Document:

Exhibit 10.1

 

Heritage Property Investment Trust, Inc.

 

Schedule of
Non-Employee Director Compensation(1)

 

	
  Annual Retainer

  	
   

  	
  $30,000

  
	
   

  	
   

  	
   

  
	
  Board/Committee Meeting Fees

  	
   

  	
  $1,500 (per meeting attended)

  
	
   

  	
   

  	
   

  
	
  Lead Director Retainer

  	
   

  	
  $25,000

  
	
   

  	
   

  	
   

  
	
  Committee Chair Retainer

  	
   

  	
  Audit Committee: $10,000

  Compensation Committee: $6,000

  Nominating and Corporate Governance Committee: $4,000

  Other Committees: $4,000

  
	
   

  	
   

  	
   

  
	
  Annual Deferred Stock Unit Awards

  	
   

  	
  Each director receives an annual grant of 1,000
  deferred stock units (“DSUs”). The DSUs are not issued until the director
  ceases to be on the Board, at which time an equivalent number of shares of
  our common stock will be issued to the director, plus all accrued dividends.

  

 

(1) Directors may elect to receive their
compensation in the form of cash, shares of our common stock or additional
DSUs.Exhibit 10.1

 

Summary of
Board of Directors Compensation Effective December 17, 2005

 

1.             Annual retainer of
$24,000

 

2.             Meeting fees of
$1,000 per meeting attended.  Lead
Director to receive a meeting fee of $3,000 per meeting attended.

 

3.             Committee meeting fee
of $500 per meeting attended.  Committee
Chair to receive a meeting fee of $3,000 per committee meeting attended.

 

4.             Award of options to
purchase 30,000 shares of Company common stock upon initial election to the
Board of Directors.

 

5.             Award of options to
purchase 15,000 shares of Company common stock for each additional year of
service on the Board.Exhibit 10.1

 

VENOCO, INC.

2005 EMPLOYEE STOCK INCENTIVE PLAN

 

1.             PURPOSES.

 

(a)           Background.
This Plan was adopted on October 13, 2005, and approved by
shareholders effective December 12, 2005.

 

(b)           Eligible
Stock Award Recipients.  The persons
eligible to receive Stock Awards are the Employees, Directors and Consultants
of the Company and its Affiliates.

 

(c)           Available
Stock Awards.  The purpose of the
Plan is to provide a means by which eligible recipients may be given an
opportunity to benefit from increases in value of the Common Stock through the
granting of the following:  (i) Incentive
Stock Options, (ii) Nonqualified Stock Options, (iii) rights to
acquire restricted stock, and (iv) stock appreciation rights.

 

(d)           General
Purpose.  The Company, by means of
the Plan, seeks to retain the services of the group of persons eligible to
receive Stock Awards, to secure and retain the services of new members of this
group and to provide incentives for such persons to exert maximum efforts for
the success of the Company and its Affiliates.

 

2.             DEFINITIONS.

 

(a)           “Affiliate” means any entity that
controls, is controlled by, or is under common control with the Company.

 

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

 

(c)           “Code” means the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(d)           “Committee” means a pre-existing or
newly formed committee of members of the Board appointed by the Board in
accordance with subsection 3(c).

 

(e)           “Common Stock” means the Company’s
common stock par value US$0.01 and other rights with respect to such shares of
common stock.

 

(f)            “Company” means Venoco, Inc., a
Delaware corporation.

 

(g)           “Consultant” means any person,
including an advisor, (i) engaged by the Company or an Affiliate to render
consulting or advisory services and who is compensated for such services or (ii) who
is a member of the Board of Directors of an Affiliate.

