Exhibit 10.7

 

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RESTRICTED STOCK PROGRAM

May 8, 2012

OFF CYCLE AWARD AGREEMENT

Employee Name:

ID Number:

Payroll Country: United States of America

Number of Restricted Stock Units Granted:

Grant Date: May 8, 2012

Grant Price: $53.61

Vesting Schedule: The restrictions lapse and the units vest on the third
anniversary of the Grant Date.

Further Terms and Conditions

This Key Employee Award Terms and Conditions describes terms and conditions of
Restricted Stock or Restricted Stock Unit Awards, as part of the ConocoPhillips
Restricted Stock Program (Program), granted under the 2011 Omnibus Stock and
Performance Incentive Plan of ConocoPhillips (referred to as the Plan) by
ConocoPhillips (Company) to certain eligible Employees (Employees). These Terms
and Conditions, together with the Annual Award Summary given to each Employee
receiving an Award, form the Award Agreement (the Agreement) relating to the
Awards described. The Agreement covers both Restricted Stock and Restricted
Stock Units, and the term Employee covers recipients of Awards made either in
Restricted Stock or Restricted Stock Units.

 

1. Type and Size of Grant. Subject to the Plans and this Agreement, the Company
grants to certain eligible Employees Restricted Stock or Restricted Stock Units.
Individual awards will be as set forth in the Annual Award Summary given to each
Employee to whom an Award is granted. The Annual Award Summary for each Employee
is made a part of this Agreement with regard to such Employee.

 

2. Grant Date, Price, and Plan. The Grant Date and the Grant Price are as set
forth above. Awards are made under the Plan.

 

3. Restrictions, Forfeiture, and Lapse of Restrictions. The Restricted Stock or
Restricted Stock Units subject hereto may be canceled or forfeited as set forth
herein. Except as otherwise noted in this Agreement, the following summary table
describes restrictions and terms, forfeiture, and lapse of restrictions, subject
to the more detailed provisions set forth below:

 

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Exhibit 10.7

 

Summary Table

 

Summary of Termination Rules

 

Status

  

Termination Date

  

Forfeiture or Lapsing of Restrictions

Retirement (age 55 and 5 years of service)

  

Prior to

6 months from

grant date

   Canceled upon Termination   

6 months from

grant date &

after

   Restrictions lapse on Termination date

Layoff

  

Prior to 6

months from

grant date

   Canceled upon Termination   

6 months to 1

year from grant

date

   Award is prorated and restrictions on remaining stock/units lapse on
Termination date   

1 year from

grant date &

after

   Restrictions lapse on Termination date

Disability

  

Any date after

grant date

   Restrictions lapse on Termination date

Death

  

Any date after

grant date

   Restrictions lapse on Termination date

Divestitures, outsourcing, and moves to joint ventures

  

Any date after

grant date

   Canceled upon Termination, unless approval otherwise

All other Terminations

        Canceled upon Termination

 

(a) Restrictions and Terms.

 

  (i) The Award shall be held in escrow by the Company until the lapsing of
restrictions placed upon the Award. The Employee shall not have the right to
sell, transfer, assign, or otherwise dispose of Restricted Stock or Restricted
Stock Units granted in an Award until the escrow is terminated. Except as set
forth below, the Award shall be forfeited and the related Restricted Stock or
Restricted Stock Units canceled upon the Employee’s Termination of Employment
with the Company prior to the lapsing of restrictions. Restrictions shall lapse
on the Restricted Stock or Restricted Stock Units granted in an Award on the
third anniversary of the Grant Date. Upon the lapsing of restrictions, the
number of shares of unrestricted Stock equal to the number of shares of
Restricted Stock or Restricted Stock Units for which the restrictions have so
lapsed shall be registered in the Employee’s name, and the related shares of
Restricted Stock or Restricted Stock Units shall be canceled; provided, however,
that the Administrator may choose instead to issue any Restricted Stock with the
restrictions removed, rather than cancel such Restricted Stock and issue
unrestricted Stock; and further provided, however, that in places where it is
determined by the Administrator that payout in the form of unrestricted Stock is
prohibited by law, regulation, or decree, or where the cost of legal compliance
to issue the unrestricted Stock would be unreasonably expensive, the Fair Market
Value of such unrestricted Stock shall be paid in cash instead of settlement of
the Award in unrestricted Stock. Cash payouts are only permitted where such
legal restrictions exist. Settlement of the Award in unrestricted Stock or cash
payout, if any, shall be made upon the lapsing of restrictions on the Award,
but, in any event, shall be made no later than March 15 of the year following
the year in which such restrictions lapse.

