Document:

Exhibit 10.2

 

Execution Copy

 

 

SUPPLEMENTAL
SAVINGS PLAN

FOR
SALARIED EMPLOYEES OF

HELMERICH &
PAYNE, INC.

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I ESTABLISHMENT
  AND PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Establishment

  	
  1

  
	
   

  	
  1.2

  	
  Purpose

  	
  1

  
	
   

  	
  1.3

  	
  ERISA Status

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Definitions

  	
  1

  
	
   

  	
  2.2

  	
  Construction

  	
  5

  
	
   

  	
  2.3

  	
  Funding

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III ELIGIBILITY
  AND PARTICIPATION 

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV ELECTIVE
  DEFERRALS

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Deferrals

  	
  6

  
	
   

  	
  4.2

  	
  Timing of Deferral
  Election

  	
  6

  
	
   

  	
  4.3

  	
  Election Forms

  	
  6

  
	
   

  	
  4.4

  	
  Hardship Withdrawal Under
  Qualified Plan

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V SUPPLEMENTAL
  MATCHING CONTRIBUTIONS

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI PAYMENT

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Payment Events

  	
  7

  
	
   

  	
  6.2

  	
  Method of Payment Upon
  Separation from Service or Disability

  	
  7

  
	
   

  	
  6.3

  	
  Method of Payment Upon a Change
  of Control Event

  	
  7

  
	
   

  	
  6.4

  	
  Method of Payment Upon
  Death

  	
  7

  
	
   

  	
  6.5

  	
  Scheduled Distribution

  	
  8

  
	
   

  	
  6.6

  	
  Payment to Specified
  Employees Upon Separation from Service

  	
  8

  
	
   

  	
  6.7

  	
  Changes in Method of
  Payment

  	
  8

  
	
   

  	
  6.8

  	
  Beneficiary Designations

  	
  8

  
	
   

  	
  6.9

  	
  Small Account Balances

  	
  9

  
	
   

  	
  6.10

  	
  Transition
  Rule Exceptions

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII ACCOUNTS AND
  INVESTMENT

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Participant Accounts

  	
  9

  
	
   

  	
  7.2

  	
  Adjustment of Accounts

  	
  9

  
	
   

  	
  7.3

  	
  Investment of Account

  	
  9

  
	
   

  	
  7.4

  	
  Vesting

  	
  10

  
	
   

  	
  7.5

  	
  Account Statements

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII ADMINISTRATION

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Administration

  	
  10

  
	
   

  	
  8.2

  	
  Indemnification and
  Exculpation

  	
  10

  
	
   

  	
  8.3

  	
  Rules of Conduct

  	
  10

  
	
   

  	
  8.4

  	
  Legal, Accounting,
  Clerical and Other Services

  	
  10

  

 

i

 

	
   

  	
  8.5

  	
  Records of Administration

  	
  11

  
	
   

  	
  8.6

  	
  Expenses

  	
  11

  
	
   

  	
  8.7

  	
  Liability

  	
  11

  
	
   

  	
  8.8

  	
  Claims Review Procedures

  	
  11

  
	
   

  	
  8.9

  	
  Finality of
  Determinations; Exhaustion of Remedies

  	
  12

  
	
   

  	
  8.10

  	
  Effect of Fiduciary Action

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX GENERAL
  PROVISIONS

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Conditions of Employment
  Not Affected by Plan

  	
  13

  
	
   

  	
  9.2

  	
  Restrictions on Alienation
  of Benefits

  	
  13

  
	
   

  	
  9.3

  	
  Information Required of
  Participants

  	
  13

  
	
   

  	
  9.4

  	
  Tax Consequences Not
  Guaranteed

  	
  13

  
	
   

  	
  9.5

  	
  Benefits Payable to
  Incompetents

  	
  13

  
	
   

  	
  9.6

  	
  Severability

  	
  13

  
	
   

  	
  9.7

  	
  Tax Withholding

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X AMENDMENT AND
  TERMINATION

  	
  14

  
	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS
  PROVISIONS

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Articles and
  Section Titles and Headings

  	
  14

  
	
   

  	
  11.2

  	
  Governing Law

  	
  14

  

 

ii

 

SUPPLEMENTAL
SAVINGS PLAN

FOR
SALARIED EMPLOYEES OF

HELMERICH &
PAYNE, INC.

 

ARTICLE
I

ESTABLISHMENT AND
PURPOSE

 

1.1                                 Establishment. 
Helmerich & Payne, Inc. (“Company”), established the
Supplemental Savings Plan for Salaried Employees of Helmerich &
Payne, Inc. effective November 1, 1993 (“Plan”).  The Company hereby amends and restates the
Plan effective December 2, 2008. 
This amendment and restatement applies to all amounts deferred under the
Plan.

