Exhibit 10.1

ANADARKO PETROLEUM CORPORATION

2012 OMNIBUS INCENTIVE COMPENSATION PLAN

 

Effective as of May 15, 2012

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TABLE OF CONTENTS

 

SECTION 1 PURPOSES

     1   

SECTION 2 DEFINITIONS

     1   

2.1

   Award      1   

2.2

   Award Agreement      1   

2.3

   Beneficiary      2   

2.4

   Board      2   

2.5

   Cash Awards      2   

2.6

   Cause      2   

2.7

   Change in Capitalization      2   

2.8

   Change of Control      3   

2.9

   Code      4   

2.10

   Common Stock      4   

2.11

   Company      4   

2.12

   Consultant      4   

2.13

   Covered Employee      5   

2.14

   Effective Date      5   

2.15

   Employee      5   

2.16

   Employer      5   

2.17

   Exchange Act      5   

2.18

   Fair Market Value      5   

2.19

   Full Value Award      5   

2.20

   Good Reason      6   

2.21

   Incentive Award      6   

2.22

   Incentive Stock Option      6   

2.23

   Management Committee      6   

2.24

   Maximum Grant      6   

2.25

   Nonqualified Option      6   

2.26

   Option      6   

2.27

   Option Price      7   

2.28

   Other Stock-Based Award      7   

2.29

   Participant      7   

2.30

   Performance Goals      7   

2.31

   Performance Period      9   

2.32

   Performance Shares      9   

2.33

   Performance Units      9   

2.34

   Permitted Transferee      9   

2.35

   Plan      9   

2.36

   Plan Administrator      9   

2.37

   Prior Plan      9   

 

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2.38

   Restricted Stock      9   

2.39

   Restricted Stock Units      9   

2.40

   Restriction Period      10   

2.41

   Rule 16b-3      10   

2.42

   Section 16 Insider      10   

2.43

   Section 162(m)      10   

2.44

   Section 409A      10   

2.45

   Securities Act      10   

2.46

   Stock Appreciation Right      10   

2.47

   Subsidiary      10   

2.48

   Termination of Service      11   

SECTION 3 ADMINISTRATION

     11   

3.1

   Plan Administrator      11   

3.2

   Authority of Plan Administrator      12   

3.3

   Indemnification of Plan Administrator      13   

3.4

   Delegation to Management Committee      13   

SECTION 4 ELIGIBILITY

     13   

SECTION 5 SHARES AVAILABLE FOR THE PLAN

     13   

5.1

   Aggregate Shares      13   

5.2

   Annual Limitations      14   

5.3

   Adjustments in Authorized Shares      15   

5.4

   Effect of Certain Transactions      16   

SECTION 6 AWARD AGREEMENTS

     17   

SECTION 7 STOCK OPTIONS

     17   

7.1

   Grant of Options      17   

7.2

   Special Provisions Applicable to Incentive Stock Options      17   

7.3

   Terms of Options      18   

SECTION 8 STOCK APPRECIATION RIGHTS

     21   

8.1

   Grant of Stock Appreciation Rights      21   

8.2

   Exercise of Stock Appreciation Rights      22   

8.3

   Special Provisions Applicable to Stock Appreciation Rights      22   

8.4

   No Repricing or Exchange      22   

SECTION 9 PERFORMANCE SHARES AND PERFORMANCE UNITS

     23   

9.1

   Grant of Performance Shares and Performance Units      23   

9.2

   Value of Performance Shares and Performance Units      23   

9.3

   Payment of Performance Shares and Performance Units      23   

9.4

   Form and Timing of Payment      24   

9.5

   Dividend Equivalents      24   

SECTION 10 RESTRICTED STOCK

     24   

10.1

   Grant of Restricted Stock      24   

10.2

   Restriction Period      24   

 

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10.3

   Other Restrictions      25   

10.4

   Voting Rights; Dividends and Other Distributions      25   

10.5

   Issuance of Shares; Settlement of Awards      25   

SECTION 11 RESTRICTED STOCK UNITS

     26   

11.1

   Grant of Restricted Stock Units      26   

11.2

   Restriction Period      26   

11.3

   Other Restrictions      26   

11.4

   Dividend Equivalents      26   

11.5

   Issuance of Shares; Settlement of Awards      27   

SECTION 12 INCENTIVE AWARDS

     27   

12.1

   Incentive Awards      27   

12.2

   Performance Goal Certification      27   

12.3

   Discretion to Reduce Awards; Participant’s Performance      28   

12.4

   Required Payment of Incentive Awards      28   

SECTION 13 CASH AWARDS AND OTHER STOCK-BASED AWARDS

     28   

13.1

   Grant of Cash Awards      28   

13.2

   Other Stock-Based Awards      28   

13.3

   Value of Cash Awards and Other Stock-Based Awards      29   

13.4

   Payment of Cash Awards and Other Stock-Based Awards      29   

SECTION 14 DEFERRAL ELECTIONS

     29   

SECTION 15 TERMINATION OF SERVICE

     29   

SECTION 16 EFFECT OF A CHANGE OF CONTROL

     30   

SECTION 17 REGULATORY APPROVALS AND LISTING

     31   

SECTION 18 GENERAL PROVISIONS

     32   

18.1

   Clawback/Forfeiture Events      32   

18.2

   Nontransferability      32   

18.3

   No Individual Rights      33   

18.4

   Other Compensation      33   

18.5

   Leaves of Absence and Change in Status      33   

18.6

   Transfers      33   

18.7

   Unfunded Obligations      33   

18.8

   Beneficiaries      34   

18.9

   Governing Law      34   

18.10

   Satisfaction of Tax Obligations      35   

18.11

   Participants in Foreign Jurisdictions      35   

SECTION 19 REGULATORY COMPLIANCE

     36   

19.1

   Rule 16b-3 of the Exchange Act and Section 162(m)      36   

19.2

   Section 409A      36   

SECTION 20 ESTABLISHMENT AND TERM OF PLAN

     36   

SECTION 21 AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN

     37   

 

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21.1

   Amendment of Plan      37   

21.2

   Termination or Suspension of Plan      37   

21.3

   Section 162(m) Approval      37   

 

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ANADARKO PETROLEUM CORPORATION

2012 OMNIBUS INCENTIVE COMPENSATION PLAN

SECTION 1

PURPOSES

The purposes of the Anadarko Petroleum Corporation 2012 Omnibus Incentive
Compensation Plan (the “Plan”) are to promote the interests of Anadarko
Petroleum Corporation (the “Company”) and its stockholders by strengthening its
ability to attract, retain and motivate salaried Employees and Consultants of
the Company and any Subsidiary by furnishing suitable recognition of their
performance, ability and experience, to align their interests and efforts to the
long-term interests of the Company’s stockholders, and to provide them with a
direct incentive to achieve the Company’s strategic and financial goals. In
furtherance of these purposes, the Plan provides for the grant of Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Incentive Awards, Cash Awards, and Other Stock-Based
Awards to Participants in accordance with the terms and conditions set forth
below.

SECTION 2

DEFINITIONS

Unless otherwise required by the context, the following terms when used in the
Plan shall have the meanings set forth in this Section 2:

 

2.1

Award

Any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, Incentive Award, Cash Award or Other
Stock-Based Award, in each case payable in cash and/or in Common Stock as may be
designated by the Plan Administrator.

 

2.2

Award Agreement

The written agreement setting forth the terms, conditions, rights and duties
applicable to an Award granted under the Plan (which, in the discretion of the
Plan Administrator, need not be countersigned by a Participant). The Plan
Administrator may, in its discretion, provide for the use of electronic,
internet or other non-paper Award Agreements. The requirement for delivery of a
written agreement is satisfied by electronic delivery of such agreement provided
that evidence of the Participant’s receipt of such electronic delivery is
available to the Company and such delivery is not prohibited by applicable laws
and regulations.

 

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2.3

Beneficiary

The person or persons designated by the Participant pursuant to Section 7.3(f)
or Section 18.8 of this Plan to whom payments are to be paid pursuant to the
terms of the Plan in the event of the Participant’s death.

 

2.4

Board

The Board of Directors of the Company.

 

2.5

Cash Awards

As defined in Section 13.1.

 

2.6

Cause

“Cause” shall have the meaning ascribed thereto in any employment, consulting or
similar service agreement between a Participant and an Employer, or, in the
absence of such agreement, a termination of a Participant’s employment with the
Company and its Subsidiaries resulting from (a) substandard work performance or
repeated unreliability that has not been cured to the Employer’s satisfaction;
(b) workplace misconduct; (c) excessive absenteeism; (d) violation of safety
rules; (e) violation of Employer’s policies, including without limitation, the
Employer’s “Code of Business Conduct and Ethics”; (f) fraud or other dishonesty
against the Employer; (g) engagement in conduct that the Participant knows or
should know is materially injurious to the business or reputation of the
Employer; (h) falsifying Employer or Employee records (including an employment
application); (i) on-the-job intoxication or being under the influence of
alcohol or an illegal narcotic or a drug not being used as prescribed;
(j) unauthorized use of Employer equipment or confidential information of an
Employer or third party who has entrusted such information to the Employer; or
(k) conviction of a felony or misdemeanor involving moral turpitude. With
respect to a Consultant, Cause shall also include a breach by the Consultant of
the applicable consulting or similar service agreement. Whether a Participant
has been terminated for Cause will be determined by the Board in its sole
discretion with respect to a Section 16 Insider and, with respect to all other
Participants, by the Vice President of Human Resources or the Company’s General
Counsel, each in his or her sole discretion.

 

2.7

Change in Capitalization

Any increase or reduction in the number of shares of Common Stock, any change
(including, without limitation, in the case of a spin-off, dividend or other
distribution in respect of shares, a change in value) in the shares of Common
Stock or any exchange of shares of Common Stock for a different number or kind
of shares of Common Stock or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants, rights
or debentures, stock dividend, stock split or reverse stock split, extraordinary
cash dividend, property dividend, combination or exchange of shares, repurchase
of shares, change in corporate structure or otherwise.

 

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2.8

Change of Control

The occurrence of any of the following after the Effective Date:

(a)        any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) acquires
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares of Common
Stock of the Company (the “Outstanding Company Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition pursuant to a transaction which complies with
clauses (A), (B) and (C) of Section 2.8(c); or

(b)        individuals who, as of the Effective Date, 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
the Effective Date whose election, or nomination for election by the Company’s
stockholders, 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, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or

(c)        consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another entity (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
person (excluding any employee benefit plan (or related trust) of the Company

 

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or such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of Common Stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

(d)        approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.

Notwithstanding the foregoing, with respect to an Award that is (i) subject to
Section 409A and (ii) a Change of Control would accelerate the timing of payment
thereunder, the term “Change of Control” shall mean a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the assets of the Company as defined in Section 409A and the authoritative
guidance issued thereunder, but only to the extent inconsistent with the above
definition, and only to the minimum extent necessary to comply with Section 409A
as determined by the Committee.

