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Exhibit 10(l)

Description of Cash Bonus Compensation Arrangements for Employees and Officers

     Since 1995, we have had a practice of paying cash bonuses to all of our employees each year
except in 1998, when no bonuses were paid to employees. There is no formal bonus plan, nor any
written formulas for determining bonus amounts. Because whether or not bonuses will be paid and in
what amounts is determined by the Compensation Committee of our Board of Directors on a
Company-wide basis; executive officers receive bonuses only if all employees receive bonuses.

     Our bonus practices currently classify employees into five levels for bonus compensation
purposes, three of which are determined solely based on salary level. The remaining two levels
include managers, as defined by senior executives, and officers. At the first bonus level, which
includes all employees, bonuses generally range from zero to ten percent of base salaries, although
in the past bonuses paid at this and all other levels have been as high as twelve and one-half
percent of base salary in an exceptionally good year. There is an additional compensation layer
for all employees in the next salary level, which generally includes the professional group (the
second level), whereby these employees may receive an additional level of bonuses of up to ten
percent of base salaries, for or a total bonus ranging from zero to twenty percent. Those in the
third or highest salary level, which generally includes the higher performing professionals,
technical experts or supervisors and managers, can receive an additional bonus equal to seven and
one-half percent of base salary, or a total bonus ranging from zero to twenty-seven and one-half
percent. In addition, employees that are considered managers, as determined by senior executives,
(the fourth level) are eligible to receive an additional level of bonuses of up to seven and
one-half percent of base salaries in addition to the bonus they receive from the first three
levels, or a maximum bonus of 35%. Lastly, our corporate officers (the fifth level) are eligible
to receive an additional level of bonuses of up to seven and one-half percent of base salaries, for
a total bonus ranging from zero to forty-two and one-half percent. All of our executive officers
are eligible for bonuses at all five levels. All bonuses are paid at the same percentage for each
level (i.e. if level one is 10%, level two is 10% and levels three through five are 7.5%).

     Since this practice began in 1995, we have paid cash bonuses ranging from 0% to 50% of base
salary to our executive officers, depending on the Company’s results for that year, as determined
by the Compensation Committee of our Board of Directors. In addition to the aforementioned bonus
practice, we have usually paid a Christmas bonus each year that is equivalent to one week of each
employee’s base salary.

     Bonus determinations are made by the directors on our Compensation Committee subjectively, not
based on arithmetic methods or formulas, generally based on our overall corporate results and
whether or not the Company has achieved predetermined Company-wide goals and objectives. Any
measure that might be considered to determine whether or not an oil and gas company had a good year
(or other measures of success or failure) is a possible consideration by the Compensation
Committee. These measures have historically included an evaluation of production levels, stock
performance, achievement of acquisition or disposition goals, completion of significant
transactions, completion of significant projects (such as software

 

 

systems or significant construction projects), operating and administrative expense levels as
compared to budget, capital expenditures as compared to budget, and the changes in our proved,
probable and possible reserves for that period as compared to costs incurred. As the Compensation
Committee’s decisions are subjective evaluations made on an overall basis, it is not possible to
determine how these measures are weighted or evaluated by the Compensation Committee.exv10wxmy

 

Exhibit 10(m)

Description of Equity and other Long-term Award Grant Practices for Employees and Officers

     Prior to December 2005, our only long-term incentive grants were stock options, except
for one-time grants of restricted stock to each officer and director (14 individuals) between
August 2004 and January 2005. At our December 15, 2005 board meeting we modified this practice and
beginning January 1, 2006 replaced stock options with a combination of deferred-payment cash
bonuses made outside our plan, plus under the plan stock appreciation rights payable in stock
(“SARs”), and shares of restricted stock. We completely replaced the use of stock options with
SARs effective January 1, 2006 as SARs are less dilutive to our shareholders while providing an
employee essentially the same economic benefits as stock options.

     The overall concept of our long-term compensation program has remained essentially the same,
in that employees and officers receive long-term incentive awards (“Awards”) on their date of hire,
and have additional Awards granted each year as part of the annual review by the Compensation
Committee of compensation (see also Exhibit 10(l)). An employee’s initial Award generally vests
25% per year over a period of four years, while the annual Awards generally cliff vest 100% four
years from the grant date. The goal of our long-term incentive program for all employees is to
provide a generally consistent level of Awards that vest each year.