 

1.2                                 Purpose.  The Plan shall provide
Eligible Employees the ability to defer payment of Compensation.  The Plan is also intended to provide the
amount of the benefit which could otherwise be earned under the
Helmerich & Payne, Inc. Employees’ 401(k)/Thrift Plan (the
“Qualified Plan”) but which cannot be contributed due to the limitations
imposed by (i) Section 401(a)(17) of the Internal Revenue Code of
1986, as amended (the “Code”), which limits the annual compensation that may be
taken into account in computing benefits under plans qualified under Sections
401(a) and 501(a) of the Code and (ii) Sections 401(k) and
402(g) of the Code which limits benefits that may be contributed by the
Company as a “matching contribution” under Section 401(m) of the Code
(collectively referred to as the “IRS Limitations”).

 

1.3                                 ERISA Status.  The
Plan is intended to qualify for the exemptions provided under Title I of ERISA
for plans that are not tax-qualified and that are maintained primarily to
provide deferred compensation for a select group of management or highly
compensated employees as defined in Section 201(2) of ERISA.

 

ARTICLE
II

DEFINITIONS

 

2.1                                 Definitions.  For purposes of this Plan, the
following definitions shall apply:

 

(a)                                  “Account” means the
recordkeeping accounts maintained by the Company to record the payment
obligation of the Company to a Participant as determined under the terms of
this Plan.  The Company may maintain an
Account to record the total obligation to the Participant under this Plan and
component accounts to reflect amounts payable at different times and in
different forms.  Reference to an Account
means any such Account established by the Company as the context requires.

 

(b)                                 “Affiliate” means a
corporation, trade or business that, together with the Company, is treated as a
single employer under Code Section 414(b) or (c).

 

(c)                                  “Beneficiary” means the
person, persons, trust, or other entity designated by a Participant on the
beneficiary designation form adopted by the Company to receive benefits, if
any, under this Plan at such Participant’s death pursuant to Section 6.5.

 

 

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

 

(e)                                  “Change of Control Event”
shall mean:

 

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

 

(ii)                                  The date a majority of the individuals who,
as of December 2, 2008, constitute the Board (the “Incumbent Board”) are
replaced during any 12-month period; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, appointment
or nomination for election by the Company’s shareholders was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for purposes of this definition, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or

 

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

 

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

 

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

 

2

 

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

 

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

 

(4)                                  An entity, at least 50% of
the total value or voting power of which is owned, directly or indirectly, by a
person described in subsection 2.1(e)(iv)(3) herein.

 

For
purposes of subsection (iv) and except as otherwise provided in
subparagraph (iv)(1), a person’s status is determined immediately after the
transfer of the assets.

 

(f)                                    “Cimarex Participants”
means those Participants who were previously employed by the Company and who
are currently employed by Cimarex Energy Co. on December 2, 2008 as a
result of a spin-off of the Company’s exploration and production assets in
2002.

 

(g)                                 “Code” means the Internal
Revenue Code of 1986, as amended from time to time, and any Regulations
relating thereto.

 

(h)                                 “Compensation” shall mean:
(1) any (i) base wages, (ii) overtime pay, (iii) pay
received for vacation, holidays, bereavement, jury duty or military service,
(iv) pay for meeting time (such as new hire, safety or school meetings),
(v) travel time pay, (vi) bonuses (excluding new hire bonus, Wal-Mart
bonus and special bonus), (vii) longevity pay, and (viii) other
extraordinary pay (such as hurricane pay or back pay) and (2) any amount
deferred by a Participant pursuant to Section 401(k), Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of
the Code with respect to employee benefit plans sponsored by the Employer and
any amounts deferred under this Plan.

 

(i)                                     “Committee” means the
Human Resources Committee which shall consist of at least three members of the
Board who shall be appointed by the Board.

 

(j)                                     “Credited Earnings” means
the gains or losses applied to a Participant’s Account pursuant to
Section 7.2.

 

(k)                                  “Deferred Amount” means
the portion of a Participant’s Compensation which the Participant elects to
defer pursuant to Article IV. 
Deferred Amounts shall be determined by reference to the Plan Year in
which the amount was deferred by the Participant.

 

(l)                                     “Disabled” or “Disability”
means the Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or last for a continuous period of not less than
12 months.  A Participant will be deemed
to be Disabled if the Participant becomes eligible to receive disability
benefits under the long-term disability benefit plan sponsored by the Company
for a period of three (3) months or more.

 

3

 

(m)                               “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

 

(n)                                 “Eligible Employee” means
an employee who is designated by the Committee as belonging to a “select group
of management or highly compensated employees,” as such phrase is defined under
ERISA and employed at a minimum salary level designated from time to time by
the Committee.

 

(o)                                 “Employer” shall mean the
Company and/or any Affiliate that employs the Participants.

 

(p)                                 “Participant” means an
Eligible Employee who has Deferred Amounts and/or Supplemental Company Matching
Contributions credited to an Account under this Plan.

 

(q)                                 “Plan” means this
Supplemental Savings Plan for Salaried Employees of Helmerich &
Payne, Inc., as amended and restated effective December 2, 2008.

 

(r)                                    “Plan Year” means the
12-month period beginning on January 1st and ending on December 31st.

 

(s)                                  “Qualified Plan” means the
Helmerich & Payne, Inc. Employees’ 401(k)/Thrift Plan.

