Exhibit 10(iii)(g.1)

 

1995 MOBIL INCENTIVE COMPENSATION AND STOCK OWNERSHIP PLAN

 

ARTICLE I—PURPOSE OF THE PLAN

 

The purpose of the Mobil Incentive Compensation and Stock Ownership Plan is to
promote the creation of shareholder value by encouraging, recognizing and
rewarding sustained outstanding corporate, division, business unit and
individual performance by key Employees of Mobil Corporation and Affiliated
Corporations who are largely responsible for the management, growth and
protection of the business. The Plan in addition provides part of a competitive
total compensation package to attract and retain key Employees.

 

The components of the Plan include the Short-Term Incentive Program, the
Long-Term Incentive Program and the Stock Ownership Program. The purpose of the
Short-Term Incentive Program is to base a portion of key Employees’ total annual
compensation on the performance of the Corporation compared to the performance
of other companies selected by the Committee, with the intention that the key
Employees will receive total compensation that is above the average for
comparable positions paid by such other companies when the Corporation’s
comparative performance is above average; total compensation that is equal to
the average for comparable positions paid by these companies when the
Corporation’s comparative performance is average; and total compensation that is
below the average for comparable positions when the Corporation’s comparative
performance is below average. The Long-Term Incentive Program provides rewards,
based on the performance of the Corporation over a longer term, to those key
Employees who have the potential to contribute significantly to the long-term
growth and success of the Corporation. These awards are denominated in
hypothetical stock or in the form of Restricted Stock, which serves to align the
interests of these key Employees with the interests of shareholders. The purpose
of the Stock Ownership Program is to provide long- term incentive, designed to
encourage Stock ownership by key Employees, thereby directly aligning their
financial interests with those of shareholders. Key Employees receive Stock
Options, which provide them an opportunity to increase their ownership of Stock,
and the Committee is expected to develop guidelines to encourage key Employees
to take advantage of the program to acquire and hold Stock.

 

ARTICLE II—DEFINITIONS

 

“Adjusted Net Income” with respect to any fiscal year of the Corporation means
the amount reported as net income in the Income Statement for such year,
adjusted to exclude any of the following items:

 

(a) extraordinary items (as described in Accounting Principles Board Opinion
No. 30);

 

(b) gains or losses on the disposition of discontinued operations of a segment
of the business; and

 

(c) the cumulative effect of changes in accounting principles.

 

“Affiliated Corporation” means any stock corporation of which a majority of the
voting common or capital stock is owned directly or indirectly by the
Corporation.

 

“Allotment” means a number of Stock Equivalents granted pursuant to
Section 5.3(a).

 

“Allotment Supplement” means a number of Stock Equivalents credited with respect
to an Allotment pursuant to Section 5.3(b).

 

“Authorized Share Pool” for any calendar year during any part of which this Plan
is in effect means nine tenths of one percent (0.9%) of the total issued and
outstanding shares of Stock as of December 31 of the preceding year, cumulative
from the effective date of the Plan, subject to adjustment pursuant to Article
IX.

 

“Award” means a Short-Term Incentive Award or a Long-Term Incentive Award
granted under Article V or an Option granted under Article VI. Awards granted
that are to be paid upon full satisfaction of any applicable conditions are
provisional Awards and are forfeitable until such conditions are satisfied. An
Award is non-forfeitable if the only condition to its payment is passage of
time.

 

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“Award Date” means the date an Award is granted.

 

“Board” means the Board of Directors of the Corporation.

 

“Chief Executive Officer” means the Employee of the Corporation acting in such
capacity.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.
Reference to a specific provision of the Code shall include such provision and
any regulation or ruling promulgated thereunder.

 

“Committee” means the Management Compensation and Organization Committee of the
Board or such other committee as may be designated by the Board to administer
the Plan.

 

“Corporation” means Mobil Corporation, a Delaware corporation, or its successor.

 

“Dividend Equivalent” means, in respect of one Stock Equivalent, an amount equal
to the amount of the dividend that would be payable on any Dividend Payment Date
with respect to one share of Stock.

 

“Dividend Payment Date” means a date on which dividends are paid with respect to
Stock.

 

“Employee” means any person who is a regular full time employee of the
Corporation or an Affiliated Corporation, including such employees who are
officers or directors of the Corporation. In the discretion of the Committee,
the term may include persons who at the request of the Corporation or any
Affiliated Corporation accept employment with any company in which the
Corporation directly or indirectly has a substantial interest.

