Exhibit 10.3

Administrative Rules

of the

Compensation Committee

of the

Board of Directors

of

National Fuel Gas Company

As amended and restated

effective December 7, 2011

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TABLE OF CONTENTS

 

I.    Meetings      1    II.    Quorum and Voting; Delegation      2    III.   
Grants and Awards Under the Plans      2       A.    General Rules Regarding
Awards Under the 1997 and 2010 Plans      3          1.    Making of An Award   
  3          2.    Contemporaneous Awards      3          3.    Stock-Based
Awards      3             a.    Source      3             b.    Cash Dividends
and Cash Dividend Equivalents      3                i.    Stock Based Awards
Other Than Restricted Stock      3                ii.    Restricted Stock Awards
     4             c.    Payment      4          4.    Withholding Taxes      4
         5.    Deferral of Payment      5       B.    Stock Options Under the
1997 and 2010 Plans      5          1.    Designation      5          2.   
Price      6          3.    Exercise Period/Duration      6             a.   
Non-Qualified Stock Options Under the 1997 and 2010 Plans      6             b.
   Incentive Stock Options Under the 1997 Plan      6             c.   
Suspension of Rights to Exercise      7             d.    Delegation of
Authority      7          4.    Death or Other Termination of Employment      8
            a.    Definitions      8             b.    Non-Qualified Stock
Options Under the 1997 and 2010 Plans      8             c.    Extension of
Incentive Stock Options Under the1997 and 2010 Plans      10          5.   
Mechanics of Exercise      11          6.    Reload Options      11       C.   
SARs Under the 1997 or 2010 Plan      11   

 

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   D.    Restricted Stock and Restricted Stock Units Under the 1997 and 2010
Plans      12          1.    Restrictions on Transferability; Vesting      12   
      2.    Mechanics of Grant      12    IV.    Procedures For Exercising Stock
Options and SARs      13       A.    Authority and Scope      13       B.   
Notice of Exercise      13          1.    Form and Delivery      13          2.
   Exercise Date      13       C.    Payment of Exercise Price      14         
1.    Cash Payment      14          2.    Payment with Existing Company Stock   
  14          3.    Additional Time to Pay Exercise Price      15          4.   
Cashless Exercise      16       D.    Restrictions Relating to Possession of
Material Nonpublic Information      17   

 

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ADMINISTRATIVE

RULES OF THE

COMPENSATION COMMITTEE

OF THE

BOARD OF DIRECTORS

OF

NATIONAL FUEL GAS COMPANY

As amended and restated

effective December 7, 2011

 

I. MEETINGS

Each meeting (“Meeting”) of the Compensation Committee (“Committee”) of the
Board of Directors of National Fuel Gas Company (“Company”) shall be held as
indicated in a notice made in accordance with these rules. Notice of each
Meeting, stating the place, date and hour thereof, shall be given to each member
of the Committee (“Member”) by e-mailing, faxing, telephoning or personally
delivering the same to him at least one day before the meeting, if there is no
reason to believe it was not received, or by mailing the same to him at least
five days before the Meeting, in all cases to the Member’s last known address or
addresses as the same appears upon the records of the Company. All such notices
shall be effective when sent, including the leaving of a message recorded at, or
spoken to any individual answering, the Member’s designated telephone number(s).
The attendance of any Member at a Meeting without protesting prior to the end of
the Meeting the lack of notice of such meeting shall constitute a waiver of
notice by that Member.

Any one or more Members of the Committee may participate in a Meeting by means
of a conference telephone or similar equipment. Participation by such means
shall constitute presence in person at a Meeting.

The Committee may also take action by unanimous written consent.

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II. QUORUM AND VOTING; DELEGATION

At all Meetings, a quorum shall be required for the transaction of business and
shall consist of a majority of the entire Committee. The majority vote of the
Members at a Meeting at which a quorum is present shall decide any question that
may come before the meeting.

Consistently with limitations imposed by the Plans (as defined below), the
Committee may delegate in these rules or by resolution any or all of its
authority to the Chief Executive Officer, to the Secretary and to any other
officer of the Company (individually, “Delegate”), so long as the Delegate has
no potential conflict of interest which would cause him or her not to exercise
his or her good faith independent business judgment in respect of a delegated
matter. Subject to such limitations, the Committee hereby delegates the power to
implement its decisions to appropriate officers of the Company.