 

(t)                                    “Separation from Service.”  A Participant incurs a Separation from
Service upon termination of employment with the Employer under the
circumstances described below.  Whether a
Separation from Service has occurred shall be determined by the Committee in
accordance with Code Section 409A.

 

Except
in the case of a Participant on a bona fide leave of absence as provided below,
a Participant is deemed to have incurred a Separation from Service if the
Employer and the Participant reasonably anticipated that the level of services
to be performed by the Participant after a certain date would be reduced to 20%
or less of the average services rendered by the Participant during the
immediately preceding 12-month period (or the total period of employment, if
less than 12 months), disregarding periods during which the Participant
was on a bona fide leave of absence.

 

A
Participant who is absent from work due to military leave, sick leave, or other
bona fide leave of absence shall incur a Separation from Service on the first
date immediately following the later of (i) the six-month anniversary of
the commencement of the leave or (ii) the expiration of the Participant’s
right, if any, to reemployment under statute or contract.

 

For
purposes of determining whether a Separation from Service has occurred, the
Employer means the Employer as defined in Section 2.1(o) of the Plan,
except that for purposes of determining whether another organization is an Affiliate
of the Company, common ownership of at least 50% shall be determinative.

 

4

 

The
Committee specifically reserves the right to determine whether a sale or other
disposition of assets to an unrelated party constitutes a Separation from
Service with respect to a Participant providing services to the seller
immediately prior to the transaction and providing services to the buyer after
the transaction.  Such determination
shall be made in accordance with the requirements of Code Section 409A.

 

(u)                                 “Specified Employee” means
those employees of the Company who are determined by the Committee to be a
“specified employee” in accordance with I.R.C. § 409A and the regulations
promulgated thereunder.

 

(v)                                 “Supplemental Matching
Contribution” means the contribution made by the Company for the benefit of
a Participant under Article V of the Plan in any Plan Year.

 

2.2                                 Construction. 
Except when otherwise indicated by the context, any masculine
terminology when used in the Plan shall also include the feminine gender, and
the definition of any term in the singular shall also include the plural.

 

2.3                                 Funding.  The benefits described in this
Plan are contractual obligations of the Employers to pay compensation for
services, and shall constitute a liability to the Participants and/or their
Beneficiaries in accordance with the terms hereof.  All amounts paid under this Plan shall be
paid in cash from the general assets of the Employers and shall be subject to
the general creditors of the Company and the Employer of the Participant.  Benefits shall be reflected on the accounting
records of the Employers but shall not be construed to create, or require the
creation of, a trust, custodial or escrow account.  No special or separate fund need be
established and no segregation of assets need be made to assure the payment of
such benefits.  No Participant shall have
any right, title or interest whatever in or to any investment reserves,
accounts, funds or assets that the Employer may purchase, establish or
accumulate to aid in providing the benefits described in this Plan.  Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
or a fiduciary relationship of any kind between an Employer or the Company and
a Participant or any other person. 
Provided, the Company may establish and/or continue a grantor trust as
defined in Section 671 of the Code to provide a source of funding for
amounts deferred hereunder.  Neither a
Participant nor the Beneficiary of a Participant shall acquire any interest
hereunder greater than that of an unsecured creditor of the Company or any
Affiliate who is the Employer of such Participant.

 

ARTICLE
III

ELIGIBILITY AND PARTICIPATION

 

The
Committee shall provide employees selected for participation in this Plan with
notice of the employee’s selection for participation under this Plan and permit
such Eligible Employee the opportunity to make an election pursuant to
Article IV.  Such notice may be
given at such time and in such manner as the Committee may determine.  All determinations as to an employee’s status
as an Eligible Employee shall be made by the Committee.  The determinations of the Committee shall be
final and binding on all employees. 
Eligible Employees who have made an election under this Plan shall
continue as a Participant as long as there is a balance credited to his or her
Account.

 

5

 

ARTICLE IV

ELECTIVE DEFERRALS

 

4.1                                 Deferrals.  An Eligible Employee may elect
to defer up to 40% of Compensation as long as such deferral does not reduce
such Eligible Employee’s Compensation below an amount necessary to satisfy
applicable withholding tax obligations, benefit plan contributions, and income
tax withholding obligations.  The
Participant may elect a different percentage of deferral rates between base
salary and bonus components of Compensation.

 

4.2                                 Timing of Deferral Election.  An
Eligible Employee must file a deferral election form for each Plan Year.  Except as may be permitted by the Code or the
regulations adopted thereunder, the election to defer Compensation shall apply
to Compensation earned during the Plan Year which commences immediately following
the Plan Year in which the election is made and is irrevocable except as
otherwise provided herein.  Elections to
defer Compensation must be completed and filed before December 31 of the
year immediately preceding the Plan Year in which the election is to apply.

 

4.3                                 Election Forms.  All elections
to defer shall be made on a deferral election form.  In addition to the deferral election form, a
Participant may be required by the Committee to complete additional forms such
that they have adequate information concerning the Deferred Amount, timing of
distributions and the form of payment, if applicable.