 

“Fair Market Value” of Stock is the mean between the highest and lowest quoted
selling price of Stock on the New York Stock Exchange or, in the discretion of
the Committee, as reported by a recognized central market reporting system on
the date an Award is granted or on any other date the value of Stock is to be
determined, provided that (i) if no sales of Stock shall have been so made on
such Exchange or so reported by such central market reporting system on such
date, or (ii) if in the opinion of the Committee insufficient sales shall have
been made on such date to constitute a representative market, then Fair Market
Value shall be determined by taking a weighted average of the means between the
highest and lowest sales prices on the nearest representative trading dates
before and after the valuation date. The average is to be weighted inversely by
the respective numbers of trading days between the trading dates and the
valuation date.

 

“Incentive Award” means a Short-Term Incentive Award or a Long-Term Incentive
Award.

 

“Income Statement” with respect to any fiscal year of the Corporation means the
consolidated statement of income and the accompanying notes to financial
statements for such year included in the Corporation’s annual report to
shareholders.

 

“Long-Term Incentive Award” means an Award granted pursuant to Section 5.3.

 

“Named Executive Officer” means an Employee described in Section 162(m)(3) of
the Code for the year an Incentive Award is granted.

 

“Non-Qualified Option” means an Option granted under Article VI which is not a
Qualified Option.

 

“Option” means an Award granted under Article VI in the form of a right to
purchase Stock evidenced by an instrument containing such provisions as the
Committee may establish.

 

“Performance Cycle” means any period, beginning not earlier than January 1,
1995, of four successive calendar years.

 

“Performance Measure” means such measure or indicator of the performance of the
Corporation, an Affiliated Corporation, any division, department or identifiable
segment thereof, or of any individual recipient of an Award as may be set forth
herein or established from time to time by the Committee.

 

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“Plan” means this 1995 Mobil Incentive Compensation and Stock Ownership Plan.

 

“Prior Plan” means the 1991 Mobil Incentive Compensation and Stock Option Plan.

 

“Qualified Option” means an option granted under Article VI which is designated
by the Committee as a Qualified Option and for which the Code provides for
either or both deferral of taxation on exercise or a lower effective rate of tax
on recognition of gain than would be available in respect of a Non-Qualified
Option.

 

“Restricted Stock” means Stock which bears such restrictive endorsements as the
Committee, in its discretion, shall deem appropriate and necessary to carry out
the purpose of this Plan.

 

“Short-Term Incentive Award” means an Award granted pursuant to Section 5.2.

 

“Special Item” with respect to any fiscal year of the Corporation means each
item in excess of $10 million after tax that is reflected in the Corporation’s
Adjusted Net Income for such year and is recorded in accordance with generally
accepted accounting principles in one of the following categories:

 

  (a)   Gains or losses on asset sales or dispositions;

 

  (b)   Asset write downs;

 

  (c)   Litigation or claim judgments or settlements;

 

  (d)   Accruals for environmental obligations;

 

  (e)   Effect of changes in tax law or rate on deferred tax liabilities;

 

  (f)   Accruals for restructuring programs; and

 

  (g)   Catastrophic property losses.

 

“Stock” means the publicly traded common stock of the Corporation or any
successor, including any adjustments in the event of changes in capital
structure of the type described in Article IX.

 

“Stock Equivalent” means a hypothetical share of Stock credited to an Employee
having a value at any time equal to the Fair Market Value of an actual share of
Stock at that time. Stock Equivalents may be recorded in full shares only or in
full and fractional shares pursuant to such rules as the Committee shall
prescribe.

 

ARTICLE III—ADMINISTRATION OF THE PLAN

 

3.1 COMPOSITION OF COMMITTEE

 

This Plan shall be administered by the Committee which shall be composed of not
less than four members of the Board as may be designated by the Board; provided
that the Committee shall not include any individual who (a) is an officer or
employee of the Corporation or any Affiliated Corporation; (b) is a former
officer of the Corporation or any Affiliated Corporation; (c) is a former
employee of the Corporation or any Affiliated Corporation who receives
compensation for prior service (other than benefits under a tax-qualified
retirement plan) during the taxable year in which such individual serves on the
Committee; (d) is not an outside director as defined under Section 162(m) of the
Code; or (e) has been eligible to receive Awards under this Plan or the Prior
Plan at any time within the 12-month period immediately prior to service as a
member of the Committee; provided that the restrictions set out in clause
(d) shall not apply prior to the annual meeting of shareholders of the
Corporation in 1996 (or such later date as may be permitted under Section 162(m)
of the Code). The Board may designate alternate members of the Committee from
eligible Board members to act in the place and stead of any absent member of the
Committee.