 

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Exhibit 10.7

 

 

  (ii) Restricted Stock Units do not have any voting rights or other rights
generally associated with Stock, and are merely an obligation of the Company to
make settlement in accordance with the terms and conditions applicable to such
Restricted Stock Units. Restricted Stock Units granted to Employees who are
resident in the United States or the United Kingdom on the Grant Date shall
accrue a dividend equivalent at such times as an ordinary quarterly cash
dividend is paid on the Stock of the Company, which dividend equivalent shall be
paid in cash to the Employee to whom the Award was made. Restricted Stock Units
granted to Employees other than those described in the previous sentence shall
not accrue a dividend equivalent. Payment of a dividend equivalent, if any,
shall be made on the first day of the third month of each calendar quarter (or,
if the New York Stock Exchange is not open on such day, the first day that the
New York Stock Exchange is open thereafter), and, in any event, shall be made no
later than March 15 of the year following the year in which the ordinary
quarterly cash dividend is paid.

 

  (iii) When an Award is made of Restricted Stock, such Restricted Stock will be
held in escrow for the Employee to whom the Award is made. The Employee to whom
the Award is made will have all rights of ownership to such stock including, but
not limited to, voting rights and the right to receive dividends, except that
the Employee to whom the Award is made shall not have the right to sell,
transfer, assign, or otherwise dispose of such shares until the escrow is
terminated. The escrow shall end upon, and to the extent of, the lapsing of
restrictions.

 

(b) Termination of Employment.

 

  (i) General Rule for Termination. If, prior to the date on which restrictions
lapse in accordance with the schedule set forth in the Award, the Employee’s
employment with a Participating Company shall be terminated for any reason
except death, Disability, Retirement, or Layoff, any Restricted Stock or
Restricted Stock Units remaining in escrow pursuant to such Award shall be
canceled and all rights thereunder shall cease; provided, however, that the
Authorized Party may, in its or his sole discretion, determine that all or any
portion of an Award shall not be canceled due to Termination of Employment.

 

  (ii) Layoff Within Six Months. If, prior to a date six months from the date an
Award is granted, the Employee’s employment with a Participating Company shall
be terminated by reason of Layoff, such Award shall be canceled and all rights
thereunder shall cease.

 

  (iii) Layoff Within One Year. If, on or after a date six months from the date
an Award is granted but prior to a date one year from the date an Award is
granted, the Employee’s employment with a Participating Company shall be
terminated by reason of Layoff, the Employee shall retain a prorated number of
the Award shares or units granted. The number of Award shares or units retained
will be computed by multiplying the original number of Award shares or units
granted by a fraction, the numerator of which is the number of full months of
employment from the first day of the month in which the Award was granted until
the date the employee is terminated and the denominator of which is 12. Such
calculation shall be rounded down to the nearest whole share. In such case, the
restrictions on the prorated Award shall lapse on the date of Termination of the
Employee from the employ of the Company and its subsidiaries, and settlement
shall be made in accordance with the settlement provisions above.

 

  (iv) Layoff After One Year. If, on or after a date one year from the date an
Award is granted, the Employee’s employment with a Participating Company shall
be terminated by reason of Layoff, the Employee shall retain all rights provided
by the Award at the time of such Termination of Employment. In such case, the
restrictions on the Award shall lapse on the date of Termination of the Employee
from the employ of the Company and its subsidiaries, and settlement shall be
made in accordance with the settlement provisions above.

 

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Exhibit 10.7

 

 

  (v) Retirement After Six Months. If, on or after a date six months after the
Grant Date of an Award, the Employee’s employment with a Participating Company
shall be terminated by reason of Retirement, the Employee shall retain all
rights provided by the Award at the time of such Termination of Employment. In
such case, the restrictions on the Award shall lapse on the date of Termination
of the Employee from the employ of the Company and its subsidiaries, and
settlement shall be made in accordance with the settlement provisions above.