 

III. GRANTS AND AWARDS UNDER THE PLANS

The following rules and regulations shall apply with respect to grants and
awards of stock options, stock appreciation rights (“SARs”), shares of
restricted stock (“Restricted Stock”) and restricted stock units (“Restricted
Stock Units”) under the Company’s 1997 Award and Option Plan (“1997 Plan”) or
the Company’s 2010 Equity Compensation Plan (“2010 Plan”) (as amended, each
individually a “Plan;” together the “Plans”).

Any capitalized term not defined in these rules shall have the same meaning as
in the applicable Plan. The following rules are intended to supplement the Plans
and, to the extent that any rule is determined to be inconsistent with any Plan,
the Plan shall control.

These rules may be amended by the Committee at any time and from time to time.
Except to the extent otherwise specified in the particular Award Notice or at
the time these rules are amended, any grant or award under the Plans shall be
subject to these rules as in effect on the date of the grant or award.

 

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  A. GENERAL RULES REGARDING AWARDS UNDER THE 1997 AND 2010 PLANS

 

  1. Making of An Award

An Award within the meaning of these rules occurs upon the grant by the
Committee of any stock option, SAR, Restricted Stock or Restricted Stock Unit.
An Award Notice within the meaning of these rules means a written notice from
the Company to a Participant (including a notice provided to the recipient in an
electronic form or by a link to cite of the notice) that sets forth the terms
and conditions of an Award in addition to those conditions established in the
applicable Plan and by the Committee’s exercise of its administrative powers.

 

  2. Contemporaneous Awards

Unless the Committee shall otherwise expressly provide at the time of grant, an
Award of one type granted contemporaneously with an Award of any other type
shall be treated as having been granted in combination, and not in the
alternative, with the Award of the other type.

 

  3. Stock-based Awards

a. Source. Stock-based Awards, to the extent actually paid in Common Stock,
shall reduce treasury shares (if any) first and thereafter authorized but
unissued shares.

b. Cash Dividends and Cash Dividend Equivalents.

(i) Stock-Based Awards Other Than Restricted Stock. No stock-based Award other
than Restricted Stock carries with it the entitlement to receive cash

 

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dividends or cash dividend equivalents until such stock-based Award is exercised
(in the case of a stock option or stock-settled SAR) or earned. If a stock-based
Award is exercised or earned prior to or on the record date for determination of
stockholders entitled to receive a cash dividend, then such stock-based Award or
the securities resulting from the exercise thereof, as the case may be, shall be
entitled to receive such cash dividend (or, if the shares related thereto have
not been issued as of the record date, to receive a dividend equivalent in
respect thereof).

(ii) Restricted Stock Awards. Notwithstanding clause (i) of this paragraph
(b) or Section 24 of the 1997 Plan or Section 14(e) of the 2010 Plan, dividends
shall be payable with respect to each outstanding Award of Restricted Stock
whether or not the restrictions in such Award have been satisfied or have
lapsed.

c. Payment. Payment of stock-based Awards shall be made with Common Stock.

 

  4. Withholding Taxes

At the time a Participant is taxable with respect to stock options, SARs,
Restricted Stock or Restricted Stock Units granted under the Plans, or the
exercise or surrender of the same, the Company (or, if applicable, an employer
other than the Company) shall have the right to withhold from amounts payable to
the Participant under the Plan or from other compensation payable to the
Participant in its sole discretion, or require the Participant to pay to it, an
amount sufficient to satisfy all federal, state and/or local (including foreign)
withholding tax requirements. A Participant may, subject to Section IV(D) below,
pay such tax withholding amounts in whole or in part by requesting that the
Company withhold such amounts of taxes from the amounts owed to the Participant,
or by delivering as payment to the Company shares of Common Stock to be canceled
having a Fair Market Value less than or equal to the amount of

 

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such required withholding taxes (with the remainder payable in cash); provided,
however, that to the extent that such withholding is satisfied by the Company’s
withholding and/or canceling any shares of Common Stock, in no event may the
Fair Market Value of the Common Stock withheld and/or canceled exceed the amount
required to be withheld at law.