 

3.2 QUORUM

 

A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all of the members in the absence of a meeting,
shall be the acts of the Committee. Any one or more members of the Committee may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all

 

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persons participating in the meeting can hear and speak to each other.
Participation by such means shall constitute presence in person at such meeting.

 

3.3 POWERS

 

The Committee shall have full and final authority to operate, manage and
administer the Plan on behalf of the Corporation. This authority includes, but
is not limited to:

 

(a) The power to grant Awards conditionally or unconditionally, subject to any
applicable limitations in this Plan,

 

(b) The power to establish Performance Measures upon which Awards shall be
based; provided that any changes to the Performance Measures applicable to Named
Executive Officers set forth in Article V shall be subject to approval by a
separate vote of the shareholders of the Corporation,

 

(c) The power to make the certification referred to in Section 3.4(b),

 

(d) The power to reduce the amount of any Award (other than an Award that has
become non-forfeitable),

 

(e) The power to determine whether Incentive Awards shall be expressed in United
States currency, shares of Stock, Restricted Stock, or any combination thereof,

 

(f) The power to prescribe the form or forms of the instruments evidencing
Awards granted under this Plan,

 

(g) The power to pay and to defer payment of Incentive Awards which have become
non-forfeitable,

 

(h) The power to direct the Corporation to make the conversions, accruals and
payments provided for by the Plan,

 

(i) The power to interpret the Plan and to make any determination of fact
incident to the operation of the Plan,

 

(j) The power to provide regulations for the operation of the various features
of the Plan, and otherwise to prescribe regulations for the interpretation,
management and administration of the Plan,

 

(k) The power to delegate responsibility for Plan operation, management and
administration on such terms, consistent with the Plan, as the Committee may
establish,

 

(l) The power to delegate to other persons the responsibility of performing
ministerial acts in furtherance of the Plan’s purpose, and

 

(m) The power to engage the services of persons, companies, or organizations,
including but not limited to banks, insurance companies, brokerage firms, and
consultants, in furtherance of the Plan’s purpose.

 

3.4 CERTIFICATION

 

No Short-Term Incentive Award or Long-Term Incentive Award will be paid to a
Named Executive Officer unless the Committee has certified in writing (which
writing may include approved minutes of a meeting of the Committee) that the
Adjusted Net Income and Special Items, or the average of the Adjusted Net Income
amounts for the years included in a Performance Cycle, as the case may be, was
equal to or in excess of the amount required for the granting of such Award
hereunder.

 

3.5 COMMUNICATION OF AWARDS

 

The Committee shall timely communicate in writing to each Employee to whom an
Award is granted in accordance with this Plan a description of such Award,
including the terms and any conditions of its payment.

 

3.6 ACCOUNTS

 

(a) For the purpose of accounting for provisional Awards and non-forfeitable
Awards deferred as to payment, the Corporation shall establish bookkeeping
accounts bearing the name of each Employee receiving such Awards. Except as
provided below, each account shall be unfunded, and shall not be a trust for the
benefit of the Employee; the existence of such accounts shall not give any
Employee any rights superior to those of unsecured general creditors of the
Corporation.

 

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(b) With respect to non-forfeitable Awards, payment of which is deferred, the
Committee may, in its discretion, direct the Corporation:

 

(i) To pay an amount equal to such Award to a trustee or fiduciary in trust for
the benefit of one or more Employees, as the Committee may designate, with
instructions to provide for the investment thereof during any period of
deferment; or

 

(ii) To allocate an amount equal to such Award to an investment manager (who
may, but need not, be an Employee of the Corporation or an Affiliated
Corporation) with instructions to provide for the investment thereof during the
period of deferment either in the discretion of such manager or one or more
designated investment advisors.

