UNIT CORPORATION
2000 NON-EMPLOYEE DIRECTORS'
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of this _____ day of _______________, 20___, by and
between UNIT CORPORATION, a Delaware corporation, (the "Company"), having a
place of business at 7130 South Lewis, Suite 1000, Tulsa, Oklahoma, 74136,
AND
______________________, a non-employee director of the Company the ("Optionee");
WITNESSETH:
WHEREAS, Optionee is a director of the Company and the Company desires to
provide Optionee with incentives to continue to serve as a member of the Board
of Directors of the Company, and to devote his best efforts to the long-term
success of the Company.
WHEREAS, the Company has adopted the Unit Corporation 2000 Non-Employee
Directors' Stock Option Plan (the "Plan") in order to provide its non-employee
directors with such incentives by establishing procedures under which each of
the Company's non-employee directors is to be granted stock options to purchase
shares of the Company's common stock ($0.20 par value per share) (the "Common
Stock");
WHEREAS, Optionee is entitled to receive an option to purchase __________
shares of the Company's Common Stock pursuant to the terms of the Plan; and,
WHEREAS, the Company and Optionee desire to set forth the terms and
conditions of Optionee's Option.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and intending to be legally bound thereby, the parties hereto agree
as follows:
1. Stock Option. Subject to the terms and conditions set forth herein and
to the terms of the Plan, the Company hereby grants to Optionee the right and
option to purchase from the Company up to, but not exceeding in the aggregate,
__________ shares of the Common Stock (the "Option"), at the option price per
share described in the succeeding paragraph and at the times described in
Section 2 of this Agreement.
The option price per share under this Agreement shall be $__________ per
share, this being the fair market value of shares of Common Stock on the date of
this Agreement. Upon exercise of the Option, in whole or in part, the option
price, multiplied by the number of shares with respect to which Options are
being exercised, shall be payable in accordance with Section 3.
2. Time of Exercise of Options. The Option granted hereunder shall not be
exercisable during the first six months hereof except in case of death as
provided in Section 4(E) of the Plan. After such time the Option shall become
exercisable to the extent set forth in the Plan. If the Option is exercised in
part, the unexercised portion of the Option shall continue to be held by the
Optionee and may thereafter be exercised as provided herein.
The Option granted herein shall, if not previously exercised, terminate on
the tenth anniversary of the date hereof, and shall not be exercisable at any
time after such date.
3. Manner of Exercise. The Option shall be exercised by Optionee delivering
to the Compensation Committee of the Company's Board of Directors a written
notification specifying the number of shares of Common Stock which Optionee
desires to purchase by exercise of the Option, together with a check payable to
the order of the Company equal in value to the option price of the shares to be
purchased.
At the election of Optionee, the option price, in whole or in part, may be
paid by surrendering to the Company stock certificates representing a whole
number of Common Stock of the Company, together with a stock power executed in
blank, having a fair market value on the date of exercise of the Option,
determined as provided in Section 4(G) of the Plan, equal to the option price
for the shares being purchased; except that (i) any portion of the option price
representing a fraction of a share shall in any event be paid in cash; and, (ii)
no shares of Common Stock which have been held for less than six months may be
delivered in payment of the option price of the Option.
Upon receipt of such payment, and upon the Company's receipt of payment of
any taxes pursuant to the notice described in Section 4 below, the Company shall
deliver to Optionee (or the person entitled to exercise the Option) a stock
certificate or certificates representing the shares of Common Stock purchased by
Optionee.
4. Withholding Taxes. The Company shall have the right to require Optionee
to remit to the Company an amount sufficient to satisfy any federal, state and
local withholding tax requirement prior to the delivery of any shares of Common
Stock acquired by the exercise of the Option granted hereunder. In each case of
the exercise of the Option, the Company will notify Optionee of the amount of
the withholding tax, if any, which must be paid under federal and, where
applicable, state and local law. Upon receipt of such notice, Optionee shall
promptly remit to the Company the amount specified in such notice.