 

  5. Deferral of Payment

The Committee intends to permit Participants to elect, at such time or times as
the Committee shall permit, to defer the receipt of payment of Awards that are
payable in cash; provided, however, that (1) under the then applicable income
tax rules the Participant is not in constructive receipt of, and subject to
income tax on, the payment prior to its actual receipt, (2) such deferral does
not result in any of the Plans being subject to the Employee Retirement Income
Security Act of 1974, as amended, (3) if the Participant is an Executive Officer
(i.e., is subject to Section 16 of the Securities Exchange Act of 1934,
including a retired officer who is, at the relevant time, a director), such
election shall comply with Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934, as then in effect, and (4) such election would not result
in the imposition of an additional tax under Section 409A of the Code on the
Participant. The Committee hereby delegates to the Chief Executive Officer,
President, Treasurer, Secretary and General Counsel of the Company, and each of
them, the Committee’s authority to establish the time or times at which deferral
elections may be permitted in respect of any Award.

 

  B. STOCK OPTIONS UNDER THE 1997 AND 2010 PLANS

 

  1. Designation

The Award Notice setting forth the terms and conditions of a grant of a stock
option shall indicate the applicable Plan under which the stock option is
granted and

 

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whether the stock option is an incentive stock option (within the meaning of
Section 422 of the Code, an “ISO”) or a non-qualified stock option (“NSO”). The
Committee hereby delegates to the Chief Executive Officer, President, Treasurer,
Secretary and General Counsel of the Company, and each of them, the authority to
prepare, execute and deliver Award Notices consistent with actions taken by the
Committee. The Committee hereby directs that any action taken by the Committee
granting stock options without specifying whether the stock options are ISOs be
interpreted as follows:

a. an award of stock options under the 1997 Plan or the 2010 Plan shall be
deemed to be awards of NSOs only; and

b. an award of stock options after December 12, 2006 under the 1997 Plan shall
be deemed to be NSOs regardless of the language of the award.

 

  2. Price

The price at which Common Stock may be purchased upon exercise of a stock option
(the “exercise price”) shall be the Fair Market Value of the Common Stock on the
date of the Award.

 

  3. Exercise Period/Duration

a. Non-Qualified Stock Options Under the 1997 and 2010 Plans. Except as may
otherwise be expressly provided in the Plan or in Section III(B)(4) of these
rules, a non-qualified stock option granted under the 1997 Plan or the 2010 Plan
first may be exercised twelve months after the date of grant.

b. Incentive Stock Options Under the 1997 and 2010 Plans. Except as may
otherwise be expressly provided in the Plan, an ISO granted under the 1997 Plan
or the 2010 Plan first may be exercised twelve months after the date of grant,
or, if earlier, on the date of the optionee’s death.

 

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c. Suspension of rights to exercise. The Committee may, among other things,
suspend or limit the right of any Participant to exercise stock options during
any period:

(i) for which counsel for the Company advises in writing that such stock option
exercises would violate federal or state securities laws or other applicable
laws, rules, regulations, judgments, or orders; or

(ii) during which management is investigating an allegation that the Participant
has engaged in any act which would permit the Committee to forfeit the
Participant’s stock options pursuant to Section 18 of the 1997 Plan or
Section 14(c) of the 2010 Plan.

d. Delegation of Authority. The Committee hereby delegates to the Chief
Executive Officer, President, Treasurer, Secretary and General Counsel of the
Company, and each of them, the Committee’s authority to suspend Participants’
rights to exercise stock options during the periods described in Section
III(B)(3)(c) above. Management shall report to the Committee at each Committee
meeting any suspension actions taken or ongoing since the previous meeting, and
the Committee shall adopt a resolution ratifying, continuing and/or
discontinuing each such suspension.

 

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  4. Death or Other Termination of Employment

a. Definitions. For purposes of these rules, the following terms shall have the
following meanings:

(i) For purposes of the 1997 Plan, “Disability” shall mean that the Participant
is eligible to receive disability benefits under Article 3 of The National Fuel
Gas Company Retirement Plan (“Retirement Plan”), as from time to time amended,
or that the Participant would be eligible to receive such benefits if he or she
were a participant in the Retirement Plan.

(ii) “Subsidiary” shall mean a corporation or other business entity in which the
Company directly or indirectly has an ownership interest of fifty percent
(50%) or more.

b. Non-Qualified Stock Options Under the 1997 Plan. If termination of employment
occurs by reason of death, each NSO awarded under the 1997 Plan shall, to the
extent not then exercisable, become immediately and fully exercisable, and shall
remain exercisable for five years from such termination or the balance of its
unexpired term, whichever is less. If termination of employment occurs by reason
of voluntary resignation (including retirement) at or after age 60, each NSO
awarded under the 1997 Plan shall, to the extent not then exercisable, become
exercisable in accordance with the terms of the 1997 Plan, and shall remain
exercisable until the earlier of the fifth anniversary of such termination or
the expiration of the balance of its term. If termination of employment occurs
by reason of Disability, (i) each NSO awarded under the 1997 Plan that is then
exercisable shall remain exercisable for five years from such termination or the
balance of its unexpired term, whichever is less, (ii) each NSO awarded under
the 1997 Plan on or after December 7, 2011 that is not then

