exv10w1





 




    Exhibit
10.1


 






 






    SANDRIDGE
    ENERGY, INC.



 




    2009
    INCENTIVE PLAN



 






 












 







    TABLE OF
    CONTENTS



 


	 	 	 	 	 	 	 
	

    ARTICLE 1. INTRODUCTION


	
 
	 
	
    1
	 

	

    1.1.


	
 
	
    Purpose of the Plan
	
 
	 
	
    1
	 

	

    1.2.


	
 
	
    Nature of Awards
	
 
	 
	
    1
	 

	

    1.3.


	
 
	
    Effective Date and Term of Plan
	
 
	 
	
    1
	 

	

    ARTICLE 2. DEFINITIONS AND CONSTRUCTION


	
 
	 
	
    2
	 

	

    2.1.


	
 
	
    Definitions
	
 
	 
	
    2
	 

	

    2.2.


	
 
	
    Construction
	
 
	 
	
    3
	 

	

    ARTICLE 3. ELIGIBILITY


	
 
	 
	
    4
	 

	

    3.1.


	
 
	
    In General
	
 
	 
	
    4
	 

	

    ARTICLE 4. ADMINISTRATION OF THE PLAN


	
 
	 
	
    5
	 

	

    4.1.


	
 
	
    In General
	
 
	 
	
    5
	 

	

    4.2.


	
 
	
    Delegation to Committees and Officers
	
 
	 
	
    5
	 

	

    ARTICLE 5. STOCK SUBJECT TO THE PLAN


	
 
	 
	
    6
	 

	

    5.1.


	
 
	
    Number of Shares
	
 
	 
	
    6
	 

	

    5.2.


	
 
	
    Substitute Awards
	
 
	 
	
    6
	 

	

    ARTICLE 6. TYPES OF AWARDS


	
 
	 
	
    7
	 

	

    6.1.


	
 
	
    Stock Options
	
 
	 
	
    7
	 

	

    6.2.


	
 
	
    Stock Appreciation Rights
	
 
	 
	
    8
	 

	

    6.3.


	
 
	
    Restricted Stock
	
 
	 
	
    9
	 

	

    6.4.


	
 
	
    Restricted Stock Units
	
 
	 
	
    9
	 

	

    6.5.


	
 
	
    Other Stock-Based Awards
	
 
	 
	
    9
	 

	

    6.6.


	
 
	
    Cash Awards
	
 
	 
	
    9
	 

	

    6.7.


	
 
	
    Performance-Based Awards
	
 
	 
	
    10
	 

	

    ARTICLE 7. ADJUSTMENTS


	
 
	 
	
    12
	 

	

    7.1.


	
 
	
    Changes in Capitalization
	
 
	 
	
    12
	 

	

    7.2.


	
 
	
    Change in Control
	
 
	 
	
    12
	 

	

    ARTICLE 8. GENERAL PROVISIONS APPLICABLE TO ALL AWARDS


	
 
	 
	
    14
	 

	

    8.1.


	
 
	
    Transferability of Awards
	
 
	 
	
    14
	 

	

    8.2.


	
 
	
    Termination of Status
	
 
	 
	
    14
	 

	

    8.3.


	
 
	
    Withholding
	
 
	 
	
    14
	 

	

    8.4.


	
 
	
    Conditions on Delivery of Stock
	
 
	 
	
    14
	 

	

    8.5.


	
 
	
    Acceleration
	
 
	 
	
    14
	 

	

    ARTICLE 9. MISCELLANEOUS


	
 
	 
	
    15
	 

	

    9.1.


	
 
	
    No Right to Employment or Other Status
	
 
	 
	
    15
	 

	

    9.2.


	
 
	
    No Rights as Stockholder
	
 
	 
	
    15
	 

	

    9.3.


	
 
	
    Amendment
	
 
	 
	
    15
	 

	

    9.4.


	
 
	
    Compliance with Code Section 409A
	
 
	 
	
    15
	 

	

    9.5.


	
 
	
    Governing Law
	
 
	 
	
    15
	 








 







		
	    SandRidge
    2009 Incentive Plan
    	     Table of
    Contents
    













 







    ARTICLE 1.
    INTRODUCTION



 


		
	
    1.1. 
	
    Purpose
    of the Plan.




 



    The Plan is intended to enhance the Company’s ability to
    attract, retain and motivate employees, officers, directors,
    consultants, and advisors of the Company, and to provide them
    with equity ownership opportunities and performance-based
    incentives that are intended to align their interests with those
    of the Company’s stockholders.



 


		
	
    1.2. 
	
    Nature of
    Awards.




 



    The Plan is intended to permit the grant of Stock Options, Stock
    Appreciation Rights, shares of Restricted Stock, Restricted
    Stock Units, and any other form of award based on the value (or
    the increase in value) of shares of the common stock of the
    Company. The Plan is also intended to permit cash incentive
    awards. Subject to Section 8.5, Participants shall vest in
    their Awards granted under the Plan to the extent certain
    conditions set forth in their Award Certificate are met. Vesting
    criteria shall include the passage of time or the attainment of
    individual
    and/or
    Company performance objectives, or a combination of both. Except
    as otherwise provided by the Plan, each Award may be made alone
    or in addition or in relation to any other Award. The terms of
    each Award need not be identical, and the Compensation Committee
    need not treat Participants uniformly.



 


		
	
    1.3. 
	
    Effective
    Date and Term of Plan.




 



    The Plan is effective as of June 5, 2009. No Awards shall
    be granted under the Plan after June 4, 2019 (or such
    earlier date as may apply under section 422 of the Code),
    but Awards previously granted may extend beyond that date.


