Exhibit 10.23

 

MILLER PETROLEUM, INC. STOCK PLAN

This STOCK PLAN by Miller Petroleum, Inc., a Tennessee corporation (“Company”)
is effective as set forth herein:

1.

PURPOSE OF PLAN.

The purpose of this Stock Plan (“Plan”) is to further the success of the Company
and its subsidiaries or affiliates by making stock of the Company available to
employees of the Company through grants of Incentive Stock Options,
non-qualified stock options and Restricted Stock. The Plan provides an incentive
to such persons to continue in the service of the Company, to perform at and
above targeted levels, and to give them a greater interest as stockholders in
the success of the Company.

2.

REFERENCES, CONSTRUCTION AND DEFINITIONS.

Unless otherwise indicated, all references made in the Plan shall be to
articles, sections and subsections of the Plan. The Plan shall be construed in
accordance with the laws of the State of Tennessee. The headings and subheadings
in the Plan have been inserted for convenience of reference only and are to be
ignored in construction of the provisions of the Plan. In the construction of
the Plan, the masculine shall include the feminine and the singular the plural
wherever appropriate. If any provision of this Plan shall be held invalid for
any reason, such illegality or invalidity shall not affect the remaining parts
of this Plan and this Plan shall be construed and enforced as if such illegal
and invalid provisions had never been included. The following terms (in
alphabetical order) shall have the meanings set forth opposite such terms for
purposes of the Plan:

 

(a)

“Board” means the Board of Directors of the Company;

 

(b)

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday on
which the New York Stock Exchange is open for business;

 

(c)

“Cause” means:

 

I.

in the case of a holder of an option who is a nonemployee Director or member of
an advisory board, the voluntary termination of the relationship with the
Company by the holder of the option or Restricted Stock award, or commission of
an act of fraud or intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
of its Subsidiaries or affiliates; and

 

II.

in the case of a holder of an option or Restricted Stock award whose employment
with the Company or a Subsidiary is, as the date of the applicable Agreement,
subject to the terms of an employment agreement between such holder and the
Company or a Subsidiary, which employment agreement includes a definition of
“Cause”, the term “Cause” as used in this Plan or any Agreement shall have the
meaning to set forth in such employment agreement during the period that such
employment agreement remains in effect; or

 

III.

in all other cases, the term “Cause” as used in this Plan or any Agreement shall
mean (i) intentional failure to perform reasonably assigned duties or voluntary

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termination of the relationship with the Company by the holder of the option,
(ii) dishonesty or willful misconduct in the performance of duties, (iii)
involvement in a transaction in connection with the performance of duties to the
Company or any of its Subsidiaries which transaction is adverse to the interests
of the Company or any of its Subsidiaries and which is engaged in for personal
profit or (iv) willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) in connection with the performance of
duties.

 

(d)

“Change of Control” means (I) the accumulation (including through a merger,
consolidation, share exchange, division or sale) by any individual, firm,
corporation or other entity (other than current shareholders of the Company as
of the date the Plan is adopted or last amended; the Company or any subsidiary;
any profit-sharing, employee stock ownership, or other employee benefit plan of
the Company or any subsidiary or any trustee of or fiduciary with respect to any
such plan when acting in such capacity), separately or in combination with any
affiliates or associates, of beneficial ownership of more than fifty-one percent
(51%) of the outstanding shares of all classes of capital stock of the Company
issued, from time to time, or (II) the sale or disposition of the assets of the
Company as a result of which current shareholders of the Company as of the date
the Plan is adopted or last amended, do not hold, immediately following such
sale, a majority of the voting power of each surviving, resulting or acquiring
corporation which, immediately following the transaction, holds more than twenty
five percent (25%) of the consolidated assets of the Company immediately prior
to the transaction; provided, however, that it shall not include any transaction
described in items (I) or (II) above which a majority of the Board, acting at a
meeting held not more than 60 days after the date of such transaction and at
which a quorum of directors sufficient to conduct business under Tennessee law
is present, declares, for reasons in its sole discretion, not to be a “Change of
Control” for purposes of this Plan; and provided, further, that the date of a
Change of Control shall be deemed to be the actual date of the transaction
described in items (I) or (II) above or, if such date is not clearly
determinable, the date on which a majority of the Board members, meeting as
described above, shall determine was the date as of which the Company had reason
to know of the same;