 

2.9

Code

The Internal Revenue Code of 1986, as amended and in effect from time to time,
and the temporary or final regulations of the Secretary of the U.S. Treasury
adopted pursuant to the Code.

 

2.10

Common Stock

The Common Stock of the Company, $0.10 par value per share, or such other class
of shares or other securities as may be applicable pursuant to the provisions of
Section 5.

 

2.11

Company

As defined in Section 1.

 

2.12

Consultant

Any consultant, agent, advisor or independent contractor (including a
non-employee member of the Board) who renders services to the Company or any
Subsidiary that qualifies as a consultant under the applicable rules of the
Securities and Exchange Commission for registration of Common Stock on a Form
S-8 Registration Statement.

 

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2.13

Covered Employee

With respect to any grant of an Award, a Participant who the Plan Administrator
deems is or may become a “covered employee” as defined in Section 162(m) for any
year.

 

2.14

Effective Date

The effective date of the Plan is May 15, 2012, the date on which it was
approved by the stockholders of the Company.

 

2.15

Employee

Any officer or other employee of the Company or of any Subsidiary. An Employee
on a leave of absence for such periods and purposes conforming to the personnel
policy of the Company may be considered still in the employ of the Company or a
Subsidiary for purposes of eligibility for participation in this Plan.

 

2.16

Employer

As to any Participant on any date, the Company or a Subsidiary that employs or
retains the Participant on such date.

 

2.17

Exchange Act

The Securities Exchange Act of 1934, as amended and rules promulgated
thereunder.

 

2.18

Fair Market Value

As of any given date, the closing sales price at which Common Stock is sold on
such date as reported in the NYSE-Composite Transactions by The Wall Street
Journal or any other comparable service the Plan Administrator may determine is
reliable for such date, or if no Common Stock was traded on such date, on the
next preceding day on which Common Stock was so traded. If the Fair Market Value
of the Common Stock cannot be determined pursuant to the preceding provisions,
the “Fair Market Value” of the Common Stock shall be determined by the Plan
Administrator in such a manner as it deems appropriate, consistent with the
requirements of Section 409A.

 

2.19

Full Value Award

An Award other than of Options or Stock Appreciation Rights, which is settled by
the issuance of Common Stock.

 

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2.20

Good Reason

Unless otherwise provided in an Award Agreement, the term “Good Reason” shall
have the following meaning: (i) to the extent defined in an Employee’s
employment agreement, the term “Good Reason” shall have the same meaning as set
forth in the employment agreement with respect to such Employee, (ii) in the
case of an Employee covered by the Company’s Key Employee Change-of-Control
Contract, the term “Good Reason” shall have the same meaning as set forth in the
Key Employee Change-of-Control Contract entered into with such Employee,
(iii) in the case of an Employee covered by the Company’s Key Manager
Change-of-Control Agreement, the term “Good Reason” shall have the same meaning
as set forth in the Key Manager Change-of-Control Agreement entered into with
such Employee; and (iv) in the case of any Employee not covered by clause (i),
(ii) or (iii) above, the term “Good Reason” shall have the same meaning as set
forth in the Company’s Employee Change-of-Control Plan, as it may be amended
from time to time.

 

2.21

Incentive Award

A percentage of base salary, a fixed dollar amount or other measure of
compensation which Participants are eligible to receive, in cash and/or other
Awards under the Plan, at the end of a Performance Period if certain performance
measures are achieved.

 

2.22

Incentive Stock Option

An option intended to meet the requirements of a “qualified stock option” as
defined in Section 422 of the Code, as in effect at the time of grant of such
Option, or any statutory provision that may hereafter replace such section.

 

2.23

Management Committee

A committee designated by the Board (either by resolution or by provisions
contained in this Plan) and consisting of the Chief Executive Officer, provided
that such officer is a member of the Board, and such other members of the Board
as the Board may determine from time to time.

 

2.24

Maximum Grant

The maximum grants set forth in Section 5.2.

 

2.25

Nonqualified Option

An Option which is not intended to meet the requirements of a “qualified stock
option” as defined in Section 422 of the Code.

 

2.26

Option

An Incentive Stock Option or a Nonqualified Option.

 

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2.27

Option Price

The price per share of Common Stock at which an Option is exercisable.

 

2.28

Other Stock-Based Award

As defined in Section 13.2.

 

2.29

Participant

An eligible Employee or a Consultant to whom Awards are granted under the Plan
as set forth in Section 4. References to a “Participant” in this Plan will be
interpreted to mean an Employee, a Consultant, Employees or Consultants as
individual groups or as one group in the aggregate, as the context so provides.

 

2.30

Performance Goals

The Plan Administrator may grant Awards subject to one or more Performance Goals
set forth in the table below (collectively the “Performance Goals”) to any
Participant, including, without limitation, to any Covered Employee. As to any
such Awards, the Plan Administrator shall establish one or more of the
Performance Goals for each Performance Period in writing. Each Performance Goal
selected for a particular Performance Period shall include any one or more of
the following, either individually, alternatively or in any combination, applied
to either the Company as a whole or to a Subsidiary or a business unit of the
Company or any Subsidiary, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of time,
on an absolute basis or relative to the pre-established target, to previous
years’ results or to a designated comparison group, in each case as specified by
the Plan Administrator:

 

Financial Goals

 

•      Earnings

•      Revenues

•      Debt level

•      Cost reduction targets

•      Interest-sensitivity gap levels

•      EBITDAX

•      Debt/average daily production

 

•      Earnings per share

•      Cash flow from operations

•      Equity ratios

•      Capital expended

•      Weighted average cost of capital

•      Return on assets

•      Debt/proved developed reserves

 

•      Net income

•      Free cash flow

•      Expenses

•      Working capital

•      Operating or profit margin

•      Return on equity or capital employed

•      Debt/proved reserves

Operating Goals

 

•      Amount of oil and gas reserves

•      Lease operating expense/barrels of oil equivalent

 

•      Oil and gas reserve additions

•      Costs of finding oil and gas reserves

 

•      Oil and gas replacement ratios

•      Natural gas and/or oil production or sales

 

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Corporate and Other Goals

  

•      Total stockholder return

•      Asset quality levels

•      Investments

•      Satisfactory internal or external audits

•      Achievement of balance sheet or income statement objectives

  

•      Market share

•      Assets

•      Asset sale targets

•      Value of assets

•      Employee retention/attrition rates

•      Improvement of financial ratings

•      Production growth per net debt adjusted share

  

•      Charge-offs

•      Non-performing assets

•      Fair Market Value of Common Stock

•      Regulatory compliance

•      Safety targets

•      Economic value added

The Plan Administrator may adjust the Performance Goals to include or exclude
extraordinary charges, gains or losses on the disposition of business units,
losses from discontinued operations, restatements and accounting changes and
other unplanned special charges such as restructuring expenses, acquisitions,
acquisition expenses, including expenses related to goodwill and other
intangible assets, stock offerings, stock repurchases and loan loss provisions.
The Plan Administrator may also provide for the manner in which performance will
be measured against the Performance Goals (or may adjust the Performance Goals)
to reflect the impact of specified corporate transactions, a Change in
Capitalization, special charges, accounting policy changes and tax law changes.
In addition, the Plan Administrator may make such adjustments to the Performance
Goals applicable to Participants who are not Covered Employees as it determines
are appropriate. Such adjustments may occur at the time of the granting of an
Award, or at any time thereafter, but, in the case of Covered Employees, only to
the extent permitted by Section 162(m). Performance Goals may include a
threshold level of performance below which no Awards shall be earned, target
levels of performance at which specific Awards will be earned, and a maximum
level of performance at which the maximum level of Awards will be earned.

In establishing Performance Goals with respect to Covered Employees, the Plan
Administrator shall ensure such Performance Goals (i) are established no later
than the end of the first 90 days of the Performance Period (or such other time
as may be required or permitted for “performance-based compensation” under
Section 162(m), if applicable), and (ii) satisfy all other applicable
requirements imposed by Section 162(m), including the requirement that such
Performance Goals be stated in terms of an objective formula or standard, and
the Plan Administrator may not in any event increase the amount of compensation
payable to a Covered Employee upon the satisfaction of any Performance Goal.
Prior to the payment of any “performance-based compensation” within the meaning
of Section 162(m), the Plan Administrator shall certify in writing (which shall
be satisfied upon the Plan Administrator’s approval of preambles and resolutions
regarding such performance results and payout and without condition with respect
to any subsequent approval of the minutes of the meeting relating to such
certification) the extent to which the applicable Performance Goals were, in
fact, achieved and the amounts to be paid, vested or delivered as a result
thereof; provided, that the Plan Administrator may reduce, but not increase,
such amount.

 

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2.31

Performance Period

That period of time during which Performance Goals are evaluated to determine
the vesting or granting of Awards under the Plan, as the Plan Administrator may
determine, provided that the period is no longer than ten (10) years.

 

2.32

Performance Shares

An Award granted under the Plan representing the right to receive a number of
shares of Common Stock for each Performance Share granted, as the Plan
Administrator may determine.

 

2.33

Performance Units

An Award granted under the Plan representing the right to receive a payment
(either in cash or Common Stock) equal to the value of a Performance Unit, as
the Plan Administrator may determine.

 

2.34

Permitted Transferee

As defined in Section 7.3(f).

 

2.35

Plan

As defined in Section 1.

 

2.36

Plan Administrator

Those committees appointed and authorized pursuant to Section 3 to administer
the Plan.

 

2.37

Prior Plan

The Anadarko Petroleum Corporation 2008 Omnibus Incentive Compensation Plan.

 

2.38

Restricted Stock

Common Stock granted under the Plan that is subject to the requirements of
Section 10 and such other restrictions as the Plan Administrator deems
appropriate. References to Restricted Stock in this Plan shall include
Restricted Stock awarded in conjunction with Incentive Awards pursuant to
Section 12, unless the context otherwise requires.

 

2.39

Restricted Stock Units

An Award granted under the Plan representing a right to receive a payment
(either in cash or Common Stock) equal to the value of a share of Common Stock.

 

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2.40

Restriction Period

As defined in Sections 10.2 and 11.2, as applicable.

 

2.41

Rule 16b-3

Rule 16b-3 of the General Rules and Regulations under the Exchange Act.

 

2.42

Section 16 Insider

Any person who is selected by the Plan Administrator to receive an Award
pursuant to the Plan and who is or is reasonably expected to become subject to
the requirements of Section 16 of the Exchange Act, and the rules and
regulations promulgated thereunder.

 

2.43

Section 162(m)

Section 162(m) of the Code.

 

2.44

Section 409A

Section 409A of the Code.

 

2.45

Securities Act

The Securities Act of 1933, as amended and rules promulgated thereunder.

