EXHIBIT 10.1
NORTHERN OIL AND GAS,
INC.
2009 EQUITY INCENTIVE
PLAN
(Adopted by the Board of Directors
on January 30, 2009)
ARTICLE I.
PURPOSE
The purpose of
this Plan is to provide a means whereby Northern Oil and Gas, Inc.
(the “Company”) may be able, by granting stock options
(”Options”) and shares of restricted stock
(“Restricted Stock”), to attract, retain and motivate
capable and loyal employees, non-employee directors, consultants
and advisors of the Company and its subsidiaries, for the benefit
of the Company and its shareholders. Options granted
under the Plan may be either Incentive Stock Options which qualify
for favorable tax treatment under Section 422 of the Internal
Revenue Code (the “Code”), or Nonqualified Stock
Options which do not qualify for favorable tax
treatment. Options and Restricted Stock are referred to
collectively in this Plan as “Awards”.
ARTICLE II.
RESERVATION OF
SHARES
A total of
3,000,000 shares (“Shares”) of the
Company’s common stock, par value $0.001 per share (the
“Common Stock”) are reserved for issuance pursuant to
Awards granted under the Plan. If any Shares included in
an Award are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares, then the
number of Shares included in the Award, to the extent of any such
forfeiture or termination, shall again be available for granting
Awards under the Plan. Shares reserved for issue as
provided herein shall cease to be reserved upon termination of the
Plan.
The maximum
number of Shares for which any person may be granted Awards under
the Plan in any calendar year shall be limited to 500,000
Shares. The maximum number of Shares for which Awards
may be granted under the Plan to all persons in any calendar year
shall be limited to ten percent (10%) of the total outstanding
Shares.
ARTICLE III.
ADMINISTRATION
(a) The
Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the
“Committee”). The Committee shall be
appointed by the Board of Directors and shall be comprised solely
of two or more “non-employee directors” within the
meaning of SEC Rule 16b-3 or any successor rule or
regulation. Each member of the Committee shall also be
an “outside director” within the meaning of Internal
Revenue Code Section 162(m) or any successor
provision. Vacancies in the Committee shall be filled by
the Board.
(b) The
Committee shall have full power to construe and interpret the Plan
and to establish and amend rules and regulations for its
administration, subject to the express provisions of the
Plan.
(c) The
Committee shall determine which persons shall be granted Awards
under the Plan, the types of Awards to be granted, the number of
Shares included in each Award, any limitations on the exercise or
vesting of Awards in addition to those imposed by this Plan, and
any other terms and conditions of Awards. The Committee
may also approve amendments to outstanding Awards, provided there
is no conflict with the terms of the Plan, applicable law, or
applicable stock market rules and regulations.
ARTICLE IV.
ELIGIBILITY
An Option may
be granted to any employee, non-employee director, consultant or
advisor of the Company or its subsidiaries, except that no
consultant or advisor shall be granted Awards in connection with
the offer and sale of securities in a capital raising transaction
on behalf of the Company. Restricted Stock may only be
granted to employees and any non-employee director. A
person who has received an Award of an Option or Restricted Stock
is referred to in this Plan as a
“Participant.”
ARTICLE V.
CHANGES IN PRESENT STOCK AND
EFFECT OF CHANGE OF CONTROL
(a) In
the event of a recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or other change in
capitalization affecting the Company’s present capital stock,
appropriate adjustment may be made by the Committee in the number
and kind of shares included in any Award, and the exercise or
purchase price of any Award.
(b) All
outstanding Options shall immediately vest and become immediately
exercisable in full and all grants of Restricted Stock shall become
immediately fully-vested and free of all forfeiture and transfer
restrictions upon any “change in control” of the
Company. Any of the following shall constitute a
“change in control” for the purposes hereof:
(i) The
consummation of a reorganization, merger, share exchange,
consolidation or similar transaction, the acquisition of a majority
of the outstanding Common Stock by a person or group acting in
concert or the sale or disposition of all or substantially all of
the assets of the Company, unless, in any case, the persons
beneficially owning the voting securities of the Company
immediately before that transaction beneficially own, directly or
indirectly, immediately after the transaction, at least
seventy-five percent (75%) of the voting securities of the Company
or any other corporation or other entity resulting from or
surviving the transaction in substantially the same proportion as
their respective ownership of the voting securities of the Company
immediately prior to the transaction;
(ii) Individuals
who constitute the incumbent Board of Directors cease for any
reason to constitute at least a majority of the Board of Directors;
or
(iii) The
Company’s shareholders approve a complete liquidation or
dissolution of the Company.
ARTICLE VI.
OPTIONS
(a)
Option Exercise Price . The per share exercise
price for each Option shall be determined by the Committee at the
time of grant, provided that the per share exercise price for any
Incentive Stock Option shall be not less than the fair market value
of the Common Stock on the date the Option is
granted. The “fair market value” of the
Common Stock as of any date shall be the closing sale price for the
Common Stock on the most recent day on which the Common stock
traded prior to the grant date. If there is no closing
sale price for the Common Stock, the Committee shall use such other
information deemed appropriate by the Committee to determine the
fair market value of the Common Stock on the date of any
grant. No Incentive Stock Option shall be granted to any
employee who at the time directly or indirectly owns more than ten
percent (10%) of the combined voting power of all classes of stock
of the Company or of a subsidiary, unless the exercise price is not
less than 110 percent (110%) of the fair market value of the Common
Stock on the date of grant, and unless the Option is not
exercisable more than five (5) years after the date of
grant.
(b)
Exercise of Options . An optionee shall exercise
an Option by delivery of a signed, written notice to the Company,
specifying the number of Shares to be purchased, together with
payment of the full purchase price for the Shares. The
Company may accept payment from a broker on behalf of the optionee
and may, upon receipt of signed, written instructions from the
optionee, deliver the Shares directly to the broker. The
date of receipt by the Company of the final item required under
this paragraph shall be the date of exercise of the
Option.
(c)
Option Agreement Provisions . Each Option granted
under the Plan shall be evidenced by a Stock Option Agreement
executed by the Company and the optionee, and shall be subject to
the following terms and conditions, and such other terms and
conditions as may be prescribed by the Committee:
(i)
Incentive Stock Option Dollar Limitation . Each
Option grant to an employee shall constitute an Incentive Stock
Option eligible for favorable tax treatment under Section 422 of
the Code, provided that no more than $100,000 of such Options
(based upon the fair market value of the underlying Shares as of
the date of grant) can first become exercisable for any employee in
any calendar year. To the extent any Option grant
exceeds the $100,000 dollar limitation, it shall constitute a
Nonqualified Stock Option. Each stock option agreement
shall specify the extent to which it is an Incentive and/or a
Nonqualified Stock Option. For purposes of applying the
$100,000 limitation, options granted under this Plan and under all
other plans of the Company and its subsidiaries which are qualified
under Section 422 of the Code shall be included.
(ii)
Payment . The full purchase price of the Shares
acquired upon exercise of any Option shall be paid in cash, by
certified or cashier’s check, or in the form of Shares of the
Company’s Common Stock with a fair market value equal to the
full purchase price and free and clear of all liens and
encumbrances.
The
Committee in its sole discretion may also permit the
“cashless exercise” of an Option. In the
event of a cashless exercise, the optionee shall surrender the
Option to the Company, and the Company shall issue the optionee the
number of Shares determined as follows:
X = Y (A-B) /A
where:
X = the number
of Shares to be issued to the optionee.
Y = the number
of Shares with respect to which the Option is being
exercised.
A = the closing
sale price of the Common Stock on the date of exercis