 

(e)

“Common Stock” means the $0.0001 par value, voting common stock of the Company;

 

(f)

“Code” means the Internal Revenue Code of 1986, as amended from time to time;

 

(g)

“Committee” means the Compensation Committee of the Board as constituted from
time to time; provided, however, that if the Committee shall not be in
existence, the term “Committee” shall mean the Board;

 

(h)

“Company” means Miller Petroleum, Inc., a Tennessee corporation;

 

(i)

“Date of Grant” means the date on which an option or award of Restricted Stock
is granted under the Plan;

 

(j)

“Effective Date” means the date on which the Plan is approved and adopted by the
Board;

 

(k)

“Fair Market Value” means, for as long as the Common Stock is not readily
tradable on an established securities market, the values determined for Common
Stock at least

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annually by the Committee in its sole discretion based on a value determined by
an “independent appraiser” as defined in regulations under Code Section
170(a)(l), provided, however, (A) if at any time Common Stock does become traded
on a reasonably active basis, but not listed on an established stock exchange,
its Fair Market Value shall be based on the mean between the highest and lowest
sales prices as reflected on the NASDAQ Interdealer Quotation System of the
National Association of Securities Dealers, Inc. on the date in question or, (B)
if it is listed on an established stock exchange, based on the mean between the
highest and lowest sales prices on such exchange on the date in question, and
(C) in the case of Incentive Stock Options, Fair Market Value may not be less
than fair market value within the meaning of Code Section 422; and provided,
further, that if, for any reason, Fair Market Value otherwise cannot be
ascertained or is unavailable for a particular date, such value shall be
determined as of the nearest preceding date on which such value can be
ascertained pursuant to the applicable method described above;

 

(l)

“Incentive Stock Option” means any option granted with the intent of being an
option as defined in Code Section 422 and containing the terms necessary to meet
the requirements of that section of the Code and related Code sections and
regulations;

 

(l)

“Plan” means this Stock Plan.

 

(m)

“Reorganization” means any statutory merger, statutory consolidation, sale of
all or substantially all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another company after the
effective date of the transaction;

 

(n)

“Reorganization Agreement” means a written plan or agreement regarding the terms
and implementation of a Reorganization;

 

(o)

“Restricted Stock” means a share of Common Stock with time or performance
conditions which must be satisfied before the holder of the share can exercise
full ownership of it;

 

(p)

“10-Percent Stockholder” means any individual who owns stock possessing more
than ten percent (10%) of the total combined voting power or value of all
classes of stock of the Company, or of its parent or subsidiary corporation (as
such terms are defined in Sections 424(e) and (f) of the Code.

3.

STOCK SUBJECT TO PLAN.

Subject to the provisions of Section 11, there shall be reserved for issuance or
transfer upon the exercise of options or the satisfaction of conditions on
Restricted Stock awards to be granted from time to time under the Plan an
aggregate of 3,000,000 shares of Common Stock, which shares may be in whole or
in part, as the Board shall from time to time determine, authorized and unissued
shares of Common Stock or issued shares of Common Stock which shall have been
reacquired by the Company. If any option or Restricted Stock award granted under
the Plan shall expire, terminate or be canceled for any reason without having
been exercised in full, the shares subject thereto shall again be available for
the purposes of the Plan. The total number of shares available for grants of
Incentive Stock Options under the Plan is 3,000,000, provided however, in the
sole discretion of the Board, the number of shares subject to the Plan may be
increased.

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4.

ADMINISTRATION.