 

2.46

Stock Appreciation Right

Any right granted under Section 8.

 

2.47

Subsidiary

An entity that is designated by the Plan Administrator as a subsidiary for
purposes of the Plan and that is a corporation, partnership, joint venture,
limited liability company, limited liability partnership, or other entity in
which the Company owns directly or indirectly, fifty percent (50%) or more of
the voting power or profit interests, or as to which the Company or one of its
affiliates serves as general or managing partner or in a similar capacity.
Notwithstanding the foregoing, for purposes of Options intended to qualify as
Incentive Stock Options, the term “Subsidiary” shall mean a corporation (or
other entity treated as a corporation for tax purposes) in which the Company
directly or indirectly holds more than fifty percent (50%) of the voting power.

 

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2.48

Termination of Service

(a)        As to an Employee, the time when the employee-employer relationship
between a Participant and the Company or any Employer is terminated for any
reason, including, without limitation, a termination by resignation, discharge,
death, disability or retirement; but excluding terminations where the
Participant simultaneously commences or remains in employment or service with
the Company or any Employer.

(b)        As to a Consultant, the time when the engagement of a Participant as
a Consultant to the Company or any Employer is terminated for any reason, with
or without Cause, including, without limitation, by resignation, discharge,
death or retirement, but excluding terminations where the Consultant
simultaneously commences or remains in employment or service with the Company or
any Employer.

SECTION 3

ADMINISTRATION

 

3.1

Plan Administrator

(a)        The Compensation and Benefits Committee of the Board shall be the
Plan Administrator with respect to all Covered Employees and all Section 16
Insiders. As to these officers, the Plan Administrator (including each
individual that is a member thereof) shall be constituted at all times so as to
(i) be “independent” as such term is defined pursuant to the rules of any stock
exchange on which the Common Stock may then be listed, and (ii) meet the
non-employee director standards of Rule 16b-3 and the outside director
requirements of Section 162(m), so long as any of the Company’s equity
securities are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act.

(b)        Other than as set forth in Section 3.1(a) and subject to Section 3.4
(and subject to applicable law), the Management Committee shall be the Plan
Administrator. The Board may from time to time remove members from, or add
members to, the Management Committee.

(c)        Notwithstanding Sections 3.1(a) and 3.1(b), the Board may designate
itself or the Compensation and Benefits Committee of the Board as the Plan
Administrator as to any Participant or groups of Participants unless such
designation with respect to a Participant or groups of Participants would not be
in compliance with the requirements of the Code, the Exchange Act or the
Securities Act.

(d)        The above committees hereby designate the appropriate Employees or
other agents of the Company to handle the day-to-day administrative matters of
the Plan.

 

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3.2

Authority of Plan Administrator

Subject to the express terms and conditions set forth herein, the Plan
Administrator shall have the power from time to time to:

(a)        select the Participants to whom Awards shall be granted under the
Plan and the number of shares or amount of cash subject to such Awards and
prescribe the terms and conditions (which need not be identical) of each such
Awards, including, in the case of Options and Stock Appreciation Rights, the
Option Price, vesting schedule and duration;

(b)        set the terms and conditions of any Award consistent with the terms
of the Plan (which may be based on Performance Goals or other performance
measures as the Plan Administrator shall determine), and make any amendments,
modifications or adjustments to such Awards as are permitted by the Plan;

(c)        construe and interpret the Plan and the Awards granted hereunder and
establish, amend and revoke rules and regulations for the administration of the
Plan, including, without limitation, correcting any defect or supplying any
omission, or reconciling any inconsistency in the Plan or in any Award
Agreement, in the manner and to the extent it shall deem necessary or advisable,
including so that the Plan and the operation of the Plan comply with Rule 16b-3,
the Code, to the extent applicable, and other applicable laws, and otherwise to
make the Plan fully effective;

(d)        exercise its discretion with respect to the powers and rights granted
to it as set forth in the Plan; and

(e)        generally, exercise such powers and perform such acts as are deemed
necessary or advisable to promote the best interests of the Company with respect
to the Plan.

All decisions and determinations by the Plan Administrator in the exercise of
the above powers shall be final, binding and conclusive upon the Company, a
Subsidiary, the Participants and all other persons having or claiming any
interest therein. The Plan Administrator shall cause the Company at the
Company’s expense to take any action related to the Plan which may be necessary
to comply with the provisions of any federal, state or foreign law or any
regulations issued thereunder, which the Plan Administrator determines are
intended to be complied with. All Awards and any administrative action taken by
the Plan Administrator shall be in conformity with all applicable federal,
state, and local laws and shall not discriminate on the basis of sex, race,
color, religion, national origin, citizenship, age, disability, marital or
veterans status, sexual orientation or any other legally protected categories.

Notwithstanding the foregoing, the Plan Administrator shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to any
Awards held by Covered Employees if the ability to exercise such discretion or
the exercise of such discretion itself would cause the compensation attributable
to such Awards to fail to qualify as performance-based compensation under
Section 162(m).

 

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3.3

Indemnification of Plan Administrator

Each member of any committee acting as Plan Administrator, while serving as
such, shall be entitled, in good faith, to rely or act upon any advice of the
Company’s independent auditors, counsel or consultants hired by the committee,
or other agents assisting in the administration of the Plan. The Plan
Administrator and any Employee of the Company acting at the direction or on
behalf of the Company shall not be personally liable for any action or
determination taken or made, or not taken or made, in good faith with respect to
the Plan, and shall, to the extent permitted by law, be fully indemnified and
protected under the Company’s charter or by-laws with respect to any such action
or determination.

 

3.4

Delegation to Management Committee

To the maximum extent permitted by applicable law and subject to Section 3.1,
the Board and the Compensation and Benefits Committee hereby delegate to the
Management Committee the authority (i) to designate the Employees and
Consultants who shall be Participants, (ii) to determine the Awards to be
granted to any such Participants or (iii) both (i) and (ii); provided, however,
that the Management Committee shall not have the authority to grant Awards to
any member of the Management Committee, a Covered Employee or a Section 16
Insider and shall be subject to such other limitations set forth in this Plan.
This provision shall be deemed to constitute a delegation from the Board to the
Management Committee without further action by the Board. However, the Board or
the Compensation and Benefits Committee may, from time to time, limit the total
number of shares Common Stock subject to such delegation.

SECTION 4

ELIGIBILITY

To be eligible to be a Participant, an individual must be an Employee (other
than an Employee who is a member of a unit subject to collective bargaining) or
a Consultant of an Employer, as of the date on which the Plan Administrator
grants to such individual an Award under the Plan. Members of the Board shall be
eligible to participate in the Plan. Each grant of an Award under the Plan shall
be evidenced by an Award Agreement.

SECTION 5

SHARES AVAILABLE FOR THE PLAN

 

5.1

Aggregate Shares

(a)        Share Authorization

Subject to adjustment as provided in Section 5.3, the maximum number of shares
of Common Stock available for grant to Participants under this Plan on or after
the Effective Date shall be 30,000,000 shares of Common Stock. Awards granted
under the Prior Plan after March

 

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8, 2012 and prior to the Effective Date will reduce the 30,000,000 shares of
Common Stock available for grant to Participants under the Plan as follows: 1.8
shares of Common Stock for every one (1) share of Common Stock related to a Full
Value Award and one (1) share for every one (1) share of Common Stock related to
an Award other than a Full Value Award.

(b)        Limit on Full Value Awards—Flexible Share Pool

To the extent that a share of Common Stock is issued pursuant to the grant or
exercise of a Full Value Award, it shall reduce the share authorization by 1.80
shares of Common Stock; and to the extent that a share of Common Stock is issued
pursuant to the grant or exercise of an Award other than a Full Value Award, it
shall reduce the share authorization by one (1) share of Common Stock.

(c)        Limit on Incentive Stock Options

Subject to adjustment as provided in Section 5.3, the maximum aggregate number
of shares subject to Incentive Stock Options granted under the Plan shall be
10,000,000.

(d)        Share Usage

Shares of Common Stock covered by an Award shall only be counted as used to the
extent they are actually issued. Any shares of Common Stock related to Awards
which terminate by expiration, forfeiture, cancellation, or otherwise without
the issuance of such shares of Common Stock or are settled in cash in lieu of
shares of Common Stock shall be available again for grant under this Plan. Such
shares of Common Stock related to a Full Value Award shall increase the share
authorization by 1.80 shares of Common Stock and shares of Common Stock related
to an Award other than a Full Value Award shall increase the share authorization
by one (1) share of Common Stock. However, the full number of Stock Appreciation
Rights granted that are to be settled by the issuance of shares of Common Stock
shall be counted against the number of shares of Common Stock available for
award under the Plan, regardless of the number of shares of Common Stock
actually issued upon settlement of such Stock Appreciation Rights. Furthermore,
any shares of Common Stock withheld to satisfy tax withholding obligations on an
Award issued under the Plan, shares of Common Stock tendered to pay the exercise
price of an Award under the Plan, and shares of Common Stock repurchased on the
open market with the proceeds of an Option exercise will no longer be eligible
to be again available for grant under this Plan. In addition, the full number of
Incentive Stock Options granted shall be counted against the number of Incentive
Stock Options that may be awarded under the Plan pursuant to Section 5.1(c),
regardless of the number of shares of Common Stock actually issued upon exercise
of such Incentive Stock Options. The shares of Common Stock available for
issuance under this Plan may be authorized and unissued shares of Common Stock
or treasury shares of Common Stock.

 

5.2

Annual Limitations

Subject to adjustment as provided in Section 5.3, the following limitations
shall apply:

 

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(a)        Options: The maximum aggregate number of shares subject to Options
granted in any one calendar year to any one Participant shall be 2,500,000.

(b)        Stock Appreciation Rights: The maximum number of shares subject to
Stock Appreciation Rights granted in any one calendar year to any one
Participant shall be 2,500,000.

(c)        Performance Shares or Performance Units: The maximum aggregate grant
with respect to Performance Shares or Performance Units that a Participant may
receive in any one calendar year shall be 1,500,000 shares, or equal to the
value of 1,500,000 shares (as of the time of settlement) if settled in cash.

(d)        Restricted Stock or Restricted Stock Units: The maximum aggregate
grant with respect to Awards of Restricted Stock or Restricted Stock Units in
any one calendar year to any one Participant shall be 1,500,000 shares, or equal
to the value of 1,500,000 shares (as of the time of settlement) if settled in
cash.

(e)        Incentive Awards: The maximum aggregate amount awarded or credited in
any one calendar year with respect to an Incentive Award to any one Participant
shall be $10,000,000.

(f)        Cash Awards: The maximum aggregate amount awarded to or credited with
respect to Cash Awards to any one Participant in any one calendar year may not
exceed the greater of $10,000,000 dollars or the value of 1,500,000 shares.

