Exhibit 10.3

UNIT CORPORATION

SEPARATION BENEFIT PLAN

FOR SENIOR MANAGEMENT

as amended and restated effective

March 19, 2009

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UNIT CORPORATION

SEPARATION BENEFIT PLAN

FOR SENIOR MANAGEMENT

INDEX

 

          Page Introduction    1 ARTICLE 1. Definitions    1

1.1

   “Base Salary”    1

1.2

   “Beneficiary”    1

1.3

   “Board of Directors”    1

1.4

   “Bonus”    1

1.5

   “Change in Control”    1

1.6

   “Code”    3

1.7

   “Company”    3

1.8

   “Comparable Position”    3

1.9

   “Compensation Committee”    3

1.10

   “Completed Year of Service”    3

1.11

   “Discharge for Cause”    3

1.12

   “Employing Company”    4

1.13

   “ERISA”    4

1.14

   “Human Resources Director”    4

1.15

   “Participant”    4

1.16

   “Plan”    4

1.17

   “Separation Agreement”    4

1.18

   “Separation Benefit”    4

1.19

   “Separation Period”    4

1.20

   “Separation from Service”    4

1.21

   “Specified Employee”    4

1.22

   “Years of Service”    4 ARTICLE 2. Benefits    4

2.1

   Participants    4

2.2

   Separation Benefit    5

2.3

   Eligibility    5

2.4

   Separation Benefit Amount    6

2.5

   Separation Benefit Limitation    7

2.6

   Withholding Tax    7

2.7

   Reemployment of a Participant    7

2.8

   Integration with Disability Benefits    7

2.9

   Plan Benefit Offset    7

2.10

   Recoupment    8

2.11

   Completion of Twenty Years of Service    8

2.12

   Change in Control    8

 

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ARTICLE 3. Method of Payment

   8

3.1

   Separation Benefit Payment    8

3.2

   Protection of Business    9

3.3

   Death Subsequent to Separation from Service    10

3.4

   Payment to Specified Employees Upon Separation from Service    11 ARTICLE 4.
Waiver and Release of Claims    11 ARTICLE 5. Funding    11 ARTICLE 6.
Administration    11

6.1

   Named Fiduciary    11

6.2

   Fiduciary Responsibilities    12

6.3

   Specific Fiduciary Responsibilities    12

6.4

   Allocations and Delegations of Responsibility    12

6.5

   Advisors    13

6.6

   Plan Determination    13

6.7

   Modification and Termination    13

6.8

   Indemnification    13

6.9

   Successful Defense    14

6.10

   Unsuccessful Defense    14

6.11

   Advance Payments    14

6.12

   Repayment of Advance Payments    14

6.13

   Right of Indemnification    14 ARTICLE 7. Effective Date and Plan Year    15
ARTICLE 8. Miscellaneous    15

8.1

   Assignment    15

8.2

   Governing Law    15

8.3

   Employing Company Records    15

8.4

   Employment Non-Contractual    15

8.5

   Taxes    16

8.6

   Binding Effect    16

8.7

   Entire Agreement    16

8.8

   Decisions and Appeals    16

 

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UNIT CORPORATION

SEPARATION BENEFIT PLAN

FOR SENIOR MANAGEMENT

Introduction

The purpose of the Unit Corporation Separation Benefit Plan for Senior
Management is to provide certain officers and key executives of Unit Corporation
or its subsidiaries with appropriate assurances of continued income and other
benefits for a reasonable period of time in the event that the individual’s
employment ceases under the circumstances described herein.

The Compensation Committee shall, in its absolute discretion select the
individuals to be covered by this Plan from time to time. The Compensation
Committee may notify each selected individual of his or her selection and
provide him or her with a copy of this Plan.

Participation in the Plan shall not in any respect be deemed to grant
Participant either a right to continued participation in the Plan or a right to
continued employment and employment and participation remains terminable at will
by either the Employing Company or Participant at any time for any reason or for
no reason.

ARTICLE 1.

Definitions

 

1.1 “Base Salary” means the regular basic cash remuneration before deductions
for taxes and other items withheld, and without regard to any salary reduction
under any plans maintained by an Employing Company under Section 401(k) or 125
of the Code, payable to a Participant for services rendered to an Employing
Company, but not including pay for Bonuses, incentive compensation, special pay,
awards or commissions.

 

1.2 “Beneficiary” means the person designated by a Participant in a written
instrument filed with the Compensation Committee to receive benefits under this
Plan.

 

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

 

1.4 “Bonus” means any annual incentive compensation paid to a Participant over
and above Base Salary earned and paid in cash or otherwise.