 

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exercisable shall become immediately and fully exercisable, and shall remain
exercisable for five years from such termination or the balance of its unexpired
term, whichever is less, and (iii) each NSO awarded under the 1997 Plan prior to
December 7, 2011 that is not then exercisable shall terminate in accordance with
the terms of the 1997 Plan. If termination of employment occurs by reason of
divestiture by the Company of one or more Subsidiaries or other business
segments, divisions or operations in a transaction that does not otherwise
qualify as a Change in Control or Change in Ownership as those terms are defined
in the 1997 Plan, (i) each NSO awarded under the 1997 Plan that is then
exercisable shall remain exercisable for five years from such termination or the
balance of its unexpired term, whichever is less, (ii) each NSO awarded under
the 1997 Plan on or after December 7, 2011 that is not then exercisable shall
become immediately and fully exercisable, and shall remain exercisable for three
years from such termination or the balance of its unexpired term, whichever is
less, and (iii) each NSO awarded under the 1997 Plan prior to December 7, 2011
that is not then exercisable shall terminate in accordance with the terms of the
1997 Plan. If termination of employment occurs by reason of discharge by the
Company for cause, or voluntary resignation of the Participant prior to age 60,
each NSO awarded under the 1997 Plan shall lapse unless extended by the
Committee in its discretion. If termination of employment occurs for any other
reason, each NSO awarded under the 1997 Plan that is exercisable at the time of
termination of employment or becomes exercisable pursuant to the terms of the
1997 Plan shall remain exercisable for five years from such termination (or such
greater period as the Committee deems appropriate) or the balance of its
unexpired term, whichever is less.

 

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c. Extension of Incentive Stock Options Under the 1997 Plan. The Committee
hereby determines that:

(i) With respect to any Participant, if termination of employment occurs by
reason of death, Disability or voluntary resignation (including retirement) at
or after age 60, an officer of the Company other than such Participant shall,
within thirty days of such termination, offer in writing to extend the period
during which any ISO granted to such optionee under the 1997 Plan may be
exercised, to the date which is the earlier of five years from such termination
of employment or the date on which the ISO would have otherwise expired absent
such termination of employment.

(ii) If termination of such Participant’s employment occurs for any other
reason, an officer of the Company other than such Participant, if the Committee
so authorizes, shall, within thirty days of such termination, offer to extend
the period during which any ISO granted to such optionee under the 1997 Plan may
be exercised to the date specified in the offer, which shall not be later than
the earlier of five years from such termination of employment or the date on
which the ISO would have otherwise expired absent such termination of
employment.

(iii) The written offer shall notify the optionee, or the optionee’s estate or
the person to whom the optionee’s rights under the ISO are transferred by will
or the laws of descent and distribution, of the right to accept the offer by
consenting to the extension, in writing, within thirty days of the offer. If
such consent is timely received the ISO may be exercised during the period
specified in the offer, but not later than the expiration of the exercise period
specified in the Award Notice.

 

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  5. Mechanics of Exercise

To exercise a stock option, the Participant shall provide a signed exercise
notice to an appropriate officer or other designee of the Company, which notice
shall indicate which stock options are being exercised, how the exercise price
is to be paid and any other appropriate information. Appropriate delivery of a
signed notice of exercise binds the Participant to pay the exercise price. Part
IV of these rules contains procedures for exercising stock options.

 

  6. Reload Options

No optionee shall be issued a new stock option automatically upon exercise of a
stock option. However, if the Award Notice provides for the issuance of such new
stock option, the new stock option shall have an exercise price equal to the
Fair Market Value of the Common Stock on the date the new stock option is issued
and shall otherwise be subject, as nearly as possible, to the same terms and
conditions as the exercised stock option.

 

  C. SARs UNDER THE 1997 OR 2010 PLAN

The base price or grant price of a SAR shall be the Fair Market Value of the
Common Stock on the date of the grant of the SAR. Each SAR shall otherwise be
subject to the terms and conditions imposed (i) by the Award Notice upon the
SAR, (ii) by the applicable Plan, and (iii) by these rules upon SARs and NSOs,
as applicable . A SAR shall be outstanding and exercisable during the entire
exercise period otherwise applicable to an NSO if the NSO had been granted on
the same day as the SAR (as adjusted in accordance with Section III(B)(4) above
in the event of death or other termination of employment).