(g)        Other Stock-Based Awards: The maximum aggregate grant with respect to
Other Stock-Based Awards in any one calendar year to any one Participant shall
be 1,500,000 shares.

 

5.3

Adjustments in Authorized Shares

(a)        In the event of a Change in Capitalization that is not also a Change
of Control, the Plan Administrator shall make such adjustments, if any, as it
determines are appropriate and equitable, and to the extent such an action does
not conflict with Delaware or other applicable laws or securities exchange
rules, to (i) the maximum number and class of shares of Common Stock or other
stock or securities with respect to which Awards may be granted under the Plan,
(ii) the maximum number and class of shares of Common Stock or other stock or
securities that may be issued upon exercise of Nonqualified Options, Incentive
Stock Options and Stock Appreciation Rights, (iii) the Maximum Grants, (iv) the
number and class of shares of Common Stock or other stock or securities which
are subject to outstanding Awards granted under the Plan and the Option Price or
exercise price therefore, if applicable and (v) the Performance Goals; provided,
however, that in the case of an “equity restructuring” (within the meaning of
the Financial Accounting Standards Board Accounting Standards No. Update Topic
718), the Board shall make an equitable or appropriate adjustment to outstanding
Awards to reflect such equity restructuring. Any such adjustment shall be final,
binding and conclusive on all persons claiming any right or interest under the
Plan.

 

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(b)        Any such adjustment in the shares of Common Stock or other stock or
securities (i) subject to outstanding Incentive Stock Options (including any
adjustments in the exercise price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code or
(ii) subject to outstanding Awards that are intended to qualify as
performance-based compensation under Section 162(m) shall be made in such a
manner as not to adversely affect the treatment of the Awards as
performance-based compensation.

(c)        If, by reason of a Change in Capitalization that is not also a Change
of Control, a Participant shall be entitled to, or shall be entitled to exercise
an Option or Stock Appreciation Right with respect to, new, additional or
different shares of stock or securities of the Company or any other corporation,
such new, additional or different shares shall thereupon be subject to all of
the conditions, restrictions and performance criteria which were applicable to
the shares of Common Stock that such shares replaced or to the Option or Stock
Appreciation Right, as the case may be, prior to such Change in Capitalization.

(d)        No adjustments made under this Section 5 shall be made with respect
to a Participant’s Award if such adjustment would result in adverse taxation to
such Participant under Section 409A.

 

5.4

Effect of Certain Transactions

Following (a) the liquidation or dissolution of the Company or (b) a merger or
consolidation of the Company (a “Transaction”), (i) each outstanding Award shall
be treated as provided for in the agreement entered into in connection with the
Transaction (which treatment may be different as among different types of Awards
and different holders thereof) or (ii) if not so provided in such agreement,
each Participant shall be entitled to receive in respect of each share of Common
Stock subject to any outstanding Awards, upon exercise of any Option or Stock
Appreciation Right or payment or transfer in respect of any other Award, the
same number and kind of stock, securities, cash, property or other consideration
that each holder of a share of Common Stock was entitled to receive in the
Transaction in respect of a share of Common Stock; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to Awards prior to such Transaction, but giving effect to any
applicable provision of this Plan or any Award Agreement if the Transaction is a
Change of Control. Without limiting the generality of the foregoing, the
treatment of outstanding Options and Stock Appreciation Rights pursuant to
clause (i) of this Section 5.4 in connection with a Transaction in which the
consideration paid or distributed to the Company’s stockholders is not entirely
shares of common stock of the acquiring or resulting corporation may include the
cancellation of outstanding Options and Stock Appreciation Rights upon
consummation of the Transaction provided either (x) the holders of affected
Options and Stock Appreciation rights have been given a period of at least
fifteen (15) days prior to the date of the consummation of the Transaction to
exercise the Options and Stock Appreciation Rights (whether or not they were
otherwise exercisable) or (y) the holders of the affected Options and Stock
Appreciation Rights are paid (in cash or cash equivalents) in respect of each
share of Common Stock covered by the Options or Stock Appreciation Rights being
cancelled an amount equal to the excess, if any, of the per share price

 

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paid or distributed to stockholders in the Transaction (the value of any
non-cash consideration to be determined by the Plan Administrator in its sole
discretion) over the exercise price thereof. For avoidance of doubt, (1) the
cancellation of Options and Stock Appreciation Rights pursuant to clause (y) of
the preceding sentence may be effected notwithstanding anything to the contrary
contained in this Plan or any Award Agreement and (2) if the amount determined
pursuant to clause (y) of the preceding sentence is zero or less, the affected
Options and Stock Appreciation Rights may be cancelled without any payment
therefore. The treatment of any Award as provided in this Section 5.4 shall be
conclusively presumed to be appropriate for purposes of Section 5.3.

SECTION 6

AWARD AGREEMENTS

Upon a determination by the Plan Administrator that an Award is to be granted to
a Participant pursuant to Section 7, 8, 9, 10, 11, 12 or 13 of this Plan, an
Award Agreement shall be provided to such Participant as soon as practicable
specifying, without limitation, the terms, conditions, rights and duties related
thereto, including terms requiring forfeiture of Awards in the event of a
Termination of Service by the Participant and terms relating to the
Clawback/Forfeiture Events under Section 18.1 of this Plan. Each Award Agreement
shall be subject to the terms and conditions of the Plan.

SECTION 7

STOCK OPTIONS

7.1

Grant of Options

Options may be granted to eligible Participants in such number, and at such
times during the term of the Plan as the Plan Administrator shall determine. The
Plan Administrator may grant an Option or provide for the grant of an Option,
either from time to time in the discretion of the Plan Administrator or
automatically upon the occurrence of specified events, including, without
limitation, the achievement of Performance Goals or other performance measures,
the satisfaction of an event or condition within the control of the recipient of
the Option or within the control of others. The granting of an Option shall take
place when the Plan Administrator by resolution, written consent or other
appropriate action determines to grant such an Option to a particular
Participant at the Option Price. Each Option granted under the Plan shall be
identified in the Award Agreement as either an Incentive Stock Option or a
Nonqualified Option (or if no such identification is made, then it shall be a
Nonqualified Option). No Incentive Stock Option shall be granted to any
Participant who is not an Employee of the Company or any “subsidiary
corporation” of the Company (as defined in Section 424(f) of the Code).

 

7.2

Special Provisions Applicable to Incentive Stock Options

Each provision of the Plan and each Incentive Stock Option granted thereunder
shall be construed so that each such Option shall qualify as an Incentive Stock
Option, and any provision thereof that cannot be so construed shall be
disregarded, unless the Employee agrees otherwise. Incentive Stock Options, in
addition to complying with the other provisions of the Plan relating to Options
generally, shall be subject to the following conditions:

 

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(a)        Ten Percent (10%) Stockholders

An Employee must not, immediately before an Incentive Stock Option is granted to
him or her, own stock representing more than ten percent (10%) of the voting
power or value of all classes of stock of the Company or of a Subsidiary. This
requirement is waived if (i) the Option Price of the Incentive Stock Option to
be granted is at least one hundred ten percent (110%) of the Fair Market Value
of the stock subject to the Option, determined at the time the Option is
granted, and (ii) the Option is not exercisable more than five (5) years from
the date the Option is granted.

(b)        Annual Limitation

To the extent that the aggregate Fair Market Value (determined at the time of
the grant of the option) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by the Employee during any calendar
year exceeds One Hundred Thousand Dollars ($100,000), such Options shall be
treated as Nonqualified Options. In applying the limitation in the preceding
sentence in the case of multiple Option grants, unless otherwise required by
applicable law, Options which were intended to be Incentive Stock Options shall
be treated as Nonqualified Options according to the order in which they were
granted such that the most recently granted Options are first treated as
Nonqualified Options.

(c)        Additional Terms

Any other terms and conditions which the Plan Administrator determines, upon
advice of counsel, must be imposed for the Option to be an Incentive Stock
Option.

(d)        Notice of Disqualifying Disposition

If an Employee shall make any disposition of shares of Common Stock issued
pursuant to an Incentive Stock Option under the circumstances described in
Section 421(b) of the Code (relating to disqualifying distributions), the
Employee shall notify the Company of such disposition within twenty (20) days
thereof.

 

7.3

Terms of Options

Except as otherwise provided in the Award Agreement and Section 7.2 of this
Plan, all Incentive Stock Options and Nonqualified Options under the Plan shall
be granted subject to the following terms and conditions:

(a)        Option Price

 

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The Option Price shall be determined by the Plan Administrator in any reasonable
manner, but shall not be less than the Fair Market Value of the Common Stock on
the date the Option is granted, except in the case of Options that are granted
in assumption of, or in substitution for, outstanding awards previously granted
by (i) a company acquired by the Company or a Subsidiary, or (ii) a company with
which the Company or a Subsidiary combines.

(b)        Duration of Options

Options shall be exercisable at such time and under such conditions as set forth
in the Award Agreement, but in no event shall any Option (whether a Nonqualified
Option or an Incentive Stock Option) be exercisable later than the tenth
(10th) anniversary of the date of its grant.

(c)        Exercise of Options

Common Stock covered by an Option may be purchased at one time or in such
installments over the option period as may be provided in the Award Agreement.
Any Common Stock not purchased on an applicable installment date may be
purchased thereafter at any time prior to the expiration of the Option in
accordance with its terms. To the extent that the right to purchase Common Stock
has accrued thereunder, an Option may be exercised from time to time by notice
to the Company setting forth the amount of Common Stock with respect to which
the Option is being exercised.

(d)        Payment

The purchase price of Common Stock purchased under Options shall be paid in full
to the Company upon the exercise of the Option by delivery of consideration
equal to the product of the Option Price and the Common Stock purchased (the
“Purchase Price”). Such consideration may be either (i) in cash or (ii) at the
discretion of the Plan Administrator, in Common Stock (by either actual delivery
of Common Stock or by attestation presenting satisfactory proof of beneficial
ownership of such Common Stock) already owned by the Participant, or any
combination of cash and Common Stock. The Fair Market Value of such Common Stock
as delivered shall be valued as of the day of exercise. The Plan Administrator
can determine that additional forms of payment will be permitted. To the extent
permitted by the Plan Administrator and applicable laws and regulations
(including, without limitation, federal tax and securities laws, regulations and
state corporate law), an Option may also be exercised in a “cashless” exercise
by delivery of a properly executed exercise notice together with irrevocable
instructions to a broker approved by the Company to promptly deliver to the
Company sufficient proceeds to pay the Purchase Price. A Participant shall have
none of the rights of a stockholder until the Common Stock is issued to the
Participant.

The Plan Administrator may permit a Participant to pay all or a portion of the
Purchase Price by having Common Stock with a Fair Market Value equal to all or a
portion of the Purchase Price be withheld from the shares issuable to the
Participant upon the exercise of the Option. The Fair Market Value of such
Common Stock as is withheld shall be determined as of the same day as the
exercise of the Option.