 

1.5 “Change in Control” of the Company shall be deemed to have occurred as of
the first day that any one or more of the following conditions shall have been
satisfied:

 

  (i) On the close of business on the tenth day following the time the Company
learns of the acquisition by any individual entity or group (a “Person”),
including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of Common Stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
Directors (the “Outstanding Company Voting Securities”); excluding, however, the
following: (A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or exchanged was
acquired directly from the Company); (B) any acquisition by the Company; (C) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (iii) of this definition; and (E) any
acquisition by the George Kaiser Family Foundation (“GKFF”) as long as the
acquisition does not cause GKFF’s total ownership to exceed 25% of our issued
and outstanding shares of common stock;

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  (ii) individuals who, as of the date hereof, constitute the Board of Directors
(the “Incumbent Board”), cease for any reason to constitute at least a majority
of such Board; provided that any individual who becomes a Director of the
Company subsequent to the date hereof whose election or nomination for election
by the Company’s stockholders was approved by the vote of at least a majority of
the Directors then comprising the Incumbent Board, shall be deemed a member of
the Incumbent Board; and provided further, that any individual who was initially
elected as a Director of the Company as a result of an actual or threatened
election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the
Board, shall not be deemed a member of the Incumbent Board;

 

  (iii) approval by the stockholders of the company of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Corporate Transaction”); excluding, however, a
Corporate Transaction pursuant to which (i) all or substantially all of the
individuals or entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 70% of, respectively, the outstanding shares of common
stock, and the combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of Directors, as the case
may be, of the corporation resulting from such Corporate Transaction (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
indirectly) in substantially the same proportions relative to each other as
their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (other than: the Company; the corporation
resulting from such Corporate Transaction; and any Person which beneficially
owned, immediately prior to such Corporate Transaction, directly or indirectly,
25% or more of the Outstanding Company Common Stock or the Outstanding Voting
Securities, as the case may be) will beneficially own, directly or indirectly,
25% or more of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined voting
power of the outstanding securities of such corporation entitled to vote
generally in the election of Directors and (iii) individuals who were members of
the Incumbent Board will constitute a majority of the members of the Board of
Directors of the corporation resulting from such Corporate Transaction; or

 

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  (iv) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.

 

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

 

1.7 “Company” means Unit Corporation, the sponsor of this Plan.

 

1.8 “Comparable Position” means a job with an Employing Company or successor
company at the same or higher Base Salary as a Participant’s current job and at
a work location within reasonable commuting distance from a Participant’s home,
as determined by the Participant’s Employing Company.

 

1.9 “Compensation Committee” means the Compensation Committee established and
appointed by the Board of Directors.

 

1.10 “Completed Year of Service” means the period of time beginning with a
Participant’s date of hire or the anniversary of the date of hire and ending
twelve months thereafter.

 

1.11 “Discharge for Cause” means termination of a Participant’s employment by
the Employing Company due to:

 

  (i) the consistent failure of Participant to perform Participant’s prescribed
duties to the Employing Company (other than any such failure resulting from
Participant’s incapacity due to physical or mental illness);

 

  (ii) the commission by Participant of a wrongful act that caused or was
reasonably likely to cause damage to the Employing Company;

 

  (iii) an act of gross negligence, fraud, unfair competition, dishonesty or
misrepresentation in the performance of Participant duties on behalf of the
Employing Company;

 

  (iv) the conviction of or the entry of a plea of nolo contendere by
Participant to any felony or the conviction of or the entry of a plea of nolo
contendere to any offense involving dishonesty, breach of trust or moral
turpitude;

 

  (v) a breach of Participant’s fiduciary duty involving personal profit; or

 

  (vi) similar actions.

 

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1.12 “Employing Company” with respect to a Participant shall mean either the
Company or, if applicable, the subsidiary of the Company which employs
Participant.

 

1.13 “ERISA” means the Employee Retirement Income Security Act of 1974, as from
time to time amended, and all regulations and rulings issued thereunder by
governmental administrative bodies.

 

1.14 “Human Resources Director” means the Human Resources Director of the
Company.

 

1.15 “Participant” means an individual who is designated as such pursuant to
Section 2.1.

 

1.16 “Plan” means the Unit Corporation Separation Benefit Plan for Senior
Management, as set forth in this document and as may be amended from time to
time.

 

1.17 “Separation Agreement” means the agreement between an Employee and the
Employing Company in which the Participant waives and releases the Company,
Employing Company and other potentially related parties from certain claims in
exchange for and in consideration of payments of the Separation Benefit, to
which the Participant would not otherwise be entitled.

 

1.18 “Separation Benefit” means the benefit provided for under this Plan as
determined under Article 2.

 

1.19 “Separation Period” means the period of time over which a Participant
receives Separation Benefits under the Plan.

 

1.20 “Separation from Service” shall mean a Participant’s “separation from
service” as determined by the Company in accordance with Section 409A of the
Code. A Separation from Service shall be effective on the date specified by the
Employing Company (the “Termination Date”).

 

1.21 “Specified Employee” means those employees of the Company or an Employing
Company who are determined by the Compensation Committee to be a “specified
employee” in accordance with Section 409A of the Code and the regulations
promulgated thereunder.

 

1.22 “Years of Service” means the sum of the number of continuous Completed
Years of Service as an employee of an Employing Company during Participant’s
period of employment beginning with Participant’s most recent hire date and
ending with Participant’s most recent termination date.

ARTICLE 2.

Benefits

 

2.1 Participants

Each individual named on Schedule I hereto shall be a Participant in the Plan.
Schedule I may be amended by the Compensation Committee from time to time to add
individuals as a Participant.

 

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2.2 Separation Benefit

A Separation Benefit shall be provided under the provisions of this Article 2 to
a Participant who is eligible to receive a Separation Benefit under Section 2.3
at the time of their Separation from Service.

