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Exhibit 10.1

KERR-McGEE CORPORATION 2005 LONG TERM INCENTIVE PLAN

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KERR-McGEE CORPORATION 2005 LONG TERM INCENTIVE PLAN

TABLE OF CONTENTS

Article
 
Page
 
Purpose
1
 
II
Definitions...……………………………………………………...
1
 
III
Administration……………………………………………………
3
 
IV
Eligibility…………………………………………………………..
5
 
V
Limitations on Awards…………………………………………..
5
 
VI
Stock Options……………………………………………………
6
 
VII
Stock Appreciation Rights………………………………………
8
 
VIII
Restricted Stock…………………………………………………
9
 
IX
Performance Awards……………………………………………
9
 
X
Adjustment Upon Changes in Stock…………………………..
10
 
XI
Change in Control……………………………………………….
10
 
XI
Miscellaneous……………………………………………………
12
 
XIII
Amendment and Termination…………………………………..
13
 
XIV
Duration of the Plan……………………………………………..
14

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KERR-McGEE CORPORATION 2005 LONG TERM INCENTIVE PLAN

Article I

Purpose

The purpose of the Kerr-McGee Corporation 2005 Long Term Incentive Plan (the
"Plan") is to provide incentive opportunities for Non-Employee Directors and key
employees, and to align their personal financial interest with the Company's
stockholders. The Plan includes provisions for stock options, stock appreciation
rights, restricted stock and performance related awards.

Article II

Definitions

a)  
"Award" shall mean an award under the Plan of Options, SARs, Restricted Stock or
a Performance Award.

b)  
"Board or Board of Directors" shall mean the Board of Directors of the Company.

c)  
"Cause" shall mean (i) the continued failure of the Employee to perform
substantially all of his or her duties as an Employee (other than any such
failure resulting from incapacity due to physical or mental illness); (ii) the
willful engaging by the Employee in gross misconduct which is materially and
demonstrably injurious to the Company; or (iii) the conviction of, or plea of
guilty or nolo contendere to, a felony.

d)  
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.

e)  
"Company" shall mean Kerr-McGee Corporation and any successor corporation by
merger or otherwise.

f)  
"Committee" shall mean a committee of two (2) or more members of the Board
appointed by the Board of Directors to administer the Plan pursuant to Article
III herein. A person may serve on the Committee only if he or she is a
"non-employee director" for purposes of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, and satisfies the requirements of an "outside director"
for purposes of Section 162(m) of the Code.

g)  
"Employee" shall mean any person employed by the Company, a Subsidiary or
Limited Liability Company on a full-time salaried basis, including officers
thereof. The term "Employee" shall not include a person hired as an independent
contractor, leased employee, consultant or a person otherwise designated by the
Company at the time of hire as not eligible to participate in the Plan, even if
such person is determined to be an "employee" by any governmental or judicial
authority.

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h)  
"Fair Market Value" of Stock shall mean the average of the highest price and the
lowest price at which Stock shall have been sold on the applicable date as
reported in the Wall Street Journal as New York Stock Exchange Composite
Transactions for that date. In the event that the applicable date is a date on
which there were no such sales of Stock, the Fair Market Value of Stock on such
date shall be the average of the highest price and the lowest price at which
Stock shall have been sold on the last trading day preceding such date.

i)  
"Incentive Stock Option" or "ISO" shall mean an Option which complies with the
terms and conditions set forth in Section 422 of the Code and applicable
regulations thereunder. Options designated as ISOs shall be interpreted and
administered in order to comply with all the provisions of Section 422 of the
Code and applicable regulations, including without limitation the requirement
that the aggregate Fair Market Value (determined at the time the Option is
granted) of Stock with respect to which ISOs are exercisable for the first time
by an individual during a calendar year under all plans of the Company, any
Subsidiary and any LLC shall not exceed $100,000.

j)  
"Indicators of Performance" shall mean the following criteria used by the
Committee to establish a performance goal under Section 3.4: Pretax Income, Net
Income, Earnings Per Share, Sales Volume, Revenue, Expenses, Return on Assets,
Return on Equity, Return on Investment, Net Profit Margin, Operating Profit
Margin, Cash Flow, Total Stockholder Return, Capitalization, Liquidity, Reserve
Adds or Replacement, Finding and Development Costs, Production Volume, Results
of Customer Satisfaction Surveys and other measures of Quality, Safety,
Productivity, Cost Management or Process Improvement.