 

4.4                                 Hardship Withdrawal Under Qualified Plan.  If a
Participant makes a “hardship withdrawal” under the Qualified Plan and such
Participant is prohibited from making future contributions under such Qualified
Plan (and this Plan) by the terms of such qualified retirement plan, then,
contributions by the Participant under this Plan shall be automatically
suspended until Participant contributions are again permitted under the
Qualified Plan.

 

ARTICLE
V

SUPPLEMENTAL MATCHING CONTRIBUTIONS

 

Each
Plan Year, the Company will make a Supplemental Matching Contribution to this
Plan on behalf of each Participant in an amount equal to (a) minus
(b) below:

 

(a)                                  5% of the Participant’s Compensation;

 

(b)                                 5% of such Participant’s “eligible
401(k) compensation” which shall, for purposes of this Article V, be
defined as the Participant’s Compensation less the Participant’s Deferred
Amount up to the IRS Limitations for the applicable Plan Year.

 

Provided,
however, the Supplemental Matching Contribution cannot exceed the Participant’s
Deferred Amount for the applicable Plan Year.

 

6

 

ARTICLE
VI

PAYMENT

 

6.1           Payment Events.

 

(a)           General.  Unless previously distributed in accordance
with the terms of a Scheduled Distribution or otherwise provided in Section
6.1(b), a Participant’s Account shall become payable at the time and in the
form described in this Article upon the earlier to occur of the following
events: (i) a Participant’s Separation from Service; (ii) a Participant’s
Disability; (iii) a Change of Control Event or (iv) the Participant’s death.

 

(b)           Cimarex
Participants.  With respect to
Cimarex Participants, payment of a Cimarex Participant’s Account shall commence
upon the earlier of the Scheduled Distribution date or death.

 

6.2           Method of Payment
Upon Separation from Service or Disability. 
A Participant must specify on the election form for each Plan Year the
method of payment of the portion of Participant’s Account attributable to such
Plan Year.  A Participant may designate
payment in the form of a single lump sum payment or annual installment payments
payable over a period of 2—10 years. 
Installment payments shall be paid annually, with the first installment
paid on the first business day of the seventh month following the Participant’s
Separation from Service or within 90 days of the date the Participant is
Disabled and each subsequent installment paid on an annual basis until all
installment payments have been paid.  If
the Participant (i) fails to make an effective designation as to the
method of payment or (ii) elects to receive payment in the form of a lump
sum, payment shall be automatically made in the form of a single lump sum
payment within 30 days of the first business day of the seventh month following
Separation from Service or in the case of Disability, within 90 days of the
date the Participant was Disabled.

 

6.3           Method of Payment
Upon a Change of Control Event.  Plan
Account balances that are payable upon a Change of Control Event will become
payable within 30 days of the occurrence of a Change of Control Event.  A Participant may designate payment in the
form of a single lump sum payment or annual installment payments payable over a
period of 2—10 years.  If the Participant
fails to make an effective designation as to the method of payment, payment
will be made in the form of a lump sum.

 

6.4           Method of Payment Upon
Death.  If a Participant dies with a
balance credited to the Participant’s Account, such balance shall be paid to
the Participant’s Beneficiary.  If the
Participant dies prior to the time of payment of the Account, the then current
balance of each of the Participant’s Account or subaccount shall be paid to the
Participant’s Beneficiary in a lump sum commencing within 90 days of the date
of Participant’s death.  If payment of
Participant’s Account has commenced as of the date of Participant’s death, the
then current balance of each Account or subaccount payable to a Beneficiary
shall be paid under the method designated for the payment of such amount by the
Participant commencing within 90 days of the date of Participant’s death.  Each Beneficiary of a deceased Participant
who is eligible to receive payments under this Section shall have the
amounts to be paid to such Beneficiary allocated to a subaccount in the name of
the Beneficiary under the deceased Participant’s Account.  Such subaccount shall be adjusted from time
to time as provided in Article VII.

 

7

 

6.5           Scheduled Distribution.  A Participant may schedule distribution of
the Deferred Amounts and Credited Earnings thereon that are attributable to a particular
Plan Year (“Scheduled Distribution”) to commence in a specified Plan Year.  Participants must request a Scheduled
Distribution on the deferral election form that is submitted for that Plan
Year.  Except as provided in Section 6.10,
if a Participant fails to elect a Scheduled Distribution prior to the date
deferrals begin for that Plan Year, that Participant will not be eligible to
obtain a Scheduled Distribution for such Plan Year.

 

  (a)                            The
Participant may elect either a lump sum payment payable in January of the
Plan Year selected or annual installment payments for a period of 2 to 5 years.

 

  (b)                           A
Participant may postpone payment of a Scheduled Distribution to a date at least
five years later than the previously Scheduled Distribution date by filing a
written request with the Committee at least twelve months prior to the date the
Scheduled Distribution is scheduled to begin.

 

  (c)                            In
the event of Separation from Service, Disability, the occurrence of a Change of
Control Event or death, payment of Participant’s Accounts (except for Cimarex
Participants) shall be determined with respect to provisions of this Plan and
elections made in reference to such events, without regard to the otherwise
Scheduled Distribution which shall be deemed to be cancelled.