 

2.3 Eligibility

Each Participant who complies with all administrative requirements of this Plan,
including the provisions of Article 4, is eligible to receive a Separation
Benefit following their Separation from Service. However, a Participant is
ineligible to receive a Separation Benefit if he or she fails to satisfy any of
the requirements of this Plan, including, but not limited to, failure to
establish that his or her termination met the requirements for a Separation from
Service. Additionally, a Participant shall be ineligible to participate in this
Plan if that Participant’s termination of employment results from:

(i) A Discharge for Cause,

(ii) A court decree or government action or recommendation having an effect on
an Employing Company’s operations or manpower involving rationing or price
control or any other similar type cause beyond the control of an Employing
Company,

(iii) An offer to Participant of a position with an Employing Company, or
affiliate,

(iv) A termination under which a Participant accepts any benefits under an
incentive retirement plan or other severance or termination benefits program,
contract or plan offered by the Company or the Employing Company,

(v) A Participant who has a written employment contract which contains severance
provisions,

(vi) A temporary work cessation due to strikes, lockouts or similar reasons,

(vii) The divestiture of any business of an Employing Company if the Participant
is offered a Comparable Position by the purchaser or successor of such business,
an affiliate thereof, or an affiliate of an Employing Company, or

(viii) A termination of the Participant if the Participant is offered a
Comparable Position arranged for or secured by an Employing Company.

 

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2.4 Separation Benefit Amount

The Separation Benefit payable to a Participant under this Plan shall be based,
in part, on his/her Years of Service with the Company, or Employing Company. The
formula for determining a Participant’s Separation Benefit payment shall be
calculated by dividing Participant’s annual Base Salary in effect immediately
before the date of Separation from Service by 52 to calculate the weekly
separation benefit (the “Weekly Separation Benefit”). The amount of the
Separation Benefit payable to Participant shall then be determined in accordance
with the following applicable provision:

 

  2.4.1 Involuntary separation - In the event the Separation from Service is the
result of an Employing Company terminating the employment of Participant, the
Separation Benefit shall be determined according to the following schedule:

Involuntary Separation

Schedule of Separation Benefits

 

Years of Service

   Number of Weekly
Separation Benefit
Payments:    Years of
Service    Number of Weekly
Separation Benefit
Payments:

1

   4    14    56

2

   8    15    60

3

   12    16    64

4

   16    17    68

5

   20    18    72

6

   24    19    76

7

   28    20    80

8

   32    21    84

9

   36    22    88

10

   40    23    92

11

   44    24    96

12

   48    25    100

13

   52    26 or more    104

 

  2.4.2 Voluntary separation - In the event the Separation from Service is the
result of Participant’s own action (such as by way of example and not
limitation, quitting, resignation or retirement) the Separation Benefit shall be
determined according to the following Schedule:

Voluntary Separation

Schedule of Separation Benefits

 

Years of Service

   Number of Weekly
Separation Benefit
Payments

1-19

   0

20

   80

21

   84

22

   88

23

   92

24

   96

25

   100

26 or more

   104

 

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Under certain exceptional circumstances the Compensation Committee may, in its
sole and absolute discretion, choose to treat a voluntary separation as an
involuntary separation and allow a Participant to receive Separation Benefits in
accordance with the schedule set forth in Section 2.4.1.

 

2.5 Separation Benefit Limitation

Notwithstanding anything in the Plan to the contrary, the Separation Benefit
payable to any Participant under this Plan shall never exceed the lesser of
(i) 104 Weekly Separation Benefit payments; or (ii) the amount permitted under
ERISA to maintain this Plan as a welfare benefit plan. The benefits payable
under this Plan shall be inclusive of and offset by any amounts paid under
federal, state, local or foreign government worker notification (e.g., Worker
Adjustment and Retraining Notification Act) or office closing requirements.

 

2.6 Withholding Tax

The Employing Company shall deduct from the amount of any Separation Benefits
payable under this Plan, any amount required to be withheld by the Employing
Company by reason of any law or regulation, for the payment of taxes or
otherwise to any federal, state, local or foreign government. In determining the
amount of any applicable tax, the Employing Company shall be entitled to rely on
the number of personal exemptions on the official form(s) filed by Participant
with the Employing Company for purposes of income tax withholding on regular
wages.

 

2.7 Reemployment of a Participant

Entitlement to the unpaid balance of any Separation Benefit due a Participant
under this Plan shall be revoked immediately on reemployment of the person as an
employee of an Employing Company. Any unpaid balance shall not be payable in any
future period.

However, if the person’s re-employment is subsequently terminated and he or she
then becomes entitled to a Separation Benefit under this Plan, Years of Service
for the period of re-employment shall be added to that portion of his or her
prior service represented by the unpaid balance or the revoked entitlement for
the prior Separation Benefit.

 

2.8 Integration with Disability Benefits

The Separation Benefit payable to a Participant with respect to any Separation
Period shall be reduced (but not below zero) by the amount of any disability
benefit payable from any disability plan or program sponsored or contributed to
by an Employing Company. The amount of any resulting reduction shall not be paid
to Participant in any future period.