k)  
"Limited Liability Company" or "LLC" shall mean any Limited Liability Company in
which the Company or a Subsidiary owns fifty percent (50%) or more of the
Limited Liability Company.

l)  
"Non-Employee Director" shall mean any person serving as a director of the
Company who is not an employee of the Company.

m)  
"Option" or "Stock Option" shall mean a right granted under the Plan to an
Optionee to purchase a stated number of shares of Stock at a stated exercise
price.

n)  
"Optionee" shall mean an Employee or Non-Employee Director who has received a
Stock Option granted under the Plan.

o)  
"Performance Award" shall mean an Award issued under Article IX.

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p)  
"Performance Period" shall mean a period established by the Committee of not
less than one year during which performance shall be measured under a
Performance Award.

q)  
"Restricted Stock" shall mean Stock which is issued pursuant to Article VIII of
the Plan.

r)  
"Restriction Period" shall mean that period of time as determined by the
Committee during which Restricted Stock is subject to such terms, conditions and
restrictions as shall be assigned by the Committee.

s)  
"Retirement" shall mean retirement of an Employee after attaining age and
service requirements of the Company pension plan in which the employee
participates. For this purpose, "service" for U.S. Employees shall be measured
under the rules for determining vesting service under the Kerr-McGee Corporation
Retirement Plan for U.S. Employees. “Retirement” for Non-Employee Directors
shall mean termination from service on the Board for any reason other than Total
Disability or death.

t)  
"Stock" shall mean the common stock of the Company.

u)  
"Stock Appreciation Right" or "SAR" shall mean a right granted in accordance
with Article VII of the Plan.

v)  
"Subsidiary" shall mean any corporation (other than the Company) in which the
Company, a Subsidiary or a Limited Liability Company of the Company owns fifty
percent (50%) or more of the total combined voting power of all classes of
stock, provided that, with regard to Incentive Stock Options, "Subsidiary" shall
have the meaning provided under Section 424(f) of the Code.

w)  
"Total Disability" and "Totally Disabled" shall have such meaning as that
defined under the Company's group insurance plan covering total disability and
determinations of Total Disability shall be made by the insurance company
providing such coverage on the date on which the Employee, whether or not
eligible for benefits under such insurance plan, becomes Totally Disabled.
However, in the absence of such insurance plan or in the event the individual is
a Non-Employee Director, the Committee shall make such determination.

Article III

Administration

3.1 The Committee. The Plan shall be administered by the Committee. Subject to
such approvals and other authority as the Board may reserve to itself from time
to time, the Committee shall, consistent with the provisions of the Plan, from
time to time establish such rules and regulations and appoint such agents as it
deems appropriate for the proper administration of the Plan, and make such
determinations under, and such interpretations of, and take such steps in
connection with the Plan or the Awards as it deems necessary or advisable.

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3.2  Authority of the Committee. Subject to the provisions herein, the Committee
shall have the full power (a) to determine the Employees and Non-Employee
Directors who shall receive Awards under the Plan, (b) to determine the size and
types of Awards to be issued under the Plan, (c) to determine the terms and
conditions of such Awards in a manner consistent with the Plan, (d) to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan, and resolve any ambiguities with respect to any of the terms and
provisions hereof as written and as applied to the operation of the Plan, (e) to
establish, amend or waive rules and regulations for the Plan's administration,
and (f) to amend the terms and conditions of any outstanding Award to the extent
such terms and conditions are within the sole discretion of the Committee as
provided in the Plan and subject to the limitations and restrictions otherwise
applicable under the Plan, including those contained in Article XIII which among
other restrictions prohibit the repricing of options without further shareholder
approval. Notwithstanding the foregoing, the Committee shall not amend an Award
in a manner that would have a materially adverse effect on the grantee's rights
or obligations under the Award without the consent of the grantee.