 

6.6           Payment to Specified Employees
Upon Separation from Service.  In no
event shall a Specified Employee receive a payment under this Plan following a
Separation from Service prior to the first business day of the seventh month
following the date of Separation from Service.

 

6.7           Changes in Method of Payment.  Except as provided in Section 6.10, the
method of payment may be changed from time to time by the Participant, but in
no event will such change be considered valid if the change occurs within the
twelve-month period prior to the date payment would have otherwise
commenced.  Any requests to change the
method of payment will not take effect for twelve months following the date it
is received by the Committee and the first payment with respect to such
election is deferred for a period of five years from the date such payment
would otherwise have been made.

 

6.8           Beneficiary Designations.  A Participant shall designate on a
beneficiary designation form a Beneficiary who, upon the Participant’s death, will
receive payments that otherwise would have been paid to him under the
Plan.  All Beneficiary designations shall
be in writing.  Any such designation
shall be effective only if and when delivered to the Committee during the
lifetime of the Participant.  A
Participant may change a Beneficiary or Beneficiaries by filing a new
beneficiary designation form.  The latest
beneficiary designation form shall apply to the combined Accounts and
subaccounts of the Participant.  If a
Beneficiary of a Participant predeceases the Participant, the designation of
such Beneficiary shall be void.  If a
Beneficiary to whom benefits under the Plan remain unpaid dies after the
Participant and the Participant failed to specify a contingent Beneficiary on
the appropriate beneficiary designation form, the remainder of such death
benefit payments shall be paid to such Beneficiary’s estate. If a Participant
fails to designate a Beneficiary with respect to any death benefit payments or
if such 

 

8

 

designation is ineffective, in whole or in part, any
payment that otherwise would have been paid to such Participant shall be paid
to the Participant’s estate.

 

6.9           Small Account
Balances.  If, upon Separation from
Service, the value of the Participant’s Account is less than $10,000, the
balance of such Account shall be paid in a single lump sum.

 

6.10         Transition Rule Exceptions.  Under the transition guidance issued by the
Internal Revenue Service under Section  409A
of the Code, an exception to the general timing rules shall apply to
Account balances subject to Section 409A. 
Participants’ elections may be revised with respect to both the time and
form of payment provided that (i) it is filed on or before December 31,
2008; (ii) it does not cause amounts that were otherwise payable in 2008
to be paid in a subsequent year; and (iii) does not provide for amounts
payable in a subsequent year to be paid in 2008.  The Committee will administer this provision
to ensure compliance with IRS Notice 2006-79.

 

ARTICLE
VII

ACCOUNTS
AND INVESTMENT

 

7.1           Participant Accounts.  The Committee shall maintain, or cause to be
maintained, a bookkeeping Account for each Participant for the purpose of
accounting for the Participant’s interest under the Plan.  The Committee shall maintain within each
Participant’s Account such subaccounts as may be necessary to identify each
separate Deferred Amount, Supplemental Company Matching Contribution and
Credited Earnings attributable thereto, by reference to the Plan Year to which
each Deferred Amount and Supplemental Company Matching Contribution
relates.  The combination of the
subaccounts maintained in the name of a Participant shall comprise the
Participant’s Account.

 

7.2           Adjustment of
Accounts.  Each Participant’s Account
shall be adjusted to reflect all Deferred Amounts and Supplemental Company
Matching Contributions credited to the Participant’s Account, all positive or
negative Credited Earnings credited  or
debited to the Participant’s Account as provided by Section 7.3, and all
payments charged to the Participant’s Account. 
A Participant’s Deferred Amount shall be credited to such Participant’s
Account as of the date on which the amount being deferred would have become
payable to the Participant absent the election to defer, or on such other date
as the Committee specifies, and shall be credited to the applicable subaccount
within such Account by reference to the applicable Plan Year.  Supplemental Company Matching Contributions shall
be credited to a Participant’s Account. 
Charges to a Participant’s Account to reflect payments shall be made as
of the date of any such payment and charged to the applicable subaccount within
such Account.  As of any relevant date,
the balance standing to the credit of a Participant’s Account, and each
separate subaccount comprising such Account, shall be the respective balance in
such Account and the component subaccounts as of the close of business on such
date after all applicable credits, debits and charges have been posted.

 

7.3           Investment of
Account.   The Committee will offer
Participants a selection of benchmark funds as deemed investment
alternatives.  The benchmark funds
offered will be determined in the sole discretion of the Committee.  Each Participant may select among the

 

9

 

different benchmark funds
offered.  The deemed investments in
benchmark funds are only for the purpose of determining the Company’s payment
obligation under the Plan.  Credited
Earnings shall be allocated to a Participant’s Account pursuant to the
performance of the benchmark funds selected by the Participant.  A Participant may, as frequently as daily,
modify his election of benchmark funds through procedures designated by the
Committee.  Such modification will be in
accordance with rules and procedures adopted by the Committee.

 

7.4           Vesting.  Subject to the conditions and limitations on
payment of benefits under the Plan, a Participant shall always have a fully
vested and nonforfeitable beneficial interest in the balance standing to the
credit of the Participant’s Account.