 

2.9 Plan Benefit Offset

The amount of any severance or separation type payment that an Employing Company
is or was obligated to pay to a Participant under any law, decree, or court
award, because of Participant’s termination of employment from an Employing
Company shall reduce the amount of Separation Benefit otherwise payable under
this Plan.

 

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2.10 Recoupment

The Company may deduct from the Separation Benefit any amount owing to an
Employing Company from

 

  (a) Participant, or

 

  (b) the executor or administrator of Participant’s estate.

 

2.11 Completion of Twenty Years of Service

Any Participant who completes 20 Years of Service before the termination of this
Plan shall be vested in his/her Separation Benefit, notwithstanding the
subsequent termination of this Plan before that Participant’s Separation from
Service. Any Separation Benefit deemed to have vested under this Section shall
be payable on such Participant’s Separation from Service with the Employing
Company and shall be paid in accordance with the greater of (1) the Plan
provisions in effect immediately before the termination of this Plan, and
(2) the Plan provisions in effect on the date Participant completed 20 Years of
Service.

 

2.12 Change in Control

Unless otherwise provided in writing by the Board of Directors before a Change
in Control of the Company, all Participant shall be vested in his/her Separation
Benefit as of the date of the Change in Control based on the Participant’s then
Years of Service as determined by reference to the schedule set forth in
Section 2.3.1 of this Plan. Any Separation Benefit deemed to have vested under
this Section shall be payable upon Participant’s Separation from Service with
the Employing Company and shall be paid in accordance with the Plan provisions
in effect immediately before the Change in Control.

ARTICLE 3.

Method of Payment

 

3.1 Separation Benefit Payment

Separation Benefit payments shall be paid in equal installments in the same
manner as wages were paid to Participant while employed, and, subject to
Section 3.4, the installments shall begin no later than 90 days following the
Termination Date. Notwithstanding anything in the Plan to the contrary, the
Separation Period for a Participant shall never exceed the amount of time
permitted under ERISA to maintain this Plan as a welfare benefit plan. If under
the payment schedule set forth in this Plan, the Separation Period will expire
before the full payment of the Separation Benefit owed to a Participant under
this Plan, then the total amount unpaid as of the final installment shall be
paid to the Participant in the final installment.

 

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  3.1.1 Each Participant, upon selection for participation in this Plan, may
make an election to defer payment of the Separation Benefit to a date specified
in the deferral election that will be provided in a form prescribed by the
Compensation Committee. A Participant who elects to defer payment of his or her
Separation Benefit will also be permitted to elect between payment of the
deferred Separation Benefit in the form of a lump sum or installment payments
over a 24-month period. A Participant may change his or her election so long as
the election to change is submitted to the Compensation Committee at least
twelve months prior to the date payment of a Separation Benefit would have
otherwise commenced and payment of the Separation Benefit is delayed at least
five years from the date payment was previously set to commence.

 

3.2 Protection of Business

 

  3.2.1 Any Participant who receives Separation Benefits under Section 2.2 of
this Plan agrees that, in consideration of the Separation Benefits, the
Participant will not, in any capacity, directly or indirectly, and on his or her
own behalf or on behalf of any other person or entity, during the period of time
he or she is receiving Separation Benefits, either (a) solicit or attempt to
induce any current customer of the Employing Company to cease doing business
with the Employing Company; (b) solicit or attempt to induce any employee of the
Employing Company to sever the employment relationship; (c) compete against the
Employing Company; (d) injure the Employing Company and the Company, in their
business activities or its reputation; or (e) act as an employee, independent
contractor, or service provider of a person or entity that is a competitor of
the Employing Company or injures the Employing Company or the Company, its
business activities or its reputation (collectively, the “Protection of Business
Requirements”). The Compensation Committee in its sole discretion shall decide
whether any Participant is in violation of this Section.

 

  3.2.2 Except as provided in the next paragraph and/or the Separation
Agreement, in the event the Participant violates the Protection of Business
Requirements of this Section (or the like provisions of his or her Separation
Agreement), the Participant shall not be entitled to any further payments of
Separation Benefits under this Plan and shall be obligated to repay the
Employing Company all monies previously received as Separation Benefits from the
date of the violation forward.

 

  3.2.3 In the event of a Change in Control, the Participant’s obligations under
this Section shall expire and be canceled, and the Participant shall be entitled
to Separation Benefits under this Plan in accordance with its terms even if he
or she engages in conduct that would otherwise violate the Protection of
Business Requirements in this Section.

 

  3.2.4 The Plan shall maintain records for each Participant that is eligible
for Separation Benefits and for each Participant that actually receives
Separation Benefits (including relevant dates, claim records, appeal records,
payment amounts, etc.).

 

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  3.2.5 The Plan shall pay benefits to Participant on a regular basis. The Plan
shall process and pay Separation Benefits on a regular basis, and adjudicate
claims for denied or terminated Separation Benefits.

 

  3.2.6 The Compensation Committee shall have the ultimate ongoing
administrative duty to monitor and investigate the activities of Participants to
ensure they are in compliance with the Protection of Business Requirements. As
set forth in this Plan, the Compensation Committee shall have discretion to
determine on an ongoing basis whether each Participant receiving Separation
Benefits remains in compliance with the Plan’s Protection of Business
Requirements during the period the Participant is receiving Separation Benefits.