The Committee may take any action consistent with the terms of the Plan which
the Committee deems necessary to comply with any laws or regulatory requirements
of a foreign country or to avoid adverse tax consequences under any such law or
requirements. Such actions may include modifying the terms and conditions
governing any Awards, including issuing restricted stock units in lieu of
Restricted Stock, or establishing any local country plans as sub-plans to this
Plan, each of which may be attached as an appendix hereto.

As permitted by law, the Committee may delegate its authority hereunder,
including without limitation delegating to a Company officer the authority to
issue Awards covering a specified number of shares of Stock to Employees who are
not officers.

3.3  Decisions Binding. All determinations and decisions of the Committee as to
any disputed question arising under the Plan or an Award, including questions of
construction and interpretation, shall be final, binding and conclusive upon all
parties.

3.4  Awards Subject to Performance Goals. The Committee may determine that an
Award shall be subject to the satisfaction of such performance goals as
established by the Committee. As determined by the Committee, achievement of the
performance goals may be measured (a) individually, alternatively or in any
combination, (b) with respect to the Company, a subsidiary, division, business
unit, product line, product, or any combination of the foregoing, or (c) on an
absolute basis, or relative to a target, to a designated comparison group, to
results in other periods, to an index, or to other external measures.

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In determining whether a performance goal is met, the Committee may exclude the
impact of any event or occurrence which the Committee determines should
appropriately be excluded, such as a restructuring or other nonrecurring charge,
an event either not directly related to the operations of the Company or not
within the reasonable control of the Company's management, or a change in
accounting standards required by U. S. generally accepted accounting principles.

For an Award that is subject to performance goals and that is intended to
qualify as "performance-based compensation" under Section 162(m) of the Code,
the following additional provisions shall apply: (a) the applicable performance
goals will be based on one or more Indicators of Performance, (b) the Committee
may adjust downwards, but not upwards, the amount payable pursuant to such Award
upon attainment of the performance goals, (c) the Committee may not waive the
achievement of the applicable performance goals except in the case of the death
or disability of the grantee, or under such other conditions where such waiver
will not jeopardize the treatment of other Awards as “performance-based
compensation” under Section 162(m), and (d) the Award shall otherwise comply
with the requirements of Section 162(m), or any successor provision thereto, and
the regulations thereunder.

3.5  Effect of Code Section 409A. To the extent that any Award under this plan
is or may be considered to involve a nonqualified deferred compensation plan or
deferral subject to Section 409A of the Code, the terms and administration of
such Award shall comply with the provisions of such Section, applicable IRS
guidance and good faith reasonable interpretations thereof and, to the extent
necessary, shall be modified, replaced, or terminated in the discretion of the
Committee.

Article IV

Eligibility

Those Employees who, in the judgment of the Committee, may contribute to the
profitability and growth of the Company, a Subsidiary, or Limited Liability
Company and all Non-Employee Directors, shall be eligible to receive Awards
under the Plan, provided that only Employees shall be eligible for grants of
ISOs.
 

Article V

Limitations on Awards

5.1 Limits on Issuance of Shares. The Stock to be distributed under the Plan may
be either authorized and issued shares or unissued shares, including but not
limited to shares held as treasury shares. The maximum number of shares of Stock
which may be issued under the Plan shall not exceed, in the aggregate, 10
million (10,000,000). The following additional limitations shall apply to the
issuance of Stock under the Plan pursuant to various types of Awards:

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Type of Awards
Maximum Issuance
 
    (a)    
Restricted Stock and Performance Awards
to Employees
 
3,000,000 shares
    (b)
Stock Options and Restricted Stock to
Non-Employee Directors, but no more
than 100,000 shares of Restricted Stock
 
300,000 shares
    (c)
Incentive Stock Options
1,000,000 shares

Any shares of Stock that are subject to an Award which for any reason lapses, is
cancelled, or is terminated without the issuance of such shares shall again be
available for Awards under the Plan.

5.2 Limits on Awards to Employees. No Employee shall be awarded, during the term
of the Plan, (a) Restricted Stock covering more than 400,000 shares of Stock, or
(b) Options and SARS covering more than 1,750,000 shares of Stock. No Employee
shall be granted Performance Awards under Article IX during a calendar year that
could result in a payment of more than $5,000,000 in cash and/or shares of
Stock, based on the Fair Market Value of the Stock as of the first day of the
performance period.