 

7.5           Account Statements.  The Committee shall provide each Participant
with a statement of the status of the Participant’s Account under the
Plan.  The Committee shall provide such
statement annually or at such other times as the Committee may determine.  Annual statements shall be in the format
prescribed by the Committee.

 

ARTICLE
VIII

ADMINISTRATION

 

8.1           Administration.  The Plan shall be administered, construed and
interpreted by the Committee.  The
Committee shall have the sole authority and discretion to determine eligibility
and to construe the terms of the Plan. 
The determinations by the Committee as to any disputed questions arising
under the Plan, including the employees who are eligible to be Participants in
the Plan, the amounts payable under the Plan, and the construction and
interpretation by the Committee of any provision of the Plan, shall be final,
conclusive and binding upon all persons including Participants, their beneficiaries,
the Company, its stockholders and employees and the Employers.  The Committee may, by resolution, in its
discretion, delegate certain administrative duties to a committee comprised of
employees of the Company.  References to “Committee”
in this Article VIII shall include the Committee as well as any designees.

 

8.2           Indemnification and
Exculpation.  The members of the
Committee and its agents shall be indemnified and held harmless by the Company
against and from any and all loss, cost, liability or expense that may be
imposed upon or reasonably incurred by them in connection with or resulting
from any claim, action, suit or proceeding to which they may be a party or in
which they may be involved by reason of any action taken or failure to act
under this Plan and against and from any and all amounts paid by them in
settlement (with the Company’s written approval) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding.  The foregoing provisions shall not be
applicable to any person if the loss, cost, liability or expense is due to such
person’s gross negligence or willful misconduct.

 

8.3           Rules of
Conduct.  The Committee shall adopt
such rules for the conduct of its business and the administration of this
Plan as it considers desirable, provided they do not conflict with the
provisions of this Plan.

 

8.4           Legal, Accounting,
Clerical and Other Services.  The
Committee may authorize one or more if its members or any agent to act on its
behalf and may contract for legal, 

 

10

 

accounting, clerical and
other services to carry out this Plan. 
The Company shall pay all expenses of the Committee.

 

8.5           Records of
Administration.  The Committee shall
keep records reflecting the administration of this Plan which shall be subject
to audit by the Company.

 

8.6           Expenses.  The expenses of administering the Plan shall
be paid by the Company.

 

8.7           Liability.  No member of the Board of Directors or of the
Committee shall be liable for any act or action, whether of commission or
omission, taken by any other member, or by any officer, agent, or employee of
the Company or of any such body, nor, except in circumstances involving his bad
faith, for anything done or omitted to be done by himself.

 

8.8           Claims Review
Procedures.  The following claim
procedures shall apply to the Plan.

 

(a)           Denial
of Claim.  If a claim for benefits is
wholly or partially denied, the claimant shall be given notice in writing of
the denial within a reasonable time after the receipt of the claim, but not
later than 90 days after the receipt of the claim.  However, if special circumstances require an
extension, written notice of the extension shall be furnished to the claimant
before the termination of the 90-day period. 
In no event shall the extension exceed a period of 90 days after the
expiration of the initial 90-day period. 
The notice of the denial shall contain the following information written
in a manner that may be understood by a claimant:

 

(i)            The specific reasons
for the denial;

 

(ii)           Specific
reference to pertinent Plan provisions on which the denial is based;

 

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

 

(iv)          An
explanation that a full and fair review by the Committee of the denial may be
requested by the claimant or his authorized representative by filing a written
request for a review with the Committee within 60 days after the notice of the
denial is received; and

 

(v)           If
a request for review is filed, the claimant or his authorized representative
may review pertinent documents and submit issues and comments in writing within
the 60-day period described in subsection 8.8(a)(iv).

 

(b)           Decisions
After Review.  The decision of the
Committee with respect to the review of the denial shall be made promptly and
in writing, but not later than 60 days after the Committee receives the request
for the review.  However, if special
circumstances require an extension of time, a decision shall be rendered not
later than 120 days after the receipt of the request for review.  A written notice of the extension shall be
furnished to the claimant prior to the expiration of the initial 60-day
period.  The claimant shall be given a
copy of the decision,

 

11

 

which shall state,
in a manner calculated to be understood by the claimant, the specific reasons
for the decision and specific reasons for the decision and specific references
to the pertinent Plan provisions on which the decision is based.

 

(c)           Other Procedures.  Notwithstanding the foregoing, the Committee
may, in its discretion, adopt different procedures for different claims without
being bound by past actions.  Any
procedures adopted, however, shall be designed to afford a claimant a full and
fair review of his claim and shall comply with applicable regulations under
ERISA.