 

 

(h)           “Continuous Service” means that the
Participant’s service with the Company or an Affiliate, whether as an Employee,
Director or Consultant, is not interrupted or terminated.  Unless otherwise provided in a Stock Award
Agreement or Option Agreement, as applicable, the Participant’s Continuous
Service shall not be deemed to have terminated merely because of a change in
the capacity in which the Participant renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Participant renders such service, provided that there is no interruption
or termination of the Participant’s service to the Company or an Affiliate as
an Employee, Director or Consultant.  For
example, a change in status from an Employee of the Company to a Consultant of
an Affiliate may not constitute an interruption of Continuous Service.  The Board, in its sole discretion, may
determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence, including sick leave, military leave or any other
personal leave.

 

(i)            “Covered Employee” means the Company’s
chief executive officer and the four (4) other highest compensated
officers of the Company for whom total compensation is required to be reported
to shareholders under the Exchange Act, as determined for purposes of Section 162(m)
of the Code.

 

(j)            “Director” means a member of the
Board of Directors of the Company.

 

(k)           “Disability” means the Participant’s
inability, due to illness, accident, injury, physical or mental incapacity or
other disability, to carry out effectively the duties and obligations to the
Company and its Affiliates performed by such person immediately prior to such
disability for a period of at
least six (6) months, as determined in the good faith judgment of the
Board.

 

(l)            “Dollars” or “$” or “US$” means United
States dollars.

 

(m)          “Employee” means any person employed
by the Company or an Affiliate.  Service
as a Director or payment of a director’s fee by the Company or an Affiliate
alone shall not be sufficient to constitute “employment” by the Company or an
Affiliate.

 

(n)           “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

(o)           “Fair Market Value”
means, as of any date, the value of the Common Stock determined as follows:

 

(i)            If
the Common Stock is listed on any established share exchange, or traded on The
Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of
Common Stock shall be the closing sales price for such share (or the closing
bid, if no sales were reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in Common Stock if such
shares are traded on more than one such exchange or market) on the last market
trading day prior to the day of determination, as reported by such exchange or
market or such other source as the Board reasonably deems reliable.

 

2

 

(ii)           In
the absence of such markets for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.

 

(p)           “Incentive Stock Option” means an
Option designated as an incentive stock option in an Option Agreement and that
is granted in accordance with the requirements of, and that conforms to the
applicable provisions of, Section 422 of the Code.

 

(q)           “Independent Director” means (i) a Director who satisfies the definition of
Independent Director or similar definition under the applicable stock exchange
or Nasdaq rules and regulations upon which the Common Stock is traded from
time to time and (ii) a Director who either (A) is not a current
employee of the Company or an “affiliated corporation” (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not
a former employee of the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect remuneration from
the Company or an “affiliated corporation” for services in any capacity other
than as a Director or (B) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code.

 

(r)           “Nonqualified Stock Option” means an
Option that is not designated in an Option Agreement as an Incentive Stock Option
or was not granted in accordance with the requirements of, and does not conform
to the applicable provisions of, Section 422 of the Code.

 

(s)           “Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.

 

(t)            “Option” means an Incentive Stock
Option or a Nonqualified Stock Option granted pursuant to the Plan.

 

(u)           “Option Agreement” means a written
agreement between the Company and an Optionholder evidencing the terms and
conditions of an individual Option grant.

 

(v)            “Optionholder” means a person to whom
an Option is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Option.

 

(w)           “Participant” means a person to whom
a Stock Award is granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Stock Award.

 

(x)           “Plan” means this Venoco, Inc.
2005 Employee Stock Incentive Plan.

 

(y)           “Retirement”
means an Employee’s retirement from the Company or an Affiliate, (i) on or
after attaining age 55 and completing at least ten (10) years of service;
or (ii) on or after attaining age 65.

 

(z)           “Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.

 

3

 

(aa)         “Securities Act” means the Securities
Act of 1933, as amended.

 

(bb)         “Stock Award” means any right granted
under the Plan, including an Option, a right to acquire restricted Common
Stock, and a stock appreciation right.

 

(cc)         “Stock Award Agreement” means a
written agreement between the Company and a holder of a Stock Award (other than
an Option) evidencing the terms and conditions of an individual Stock Award
grant.