Article VI

Stock Options

6.1 Grant of Options.

(a) The Committee may, at any time and from time to time, grant Options under
the Plan to eligible Employees or Non-Employee Directors, for such numbers of
shares and having such terms as the Committee shall designate, subject to the
provisions of the Plan. The Committee will also determine the type of Option
granted (e.g., ISO, nonstatutory, other statutory Options as from time to time
may be permitted by the Code) or a combination of various types of Options. The
date on which an Option shall be granted shall be the date of the Committee's
authorization of such grant. Any individual at any one time and from time to
time may hold more than one Option granted under the Plan or under any other
Stock plan of the Company.

(b) Each Option shall be evidenced by a Stock Option Agreement in such form and
containing such provisions consistent with the provisions of the Plan as the
Committee from time to time shall approve.

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6.2 Exercise Price. The price at which shares of Stock may be purchased under an
Option shall not be less than 100% of the Fair Market Value of the Stock on the
date the Option is granted.

6.3 Option Period. The period during which an Option may be exercised shall be
determined by the Committee; provided, that such period will not be longer than
ten years from the date on which the Option is granted in the case of ISOs, and
ten years and one day in the case of other Options. The date or dates on which
portion(s) of an Option may be exercised during the term of an Option shall be
determined by the Committee and may vary from Option to Option. The Committee
may also determine to accelerate the time at which portion(s) of an outstanding
Option may be exercised.

6.4 Termination of Service. An Option shall terminate and may no longer be
exercised three months after the Optionee ceases to be an Employee for any
reason other than termination for Cause, Total Disability, death or Retirement.
Unless an Employee's Stock Option Agreement provides otherwise, all Options
shall terminate and may no longer be exercised upon an Optionee's termination
for Cause. If an Employee's employment is terminated by reason of Total
Disability or Retirement, all Options held by the Employee will vest and may be
exercised within the period not to exceed the lesser of four years following
such termination or the remaining term of the Option award. If the Optionee is
an Employee and dies while in the employ of the Company, a Subsidiary or LLC,
the vesting provisions of an Option held by the Employee will lapse and such
Option may, within the lesser of four years after the Optionee's death or the
remaining term of the Option award, be exercised by the legal representative of
the Optionee's estate, or if it has been distributed as part of the estate, by
the person or persons to whom the Optionee's rights under the Option shall pass
by will or by the applicable laws of descent and distribution. If a Non-Employee
Director’s service is terminated due to Retirement or Total Disability, all
Options held by the Non-Employee Director will vest and such Options may be
exercised within the remainder of the Option's term. If a Non-Employee Director
dies while in the service of the Company, all Options held by the Non-Employee
Director will vest and such Options may be exercised within the remainder of the
term of the Option by the legal representative of the Optionee's estate, or if
it has been distributed as part of the estate, by the person or persons to whom
the Optionee's rights under the Option shall pass by will or by the applicable
laws of descent and distribution. In no event may an Option be exercised to any
extent by anyone after the expiration or termination of the Option.

6.5 Payment for Shares.

To the extent permitted under applicable law and the relevant Stock Option
Agreement, the exercise price of an Option shall be paid to the Company in full
at the time of exercise at the election of the Optionee (1) in cash, (2) in
shares of Stock having a Fair Market Value equal to the aggregate exercise price
of the Option and satisfying such other requirements as may be imposed by the
Committee, (3) partly in cash and partly in such shares of Stock, (4) to the
extent permitted by the Committee, through the withholding of shares of Stock
(which would otherwise be delivered to the Optionee) with an aggregate Fair
Market Value on the exercise date equal to the aggregate exercise price of the
Option or (5) through the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the aggregate exercise price
of the Option. The Committee may limit the extent to which shares of Stock may
be used in exercising Options. No Optionee shall have any rights to dividends or
other rights of a stockholder with respect to shares of Stock subject to an
Option until the Optionee has given written notice of exercise of the Option,
paid in full for such shares of Stock and, if applicable, has satisfied any
other conditions imposed by the Committee pursuant to the Plan.

