Long Term Incentive Plan 2005











Exhibit
10.1




















































KERR-McGEE
CORPORATION 2005 LONG TERM INCENTIVE PLAN















































































KERR-McGEE
CORPORATION 2005 LONG TERM INCENTIVE PLAN







TABLE
OF CONTENTS














	
      Article
	 	
      Page

	
       
	
      Purpose
      
	
      1

       

	
      II
	
      Definitions..................................................................
	
      1

       

	
      III
	
      Administration............................................................
	
      3

       

	
      IV
	
      Eligibility....................................................................
	
      5

       

	
      V
	
      Limitations
      on Awards..................................................
	
      5

       

	
      VI
	
      Stock
      Options............................................................
	
      6

       

	
      VII
	
      Stock
      Appreciation Rights.............................................
	
      8

       

	
      VIII
	
      Restricted
      Stock.........................................................
	
      9

       

	
      IX
	
      Performance
      Awards...................................................
	
      9

       

	
      X
	
      Adjustment
      Upon Changes in Stock................................
	
      10

       

	
      XI
	
      Change
      in Control.......................................................
	
      10

       

	
      XI
	
      Miscellaneous............................................................
	
      12

       

	
      XIII
	
      Amendment
      and Termination.........................................
	
      13

       

	
      XIV
	
      Duration
      of the Plan.....................................................
	
      14

















































KERR-McGEE
CORPORATION 2005
LONG TERM INCENTIVE PLAN







Article
I




Purpose




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







Article
II




Definitions





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








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








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








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








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








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








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




























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








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








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








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








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








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








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








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



























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








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








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








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








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








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








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








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










Article
III




Administration




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























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




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




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




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




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























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




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




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







Article
IV




Eligibility




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

 




Article
V




Limitations
on Awards




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























	 	
      Type
      of Awards
	
      Maximum
      Issuance

       

	
          (a)    
	
      Restricted
      Stock and Performance Awards

      to
      Employees

       
	
      3,000,000
      shares

	
          (b)
	
      Stock
      Options and Restricted Stock to

      Non-Employee
      Directors, but no more

      than
      100,000 shares of Restricted Stock

       
	
      300,000
      shares

	
          (c)
	
      Incentive
      Stock Options
	
      1,000,000
      shares
















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




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







Article
VI




Stock
Options




6.1 Grant
of Options.




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




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























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




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




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




6.5 Payment
for Shares.




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


























Article
VII




Stock
Appreciation Rights




7.1 Grant.  An
SAR shall represent a right to receive a payment in cash equal to the excess of
the Fair Market Value of a specified number of shares of Stock on the date the
SAR is exercised over an amount (the SAR exercise price) which shall be no less
than the Fair Market Value of the shares on the date the SAR was granted (or the
option price for SARs granted in tandem with an Option), as set forth in the
applicable Award agreement. Each SAR shall be evidenced by an Award agreement
that shall specify the SAR exercise price, the duration of the SAR, the number
of shares of stock to which the SAR pertains, whether the SAR is granted in
tandem with the grant of an Option or is freestanding, and such other provisions
as the Committee shall determine. SARs shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve and which shall be set forth in the applicable Award agreement,
which need not be the same for each grant of for each grantee. 

 

7.2 Exercise.  
SARs granted in tandem with the grant of an Option may be exercised for all or
part of the shares of Stock subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option. SARs granted
in tandem with the grant of an Option may be exercised only with respect to the
shares of Stock for which its related Option is then exercisable. SARs granted
independently from the grant of an Option may be exercised upon the terms and
conditions contained in the applicable Award agreement. 

 

7.3 Termination.  The
Award agreement for a SAR shall set
forth the extent to which a grantee shall have the right to exercise an SAR
following termination of the grantee's service. Such provisions shall be
determined in the sole discretion of the Committee, need not be uniform among
all SARs, and may reflect distinctions based on the reasons for termination.





























Article
VIII




Restricted
Stock




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




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




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




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







Article
IX




Performance
Awards




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




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























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

 

Article
X




Adjustment
Upon Changes In Stock




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

 

 

Article
XI




Change
In Control




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




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




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























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




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




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




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




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




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






















Article
XII




Miscellaneous




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




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




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




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























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




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




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




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





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




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




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







Article
XIII




Amendment
And Termination




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























Article
XIV




Duration
Of The Plan




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