 

ARTICLE IV—ELIGIBILITY

 

4.1 ELIGIBLE EMPLOYEES

 

Awards will be granted only to key Employees described in Article I, selected or
determined by (or pursuant to delegation of authority from) the Committee in its
sole discretion. An Incentive Award may be granted within a reasonable period
after an employee’s termination of service and such Incentive Award shall be
deemed granted to an Employee. Neither the members of the Committee nor any
member of the Board who is not an Employee shall be eligible to receive an
Award. In lieu of determining individual Employees to whom Awards may be granted
and the amounts of such Awards, the Committee may in its discretion from time to
time authorize such determinations with respect to Employees other than Named
Executive Officers to be made by the Chief Executive Officer or by senior
management of the divisions, departments or other identifiable segments of the
Corporation or of Affiliated Corporations or their divisions, departments or
other identifiable segments, provided that such determinations shall be made in
accordance with such rules, regulations and guidance as the Committee shall
prescribe. Named Executive Officers, other Officers of the Corporation,
Directors who are Employees and other Employees to whom the Committee delegates
final authority to determine Awards under the Plan are eligible only for Awards
granted directly by the Committee.

 

4.2 RELEVANT FACTORS

 

In selecting individual Employees to whom Awards shall be granted at any time,
as well as in determining the amount, type, terms and conditions of any Award,
the Committee (or as authorized, its representative) shall weigh such factors as
are relevant to accomplish the purpose of the Plan as stated in Article I. No
Employee shall be eligible for the grant of any Option under the Plan if at the
time of grant the Employee, directly or indirectly, owns Stock possessing more
than 5% of the combined voting power of all classes of Stock of the Corporation
and its Affiliated Corporations. No Named Executive Officer shall be eligible
for the grant of any Award that would cause the applicable amounts in Articles V
or VI to be exceeded.

 

ARTICLE V—INCENTIVE AWARDS

 

5.1 PROVISIONAL AND NON-FORFEITABLE INCENTIVE AWARDS

 

The Committee may in its discretion grant Incentive Awards that are provisional
or non-forfeitable in accordance with such criteria, at such intervals, in such
form and upon such conditions as the Committee may establish, subject to the
limitations set forth in this Plan. Incentive Awards, whether provisional or
non-forfeitable, may be expressed in United States currency, shares of Stock,
shares of Restricted Stock or any combination thereof, and upon satisfaction of
the relevant conditions, if any, may be paid or distributed currently, deferred
for payment at a later date, or paid in part currently and in part at a later
date, all as the Committee in its discretion shall determine.

 

5.2 SHORT-TERM INCENTIVE AWARDS

 

The Committee in its sole discretion may grant or approve Short-Term Incentive
Awards to Employees from time to time. The amounts of such Awards shall be
determined on the basis of such Performance Measures as the Committee shall
establish from time to time. In the case of Named Executive Officers, the
Performance Measure for Short-Term Incentive Awards shall be the Adjusted Net
Income for the year prior to the year in which any such Award is granted,
further adjusted to exclude the effects of any Special Items for such year.

 

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The amount of the Short-Term Incentive Award for any year to a Named Executive
Officer who is the Chief Executive Officer shall be 0.1% of such Performance
Measure, and the amount of the Short-Term Incentive Award for any year to any
other Named Executive Officer shall be 0.0375% of such Performance Measure, in
each case subject to reduction pursuant to Section 5.4.

 

5.3 LONG-TERM INCENTIVE AWARDS

 

(a) The Committee in its sole discretion may grant Allotments comprised of a
specified number of Stock Equivalents to Employees from time to time. Each
Allotment shall be granted during the first year of, and shall be in respect of,
a Performance Cycle and shall remain provisional until the Committee grants or
determines not to grant a Long-Term Incentive Award in respect of such Allotment
pursuant to Section 5.3(c). The maximum number of Stock Equivalents that may
comprise Allotments granted at any time during any calendar year during any part
of which this Plan is in effect shall be the number of shares of Stock in the
Authorized Share Pool for such calendar year reduced by:

 

(i) the number of shares of Stock upon which Options have theretofore been
granted pursuant to Section 6.2 during such calendar year;

 

(ii) the number of Stock Equivalents comprising Allotments that have theretofore
been granted pursuant to this Section 5.3(a) during such calendar year;

 

(iii) the number of Stock Equivalents comprising Allotment Supplements that have
theretofore been credited pursuant to Section 5.3(b) during such calendar year
or are reasonably estimated to be so credited during the remainder of such
calendar year; and

 

(iv) the number of shares of Restricted Stock, if any, that have theretofore
been awarded pursuant to Section 5.3(d) during such calendar year.