 

8.9           Finality of
Determinations; Exhaustion of Remedies. 
To the extent permitted by law, decisions reached under the claims
procedures set forth in Section 8.8 shall be final and binding on all
parties.  No legal action for benefits
under the Plan shall be brought unless and until the claimant has exhausted his
remedies under Section 8.8.  In any
such legal action, the claimant may only present evidence and theories which
the claimant presented during the claims procedure.  Any claims which the claimant does not in
good faith pursue through the review stage of the procedure shall be treated as
having been irrevocably waived.  Judicial
review of a claimant’s denied claim shall be limited to a determination of
whether the denial was arbitrary, capricious or an abuse of discretion based on
the evidence and theories the claimant presented during the claims
procedure.  This Section shall have
no application during the 24-month period following a Change of Control Event
as to a claim which is first asserted or first denied after the Change of
Control Event and, as to such a claim, the de  novo standard of
judicial review shall apply.  After the
expiration of the 24-month period following a Change of Control Event, then,
this Section shall again apply until the occurrence of a subsequent Change
of Control Event.

 

8.10         Effect of Fiduciary
Action.  The Plan shall be
interpreted by the Committee and all Plan fiduciaries in accordance with the
terms of the Plan and their intended meanings. 
However, the Committee and all Plan fiduciaries shall have the
discretion to make any findings of fact needed in the administration of the
Plan, and shall have the discretion to interpret or construe ambiguous, unclear
or implied (but omitted) terms in any fashion they deem to be appropriate in
their sole judgment.  Except as stated in
Section 8.9, the validity of any such finding of fact, interpretation,
construction or decision shall not be given de  novo review if
challenged in court, by arbitration or in any other forum, and shall be upheld
unless clearly arbitrary or capricious. 
To the extent the Committee or any Plan fiduciary has been granted
discretionary authority under the Plan, the Committee’s or Plan fiduciary’s
prior exercise of such authority shall not obligate it to exercise its
authority in a like fashion thereafter. 
If any Plan provision does not accurately reflect its intended meaning,
as demonstrated by consistent interpretations or other evidence of intent, or
as determined by the Committee in it sole and exclusive judgment, the provision
shall be considered ambiguous and shall be interpreted by the Committee and all
Plan fiduciaries in a fashion consistent with its intent, as determined by the
Committee in its sole discretion.  The
Committee, without the need for Board of Directors’ approval, may amend the
Plan retroactively to cure any such ambiguity. 
This Section may not be invoked by any person to require the Plan
to be interpreted in a manner which is inconsistent with its interpretation by
the Committee or by any Plan fiduciaries. 
All actions taken and all determinations made in good faith by the
Committee or by Plan fiduciaries shall be final and binding upon all persons
claiming any interest in or under the Plan. 
This Section shall not apply to fiduciary or Committee actions or
interpretations which take place or are made during the 24-month

 

12

 

period following a Change
of Control Event.  After the expiration
of the 24-month period following a Change of Control Event, then, this Section shall
again apply until the occurrence of a subsequent Change of Control Event.

 

 

ARTICLE
IX

GENERAL
PROVISIONS

 

9.1           Conditions of
Employment Not Affected by Plan.  The
establishment and maintenance of the Plan shall not be construed as conferring
any legal rights upon any Participant to the continuation of employment with
the Company, nor shall the Plan interfere with the rights of the Company to
discharge any Participant with or without cause.

 

9.2           Restrictions on
Alienation of Benefits.  No right or
benefit under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge the same shall be
void.  No right or benefit hereunder
shall in any manner be liable for or subject to the debts, contracts,
liabilities, or torts of the person entitled to such benefit.  If any Participant or the Participant’s
Beneficiary under this Plan should become bankrupt or attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge any right to a benefit
hereunder, then, such right or benefit shall cease and terminate.

 

9.3           Information Required
of Participants.  Payment of benefits
shall begin as of the payment date(s) provided in this Plan and no formal
claim shall be required therefor; provided, in the interest of orderly
administration of the Plan, the Committee may make reasonable requests of
Participants and Beneficiaries to furnish information which is reasonably
necessary and appropriate to the orderly administration of the Plan, and, to that
limited extent, payments under the Plan are conditioned upon the Participants
and Beneficiaries promptly furnishing true, full and complete information as
the Committee may reasonably request.

 

9.4           Tax Consequences Not
Guaranteed.  The Company does not warrant
that this Plan will have any particular tax consequences for Participants or
Beneficiaries and shall not be liable to them if tax consequences they
anticipate do not actually occur.  The
Company shall have no obligation to indemnify a Participant or Beneficiary for
lost tax benefits (or other damage or loss).

 

9.5           Benefits Payable to
Incompetents.  Any benefits payable
hereunder to a minor or person under legal disability may be made, at the
discretion of the Committee, (i) directly to the said person, or (ii) to
a parent, spouse, relative by blood or marriage, or the legal representative of
said person.  The Committee shall not be
required to see to the application of any such payment, and the payee’s receipt
shall be a full and final discharge of the Committee’s responsibility
hereunder.

 

9.6           Severability.  If any provision of the Plan is held invalid
or illegal for any reason, any illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had never been contained therein.  The Company shall have the privilege and
opportunity to correct and remedy such questions of illegality or invalidity by
amendment.