 

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(e)        Restrictions

The Plan Administrator shall determine and reflect in the Award Agreement, with
respect to each Option, the nature and extent of the restrictions, if any, to be
imposed on the Common Stock which may be purchased thereunder, including,
without limitation, restrictions on the transferability of such Common Stock
acquired through the exercise of such Options for such periods as the Plan
Administrator may determine. In addition, to the extent permitted by applicable
laws and regulations, the Plan Administrator may require that a Participant who
wants to effectuate a “cashless” exercise of Options be required to sell the
Common Stock acquired in the associated exercise to the Company, or in the open
market through the use of a broker selected by the Company, at such price and on
such terms as the Plan Administrator may determine at the time of grant, or
otherwise. Without limiting the foregoing, the Plan Administrator may impose
such restrictions, conditions or limitations as it determines appropriate as to
the timing and manner of any resales by the Participant or other subsequent
transfers by the Participant of any Common Stock issued as a result of the
exercise of an Option, including without limitation (i) restrictions under an
insider trading policy, (ii) restrictions designed to delay and/or coordinate
the timing and manner of sales by one or more Participants and
(iii) restrictions as to the use of a specified brokerage firm for such resales
or other transfers.

(f)        Transferability of Options

Notwithstanding Section 18.2 and only if allowed by the Plan Administrator in
its discretion, Nonqualified Options may be transferred to a Participant’s
immediate family members, directly or indirectly or by means of a trust,
corporate entity or partnership (a person who thus acquires this option by such
transfer, a “Permitted Transferee”). A transfer of a Nonqualified Option may
only be effected by the Company at the request of the Participant and shall
become effective upon the Permitted Transferee agreeing to such terms as the
Plan Administrator may require and only when recorded in the Company’s record of
outstanding Options. In the event an Option is transferred as contemplated
hereby, the Option may not be subsequently transferred by the Permitted
Transferee except a transfer back to the Participant or by will or the laws of
descent and distribution. A transferred Option may be exercised by a Permitted
Transferee to the same extent as, and subject to the same terms and conditions
as, the Participant (except as otherwise provided herein), as if no transfer had
taken place. As used herein, “immediate family member” shall mean, with respect
to any person, such person’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, and shall include adoptive
relationships. In the event of exercise of a transferred Option by a Permitted
Transferee, any amounts due to (or to be withheld by) the Company upon exercise
of the Option shall be delivered by (or withheld from amounts due to) the
Participant, the Participant’s estate or the Permitted Transferee, in the
reasonable discretion of the Company.

In addition, to the extent permitted by applicable law and Rule 16b-3, the Plan
Administrator may permit a recipient of a Nonqualified Option to designate in
writing during the Participant’s lifetime a Beneficiary to receive and exercise
the Participant’s Nonqualified Options in the event of such Participant’s death.

 

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(g)        Purchase for Investment

The Plan Administrator shall have the right to require that each Participant or
other person who shall exercise an Option under the Plan, and each person into
whose name the Common Stock shall be issued pursuant to the exercise of an
Option, represent and agree that any and all Common Stock purchased pursuant to
such Option is being purchased for investment only and not with a view to the
distribution or resale thereof and that such Common Stock will not be sold
except in accordance with such restrictions or limitations as may be set forth
in the Option or by the Plan Administrator. This Section 7.3(g) shall be
inoperative during any period of time when the Company has obtained all
necessary or advisable approvals from governmental agencies and has completed
all necessary or advisable registrations or other qualifications of the Common
Stock as to which Options may from time to time be granted as contemplated in
Section 17.

(h)        No Repricing or Exchange

Except as provided in the Plan or upon approval of the Company’s stockholders,
the Options granted under this Plan shall not be repriced. In particular, the
Plan Administrator may not take any action (i) to amend the terms of an
outstanding Option to reduce the Option Price thereof, cancel an Option and
replace it with a new Option with a lower Option Price, or that has an economic
effect that is the same as any such reduction or cancellation or (ii) to cancel
an outstanding Option having an Option Price above the then-current Fair Market
Value of the Common Stock in exchange for the grant of another type of Award,
without, in each such case, first obtaining approval of the Company’s
stockholders of such action.

SECTION 8

STOCK APPRECIATION RIGHTS

 

8.1

Grant of Stock Appreciation Rights

Stock Appreciation Rights may be granted to Participants in such number, and at
such times during the term of the Plan as the Plan Administrator shall
determine. The Plan Administrator may grant a Stock Appreciation Right or
provide for the grant of a Stock Appreciation Right, either from time to time in
the discretion of the Plan Administrator or automatically upon the occurrence of
specified events, including, without limitation, the achievement of Performance
Goals or other performance measures, the satisfaction of an event or condition
within the control of the recipient of the Stock Appreciation Right or within
the control of others. The granting of a Stock Appreciation Right shall take
place when the Plan Administrator by resolution, written consent or other
appropriate action determines to grant such a Stock Appreciation Right to a
particular Participant at a particular price. A Stock Appreciation Right may be
granted freestanding or in tandem or in combination with any other Award under
the Plan.

 

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8.2

Exercise of Stock Appreciation Rights

A Stock Appreciation Right may be exercised upon such terms and conditions and
for such term as the Plan Administrator shall determine; provided, however, no
Stock Appreciation Right shall be exercisable later than the tenth
(10th) anniversary of the date of its grant. Upon exercise of a Stock
Appreciation Right, a Participant shall be entitled to receive Common Stock, or
the cash equivalent, with an aggregate Fair Market Value determined by
multiplying (i) the difference between the Fair Market Value of a share of
Common Stock on the date of exercise of the Stock Appreciation Right over the
price determined by the Plan Administrator on the date of grant (which price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date of grant, except in the case of Stock Appreciation Rights that are
granted in assumption of, or in substitution for, outstanding awards previously
granted by (x) a company acquired by the Company or a Subsidiary, or (y) a
company with which the Company or a Subsidiary combines) times (ii) the number
of shares of Common Stock with respect to which the Stock Appreciation Right is
exercised. The value of any fractional shares shall be paid in cash.

 

8.3

Special Provisions Applicable to Stock Appreciation Rights

Stock Appreciation Rights are subject to the following restrictions:

(a)        A Stock Appreciation Right granted in tandem with any other Award
under the Plan shall be exercisable at such time or times as the Award to which
it relates shall be exercisable, or at such other times as the Plan
Administrator may determine.

(b)        The right of a Participant to exercise a Stock Appreciation Right
granted in tandem with any other Award under the Plan shall be canceled if and
to the extent the related Award is exercised or canceled. To the extent that a
Stock Appreciation Right is exercised, the related Award shall be deemed to have
been surrendered unexercised and canceled.

(c)        A holder of Stock Appreciation Rights shall have none of the rights
of a stockholder until the Common Stock, if any, is issued to such holder
pursuant to such holder’s exercise of such rights.

(d)        The acquisition of Common Stock pursuant to the exercise of a Stock
Appreciation Right shall be subject to the same restrictions as would apply to
the acquisition of Common Stock acquired upon exercise of an Option, as set
forth in Section 7.3.

 

8.4

No Repricing or Exchange

Except as provided in the Plan or upon approval of the Company’s stockholders,
the Stock Appreciation Rights granted under this Plan shall not be repriced. In
particular, the Plan Administrator may not take any action (i) to amend the
terms of an outstanding Stock Appreciation Right to reduce the grant price
thereof, cancel a Stock Appreciation Right and replace it with a new Stock
Appreciation Right with a lower grant price, or that has an economic

 

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effect that is the same as any such reduction or cancellation or (ii) to cancel
an outstanding Stock Appreciation Right having a grant price above the
then-current Fair Market Value of the Common Stock in exchange for the grant of
another type of Award, without, in each such case, first obtaining approval of
the Company’s stockholders of such action.

SECTION 9

PERFORMANCE SHARES AND PERFORMANCE UNITS

 

9.1

Grant of Performance Shares and Performance Units

Subject to the limitations in Section 5.2, Performance Shares or Performance
Units may be granted to Participants at any time and from time to time as the
Plan Administrator shall determine. The Plan Administrator shall have complete
discretion in determining the number of Performance Shares or Performance Units
granted to each Participant and the terms and conditions thereof. Performance
Shares and Performance Units may be granted alone or in combination with any
other Award under the Plan.

 

9.2

Value of Performance Shares and Performance Units

The Plan Administrator shall establish Performance Goals for any specified
Performance Periods. In no event shall a Performance Period be less than one
(1) year with respect to grants of Performance Shares or Performance Units.
Prior to each grant of Performance Shares or Performance Units, the Plan
Administrator shall establish an initial amount of Common Stock for each
Performance Share and an initial value for each Performance Unit granted to each
Participant for that Performance Period. Prior to each grant of Performance
Shares or Performance Units, the Plan Administrator also shall set the
Performance Goals that will be used to determine the extent to which the
Participant receives Common Stock for the Performance Shares or payment of the
value of the Performance Units awarded for such Performance Period. With respect
to each such Performance Goal utilized during a Performance Period, the Plan
Administrator may assign percentages or other relative values to various levels
of performance which shall be applied to determine the extent to which the
Participant shall receive a payout of the number of Performance Shares or value
of Performance Units awarded.

 

9.3

Payment of Performance Shares and Performance Units

After a Performance Period has ended, the holder of a Performance Share or
Performance Unit shall be entitled to receive the value thereof as determined by
the Plan Administrator. The Plan Administrator shall make this determination by
first determining the extent to which the Performance Goals set pursuant to
Section 9.2 have been met. The Plan Administrator shall then determine the
applicable percentage or other relative value to be applied to, and will apply
such percentage or other relative value to, the number of Performance Shares or
value of Performance Units to determine the payout to be received by the
Participant. In addition, with respect to Performance Shares and Performance
Units granted to each Participant, no payout shall be made hereunder except upon
written certification by the Plan Administrator that the applicable Performance
Goals have been satisfied to a particular extent.

 

23

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9.4

Form and Timing of Payment

The payment described in Section 9.3 shall be made in Common Stock, or in cash,
or partly in Common Stock and partly in cash, at the discretion of the Plan
Administrator and set forth in the Award Agreement. The value of any fractional
shares shall be paid in cash. Payment shall be made in a lump sum or
installments as prescribed by the Plan Administrator or the Award Agreement, as
applicable, and consistent with Section 409A. If Common Stock is to be converted
into an amount of cash on any date, or if an amount of cash is to be converted
into Common Stock on any date, such conversion shall be done at the then-current
Fair Market Value of the Common Stock on such date.