 

(dd)         “Ten Percent Stockholder” means a
person who owns (or is deemed to own pursuant to Section 424(d) of
the Code) shares possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any parent corporation
or any subsidiary corporation, both as defined in Section 424 of the Code.

 

3.             ADMINISTRATION.

 

(a)           Administration
by Board.  The Board shall administer
the Plan unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c).  The
Board may, at any time and for any reason in its sole discretion, rescind some
or all of such delegation.

 

(b)           Powers of
Board.  The Board shall have the
power, subject to, and within the limitations of, the express provisions of the
Plan:

 

(i)            To
determine from time to time which of the persons eligible under the Plan shall
be granted Stock Awards; when and how each Stock Award shall be granted; what
type or combination of types of Stock Award shall be granted; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person.

 

(ii)           To
construe and interpret the Plan, Stock Awards granted under it, Option
Agreements and Stock Award Agreements, and to establish, amend and revoke rules and
regulations for their administration. 
The Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan or in any Option Agreement or Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.

 

(iii)         To
amend the Plan, a Stock Award, a Stock Award Agreement or an Option Agreement
as provided in Section 12.

 

(iv)          Generally,
to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in
conflict with the provisions of the Plan.

 

4

 

(c)           Delegation
to Committee.

 

(i)            General.  The Board may delegate administration of the
Plan and its powers and duties thereunder to a Committee or Committees, and the
term “Committee” shall apply to
any person or persons to whom such authority has been delegated.  Upon such delegation, the Committee shall
have the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be deemed to include the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under this Plan, except respecting matters under Rule 16b-3 of
the Exchange Act or Section 162(m) of the Code, or any rules or
regulations issued thereunder, which are required to be determined in the sole
discretion of the Committee.

 

(ii)           Committee
Composition.  A Committee shall
consist solely of two or more Independent Directors.  Within the scope of its authority, the Board
or the Committee may (1) delegate to a committee of one or more members of
the Board who are not Independent Directors the authority to grant Stock Awards
to eligible persons who are either (a) not then Covered Employees and are
not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate
to a committee of one or more members of the Board who are not Independent
Directors or to the Company’s Chief Executive Officer the authority to grant
Stock Awards to eligible persons who are not then subject to Section 16 of
the Exchange Act and with respect to whom the Company does not wish to comply
with Section 162(m) of the Code.

 

(d)           Effect of Board’s Decision; No Liability.   All
determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.  No
member of the Board or the Committee or any person to whom duties hereunder
have been delegated shall be liable for any action, interpretation or
determination made in good faith, and such persons shall be entitled to full
indemnification and reimbursement consistent with applicable law and in the
manner provided in the Company’s Certificate of Incorporation, as the same may
be amended from time to time, or as otherwise provided in any agreement between
any such member and the Company.

 

(e)           Compliance with Section 409A of the
Code.   In connection with any
proposed grant of a Stock Award, the Board shall ask tax advisors to the
Company to evaluate whether the terms of the Stock Award are likely to comply
with the requirements of Section 409A of the Code. If tax advisors to the
Company determine that compliance of the terms of a proposed Stock Award with Section 409A
of the Code is unlikely or uncertain, the Board may determine whether to modify
the terms of the proposed Stock Award, consistent with this Plan, in order to
improve the likelihood of compliance with Section 409A of the Code. If, at
any time, tax advisors to the Company determine that the terms of any
outstanding Stock Award may fail to comply with Section 409A of the Code,
the Board shall have the authority to enter into an 

 

5

 

amendment
of such Stock Award, consistent with this Plan, that is designed to achieve
such compliance.

 

4.             STOCK SUBJECT TO THE
PLAN.

 

(a)           Share
Reserve.  Subject to the provisions
of Section 11 relating to adjustments upon changes in Common Stock, the
Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate
1,200,000 shares of Common Stock.  Stock
appreciation rights provided for in Section 7(b) hereof that are
payable only in cash will not reduce the number of shares of Common Stock
available for Stock Awards granted under the Plan.