5. Termination of Option. If Optionee ceases to be a director of the
Company, any outstanding stock option held by Optionee hereunder shall be
exercisable and/or shall terminate, according to the following provisions:
(a) If Optionee ceases to be a director of the Company for any reason other
than resignation, removal for cause, or death, any part of the Option then
outstanding shall be exercisable by Optionee (but only to the extent exercisable
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by Optionee immediately prior to ceasing to be a director) at any time prior to
the regular expiration date of the Option or within one year after the date
Optionee ceases to be a director, whichever is the longer period;
(b) If during his or her term of office as a director Optionee resigns from
the Board or is removed from office for cause, that part of the Option held by
Optionee which is not exercisable immediately prior to Optionee's resignation or
removal shall terminate as of the date of such resignation or removal, and that
part of the Option held by Optionee which is exercisable by Optionee immediately
prior to resignation or removal shall be exercisable by Optionee at any time
prior to the regular expiration date of the Option or within 90 days after the
date of resignation or removal, whichever is the longer period;
(c) Following the death of Optionee during service as a director of the
Company, that part of the Option held by Optionee at the time of death (whether
or not exercisable by Optionee immediately prior to death) shall be exercisable
by the person entitled to do so under the Will of Optionee, or, if Optionee
shall fail to make testamentary disposition of the Option or shall die
intestate, by the legal representative of Optionee at any time prior to the
regular expiration date of such Option or within two years after the date of
death, whichever is the longer period;
(d) Following the death of Optionee after ceasing to be a director and
during a period when the Option is exercisable, that part of the Option then
outstanding at the time of death shall be exercisable by such person entitled to
do so under the Will of Optionee or by such legal representative at any time
prior to the expiration date of such Option or within one year after the date of
death, whichever is the shorter period.
6. Nonassignability. This Option shall not be assignable or transferable by
Optionee except by the laws of descent and distribution. During the lifetime of
Optionee, the Option shall be exercisable only by Optionee, and no other person
shall acquire any rights therein.
7. Miscellaneous.
(a) If a dividend or other distribution shall be declared upon the Common
Stock payable in shares of the Common Stock the number of shares of the Common
Stock set forth in Section 1 shall be adjusted by adding thereto the number of
shares of the Common Stock which would have been distributable thereon if such
shares had been outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend or distribution.
If the outstanding shares of the Common Stock shall be changed into or
exchangeable for a different number or kind of shares of stock, other securities
or other property of the Company or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of the Common Stock set forth in Section 1 the number and kind of shares
of stock or other securities into which each outstanding share of the Common
Stock shall be so changed or for which each such share shall be exchangeable.
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In case of any adjustment or substitution as provided for in this Section
7, the aggregate option price for all shares subject to any outstanding Option
prior to such adjustments or substitution shall be the aggregate option price
for all shares of stock or other securities (including any fraction) to which
such shares shall have been adjusted or which shall have been substituted for
such shares. Any new option price per share shall be carried to at least three
decimal places with the last decimal place rounded upwards to the nearest whole
number.
No adjustment or substitution provided for in this Section 7 shall require
the Company to issue or deliver or sell a fraction of a share or other security.
Accordingly, all fractional shares or other securities which result from any
such adjustment or substitution shall be eliminated and not carried forward to
any subsequent adjustment or substitution.
The grant of the Option provided for herein shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(b) Neither Optionee nor a transferee of the Option shall have any rights
as a stockholder with respect to any shares covered by the Option until the date
of the exercise of the Option and the receipt of payment (including any amounts
which may be required by the Company pursuant to Section 4) by the Company. No
adjustments shall be made in respect of the Option for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to such date, except as
provided in Subsection (a) of Section 7 hereof.
(c) The Plan shall be administered by the Compensation Committee appointed
by the Board of Directors, which shall have the power to construe the Plan, to
determine all questions arising thereunder, to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable, and to
otherwise carry out the terms of the Plan. The interpretation and construction
by the Committee of any provisions of the Plan or of any option granted under it
shall be final. This Agreement is subject to amendment as set forth in the Plan.
(d) If the Company shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to the Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of the Option or the issuance,
if any, of the Common Stock or purchase of shares in connection therewith, the
Option granted herein may not be exercised unless such listing, registration,
qualification, consent or approval shall have been effected or obtained, free of
conditions not acceptable to the Company.
(e) The Option granted hereunder is not an Incentive Stock Option entitled
to favorable tax treatment under Section 422A of the Internal Revenue Code.
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(f) Nothing in the Plan, this Agreement or the Option shall confer any
right to Optionee to continue as a director of the Company or interfere in any
way with the rights of the stockholders of the Company or the Board of Directors
to elect and/or remove directors.
(g) Optionee represents that he/she accepts the Option, and any stock
received pursuant to exercise of the Option for his/her own account for
investment and not with a view to, or for resale in connection with any
distribution by him/her. Optionee further represents that he/she will not resell
or otherwise dispose of any shares of the Common Stock received pursuant to
exercise of the Option except in accordance with the provisions of the
Securities Act of 1933, as amended, and all of the Federal and State laws
applicable to such resale or other disposition.
(h) Optionee agrees that the Plan (a copy of which is attached hereto) is
the controlling instrument and to the extent that there is any conflict between
the terms of the Plan and this Agreement, the Plan shall control and be the
governing document.
WITNESS the due execution hereof.
UNIT CORPORATION
By:__________________________________
____________________, President
OPTIONEE
______________________________________
______________________, Optionee
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