UNIT CORPORATION
STOCK APPRECIATION RIGHTS AWARD AGREEMENT
 
PERSONAL AND CONFIDENTIAL
 
[Date]
 
Participant Name
[--------------------]
Date of Grant
[--------------------]
Type of Award
Stock Settled SAR
Grant Price per Stock Appreciation Right
[--------------------]
Number of Share equivalents subject to this Award
[--------------------]
Expiration Date
[--------------------]

 
We are pleased to inform you that as an employee of Unit Corporation or one of
its Affiliates, you have been granted an Award of Stock Appreciation Rights
(also referred to as a "SARs") under the Unit Corporation Stock and Incentive
Compensation Plan (the "Plan"). The SARs give you the opportunity to receive
shares of Unit Corporation common stock at the time of exercise in an amount
determined by the excess of (i) the Fair Market Value of the exercised number of
SARs (which shall be equal, on a per share basis to the Fair Market Value of
Shares) as of the date of exercise over (ii) the grant price of the specified
number of SAR Shares. Such excess, if any, shall be paid in whole shares of the
Stock with a value per share equal to the Fair Market Value of the Shares as of
the date of exercise, provided that fractional shares of the Shares shall be
rounded down to the nearest whole share of the SARs This Award is subject to
your acceptance of this Award as provided in Section 1 below and the terms and
conditions that follow in this agreement.
 
The date of the Award evidenced by this agreement (the "date of grant") and the
date the SARs expire are set forth above.
 
The terms and conditions of this Award, including non-standard provisions
permitted by the Plan, are set forth below.
 
1.  Acceptance of SARs.  The SARs cannot be exercised unless you sign your name
in the space provided on the enclosed copy of this agreement and cause it to be
delivered to the Secretary of the Company, 7130 South Lewis, Suite 1000, Tulsa,
Oklahoma 74136, before the 30th day after the date of grant. If the Secretary
does not timely receive your properly signed copy of this agreement, then,
despite anything else stated in this agreement, the SARs will be void as if they
were never awarded to you and will be of no effect. Your signing and timely
delivering a copy of this agreement will evidence your acceptance of the SARs on
the terms and conditions stated in this agreement.
 
2.  When You Can Exercise the SARs.
 

(a)  
Unless previously forfeited and subject to the other provisions of this
agreement, the SARs shall be exercisable in the following percentages of the
number of Share equivalents subject to this Award on the following dates:

 

 
(i)
 
 
[----]% on the [----------] anniversary of the date of grant;
 

 
 
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(ii) 
 
 
an additional [---]% on the [----------] anniversary of the date of grant; and
 
 
(iii)
 
 
the remaining [---]% on the [----------] anniversary of the date of grant
 

 
 

(b)  
Except as otherwise provided in Section 6, the SARs shall lapse on the 10th
anniversary of the date of grant.

 
 

(c)  
SARs shall not become exercisable unless you remain continuously in the employ
or service of Unit Corporation or of one of its Affiliates from the date of the
grant until exercise, except as provided in Sections 6 and 10.

 
 

(d)  
The right to exercise shall be cumulative. If the full number of Shares with
respect to which the SARs are available for exercise in a period shall not be
exercised, the balance, subject to any forfeiture provisions, may be exercised
at any time or from time to time thereafter before the lapse, forfeiture or
termination of the SARs.

 
3.  Notice of Exercise.  After you vest in them, you may exercise your SARs by
delivering a signed Notice of Exercise in the form attached to this agreement to
Unit Corporation's Secretary at the office specified above. Delivery of a signed
form constitutes your legally binding irrevocable exercise of the SARs, as
indicated on the form. In the case of any delivery by facsimile transmission,
the original Notice of Exercise form shall be promptly forwarded by you by hand
or mail to the Secretary of Unit Corporation. If a properly signed Notice of
Exercise form is not received by Unit Corporation's Secretary by the applicable
expiration date specified in Sections 2(b), 6 or 7, the notice will be deemed
void and of no effect. If notice of exercise of the SARs is given by a person
other than you, Unit Corporation may require as a condition to exercise of the
SARs the submission to Unit Corporation of appropriate proof of the right of
such person to exercise the SARs. A SAR will be deemed to have been exercised on
the date on which the notice is received by Unit Corporation's secretary as
described above.
 
