholder”), as the Board shall determine, in its sole and absolute
discretion.
(iii)Purchase of Less Than All Shares. Anything in this Section 9(b) to the
contrary notwithstanding, the Company and any Assignee Stockholder individually
may, pursuant to the exercise of the Right, purchase fewer than all of the
Subject Securities provided that such persons in the aggregate purchase all, and
not less than all, of the Subject Securities, and it shall be a condition
precedent to the obligation of any of such persons to purchase any Subject
Securities, that all, and not less than all, of the Subject Securities have been
elected to be purchased pursuant to the exercise of the Right.
(iv)Failure to Exercise Right or Consummate Transaction. If the Company elects
not to exercise the Right, or if the Right is exercised and the obligations to
be performed thereunder by the Company are not performed in accordance with this
Section 9(b), or if the Company’s rights are assigned to an Assignee Stockholder
and such Assignee Stockholder fails to perform his or her obligations under the
assigned Right in accordance with this Section 9(b), then, subject to the
application of any applicable state or federal securities laws, the Transferor
may dispose of all of the Subject Securities within 90 days after the date of
the
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Statement at the per share price and on the terms, if any, as set forth in the
Statement free and clear of the terms of this Section 9(b); provided, however,
that (A) any subsequent transfer by the Offeror or Donee, as applicable, shall
once again be subject to this Section 9(b) and (B) if the sale or gift of the
Subject Securities is not consummated within such 90-day period, then the
Transfer of any such Stock shall once again be subject to the terms of this
Section 9(b).
(v)Legend. To assure the enforceability of the Company’s rights under this
Section 9(b), until the date of a Qualifying Public Offering, each certificate
or instrument representing Stock or an Award held by him, her, or it may, in the
Committee’s discretion, bear a conspicuous legend in substantially the following
form:
“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO THIS
AGREEMENT] ARE SUBJECT TO THE COMPANY’S RIGHT OF FIRST REFUSAL IN THE CASE OF A
TRANSFER AS PROVIDED UNDER THE COMPANY’S LONG TERM INCENTIVE PLAN AND/OR AN
AWARD AGREEMENT ENTERED INTO PURSUANT THERETO. COPIES OF SUCH PLAN AND AWARD
AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.”
(vi)Expiration. The rights and obligations pursuant to this Section 9(b) hereof
will terminate upon the date of a Qualifying Public Offering.
(c)Purchase Option.
(i)Except as otherwise expressly provided in any particular Award Agreement, (A)
if a Participant ceases to be employed by or perform services for the Company
its parent or any of its subsidiaries for any reason at any time or (B) upon the
occurrence of a Change in Control, the Company (and/or its designee(s)) shall
have the option (the “Purchase Option”) to purchase, and the Participant (or the
Participant’s executor or the administrator of the Participant’s estate in the
event of the Participant’s death, or the transferee of the Stock or Award in the
case of any disposition, or the Participant’s legal representative in the event
of the Participant’s incapacity) (hereinafter, collectively with such
Participant, the “Grantor”) shall sell to the Company and/or its designee(s),
all or any portion (at the Company’s option) of the shares of Stock issued
pursuant to this Plan and held by the Grantor (such shares of Stock herein
referred to as the “Purchasable Shares”).
(ii)The Company shall give notice in writing to the Grantor of the exercise of
the Purchase Option within eighteen months of the date of the termination of the
Participant’s employment or service relationship or the date of the Change in
Control. Such notice shall state the number of Purchasable Shares to be
purchased and the determination of the Board of the Fair Market Value per share
of such Purchasable Shares, or the Change in Control Price, if applicable. If no
notice is given within the time limit specified above, the Purchase Option shall
terminate.