 

  (vi) Disability. If, after the date the Award is granted, an Employee shall
terminate employment following Disability of the Employee, the Employee shall
retain all rights provided by the Award at the time of such Termination of
Employment. In such case, the restrictions on the Award shall lapse on the date
of Termination of Employment from the employ of the Company and its
subsidiaries, and settlement shall be made in accordance with the settlement
provisions above.

 

  (vii) Death. If, after the date an Award is granted, a Employee shall die
while in the employ of a Participating Company, or after Termination of
Employment by reason of Retirement, Disability, or Layoff (and prior to the
cancellation of the Award), the executor or administrator of the estate of the
Employee or the person or persons to whom the Award shall have been validly
transferred by the executor or the administrator pursuant to will or the laws of
descent and distribution shall have the right to settlement of the Award to the
same extent the Employee would have, had the Employee not died. In such case,
the restrictions on the Award shall lapse upon the determination of death by the
Administrator, and settlement shall be made in accordance with the settlement
provisions above. No transfer of an Award, or of the unrestricted Stock or other
proceeds of an Award, by the Employee by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Administrator
shall have been furnished with written notice thereof and a copy of the will and
such other evidence as the Administrator may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of such Award.

 

  (viii) Transfers and Leaves. Transfer of employment between Participating
Companies shall not constitute Termination of Employment for the purpose of any
Award granted under the Program. Whether any leave of absence shall constitute
Termination of Employment for the purposes of any Award granted under the
Program shall be determined by the Administrator, in each case in accordance
with applicable law and by application of the policies and procedures adopted by
the Company in relation to such leave of absence.

 

  (ix) Divestiture, Outsourcing, or Move to Joint Venture. If, after the date
the Award is granted, a Employee ceases to be employed by Participating Company
as a result of (a) the outsourcing of a function, (b) the sale or transfer of
all or a portion of the equity interest of such Participating Company (removing
it from the controlled group of companies of which the Company is a part),
(c) the sale of all or substantially all of the assets of such Participating
Company to another employer outside of the controlled group of corporations
(whether the Employee is offered employment or accepts employment with the other
employer), (d) the Termination of the Employee by a Participating Company
followed by employment within a reasonable time with a company or other entity
in which the Company owns, directly or indirectly, at least a 50% interest,
prior to exercise of an Award, or (e) any other sale of assets determined by the
Authorized Party to be considered a divestiture under this program, the
Authorized Party may, in its or his sole discretion, determine that all or a
portion of any such Award shall not be canceled. In such cases, the restrictions
on the Award shall lapse on the date of Termination of the Employee from the
employ of the Company and its subsidiaries, and settlement shall be made in
accordance with the settlement provisions above.

 

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Exhibit 10.7

 

 

  (x) Change of Control. In the event of a Change of Control, as defined
hereafter, unless explicitly provided otherwise in the applicable Award
Agreement, all restrictions and other limitations applicable to any Restricted
Stock or Restricted Stock Units granted in any Award shall lapse. With regard to
such Restricted Stock, it shall become free of all restrictions and become fully
vested and transferable to the full extent of the original grant. With regard to
such Restricted Stock Units, the Employee shall be vested in the Restricted
Stock Units and the Restricted Stock Units shall be non-forfeitable upon the
Change of Control. Settlement in unrestricted Stock or cash shall be made at the
same times and upon the same events as it would otherwise have been made in
accordance with the settlement provisions above.

 

  (xi) Notwithstanding anything herein to the contrary, in the event that this
Award or the dividend equivalents associated with this Award are includible in
income pursuant to section 409A of the Internal Revenue Code, settlement of the
Award or any other distribution hereunder due to Separation from Service with
the Company and its subsidiaries shall not be made to a “specified employee” (as
that term is defined in section 409A(a)(2)(B)(i)) prior to six months after the
specified employee’s Separation from Service from the Company and its
subsidiaries (or, if earlier, the date of death of the specified employee).

 

(c) Detrimental Activities and Suspension of Award.

 

  (i) If the Authorized Party determines that, subsequent to the grant of any
Award, the Employee has engaged or is engaging in any activity which, in the
sole judgment of the Authorized Party, is or may be detrimental to the Company
or a subsidiary, the Authorized Party may cancel all or part of the Restricted
Stock or Restricted Stock Units held in escrow pursuant to the Award or Awards
granted to that Employee.