 







		
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    2009 Incentive Plan
    	     Page 1
    









 





 




    ARTICLE 2.
    DEFINITIONS AND CONSTRUCTION



 


		
	
    2.1. 
	
    Definitions.




 



    When used in this 2009 Incentive Plan, the following terms shall
    have the meanings set forth below, unless the context clearly
    requires a different meaning:



 


			
	 	    (a) 
	
    “Article” means an article of the Plan.




 


			
	 	    (b) 
	
    “Award” means an award issued under the
    Plan.




 


			
	 	    (c) 
	
    “Award Certificate” means the agreement,
    certificate or other document evidencing an Award, which shall
    be in such form (written, electronic or otherwise) as the
    Compensation Committee shall determine.




 


			
	 	    (d) 
	
    “Board” means the Board of Directors of
    the Company.




 


			
	 	    (e) 
	
    “Change in Control” shall mean:




 


			
	 	    (1) 
	
    the acquisition by any individual, entity or group (within the
    meaning of section 13(d)(3) or 14(d)(2) of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”))
    (a “Person”), other than Tom L. Ward or his affiliates
    (the “Exempt Persons”), of beneficial ownership
    (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of 40% or more of either
    (A) the then-outstanding shares of the Company’s
    common stock (the “Outstanding Company Common Stock”)
    or (B) 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”). For purposes of this paragraph (1), the
    following acquisitions by a Person will not constitute a Change
    in Control: (i) any acquisition directly from the Company;
    (ii) any acquisition by the Company; or (iii) any
    acquisition by any employee benefit plan (or related trust)
    sponsored or maintained by the Company or any entity controlled
    by the Company;

	 
	 	    (2) 
	
    the individuals who, as of the Effective Date, constitute the
    Board (the “Incumbent Board”) cease for any reason to
    constitute at least a majority of the Board. Any individual
    becoming a director subsequent to the Effective Date whose
    election, or nomination for election by the Company’s
    stockholders, is approved by a vote of at least a majority of
    the directors then comprising the Incumbent Board will be
    considered a member of the Incumbent Board as of the Effective
    Date, but 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 Incumbent Board will not be
    deemed a member of the Incumbent Board as of the Effective Date;

	 
	 	    (3) 
	
    the consummation of a reorganization, merger, consolidation or
    sale or other disposition of all or substantially all of the
    assets of the Company (a “Business Combination”),
    unless following such Business Combination: (A) the
    individuals and entities who were the beneficial owners,
    respectively, of the Outstanding Company Common Stock and
    Outstanding Company Voting Securities immediately prior to such
    Business Combination beneficially own, directly or indirectly,
    more than 60% of, respectively, the then-outstanding shares of
    common stock and the combined voting power of the
    then-outstanding voting securities entitled to vote generally in
    the election of directors, as the case may be, of the entity
    resulting from such Business Combination (including, without
    limitation, a corporation that as a result of such transaction
    owns the Company or all or substantially all of the
    Company’s assets either directly or through one or more
    subsidiaries) in substantially the same proportions to one
    another as their ownership, immediately prior to such Business
    Combination of the Outstanding Company Common



 







		
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    2009 Incentive Plan
    	     Page 2
    









 





			
	 	
	
    Stock and Outstanding Company Voting Securities, as the case may
    be, (B) no Person (excluding any entity resulting from such
    Business Combination or any employee benefit plan (or related
    trust) of the Company or such entity resulting from such
    Business Combination) other than one or more of the Exempt
    Persons beneficially owns, directly or indirectly, 40% or more
    of, respectively, the then-outstanding shares of common stock of
    the entity resulting from such Business Combination or the
    combined voting power of the then-outstanding voting securities
    of such entity except to the extent that such ownership existed
    prior to the Business Combination and (C) at least a
    majority of the members of the Board of Directors of the
    corporation resulting from such Business Combination were
    members of the Incumbent Board at the time of the execution of
    the initial agreement, or of the action of the Board, providing
    for such Business Combination; or




 


			
	 	    (4) 
	
    the approval by our stockholders of a complete liquidation or
    dissolution of the Company.




 


			
	 	    (f) 
	
    “Code” means the Internal Revenue Code
    of 1986, as amended.




 


			
	 	    (g) 
	
    “Company” means SandRidge Energy, Inc.

	 
	 	    (h) 
	
    “Compensation Committee” shall mean the
    Compensation Committee of the Board.




 


			
	 	    (i) 
	
    “Disability” shall mean a disability
    within the meaning of the federal Social Security Act.

	 
	 	    (j) 
	
    “Effective Date” means the first date
    set forth in Section 1.3.




 


			
	 	    (k) 
	
    “Employee Benefits Committee” means the
    Company’s Employee Benefits and Compensation Committee or
    any successor to such committee.




 


			
	 	    (l) 
	
    “Fair Market Value” means the closing
    sales price (for the primary trading session) of a Share on the
    relevant date. For any date that is not a trading day, the Fair
    Market Value of a Share for such date will be determined by
    using the closing sale price for the immediately preceding
    trading day. The Compensation Committee can substitute a
    particular time of day or other measure of “closing sale
    price” if appropriate because of unusual circumstances or
    can use weighted averages either on a daily basis or such longer
    period as complies with section 409A of the Code.




 


			
	 	    (m) 
	
    “Plan” means this 2009 Incentive Plan.




 


			
	 	    (n) 
	
    “Restricted Stock” means an Award
    granted pursuant to Section 6.3.

	 
	 	    (o) 
	
    “Restricted Stock Unit” means an Award
    granted pursuant to Section 6.4.

	 
	 	    (p) 
	
    “Section” means a section of the Plan.

	 
	 	    (q) 
	
    “Share” means a share of common stock of
    the Company, $0.001 per share par value.