 

(b) On each Dividend Payment Date after the Award Date of any Allotment, an
Allotment Supplement shall be credited in respect of such Allotment and any
Allotment Supplements theretofore credited pursuant to this Section 5.3(b) in
respect of such Allotment. The number of Stock Equivalents that shall comprise
an Allotment Supplement shall be determined by dividing (i) the Dividend
Equivalents in respect of the number of Stock Equivalents that comprise such
Allotment and any Allotment Supplements theretofore credited pursuant to this
Section 5.3(b) in respect of such Allotment by (ii) the Fair Market Value of a
share of Stock on the Dividend Payment Date.

 

(c) After the end of each Performance Cycle, all Stock Equivalents that comprise
an Allotment in respect of such Performance Cycle and all Allotment Supplements
theretofore credited in respect of such Allotment shall be converted to a
Long-Term Incentive Award in an amount, if any, to be based on Performance
Measures established by the Committee from time to time. In the case of each
Named Executive Officer, the Performance Measure shall be Adjusted Net Income,
and the amount of the Long-Term Incentive Award granted to each such Officer in
respect of a Performance Cycle, irrespective of the number of Stock Equivalents
credited to the account of such Officer in respect of such Performance Cycle,
shall be 0.2% of the average of the Adjusted Net Income for each of the four
years of such Performance Cycle, subject to reduction pursuant to Section 5.4.

 

(d) In addition to the Long-Term Incentive Awards described in Sections 5.3(a),
(b) and (c), the Committee in its sole discretion may grant Long-Term Incentive
Awards in the form of Restricted Stock to such Employees as it shall identify as
having extraordinary potential to make a long-term contribution to the success
of the Corporation. The maximum number of shares of Restricted Stock that can be
the subject of any such grant shall be 10,000, subject to adjustment in
accordance with Article IX. No Award may be made pursuant to this Section 5.3(d)
to any person who at the time of the Award holds Restricted Stock granted
pursuant to this Section 5.3(d) as to which all restrictions applicable to such
Restricted Stock have not lapsed. The foregoing determination as to whether
restrictions have lapsed shall be made without regard to any potential or actual
modification of such restrictions after the original grant date. The maximum
number of shares of Restricted Stock that may be granted at any time during any
calendar year during any part of which this Plan is in effect shall be the
number of shares in the Authorized Share Pool for such calendar year reduced by:

 

(i) the number of shares of Stock upon which Options have theretofore been
granted pursuant to Section 6.2 during such calendar year;

 

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(ii) the number of Stock Equivalents comprising Allotments that have theretofore
been granted pursuant to Section 5.3(a) during such calendar year;

 

(iii) the number of Stock Equivalents comprising Allotment Supplements that have
theretofore been credited pursuant to Section 5.3(b) during such calendar year
or are reasonably expected to be so credited during the remainder of such
calendar year; and

 

(iv) the number of shares of Restricted Stock that have theretofore been awarded
pursuant to this Section 5.3(d) during such calendar year.

 

5.4 REDUCTION OF AWARDS

 

(a) The Committee in its sole discretion may, but shall not be required to,
reduce the amount of, or not grant, any Short-Term Incentive Award or any Long-
Term Incentive Award that could otherwise be granted, based on such Performance
Measures or other considerations as it deems appropriate.

 

(b) No Short-Term Incentive Award or Long-Term Incentive Award that could
otherwise be granted shall be granted if no dividend has been paid to holders of
Stock in the preceding 12 months. Allotments or Allotment Supplements with
respect to which Long-Term Incentive Awards are prohibited by the preceding
sentence shall be cancelled.

 

5.5 DEATH OF EMPLOYEE

 

Any provisional Incentive Award shall be cancelled upon death of the Employee
during the provisional period except as the Committee may otherwise provide. If
a provisional Incentive Award is cancelled by reason of the death of the
Employee, the Committee may authorize an alternative disposition in its
discretion.

 

5.6 DEFERRAL OF INCENTIVE AWARDS

 

The Committee may, in its sole discretion, permit or require deferral of payment
of any Incentive Award, subject to such terms, conditions, rules and regulations
as the Committee shall prescribe. Deferred Incentive Awards may be denominated
in Stock Equivalents or such other units as the Committee shall prescribe. Where
a deferred Incentive Award is denominated in Stock Equivalents, each such Stock
Equivalent shall be valued at an amount equal to the Fair Market Value of a
share of Stock on the date that payment would have been due but for the deferral
(or the Fair Market Value of a share of Stock averaged over such dates as the
Committee shall establish from time to time). An account bearing the name of the
Employee as provided in Section 3.6 shall be credited with the number of Stock
Equivalents determined on the basis of such value. Each such account shall also
be credited on each Dividend Payment Date with an amount of Dividend Equivalents
in respect of the Stock Equivalents in the account. Dividend Equivalents may, in
the discretion of the Committee, be disbursed in cash to the Employee to whose
account they have been credited or accumulated in such account in the form of
additional Stock Equivalents based on the Fair Market Value of a share of Stock
on the Dividend Payment Date. Stock Equivalents resulting from deferral of
Incentive Awards shall not be charged against any Authorized Share Pool.

