Exhibit 10.3


 


Execution Copy


 


 


HELMERICH & PAYNE, INC.


 


DIRECTOR DEFERRED COMPENSATION PLAN


 

















 


HELMERICH & PAYNE, INC.


DIRECTOR DEFERRED COMPENSATION PLAN


 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  “Account”

  	
  1

  
	
  1.2

  	
  “Beneficiary”

  	
  1

  
	
  1.3

  	
  “Board of
  Directors”

  	
  1

  
	
  1.4

  	
  “Change of
  Control”

  	
  1

  
	
  1.5

  	
  “Common
  Stock”

  	
  2

  
	
  1.6

  	
  “Company”

  	
  2

  
	
  1.7

  	
  “Director”
  or “Directors”

  	
  3

  
	
  1.8

  	
  “Eligible
  Compensation”

  	
  3

  
	
  1.9

  	
  “Fair Market
  Value”

  	
  3

  
	
  1.10

  	
  “Plan”

  	
  3

  
	
  1.11

  	
  “Separation
  from Service”

  	
  3

  
	
  1.12

  	
  “Stock Unit”

  	
  3

  
	
  1.13

  	
  “Year”

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  Participation

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Participation

  	
  3

  
	
  2.2

  	
  Timing and
  Types of Elections

  	
  3

  
	
  2.3

  	
  Election
  Amounts

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  Accounts and Investments

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Establishment
  of Account

  	
  4

  
	
  3.2

  	
  Interest
  Alternative

  	
  4

  
	
  3.3

  	
  Stock Unit
  Alternative

  	
  4

  
	
  3.4

  	
  Limitations
  on Rights Associated with Stock Units

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  Distribution of Account

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Manner of
  Distribution of Account

  	
  5

  
	
  4.2

  	
  Change in
  Manner of Distribution of Account

  	
  5

  
	
  4.3

  	
  Commencement
  of Payments

  	
  5

  
	
  4.4

  	
  Death Benefits

  	
  5

  
	
  4.5

  	
  Emergency
  Withdrawals

  	
  5

  
	
  4.6

  	
  Responsibility
  for Taxes

  	
  5

  
	
  4.7

  	
  Change of
  Control

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  Administration, Amendment And Termination

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Administration

  	
  6

  
	
  5.2

  	
  Amendment
  and Termination

  	
  6

  



 


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  ARTICLE VI
  Miscellaneous Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Limitation
  on Director’s Rights

  	
  6

  
	
  6.2

  	
  Beneficiaries

  	
  6

  
	
  6.3

  	
  Benefits Not
  Transferable; Obligations Binding Upon Successors

  	
  6

  
	
  6.4

  	
  Governing
  Law; Severability

  	
  7

  
	
  6.5

  	
  Headings Not
  Part of Plan

  	
  7

  
	
  6.6

  	
  Consent to
  Plan Terms

  	
  7

  



 


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HELMERICH & PAYNE, INC.


DIRECTOR DEFERRED COMPENSATION PLAN


 


PURPOSE


 


The purpose of this Plan is to give each Director of Helmerich &
Payne, Inc., the opportunity to be compensated for service as a Director
on a deferred basis.  The Plan is also
intended to aid the Company in attracting and retaining, as members of the
Board, persons whose abilities, experience, and judgment can contribute to the
success of the Company.  The Plan was adopted
on October 1, 2004 and is amended and restated December 2, 2008.  This amendment and restatement applies to all
amounts deferred under the Plan.


 


ARTICLE I


Definitions


 


Whenever the following terms are used in this Plan, they shall have the
meaning specified below, unless the context clearly indicates to the contrary:


 


1.1                                 “Account”
shall mean the bookkeeping account maintained by the Company to which will be
credited Directors deferrals of Eligible Compensation and any earnings thereon.


 


1.2                                 “Beneficiary”
means the person(s) or entity(ies) designated by the Director under Section 6.2
hereof who will receive the balance of the Director’s Account(s) in the
event of his or her death.


 


1.3                                 “Board
of Directors” or “Board” shall mean the Board of Directors of the Company.