 

  3.2.7 The Compensation Committee shall have full and sole discretion to
determine eligibility for Separation Benefits and to construe the terms of the
Plan.

 

  3.2.8 By accepting Separation Benefits, a Participant certifies that he/she is
in compliance with the Protection of Business Requirements. Participants must
notify the Plan, through the Human Resources Director, of any change of
employer, employment status, or job status or responsibilities, while eligible
for Separation Benefits. Additionally, Participants receiving benefits must
complete and submit to the Plan on request a form certifying that they are in
compliance with the Protection of Business Requirements. The Human Resources
Director shall review such forms and make preliminary decisions regarding
whether the Participant is in compliance with the Protection of Business
Requirements.

 

  3.2.9 As a condition to receiving Separation Benefits or coverage,
Participants and their employers must fully cooperate with any inquiry or
investigation by the Plan concerning the Protection of Business Requirements. If
the Participant or employer fails to fully cooperate with any such inquiry or
investigation, the Participant shall be deemed to have been in violation of the
Protection of Business Requirements, and shall therefore forfeit any further
benefits under the Plan and shall be obligated to repay the Employing Company
all monies previously received as Separation Benefits.

 

  3.2.10 The Company shall maintain a projection of the amount of money that
will be required for the Company to fulfill its unfunded obligation under the
Plan to make payments to various Participants at different times.

 

3.3 Death Subsequent to Separation from Service

If the death of a Participant occurs after the date of Separation from Service
and before receipt of the full Separation Benefit to which he or she was
entitled, the remaining payments shall be paid to such Participant’s Beneficiary
in accordance with the Provisions of Section 2.4.2 and 3.1. If there is no
designated living Beneficiary, the payments shall be paid to the executor or
administrator of Participant’s estate.

 

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3.4 Payment to Specified Employees Upon Separation from Service

In no event shall a Specified Employee receive a payment under this Plan
following a Separation from Service before the first business day of the seventh
month following the date of Separation from Service, unless the Separation from
Service results from death. Any amounts which would otherwise be payable to the
Specified Employee during the six month period may, at the Employing Company’s
discretion, be accumulated and paid on the first day of the seventh month
following the date of the Specified Employee’s Separation from Service.

ARTICLE 4.

Waiver and Release of Claims

It is a condition of this Plan that no Separation Benefit shall be paid to or
for any Participant except on due signing and delivery to the Employing Company
by that Participant of a Separation Agreement, in substantially the form
attached to this Plan as Attachment A (except as may be modified from time to
time), by which Participant waives and releases the Company, the Employing
Company, their subsidiaries and their officers, directors, agents, employees,
and affiliates from all claims arising or alleged to arise out of his or her
employment or the Separation from Service. The waiver and release provided in
the Separation Agreement is being given in exchange for and in consideration of
payment of the Separation Benefit, to which Participant would not otherwise be
entitled.

In connection with the signing of the Separation Agreement, the following
procedures shall be followed (except as modified from time to time): Participant
shall be advised in writing, by receiving the written text of the Separation
Agreement so stating, to consult a lawyer before signing the Separation
Agreement; Participant shall be given 21 days to consider the Separation
Agreement before signing; after signing, Participant shall have seven days in
which to revoke the Separation Agreement; and the Separation Agreement shall not
take effect until that seven-day period shall have passed.

ARTICLE 5.

Funding

This Plan is an unfunded employee welfare benefit plan under ERISA established
by the Company. Benefits payable to Participants shall be paid out of the
general assets of the Company or the Employing Company. The Employing Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Separation Benefits
under this Plan.

ARTICLE 6.

Administration

 

6.1 Named Fiduciary

This Plan shall be administered by the Company acting through the Compensation
Committee or such other person as may be designated by the Company from time to
time. The Compensation Committee shall be the “Administrator” of the Plan and
shall be, in its capacity as Administrator, a “Named Fiduciary,” as such terms
are defined or used in ERISA.

 

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6.2 Fiduciary Responsibilities

The named fiduciary shall fulfill the duties and requirements of fiduciary under
ERISA and is the Plan’s agent for service of legal process. The named fiduciary
may designate other persons to carry out the fiduciary responsibilities and may
cancel any designation. A person may serve in more than one fiduciary or
administrative capacity with respect to this Plan. The named fiduciary shall
periodically review the performance of the fiduciary responsibilities by each
designated person.

 

6.3 Specific Fiduciary Responsibilities

The Compensation Committee shall be responsible for the general administration
and interpretation of the Plan and the proper carrying out of its provisions and
shall have full discretion to carry out its duties. In addition to any powers of
the Compensation Committee specified elsewhere in this Plan, the Compensation
Committee shall have all discretionary powers necessary to discharge its duties
under this Plan, including, but not limited to, the following discretionary
powers and duties:

(i) To interpret or construe the terms of this Plan, including eligibility to
participate, and resolve ambiguities, inconsistencies and omissions;

(ii) To make and enforce such rules and regulations and prescribe the use of
these forms as it deems necessary or appropriate for the efficient
administration of the Plan;

(iii) To decide all questions concerning this Plan and the determination of who
shall be a Participant; and

(iv) To determine eligibility for Separation Benefits under this Plan.