(iii)The purchase price to be paid for the Purchasable Shares purchased pursuant
to the Purchase Option shall be the Change in Control Price, if applicable, or
Fair Market Value per share, as of the date of the notice of exercise of the
Purchase Option times the
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number of shares being purchased or, to the extent approved by the Company in
its sole discretion, such other amount mutually agreeable to the Company and the
Grantor. The purchase price shall be paid in cash. The closing of such purchase
shall take place at the Company’s principal executive offices within ten (10)
days after the purchase price has been determined. At such closing, the Grantor
shall deliver to the purchasers the certificates or instruments evidencing the
Purchasable Shares being purchased free and clear of all liens and encumbrances
(if any), duly endorsed (or accompanied by duly executed stock powers) and
otherwise in good form for delivery, against payment of the purchase price by
check of the purchasers. In the event that, notwithstanding the foregoing, the
Grantor shall have failed to obtain the release of any pledge or other
encumbrance on any Purchasable Shares by the scheduled closing date, at the
option of the purchasers, the closing shall nevertheless occur on such scheduled
closing date, with the cash purchase price being reduced to the extent of all
unpaid indebtedness for which such Purchasable Shares are then pledged or
encumbered.
(iv)To assure the enforceability of the Company’s rights under this Section
9(c), until the date of a Qualifying Public Offering, each certificate or
instrument representing Stock or an Award held by him, her, or it may, in the
Committee’s discretion, bear a conspicuous legend in substantially the following
form:
“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO THIS
AGREEMENT] ARE SUBJECT TO AN OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS
OF THE COMPANY’S LONG TERM INCENTIVE PLAN AND/OR AN AWARD AGREEMENT ENTERED INTO
PURSUANT THERETO. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE AVAILABLE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.”
(v)The Company’s rights under this Section 9(c) shall terminate upon the date of
a Qualifying Public Offering.
(d)Lock-Up Period. If so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”) in connection with any registration of
the offering of any securities of the Company under the Securities Act, a
Participant or transferee will not sell or otherwise transfer any Stock or other
securities of the Company during the 180-day period (or such other period as may
be requested in writing by the Managing Underwriter and agreed to in writing by
the Company) (the “Market Standoff Period”) following the effective date of a
Qualifying Public Offering. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such Market Standoff Period.
(e)Tax Withholding. The Company and any of its Affiliates are authorized to
withhold from any Award granted, or any payment relating to an Award, including
from a distribution of Stock, taxes due or potentially payable in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company, its Affiliates and
Participants to satisfy the payment of withholding taxes and other tax
obligations relating to any Award in such amounts as may be determined by the
Committee. The Committee shall determine, in its sole discretion, the form of
payment
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acceptable for such tax withholding obligations, including the delivery of cash
or cash equivalents, Stock (including previously owned shares, net settlement, a
broker-assisted sale, or other cashless withholding or reduction of the amount
of shares otherwise issuable or delivered pursuant to the Award), other
property, or any other legal consideration the Committee deems appropriate. If
such tax withholding amounts are satisfied through net settlement or previously
owned shares, the maximum number of shares of Stock that may be so withheld or
surrendered shall be the number of shares of Stock that have an aggregate Fair
Market Value on the date of withholding or surrender equal to the aggregate
amount of such tax liabilities determined based on the greatest withholding
rates for federal, state, foreign and/or local tax purposes, including payroll
taxes, that may be utilized without creating adverse accounting treatment for
the Company with respect to such Award, as determined by the Committee.
(f)Limitation on Rights Conferred under Plan. Neither the Plan nor any action
taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or any of its Affiliates; (ii) interfering in
any way with the right of the Company or any of its Affiliates to terminate any
Eligible Person’s or Participant’s employment or service relationship at any
time; (iii) giving an Eligible Person or Participant any claim to be granted any
Award under the Plan or to be treated uniformly with other Participants and/or
employees and/or other service providers; or (iv) conferring on a Participant
any of the rights of a stockholder of the Company unless and until the
Participant is duly issued or transferred shares of Stock in accordance with the
terms of an Award.
(g)Governing Law; Submission to Jurisdiction. All questions arising with respect
to the provisions of the Plan and Awards shall be determined by application of
the laws of the State of Delaware, without giving effect to any conflict of law
provisions thereof, except to the extent Delaware law is preempted by federal
law. The obligation of the Company to sell and deliver Stock hereunder is
subject to applicable federal and state laws and to the approval of any
governmental authority required in connection with the authorization, issuance,
sale, or delivery of such Stock. With respect to any claim or dispute related to
or arising under the Plan, the Company and each Participant who accepts an Award
hereby consent to the exclusive jurisdiction, forum and venue of the state and
federal courts located in the state of Oklahoma.