 


1.4                                 “Change
of Control” shall mean :


 


(a)                                  The date that any one
person, or more than one person acting as a group (as defined in
§1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires ownership of
stock that, together with stock held by such person or group, constitutes more
than 50% 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 voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that the following acquisitions shall not
constitute a Change of Control:  (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (iv) any acquisition of additional stock by a person or
group already considered to own more than 50% of the Outstanding Company Common
Stock or Outstanding Company Voting Securities; or


 


(b)                                 The date a majority of
the individuals who, as of December 2, 2008, constitute the Board (the
“Incumbent Board”) are replaced during any 12-month period; 


 

















 


provided, however, that any individual becoming a director subsequent
to the date hereof whose election, appointment or nomination for election by
the Company’s shareholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for
purposes of this definition, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or


 


(c)                                  The date any one
person, or more than one person acting as a group (as defined in
§1.409A-3(i)(5)(v)(B) of the Treasury Regulations) acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing
thirty percent (30%) or more of the total voting power of the stock of the
Company; provided that, if a Change of Control occurs by reason of an
acquisition described in this paragraph (iii), no additional Change of Control
shall be deemed to occur under this paragraph (iii) or paragraph (i) by
reason of the acquisition of additional control of the Company by the same
Person.


 


(d)                                 The date that any one
person, or more than one person acting as a group (as defined in
§1.409A-3(i)(5)(v)(B) of the Treasury Regulations) acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) all or substantially all of the assets
of the Company, unless such assets are transferred to:


 


(i)                               A
shareholder of the Company (immediately before the asset transfer) in exchange
for or with respect to its stock;


 


(ii)                          An
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;


 


(iii)                     A person, or
more than one person acting as a group, that owns, directly or indirectly, 50%
or more of the total value or voting power of all the outstanding stock of the
Company; or


 


(iv)                        An entity,
at least 50% of the total value or voting power of which is owned, directly or
indirectly, by a person described in subsection 1.4(d)(3) herein.


 


For purposes of subsection (d) and except as otherwise provided in
subparagraph (d)(i), a person’s status is determined immediately after the
transfer of the assets.


 


1.5                                 “Common
Stock” shall mean the common stock, par value $0.10 per share of the Company.


 


1.6                                 “Company”
shall mean Helmerich & Payne, Inc., a Delaware corporation and
its successors.


 


2

















 


1.7                                 “Director”
or “Directors” shall mean, at any given time, a member of the Board of
Directors of the Company.


 


1.8                                 “Eligible
Compensation” shall mean all forms of cash compensation paid by the Company for
services as a Director including, but not limited to, retainer, committee fees
and meeting fees.


 


1.9                                 “Fair
Market Value” means (A) during such time as the Common Stock is listed
upon the New York Stock Exchange or other exchanges or the Nasdaq/National
Market System, the average of the highest and lowest sales prices of the Common
Stock as reported by such stock exchange or exchanges or the Nasdaq/National
Market System on the day for which such value is to be determined, or if no
sale of the Common Stock shall have been made on any such stock exchange or the
Nasdaq/National Market System that day, on the next preceding day on which
there was a sale of such Common Stock or (B) during any such time as the
Common Stock is not listed upon an established stock exchange or the
Nasdaq/National Market System, the mean between dealer  “bid” and “ask” prices of the Common Stock in
the over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities Dealers, Inc.


 


1.10                           “Plan”
shall mean the Helmerich & Payne, Inc. Director Deferred Compensation
Plan.


 


1.11                           “Separation
from Service” means the date a Director ceases to be a member of the
Board.  The determination of whether a
“separation from service” has occurred shall be made in accordance with the
meaning of “separation from service” under Section 409A of the Code.


 


1.12                           “Stock
Unit” shall mean the unit of measurement which is deemed for bookkeeping and
payment purposes to represent one outstanding share of Common Stock.


 


1.13                           “Year”
shall mean each calendar year during the term of this Plan.


 


ARTICLE II


Participation


 


2.1                                 Participation.  Each Director may elect to defer, under and
subject to Sections 2.2 and 2.3 of this Plan, all or any portion of his or her
Eligible Compensation for any Year.


 


2.2                                 Timing
and Types of Elections.  On or before
the December 31 immediately preceding each Year (or, in the case of a
person who first becomes a Director during the Year, within 30 days after
becoming a Director), each Director may make an irrevocable election, to (a) receive
his or her Eligible Compensation for the next Year in cash, or (b) defer
all or any portion of the Eligible Compensation for services to be rendered by
the Director during the next Year.


 


2.3                                 Election
Amounts.  Up to 100% of Eligible
Compensation is eligible for deferral and the deferred amount must be stated
either in a dollar amount or percentage of Eligible Compensation to be
deferred.  All elections shall be in
writing on forms provided by the Company. 
Deferral elections are not continuous from Year to Year, and are only effective
for the Year indicated on the written election form.