 

9.5

Dividend Equivalents

The Plan Administrator may provide that Performance Shares or Performance Units
awarded under the Plan shall be entitled to an amount per Performance Share or
Performance Unit equal in value to the cash dividend, if any, paid per share of
Common Stock on issued and outstanding shares, on the dividend payment dates
(“Dividend Payment Date”) occurring during the period between the date on which
the Performance Shares or Performances Unit are granted to the Participant and
the date on which such Performance Shares or Performance Units are settled,
cancelled, forfeited, waived, surrendered or terminated under the Plan. Such
paid amounts called “dividend equivalents” shall be accrued and paid in cash
and/or Common Stock (including reinvestment in additional shares of Common
Stock) and paid at such time as the Performance Share or Performance Unit to
which it relates vests and settles as the Plan Administrator shall determine.
The number of shares of Common Stock to be issued and/or reinvested shall be
determined based on the Fair Market Value on the Dividend Payment Date. In the
event the dividend equivalents are deferred, they shall be payable in accordance
with the requirements of Section 409A.

SECTION 10

RESTRICTED STOCK

 

10.1

Grant of Restricted Stock

Subject to the limitations in Section 5.2, Restricted Stock may be granted to
Participants in such number and at such times during the term of the Plan as the
Plan Administrator shall determine. The Plan Administrator may grant Restricted
Stock or provide for the grant of Restricted Stock, either from time to time in
the discretion of the Plan Administrator or automatically upon the occurrence of
specified events.

 

10.2

Restriction Period

Except as permitted by the Plan Administrator and specified in the Award
Agreement, during a period following the date of grant, as determined by the
Plan Administrator, which in no event shall be less than three (3) years with
respect to Restricted Stock subject to restrictions

 

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based upon time and one (1) year with respect to Restricted Stock subject to
restrictions based upon the achievement of specific Performance Goals or other
performance measures (the “Restriction Period”) the Restricted Stock shall be
subject to Section 18.2. During the Restriction Period, the Plan Administrator
shall evidence the restrictions on the shares of Restricted Stock in such a
manner as it determines is appropriate (including, without limitation, (i) by
means of appropriate legends on shares of Restricted Stock that have been
certificated and (ii) by means of appropriate stop-transfer orders on shares of
Restricted Stock credited to book-entry accounts).

 

10.3

Other Restrictions

The Plan Administrator shall impose such other restrictions on Restricted Stock
granted pursuant to the Plan as it may deem advisable, including Performance
Goals or other performance measures. The Plan Administrator may require, under
such terms and conditions as it deems appropriate or desirable, that the
certificates for Restricted Stock delivered under the Plan may be held in
custody by a bank or other institution, or that the Company may itself hold such
shares in custody until the Restriction Period expires or until restrictions
thereon otherwise lapse, and may require, as a condition of any issuance of
Restricted Stock that the Participant shall have delivered a stock power
endorsed in blank relating to the shares of Restricted Stock.

 

10.4

Voting Rights; Dividends and Other Distributions

A Participant receiving a grant of Restricted Stock shall be recorded as a
stockholder of the Company. Except as otherwise provided under the terms of the
Plan or an Award Agreement, a Participant who receives a grant of Restricted
Stock shall have the rights of a stockholder with respect to such shares (except
as provided in the restrictions on transferability), including the right to vote
the shares and receive dividends and other distributions paid with respect to
the underlying shares of Common Stock. The Plan Administrator may require that
any cash dividend paid on a share of Common Stock subject to the Restricted
Stock be (i) paid in cash on or about the Dividend Payment Date or accrued and
paid at such time as the Restricted Stock to which it relates vests and settles,
(ii) paid in Common Stock on or about the Dividend Payment Date or accrued
and/or reinvested in additional shares of Common Stock and paid at such time as
the Restricted Stock to which it relates vests and settles, or (iii) paid in any
combination thereof of cash or Common Stock and paid at such times as the Plan
Administrator shall determine. The number of shares of Common Stock to be issued
and/or reinvested shall be determined based on the Fair Market Value on the
Dividend Payment Date. In the event the dividends are deferred, they shall be
payable in accordance with the requirements of 409A.

 

10.5

Issuance of Shares; Settlement of Awards

When the restrictions imposed by Section 10.2 expire or otherwise lapse with
respect to one or more shares of Restricted Stock, the Participant shall be
obligated to return to the Company any certificate(s) representing shares of
Restricted Stock (if applicable), and the Company shall deliver to the
Participant one (1) share of Common Stock (which may be delivered in book-entry
or certificated form) in satisfaction of each share of Restricted Stock, which
shares so delivered shall not contain any legend. The delivery of shares
pursuant to this

 

25

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Section 10.5 shall be subject to any required share withholding to satisfy tax
withholding obligations pursuant to Section 18.10. Any fractional shares subject
to such Restricted Stock shall be paid to the Participant in cash.

SECTION 11

RESTRICTED STOCK UNITS

 

11.1

Grant of Restricted Stock Units

Subject to the limitations in Section 5.2, Restricted Stock Units may be granted
to Participants in such number and at such times during the term of the Plan as
the Plan Administrator shall determine. The Plan Administrator may grant
Restricted Stock Units or provide for the grant of Restricted Stock Units,
either from time to time in the discretion of the Plan Administrator or
automatically upon the occurrence of specified events.

 

11.2

Restriction Period

Except as permitted by the Plan Administrator and specified in the Award
Agreement, during a period following the date of grant, as determined by the
Plan Administrator, which in no event shall be less than three (3) years with
respect to Restricted Stock Units subject to restrictions based upon time and
one (1) year with respect to Restricted Stock Units subject to restrictions
based upon the achievement of specific Performance Goals or other performance
measures (the “Restriction Period”) the Restricted Stock Units shall be subject
to Section 18.2.

 

11.3

Other Restrictions

The Plan Administrator shall impose such other restrictions on Restricted Stock
Units granted pursuant to the Plan as it may deem advisable, including the
requirement that certain pre-established Performance Goals be met. A Participant
receiving a grant of Restricted Stock Units shall not be recorded as a
stockholder of the Company and shall not acquire any rights of a stockholder
unless or until the Participant is issued shares of Common Stock in settlement
of such Restricted Stock Units.

 

11.4

Dividend Equivalents

The Plan Administrator may provide that Restricted Stock Units awarded under the
Plan shall be entitled to an amount per Restricted Stock Unit equal in value to
the cash dividend, if any, paid per share of Common Stock on issued and
outstanding shares, on the Dividend Payment Dates occurring during the period
between the date on which the Restricted Stock Units are granted to the
Participant and the date on which such Restricted Stock Units are settled,
cancelled, forfeited, waived, surrendered or terminated under the Plan. Such
paid amounts called “dividend equivalents” shall be (i) paid in cash on or about
the Dividend Payment Date or accrued and paid at such time as the Restricted
Stock Unit to which it relates vests and settles, (ii) paid in Common Stock on
or about the Dividend Payment Date or accrued and/or reinvested in additional
shares of Common Stock and paid at such time as the Restricted Stock Units to

 

26

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which it relates vests and settles, or (iii) paid in any combination thereof of
cash or Common Stock and paid at such times as the Plan Administrator shall
determine. The number of shares of Common Stock to be issued and/or reinvested
shall be determined based on the Fair Market Value on the Dividend Payment Date.
In the event the dividend equivalents are deferred, they shall be payable in
accordance with the requirements of Section 409A.

 

11.5

Issuance of Shares; Settlement of Awards

When the restrictions imposed by Section 11.2 expire or otherwise lapse with
respect to one or more Restricted Stock Units, Restricted Stock Units shall be
settled (i) in cash or (ii) by the delivery to the Participant of the number of
shares of Common Stock equal to the number of the Participant’s Restricted Stock
Units that are vested, or any combination thereof, as the Plan Administrator
shall determine and in accordance with Section 409A. The delivery of shares
pursuant to this Section 11.5 shall be subject to any required share withholding
to satisfy tax withholding obligations pursuant to Section 18.10. Any fractional
shares subject to such Restricted Stock Units shall be paid to the Participant
in cash.

SECTION 12

INCENTIVE AWARDS

 

12.1

Incentive Awards

Prior to the beginning of each Performance Period, or not later than ninety
(90) days following the commencement of the relevant fiscal year (or such other
time as may be required or permitted for “performance-based compensation” under
Section 162(m), if applicable), the Plan Administrator shall establish
Performance Goals or other performance measures which must be achieved for any
Participant to receive an Incentive Award for that Performance Period. The
Performance Goals or other performance measures may be based on any combination
of corporate and business unit Performance Goals or other performance measures.
The Plan Administrator may also establish one or more Company-wide Performance
Goals or other performance measures which must be achieved for any Participant
to receive an Incentive Award for that Performance Period. Such Performance
Goals or other performance measures may include a threshold level of performance
below which no Incentive Award shall be earned, target levels of performance at
which specific Incentive Awards will be earned, and a maximum level of
performance at which the maximum level of Incentive Awards will be earned. Each
Incentive Award shall specify the amount of cash and the amount of any other
Awards subject to such Incentive Award.

 

12.2

Performance Goal Certification

An Incentive Award shall become payable to the extent provided herein in the
event that the Plan Administrator certifies in writing prior to payment of the
Incentive Award that the Performance Goals or other performance measures
selected for a particular Performance Period have been attained. In no event
will an Incentive Award be payable under this Plan if the threshold level of
performance set for each Performance Goal or other performance measure for the
applicable Performance Period is not attained.

 

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12.3

Discretion to Reduce Awards; Participant’s Performance

The Plan Administrator, in its sole and absolute discretion and only prior to a
Change of Control, may reduce the amount of any Incentive Award otherwise
payable to a Participant upon attainment of any Performance Goal or other
performance measure for the applicable Performance Period. A Participant’s
individual performance must be satisfactory as determined by the Plan
Administrator, regardless of the Company’s performance and the attainment of
Performance Goals or other performance measures, before he or she may be paid an
Incentive Award. In evaluating a Participant’s performance, the Plan
Administrator shall consider the Performance Goals or other performance
measures, the Participant’s responsibilities and accomplishments, and such other
factors as it deems appropriate.

 

12.4

Required Payment of Incentive Awards

The Plan Administrator shall make a determination as soon as administratively
possible after the information that is necessary to make such a determination is
available for a particular Performance Period whether the Performance Goals or
other performance measures for the Performance Period have been achieved, the
amount of the Incentive Award for each Participant and whether the Incentive
Award shall be paid in cash and/or other Awards under the Plan. The Plan
Administrator shall certify the foregoing determinations in writing as provided
in Section 2.30. In the absence of an election by the Participant pursuant to
Section 14, the Incentive Award shall be paid as soon as practicable after the
end of the calendar year, but in no event later than March 15 following the end
of the calendar year in which the foregoing determinations have been made.

SECTION 13

CASH AWARDS AND OTHER STOCK-BASED AWARDS

 

13.1

Grant of Cash Awards

Subject to the terms and provisions of this Plan, the Plan Administrator, at any
time and from time to time, may grant cash awards to Participants in such
amounts and upon such terms, including the achievement of Performance Goals or
other specific performance measures, as the Plan Administrator may determine
(each, a “Cash Award”).