 

(a)

The Plan shall be administered by the Committee. Actions by the Committee for
purposes of the Plan shall be by not less than a majority of its members, or in
the case of any action directly affecting one or more of the Committee members,
by not less than a majority of those members not affected directly by the
action. Any decision or determination reduced to writing and signed by all the
members shall be fully as effective as if it had been made by a majority vote at
a meeting duly called and held. The Committee, if other than the full Board,
shall report all action taken by it to the Board.

 

(b)

In the granting of options or Restricted Stock Awards under the Plan and during
the term of such awards, the Committee shall have authority in its discretion,
but subject to the express provisions of the Plan:

 

1.

to determine the employees to whom options or Restricted Stock awards shall be
granted;

 

2.

to determine the time or times when options or Restricted Stock awards shall be
granted;

 

3.

to determine whether an option shall be granted as an Incentive Stock Option or
a non-qualified stock option;

 

4.

to determine the purchase price of the Common Stock covered by each option;

 

5.

to determine the number of shares to be subject to each option or Restricted
Stock award, except that no option or award for fractional shares may be issued;

 

6.

to determine when an option can be exercised and whether in whole or in
installments as the result of a vesting schedule triggered by the passage of
time or the attainment of performance goals set by the Committee and approved by
the Board;

 

7.

to determine the conditions that must be satisfied for restrictions to be
removed from stock subject to Restricted Stock awards granted and the timing and
manner by which those conditions must be satisfied;

 

8.

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

 

9.

to determine any other terms and provisions and any related amendments of the
individual option or Restricted Stock award agreements, which need not be
identical for each employee, including such terms and provisions (and
amendments) as shall be required in the judgment of the Committee to conform to
any change in any law or regulation applicable thereto, and with particular
regard to any changes in or effect of the Code and the regulations thereunder;
and

 

10.

to make all other determinations deemed necessary or advisable for the
administration of the Plan.

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5.

ELIGIBILITY.

Options and Restricted Stock may be granted under this Plan only to employees,
officers or directors of the Company, or to members of any advisory panel or
board established at the direction of the Board. In determining the persons to
whom options or Restricted Stock awards shall be granted and the number of
shares to be covered by each option or award, the Committee may take into
account the nature of the services rendered by the respective persons, their
present and potential contributions to the Company’s success and such other
factors as the Committee in its discretion shall deem relevant. Options and
awards may be granted to persons who hold or have held options or awards under
the Plan or any other previous or contemporaneous plans.

6.

OPTION GRANTS AND LIMITS.

 

(a)

Nothing contained in the Plan or in any resolution adopted or to be adopted by
the Board shall constitute the granting of any option hereunder. The granting of
an option pursuant to the Plan shall take place only when a written option
agreement shall have been duly executed and delivered by or on behalf of the
Company and the individual (or his duly authorized attorney-in-fact) in whom
such option is to be granted.

 

(b)

During an employee’s lifetime, any option granted to him under the Plan shall be
exercisable only by the employee or any guardian or legal representative of the
employee, and the option shall not be transferable except, in case of the death
of the employee, by will or the laws of descent and distribution, nor shall the
option be subject to attachment, execution or other similar process. In the
event of (I) any attempt by the employee to alienate, assign, pledge,
hypothecate or otherwise dispose of the option, except as provided in the Plan,
or (II) the levy of any attachment, execution or similar process upon the rights
or interest conferred by the option, the Company may terminate the option by
notice to the employee and upon such notice the option shall become null and
void.

 

(c)

The aggregate Fair Market Value, determined on the date of grant, of shares with
respect to which any Incentive Stock Options under the Plan and all other plans
of the Company become exercisable by any individual for the first time in any
calendar year shall not exceed $100,000. To the extent that any option exceeds
this limit, it shall be deemed a nonqualified stock option.

7.

OPTION PRICES.