 

5.7 PAYMENT OF INCENTIVE AWARDS

 

Payment of Incentive Awards shall be made, in the sole discretion of the
Committee, in cash, Stock, Restricted Stock, or any combination of cash, Stock
and Restricted Stock; provided that the Committee may prescribe by regulation
circumstances in which amounts payable to any person who is or was a director or
officer subject to Section 16 of the Securities Exchange Act of 1934 shall be
paid solely in cash.

 

ARTICLE VI—STOCK OPTION AWARDS

 

6.1 NUMBER OF SHARES

 

The maximum number of shares of Stock upon which Options may be granted at any
time during any calendar year during any part of which this Plan is in effect
shall be the number of shares in the Authorized Share Pool for such calendar
year reduced by:

 

(a) the number of shares of Stock upon which Options have theretofore been
granted pursuant to Section 6.2 during such calendar year;

 

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(b) the number of Stock Equivalents comprising Allotments that have theretofore
been granted pursuant to Section 5.3(a) during such calendar year;

 

(c) the number of Stock Equivalents comprising Allotment Supplements that have
theretofore been credited pursuant to Section 5.3(b) during such calendar year
or are reasonably estimated to be so credited during the remainder of such
calendar year; and

 

(d) the number of shares of Restricted Stock that have theretofore been awarded
pursuant to Section 5.3.(d) during such calendar year.

 

Of the shares of Stock upon which Options may be granted in any year pursuant to
the foregoing sentence, no more than 2,000,000 shares (subject to adjustment
pursuant to Article IX) per year, cumulative from the effective date of the
Plan, shall be available for the grant of Incentive Stock Options.

 

6.2 OPTION GRANTS

 

The Committee in its sole discretion may from time to time grant Options on such
terms and subject to such conditions as it shall deem appropriate, subject to
the applicable provisions of this Plan; provided that the maximum number of
shares of Stock upon which Options may be granted to any Employee in any
calendar year shall be 150,000, subject to adjustment as provided in Article IX.
As to each Option, the Committee shall have full and final authority in its
discretion: (a) to determine whether the same shall be a Qualified Option or a
Non-Qualified Option or both, (b) to determine the number of shares of Stock
subject to each Option, subject to the limit set forth in the immediately
preceding sentence, (c) to determine the purchase price of the shares of Stock
subject to each Option (the “Option Price”), which price shall be not less than
the minimum price specified in Section 6.4, and (d) to determine the time or
times when each Option shall become exercisable and the duration of the exercise
period, which period shall not exceed the maximum period specified in
Section 6.3.

 

6.3 TERM OF OPTIONS

 

The full term of each Option granted hereunder shall be for such period as the
Committee shall determine, but not for more than ten years from the date of
granting thereof. Each Option shall be subject to earlier termination as
provided in Sections 6.8 and 6.9.

 

6.4 OPTION PRICE

 

The Option Price shall be determined by the Committee at the time any Option is
granted and shall be not less than 100 percent of the Fair Market Value of the
shares covered thereby at the time the Option is granted (but in no event less
than par value).

 

6.5 NON-TRANSFERABILITY OF OPTIONS

 

No Option granted under this Plan shall be transferable by the grantee otherwise
than by will or the laws of descent and distribution, and such Option may be
exercised during the grantee’s lifetime only by the grantee; provided that the
Committee may in its sole discretion provide in the instrument evidencing any
Non-Qualified Option any terms and conditions upon which such Non-Qualified
Option may be transferred if the Committee determines, based upon such advice of
counsel (which may be counsel to the Corporation) as it deems appropriate, that
a Registration Statement under the Securities Act of 1933 is in effect, or an
exemption from the requirements for such a Registration Statement exists, for
each of (a) the transfer of such Non-Qualified Option; (b) the issuance of Stock
to the transferee of the Non-Qualified Option upon exercise of the Non-Qualified
Option; and (c) any sale by the transferee of the Option of Stock issued to such
transferee upon exercise of the Non-Qualified Option.