 

(b)           Reversion
of Stock to the Share Reserve.  If
any Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the Common Stock not acquired
under such Stock Award shall revert to and again become available for issuance
under the Plan.

 

(c)           Source of
Shares.  The Common Stock subject to
the Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

 

5.             ELIGIBILITY.

 

(a)           Eligibility
for Specific Stock Awards.  Incentive
Stock Options may be granted only to Employees. 
Stock Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants.

 

(b)           Ten
Percent Stockholders.  A Ten Percent
Stockholder shall not be granted an Incentive Stock Option unless the exercise
price of such Option is at least one hundred ten percent (110%) of the Fair
Market Value of the Common Stock at the date of grant and the Option is not
exercisable after the expiration of five (5) years from the date of grant.

 

(c)           Consultants.

 

(i)            A
Consultant shall not be eligible for the grant of a Stock Award if, at the time
of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to
register a resale of the Company’s securities issued to such Consultant because
of the nature of the services that the Consultant is providing to the Company,
or because the Consultant is not a natural person, or as otherwise provided by
the rules governing the use of Form S-8, unless the Board determines
both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

 

(ii)           Form S-8
generally is available to consultants and advisors only if (i) they are
natural persons; (ii) they provide bona fide services to the issuer, its
parents, its majority-

 

6

 

owned
subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the
services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the issuer’s securities.

 

6.             OPTION PROVISIONS.

 

Each Option Agreement shall be subject to the terms
and conditions of this Plan.  Each Option
and Option Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. 
All Options shall be separately designated Incentive Stock Options or
Nonqualified Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for Common Stock
purchased on exercise of each type of Option. 
The provisions of separate Options need not be identical.

 

(a)           Provisions Applicable to All Options.

 

(i)            Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid either (A) in cash in Dollars or (B) in
the discretion of the Board or the Committee, with Common Stock based on the
Fair Market Value of such Common Stock, in either case at the time the Option
is exercised.

 

(ii)           Vesting
Generally.  The total number of
shares of Common Stock subject to an Option may (A) vest, and therefore
become exercisable, in periodic installments that may, but need not, be equal,
or (B) be fully vested at the time of grant.  The Option may be subject to such other terms
and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate.  The vesting provisions, if any, of individual
Options may vary.  The provisions of this
subsection 6(a)(ii) are subject to any Option Agreement provisions
governing the minimum number of shares of Common Stock as to which an Option
may be exercised.

 

(iii)         Termination
of Continuous Service.  Unless
otherwise provided in the Option Agreement, in the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death,
Disability, Retirement or as a result of a Change of Control), all Options held
by the Optionholder shall immediately terminate; provided, however,
if an Optionholder’s Continuous Service is terminated for reasons other than
for cause, all vested Options held by such person shall continue to be
exercisable until the earlier of the expiration date of such Option or
180 days after the date of such termination.  All such vested Options not exercised within
the period described in the preceding sentence shall terminate.

 

(iv)          Disability
or Death of Optionholder.  Unless
otherwise provided in the Option Agreement, in the event that an Optionholder’s
Disability or death, all unvested Options shall immediately terminate, and all
vested Options held by such person shall continue to be exercisable until
12 months after the date of such Disability or death.  All such vested Options not exercised within
such 12-month period shall terminate.

 

(v)            Retirement. 
Unless otherwise provided in the Option Agreement, in the
event of the Optionholder’s Retirement, all unvested Options shall
automatically vest on the date 

 

7

 

of
such Retirement and all Options shall be exercisable until the earlier of 24
months after such Retirement date or the expiration date of such Options.  All such Options not exercised within the
period described in the preceding sentence shall terminate.

 

(b)           Provisions Applicable to Incentive Stock
Options.

 

(i)            Term.  Subject to the provisions of subsection 5(b) regarding
Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after
the expiration of ten (10) years from the date it was granted.  Further, no grant of an Incentive Stock
Option shall be made under this Plan more than ten (10) years after the
date the Plan is approved by the stockholders of the Company.