4.  Terms of Exercise.  On proper exercise of any vested portion of your SARs,
you shall be entitled to receive the excess of (i) the Fair Market Value of the
specified number of SARs (which shall be equal, on a per share basis to the Fair
Market Value of the Shares) as of the date of exercise over (ii) the grant price
of the specified number of SARs. Such excess, if any, shall be paid in whole
shares of the Shares with a value per share equal to the Fair Market Value of
the Shares as of the date of exercise, provided that fractional shares of the
Shares shall be rounded down to the nearest whole share.
 
5.  Transferability of SARs.  The SARs shall not be transferable by you
otherwise than (i) by will, (ii) by the laws of descent and distribution, or
(iii) under a qualified domestic relations order. During your lifetime the SARs
shall be exercisable only by you. Any transferred SARs shall continue to be
subject to the terms and conditions of this agreement, including, without
limitation, the provisions of this Section 5. Any transfer permitted under this
agreement shall be promptly reported in writing to Unit Corporation's Secretary.
 
6.  Affect of Death or Disability.  Despite what is provided for in Section 2,
if your employment by or service with Unit Corporation or one of its Affiliates
terminates by reason of your death or disability (as determined by the Committee
in its sole discretion), all of the SARs will become immediately exercisable in
full and non-forfeitable and shall continue to be exercisable for a period of
six months from the date of termination.
 
7.  Affect of Other Causes of Termination of Employment.
 

(a)  
Subject to Section 7(b), if your employment with the Company or a subsidiary
terminates otherwise than by reason of your death or disability, the SARs shall
be exercisable only with respect to the number of SARs with respect to which it
was exercisable on the date of termination of employment and then must be
exercised, if at all, within thirty days after your termination of employment or
such SARs

 
 
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 shall terminate and cease to be exercisable; provided however, that in the case
of termination for Cause, such SARs shall be forfeited and no longer exercisable
as of the date of your termination of employment.

 

(b)  
For the purposes of this agreement, your employment by an Affiliate of Unit
Corporation shall be considered terminated on the date that the company by which
you are employed is no longer an Affiliate of Unit Corporation.

 
8.  Transfer of Employment; Leave of Absence.  A transfer of your employment
from Unit Corporation to an Affiliate or vice versa, or from one Affiliate to
another, without an intervening period, shall not be deemed a termination of
employment. If you are granted an authorized leave of absence, you shall be
deemed to have remained in the employ of the company by which you are employed
during such leave of absence.
 
9.  Adjustments in SARs.
 

(a)  
The existence of this agreement and the SARs shall not affect or restrict in any
way the right or power of the Board of Directors or the stockholders of Unit
Corporation (or any of its Affiliates) to make or authorize any reorganization
or other change in its capital or business structure, any merger or
consolidation, any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the SARs, the dissolution or liquidation of the
company or any sale or transfer of all or any part of its (or their) assets or
business.

 

(b)  
In the event of any corporate event or transaction that is subject to the
provisions of Section 4.2 of the Plan, the Committee may make adjustments or
amendments to the terms of this Award as it deems appropriate, under the
circumstances, in its sole discretion. Any adjustments or amendments may
include, but are not limited to, (i) changes in the number and kind of Share
equivalents into which your SARs may be settled, (ii) changes in the grant price
per share, and (iii) accelerating the vesting of the SARs. The determination by
the Committee as to the terms of any adjustments or amendments shall be
conclusive and binding.

 
10.  Change in Control.  Article 14 of the Plan shall apply to the terms of this
Award in the event a Change of Control occurs.
 