 


			
	 	    (r) 
	
    “Stock Appreciation Right” means an
    Award granted pursuant to Section 6.2.

	 
	 	    (s) 
	
    “Stock Option” means an Award granted
    pursuant to Section 6.1; a Stock Option can be either an
    “Incentive Stock Option” (if it complies with the
    requirements of Section 6.1(b)) or a “Nonqualified
    Stock Option” or “Nonstatutory Stock Option” (if
    it does not comply with the requirements of Section 6.1(b)).




 


			
	 	    (t) 
	
    “Ten Percent Stockholder” means a
    Participant who on the date of grant is treated under
    section 424(d) of the Code as owning stock (not including
    stock purchasable under outstanding options) possessing more
    than 10% of the total combined voting power of all classes of
    the stock of the Company or any parent or subsidiary of the
    Company as defined in section 424(e) or (f) of the
    Code.




 


		
	
    2.2. 
	
    Construction.




 



    When used in the Plan, (a) the terms “include”
    and “including” shall be deemed to include the phrase
    “but not limited to” and (b) masculine pronouns
    shall include the feminine.


 







		
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    2009 Incentive Plan
    	     Page 3
    









 







    ARTICLE 3.
    ELIGIBILITY



 


		
	
    3.1. 
	
    In
    General.




 



    Any natural person is eligible to be granted an Award if such
    individual is a current employee, officer, director, consultant,
    or advisor of the Company or any of the Company’s present
    or future parent or subsidiary corporations as defined in
    sections 424(e) or (f) of the Code or any other
    business venture (including, without limitation, a joint venture
    or limited liability company) in which the Company has a
    controlling interest, as determined by the Compensation
    Committee.


 







		
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    2009 Incentive Plan
    	     Page 4
    









 







    ARTICLE 4.
    ADMINISTRATION OF THE PLAN



 


		
	
    4.1. 
	
    In
    General.




 


			
	 	    (a) 
	
    The Plan will be administered by the Compensation Committee. The
    Compensation Committee shall have authority to grant Awards and
    determine recipients and terms of any Awards, and to adopt,
    amend and repeal such administrative rules, guidelines and
    practices relating to the Plan as it shall deem advisable.




 


			
	 	    (b) 
	
    The Compensation Committee shall have full discretionary
    authority to construe and interpret the terms of the Plan and
    any Award Certificate, and to determine all facts necessary to
    administer the Plan and any Award Certificate. The Compensation
    Committee may correct any defect, supply any omission or
    reconcile any inconsistency in the Plan or any Award Certificate
    in the manner and to the extent it shall deem necessary or
    advisable.




 


			
	 	    (c) 
	
    All decisions by the Compensation Committee shall be made in its
    sole discretion and shall be final and binding on all persons
    having or claiming any interest in the Plan or in any Award. No
    director or person acting pursuant to the authority delegated by
    the Compensation Committee shall be liable for any action or
    determination relating to or under the Plan made in good faith.




 


			
	 	    (d) 
	
    With respect to Awards made to directors, the Board shall also
    have the authority described in this Section 4.1 and
    Section 8.5.




 


		
	
    4.2. 
	
    Delegation
    to Committees and Officers.




 


			
	 	    (a) 
	
    To the extent permitted by applicable law, the Compensation
    Committee may delegate any or all of its powers under the Plan
    to one or more committees or subcommittees of the Company’s
    management, including the Employee Benefits Committee.




 


			
	 	    (b) 
	
    To the extent permitted by applicable law and subject to any
    limitations under the Plan, the Compensation Committee may
    delegate to one or more officers of the Company the power
    (1) to grant Awards to any individual eligible under
    Section 3.1 other than a director or executive officer and
    (2) to exercise such other powers under the Plan as the
    Compensation Committee may determine; provided further, however,
    that no officer shall be authorized to grant Awards to himself
    or herself. For purposes of this Section 4.2(b), the phrase
    “executive officer” shall mean the Chief Executive
    Officer, President, and any Executive Vice President or Senior
    Vice President.




 


			
	 	    (c) 
	
    All references in the Plan to the “Compensation
    Committee” shall mean the Compensation Committee or a
    committee of the Board (or the Company’s management) or the
    officers referred to in Section 4.2(b) to the extent that the
    Compensation Committee’s powers or authority under the Plan
    have been delegated to such committee or officers.



 







		
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    2009 Incentive Plan
    	     Page 5
    









 







    ARTICLE 5.
    STOCK SUBJECT TO THE PLAN



 


		
	
    5.1. 
	
    Number of
    Shares.




 


			
	 	    (a) 
	
    Subject to adjustment under ARTICLE 7, Awards may be made
    under the Plan for up to 12,000,000 Shares, of which
    12,000,000 shares can be issued as Incentive Stock Options.




 


			
	 	    (b) 
	
    If any Award expires or is terminated, surrendered or canceled
    without having been fully exercised, is forfeited in whole or in
    part, or results in any Shares not being issued, the unused
    Shares covered by such Award shall again be available for the
    grant of Awards under the Plan. Further, Shares tendered to the
    Company by a Participant to exercise an Award shall be added to
    the number of Shares available for the grant of Awards under the
    Plan. However, in the case of Incentive Stock Options, the
    foregoing provisions shall be subject to any limitations under
    the Code. Shares issued under the Plan may consist in whole or
    in part of authorized but unissued shares or treasury shares.




 


		
	
    5.2. 
	
    Substitute
    Awards.




 


			
	 	    (a) 
	
    In connection with a merger or consolidation of an entity with
    the Company or the acquisition by the Company of property or
    stock of an entity, the Compensation Committee may grant Awards
    in substitution for any options or other stock or stock-based
    awards granted by such entity or an affiliate thereof.
    Substitute Awards may be granted on such terms as the
    Compensation Committee deems appropriate in the circumstances.