 

(ii)           Exercise
Price of an Incentive Stock Option. 
Subject to the provisions of subsection 5(b) regarding Ten
Percent Stockholders, the exercise price of each Incentive Stock Option shall
be not less than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, a Nonqualified
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

(iii)         Transferability
of an Incentive Stock Option.  An
Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder.

 

(iv)          Incentive
Stock Option $100,000 Limitation. 
Notwithstanding any other provision of the Plan or an Option Agreement,
the aggregate Fair Market Value of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Optionholder
in any calendar year, under the Plan or any other option plan of the Company or
its Affiliates, shall not exceed $100,000. 
For this purpose, the Fair Market Value of the Common Stock shall be
determined as of the time an Option is granted. 
The Options or portions thereof which exceed such limit (according to
the order in which they were granted) shall be treated as Nonqualified Common
Stock Options.

 

(c)           Provisions Applicable to Nonqualified Stock
Options.

 

(i)            Exercise
Price of a Nonqualified Stock Option. 
To assure sufficient Board discretion, the exercise price of each
Nonqualified Stock Option shall be not less than eighty-five percent (85%) of
the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted, provided, however, that the exercise price of each
Nonqualified Stock Option granted to a Covered Employee shall not be less than
one hundred percent (100%) of the Fair Market Value of the Common Stock subject
to the Option on the date the Option is granted.  Notwithstanding the foregoing, a Nonqualified
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

8

 

(ii)           Transferability
of a Nonqualified Stock Option. A Nonqualified Stock Option shall be transferable,
if at all, to the extent provided in the Option Agreement.  If the Option Agreement does not provide for
transferability, then the Nonqualified Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.

 

7.             PROVISIONS OF STOCK
AWARDS OTHER THAN OPTIONS.

 

(a)           Restricted
Stock Awards.  Each restricted stock
award agreement shall be in such form and shall contain such restrictions,
terms and conditions, if any, as the Board shall deem appropriate and shall be
subject to the terms and conditions of this Plan.  The terms and conditions of restricted stock
award agreements may change from time to time, and the terms and conditions of
separate restricted stock award agreements need not be identical, but each
restricted stock award agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

 

(i)            Consideration.  A restricted stock award may be awarded in
consideration for past services actually rendered, or for future services to be
rendered, to the Company or an Affiliate for its benefit.

 

(ii)           Vesting.  Common Stock awarded under the restricted
stock award agreement may (A) be subject to a vesting schedule to be
determined by the Board, or (B) be fully vested at the time of grant.

 

(iii)         Termination
of Participant’s Continuous Service. 
Unless otherwise provided in the restricted stock award agreement, in
the event a Participant’s Continuous Service terminates prior to a vesting date
set forth in the restricted stock award agreement, any unvested restricted
stock award shall be forfeited and automatically transferred to and reacquired
by the Company at no cost to the Company, and neither the Participant nor his
or her heirs, executors, administrators or successors shall have any right or
interest in the restricted stock award. 
Notwithstanding the foregoing, unless otherwise provided in the
restricted stock award agreement, in the event a Participant’s Continuous
Service terminates as a result of (A) being terminated by the Company for
reasons other than for cause, (B) death, (C) Disability, (D) Retirement,
or (E) a Change of Control (subject to the provisions of Section 11(c) hereof),
then any unvested restricted stock award shall vest immediately upon such date.

 

(iv)          Transferability.  Rights to acquire Common Stock under the
restricted stock award agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the restricted stock award
agreement, as the Board shall determine in its discretion, so long as Common
Stock awarded under the restricted stock award agreement remain subject to the terms
of the restricted stock award agreement.