 

6.4 Allocations and Delegations of Responsibility

The Board of Directors and the Compensation Committee, respectively, shall have
the authority to delegate, from time to time, all or any part of its
responsibilities under this Plan to those person or persons as it may deem
advisable and in the same manner to revoke any such delegation of
responsibility. Any action of the delegate in the exercise of such delegated
responsibilities shall have the same force and effect for all purposes hereunder
as if such action had been taken by the Board of Directors or the Compensation
Committee. The Company, the Board of Directors and the Compensation Committee
shall not be liable for any acts or omissions of any such delegate. The delegate
shall report periodically to the Board of Directors or the Compensation
Committee, as applicable, concerning the discharge of the delegated
responsibilities.

The Board of Directors and the Compensation Committee, respectively, shall have
the authority to allocate, from time to time, all or any part of its
responsibilities under this Plan to one or more of its members as it may deem
advisable, and in the same manner to remove such allocation of responsibilities.
Any action of the member to whom responsibilities are allocated in the exercise
of such allocated responsibilities shall have the same force and effect for all
purposes hereunder as if such action had been taken by the Board of Directors or
the Compensation Committee. The Company, the Board of Directors and the
Compensation Committee shall not be liable for any acts or omissions of such
member. The member to whom responsibilities have been allocated shall report
periodically to the Board of Directors or the Compensation Committee, as
applicable, concerning the discharge of the allocated responsibilities.

 

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6.5 Advisors

The named fiduciary or any person designated by the named fiduciary to carry out
fiduciary responsibilities may employ one or more persons to render advice with
respect to any responsibility imposed by this Plan.

 

6.6 Plan Determination

The determination of the Compensation Committee as to any question involving the
general administration and interpretation or construction of the Plan shall be
within its sole discretion and shall be final, conclusive and binding on all
persons, except as otherwise provided herein or by law.

 

6.7 Modification and Termination

The Company may at any time, without notice or consent of any person, terminate
or modify this Plan in whole or in part, and such termination or modification
shall apply to existing as well as to future Participants, but such actions
shall not affect any Separation Benefit that has become payable to a
Participant, and such benefit shall continue to be paid in accordance with the
Plan provisions in effect on the date of the Separation from Service.

 

6.8 Indemnification

To the extent permitted by law, the Company shall indemnify and hold harmless
the members of the Board of Directors, the Compensation Committee members, and
any employee to whom any fiduciary responsibility with respect to this Plan is
allocated or delegated to, and against any and all liabilities, costs and
expenses incurred by any such person as a result of any act, or omission to act,
in connection with the performance of his/her duties, responsibilities and
obligations under this Plan, ERISA and other applicable law, other than such
liabilities, costs and expenses as may result from the gross negligence or
willful misconduct of any such person. The foregoing right of indemnification
shall be in addition to any other right to which any such person may be entitled
as a matter of law or otherwise. The Company may obtain, pay for and keep
current a policy or policies of insurance, insuring the members of the Board of
Directors, the Compensation Committee members and any other employees who have
any fiduciary responsibility with respect to this Plan from and against any and
all liabilities, costs and expenses incurred by any such person as a result of
any act, or omission, in connection with the performance of his/her duties,
responsibilities and obligations under this Plan and under ERISA.

 

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6.9 Successful Defense

A person who has been wholly successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding or claim or demand of the
character described in Section 6.8 shall be entitled to indemnification as
authorized in Section 6.8.

 

6.10 Unsuccessful Defense

Except as provided in Section 6.9, any indemnification under Section 6.8, unless
ordered by a court of competent jurisdiction, shall be made by the Company only
if authorized in the specific case:

 

  6.10.1 By the Board of Directors acting by a quorum consisting of directors
who are not parties to such action, proceeding, claim or demand, upon a finding
that the member of the Compensation Committee has met the standard of conduct
set forth in Section 6.8; or

 

  6.10.2 If a quorum under Section 6.10.1 is not obtainable with due diligence
by the Board of Directors upon the opinion in writing of independent legal
counsel (who may be counsel to any Employing Company) that indemnification is
proper in the circumstances because the standard of conduct set forth in
Section 6.8 has been met by such member of the Compensation Committee.

 

6.11 Advance Payments

Expenses incurred in defending a civil or criminal action or proceeding or claim
or demand may be paid by the Company or Employing Company, as applicable, in
advance of the final disposition of such action or proceeding, claim or demand,
if authorized in the manner specified in Section 6.10, except that, in view of
the obligation of repayment set forth in Section 6.12, there need be no finding
or opinion that the required standard of conduct has been met.

 

6.12 Repayment of Advance Payments

All expenses incurred, in defending a civil or criminal action or proceeding,
claim or demand, which are advanced by the Company or Employing Company, as
applicable, under Section 6.11 shall be repaid if the person receiving such
advance is ultimately found, under the procedures set forth in this Article 6,
not to be entitled to the extent the expenses so advanced by the Company exceed
the indemnification to which he or she is entitled.