 


3

















 


ARTICLE
III


Accounts
and Investments


 


3.1                                 Establishment
of Account.  The Company will
establish and maintain a separate Account in the name of each Director who has
elected to defer Eligible Compensation under the Plan.  The balance of each Account will reflect
deferrals of Eligible Compensation as well as income, gains or losses from
deemed investments.  A Director may
select between two deemed investment alternatives: (i) an interest
investment alternative (as provided in Section 3.2) or (ii) a Stock
Unit investment alternative (as provided in Section 3.3).  Investment elections must be specified at the
time the deferral election is provided to the Company.  Deemed investment elections are effective for
the entire Plan Year and cannot be changed until deferral elections are due for
the next Plan Year.  Directors may, at
the time deferral elections are due for the next Plan Year, change their deemed
investment selections with respect to all Plan Year deferrals.


 


3.2                                 Interest
Alternative.  If a Director has made
an election for investment in the interest alternative, a Director’s Account
shall be credited as follows:


 


(a)                                  as of the date the
Eligible Compensation would have been otherwise payable, the Company shall
credit the Director’s Account with an amount equal to the amount of the
Eligible Compensation deferred; and


 


(b)                                 as of the last day of
each calendar quarter, the Director’s Account shall be credited to reflect
interest earnings for such calendar quarter, calculated at an interest rate
equal to the prime rate of interest plus 1% as published in the Wall Street Journal
(Southwest Edition) in the Money Rate Section at the beginning of each such
calendar quarter.


 


3.3                                 Stock
Unit Alternative.  If a Director has
made a Stock Unit election, the Company shall credit the Director’s Account, as
of the date the Eligible Compensation would have been otherwise payable, with a
number of Stock Units determined by dividing an amount which is equal to the
amount of the Director’s Eligible Compensation deferred by the Fair Market
Value of a share of Common Stock on such date. 
The Director’s Stock Unit Account will be valued at the end  of each calendar quarter based upon the Fair
Market Value of the Common Stock at such date. 
The Director’s Account shall also be credited with any dividends that
would have been paid by the Company had the Director held actual shares of Common
Stock.  The Account balance attributable
to the Stock Unit investment alternative may increase or decrease depending
upon fluctuations in value of the Company’s Common Stock and the distribution
of dividends.


 


3.4                                 Limitations
on Rights Associated with Stock Units. 
The Stock Units credited to a Director’s Account shall be used solely as
a device for the determination of the amount of the cash payment to be
eventually distributed to the Director in accordance with this Plan.  The Stock Units shall not be treated as
property or as a trust fund of any kind. 
No Director shall be entitled to a distribution of actual shares of
Common Stock or to any voting or other stockholder rights with respect to Stock
Units credited under this Plan.


 


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ARTICLE
IV


Distribution
of Account


 


4.1                                 Manner
of Distribution of Account.  The cash
payable under this Plan in respect of a Director’s Account shall be distributed
to the Director (or, in the event of his or her death, the Director’s
Beneficiary or estate) in such manner as elected by the Director and set forth
in the Director’s written deferral election form.  The form of payment shall be either in a
single lump sum payment or annual installments for a period of up to ten years.


 


4.2                                 Change
in Manner of Distribution of Account. 
Subject to Section 4.1 herein, a Director may change the manner of
any distribution election with respect to amounts credited under an Account by
filing a written election with the Company’s General Counsel on a form provided
by the Company at least 12 months prior to the date payment would have
otherwise commenced.  Provided, however,
that no election shall be effective until 12 months after the election is filed
with the Company, and the first payment with respect to such election is deferred
for a period of five years from the date such payment would have otherwise
commenced.


 


4.3                                 Commencement
of Payments.  Subject to the
provisions of Sections 4.1 and 4.7 and except as provided in Section 4.5,
the payment of the balance of the Account(s) to a Director shall commence
no later than 60 days from the date of the Director’s Separation from
Service.  If elected by the Director,
installment payments shall continue to be made in the same month  of each succeeding Year until all
installments have been paid.


 


4.4                                 Death
Benefits.  Subject to the provisions
of Section 4.7, in the event that a Director dies before payment of the
balance of the Director’s Account(s) has commenced or has been completed,
the balance(s) of the Director’s Account(s) shall be distributed to
the Director’s Beneficiary commencing no later than 60 days following the date
of the Director’s death in accordance with the manner of distribution elected
by the Director for payments during the Director’s lifetime.