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Article VII

Stock Appreciation Rights

7.1 Grant.  An SAR shall represent a right to receive a payment in cash equal to
the excess of the Fair Market Value of a specified number of shares of Stock on
the date the SAR is exercised over an amount (the SAR exercise price) which
shall be no less than the Fair Market Value of the shares on the date the SAR
was granted (or the option price for SARs granted in tandem with an Option), as
set forth in the applicable Award agreement. Each SAR shall be evidenced by an
Award agreement that shall specify the SAR exercise price, the duration of the
SAR, the number of shares of stock to which the SAR pertains, whether the SAR is
granted in tandem with the grant of an Option or is freestanding, and such other
provisions as the Committee shall determine. SARs shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
in each instance approve and which shall be set forth in the applicable Award
agreement, which need not be the same for each grant of for each grantee.
 
7.2 Exercise.   SARs granted in tandem with the grant of an Option may be
exercised for all or part of the shares of Stock subject to the related Option
upon the surrender of the right to exercise the equivalent portion of the
related Option. SARs granted in tandem with the grant of an Option may be
exercised only with respect to the shares of Stock for which its related Option
is then exercisable. SARs granted independently from the grant of an Option may
be exercised upon the terms and conditions contained in the applicable Award
agreement.
 
7.3 Termination.  The Award agreement for a SAR shall set forth the extent to
which a grantee shall have the right to exercise an SAR following termination of
the grantee's service. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all SARs, and may reflect
distinctions based on the reasons for termination.

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Article VIII

Restricted Stock

8.1 Terms of Grant. At the time of making a grant of Restricted Stock or making
payment of an Award in Restricted Stock to an Employee or Non-Employee Director,
the Committee shall establish a Restriction Period and assign such terms,
conditions and other restrictions to the Restricted Stock as it shall determine.

8.2 Restricted Stock - Rights. Restricted Stock will be represented by a Stock
certificate registered in the name of the Restricted Stock recipient. Such
certificate, accompanied by a separate duly endorsed stock power, shall be
deposited with the Company. The recipient shall be entitled to receive dividends
during the Restriction Period and shall have the right to vote such Restricted
Stock and all other stockholder's rights, with the exception that (i) the
recipient will not be entitled to delivery of the Stock certificate during the
Restriction Period, (ii) the Company will retain custody of the Restricted Stock
during the Restriction Period and (iii) a breach of the terms and conditions
established by the Committee pursuant to the Award will cause a forfeiture of
the Restricted Stock. The Committee may, in addition, prescribe additional
restrictions, terms and conditions upon or to the Restricted Stock.

8.3 Termination of Service. If an Employee or Non-Employee Director terminates
service by reason of Total Disability, death or Retirement prior to the
expiration of a Restriction Period for a grant of Restricted Stock, the
Restriction Period will lapse and the shares will be delivered to the recipient.
Unless the Committee provides otherwise, a termination of service for other
reasons prior to the expiration of the applicable Restriction Period will result
in the forfeiture of the Restricted Stock.

8.4 Restricted Stock Agreement. Each grant of, or payment of an Award in,
Restricted Stock shall be evidenced by a Restricted Stock Agreement in such form
and containing such terms and conditions not inconsistent with the provisions of
the Plan as the Committee from time to time shall approve.

Article IX

Performance Awards

9.1 Eligibility for Awards. The Committee shall designate Employees as eligible
to receive Performance Awards under the Plan and shall establish applicable
Performance Periods and performance goals for any such Awards.

9.2 Performance Awards. Performance Awards may be in the form of performance
shares, which are units valued by reference to shares of Stock or performance
units, which are units valued by reference to financial measures or property
other than Stock, and shall be subject to such terms and conditions and other
restrictions as the Committee shall assign. At the time of making grants of
Performance Awards, the Committee shall establish such terms and conditions as
it shall determine applicable to such Awards. Performance Awards may be paid out
in cash, Stock, Restricted Stock, other property or a combination thereof.
Recipients of Performance Awards are not required to provide consideration other
than the rendering of service.

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9.3 Partial Performance Period Participation. Subject to applicable restrictions
under Section 162(m) of the Code, the Committee shall determine the extent to
which an Employee shall participate in a partial Performance Period because of
becoming eligible after the beginning of such Performance Period. In the event
an Employee terminates employment due to death, Total Disability or Retirement
after completing at least one month of the Performance Period for an Award, such
Employee shall be entitled to a pro rata portion of the Award if the applicable
performance goals are met, payable in accordance with procedures established by
the Committee. Unless the Committee provides otherwise, if an Employee
terminates employment for any other reason prior to the end of a Performance
Period for an Award, he shall not be entitled to any payment under the Award.
 