 


			
	 	    (b) 
	
    Substitute Awards shall not count against the overall share
    limit set forth in Section 5.1, except as may be required
    by reason of section 422 and related provisions of the Code.



 







		
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    2009 Incentive Plan
    	     Page 6
    









 







    ARTICLE 6.
    TYPES OF AWARDS



 


		
	
    6.1. 
	
    Stock
    Options.




 


			
	 	    (a) 
	
    In General.  The Compensation Committee may
    grant options to purchase Shares and determine the number of
    Shares to be covered by each option, the exercise price of each
    option and the conditions and limitations applicable to the
    exercise of each option, including conditions relating to
    applicable federal or state securities laws, as it considers
    necessary or advisable. A Stock Option that is not intended to
    be an Incentive Stock Option shall be designated as a
    “Nonstatutory Stock Option” or a “Nonqualified
    Stock Option.”




 


			
	 	    (b) 
	
    Incentive Stock Options.




 


			
	 	    (1) 
	
    A Stock Option that the Compensation Committee intends to be an
    Incentive Stock Option shall only be granted to employees of the
    Company or any of the Company’s present or future parent or
    subsidiary corporations as defined in sections 424(e) or
    (f) of the Code, and any other entities the employees of
    which are eligible to receive Incentive Stock Options under the
    Code, and shall be subject to and construed consistently with
    the requirements of section 422 of the Code.

	 
	 	    (2) 
	
    A Stock Option that is intended to be an Incentive Stock Option
    shall be treated as a Nonqualified Stock Option to the extent
    that, in the calendar year in which the Award is first
    exercisable, the aggregate Fair Market Value of the Shares
    subject to the Award (when added to other awards granted to the
    same individual that are intended to be Incentive Stock Options
    under the Plan or any other plan maintained by the Company and
    certain related corporations) exceeds $100,000 or such other
    limitation as might apply under section 422 of the Code.

	 
	 	    (3) 
	
    The Company shall have no liability to a Participant, or any
    other party, if a Stock Option (or any part thereof) that is
    intended to be an Incentive Stock Option is not an Incentive
    Stock Option, or for any action taken by the Compensation
    Committee, including without limitation the conversion of an
    Incentive Stock Option to a Nonstatutory Stock Option.




 


			
	 	    (c) 
	
    Exercise Price.




 


			
	 	    (1) 
	
    The Compensation Committee shall establish the exercise price of
    each Stock Option and specify the exercise price in the
    applicable Award Certificate.

	 
	 	    (2) 
	
    The exercise price of a Stock Option intended to be an Incentive
    Stock Option shall not be less than 100% of the Fair Market
    Value on the date the Stock Option is granted, except that, if
    any Incentive Stock Option is granted to a Ten
    Percent Stockholder, the exercise price shall not be less
    than 110% of the Fair Market Value of the Shares on the date
    such Incentive Stock Option is granted. The 100% and 110%
    limitation in this Section 6.1(c)(2) shall automatically
    adjust to the extent required by section 422 of the Code.




 


			
	 	    (d) 
	
    Term of Stock Options.




 


			
	 	    (1) 
	
    Each Stock Option shall be exercisable at such times and subject
    to such terms and conditions as the Compensation Committee may
    specify in the applicable Award Certificate; except that no
    Stock Option shall be granted for a term of more than
    10 years. Incentive Stock Options issued to a Ten
    Percent Stockholder shall not have a term of more than
    5 years.

	 
	 	    (2) 
	
    No Stock Option shall permit the Participant to defer receipt of
    compensation on the Stock Option beyond the date of exercise,
    unless the Compensation Committee expressly determines that such
    Stock Option shall be subject to section 409A of the Code.



 







		
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    2009 Incentive Plan
    	     Page 7
    









 





 


			
	 	    (e) 
	
    Exercise of Stock Option.




 



    Stock Options may be exercised by delivery to the Company of a
    written notice of exercise in the form attached to, or the
    manner described in, the Award Certificate or by any other form
    of notice (including electronic notice) or such other manner
    approved by the Compensation Committee, together with payment in
    full for the number of shares for which the Stock Option is
    exercised. Shares subject to the Stock Option will be delivered
    by the Company as soon as practicable following exercise.



 


			
	 	    (f) 
	
    Payment Upon Exercise.




 



    Shares purchased upon the exercise of a Stock Option granted
    under the Plan shall be paid for as follows:



 


			
	 	    (1) 
	
    in cash or by check, payable to the order of the Company;

	 
	 	    (2) 
	
    if provided in the applicable Award Certificate, by
    (1) delivery of an irrevocable and unconditional
    undertaking by a creditworthy broker to deliver promptly to the
    Company sufficient funds to pay the exercise price and any
    required tax withholding or (2) delivery by the Participant
    to the Company of a copy of irrevocable and unconditional
    instructions to a creditworthy broker to deliver promptly to the
    Company cash or a check sufficient to pay the exercise price and
    any required tax withholding;

	 
	 	    (3) 
	
    to the extent provided for in the applicable Award Certificate
    or approved by the Compensation Committee, by delivery (either
    by actual delivery or attestation) of Shares owned by the
    Participant valued at their Fair Market Value, provided
    (1) such method of payment is then permitted under
    applicable law, (2) such Shares, if acquired directly from
    the Company, were owned by the Participant for such minimum
    period of time, if any, as may be established by the
    Compensation Committee, and (3) such Shares are not subject
    to any repurchase, forfeiture, unfulfilled vesting or other
    similar requirements;

	 
	 	    (4) 
	
    to the extent permitted by applicable law and provided for in
    the applicable Award Certificate, by (1) delivery of a
    promissory note of the Participant to the Company on terms
    determined by the Compensation Committee, or (2) payment of
    such other lawful consideration as the Compensation Committee
    may determine; or

	 
	 	    (5) 
	
    by any combination of the above permitted forms of payment.