The option price for Common Stock to be issued pursuant to any option granted
under the Plan shall be not less than the Fair Market Value as of the date of
grant of the option, which date shall be a Business Day. In the event that an
Incentive Stock Option is granted to an employee who at the time of such grant
is a 10% Stockholder, then the option price per share shall be not less than
110% of such Fair Market Value.

8.

EXERCISE OF OPTIONS.

 

(a)

An employee may exercise any option granted under the Plan with respect to all
or any part of the number of shares then exercisable under the terms of his
written option grant agreement by giving the Committee written notice of intent
to exercise. The notice of exercise shall specify the number of shares to be
purchased under the option and the date of exercise, which shall be at least
five (5) days after the giving of such notice unless an earlier time shall have
been mutually agreed upon by the employee and the Company.

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(b)

Full payment of the option price for the shares purchased shall be made by the
employee on or before the exercise date specified in the notice of exercise.
Payment of the purchase price of any shares with respect to which the option is
being exercised shall be (I) cash, (II) certified check to the order of the
Company, or (III) shares of Common Stock of the Company valued at the Fair
Market Value on such Business Day as the option or portion thereof is exercised.

 

(c)

The Company shall not be required to deliver certificates for such shares until
full payment of the option price has been made. On or as soon as is practicable
after the exercise date specified in an employee’s notice and upon full payment
of the option price, the Company shall cause to be delivered to the employee a
certificate or certificates for the shares then being purchased (out of
previously unissued Common Stock or reacquired Common Stock, as the Company may
elect). The exercise of the option and the resulting obligation of the Company
to deliver Common Stock shall, however, be subject to the condition that the
listing, registration, or qualification of the option or the shares upon any
securities exchange or under any State or federal law, or the consent or
approval of any governmental regulatory body shall have been effected or
obtained free of any conditions not acceptable to the Committee, if at any time
the Committee shall determine in its sole discretion that such listing,
registration, qualification, consent or approval is necessary or desirable.

 

(d)

If an employee fails to pay for any of the shares specified in such notice or
fails to accept delivery of the shares, his right to purchase such shares may be
terminated by the Company. The date specified in the employee’s notice as the
date of exercise shall be deemed the date of exercise of the option, provided
that payment in full for the shares to be purchased upon such exercise shall
have been received by such date.

 

(e)

In no event may an option be exercised after the date which is ten (10) years
from the Date of Grant of such option (or five (5) years from the Date of Grant
for any Incentive Stock Option issued under the Plan to any 10-Percent
Shareholder) or such shorter period as is prescribed in Section 9.

 

(f)

In the event of the Change of Control, dissolution or liquidation of the
Company, then the Board shall determine, at its sole discretion, the treatment
of any and all unvested options granted under the Plan, including without
limitation, that the unvested options shall terminate, shall become fully
exercisable or convertible into options of the acquiring entity, as to all or
any part of the shares covered thereby including shares as to which such option
would not otherwise be exercisable by reason of an insufficient lapse of time,
conditioned upon the occurrence of the Change of Control. In the event they are
fully exercisable, an employee may exercise such options, as the case may be:
(I) at the closing of such Change of Control, or (II) for a period of not less
than thirty (30) days prior to the dissolution or liquidation, beginning as of a
date to be fixed by the Committee, provided that not less than thirty (30) days’
written notice of the date so fixed shall be given to each employee. Only in the
event of an exercise upon Change of Control, dissolution, or liquidation under
this subparagraph may an employee simultaneously exercise an option and sell the
underlying stock so as to effect a “cashless” exercise of the option by using
the cash proceeds from the sale of the underlying stock to exercise the option.

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(g)

The holder of an option shall not have any of the rights of a stockholder with
respect to the shares subject to the option until such shares shall be issued to
him or her upon the exercise of his option.

 

(h)

Notwithstanding the foregoing, any shares that may be purchased as of the
Effective Date, pursuant to the terms of any option granted prior to the
Effective Date, shall continue thereafter to be purchasable pursuant to the
exercise of such option.

9.