To exercise a SAR, the Participant shall deliver a signed exercise notice to an
appropriate officer or other designee of the Company, which notice shall
indicate which SARs are being exercised, and any other appropriate information.
Part IV of these rules contains

 

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procedures for exercising SARs. Any SAR not already exercised shall be deemed to
be exercised at the close of business on the scheduled expiration date of such
SAR, if at such time the SAR by its terms remains exercisable and, if so
exercised, would result in a payment to the holder of such SAR. If upon any such
deemed exercise the payment to the holder of such SAR is to be made in shares of
Common Stock, the holder of such SAR shall be deemed to have elected to pay the
minimum required tax withholding in shares of Common Stock.

 

  D. RESTRICTED STOCK AND RESTRICTED STOCK UNITS UNDER THE 1997 AND 2010 PLANS

 

  1. Restrictions on Transferability; Vesting

The restrictions on transferability and vesting and all other terms and
conditions of Restricted Stock and Restricted Stock Units granted under either
the 1997 Plan or the 2010 Plan shall be specified in the Award Notice. Except as
otherwise provided in the applicable Plan, all shares of Restricted Stock and
all Restricted Stock Units shall be subject to the Participant’s continued
employment with the Company or a Subsidiary until vesting. The Committee may
accelerate the vesting of Restricted Stock or Restricted Stock Units on its own
motion as it deems appropriate and in the best interests of the Company.

 

  2. Mechanics of Grant

The Committee hereby delegates to appropriate officers of the Company the
authority to establish and revise appropriate procedures with respect to the
issuance of certificates representing Restricted Stock and the payment of
dividends thereon.

 

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IV. PROCEDURES FOR EXERCISING STOCK OPTIONS AND SARS

 

  A. AUTHORITY AND SCOPE

Notwithstanding any provision of any award letter issued before 1998, these are
the exercise procedures for ISOs, NSOs and SARs issued under the 1997 Plan, the
2010 Plan, and (unless the Compensation Committee specifically orders otherwise)
any other compensation plan which in the future is adopted by the Company.

 

  B. NOTICE OF EXERCISE

 

  1. Form and Delivery

A Participant holding stock options or SARs granted under any of the Plans
elects to exercise stock options or SARs by delivering (by personal delivery,
fax or e-mail) to the office of the Company’s Secretary or Assistant Secretary a
Notice of Exercise. A Notice of Exercise is a writing signed by the Participant
indicating that the Participant thereby elects to exercise the stock options or
SARs identified in the Notice (including the quantity and either the stock
option exercise price or the SAR base price), and describing the method by which
the Participant will pay the exercise price of the stock options (since there is
no exercise price payment due in connection with the exercise of a SAR).
Appropriate delivery of a Notice of Exercise binds the Participant to pay the
exercise price. Optional forms of Notice of Exercise are attached to these rules
(see Exhibit A).

 

  2. Exercise Date

The effective date of a Notice of Exercise is the “Exercise Date”. An exercise
will be effective as of the date the Notice of Exercise is received by the
office of the Secretary or Assistant Secretary; provided, however, that:

(i) a Notice of Exercise received on a trading day before trading opens that day
on the New York Stock Exchange may validly designate the Exercise Date to be the
preceding trading day;

 

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(ii) a Notice of Exercise may validly designate the Exercise Date to be any date
later than the date the Notice of Exercise is received; and

(iii) if the exercise of a stock option is accomplished through a “cashless
exercise” as described in Section IV(C)(4) below, the Exercise Date shall be the
date the broker sells Company stock into the market regarding that exercise.

 

  C. PAYMENT OF EXERCISE PRICE

 

  1. Cash Payment

To pay the exercise price of a stock option in cash, a Participant must deliver
to the Secretary or Assistant Secretary payment in full, in cash or by check
payable in immediately available U.S. funds to the Company, within three
business days after the Exercise Date (except as additional time may be allowed
under Section IV(C)(3) below). For purposes of these rules, the term “business
day” shall mean any day other than a Saturday, Sunday, federal holiday or day on
which the Company’s principal office is closed for business. Subject to Section
IV(D) below, payment of the exercise price may be partly in cash and partly in
Company stock as described in Section IV(C)(2) below, or may be accomplished
through a “cashless exercise” as described in Section IV(C)(4) below.