Article X

Adjustment Upon Changes In Stock

Subject to the limitations of Article XIII, the Committee shall appropriately
adjust the number of shares or kind of Stock which may be issued pursuant to
this Plan, the other limits on Stock issuable under the Plan under Article V,
and the number of shares covered by, and the exercise price of, each outstanding
Award, for any increase or decrease in the total number of issued and
outstanding Stock (or change in kind) resulting from any change in the Stock
through a merger, consolidation, reorganization, recapitalization, subdivision
or consolidation of shares or other capital adjustment or the payment of a stock
dividend or other increase or decrease (or change in kind) in such shares. In
the event of any such adjustment, fractional shares shall be eliminated.
 
 
Article XI

Change In Control

Notwithstanding anything to the contrary in the Plan, in the event of a Change
in Control:

(i) If during a Restriction Period(s) applicable to Restricted Stock issued
under the Plan, all restrictions imposed hereunder on such Restricted Stock
shall lapse effective as of the date of the Change in Control;

(ii) If during a Performance Period(s) applicable to a Performance Award granted
under the Plan, an Employee shall earn the number of performance shares or
performance units which the Employee would have earned as if target performance
under the Award was obtained; and

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(iii) Any outstanding Options or SARs that are not exercisable shall become
exercisable effective as of the date of a Change in Control. If a grantee's
employment or service is terminated within 24 months of the effective date of a
Change in Control, to the extent that any Option or SAR was exercisable at the
time of the grantee's termination, such Option or SAR may be exercised within
four years following the date of termination or expiration of the Award if
sooner.

For purposes of the Plan, a "Change in Control" shall be deemed to have occurred
if:

(a) Any person ("Person") as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as used in Section
13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the
Exchange Act, but excluding the Company and any subsidiary and any employee
benefit plan sponsored or maintained by the Company or any subsidiary (including
any trustee of such plan acting as trustee), directly or indirectly, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities (other than indirectly as a result
of the Company's redemption of its securities); or

(b) The consummation of any merger or other business combination of the Company,
sale of 50% or more of the Company's assets, liquidation or dissolution of the
Company or combination of the foregoing transactions (the "Transactions") other
than a Transaction immediately following which the shareholder of the Company
and any trustee or fiduciary of any Company employee benefit plan immediately
prior to the Transaction own at least 60% of the voting power, directly or
indirectly, of (A) the surviving corporation in any such merger or other
business combination; (B) the purchaser or successor to the Company's assets;
(C) both the surviving corporation and the purchaser in the event of any
combination of Transactions; or (D) the parent company owning 100% of such
surviving corporation, purchaser or both the surviving corporation and the
purchaser, as the case may be; or

(c) Within any twenty-four month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of a successor to the Company. For this
purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors (so long
as such director was not nominated by a person who commenced or threatened to
commence an election contest or proxy solicitation by or on behalf of a Person
(other than the Board) or who has entered into an agreement to effect a Change
in Control or expressed an intention to cause such a Change in Control); or

(d) A majority of the members of the Board of Directors in office immediately
prior to a proposed transaction determine by a written resolution that such
proposed transaction, if taken, will be deemed a Change in Control and such
proposed transaction is consummated.

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Article XII

Miscellaneous

12.1 Effect on Other Plans. Except as otherwise required by law, no action taken
under the Plan shall be taken into account in determining any benefits under any
pension, retirement, thrift, profit sharing, group insurance or other benefit
plan maintained by the Company or any Subsidiaries, unless such other plan
specifically provides for such inclusion.

12.2 Transfer Restrictions. Except as provided in Article XII, Section 12.3, no
Award shall be transferable other than by will or the laws of descent and
distribution. Any Option or SAR shall be exercisable (i) during the lifetime of
the grantee, only by the grantee or, to the extent permitted by the Code, by an
appointed guardian or legal representative of the grantee, and (ii) after death
of the grantee, only by the grantee's legal representative or by the person who
acquired the right to exercise such Option or SAR by bequest or inheritance or
by reason of the death of the grantee.