OPTION PERIOD

The ability to exercise options under the Plan shall be conditioned as follows:

 

(a)

Exercise During Employment. Unless otherwise provided in the terms of an option,
a vested option may be exercised by an employee while he is an employee and has
maintained since the date of the grant of the option continuous status as an
employee. An option granted pursuant to the Plan may not be exercised following
the termination of the employee’s employment with the Company or its
subsidiaries for any reason other than (I) permanent disability described in
subsection (c) below, (II) death as described in subsection (d) below, or (III)
if his or her relationship with the Company is terminated without Cause, in
which case options which have fully vested prior to such termination date may be
exercised within thirty (30) days following his or her termination date.

 

(b)

Exercise Upon Retirement. Unless otherwise provided in the terms of an option,
if an employee’s continuous employment shall terminate by reason of his
retirement from the Company, such retired employee may exercise the vested
portion of his or her otherwise exercisable option, but not an unexercisable
portion, within one hundred eighty (180) days following the applicable
retirement date, provided however, that if an option is an Incentive Stock
Option and is exercised more than 3 months after termination of employment, it
will be treated as a nonqualified option. For purposes of this Plan only,
retirement shall mean the employee’s total cessation of activity in the business
practiced by the Company on or after he attains age sixty-two (62) after not
less than five (5) years continuous employment with the Company.

 

(c)

Exercise Upon Permanent Disability. Unless otherwise provided in the terms of an
option, if an employee’s continuous employment shall terminate by reason of a
permanent disability (as determined by the employee’s establishing to the
Committee his disability as defined in Code Section 22(e)(3), as amended from
time to time), then such permanently disabled employee may exercise the vested
portion of his or her otherwise exercisable option anytime within six (6) months
of his termination of employment due to permanent disability.

 

(d)

Exercise Upon Death. Unless otherwise provided in the terms of an option, if an
employee’s continuous employment shall terminate by reason of his death, then
the person or persons (including his estate) to whom his rights under such
option shall have passed by will or by laws of descent and distribution may
exercise the otherwise exercisable option anytime within six (6) months of his
death.

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10.

RESTRICTED STOCK AWARD GRANTS AND LIMITS.

 

(a)

Nothing contained in the Plan or in any resolution adopted or to be adopted by
the Board shall constitute the granting of any Restricted Stock award hereunder.
The granting of an award pursuant to the Plan shall take place only when a
written Restricted Stock award agreement shall have been duly executed and
delivered by or on behalf of the Company and the individual (or his duly
authorized attorney-in-fact) to whom such award is to be granted.

 

(b)

During an employee’s lifetime and at any time prior to the satisfaction of the
conditions under the Restricted Stock award, a Restricted Stock award granted
under the Plan shall not be transferable except, in case of the death of the
employee, by will or the laws of descent and distribution, nor shall the award
be subject to attachment, execution or other similar process. In the event of
(I) any attempt by the employee to alienate, assign, pledge, hypothecate or
otherwise dispose of the award, except as provided in the Plan, or (II) the levy
of any attachment, execution or similar process upon the rights or interest
conferred by the award, the Company may terminate the award by notice to the
employee and upon such notice the award shall become null and void.

 

(c)

Unless otherwise provided in the terms of the award, if an employee’s continuous
employment shall terminate by reason of his death or disability (as determined
by the employee’s establishing to the Committee his disability as defined in
Code Section 22(e)(3), as amended from time to time), then all conditions under
the Restricted Stock award shall be considered satisfied and the employee (or
his surviving beneficiary) shall become one hundred percent (100%) vested in
full ownership rights in the Common Stock subject to the award as of that date.

 

(d)

If an employee’s continuous employment shall terminate for any reason other than
his death or disability, then all Common Stock under the Restricted Stock award
shall be forfeited immediately by the employee as of that date.

 

(e)

In the event of the Change of Control, dissolution or liquidation of the
Company, then the Board shall determine, in its sole discretion, the treatment
of conditions to outstanding Restricted Stock awards granted under the Plan,
including without limitation, that the conditions to such Restricted Stock
awards shall be deemed fully satisfied as to all or any part of the shares of
Common Stock covered thereby, conditioned upon the occurrence of the Change of
Control.