 


		
	
    6.2. 
	
    Stock
    Appreciation Rights.




 


			
	 	    (a) 
	
    In General.  A Stock Appreciation Right is an
    Award in the form of a right to receive cash or a Share, upon
    surrender of the Stock Appreciation Right, in an amount equal to
    the appreciation in the value of the Share over a base price
    established in the Award. The Committee may grant Stock
    Appreciation Rights either independently of Stock Options, or in
    tandem with Stock Options such that the exercise of the Stock
    Option or Stock Appreciation Right cancels the tandem Stock
    Appreciation Right or Stock Option.




 


			
	 	    (b) 
	
    Exercise Price.  The minimum base price of a
    Stock Appreciation Right granted under the Plan shall be the
    price set forth in the applicable Award Certificate, or, in the
    case of a Stock Appreciation Right related to a Stock Option
    (whether already outstanding or concurrently granted), the
    exercise price of the related Stock Option.




 


			
	 	    (c) 
	
    Term, Exercise, and Payment.  The provisions of
    Sections 6.1(d), (e), and (f) shall generally apply to
    Stock Appreciation Rights, as applicable.



 







		
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    2009 Incentive Plan
    	     Page 8
    









 





 


		
	
    6.3. 
	
    Restricted
    Stock.




 


			
	 	    (a) 
	
    In General.  The Compensation Committee may
    grant Awards of Restricted Stock. The Compensation Committee
    shall determine the terms and conditions of a Restricted Stock
    Award, including the conditions for vesting and repurchase (or
    forfeiture), the issue price (if any) and whether the Shares
    shall be entitled to exercise voting or other rights associated
    with ownership of a Share.




 


			
	 	    (b) 
	
    Dividends.  Unless otherwise provided by the
    Compensation Committee, Participants holding Restricted Stock
    will be eligible to receive all dividends paid with respect to
    such Shares. If any dividends or distributions are paid in
    shares, or consist of a dividend or distribution to holders of
    Shares other than an ordinary cash dividend, the shares or other
    property will be subject to the same restrictions on
    transferability and forfeitability as the Restricted Stock with
    respect to which they were paid. Each dividend payment will be
    made no later than the end of the calendar year in which the
    Restricted Stock on which such dividends are paid vests or, if
    later, the 15th day of the third month following the date
    on which the Restricted Stock on which such dividends are paid
    vests.




 


			
	 	    (c) 
	
    Stock Certificates.  The Company may require
    that any stock certificates issued for shares of Restricted
    Stock be deposited in escrow by the Participant, together with a
    stock power endorsed in blank, with the Company (or its
    designee). At the expiration of the applicable restriction
    periods, the Company (or such designee) shall deliver the
    certificates no longer subject to such restrictions to the
    Participant. If the Participant has died before the certificates
    are delivered, the certificates shall be delivered to the
    beneficiary designated by the Participant under the Plan and on
    file with the Company (or its designee) before the
    Participant’s death. If there is no such valid beneficiary
    designation, the Participant’s estate shall be the
    beneficiary.




 


		
	
    6.4. 
	
    Restricted
    Stock Units.




 



    The Compensation Committee may grant Restricted Stock Units to
    any participant subject to the same conditions and restrictions
    as the Compensation Committee would have imposed in connection
    with any Award of Restricted Stock. Each Restricted Stock Unit
    shall have a value equal to the Fair Market Value of one Share.
    Restricted Stock Units may be paid at such time as the
    Compensation Committee may determine and payments may be made in
    a lump sum or in installments, in cash, Shares, or any
    combination thereof, as determined by the Compensation Committee.



 


		
	
    6.5. 
	
    Other
    Stock-Based Awards




 



    Other Awards that are valued in whole or in part by reference
    to, or are otherwise based on, Shares or other property, may be
    granted under the Plan to Participants. To the extent permitted
    by law, such other Share Awards shall also be available as a
    form of payment in the settlement of other Awards granted under
    the Plan or as payment in lieu of compensation to which a
    Participant is otherwise entitled. Other Share Awards may be
    paid in Shares or cash, as the Compensation Committee shall
    determine. Subject to the provisions of the Plan, the
    Compensation Committee shall determine the terms and conditions
    of each other Share Award.



 


		
	
    6.6. 
	
    Cash
    Awards.




 



    Cash Awards are Awards that provide participants with the
    opportunity to earn a cash payment based upon the achievement of
    one or more performance goals for a performance period
    determined by the Compensation Committee. For each performance
    period, the Compensation Committee shall determine the relevant
    performance criteria, the performance goal for each performance
    criterion, the level or levels of achievement necessary for
    Awards to be paid, the weighting of the performance goals if
    more than one performance goal is applicable, and the size of
    the Awards.


 







		
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    6.7. 
	
    Performance-Based
    Awards.




 


			
	 	    (a) 
	
    In General.  Any of the Awards listed in
    ARTICLE 6 may be granted as Awards that satisfy the
    requirements for “performance-based compensation”
    within the meaning of section 162(m) of the Code. The
    performance goals must be established by the Compensation
    Committee and may be for the Company, or a Company subsidiary,
    affiliate or other Company operating unit or department, or a
    combination of such units or departments. The performance goal
    shall be based on one or more performance criteria selected by
    the Compensation Committee. With the exception of any Stock
    Option or Stock Appreciation Right, an Award that is intended to
    satisfy the requirements of a performance-based Award shall be
    so designated at the time of grant.