 

  (ii) If the Authorized Party, in its or his sole discretion, determines that
the lapsing of restrictions on Restricted Stock or Restricted Stock Units held
in escrow pursuant to any Award has the possibility of violating any law,
regulation, or decree pertaining to the Company or Employee, the Authorized
Party may freeze or suspend the Employee’s right to settlement or payout of the
Award until such time as the lapse of restrictions would no longer, in the sole
discretion of the Authorized Party, have the possibility of violating such law,
regulation, or decree.

 

  (iii) Notwithstanding anything herein to the contrary, any Award is subject to
forfeiture or recoupment, in whole or in part, under applicable law, including
the Sarbanes-Oxley Act and the Dodd-Frank Act.

 

4. Assignment of Award Upon Death. Rights under the Plans and this Agreement
cannot be assigned or transferred other than by (i) will or (ii) the laws of
descent and distribution.

 

5. Tax Withholding. In all cases the Employee will be responsible to pay all
required withholding taxes associated with an Award. Should a withholding tax
obligation arise with regard to an Award or the lapsing of restrictions on
Restricted Stock or Restricted Stock Units granted in an Award, the withholding
tax may be satisfied by withholding shares of Stock. The value of the shares of
Stock withheld for this purpose shall not exceed the minimum withholding amount
required by applicable laws and regulations. In cases where a withholding tax
obligation arises prior to the lapse of restrictions on Restricted Stock or
Restricted Stock Units granted in an Award, the withholding tax may be satisfied
instead by payment of cash by the Employee. Payment of cash shall not be allowed
unless the Employee has elected to make such payment by payroll withholding over
a period of six months following the date the obligation shall arise, which
election must be made within thirty days of the Grant Date of the relevant
Award. If any interest is required under local laws, regulations, or decrees to
be charged on or imputed against the payroll withholding, the Employee shall be
responsible for paying such interest, which shall

 

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Exhibit 10.7

 

  be withheld from pay over the same six-month period. In cases where payment by
payroll withholding cannot be made due to circumstances arising after the
election or where the Administrator has determined that such withholding would
violate any applicable law, regulation, or decree, shares of Stock shall be
withheld instead. When necessary, lapsing of restrictions may be accelerated by
the Authorized Party to the extent necessary to provide shares of Stock to
satisfy any withholding tax obligation. This withholding tax obligation
includes, but is not limited to, federal, state, and local taxes, including
applicable non-U.S. taxes such as U.K. PAYE.

 

6. Shareholder Rights for Restricted Stock Units. The Employee shall not have
the rights of a shareholder until the Restricted Stock Unit has been canceled
and ownership of shares of Stock has been transferred to the Employee. As
described above, the Company may pay dividend equivalents with regard to
Restricted Stock Units in certain circumstances.

 

7. Certain Adjustments. In the event certain corporate transactions,
recapitalizations, or stock splits occur while Restricted Stock or Restricted
Stock Units are outstanding, the Grant Price and the number of shares of
Restricted Stock or Restricted Stock Units shall be correspondingly adjusted.

 

8. Relationship to the Plan. In addition to the terms and conditions described
in this Agreement, Awards are subject to all other applicable provisions of the
Plan. The decisions of the Committee with respect to questions arising as to the
interpretation of the Plan or this Agreement and as to findings of fact, shall
be final, conclusive, and binding.

 

9. No Employment Guarantee. No provision of this Agreement shall confer any
right upon the Employee to continued employment with any Participating Company.

 

10. Governing Law. This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of Delaware.

 

11. Amendment. Without the consent of the Employee, this Agreement may be
amended or supplemented (i) to cure any ambiguity or to correct or supplement
any provision herein which may be defective or inconsistent with any other
provision herein, or (ii) to add to the covenants and agreements of the Company
for the benefit of an Employee or to add to the rights of an Employee or to
surrender any right or power reserved to or conferred upon the Company in this
Agreement, provided, in each case, that such changes or corrections shall not
adversely affect the rights of the Employee with respect to the grant of an
Award evidenced hereby without the Employee’s consent, or (iii) to make such
other changes as the Company, upon advice of counsel, determines are necessary
or advisable because of the adoption or promulgation of, or change in or of the
interpretation of, any law or governmental rule or regulation, including any
applicable federal or state securities or tax laws.