 

6.13 Right of Indemnification

Notwithstanding the failure of the Company or Employing Company, as applicable,
to provide indemnification in the manner set forth in Sections 6.10 and 6.11,
and despite any contrary resolution of the Board of Directors or of the
shareholders in the specific case, if the member of the Compensation Committee
has met the standard of conduct set forth in Section 6.8, the person made or
threatened to be made a party to the action or proceeding or against whom the
claim or demand has been made, shall have the legal right to indemnification
from the Company or Employing Company, as applicable, as a matter of contract by
virtue of this Plan, it being the intention that each such person shall have the
right to enforce such right of indemnification against the Company or Employing
Company, as applicable, in any court of competent jurisdiction.

 

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ARTICLE 7.

Effective Date and Plan Year

This Plan shall be effective as amended and restated on and after December 31,
2008. The Plan Year is the calendar year.

ARTICLE 8.

Miscellaneous

 

8.1 Assignment

A Participant’s right to benefits under this Plan shall not be assigned,
transferred, pledged, encumbered in any way or subject to attachment or
garnishment, and any attempted assignment, transfer, pledge, encumbrance,
attachment, garnishment or other disposition of such benefits shall be null and
void and without effect.

 

8.2 Governing Law

The Plan shall be construed and administered in accordance with ERISA and with
the laws of the State of Oklahoma, to the extent such State laws are not
preempted by ERISA.

 

8.3 Employing Company Records

The records of the Employing Company with regard to any person’s Participant
status, Beneficiary status, employment history, Years of Service and all other
relevant matters shall be conclusive for purposes of administration of the Plan.

 

8.4 Employment Non-Contractual

This Plan is not intended to and does not create a contract of employment,
express or implied, and an Employing Company may terminate the employment of any
employee with or without cause as freely and with the same effect as if this
Plan did not exist. Nothing contained in this Plan shall be deemed to qualify,
limit or alter in any manner the Employing Company’s sole and complete authority
and discretion to establish, regulate, determine or modify at all times, the
terms and conditions of employment, including, but not limited to, levels of
employment, hours of work, the extent of hiring and employment termination, when
and where work shall be done, marketing of its products, or any other matter
related to the conduct of its business or the manner in which its business is to
be maintained or carried on, in the same manner and to the same extent as if
this Plan were not in existence.

 

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8.5 Taxes

Neither an Employing Company nor any fiduciary of this Plan shall be liable for
any taxes incurred by a Participant or Beneficiary for Separation Benefit
payments made pursuant to this Plan.

 

8.6 Binding Effect

This Plan shall be binding on the Company, any Employing Company and their
successors and assigns, and Participant, Participant’s heirs, executors,
administrators and legal representatives. As used in this Plan, the term
“successor” shall include any person, firm, corporation or other business entity
which at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of the Company or any Employing
Company.

 

8.7 Entire Agreement

This Plan constitutes the entire understanding between the parties hereto and
may be modified only in accordance with the terms of this Plan.

 

8.8 Decisions and Appeals

 

  8.8.1 Manner and Content of Benefit Determination

Within ninety (90) days from the date of a Participant’s Separation from Service
(or longer if special circumstances require), the Human Resources Director and
the General Counsel shall provide the Participant with either an agreement and
release offering Separation Benefits under the Plan or written or electronic
notification of such Participant’s ineligibility for or denial of Separation
Benefits, either in whole or in part. If at any time the Human Resources
Director and the General Counsel make any adverse benefit determination, such
notification shall set forth, in a manner calculated to be understood by the
Participant including the following:

(i) the specific reason(s) for the adverse determination;

(ii) references to the specific plan provisions upon which the determination is
based;

(iii) a description of any additional material or information necessary for the
Participant to perfect the claim and an explanation of why such material or
information is necessary;

(iv) a description of the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the Participant’s right
to bring a civil action under section 502(a) of ERISA following an adverse
benefit determination on review under Section 8.8.3;

 

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(v) if the Plan utilizes a specific internal rule, guideline, protocol, or other
similar criterion in making the determination, either the specific rule,
guideline, protocol or other similar criterion; or a statement that such a rule,
guideline, protocol or other similar criterion was relied upon and that a copy
of such rule, guideline, protocol or similar criterion will be provided free of
charge to the Participant upon request;

 

  8.8.2 Appeal of Denied Claim and Review Procedure

If a Participant does not agree with the reason for the denial or termination of
Separation Benefits (including a denial or termination of benefits based on a
determination of a Participant’s eligibility to participate in the Plan), he/she
may file a written appeal within 180 days after the receipt of the original
claim determination. The request should state the basis for the disagreement
along with any data, questions, or comments he/she thinks are appropriate, and
should be sent to the office of the Human Resources Director.

The Compensation Committee shall conduct a full and fair review of the
determination. The review shall not defer to the initial determination, and it
shall take into account all comments, documents, records and other information
submitted by the Participant without regard to whether such information was
previously submitted or considered in the initial determination.