 


			
	 	    (b) 
	
    Limits.  The maximum aggregate number of shares
    of Stock for which performance-based Awards may be issued under
    this Section 6.7 in any calendar year to an individual
    Participant shall not exceed 1,000,000, the maximum amount that
    may be earned as a Cash Award for a performance period for a
    single calendar year by any individual Participant is
    $2,000,000, and the maximum amount that may be earned as a Cash
    Award for a performance period of greater than a single calendar
    year by any individual Participant is $6,000,000.




 


			
	 	    (c) 
	
    Performance Criteria.  In the case of Awards
    intended to qualify as performance-based Awards, the performance
    criteria shall be selected only from among the following:
    production growth; reserve growth; reserve replacement; lease
    operating expense; revenue growth; finding/development costs;
    net sales; operating income; pre- or after-tax income; operating
    profit minus capital charges; cash flow, including operating
    cash flow, free cash flow, cash flow return on equity and cash
    flow return on investment; net income; earnings per share;
    earnings before interest and taxes; earnings before interest,
    taxes, depreciation
    and/or
    amortization; return on equity; return on invested capital;
    return on assets; economic value added (or an equivalent
    measure); share price performance; total stockholder return;
    improvement in or achievement of expense levels; improvement in
    or achievement of working capital levels; innovation as measured
    by a percentage of sales of new products; market share;
    productivity ratios; completion
    and/or
    integration of acquisitions of businesses or companies;
    completion of divestitures and asset sales; and any combination
    of any of the foregoing business criteria. Any of the
    performance criteria may be used to measure the performance of
    the Company, a subsidiary,
    and/or
    affiliate as a whole or any business unit of the Company, a
    subsidiary,
    and/or
    affiliate or any combination thereof, as the Compensation
    Committee may deem appropriate, or any of the above performance
    criteria as compared to the performance of a group of comparator
    companies, or published or special index that the Compensation
    Committee deems appropriate. The Compensation Committee also has
    the authority to provide for accelerated vesting of any Award
    based on the achievement of the performance criteria specified
    in this Section 6.7.




 


			
	 	    (d) 
	
    Application to Stock Options and Stock Appreciation
    Rights. Notwithstanding anything contained in this
    Section 6.7 to the contrary, Stock Options and Stock
    Appreciation Rights need not satisfy the specific performance
    criteria described in this Section 6.7 in order to qualify as
    performance-based Awards under this section 162(m) of the
    Code.




 


			
	 	    (e) 
	
    Time for Establishing Performance Goals.  The
    specific performance goal(s) and the applicable performance
    criteria must be established by the Compensation Committee in
    advance of the deadlines applicable under section 162(m) of
    the Code and while the achievement of the performance goal(s)
    remains substantially uncertain.




 


			
	 	    (f) 
	
    Committee Certification and Payment of
    Awards.  Before any performance-based Award (other
    than Stock Options and Stock Appreciation Rights) is paid, the
    Compensation Committee must certify in writing (by resolution or
    otherwise) that the applicable performance goal(s) and any other
    material terms of the Award have been satisfied. Unless
    otherwise provided by the Compensation Committee,
    performance-based Awards shall be paid as soon as practicable
    after the Compensation Committee has certified that the
    applicable goals and terms of such awards



 







		
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    have been satisfied, but in no event later than the fifteenth
    (15th) day of the third month following the end of the
    performance period to which the award relates (absent a timely
    election to defer such Award under a deferred compensation plan,
    if any, maintained by the Company). Notwithstanding the
    foregoing, to the extent an amount was intended to be paid so as
    to qualify as a short-term deferral under section 409A of the
    Code and the applicable regulations, then such payment may be
    delayed if the requirements of Treas. Reg. 1.409A-1(b)(4)(ii)
    are met. In such case, payment of such deferred amounts must be
    made as soon as reasonably practicable following the first date
    on which the Company anticipates or reasonably should anticipate
    that, if the payments were made on such date, the Company’s
    deduction with respect to such payment would no longer be
    restricted due to the applicability of section 162(m) of
    the Code.




 


			
	 	    (g) 
	
    Terms and Conditions of Awards; Committee Discretion to
    Reduce Performance Awards.  The Compensation
    Committee shall have discretion to determine the conditions,
    restrictions or other limitations, in accordance with, and
    subject to, the terms of the Plan and section 162(m) of the
    Code, on the payment of individual Awards under this
    Section 6.7. To the extent set forth in an Award
    Certificate, the Compensation Committee may reserve the right to
    adjust the amount payable in accordance with any standards or on
    any other basis (including the Compensation Committee’s
    discretion), as the Compensation Committee may determine;
    provided, however, that, in the case of Awards intended to
    qualify as performance-based Awards, such adjustments shall be
    prescribed in a form that meets the requirements of
    section 162(m) of the Code.

	 
	 	    (h) 
	
    Adjustments for Material Changes.  To the
    extent the Compensation Committee makes adjustments in
    accordance with ARTICLE 7 that affect Awards intended to be
    performance-based Awards under this Section 6.7, such
    adjustments shall be prescribed in a form that meets the
    requirements of section 162(m) of the Code.



 







		
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    ARTICLE 7.
    ADJUSTMENTS



 


		
	
    7.1. 
	
    Changes
    in Capitalization.