 

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Exhibit 10.7

 

DEFINITIONS

Capitalized terms not defined below shall have the meanings set forth in the
Plan.

Authorized Party means the person who is authorized to approve an Award,
exercise discretion or take action under the Administrative Procedure for the
Restricted Stock Program and pursuant to the Program. With regard to Senior
Officers, the Committee is the Authorized Party. With regard to other Employees,
the Chief Executive Officer, acting as the Special Equity Award Committee of the
Board of Directors of the Company, is the Authorized Party, although the
Committee may act concurrently as the Authorized Party.

Award means any Restricted Stock or Restricted Stock Units granted to an
Employee pursuant to such applicable terms, conditions, and limitations as the
Authorized Party may establish in order to fulfill the objectives of the
Program.

Change of Control has the meaning set forth in Attachment A to these Terms and
Conditions.

Committee means the Human Resources and Compensation Committee of the Board of
Directors of the Company, or any successor committee to it.

Company means ConocoPhillips, a Delaware corporation.

Disability means a disability for which the employee in question has been
determined to be entitled to either (i) benefits under the applicable plan of
long-term disability of the Company or its subsidiaries or (ii) disability
benefits under the Social Security Act. In the absence of any such
determination, the Authorized Party may make a determination that the employee
has a Disability.

Fair Market Value means, as of a particular date, the mean between the highest
and lowest sales price per share of such Stock on the consolidated transaction
reporting system for the principal national securities exchange on which shares
of Stock are listed on that date, or, if there shall have been no such sale so
reported on that date, on the next preceding date on which such a sale was so
reported, or, at the discretion of the Committee, the price prevailing on the
exchange at a designated time.

Grant Price means the Fair Market Value for one share of Stock as of the date of
the grant of an Award. Grant price is not adjusted for any restrictions
applicable to the Award.

Layoff means an applicable Termination of Employment due to layoff under the
ConocoPhillips Severance Pay Plan, the ConocoPhillips Executive Severance Plan,
or the ConocoPhillips Key Employee Change in Control Severance Plan, or layoff
or redundancy under any similar layoff or redundancy plan which the Company or
its subsidiaries may adopt from time to time. If all or any portion of the
benefits under the redundancy or layoff plan are contingent on the employee’s
signing a general release of liability, such Termination shall not be considered
as a “Layoff” for purposes of this Award unless the employee executes and does
not revoke a general release of liability, acceptable to the Company, under the
terms of such layoff or redundancy plan. In order to be considered a layoff for
purposes of this Award, the Termination of Employment must also be considered a
Separation from Service.

Participating Company includes ConocoPhillips and its 100% owned subsidiaries,
including both those directly owned and those owned through subsidiaries, whose
participation has been approved by the Authorized Party.

Restricted Stock means shares of Stock that have certain restrictions attached
to the ownership thereof.

Restricted Stock Unit means a unit equal to one share of Stock (as determined by
the Authorized Party) that is subject to forfeiture provisions or that has
certain restrictions attached to the ownership thereof.

 

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Exhibit 10.7

 

Retirement means Termination at age 55 or older with a minimum of 5 years
service with a Participating Company; provided, however, that with regard to an
Employee not on the United States payroll, the CEO may approve the use of a
different definition. Service is defined by the policies of the Participating
Company.

Senior Officer means the Chairman of the Board, the CEO, all other executive
officers of the Company (determined in accordance with the Company’s custom and
practice pursuant to section 16(b) of the Securities Exchange Act of 1934, as
amended), all other employees of the Company who report directly to the CEO and
whose salary grade is 23 or higher, and all other employees of the Company whose
salary grade is 26 or higher.

Separation from Service means “separation from service” as that term is used in
section 409A of the Internal Revenue Code.

Stock means shares of common stock of the Company, par value $.01. Stock may
also be referred to as “Common Stock.”

Termination and Termination of Employment mean cessation of employment with the
Participating Companies, determined in accordance with the policies and
practices of the Participating Company for whom the Employee was last performing
services.

 

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Exhibit 10.7

 

Attachment A

Change of Control

The following definitions apply to the Change of Control provision in Paragraph
10 of the Plan.