(h)Severability and Reformation. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable law or, if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect. If any of the terms or
provisions of the Plan or any Award Agreement conflict with the requirements of
Section 422 of the Code (with respect to ISOs), then those conflicting terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of Section 422 of the Code. With respect to ISOs, if the Plan does
not contain any provision required to be included herein under Section 422 of
the Code, that provision shall be deemed to be incorporated herein with the same
force and effect as if that provision had been set out at length herein;
provided, further, that, to the extent any Option that
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is intended to qualify as an ISO cannot so qualify, that Option (to that extent)
shall be deemed a Nonstatutory Option for all purposes of the Plan.
(i)Unfunded Status of Awards; No Trust or Fund Created. The Plan is intended to
constitute an “unfunded” plan for certain incentive awards. Neither the Plan nor
any Award shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any general unsecured creditor of
the Company or such Affiliate.
(j)Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor
its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a committee
thereof to adopt such other incentive arrangements as it may deem desirable.
Nothing contained in the Plan shall be construed to prevent the Company or any
of its Affiliates from taking any corporate action which is deemed by the
Company or such Affiliate to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any Award made under
the Plan. No employee, beneficiary or other Person shall have any claim against
the Company or any of its Affiliates as a result of any such action.
(k)Fractional Shares. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine in its sole
discretion whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional shares of Stock or whether such fractional
shares of Stock or any rights thereto shall be cancelled, terminated, or
otherwise eliminated with or without consideration.
(l)Interpretation. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof. Words in the masculine gender shall include
the feminine gender, and, where appropriate, the plural shall include the
singular and the singular shall include the plural. In the event of any conflict
between the terms and conditions of an Award Agreement and the Plan, the
provisions of the Plan shall control. The use herein of the word “including”
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation”, “but not limited to”, or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter.
References herein to any agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and not
prohibited by the Plan.
(m)Facility of Payment. Any amounts payable hereunder to any individual under
legal disability or who, in the judgment of the Committee, is unable to manage
properly his financial affairs, may be paid to the legal representative of such
individual, or may be applied
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for the benefit of such individual in any manner that the Committee may select,
and the Company shall be relieved of any further liability for payment of such
amounts.
(n)Conditions to Delivery of Stock. Nothing herein or in any Award Agreement
shall require the Company to issue any shares with respect to any Award if that
issuance would, in the opinion of counsel for the Company, constitute a
violation of any applicable statute or regulation. In addition, each Participant
who receives an Award under the Plan shall not sell or otherwise dispose of
Stock that is acquired upon grant, exercise or vesting of an Award in any manner
that would constitute a violation of any applicable federal or state securities
laws or the Plan. At the time of any exercise of an Option or SAR, or at the
time of any grant of any other Award, the Company may, as a condition precedent
to the exercise of such Option or SAR or settlement of any other Award, require
from the Participant (or in the event of his or her death, his or her legal
representatives, heirs, legatees, or distributees) such written representations,
if any, concerning the holder’s intentions with regard to the retention or
disposition of the shares of Stock being acquired pursuant to the Award and such
written covenants and agreements, if any, as to the manner of disposal of such
shares as, in the opinion of counsel to the Company, may be necessary to ensure
that any disposition by that holder (or in the event of the holder’s death, his
or her legal representatives, heirs, legatees, or distributees) will not involve
a violation of any applicable state or federal statute or regulation. Stock or
other securities shall not be delivered pursuant to any Award until payment in
full of any amount required to be paid pursuant to the Plan or the applicable
Award Agreement (including any Exercise Price, grant price, or tax withholding)
is received by the Company.