 

13.2

Other Stock-Based Awards

The Plan Administrator may grant other types of equity-based or equity-related
Awards not otherwise described by the terms of this Plan (including the grant or
offer for sale of unrestricted shares of Common Stock, Awards in lieu of
obligations to pay cash or deliver other property, or Common Stock) in such
amounts and subject to such terms and conditions, as the Plan Administrator
shall determine (each, an “Other Stock-Based Award”). Such Other Stock-

 

28

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Based Awards may involve the transfer of Common Stock to Participants, or
payment in cash or otherwise of amounts based on or valued in whole or in part
by reference to the value of Common Stock.

 

13.3

Value of Cash Awards and Other Stock-Based Awards

Each Cash Award granted pursuant to this Section 13 shall specify a payment
amount or payment range as determined by the Plan Administrator. Each Other
Stock-Based Award shall be expressed in terms of Common Stock or units based on
Common Stock, as determined by the Plan Administrator. The Plan Administrator
may establish performance measures applicable to such Awards in its discretion.
If the Plan Administrator exercises its discretion to establish performance
measures, the number and/or value of such cash awards or Other Stock-Based
Awards that will be paid out to the Participant will depend on the extent to
which the performance measures are met.

 

13.4

Payment of Cash Awards and Other Stock-Based Awards

Payment, if any, with respect to a Cash Award or an Other Stock-Based Award
shall be made in accordance with the terms of the Award, in cash or Common Stock
as the Plan Administrator determines and in accordance with Section 409A so as
not to be treated as payment made pursuant to a nonqualified deferred
compensation plan. The value of any fractional shares shall be paid in cash.

SECTION 14

DEFERRAL ELECTIONS

The Plan Administrator may, to the extent permitted by applicable law, permit
Employees to defer Awards under the Plan. Any such deferrals shall be subject to
such terms, conditions and procedures that the Company may establish from time
to time in its sole discretion and consistent with the advance and subsequent
deferral election requirements of Section 409A.

SECTION 15

TERMINATION OF SERVICE

The Award Agreement applicable to each Award shall set forth the effect of a
Termination of Service upon such Award; provided, however, that, unless
explicitly set forth otherwise in an Award Agreement or as determined by the
Plan Administrator, (i) all of a Participant’s unvested and/or unexercisable
Awards shall automatically be forfeited upon a Termination of Service for any
reason, and, as to Awards consisting of Options or Stock Appreciation Rights,
the Participant shall be permitted to exercise the vested portion of the Option
or Stock Appreciation Right for at least three months following termination of
his or her employment, and (ii) all of a Participant’s Awards (whether vested or
unvested, exercisable or unexercisable) shall automatically be forfeited upon
termination of the Participant’s employment for Cause. Provisions relating to
the effect of a Termination of Service upon an Award shall be

 

29

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determined in the sole discretion of the Plan Administrator and need not be
uniform among all Awards or among all Participants. Unless the Plan
Administrator determines otherwise in accordance with Section 409A, the transfer
of employment of a Participant as between the Company and a Subsidiary shall not
constitute a Termination of Service. The Plan Administrator shall have the
discretion to determine the effect, if any, that a sale or other disposition of
an Employer will have on the Participant’s Awards.

SECTION 16

EFFECT OF A CHANGE OF CONTROL

Notwithstanding any other provision of the Plan to the contrary and unless
otherwise provided in the Award Agreement, in the event of a Change of Control:

 

  (a)

Any Options and Stock Appreciation Rights outstanding which are not then
exercisable and vested, shall become fully exercisable and vested upon the
termination of the Participant’s employment without Cause or for Good Reason
during the Applicable Period.

 

  (b)

The restrictions applicable to any Restricted Stock or Restricted Stock Unit
Award which are not performance based shall lapse and such Restricted Stock or
Restricted Stock Unit shall become free of all restrictions and become fully
vested and transferable upon the termination of the Participant’s employment
without Cause or for Good Reason during the Applicable Period.

 

  (c)

The restrictions applicable to any Performance Share or Performance Unit Award
and any performance-based Restricted Stock or Restricted Stock Unit Award
granted pursuant to Sections 9, 10 or 11 shall become free of all restrictions
and become fully vested and transferable upon the termination of the
Participant’s employment without Cause or for Good Reason during the Applicable
Period.

 

  (d)

Any restrictions applicable to Cash Awards and Other Stock-Based Awards shall
immediately lapse and become payable within twenty (20) days following the
termination of the Participant’s employment without Cause or for Good Reason
during the Applicable Period.

For purposes of this Section 16 and unless otherwise provided in the Award
Agreement, the term “Applicable Period” shall have the following meaning: (i) to
the extent provided in an Employee’s employment agreement, severance or other
individual agreement, the term “Applicable Period” shall mean the protection
period following a Change of Control provided in the such agreement with respect
to such Employee, (ii) in the case of an Employee covered by the Company’s Key
Employee Change-of-Control Contract, the term “Applicable Period” shall mean the
protection period following a Change of Control provided in the Key Employee
Change-of-Control Contract entered into with such Employee, (iii) in the case of
an Employee covered by the Company’s Key Manager Change-of-Control Agreement,
the term “Applicable Period” shall mean the protection period following a Change
of Control provided in the Key

 

30

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Manager Change-of-Control Agreement entered into with such Employee; and (iv) in
the case of any Employee not covered by clause (i), (ii) or (iii) above, the
term “Applicable Period” shall mean the protection period following a Change of
Control provided in the Company’s Employee Change-of-Control Plan, as it may be
amended from time to time.

In addition to the Plan Administrator’s authority set forth in Sections 5.3, in
order to maintain the Participants’ rights in the event of any Change of
Control, the Plan Administrator, as constituted before such Change of Control,
is hereby authorized, and has sole discretion, as to any Award, either at the
time such Award is made hereunder or any time thereafter, to take any one or
more of the following actions: (i) provide for the purchase of any such Award
for an amount of cash equal to the amount that could have been attained upon the
exercise of such Award or realization of the Participant’s rights had such Award
been currently exercisable or payable, as long as such purchase does not result
in taxation to the Participant under Section 409A; or (ii) cause any such Award
then outstanding to be assumed, or new rights substituted therefore, by the
acquiring or surviving corporation after such Change of Control. The Plan
Administrator may, in its discretion, include such further provisions and
limitations in any Award Agreement, as it may deem equitable and in the best
interests of the Company.

SECTION 17

REGULATORY APPROVALS AND LISTING

The Company shall not be required to issue any certificate or create a
book-entry account for shares of Common Stock under the Plan prior to:

(a)        obtaining any approval or ruling from the Securities and Exchange
Commission, the Internal Revenue Service or any other governmental agency which
the Company, in its sole discretion, shall determine to be necessary or
advisable;

(b)        listing of such shares on any stock exchange on which the Common
Stock may then be listed; and

(c)        completing any registration or other qualification of such shares
under any federal or state laws, rulings or regulations of any governmental body
which the Company, in its sole discretion, shall determine to be necessary or
advisable.

All certificates, or book-entry accounts, for shares of Common Stock delivered
under the Plan shall also be subject to such stop-transfer orders and other
restrictions as the Plan Administrator may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which Common Stock is then listed and any applicable
federal or state securities laws, and the Plan Administrator may cause a legend
or legends to be placed on any such certificates, or notations on such
book-entry accounts, to make appropriate reference to such restrictions. The
foregoing provisions of this paragraph shall not be effective if and to the
extent that the shares of Common Stock delivered under the Plan are covered by
an effective and current registration statement under the Securities Act of
1933, as amended, or if and so long as the Plan Administrator determines that
application

 

31

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of such provisions are no longer required or desirable. In making such
determination, the Plan Administrator may rely upon an opinion of counsel for
the Company. Without limiting the foregoing, the Plan Administrator may impose
such restrictions, conditions or limitations as it determines appropriate as to
the timing and manner of any resales by a Participant or other subsequent
transfers by a Participant of any shares of Common Stock issued under this Plan,
including without limitation (i) restrictions under an insider trading policy,
(ii) restrictions designed to delay and/or coordinate the timing and manner of
sales by one or more Participants and (iii) restrictions as to the use of a
specified brokerage firm for such resales or other transfers.

SECTION 18

GENERAL PROVISIONS

 

18.1

Clawback/Forfeiture Events

(a)        If required by Company policy, by the Sarbanes-Oxley Act of 2002
and/or by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
or other applicable laws, each Participant’s Award shall be conditioned on
repayment or forfeiture in accordance with such applicable laws, Company policy,
and any relevant provisions in the related Award Agreement.

(b)        The Plan Administrator may specify in an Award Agreement or otherwise
that a Participant’s rights, payments, and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, without
limitation, termination of employment for Cause, violation of material policies
that may apply to the Participant, breach of noncompetition, confidentiality, or
other restrictive covenants that may apply to the Participant, or other conduct
by the Participant that is detrimental to the business or reputation of the
Company or a Subsidiary.

 

18.2

Nontransferability

Unless otherwise provided in the Plan and permitted by law, including but not
limited to the Code, the right of a Participant or Beneficiary to the payment of
any Award granted under the Plan and the rights and privileges conferred thereby
shall not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution unless the Participant has received the Plan
Administrator’s prior written consent. Except as otherwise provided for under
the Plan, if any Participant attempts to transfer, assign, pledge, hypothecate
or otherwise dispose of any Award under the Plan or of any right or privilege
conferred thereby, contrary to the provisions of the Plan or such Award, or
suffers the sale or levy or any attachment or similar process upon the rights
and privileges conferred hereby, all affected Awards held by such Participant
shall be immediately forfeited.

 

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18.3

No Individual Rights

Nothing contained in the Plan, or in any Award granted pursuant to the Plan,
shall confer upon any Participant any right to continue in the employ of, or as
a Consultant for, the Company or a Subsidiary, nor interfere in any way with the
right of the Company or a Subsidiary to terminate the employment or service of
such Participant at any time with or without assigning any reason therefor,
except to the extent expressly provided otherwise in a written agreement between
the Participant and the Company or any Employer.

 

18.4

Other Compensation

Unless determined otherwise by the Plan Administrator or required by contractual
obligations, the grant, vesting or payment of Awards under the Plan shall not be
considered as part of an Employee’s salary or used for the calculation of any
other pay, allowance, pension or other benefit unless otherwise permitted by
other benefit plans provided by the Company or a Subsidiary, or required by law
or by contractual obligations of the Company or a Subsidiary.