11.  Tax Matters.
 

(a)  
You should consult your tax accountant about the tax consequences of the grant,
vesting and exercise of the SARs.

 

(b)  
On exercise of a SAR, Federal income tax withholding (and state and local income
tax withholding, if applicable) may be required in respect of taxes on income
realized. You are required to deliver to Unit Corporation the amounts that it
determines should be withheld, provided, however, that you may pay a portion or
all of such withholding taxes by electing to have (i) Unit Corporation withhold
a portion of the Shares that would otherwise be delivered to you, or (ii) you
can deliver to Unit Corporation Shares that you have owned for at least six
months, in either case, having a Fair Market Value (as of the date that the
amount of taxes is to be withheld) in the amount to be withheld, and provided
further that your election shall be irrevocable.

 
12.  Employment.  Nothing contained in this agreement shall confer on you any
right to continue in the employ or other service of Unit Corporation or any of
its Affiliates or limit in any way the right of your employer to change your
compensation or other benefits or to terminate your employment or other service
with or without Cause.
 
13.  Short-Swing Trading.  An executive officer of Unit Corporation who
exercises a SAR must report the disposition of the SARs on a Form 4 Statement of
Changes in Beneficial Ownership filed within two trading
 
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days with the EDGAR database of the Securities and Exchange Commission. While
the General Counsel of the Company will draft the Form 4 on your request, the
filing is your personal responsibility.
 
14.  Forfeiture of Award.  If at any time during your employment by Unit
Corporation or one of its Affiliates, the Committee determines that you have
engaged in any activity in competition with any activity of Unit Corporation or
its Affiliates, or activity or conduct that is inimical, contrary or harmful to
the interests of Unit Corporation or its Affiliates, including but not limited
to:
 

(a)  
conduct relating to your employment for which either criminal or civil penalties
against you may be sought;

 

(b)  
conduct or activity that results in the termination of your employment because
of your: (i) failure to abide by your employer's rules and regulations governing
the transaction of its business, including without limitation, its Code of
Business Ethics and Conduct; (ii) inattention to duties, or the commission of
acts within employment with your employer amounting to negligence or misconduct;
(iii) misappropriation of funds or property of Unit Corporation or any of its
Affiliates or committing any fraud against Unit Corporation or any of its
Affiliates or against any other person or entity in the course of employment
with Unit Corporation or any of its Affiliates; (iv) misappropriation of any
corporate opportunity, or otherwise obtaining personal profit from any
transaction which is adverse to the interests of Unit Corporation or any of its
Affiliates or to the benefits of which Unit Corporation or any of its Affiliates
is entitled; or (v) the commission of a felony or other crime involving moral
turpitude;

 

(c)  
accepting employment with, acquiring a 5% or more equity or participation
interest in, serving as a consultant, advisor, director or agent of, directly or
indirectly soliciting or recruiting any employee of Unit Corporation or any of
its Affiliates who was employed at any time during your tenure with Unit
Corporation or any of its Affiliates, or otherwise assisting in any other
capacity or manner any company or enterprise that is directly or indirectly in
competition with or acting against the interests of Unit Corporation of an of
its Affiliates (a "competitor"), except for (i) any isolated, sporadic
accommodation or assistance provided to a competitor, at its request, by you
during your tenure with Unit Corporation of an of its Affiliates, but only if
provided in the good faith and reasonable belief that such action would benefit
Unit Corporation or any of its Affiliates by promoting good business relations
with the competitor and would not harm Unit Corporation or any of its Affiliates
interests in any substantial manner or (ii) any other service or assistance that
is provided at the request or with the written permission of Unit Corporation or
any of its Affiliates;

 

(d)  
disclosing or misusing any confidential information or material concerning Unit
Corporation or any of its Affiliates; or

 