     As part of their annual compensation evaluation, the Compensation Committee considers the
computed value of the total Awards using the Black-Scholes pricing model, and also takes into
consideration:

	 	•	 	the total Awards outstanding relative to the total common stock outstanding;
	 
	 	•	 	the number of Awards made by comparable companies in the aggregate and for
similar positions;
	 
	 	•	 	the perceived incentive value of the Awards currently held by the employees;
and
	 
	 	•	 	the overall compensation package by the Company for that year.

     Based on these factors, the Committee determines the appropriate amount of Award value to set
aside for issuance to new employees and the amount to be granted to existing employees who are part
of the Company’s annual recurring grant program. Since the price of the Company’s stock has
generally increased over the last few years, the Black-Scholes pricing model suggests that the
number of SARs or stock options granted to each employee should decrease correspondingly, assuming
that other variables that are part of the Black-Scholes computation remain constant. Historically,
the Committee, following a practice generally used since 1999, has reduced the number of annual
option grants to each employee by approximately one-half of what the Black-Scholes formula would
suggest is necessary to maintain a consistent level of long-term incentive compensation for each
employee, as they believe the other factors,

 

 

noted above, should also be taken into consideration, and in making the changes for 2005, applied
the same type of reduction.

     Once overall Company-wide levels of cash and long-term incentive compensation are determined,
the overall Award value is allocated among employees on the basis of their current year bonuses
which are set at the same time. Our executive officers receive a level of Awards calculated using
the same percentage of bonuses as the other employees in the management and professional group,
using the same classifications of employees referenced in Exhibit 10(l) fourth level even though
their bonuses are paid at the fifth level. These classifications of employees for cash bonuses and
stock options are generally based upon the level of base compensation.

     Beginning January 1, 2006, once the total Award value is allocated, the Award value is
converted into a combination of deferred-payment cash bonuses, SARs and shares of restricted stock.
For the first level of employees (see Exhibit 10(l)), the long-term value is awarded as a
deferred-payment cash bonus. Such funds are not segregated from the Company’s other assets and are
general unsecured obligations of the Company to pay such cash Awards at the time such Awards vest.
For the second level employees, the long-term value is equally split between cash and SARs. For
all employees in the third level or above, the long-term value is equally split one-third cash,
one-third SARs and one-third restricted stock. The relative relationship between SARs, cash and
restricted stock is made using formulas determined by the Committee in their sole discretion, which
generally relates to relative Black-Scholes values, discounted somewhat to account for the reduced
risk associated with cash or restricted stock. All SARs are granted at the prevailing market price
for our common stock and only have value if the market price of the common stock increases after
the date of grant. All of the SARs granted under the plan expire ten years from the date of grant.exv10wxny

 

Exhibit 10(n)

Directors’ Compensation Arrangements

     We increased our cash compensation for the non-employee directors effective July 1, 2004.
Since July 2004, directors have been paid an annual retainer fee of $35,000, plus $2,000 per board
meeting attended and $1,000 per telephone conference attended, including, as of the fourth quarter
of 2005, a $1,000 fee for meetings or conferences attended as part of their duties as a board or
committee member. The Chairman of the Compensation Committee and the Chairman of the Board are
also paid an additional fee of $5,000 per year. The Co-Chairman (or sole Chairman as of January 1,
2006) of the Audit Committee are both paid an additional fee of $20,000 per year and the other
Audit Committee members are paid an additional annual retainer of $5,000 for serving on the Audit
Committee. The members of the Audit Committee may also receive an additional $5,000 per year fee
for performing special services. The only such award to date has been to Mr. Heather who performs
review work on our annual reserve report and began receiving this additional fee in the fourth
quarter of 2002.

     The Director Plan allows each non-employee director to make a quarterly election to receive
his or her compensation either in cash or in shares of our common stock (see Exhibit 10(i)).

     Commencing in 2005, we began a practice to grant our directors stock option or stock
appreciation rights payable in common stock (“SARs”) each year, awarded at the discretion of the
Board of Directors. The awards cliff vest four years from the date of grant and have an exercise
price equal to the closing market price on the date of date. The directors received 3,000 SARs in
February 2006 as part of their annual grants for that year.

     During 2004 or 2005, we gave each non-employee director 20,000 shares of restricted stock that
vests over a period of five years, 20% per annum. As per the terms of the agreement, the Company
retains 60% of the shares as they vest, with such shares to be released when the director separates
from the Company. The remaining 40% are issued to the director on the vesting dates.

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