 

18.5

Leaves of Absence and Change in Status

Leaves of absence for such periods and purposes conforming to the personnel
policy of the Company, or of a Subsidiary, as applicable, shall not be deemed a
Termination of Service, unless a Participant commences a leave of absence from
which he or she is not expected to return to active employment or service with
the Company or a Subsidiary. The foregoing notwithstanding, with respect to
Incentive Stock Options, employment shall not be deemed to continue beyond the
first ninety (90) days of such leave unless the Participant’s reemployment
rights are guaranteed by statute or contract. With respect to any Participant
who, after the date an Award is granted under this Plan, ceases to be employed
by or provide services to the Company or a Subsidiary on a full-time basis but
continues to be employed or provide services on a part-time basis, the Plan
Administrator may make appropriate adjustments, as determined in its sole
discretion, as to the number of shares issuable under, the vesting schedule of,
or the amount payable under any unvested Awards held by such Participant.

 

18.6

Transfers

In the event a Participant is transferred from the Company to a Subsidiary, or
vice versa, or is promoted or given different responsibilities, Awards granted
to the Participant prior to such date shall not be affected.

 

18.7

Unfunded Obligations

Any amounts (deferred or otherwise) to be paid to Participants pursuant to the
Plan are unfunded obligations. Neither the Company nor any Subsidiary is
required to segregate any monies from its general funds, to create any trusts or
to make any special deposits with respect to this obligation. The Plan
Administrator, in its sole discretion, may direct the Company to share with a
Subsidiary the costs of a portion of the Incentive Awards paid to Participants
who are

 

33

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executives of those companies. Beneficial ownership of any investments,
including trust investments which the Company may make to fulfill this
obligation, shall at all times remain in the Company. Any investments and the
creation or maintenance of any trust or any Participant account shall not create
or constitute a trust or a fiduciary relationship between the Plan
Administrator, the Company or any Subsidiary and a Participant, or otherwise
create any vested or beneficial interest in any Participant or the Participant’s
Beneficiary or the Participant’s creditors in any assets of the Company or a
Subsidiary whatsoever. The Participants shall have no claim against the Company
for any changes in the value of any assets which may be invested or reinvested
by the Company with respect to the Plan.

 

18.8

Beneficiaries

The designation of a Beneficiary shall be on a form provided by the Company,
executed by the Participant (with the consent of the Participant’s spouse, if
required by the Company for reasons of community property or otherwise), and
delivered to a designated representative of the Company. The Company may, in its
discretion, utilize an electronic process for Beneficiary designations. A
Participant may change his or her Beneficiary designation at any time. A
designation by a Participant under any predecessor plans shall remain in effect
under the Plan unless such designation is revoked or changed under the Plan. In
the event that a Participant becomes divorced, a Beneficiary designation under
this Plan or a predecessor plan in favor of his or her divorced spouse shall
become void as of the effective date of the divorce, unless the Participant
re-designates the former spouse as his or her Beneficiary following the
effective date of the divorce. If no Beneficiary is designated, if the
designation is ineffective, or if the Beneficiary dies before the balance of a
Participant’s benefit is paid, the balance shall be paid to the Participant’s
spouse, or if there is no surviving spouse, to the Participant’s estate.
Notwithstanding the foregoing, however, a Participant’s Beneficiary shall be
determined under applicable state law if such state law does not recognize
Beneficiary designations under plans of this sort and is not preempted by laws
which recognize the provisions of this Section 18.8. In the event that the Plan
Administrator determines that two or more claims are made by claimed
Beneficiaries against the Plan for an Award, the Plan Administrator may initiate
an interpleader action in a court of competent jurisdiction to resolve the
controversy.

In the event that an Award has vested, its restrictions have lapsed, or it has
been exercised and the underlying shares of Common Stock relating to such award
have been transferred to a brokerage account, it is the responsibility of the
Participant to establish and maintain beneficiary designations with that broker.

 

18.9

Governing Law

The Plan shall be construed and governed in accordance with the laws of the
State of Texas.

 

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18.10 Satisfaction of Tax Obligations

Appropriate provision shall be made for all taxes required to be withheld in
connection with the exercise, grant, vesting or other taxable event of Awards
under the applicable laws and regulations of any governmental authority, whether
federal, state or local and whether domestic or foreign, including, without
limitation, the required withholding of a sufficient amount of Common Stock
otherwise issuable to an Employee to satisfy the said required minimum tax
withholding obligations. To the extent provided by the Plan Administrator, an
Employee is permitted to deliver Common Stock (including shares acquired
pursuant to the exercise of an Option or Stock Appreciation Right other than the
Option or Stock Appreciation Right currently being exercised, to the extent
permitted by applicable regulations) for payment of withholding taxes on the
exercise of an Option or Stock Appreciation Right, upon the grant or vesting of
Restricted Stock or Restricted Stock Units or upon the payout of Performance
Shares, Performance Units or Incentive Awards. Common Stock may be required to
be withheld from the shares issuable to the Employee upon the exercise of an
Option or Stock Appreciation Right, upon the vesting of Restricted Stock or
Restricted Stock Units or upon the payout of Performance Shares or Performance
Units to satisfy such minimum required tax withholding obligations. The Fair
Market Value of Common Stock as delivered pursuant to this Section 18.10 shall
be determined as of the day of release, and shall be calculated in accordance
with Section 2.18.

Any Participant who makes a Section 83(b) election under the Code shall, within
ten (10) days of making such election, notify the Company in writing of such
election and shall provide the Company or such Participant’s Employer with a
copy of such election form filed with the Internal Revenue Service.

A Participant is solely responsible for obtaining, or failing to obtain, tax
advice with respect to participation in the Plan prior to the Participant’s
(i) entering into any transaction under or with respect to the Plan,
(ii) designating or choosing the times of distributions under the Plan, or
(iii) disposing of any Common Stock issued under the Plan.

18.11 Participants in Foreign Jurisdictions

The Plan Administrator shall have the authority to adopt such modifications,
procedures and subplans as may be necessary or desirable to comply with
provisions of the laws of any countries in which the Company or any Subsidiary
may operate to ensure the viability of the benefits from Awards granted to
Participants employed in such countries, to meet the requirements of local laws
that permit the Plan to operate in a qualified or tax-efficient manner, to
comply with applicable foreign laws and to meet the objectives of the Plan;
provided, however, that no such action taken pursuant to this Section 18.11
shall result in a “material revision” of the Plan under applicable securities
exchange governance rules.

 

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SECTION 19

REGULATORY COMPLIANCE

 

19.1

Rule 16b-3 of the Exchange Act and Section 162(m)

The Company’s intention is that, so long as any of the Company’s equity
securities are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, the Plan shall comply in all respects with the rules of any exchange on
which the Common Stock is traded and with Rule 16b-3. In addition, it is the
Company’s intention that, as to Covered Employees, unless otherwise indicated in
an Award Agreement, Options, Stock Appreciation Rights, Performance Shares,
Performance Units and Incentive Awards shall be designed to qualify as
performance-based compensation under Section 162(m). If any Plan provision is
determined not to be in compliance with the foregoing intentions, that provision
shall be deemed modified as necessary to meet the requirements of any such
exchange, Rule 16b-3 and Section 162(m).

 

19.2

Section 409A

The Plan is intended to be administered, operated and construed in compliance
with Section 409A and any guidance issued thereunder. Notwithstanding this or
any other provision of the Plan to the contrary, the Board or the Plan
Administrator may amend the Plan in any manner, or take any other action, that
either of them determines, in its sole discretion, is necessary, appropriate or
advisable to cause the Plan to comply with Section 409A and any guidance issued
thereunder. Any such action, once taken, shall be deemed to be effective from
the earliest date necessary and applicable to avoid a violation of Section 409A
and shall be final, binding and conclusive on all Employees and other
individuals having or claiming any right or interest under the Plan.

Notwithstanding the provisions of the Plan or any Award Agreement, if a
Participant is a “specified employee” upon his or her “separation from service”
(within the meaning of such terms in Section 409A under such definitions and
procedures as established by the Company in accordance with Section 409A), any
portion of a payment, settlement or other distribution made upon such a
“separation from service” that would cause the acceleration of, or an addition
to, any taxes pursuant to Section 409A will not commence or be paid until a date
that is six (6) months and one (1) day following the applicable “separation from
service.” Any payments, settlements or other distributions that are delayed
pursuant to this Section 19.2 following the applicable “separation from service”
shall be accumulated and paid to the Participant in a lump sum without interest
on the first business day immediately following the required delay period.

SECTION 20

ESTABLISHMENT AND TERM OF PLAN

The Plan was adopted by the Board on February 16, 2012, and is subject to
approval by the Company’s stockholders. If approved by the stockholders, this
Plan will replace the Prior Plan, and no further Awards will be made under the
Prior Plan. This Plan shall become effective

 

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on the Effective Date, and shall remain in effect, subject to the right of the
Board to terminate the Plan at any time pursuant to Section 21, until all Common
Stock subject to it shall have been purchased or acquired according to the
provisions herein. However, in no event may an Award be granted under the Plan
on or after the tenth (10th) anniversary of the Effective Date. After this Plan
is terminated, no future Awards may be granted pursuant to the Plan, but Awards
previously granted shall remain outstanding in accordance with their applicable
terms and conditions and this Plan’s terms and conditions.

SECTION 21

AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN

 

21.1

Amendment of Plan

Subject to approval of the Board with respect to amendments that are required by
law or regulation or stock exchange rules to be submitted to the stockholders of
the Company for approval, the Compensation and Benefits Committee may from time
to time make such amendments to the Plan as it may deem proper and in the best
interest of the Company, including, without limitation, any amendment necessary
to ensure that the Company may obtain any regulatory approval referred to in
Section 16; provided, however, that (i) to the extent required by applicable
law, regulation or stock exchange rule, stockholder approval shall be required,
and (ii) except as otherwise provided in the Plan, no change in any Award
previously granted under the Plan may be made without the consent of the
Participant if such change would impair the right of the Participant under the
Award to acquire or retain Common Stock or cash that the Participant may have
acquired as a result of the Plan.

 

21.2

Termination or Suspension of Plan

The Compensation and Benefits Committee may at any time suspend the operation of
or terminate the Plan with respect to any Common Stock or rights which are not
at that time subject to any Award outstanding under the Plan.

 

21.3

Section 162(m) Approval

If so determined by the Plan Administrator, the provisions of the Plan relating
to Performance Goals and Awards that are intended to constitute
“performance-based compensation” under Section 162(m) shall be disclosed to, and
reapproved by, the Company’s stockholders no later than the first stockholder
meeting that occurs in the fifth year following the year in which the Effective
Date occurs (or at any such other time as may be required or allowed by
Section 162(m)) in order for Awards that are intended to constitute
“performance-based compensation” under Section 162(m) granted after such time to
be exempt from the deduction limitations of Section 162(m).

 

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IN WITNESS WHEREOF, the Company has caused the Plan to be executed effective as
of May 15, 2012.

 

ANADARKO PETROLEUM CORPORATION /s/ Julia A. Struble

Julia A. Struble

Vice President, Human Resources

 

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