 

(b)           Grant of Stock Appreciation Rights.  Stock appreciation rights to receive Common
Stock (or, at the discretion of the Board, an equivalent amount of cash) the
excess of the Fair Market Value of Common Stock on the date the rights are
surrendered over the Fair Market Value of Common Stock on the date of grant may
be granted to any Employee, Director 

 

9

 

or
Consultant selected by the Board.  A
stock appreciation right may be granted (i) in connection and
simultaneously with the grant of another Stock Award, (ii) with respect to
a previously granted Stock Award, or (iii) independent of another Stock
Award.  A stock appreciation right shall
be subject to such terms and conditions not inconsistent with this Plan as the
Board shall impose and shall be evidenced by a written stock appreciation right
agreement, which shall be executed by the Participant and an authorized officer
of the Company.  The Board, in its
discretion, may determine whether a stock appreciation right is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code and stock appreciation right agreements evidencing stock appreciation
rights intended to so qualify shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.  The Board may, in its discretion
and on such terms as it deems appropriate, require as a condition of the grant
of a stock appreciation right that the Participant surrender for cancellation
some or all of the Stock Awards previously granted to such person under this
Plan or otherwise.  A stock appreciation
right, the grant of which is conditioned upon such surrender, may have an
exercise price lower (or higher) than the exercise price of the surrendered
Stock Award, may contain such other terms as the Board deems appropriate, and
shall be exercisable in accordance with its terms, without regard to the number
of shares, price, exercise period or any other term or condition of such
surrendered Stock Award.

 

8.             AVAILABILITY OF SHARES.  During
the terms of the Stock Awards, the Company shall keep available at all times
the number of shares of Common Stock required to satisfy such Stock Awards.

 

9.             USE OF PROCEEDS FROM
STOCK.

 

Proceeds from the sale of Common Stock pursuant to
Stock Awards shall constitute general funds of the Company.

 

10.          MISCELLANEOUS.

 

(a)           Exercise of
Awards.  Stock Awards shall be exercisable at such times, or upon the occurrence
of such event or events as the Board shall determine at or subsequent to
grant.  Stock Awards may be exercised in
whole or in part.  Common Stock purchased
upon the exercise of a Stock Award shall be paid for in full at the time of
such purchase.

 

(b)           Acceleration
of Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

 

(c)           Stockholder
Rights.

 

(i)            Options.  Unless otherwise provided in and upon the
terms and conditions in the Option Agreement, no Participant shall be deemed to
be the holder of, or to have any of the rights of a holder with respect to, any
Common Stock subject to an Option unless and until 

 

10

 

such
Participant has satisfied all requirements for exercise of, and has exercised,
the Option pursuant to its terms.

 

(ii)           Restricted Stock.  Unless otherwise provided in and
upon the terms and conditions in the restricted stock award agreement, a
Participant shall have the right to receive all dividends and other
distributions paid or made respecting such restricted stock, provided, however,
no unvested restricted stock shall have any voting rights of a stockholder
respecting such unvested restricted stock unless and until such unvested restricted
stock becomes vested.

 

(d)           No
Employment or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted, or any other capacity, or shall affect the right of
the Company or an Affiliate to terminate with or without notice and with or
without cause (i) the employment of an Employee, (ii) the service of
a Consultant to the Company or an Affiliate or (iii) the service of a
Director of the Company or an Affiliate.

 

(e)           Withholding
Obligations.  If the Company has or
will have a legal obligation to withhold the taxes related to the grant,
vesting or exercise of the Stock Award, such Award may not be granted, vested
or exercised in whole or in part, unless such tax obligation is first satisfied
in a manner satisfactory to the Company. 
If permitted by the Committee, the Participant may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under a Stock Award by any of the following means
(in addition to the Company’s right to withhold from any compensation paid to
the Participant by the Company) or by a combination of such means:  (i) tendering a cash payment in Dollars;
(ii) authorizing the Company to withhold Common Stock from the Common
Stock otherwise issuable to the Participant as a result of the exercise or
acquisition of Common Stock under the Stock Award, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount
of tax required to be withheld by law; or (iii) delivering to the Company
owned and unencumbered Common Stock.