 



    In the event of any stock split, reverse stock split, stock
    dividend, recapitalization, combination of shares,
    reclassification of shares, spin-off or other similar change in
    capitalization or event, or any dividend or distribution to
    holders of Shares other than an ordinary cash dividend,
    (1) the number and class of securities available under this
    Plan, (2) the number and class of securities and exercise
    price per Share of each outstanding Stock Option, (3) the
    number of Shares subject to each outstanding Restricted Stock
    Award, and (4) the terms of each other outstanding Award
    shall be equitably adjusted by the Company (or substituted
    Awards may be made, if applicable) in the manner determined by
    the Compensation Committee. Without limiting the generality of
    the foregoing, if the Company effects a split of the Shares by
    means of a stock dividend and the exercise price of and the
    number of Shares subject to an outstanding Stock Option are
    adjusted as of the date of the distribution of the dividend
    (rather than as of the record date for such dividend), then an
    optionee who exercises a Stock Option between the record date
    and the distribution date for such stock dividend shall be
    entitled to receive, on the distribution date, the stock
    dividend with respect to the Shares acquired upon such Stock
    Option exercise, notwithstanding the fact that such Shares were
    not outstanding as of the close of business on the record date
    for such stock dividend.



 


		
	
    7.2. 
	
    Change in
    Control.




 


			
	 	    (a) 
	
    Consequences of a Change in Control on Awards Other than
    Restricted Stock Awards.  In connection with a
    Change in Control, the Compensation Committee shall take any one
    or more of the following actions as to all or any (or any
    portion of) outstanding Awards other than Restricted Stock
    Awards on such terms as the Compensation Committee determines:
    (1) provide that Awards shall be assumed, or substantially
    equivalent Awards shall be substituted, by the acquiring or
    succeeding entity (or an affiliate thereof), (2) upon
    written notice to a Participant, provide that the
    Participant’s unexercised Awards will terminate immediately
    prior to the consummation of the Change in Control unless
    exercised by the Participant within a specified, reasonable
    period following the date of such notice, (3) provide that
    outstanding Awards shall become exercisable, realizable, or
    deliverable, or restrictions applicable to an Award shall lapse,
    in whole or in part before or upon the Change in Control,
    (4) if holders of Shares will receive upon consummation of
    the Change in Control a cash payment for each Share surrendered
    in the Change in Control, make or provide for a cash payment to
    a Participant equal to the excess, if any, of (A) the
    consideration received by stockholders generally with respect to
    the Change in Control (the “Change in Control Price”)
    times the number of Shares subject to the Participant’s
    Awards (to the extent the exercise price does not exceed the
    Change in Control Price) over (B) the aggregate exercise
    price of all such outstanding Awards and any applicable tax
    withholdings, in exchange for the termination of such Awards,
    (5) provide that, in connection with a liquidation or
    dissolution of the Company, Awards shall convert into the right
    to receive liquidation proceeds (if applicable, net of the
    exercise price thereof and any applicable tax withholdings) and
    (6) any combination of the foregoing. In taking any of the
    actions permitted under this Section 7.2(a), the
    Compensation Committee shall not be obligated by the Plan to
    treat all Awards, all Awards held by a Participant, or all
    Awards of the same type, identically.




 



    For purposes of clause (1) above, a Stock Option shall be
    considered assumed if, following consummation of the Change in
    Control, the Stock Option confers the right to purchase, for
    each Share subject to the Stock Option immediately prior to the
    consummation of the Change in Control, the consideration
    (whether cash, securities or other property) received as a
    result of the Change in Control by holders of Shares for each
    Share held immediately prior to the consummation of the Change
    in Control (and if holders were offered a choice of
    consideration, the type of consideration chosen by the holders
    of a majority of the outstanding Shares);


 







		
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    provided, however, that if the consideration received as a
    result of the Change in Control is not solely common stock of
    the acquiring or succeeding entity(or an affiliate thereof), the
    Company may, with the consent of the acquiring or succeeding
    entity, provide for the consideration to be received upon the
    exercise of Stock Options to consist solely of common stock of
    the acquiring or succeeding corporation (or an affiliate
    thereof) equivalent in value (as determined by the Compensation
    Committee) to the per share consideration received by holders of
    outstanding Shares as a result of the Change in Control.



 


			
	 	    (b) 
	
    Consequences of a Change in Control on Restricted Stock
    Awards. Upon the occurrence of a Change in Control, except
    to the extent specifically provided to the contrary in the
    applicable Award Certificate or any other agreement between a
    Participant and the Company, all restrictions and conditions on
    all Restricted Stock Awards then outstanding shall automatically
    lapse and be deemed terminated or satisfied, as applicable.



 







		
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    ARTICLE 8.
    GENERAL PROVISIONS APPLICABLE TO ALL AWARDS.



 


		
	
    8.1. 
	
    Transferability
    of Awards.




 



    Except as the Compensation Committee may otherwise determine or
    provide in an Award Certificate, Awards shall not be sold,
    assigned, transferred, pledged or otherwise encumbered by the
    person to whom they are granted, either voluntarily or by
    operation of law, except by will or the laws of descent and
    distribution or, other than in the case of an Incentive Stock
    Option, pursuant to a qualified domestic relations order, and,
    during the life of the Participant, shall be exercisable only by
    the Participant. References to a Participant, to the extent
    relevant in the context, shall include references to authorized
    transferees.



 


		
	
    8.2. 
	
    Termination
    of Status.




 



    Except to the extent provided in an Award Certificate, the
    Compensation Committee shall determine the effect on an Award of
    the disability, death, termination or other cessation of
    employment, authorized leave of absence or other change in the
    employment or other status of a Participant and the extent to
    which, and the period during which, the Participant, or the
    Participant’s legal representative, conservator, guardian
    or Beneficiary, may exercise rights under the Award.



 


		
	
    8.3. 
	
    Withholding.