 

  2. Payment with Existing Company Stock

To pay the exercise price in shares of Company stock already owned by a
Participant, the Participant must surrender to the Company shares having a total
Fair Market Value (as of the Exercise Date) of at least the total exercise
price, or pay any shortfall in cash. The Participant must, within three business
days after the Exercise Date (except as additional time may be allowed under
Section IV(C)(3) below) do one or both of the following:

 

  a. regarding shares in the Company’s Direct Registration System, comply with
the Company’s procedures (including signature guarantee requirements) for
transferring book-entry shares to the Company; or

 

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  b. regarding shares that are evidenced by a paper stock certificate, deliver
the certificate to the Secretary or Assistant Secretary. Each certificate
delivered must have a guaranteed signature either on the back or on a stock
power to be attached. The recommended procedure for mailing certificates is to
mail the certificate and signed stock power separately.

 

  3. Additional Time to Pay Exercise Price

If, at any time the Participant’s payment of the exercise price would otherwise
be required pursuant to Section IV(C)(1) or (2) above, a Participant is either

a. traveling away from his or her usual place of Company employment, or

b. “disabled”, as defined in the applicable Plan or these rules, then, to the
extent permitted by applicable law, the Participant may pay the exercise price
on or before the first business day after the Participant’s return to his or her
usual place of NFG employment, but no later than the tenth business day after
the Exercise Date. However, the President, Chief Executive Officer, Treasurer or
General Counsel of the Company shall have the authority to grant such additional
time to pay the exercise price as is reasonably necessary to accommodate the
travel or disability of the Participant.

 

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  4. Cashless Exercise

The broker-assisted method of exercising stock options described in this
Section IV(C)(4) (“cashless exercise”) requires no cash outlay by the
Participant. A Participant wishing to do a cashless exercise must first
establish a trading account with a registered securities broker-dealer.
Establishing that trading account will likely include the Participant’s
commitment to pay the broker as described in their agreement. Upon request by a
Participant, the Secretary or Assistant Secretary will provide information that
may help the Participant find a broker who has previously done cashless
exercises with the Company and/or may be willing to do so at a discounted
commission rate. The Participant must provide the Secretary or Assistant
Secretary with the Participant’s broker’s name, firm, address, telephone and fax
numbers.

To do a cashless exercise, the Participant must deliver a Notice of Exercise as
described in Section IV(B)(1), and notify the Participant’s broker to proceed
with the exercise and to notify the Company of the date the stock is sold. The
Participant’s broker will sell Company stock for the Participant’s account and
pay to the Company the exercise price, plus any necessary tax withholding. The
Company will have share certificates delivered to the Participant’s broker
within three business days after the Exercise Date, unless the Company elects to
retain the certificates pending receipt of the exercise price. The Participant
will be required to pay the Participant’s broker according to the agreement
between them, typically a few days’ interest on the exercise price plus a
commission on the shares sold.

 

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  D. RESTRICTIONS RELATING TO POSSESSION OF MATERIAL NON-PUBLIC INFORMATION

Notwithstanding anything to the contrary provided above in these rules, a
Participant may not, while in possession of material nonpublic information
relating to the Company, or while subject to any quarterly or other “blackout
period” imposed under the Company’s Policy on Insider Trading in National Fuel
Gas Company Securities, (i) pay the exercise price of a stock option with
Company stock, (ii) pay tax withholding in connection with the exercise or
vesting of any Award by having Company stock withheld and/or canceled,
(iii) exercise SARs, or (iv) effect a cashless exercise of stock options. For a
Participant subject to a quarterly or other blackout period, these prohibited
transactions include any transaction the effective date of which occurs within
the blackout period.

The restrictions set forth in this Section IV(D) shall not apply to any deemed
exercise of SARs or deemed payment of tax withholding in connection therewith
pursuant to a Plan or these rules, or to any transaction effected pursuant to an
instruction, contract or written plan that meets the requirements of
Rule 10b5-1(c) under the Securities Exchange Act of 1934, which provides a
defense against insider trading liability. An instruction, contract or written
plan relating to any transactions set forth in this Section IV(D) and intended
by a Participant to comply with Rule 10b5-1 (such as a written 10b5-1 plan on a
form provided by a stockbroker) must meet the requirements of Rule 10b5-1(c) and
should be pre-approved by the NFG Legal Department before the Participant enters
into any transactions under that instruction, contract or written plan.

 

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