(e)  
making any statement or disclosing any information to any customers, suppliers,
lessors, lessees, licensors, licensees, regulators, employees or others with
whom Unit Corporation or any of its Affiliates engages in business that is
defamatory or derogatory with respect to the business, operations, technology,
management, or other employees of Unit Corporation or any of its Affiliates, or
taking any other action that could reasonably be expected to injure Unit
Corporation or any of its Affiliates in its business relationships with any of
the foregoing parties or result in any other detrimental effect on Unit
Corporation or any of its Affiliates;

 
then the SARs subject to this Award shall automatically terminate and be
forfeited effective as of the date you breached this Section 14.(a) - (e) as
determined by the Committee and (i) you must return to Unit Corporation any
Shares issued to you on your exercise of SARs, (ii) if any of the SARs or the
Shares issued on your exercise of SARs are no longer in your possession you must
pay to Unit Corporation, without interest, all cash, securities or other assets
received by you on the sale or transfer of the SARs or such Shares, and (iii)
all unvested SARs shall be forfeited.
 
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(f)   If you owe any amount under the above subsections of this Section 14, you
acknowledge that your employer may, to the fullest extent permitted by
applicable law, deduct such amount from any amounts your employer owes you from
time to time for any reason (including without limitation amounts owed to you as
salary, wages, reimbursements or other compensation, fringe benefits, retirement
benefits or vacation pay). Whether or not your employer elects to make any such
set-off in whole or in part, if your employer does not recover by means of
set-off the full amount you owe it, you hereby agree to pay immediately the
unpaid balance to your employer.
 
15.  Time of Essence.  Time is of the essence of the provisions of this
agreement with respect to delivering notices. There is no grace period.
 
16.   Listing; Securities Considerations.  Despite anything else in this
agreement, if at any time Unit Corporation determines, in its sole discretion,
that the listing, registration or qualification (or any updating of any such
document) of the Shares issuable under this agreement is necessary on any
securities exchange or under any federal or state securities or blue sky law, or
that the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the issuance of the Shares of
Restricted Stock, or the removal of any restrictions imposed on such Shares,
such Shares shall not be issued, in whole or in part, or the restrictions on the
Shares removed, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to Unit Corporation.
 
17.  Binding Effect.  This agreement shall inure to the benefit of and be
binding on the parties to this agreement and their respective heirs, executors,
administrators, legal representatives and successors. Without limiting the
generality of the foregoing, whenever the term "you" is used in any provision of
this agreement under circumstances where the provision appropriately applies to
the heirs, executors, administrators or legal representatives to whom this Award
may be transferred as provided for in this agreement, the term "you" shall be
deemed to include that person or persons.
 
18.  Plan Provisions Govern. 
 

(a)  
This Award is subject to the terms, conditions, restrictions and other
provisions of the Plan as fully as if all those provisions were set forth in
their entirety in this agreement. If any provision of this agreement conflicts
with a provision of the Plan, the Plan provision shall control.

 

(b)  
You acknowledge that a copy of the Plan and a prospectus summarizing the Plan
was distributed or made available to you and that you were advised to review
that material before entering into this agreement. You waive the right to claim
that the provisions of the Plan are not binding on you and your heirs,
executors, administrators, legal representatives and successors.

 

(c)  
Capitalized terms used but not defined in this agreement have the meaning given
those terms in the Plan.

 

(d)  
By your signature below, you represent that you are familiar with the terms and
provisions of the Plan, and hereby accept this agreement subject to all of the
terms and provisions of the Plan. You have reviewed the Plan and this agreement
in their entirety and fully understand all provisions of this agreement. You
agree to accept as binding, conclusive and final all decisions or
interpretations of the Committee on any questions arising under the Plan or this
agreement.

 
19.  Governing Law.  This agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma despite any laws of the State
of Oklahoma that would apply the laws of a different State.
 
