EXHIBIT 10.27
MILLER EXPLORATION COMPANY
EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
SECTION 1
Establishment and Purpose of Plan
The Company hereby establishes the Equity Compensation Plan for Non-
Employee Directors (the "Plan") for its non-employee directors. The purposes of
the Plan are to provide an opportunity and means by which non-employee directors
can increase their financial interest in the Company, and thereby increase their
personal interest in the Company's continued success, through the payment of
directors' fees in Company Common Stock.
SECTION 2
Definitions
The following words have the following meanings unless a different meaning
is plainly required by the context:
2.1 "Award" means the award of Common Stock to a Participant under the
Plan.
2.2 "Committee" means a committee designated by the Board of Directors of
the Company to administer the Plan or, if no committee is designated, the Board
of Directors.
2.3 "Common Stock" means the Common Stock of the Company, $.01 par value.
2.4 "Company" means Miller Exploration Company, a Delaware corporation,
and its subsidiaries.
2.5 "Director's Fee" means the amount of income payable to a Participant
for service as a director for a fiscal year, including without limitation
payments for attendance at meetings of the Board of Directors or meetings of
committees of the Board of Directors, and any retainer fee paid to members of
the Board of Directors, but excluding reimbursement of costs.
2.6 "Market Value" of any security on any given date means if the
security is listed for trading on The Nasdaq Market or one or more national
securities exchanges, the last reported sales price on the date in question, or
if such security shall not have been traded on such principal exchange on such
date, the last reported sales price on the first day prior thereto on which such
security was so traded.
2.7 "Non-Employee Director" shall mean a director of the Company who is
not employed by the Company or its subsidiaries.
2.8 "Participant" means the Non-Employee Directors of the Company who are
granted Awards under the Plan.
SECTION 3
Administration
3.1 Power and Authority. The Committee shall administer the Plan.
Except as limited in this Plan, the Committee shall have full power and
authority to interpret the provisions of the Plan and Awards granted under the
Plan, to supervise the administration of the Plan and Awards granted under the
Plan and to make all other determinations considered necessary or advisable
under the Plan. All determinations, interpretations, and selections made by the
Committee regarding the Plan shall be final and conclusive. The Committee may
delegate recordkeeping, calculation, payment, and other ministerial
administrative functions to individuals designated by the Committee, who may be
employees of the Company.
3.2 Awards to Participants. In accordance with and subject to the
provisions of the Plan, the Committee shall have the authority to determine all
provisions of Awards as the Committee may deem necessary or desirable and as are
consistent with the terms of the Plan, including the authority to determine
whether and when Awards will be granted, the persons to be granted Awards, and
the amount of Awards to be granted to each person. Awards shall be awarded by
the Committee, and Awards may be amended by the Committee consistent with the
Plan, provided that no such amendment may become effective without the consent
of the Participant, except to the extent that the amendment benefits the
Participant.
3.3 Indemnification of Committee Members. Neither any member or former
member of the Committee nor any individual to whom authority is or has been
delegated shall be personally responsible or liable for any act or omission in
connection with the performance of powers or duties or the exercise of
discretion or judgment in the administration and implementation of the Plan.
Each person who is or shall have been a member of the Committee shall be
indemnified and held harmless by the Company from and against any cost,
liability, or expense imposed or incurred in connection with such person's or
the Committee's taking or failing to take any action under the Plan. Each such
person shall be justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.
SECTION 4
Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.2, a
maximum of 120,000 shares of Common Stock shall be available for Awards under
the Plan. Such shares may be authorized but unissued shares.
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4.2 Adjustments. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares, or any other change in the
corporate structure or shares of the Company, the aggregate number and class of
shares available for Awards under the Plan shall be appropriately adjusted. No
fractional shares shall be issued pursuant to the Plan, and any fractional
shares resulting from adjustments shall be eliminated from the respective Award,
with an appropriate cash adjustment for the value of any Awards eliminated.
SECTION 5
Awards
5.1 Grant. Subject to adjustments provided in Section 4.2, the
Committee, in its discretion, may determine to compensate a Participant for the
Participant's Director's Fee in shares of Common Stock rather than cash.
5.2 Determination of Number of Shares. If the Committee determines to
compensate a Participant in shares of Common Stock rather than cash, the number
of shares of Common Stock (rounded to the nearest whole share) to be awarded to
a Participant shall be calculated by dividing the dollar amount of a
Participant's Director's Fee for a fiscal year by the Market Value of the Common
Stock on the day before the payment date.
5.3 Time of Payment by the Company. If a Participant is compensated for
the Participant's Director's Fee in shares of Common Stock rather than cash
pursuant to an Award hereunder, the Company shall distribute or cause to be
distributed to a Participant the number of shares of Common Stock as calculated
in Section 5.2 on or before the 45th day after the end of the Company's fiscal
year in which the Director's Fees are earned. The time of payment may be amended
before or after an Award (a) by the Committee in its sole discretion, if the
terms of such amendment benefits the Participant, or (b) in all other cases, by
the Committee with the consent of the Participant.
SECTION 6
General Provisions
6.1 No Rights to Awards. No Participant or other person shall have any
claim to be granted any Award, and there is no obligation of uniformity of
treatment of Participants. The terms and conditions of the Awards of the same
type and the determination of the Committee to grant a waiver or modification of
any Award and the terms and conditions thereof need not be the same with respect
to each Participant.
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6.2 Compliance With Laws; Listing and Registration of Shares. All
issuances of Common Stock under the Plan shall be subject to applicable laws,
rules, and regulations, and to the requirement that if at any time the Committee
determines, in its sole discretion, that the listing, registration, or
qualification of the shares covered thereby upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the issue of shares thereunder, such Award may not be granted in whole or
in part, unless and until such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
6.3 No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company from adopting or continuing in effect other
or additional compensation arrangements, including the grant of options and
other stock-based awards, and such arrangements may be either generally
applicable or applicable only in specific cases.
6.4 No Right to Directorship. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the directorship
of the Company.
6.5 Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal law.
6.6 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
6.7 Unfunded Plan. This Plan shall be an unfunded plan within the
meaning of the Internal Revenue Code of 1986, as amended. Benefits provided in
the Plan constitute only an unsecured contractual promise to pay in accordance
with the terms of the Plan by the Company.
SECTION 7
Effective Date and Duration of the Plan
This Plan stall take effect December 7, 1998, which is the effective
date of approval by the Board of Directors, provided that, if required by
applicable law, rule or regulation or by the listing standards of any securities
exchange or quotation service, an Award granted before stockholder approval
shall be subject to approval of the Plan by the Company's stockholders at a
regular or special meeting. Unless earlier terminated by the Board of
Directors, no Award shall be granted under this Plan after December 6, 2008.
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SECTION 8
Termination and Amendment
The Board may terminate the Plan at any time, or may from time to time
amend the Plan, provided that no such amendment may impair any outstanding Award
without the consent of the Participant. No termination, amendment, or
modification of the Plan shall become effective with respect to any Award
previously granted under the Plan without the prior written consent of the
Participant holding such Award unless such amendment or modification benefits
the Participant.
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