Affiliate shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect at the time
of determination.

Associate shall mean, with reference to any Person, (a) any corporation, firm,
partnership, association, unincorporated organization or other entity (other
than the Company or a subsidiary of the Company) of which such Person is an
officer or general partner (or officer or general partner of a general partner)
or is, directly or indirectly, the Beneficial Owner of 10% or more of any class
of equity securities, (b) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity and (c) any relative or spouse of such Person,
or any relative of such spouse, who has the same home as such Person.

Beneficial Owner shall mean, with reference to any securities, any Person if:

(a) such Person or any of such Person’s Affiliates and Associates, directly or
indirectly, is the “Beneficial Owner” of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in effect at the
time of determination) such securities or otherwise has the right to vote or
dispose of such securities;

(b) such Person or any of such Person’s Affiliates and Associates, directly or
indirectly, has the right or obligation to acquire such securities (whether such
right or obligation is exercisable or effective immediately or only after the
passage of time or the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to “beneficially own,” (i) securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or exchange
or (ii) securities issuable upon exercise of Exempt Rights; or

(c) such Person or any of such Person’s Affiliates or Associates (i) has any
agreement, arrangement or understanding (whether or not in writing) with any
other Person (or any Affiliate or Associate thereof) that beneficially owns such
securities for the purpose of acquiring, holding, voting (except as set forth in
the proviso to subsection (a) of this definition) or disposing of such
securities or (ii) is a member of a group (as that term is used in Rule 13d-5(b)
of the General Rules and Regulations under the Exchange Act) that includes any
other Person that beneficially owns such securities;

provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or to
beneficially own, any securities acquired through such Person’s participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes hereof, “voting” a security
shall include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for a
shareholder list, to call a shareholder meeting or to inspect corporate books
and records) or otherwise giving an authorization (within the meaning of
Section 14(a) of the Exchange Act) in respect of such security.

The terms beneficially own and beneficially owning shall have meanings that are
correlative to this definition of the term Beneficial Owner.

 

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Exhibit 10.7

 

Board shall have the meaning set forth in the foregoing Plan.

Change of Control shall mean any of the following occurring on or after May 11,
2011:

(a) any Person (other than an Exempt Person) shall become the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding or 20% or more of
the combined voting power of the Voting Stock of the Company then outstanding;
provided, however, that no Change of Control shall be deemed to occur for
purposes of this subsection (a) if such Person shall become a Beneficial Owner
of 20% or more of the shares of Common Stock or 20% or more of the combined
voting power of the Voting Stock of the Company solely as a result of (i) an
Exempt Transaction or (ii) an acquisition by a Person pursuant to a
reorganization, merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses (i), (ii) and
(iii) of subsection (c) of this definition are satisfied;

(b) individuals who, as of May 11, 2011, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to May 11,
2011 whose election, 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; provided, further, that there shall be excluded, for
this purpose, any such individual whose initial assumption of office occurs as a
result of any actual or threatened Election Contest that is subject to the
provisions of Rule 14a-11 of the General Rules and Regulations under the
Exchange Act;

(c) the Company shall consummate a reorganization, merger, or consolidation, in
each case, unless, following such reorganization, merger, or consolidation,
(i) 50% or more of the then outstanding shares of common stock of the
corporation, or common equity securities of an entity other than a corporation,
resulting from such reorganization, merger, or consolidation and the combined
voting power of the then outstanding Voting Stock of such corporation or other
entity are beneficially owned, directly or indirectly, by all or substantially
all of the Persons who were the Beneficial Owners of the outstanding Common
Stock immediately prior to such reorganization, merger, or consolidation in
substantially the same proportions as their ownership, immediately prior to such
reorganization, merger, or consolidation, of the outstanding Common Stock,
(ii) no Person (excluding any Exempt Person or any Person beneficially owning,
immediately prior to such reorganization, merger, or consolidation, directly or
indirectly, 20% or more of the Common Stock then outstanding or 20% or more of
the combined voting power of the Voting Stock of the Company then outstanding)
beneficially owns, directly or indirectly, 20% or more of the then outstanding
shares of common stock of the corporation, or common equity securities of an
entity other than a corporation, resulting from such reorganization, merger, or
consolidation or the combined voting power of the then outstanding Voting Stock
of such corporation or other entity, and (iii) at least a majority of the
members of the board of directors of the corporation, or the body which is most
analogous to the board of directors of a corporation if not a corporation,
resulting from such reorganization, merger, or consolidation were members of the
Incumbent Board at the time of the initial agreement or initial action by the
Board providing for such reorganization, merger, or consolidation; or