 

(f)            Listing and
Qualification of Shares.  This Plan and grant and exercise of
Stock Awards hereunder, and the obligation of the Company to sell and deliver
shares of Common Stock under such Stock Awards, shall be subject to all
applicable United States federal and state laws, rules and regulations and
to such approvals by any government or regulatory agency as may be required.
The Company, in its discretion, may postpone the issuance or delivery of Common
Stock upon any exercise of a Stock Award until completion of any stock exchange
listing, or other qualification of such shares of Common Stock under any United
States federal or state law rule or regulation as the Company may consider
appropriate, and may require any individual to whom a Stock Award is granted,
such individual’s beneficiary or legal representative, as applicable, to make
such representations and furnish such information as the Board may consider
necessary, desirable or advisable in connection with the issuance or delivery
of the Common Stock in compliance with applicable laws, rules and
regulations.

 

(g)           Non-Uniform
Determinations.  The Board’s
determinations under this Plan (including, without limitation, determinations
of the persons to receive Stock Awards, the form, 

 

11

 

term,
provisions, amount and timing of the grant of such Stock Awards and of the
agreements evidencing the same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Stock Awards
under this Plan, whether or not such persons are similarly situated.

 

11.          ADJUSTMENTS UPON
CHANGES IN STOCK.

 

(a)           Capitalization
Adjustments.  If any change is made
in the Common Stock subject to the Plan, or subject to any Stock Award, without
the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of stock, exchange of stock, change in corporate
structure or other transaction), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and
the maximum number of securities subject to award to any person pursuant to subsection 5(c),
and the outstanding Stock Awards will be appropriately adjusted in the
class(es) and number of securities and price per share of Common Stock subject
to such outstanding Stock Awards.  The
Board shall make such adjustments, and its determination shall be final,
binding and conclusive.  (The conversion
of any convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the Company.)

 

(b)           Dissolution or Liquidation.  In
the event of a dissolution or liquidation of the Company, then all outstanding
Stock Awards shall terminate immediately prior to such event.

 

(c)           Recapitalization
or Reorganization.  If the Company
recapitalizes, reclassifies its capital stock, or otherwise changes its capital
structure (a “recapitalization”),
the number and class of shares of Common Stock covered by an Option theretofore
granted shall be adjusted so that such Option shall thereafter cover the number
of class of shares of stock and securities to which the stockholder would have
been entitled pursuant to the terms of the recapitalization if, immediately
prior to the recapitalization, the stockholder had been the holder of record of
the number of shares of Common Stock then covered by such Option.  If (i) the Company shall not be the
surviving entity in any merger or reconsolidation (or survives only as a
subsidiary of an entity other than a previously wholly owned subsidiary of the
Company), (ii) the Company sells, leases or exchanges or agrees to sell,
lease or exchange all or substantially all of its assets to any other person or
entity (other than a wholly owned subsidiary of the Company), (iii) the
Company is to be dissolved and liquidated, (iv) any person or entity,
including a “group” as contemplated by Section 13(d)(3) of the
1934 Act, acquires or gains ownership or control (including, without
limitation, power to vote) of more than 50% of the outstanding shares of the
Company’s voting stock (based upon voting power), or (v) as a result of or
in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such event is referred to herein as a “Corporate Change”), no later than
(x) ten days after the approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of directors or (y) thirty days after a Corporate
Change of the type described in clause (iv), the Committee, acting in its
sole discretion without the consent or approval of any 

 

12

 

stockholder,
shall effect one or more of the following alternatives, which may vary among
individual stockholders and which may vary among Options held by any individual
stockholder: (1) accelerate the time at which Options then outstanding may
be exercised so that such Options may be exercised in full for a limited period
of time on or before a specified date (before or after such Corporate Change)
fixed by the Committee, after which specified date all unexercised Options and
all rights of stockholders thereunder shall terminate, (2) require the
mandatory surrender to the Company by selected stockholders of some or all of the
outstanding Options held by such stockholders (irrespective of whether such
Options are then exercisable under the provisions of the Plan) as of a date,
before or after such Corporate Change, specified by the Committee, in which
event the Committee shall thereupon cancel such Options and pay to each
stockholder an amount of cash per share equal to the excess, if any, of the
amount calculated in subsection (d) below (the “Change of Control Value”) of the shares
subject to such Option over the exercise price(s) under such Options for such
shares, (3) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole discretion that
adjustment is necessary to Options then outstanding) or (4) provide that
the number and class of shares of Common Stock covered by an Option theretofore
granted shall be adjusted so that such Option shall thereafter cover the number
and class of shares of stock or other securities or property (including,
without limitation, cash) to which the stockholder would have been entitled
pursuant to the terms of the agreement of merger, consolidation or sale of
assets and dissolution if, immediately prior to such merger, consolidation or
sale of assets and dissolution, the stockholder had been the holder of record
of the number of shares of Common Stock then covered by such Option.