(o)Section 409A of the Code. It is the general intention, but not the
obligation, of the Committee to design Awards to comply with or to be exempt
from the Nonqualified Deferred Compensation Rules, and Awards will be operated
and construed accordingly. Neither this Section ‎9(o) nor any other provision of
the Plan is or contains a representation to any Participant regarding the tax
consequences of the grant, vesting, exercise, settlement, or sale of any Award
(or the Stock underlying such Award) granted hereunder, and should not be
interpreted as such. In no event shall the Company be liable for all or any
portion of any taxes, penalties, interest or other expenses that may be incurred
by the Participant on account of non-compliance with the Nonqualified Deferred
Compensation Rules. Notwithstanding any provision in the Plan or an Award
Agreement to the contrary, in the event that a “specified employee” (as defined
under the Nonqualified Deferred Compensation Rules) becomes entitled to a
payment under an Award that would be subject to additional taxes and interest
under the Nonqualified Deferred Compensation Rules if the Participant’s receipt
of such payment or benefits is not delayed until the earlier of (i) the date of
the Participant’s death, or (ii) the date that is six months after the
Participant’s “separation from service,” as defined under the Nonqualified
Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then
such payment or benefit shall not be provided to the Participant until the
Section 409A Payment Date. Any amounts subject to the preceding sentence that
would otherwise be payable prior to the Section 409A Payment Date will be
aggregated and paid in a lump sum without interest on the Section 409A Payment
Date. The applicable provisions of the Nonqualified Deferred Compensation Rules
are hereby incorporated by reference and shall control over any Plan or Award
Agreement provision in conflict therewith.
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(p)Clawback. The Plan and all Awards granted hereunder are subject to any
written clawback policies that the Company, with the approval of the Board or an
authorized committee thereof, may adopt either prior to or following the
Effective Date that the Company determines should apply to Awards. Any such
policy may subject a Participant’s Awards and amounts paid or realized with
respect to Awards to reduction, cancelation, forfeiture or recoupment if certain
specified events or wrongful conduct occur, including an accounting restatement
due to the Company’s material noncompliance with financial reporting regulations
or other events or wrongful conduct specified in any such clawback policy.
(q)Status under ERISA. The Plan shall not constitute an “employee benefit plan”
for purposes of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended.
(r)Rule 701. The Plan is a “compensatory benefit plan” within the meaning of
Rule 701 under the Securities Act and an “employee compensation plan” within the
meaning of Section 12(g)(5) of the Exchange Act, and all Awards granted under
the Plan are intended to qualify for an exemption from the registration
requirements under the Securities Act, including, without limitation, pursuant
to Regulation D or Rule 701 under the Securities Act.
(s)Beneficiary Designation. Each Participant under the Plan may from time to
time name any beneficiary or beneficiaries by whom any right under the Plan is
to be exercised in case of such Participant’s death. Each designation shall
revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee and shall be effective only when filed by
the Participant in writing with the Company during the Participant’s lifetime.
(t)Plan Effective Date and Term. The Plan was adopted by the Board to be
effective on the Effective Date. No Awards may be granted under the Plan on and
after the tenth anniversary of the Effective Date. However, any Award granted
prior to such termination (or any earlier termination pursuant to Section 10),
and the authority of the Board or Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under such Award in accordance with the terms of the Plan, shall extend beyond
such termination until the final disposition of such Award.
10.Amendments to the Plan and Awards. The Committee may amend, alter, suspend,
discontinue or terminate any Award or Award Agreement, the Plan or the
Committee’s authority to grant Awards without the consent of stockholders of the
Company or Participants, except that any amendment or alteration to the Plan,
including any increase in any share limitation, shall be subject to the approval
of the stockholders of the Company not later than the annual meeting next
following such Committee action if such stockholder approval is required by any
federal or state law or regulation, and the Committee may otherwise, in its
discretion, determine to submit other changes to the Plan to stockholders of the
Company for approval; provided, that, without the consent of an affected
Participant, no such Committee action may materially and adversely affect the
rights of such Participant under any previously granted and outstanding Award.
For purposes of clarity, any adjustments made to Awards pursuant to Section 8
will be deemed not to materially and adversely affect the rights of any
Participant
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under any previously granted and outstanding Award and therefore may be made
without the consent of affected Participants.
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