20.  Severability.  If any term or provision of this agreement, or the
application of this agreement to any person or circumstance, shall at any time
or to any extent be invalid, illegal or unenforceable in any respect as written,
 
Page 5 of 7

 
both parties intend for any court construing this agreement to modify or limit
that provision so as to render it valid and enforceable to the fullest extent
allowed by law. Any provision that is not susceptible of reformation shall be
ignored so as to not affect any other term or provision of this agreement, and
the remainder of this agreement, or the application of that term or provision to
persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable, shall not be affected thereby and each term and
provision of this agreement shall be valid and enforced to the fullest extent
permitted by law.
 
21.  Consent to Electronic Delivery; Electronic Signature.  In lieu of receiving
documents in paper format, you agree, to the fullest extent permitted by law, to
accept electronic delivery of any documents that may be required to be deliver
to you (including, but not limited to, prospectuses, prospectus supplements,
grant or award notifications and agreements, account statements, annual and
quarterly reports, and all other forms of communications) in connection with
this and any other award made or offered by Unit Corporation. Electronic
delivery may be via electronic mail system or by reference to a location on a
company intranet to which you have access. You hereby consent to any and all
procedures Unit Corporation has established or may establish for an electronic
signature system for delivery and acceptance of any such documents that may be
required to be delivered to you, and agrees that your electronic signature is
the same as, and shall have the same force and effect as, your manual signature.
 
22.  Entire Agreement; Modification.  The Plan and this agreement contain the
entire agreement between the parties with respect to the subject matter
contained in this agreement and may not be modified except as provided in the
Plan, as it may be amended from time to time in the manner provided in the Plan
(or in this agreement), or as it may be amended from time to time by a written
document signed by each of the parties to this agreement. Any oral or written
agreements, representations, warranties, written inducements, or other
communications with respect to the subject matter contained in this agreement
made before the signing of this agreement shall be void and ineffective for all
purposes.
 
23.  Counterparts.  This agreement may be signed in duplicate counterparts, each
of which shall be deemed to be an original.
 
In Witness Whereof, the parties have caused this agreement to be signed and
delivered as of the day and year first above written.
 
Unit Corporation
Participant:
 
           
___________________________________
_______________________________________
By:
Signature
Signature
Title:
   
Date:
 
Date: __________________________________

 

Page 6 of 7

 

 
NOTICE OF EXERCISE
 
 
(STOCK SETTLED SAR)
 
To:
     
Unit Corporation
 
7130 South Lewis, Suite 1000
 
Tulsa, Oklahoma 74136
Date of Exercise: ___________________________
Attention: Office of the Corporate Secretary
 

 
Ladies and Gentlemen:
 
This constitutes notice that I elect to exercise my Stock Appreciation Right
Award as follows:
 
Stock appreciation right dated: 
 
 
 
_______________________________________
 
 
Number of Shares (Common Stock equivalents) as to which stock appreciation right
is exercised:
 
 
 
_______________________________________
 
 
Certificates to be issued in name of:
 
 
 
_______________________________________
 

 
By this exercise, I agree (i) to provide such additional documents as you may
require under the terms of the Unit Corporation Stock and Incentive Compensation
Plan, and (ii) to provide for the payment by me to you of your withholding
obligation, if any, relating to this exercise of my stock appreciation right.

Income Tax Withholding Options
[ ] By checking the box next to this line I represent that I will pay to Unit
Corporation the monetary amount that it determines is owed by me to satisfy the
tax withholding obligation created by this exercise.
[ ] By checking the box next to this line I elect to have Shares withheld from
the Shares deliverable on my exercise to satisfy the tax withholding obligation
determined by Unit Corporation to be due as a result of my exercise.
[ ] By checking the box next to this line I elect to return that number of
shares (owned by me for six months or more) necessary to satisfy the tax
withholding obligation determined by Unit Corporation to be due as a result of
my exercise.
 

 
Very truly yours,
   
______________________________________
Signature
     
______________________________________
Print your name
 

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