(d) (i) the shareholders of the Company shall approve a complete liquidation or
dissolution of the Company unless such liquidation or dissolution is approved as
part of a plan of liquidation and dissolution involving a sale or disposition of
all or substantially all of the assets of the Company to a corporation with
respect to which, following such sale or other disposition, all of the
requirements of clauses (ii)(A), (B), and (C) of this subsection (d) are
satisfied, or (ii) the Company shall consummate the sale or other disposition of
all or substantially all of the assets of the Company, other than to a
corporation or other entity, with respect to which, following such sale or other
disposition, (A) 50% or more of the then outstanding shares of common stock of
such corporation, or common

 

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Exhibit 10.7

 

equity securities of an entity other than a corporation, and the combined voting
power of the Voting Stock of such corporation or other entity is then
beneficially owned, directly or indirectly, by all or substantially all of the
Persons who were the Beneficial Owners of the outstanding Common Stock
immediately prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Common Stock, (B) no Person (excluding any
Exempt Person and any Person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, 20% or more of the Common Stock
then outstanding or 20% or more of the combined voting power of the Voting Stock
of the Company then outstanding) beneficially owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of such corporation, or
common equity securities of an entity other than a corporation, and the combined
voting power of the then outstanding Voting Stock of such corporation or other
entity, and (C) at least a majority of the members of the board of directors of
such corporation, or the body which is most analogous to the board of directors
of a corporation if not a corporation, were members of the Incumbent Board at
the time of the initial agreement or initial action of the Board providing for
such sale or other disposition of assets of the Company.

Common Stock shall have the meaning set forth in the foregoing Plan.

Company shall have the meaning set forth in the foregoing Plan.

Election Contest shall mean a solicitation of proxies of the kind described in
Rule 14a-12(c) under the Exchange Act.

Exchange Act shall mean the Securities Exchange Act of 1934, as amended.

Exempt Person shall mean any of the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any subsidiary of the Company, and any
Person organized, appointed or established by the Company for or pursuant to the
terms of any such plan.

Exempt Rights shall mean any rights to purchase shares of Common Stock or other
Voting Stock of the Company if at the time of the issuance thereof such rights
are not separable from such Common Stock or other Voting Stock (i.e., are not
transferable otherwise than in connection with a transfer of the underlying
Common Stock or other Voting Stock), except upon the occurrence of a
contingency, whether such rights exist as of May 11, 2011 or are thereafter
issued by the Company as a dividend on shares of Common Stock or other Voting
Securities or otherwise.

Exempt Transaction shall mean an increase in the percentage of the outstanding
shares of Common Stock or the percentage of the combined voting power of the
outstanding Voting Stock of the Company beneficially owned by any Person solely
as a result of a reduction in the number of shares of Common Stock then
outstanding due to the repurchase of Common Stock or Voting Stock by the
Company, unless and until such time as (a) such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial Owner
of additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or additional Voting Stock representing 1% or
more of the combined voting power of the then outstanding Voting Stock, or
(b) any other Person (or Persons) who is (or collectively are) the Beneficial
Owner of shares of Common Stock constituting 1% or more of the then outstanding
shares of Common Stock or Voting Stock representing 1% or more of the combined
voting power of the then outstanding Voting Stock shall become an Affiliate or
Associate of such Person.

Person shall mean any individual, firm, corporation, partnership, association,
trust, unincorporated organization or other entity.

Voting Stock shall mean, (1) with respect to a corporation, all securities of
such corporation of any class or series that are entitled to vote generally in
the election of, or to appoint by contract, directors

 

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Exhibit 10.7

 

of such corporation (excluding any class or series that would be entitled so to
vote by reason of the occurrence of any contingency, so long as such contingency
has not occurred) and (ii) with respect to an entity which is not a corporation,
all securities of any class or series that are entitled to vote generally in the
election of, or to appoint by contract, members of the body which is most
analogous to the board of directors of a corporation.

 

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