 


4.5                                 Emergency
Withdrawals.  In the event of an
unforeseeable emergency prior to the commencement of distribution or after the
commencement of installment payments, the Board may approve a distribution to a
Director (or Beneficiary after the death of a Director) of the part of the
Director’s Account balance that is reasonably needed to satisfy the emergency
need.  An emergency withdrawal will be
approved only in a circumstance of severe financial hardship to the Director
(or Beneficiary after the death of the Director) resulting from a sudden and
unexpected illness or accident of the Director (or Beneficiary, as applicable)
or of a dependent of the Director (or Beneficiary, as applicable), loss of
property due to casualty,  or other
similar extraordinary or unforeseeable circumstance arising from events beyond
the control of the Director (or Beneficiary, as applicable).  The investment earnings credited to the
Director’s Account shall be determined as if the withdrawal had been debited
from the Director’s Account on the first day of the month in which the
withdrawal occurs.


 


4.6                                 Responsibility
for Taxes.  The Directors and their
respective Beneficiaries will be liable for payment of any and all income or
other taxes imposed on amounts payable under this Plan unless the Company is otherwise
required to withhold such amounts from the payment of the Account.


 


5

















 


4.7                                 Change
of Control.  In the event a Change of
Control occurs, each Director’s Account shall be payable in a lump sum to the Director
or to the Director’s Beneficiary or estate within 30 days of the Change of
Control.


 


ARTICLE
V


Administration,
Amendment And Termination


 


5.1                                 Administration.  This Plan shall be interpreted and
administered by the Human Resources Committee of the Board of Directors (the
“Committee”).  Determinations made by the
Board or the Committee pursuant to this Plan shall be final and binding on all
parties.


 


5.2                                 Amendment
and Termination.  This Plan may be
amended, modified, or terminated by the Board at any time, except that no such
action shall (without the consent of affected Directors or, if appropriate,
their respective Beneficiaries or personal representatives) adversely affect
the rights of Directors or Beneficiaries with respect to Eligible Compensation
earned and deferred under this Plan prior to the date of such amendment,
modification, or termination.


 


ARTICLE
VI


Miscellaneous
Provisions


 


6.1                                 Limitation
on Director’s Rights.  Participation
in this Plan shall not give any Director the right to continue to serve as a
member of the Board or any rights or interests other than as herein
provided.  No Director shall have any
right to any payment or benefit hereunder, except to the extent provided in
this Plan.  This Plan shall create only a
contractual obligation on the part of the Company as to such amounts and shall
not be construed as creating a trust. 
The Plan, in and of itself, has no assets.  Directors shall have only the rights of
general unsecured creditors of the Company with respect to amounts credited to
or payable from their Account(s).


 


6.2                                 Beneficiaries.


 


(a)                                  Beneficiary
Designation.  Subject to applicable
laws (including any applicable community property and probate laws), each
Director may designate in writing the Beneficiary that the Director chooses to
receive any payments that become payable after the Director’s death.  A Director’s Beneficiary designation shall be
made on forms provided and in accordance with procedures established by the
Company and may be changed by the Director at any time before the Director’s
death.


 


(b)                                 Definition Of
Beneficiary.  A Director’s
“Beneficiary” or “Beneficiaries” shall be the person(s), including a revocable
living trust established by and for the benefit of the Director alone or for
the benefit of the Director and one or more immediate family members, validly
designated by the Director or, in the absence of a valid designation, entitled
by will or the laws of descent and distribution to receive the amounts
otherwise payable to the Director under this Plan in the event of the
Director’s death.


 


6.3                                 Benefits
Not Transferable; Obligations Binding Upon Successors.  Benefits of a Director under this Plan shall
not be assignable or transferable and any purported transfer, assignment,


 


6

















 


pledge or other encumbrance or attachment of any payments or benefits
under this Plan, or any interest thereon, other than pursuant to Section 6.2,
shall not be permitted or recognized. 
Obligations of the Company under this Plan shall be binding upon
successors of the Company.


 


6.4                                 Governing
Law; Severability.  The validity of
this Plan or any of its provisions shall be construed, administered, and
governed in all respects under and by the laws of the State of Oklahoma.  If any provisions of this instrument shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.


 


6.5                                 Headings
Not Part of Plan.  Headings and
subheadings in this Plan are inserted for reference only and are not to be
considered in the construction of this Plan.


 


6.6                                 Consent
to Plan Terms.  By electing to
participate in this Plan, a Director shall be deemed conclusively to have
accepted and consented to all of the terms of this Plan and to all actions and
decisions of the Company and/or Board. 
Such terms and consent shall also apply to and be binding upon each
Director’s Beneficiary or Beneficiaries, personal representative(s), and other
successors in interest.


 


	
   

  	
  HELMERICH & PAYNE, Inc., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


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