 

13

 

9.7           Tax Withholding.  The Employer may withhold from a payment or
accrued benefit or from the Participant’s other compensation any federal,
state, or local taxes required by law to be withheld with respect to such
payment or accrued benefit and such sums as the Employer may reasonably
estimate as necessary to cover any taxes for which the Employer may be liable
and which may be assessed with regard to such payment.

 

ARTICLE X

AMENDMENT
AND TERMINATION

 

The Board of Directors of the Company may amend, modify or terminate
the Plan at any time and in any manner. 
Provided, no amendment shall reduce any portion of a Participant’s
Account that is vested.  Provided
further, no amendment or proposed termination will be effective to the extent
it provides for payment under this Plan in a manner that would result in a
violation of I.R.C. § 409A.

 

ARTICLE
XI

MISCELLANEOUS
PROVISIONS

 

11.1         Articles and Section Titles
and Headings.  The titles and
headings at the beginning of each Article and Section shall not be considered
in construing the meaning of any provisions in this Plan.

 

11.2         Governing Law.  This Plan is subject to ERISA, but is exempt
from most parts of ERISA since it is an unfunded deferred compensation plan
maintained for a select group of management or highly compensated
employees.  In no event shall any
references to ERISA in the Plan be construed to mean that the Plan is subject
to any particular provisions of ERISA. 
The Plan shall be governed and construed in accordance with federal law
and the laws of the State of Oklahoma, except to the extent such laws are
preempted by ERISA.

 

IN WITNESS WHEREOF, the
Company and each Employer have caused this instrument to be executed by their
duly authorized officers in a number of copies, each of which shall be deemed
an original but all of which shall constitute one and the same instrument,
effective December 2, 2008.

 

	
   

  	
  HELMERICH & PAYNE, INC, a Delaware

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

14Exhibit 10.3

 

Execution Copy

 

 

HELMERICH & PAYNE, INC.

 

DIRECTOR DEFERRED COMPENSATION PLAN

 

 

HELMERICH & PAYNE, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  “Account”

  	
  1

  
	
  1.2

  	
  “Beneficiary”

  	
  1

  
	
  1.3

  	
  “Board of
  Directors”

  	
  1

  
	
  1.4

  	
  “Change of
  Control”

  	
  1

  
	
  1.5

  	
  “Common
  Stock”

  	
  2

  
	
  1.6

  	
  “Company”

  	
  2

  
	
  1.7

  	
  “Director”
  or “Directors”

  	
  3

  
	
  1.8

  	
  “Eligible
  Compensation”

  	
  3

  
	
  1.9

  	
  “Fair Market
  Value”

  	
  3

  
	
  1.10

  	
  “Plan”

  	
  3

  
	
  1.11

  	
  “Separation
  from Service”

  	
  3

  
	
  1.12

  	
  “Stock Unit”

  	
  3

  
	
  1.13

  	
  “Year”

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  Participation

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Participation

  	
  3

  
	
  2.2

  	
  Timing and
  Types of Elections

  	
  3

  
	
  2.3

  	
  Election
  Amounts

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  Accounts and Investments

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Establishment
  of Account

  	
  4

  
	
  3.2

  	
  Interest
  Alternative

  	
  4

  
	
  3.3

  	
  Stock Unit
  Alternative

  	
  4

  
	
  3.4

  	
  Limitations
  on Rights Associated with Stock Units

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  Distribution of Account

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Manner of
  Distribution of Account

  	
  5

  
	
  4.2

  	
  Change in
  Manner of Distribution of Account

  	
  5

  
	
  4.3

  	
  Commencement
  of Payments

  	
  5

  
	
  4.4

  	
  Death Benefits

  	
  5

  
	
  4.5

  	
  Emergency
  Withdrawals

  	
  5

  
	
  4.6

  	
  Responsibility
  for Taxes

  	
  5

  
	
  4.7

  	
  Change of
  Control

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  Administration, Amendment And Termination

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Administration

  	
  6

  
	
  5.2

  	
  Amendment
  and Termination

  	
  6

  

 

i

 

	
  ARTICLE VI
  Miscellaneous Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Limitation
  on Director’s Rights

  	
  6

  
	
  6.2

  	
  Beneficiaries

  	
  6

  
	
  6.3

  	
  Benefits Not
  Transferable; Obligations Binding Upon Successors

  	
  6

  
	
  6.4

  	
  Governing
  Law; Severability

  	
  7

  
	
  6.5

  	
  Headings Not
  Part of Plan

  	
  7

  
	
  6.6

  	
  Consent to
  Plan Terms

  	
  7

  

 

ii

 

HELMERICH & PAYNE, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

 

PURPOSE

 

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

 

ARTICLE I

Definitions

 

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

 

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

 

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

 

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

 

1.4                                 “Change
of Control” shall mean :

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

Participation

 

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

 

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

 

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

 

3

 

ARTICLE
III

Accounts
and Investments

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

ARTICLE
IV

Distribution
of Account

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

ARTICLE
V

Administration,
Amendment And Termination

 

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

 

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

 

ARTICLE
VI

Miscellaneous
Provisions

 

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

 

6.2                                 Beneficiaries.

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

	
   

  	
  HELMERICH & PAYNE, Inc., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

7

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