12.3 Transfer of Options. The Committee may, in its discretion, authorize all or
a portion of the Options to be granted to an Optionee to be on terms which
permit transfer by such Optionee to an immediate family member of the Optionee
who acquires the options from the Optionee through a gift or a domestic
relations order. For purposes of this Article XII, Section 12.3, "family member"
includes any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships, trusts for
the exclusive benefit of these persons and any other entity owned solely by
these persons, provided that the Stock Option Agreement pursuant to which such
Options are granted must be approved by the Committee and must expressly provide
for transferability in a manner consistent with this Section and provided
further that subsequent transfers of transferred options shall be prohibited
except those in accordance with Article XII, Section 12.2. Following transfer,
any such Options shall continue to be subject to the same terms and conditions
as were applicable immediately prior to transfer. The events of termination of
service of Article VI, Section 6.4 hereof shall continue to be applied with
respect to the original Optionee, following which the options shall be
exercisable by the Transferee only to the extent and for the periods specified
in Article VI, Section 6.4.

12.4 Withholding Taxes. The Company shall have the right to withhold from any
settlement hereunder any federal, state, or local taxes required by law to be
withheld, or require payment in the amount of such withholding. If settlement
hereunder is in the form of Stock, such withholding may be satisfied by the
withholding of shares of Stock by the Company, unless the grantee shall pay to
the Company an amount sufficient to cover the amount of taxes required to be
withheld, and such withholding of shares does not violate any applicable laws,
rules or regulations of federal, state or local authorities.

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12.5 Transfer of Employment and Leave of Absence. Transfer of employment between
the Company, a Subsidiary or Limited Liability Company, or between Limited
Liability Companies and Subsidiaries shall not constitute termination of
employment for the purpose of the Plan. Whether any leave of absence shall
constitute termination of employment for the purposes of the Plan shall be
determined in each case by the Committee.

12.6 Administrative Expenses. All administrative expenses associated with the
administration of the Plan shall be borne by the Company.

12.7 Titles and Headings. The titles and headings of the articles in this Plan
are for convenience of reference only and in the event of any conflict, the text
of the Plan, rather than such titles or headings, shall control.

12.8 No Guarantee of Continued Employment. No grant of an Award to an Employee
under the Plan or any provisions thereof shall constitute any agreement for or
guarantee of continued employment by the Company and no grant of an Award to a
Non-Employee Director shall constitute any agreement for or guarantee of
continuing as a Non-Employee Director.

12.9 Proceeds. The proceeds received by the Company from the sale of Stock under
the Plan shall be added to the general funds of the Company and shall be used
for corporate purposes as the Board shall direct.

12.10 Governing Law. The Plan shall be governed and construed in accordance with
the laws of Delaware, except to the extent that federal law applies.

12.11  Award Deferrals. Employees who are eligible to participate in the
Kerr-McGee Corporation Executive Deferred Compensation Plan (the "EDCP") may
elect to defer receipt of amounts under an Award in accordance with the terms of
the EDCP. Non-Employee Directors who are eligible to participate in the
Kerr-McGee Corporation Deferred Compensation Plan for Non-Employee Directors
(the "Directors Plan") may elect to defer receipt of amounts under an Award in
accordance with the terms of the Directors Plan.

Article XIII

Amendment And Termination

The Board may at any time terminate or amend this Plan in such respect as it
shall deem advisable. Notwithstanding the foregoing, the Board may not, without
further approval of the stockholders of the Company, amend the Plan in a manner
that requires such approval under the rules of the New York Stock Exchange, the
Code, or any other applicable law, including any amendment that materially
increases the maximum number of shares of Stock issuable under the Plan or
results in the repricing of Options. No amendment or termination of the Plan
shall, without the consent of the grantee of an Award, have a materially adverse
effect on the grantee’s rights or obligations under the Award.

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Article XIV

Duration Of The Plan

The effective date of this Plan shall be May 10, 2005. If not sooner terminated
by the Board, this Plan shall terminate on May 10, 2015. No Awards shall be made
after the Plan has terminated. Awards granted before the termination of the Plan
shall remain outstanding and the terms of the Plan shall continue to apply to
such Awards.