 

6.6 INCENTIVE STOCK OPTIONS

 

Any Option issued hereunder which is intended to qualify as an “incentive stock
option” as described in Section 422 of the Code (an “ISO”) shall be subject to
the limitations or requirements as may be necessary for the purposes of
Section 422 of the Code to the extent and in such form as determined by the
Committee in its discretion.

 

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6.7 EXERCISE OF OPTIONS

 

Each Option granted under this Plan shall be exercisable on such date or dates
and during such period and for such number of shares as shall be determined
pursuant to the provisions of the instrument evidencing such Option. A person
electing to exercise an Option shall give written notice to the Corporation or
its agent of such election and of the number of shares he or she has elected to
purchase and shall at the time of exercise tender the full purchase price of the
shares he or she has elected to purchase plus any required withholding taxes.
Until a certificate or certificates for the shares so purchased has been issued
to, or for the benefit of, such person, or until an entry in lieu of such a
certificate is made on the stock books of the Corporation, he or she shall
possess no rights of a record holder with respect to any of such shares. The
purchase price may be paid in cash, by certified check or in shares of Stock
(excluding fractional shares) or any combination thereof. Shares of Stock
delivered in payment of the purchase price shall be valued at the Fair Market
Value of such shares on the date of exercise of the Option. The shares to be
delivered upon exercise of Options under this Plan shall be made available, at
the discretion of the Board, either from authorized but unissued shares or from
previously issued and reacquired shares of Stock held by the Corporation as
treasury shares, including shares purchased in the open market.

 

6.8 OPTION UNAFFECTED BY CHANGE IN DUTIES

 

No Option shall be affected by any change of duties or position of the optionee
(including transfer to or from an Affiliated Corporation), so long as he or she
continues to be an Employee. If an optionee shall cease to be an Employee for
any reason other than death, such Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which have accrued as of the date of
such cessation; provided that (i) the Committee may provide in the instrument
evidencing any Option that the Committee may in its absolute discretion, upon
any such cessation of employment, determine (but be under no obligation to
determine) that such accrued purchase rights shall be deemed to include
additional shares covered by such Option and (ii) unless the Committee shall
otherwise provide in the instrument evidencing any Option, upon any such
cessation of employment, such remaining rights to purchase shall in any event
terminate upon the expiration of the original term of the Option where such
cessation of employment is on account of retirement under a Corporation
sponsored retirement plan on or after the Employee attains age sixty, on account
of long-term disability, or on account of any other reason specified by the
Committee, or its delegate, for the purpose of making this clause applicable,
and otherwise, upon the expiration of three months from such date of
termination, but in no event later than the expiration of the original term of
the Option.

 

6.9 DEATH OF OPTIONEE

 

Should an optionee die while in possession of the legal right to exercise an
Option or Options under this Plan, such person (the “personal representative”)
as shall have acquired, by will or by the laws of descent and distribution, the
right to exercise any Option theretofore granted may exercise such Option (i) at
any time up to the expiration of the original term of the Option in the
following cases: (a) where the optionee was an Employee on the date of death and
(b) where the optionee was not an Employee on the date of death and his or her
employment ceased on account of retirement under a Corporation sponsored plan on
or after the Employee attained age sixty, on account of long term disability, or
on account of any other reason specifically approved by the Committee or its
delegate for the purpose of making this clause applicable; or (ii) at any time
prior to one year from the date of death where the optionee was not an Employee
on the date of death and his or her employment ceased on account of a cause
other than those specified in clause (i)(b) above, provided that such Option
shall expire in all events no later than the last day of the original term of
such Option, and provided further, that any such exercise shall be limited to
the purchase rights which have accrued as of the date when the optionee ceased
to be such an Employee, whether by death or otherwise, provided further,
however, that the Committee may provide in the instrument evidencing any Option
that all shares covered by such Option shall become subject to purchase
immediately upon the death of the optionee.

 

ARTICLE VII—BENEFITS PLANS

 

Incentive Awards, Awards of Restricted Stock and Awards of Options under the
Plan are discretionary and are additional to and not a part of regular salary.
Incentive Awards, Awards of Restricted Stock and Awards of Options may not be
used in determining the amount of compensation for any purpose under the benefit
plans of the Corporation, or an Affiliated Corporation, except (1) an Incentive
Award made to an

 

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Employee may be used in determining the amount of compensation for the purpose
of any retirement or life insurance plan of the Corporation and its Affiliated
Corporations to the extent provided from time to time in such plan, and (2) as
the Committee may otherwise from time to time expressly provide.