 



    The Participant must satisfy all applicable federal, state, and
    local or other income and employment tax withholding obligations
    before the Company will deliver stock certificates or otherwise
    recognize ownership of Shares under an Award. The Company may
    decide to satisfy the withholding obligations through additional
    withholding on salary or wages. If the Company elects not to or
    cannot withhold from other compensation, the Participant must
    pay the Company the full amount, if any, required for
    withholding. Payment of withholding obligations is due before
    the Company will issue any Shares on exercise or release from
    forfeiture of an Award or, if the Company so requires, at the
    same time as is payment of the exercise price unless the Company
    determines otherwise. To the extent not otherwise provided for
    in an Award Certificate or approved by the Compensation
    Committee, a Participant shall satisfy such tax obligations in
    whole or in part by delivery of a portion of the Award creating
    the tax obligation, valued at Fair Market Value; provided,
    however, except as otherwise provided by the Compensation
    Committee, that the total tax withholding where stock is being
    used to satisfy such tax obligations cannot exceed the
    Company’s minimum statutory withholding obligations (based
    on minimum statutory withholding rates for federal and state tax
    purposes, including payroll taxes, that are applicable to such
    supplemental taxable income). Shares surrendered to satisfy tax
    withholding requirements cannot be subject to any repurchase,
    forfeiture, unfulfilled vesting or other similar requirements.



 


		
	
    8.4. 
	
    Conditions
    on Delivery of Stock.




 



    The Company will not be obligated to deliver any Shares pursuant
    to the Plan or to remove restrictions from Shares previously
    delivered under the Plan until (a) all conditions of the
    Award have been met or removed to the satisfaction of the
    Company, (b) in the opinion of the Company’s counsel,
    all other legal matters in connection with the issuance and
    delivery of such Shares have been satisfied, including any
    applicable securities laws and any applicable stock exchange or
    stock market rules and regulations, and (c) the Participant
    has executed and delivered to the Company such representations
    or agreements as the Company may consider appropriate to satisfy
    the requirements of any applicable laws, rules or regulations.



 


		
	
    8.5. 
	
    Acceleration.




 



    The Compensation Committee or its delegee may at any time
    provide that any Award shall become immediately exercisable in
    full or in part, free of some or all restrictions or conditions,
    or otherwise realizable in full or in part, as the case may be.


 







		
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    ARTICLE 9.
    MISCELLANEOUS



 


		
	
    9.1. 
	
    No Right
    to Employment or Other Status.




 



    No person shall have any claim or right to be granted an Award,
    and the grant of an Award shall not be construed as giving a
    Participant the right to continued employment or any other
    relationship with the Company. The Company expressly reserves
    the right at any time to dismiss or otherwise terminate its
    relationship with a Participant free from any liability or claim
    under the Plan, except as expressly provided in the applicable
    Award Certificate.



 


		
	
    9.2. 
	
    No Rights
    as Stockholder.




 



    Subject to the provisions of the applicable Award Certificate
    and except as provided in Section 6.3, no Participant or
    beneficiary shall have any rights as a stockholder with respect
    to any Shares to be distributed with respect to an Award until
    becoming the record holder of such shares.



 


		
	
    9.3. 
	
    Amendment.




 


			
	 	    (a) 
	
    Amendment of the Plan.  The Compensation
    Committee may amend, suspend or terminate the Plan or any
    portion of the Plan at any time; provided that if at any time
    the approval of the Company’s stockholders is required as
    to any modification or amendment under section 422 of the
    Code or any successor provision with respect to Incentive Stock
    Options, the Compensation Committee may not effect such
    modification or amendment without such approval. Unless
    otherwise specified in the amendment, any amendment to the Plan
    adopted in accordance with this Section 9.3 shall apply to,
    and be binding on the holders of, all Awards outstanding under
    the Plan at the time the amendment is adopted, provided the
    Compensation Committee determines that such amendment, taking
    into account any related action, does not materially and
    adversely affect the rights of Participants under the Plan.




 


			
	 	    (b) 
	
    Amendment of Award.  The Compensation Committee
    may amend, modify or terminate any outstanding Award, including
    but not limited to, substituting another Award of the same or a
    different type, changing the date of exercise or realization,
    and converting an Incentive Stock Option to a Nonstatutory Stock
    Option; provided, however, that no outstanding Award may be
    amended to reduce the exercise price of a Stock Option, Stock
    Appreciation Right or other similar Award. The
    Participant’s consent to such action shall be required
    unless the Compensation Committee determines that the action,
    taking into account any related action, would not materially and
    adversely affect the Participant’s rights under the Plan.




 


		
	
    9.4. 
	
    Compliance
    with Code Section 409A.




 



    No Award shall provide for a deferral of compensation within the
    meaning of section 409A of the Code, unless the
    Compensation Committee, at the time of grant, specifically
    provides that the Award is intended to be subject to
    section 409A of the Code. If an Award is intended to be
    subject to section 409A, the following provisions shall
    apply except to the extent that a contrary provision is included
    in the Award Certificate: (a) such Award shall be payable
    on the earlier of a “change in control” or the
    Participant’s “separation from service” with the
    Company and (2) any payment made to a Participant who is a
    “specified employee” of the Company shall not be made
    before such date as is six months after the Participant’s
    “separation from service” to the extent required to
    avoid the adverse consequences of Section 409A of the Code.
    For purposes of this Section 9.4, the terms “change in
    control,” “separation from service” and
    “specified employee” shall have the meanings set forth
    in section 409A and the applicable Treasury regulations.
    The Company shall have no liability to a Participant, or any
    other party, if an Award that is intended to be exempt from, or
    compliant with, section 409A is not so exempt or compliant
    or for any action taken by the Compensation Committee.



 


		
	
    9.5. 
	
    Governing
    Law.




 



    The provisions of the Plan and all Awards made hereunder shall
    be governed by and interpreted in accordance with the laws of
    the State of Delaware, excluding choice-of-law principles of the
    law of such state that would require the application of the laws
    of a jurisdiction other than such state.


 







		
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