 

(f)

Notwithstanding anything to the contrary in this Section 10, if an employee’s
employment is terminated with Cause then all Common Stock under any Restricted
Stock award held by the employee shall be forfeited by him immediately as of
such termination.

 

(g)

The Company shall not be required to deliver certificates for such shares until
all conditions under the Restricted Stock award have been satisfied or deemed
satisfied pursuant to paragraphs (c) or (e) above. On or as soon as is
practicable after the conditions under the award have been satisfied, the
Company shall cause to be delivered to the employee a certificate or
certificates for the shares then being released (out of previously unissued
Common Stock or reacquired Common Stock, as the Company may elect). The
obligation of the Company to deliver Common Stock

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shall, however, be subject to the condition that the listing, registration, or
qualification of the shares upon any securities exchange or under any State or
federal law, or the consent or approval of any governmental regulatory body
shall have been effected or obtained free of any conditions not acceptable to
the Committee, if at any time the Committee shall determine in its sole
discretion that such listing, registration, qualification, consent or approval
is necessary or desirable.

11.

ADJUSTMENTS.

 

(a)

In the event that the outstanding shares of Common Stock are hereafter increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation, by reason
of a recapitalization, reclassification, stock split-up, combination of shares
or dividend or other distribution payable in capital stock, appropriate
adjustment shall be made by the Committee in the number and kind of shares for
which options and Restricted Stock awards may be granted under the Plan. In
addition, the Committee shall make appropriate adjustment in the number and kind
of shares as to which outstanding grants, or portions thereof then unexercised
or unsatisfied, shall be applicable, to the end that the proportionate interest
of the holder of the grant shall, to the extent practicable without the
existence of fractional shares, be maintained as before the occurrence of such
event. Such adjustment in outstanding options shall be made without change in
the total price applicable to the unexercised portion of the option, but with a
corresponding adjustment in the option price per share. To the extent that
fractional shares would have otherwise resulted from such adjustments, such
fractional shares will be deemed forfeited from any option or Restricted Stock
award, and appropriate adjustments shall be made to the option price of any
effected option.

 

(b)

In the event of a Reorganization in which the Company is not the surviving or
acquiring company, or in which the Company is or becomes a wholly-owned
subsidiary of another company after the effective date of the Reorganization,
then if there is no Reorganization Agreement or if the Reorganization Agreement
does not specifically provide for the change, conversion or exchange of the
shares under outstanding options or Restricted Stock awards for securities of
another corporation, then the Committee shall take such action, and the options
shall terminate, as provided in subparagraph (f) of Section 8 and the conditions
under all Restricted Stock awards shall be deemed to be fully satisfied as
provided in Section 10(e), but if there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change, conversion or
exchange of the shares under outstanding options or Restricted Stock awards for
securities of another corporation, then the Committee shall adjust the shares
under the Plan, if the Reorganization Agreement makes specified provision for
such adjustment, in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change, conversion or exchange of
such stock and such options.

 

(c)

Decisions regarding adjustments and determinations shall be made by the
Committee in good faith whose decisions as to what adjustments or determinations
shall be made, and the extent thereof, shall be final, binding and conclusive,
and shall not be challenged except to the degree the claim is a lack of good
faith.

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12.

AMENDMENT AND TERMINATION.

Unless the Plan shall have been terminated earlier as hereinafter provided, it
shall terminate upon, and no option or Restricted Stock award shall be granted
under this Plan after, the tenth anniversary of the Effective Date. The Board
may terminate the Plan or make such modifications or amendments thereof as it
shall deem advisable, or to conform to any change in any law or regulation
applicable thereto, including but not limited to: (a) increasing the maximum
number of shares for which options and Restricted Stock awards may be granted
under the Plan, subject to shareholder approval, (b) changing the class of
employees eligible to receive such grants, subject to shareholder approval, (c)
increasing the periods during which grants may be made or fulfilled, or (d)
providing for the administration of the Plan other than by the Committee. No
termination, modification or amendment of the Plan may, without the consent of
any employee with rights under an outstanding grant under this Plan, adversely
affect the rights of such employee.