 

ARTICLE VIII—AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

 

The Board may suspend the Plan or any part thereof at any time or may terminate
the Plan in its entirety. Awards shall not be granted under any part of the Plan
affected by a suspension, nor shall Awards be granted after Plan termination.

 

The Board may also amend the Plan from time to time, except that amendments
which affect the following subjects must be approved by shareholders of the
Corporation:

 

(a) The qualifications for eligibility to become or remain a member of the
Committee;

 

(b) The Performance Measures and the amounts of the Short-Term Incentive Awards
and the Long-Term Incentive Awards for Named Executive Officers;

 

(c) Except as provided in Article IX relating to capital changes, the number of
shares in the Authorized Share Pool for any calendar year, the maximum number of
shares of Stock upon which Options may be granted to any person in any calendar
year and the maximum number of shares of Restricted Stock that may be awarded to
any person pursuant to Section 5.3(d);

 

(d) The maximum term of Options granted;

 

(e) The minimum Option Price;

 

(f) The term of the Plan;

 

(g) The requirements as to eligibility for participation in the Plan;

 

(h) The prohibition against granting Awards to a member of the Committee; and

 

(i) The provision requiring that Employees to whom the Committee has delegated
final authority to determine Awards under the Plan are eligible only for Awards
granted directly by the Committee.

 

Awards granted prior to suspension or termination of the Plan may not be
cancelled solely because of such suspension or termination, except with the
consent of the grantee of the Award.

 

ARTICLE IX—CHANGES IN CAPITAL STRUCTURE

 

Stock, Stock Equivalents, Restricted Stock and the instruments evidencing
Options granted hereunder shall be subject to adjustments in the event of
changes in the outstanding stock of the Corporation by reason of Stock
dividends, Stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of an Award to the same extent as would
affect an actual share of Stock issued and outstanding on the effective date of
such change. In the event of any such change, the aggregate number and classes
of shares comprising the Authorized Share Pool for the calendar year in which
such change occurs, the number of shares upon which Options may thereafter be
granted to any person pursuant to Section 6.2, and the number of shares of
Restricted Stock that may thereafter be awarded to any person pursuant to
Section 5.3(d) shall be appropriately adjusted as determined by the Board so as
to reflect such change.

 

ARTICLE X—EFFECTIVE DATE AND TERM OF THE PLAN

 

The Plan became effective January 1, 1995, subject to the affirmative vote of
the holders of shares entitled to cast a majority of the votes entitled to be
cast (in person or by proxy) for or against approval of the Plan at the Annual
Meeting of the shareholders of the Corporation in 1995. The Plan shall continue
until such time as it may be terminated by action of the Board; provided,
however, that the Plan, if not so terminated, shall be submitted to the
shareholders of the Corporation for their approval not later than December 31,
2000. No Options may be granted under this Plan subsequent to April 30, 2000.

 

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ARTICLE XI—TRANSITION—1991 INCENTIVE COMPENSATION AND STOCK OPTION PLAN

 

(a) This Plan supersedes the Prior Plan, and no new Incentive Awards or Options,
as defined in the Prior Plan, may be granted under the Prior Plan after the
effective date of this Plan, except that (i) short-term incentive awards in
respect of 1994 shall be payable pursuant to the Prior Plan in 1995 and
(ii) options granted in 1995 to persons, other than Named Executive Officers,
that are subject to the laws of any foreign jurisdiction that require, or
condition favorable tax treatment on, approval of the plan pursuant to which
options are granted prior to the grant thereof shall be granted pursuant to the
Prior Plan but shall count against the Authorized Share Pool for 1995; provided
that nothing herein shall modify the terms of the Prior Plan if this Plan is not
approved by vote of the shareholders of the Corporation as contemplated by
Article X. Incentive Awards including conditional Incentive Awards made and
Options granted under the Prior Plan before the effective date of this Plan
shall remain outstanding and shall be administered under the terms of the Prior
Plan.

 

(b) Any Awards granted under this Plan prior to approval of this Plan by the
shareholders of the Corporation shall be conditional upon, and forfeited upon
the failure of, such approval at the Annual Meeting of Stockholders of Mobil
Corporation in 1995; provided that failing such approval any such Award to a
person other than a Named Executive Officer that could have been granted under
the terms of the Prior Plan may, in the discretion of the Committee, be deemed
to have been so granted.

 

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