 

  8.8.3 Manner and Content of Notification of Benefit Determination on Review

Within 60 days (or longer if special circumstances require), the Compensation
Committee shall provide a Participant with written or electronic notification of
any adverse benefit determination on review. The notification shall set forth,
in a manner calculated to be understood by the Participant the following:

(i) the specific reason(s) for the adverse determination on review;

(ii) reference to the specific plan provisions upon which the review is based;

(iii) a statement that the Participant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to his claim for benefits;

(iv) a statement describing any voluntary appeal procedures offered by the Plan
and the Participant’s right to obtain the information about such procedures, and
a statement of the Participant’s right to bring an action under section 502(a)
of ERISA;

 

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(v) if an internal rule, guideline, protocol, or other similar criterion was
relied upon in making the adverse determination on review, either the specific
rule, guideline, protocol, or other similar criterion, or a statement that such
rule, guideline, protocol, or other similar criterion was relied upon in making
the adverse determination on review and that a copy of the rule, guideline,
protocol, or other similar criterion will be provided free of charge to the
Participant upon request;

(vi) the following statement: “Other voluntary alternative dispute resolution
methods, such as mediation, may be available. You may seek additional
information by contacting your local U.S. Department of Labor office and your
State insurance regulatory agency.”

EXECUTED as of this 31st day of December, 2008.

 

UNIT CORPORATION By:  

/s/ Mark E. Schell

  Mark E. Schell,   Senior Vice President and General Counsel

 

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To receive a Separation Benefit, a participant must sign the following
Separation Agreement provided by the Company:

SEPARATION AGREEMENT

[Name of Employing Company] (“Unit”) and
                                                      (“Participant”) hereby
agree as follows:

Participant’s employment will end on                                 ,
20        .

Unit will pay to Participant a Separation Benefit of $                     in
accordance with and subject to the terms of the Unit Corporation Separation
Benefit Plan for Senior Management (the “Plan”).

Participant knows that state and federal laws, including the Age Discrimination
in Employment Act, prohibit employment discrimination based on age, sex, race,
color, national origin, religion, handicap, disability, or veteran status, and
that these laws are enforced through the United States Equal Employment
Opportunity Commission (“EEOC”), United States Department of Labor, and State
Human Rights Agencies.

PARTICIPANT IS ADVISED TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.

PARTICIPANT HAS TWENTY-ONE DAYS AFTER RECEIVING THIS AGREEMENT TO CONSIDER
WHETHER TO SIGN IT.

AFTER SIGNING THIS AGREEMENT, PARTICIPANT HAS ANOTHER SEVEN DAYS IN WHICH TO
REVOKE IT, AND IT DOES NOT TAKE EFFECT UNTIL THOSE SEVEN DAYS HAVE ENDED.

In exchange for the Separation Benefit described above, to which Participant is
not otherwise entitled, Participant forever releases and discharges [Unit], Unit
Corporation, and its subsidiaries, their officers, directors, agents, employees,
and affiliates from all claims, liabilities, and lawsuits arising out of
Participant’s employment or the termination of that employment and agrees not to
assert any such claim, liability, or lawsuit. This includes any claim under the
Age Discrimination in Employment Act or under any other federal, state, or local
statute or regulation relating to employment discrimination. It also includes
any claim under any other statute or regulation or common law rule relating to
Participant’s employment or the termination of that employment. This Agreement
does not have any effect with respect to acts or events occurring after the date
upon which Participant signs it. This Agreement does not limit any benefits to
which Participant is entitled under any retirement plans, if any.

As further consideration for the payment of the Separation Benefit described
above, Participant agrees that if Participant’s Separation Benefit is received
pursuant to Section 2.3.2 “Voluntary Separation” of the Plan, Participant will
not in any capacity directly or indirectly and on his or her own behalf or on
behalf of any other person or entity, during the period of time he or she is
receiving such Separation Benefits, either (a) solicit or attempt to induce any
current customer of the Company to cease doing business with the Company or
(b) solicit or attempt to induce any employee of the Company to sever the
employment relationship with the Company (collectively, the “Protection of
Business Requirements”).

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Except as provided in the next paragraph, in the event Participant violates the
Protection of Business Requirements hereof, Participant shall not be entitled to
any further payments of Separation Benefits under the Plan or this Agreement and
shall be obligated to repay Unit all Separation Benefit payments previously
received under the Plan and this Agreement.

In the event of a Change in Control (as defined in the Plan), Participant’s
obligations regarding the Protection of Business Requirements under this
Agreement shall expire and be canceled, and Participant shall be entitled to the
Separation Benefits provided under the Plan in accordance with the terms of the
Plan, notwithstanding whether Participant thereafter engages in conduct that
would otherwise violate the Protection of Business Requirements described in
this Agreement.

Participant has carefully read and fully understands all the provisions of this
Agreement. This Agreement and the Plan constitute the entire agreement between
the parties and is legally binding and enforceable. Participant has not relied
upon any representation or statement, written or oral, not set forth in this
Agreement.

This Agreement shall be governed and interpreted under federal law and the laws
of Oklahoma.

Participant knowingly and voluntarily signs this Agreement.

 

Date Delivered to Participant:    [Name of Employing Company]

 

   By:   

 

   Title:   

 

Date signed by Participant:    Date:   

 

 

      Participant Signature:    Seven-Day Revocation Period Ends:

 

  

 

 

      (Print Participant’s Name)      

 

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SCHEDULE I

Dated as of December 31, 2008

Name of Participants

King P. Kirchner

O. Earle Lamborn

John G. Nikkel