 

(d)           For
the purposes of clause (2) in subsection (c) above, the “Change
of Control Value” shall equal the amount determined in clause (i), (ii) or
(iii), whichever is applicable, as follows: (i) the per share price
offered to stockholders of the Company in any such merger, consolidation, sale
of assets or dissolution transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) if such Corporate Change occurs
other than pursuant to a tender or exchange offer, the Fair Market Value per
share of the shares into which such Options being surrendered are exercisable,
as determined by the Committee as of the date determined by the Committee to be
the date of cancellation and surrender of such Options. In the event that the
consideration offered to stockholders of the Company in any transaction
described in this subsection (d) or subsection (c) above
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.

 

12.          AMENDMENT OF THE PLAN
AND STOCK AWARDS.

 

(a)           Amendment
of Plan.  The Board at any time, and
from time to time, may amend the Plan. 
However, except as provided in Section 11 relating to adjustments
upon changes in Common Stock, no amendment shall be effective unless approved
by the stockholders of the Company to the extent stockholder approval is
necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any applicable Nasdaq or securities exchange listing requirements.

 

13

 

(b)           Stockholder
Approval.  The Board may, in its sole
discretion, submit any other amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the
requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on
corporate deductibility of compensation paid to certain executive officers.

 

(c)           Contemplated
Amendments.  It is expressly
contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the
Plan and/or Incentive Stock Options granted under it into compliance therewith.

 

(d)           No
Impairment of Rights.  Rights under
any Stock Award granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless the Participant consents in writing.

 

(e)           Amendment
of Stock Awards.  The Board at any
time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be
impaired by any such amendment unless the applicable Participant consents in
writing.

 

13.          TERMINATION OR
SUSPENSION OF THE PLAN.

 

(a)           Plan
Term.  The Board may suspend or
terminate the Plan at any time.  Unless
sooner terminated, the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the stockholders of the
Company.  No Stock Awards may be granted
under the Plan while the Plan is suspended or after it is terminated.

 

(b)           No
Impairment of Rights.  Suspension or
termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of
the Participant.

 

(c)           Savings Clause.  This Plan is intended to comply in all
aspects with applicable laws and regulations. In case any one or more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law or regulation, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby and the invalid, illegal or unenforceable provision shall be deemed
null and void; however, to the extent permissible by law, any provision which
could be deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Plan to be construed in compliance with all
applicable laws so as to foster the intent of this Plan.

 

14.          EFFECTIVE DATE OF PLAN.

 

The Plan shall
become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a restricted Stock Award, shall be granted)
unless and until the Plan 

 

14

 

has been approved by the
stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.

 

15.          CHOICE OF LAW.

 

The law of the Delaware
shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws
rules.

 

 

Shareholder Approval

 

The undersigned, being
the sole shareholder of Venoco, Inc., hereby approves the Venoco, Inc.
2005 Stock Incentive Plan as set forth above.

 

Dated:  December 12, 2005

 

	
   

  	
   

  	
  /s/ Timothy M. Marquez

  	
   

  
	
   

  	
   

  	
  Timothy M. Marquez,
  Trustee

  
	
   

  	
   

  	
  Marquez Trust,
  under Trust Agreement

  
	
   

  	
   

  	
  dated February 26,
  2002, as amended

  

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]