13.

RESTRICTIONS ON ISSUING SHARES.

 

(a)

Each issuance of Common Stock shares as the result of the exercise of any option
or satisfaction of the conditions under any Restricted Stock award shall be
subject to the condition that if at any time the Company shall determine in its
discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with, such
delivery or purchase of Common Stock shares, then in any such event, such option
exercise or Restricted Stock grant satisfaction shall not be effective unless
such withholding, listing, registration, qualification, consent or approval
shall have been effected or obtained under conditions acceptable to the Company.

 

(b)

Any employee of the Company who receives an option or Restricted Stock grant
under this Plan, by the receipt of that grant agrees to be subject to and bound
by the provisions of the Company’s standard form Shareholder’s Buy-Sell
Agreement, containing terms acceptable to the Company, and as a condition of
exercise of such option or right to acquire the Restricted Stock shall execute
such Shareholder’s Buy-Sell Agreement, which shall include among other
provisions, non transferability, call rights, a drag along, and a first right of
refusal.

14.

INDEMNIFICATION OF COMMITTEE.

In addition to such other rights of indemnification as they may have as members
of the Board or as members of the Committee, the members of the Committee shall
be indemnified by the Company against all costs and expenses reasonably incurred
by them in connection with an action, suit or proceeding to which they or any of
them may be party be reason of any action taken or failure to act under or in
connection with the Plan, or any option or Restricted Stock award granted
hereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by legal counsel selected by the Company) or paid by
them in satisfaction or a judgment in any such action, suit or proceeding,
except a judgment based upon a finding of bad faith. Upon the institution of any
such action, suit or proceeding, a Committee member shall notify the Company in
writing, giving an opportunity, at its own expense, to handle and defend the
same before such Committee member undertakes to handle it on his own behalf.

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15.

EFFECTIVENESS OF THE PLAN.

The Plan shall become effective as of the Effective Date. Options and Restricted
Stock awards may be granted to employees prior to such date, but the right of
any employee to the issuance of Common Stock shares as the result of the
exercise of any option or satisfaction of the conditions under any Restricted
Stock award shall be conditioned upon such adoption and approval by the Board of
the Company.

16.

MISCELLANEOUS.

 

(a)

Employment Not Affected. Neither the granting of an option or Restricted Stock
award, nor the exercise of the option or fulfillment of the conditions of an
award shall be construed as granting to any employee any right with respect to
continuance of his employment with the Company. Except as may otherwise be
limited by a written agreement between the Company and an employee, the right of
the Company to terminate at will the employee’s employment with it at any time
(whether by dismissal, discharge, retirement or otherwise) is specifically
reserved by the Company as the employer or on behalf of the employer (whichever
the case may be), and acknowledged by the employee.

 

(b)

Notice. Any notice to the Company provided for in this instrument shall be
addressed to it in care of its Secretary at its principal office in the State of
Tennessee, and any notice to an employee shall be addressed to the employee at
the current address shown on the payroll records of the Company. Any notice
shall be deemed to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.

 

(c)

Waiver or Breach. No waiver of any breach of any covenant or provision of this
Plan shall be deemed a waiver of any preceding or succeeding breach of the
provisions of this Plan, or of any other covenant or provision herein contained.
No extension of time for performance of any obligation or act shall be deemed an
extension of the time for performance of any other obligation or act.

 

(d)

Binding Effect. This agreement shall be binding upon and shall inure to the
benefit of the successors and permitted assigns of the parties hereto.

 

COMPANY:

Miller Petroleum, Inc.

 

By:___________________________

Scott M. Boruff, CEO

 

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