Document:

exv4wxdy

Exhibit 4(d)

AMENDMENT NO. THREE

TO THE

ATMOS ENERGY CORPORATION

RETIREMENT SAVINGS PLAN AND TRUST

AMENDED AND RESTATED

EFFECTIVE AS OF JANUARY 1, 2005

     WHEREAS, ATMOS ENERGY CORPORATION (the “Company”) has heretofore amended and restated the
Atmos Energy Corporation Retirement Savings Plan and Trust Amended and Restated Effective as of
January 1, 2005 (the “Plan”); and

     WHEREAS, pursuant to the provisions of Section 10.01 of the Plan, the Company desires to amend
the Plan (i) as necessary to reflect required and applicable discretionary amendments described in
Internal Revenue Service Notice 2007-3, and (ii) as necessary to reflect applicable provisions of
the Pension Protection Act of 2006.

     NOW, THEREFORE, Atmos Energy Corporation does hereby amend the Plan, effective as of January
1, 2008, except as otherwise provided, as follows:

     1. Subsection 2.01(a) is amended by striking said Subsection and substituting in lieu thereof
the following:

	 	(a)	 	ADDITIONS: With respect to each Year, the sum of: (i) the total of the
Employer contributions allocated to a Participant’s Employer Contribution
Account, Safeharbor Matching Contribution Account , Matching Contribution
Account, where appropriate, and Salary Reduction Contribution Account
(including any amounts characterized as Excess Contributions and amounts
characterized as Excess Deferrals, if such Excess Deferrals are not distributed
as provided for in Subsection 4.01(c) hereof), (ii) any amount allocated to an
“individual medical account,” as defined in Code Section 415(l)(2), which is
part of a Defined Benefit Plan maintained by an Employer; and (iii) any amounts
derived from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post retirement medical
benefits allocated to the separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit fund (as defined in Code
Section 419(e)) maintained by an Employer. Additions shall not include
rollover contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
408(d)(3) and 409(b)(3)(C)), repayments of loans made to a Participant from the
Plan, repayments of amounts described Code Section 411(a)(7)(B) (in accordance
with Code Section 411(a)(7)(C)) and Code Section 411(a)(3)(D); and the direct
transfer of employee contributions from one qualified plan to another. The
restoration of an Employee’s accrued benefits by the Employer in accordance
with Code Section 411(a)(3)(D) or Code Section 411(a)(7)(C) will not be
considered an Addition for the Year in which the restoration occurs. The
transfer of funds from one qualified plan to another will not be considered an
Annual Addition for the Year in which the transfer occurs.

 

 

     2. Subsection 2.01(j)(1) is amended by striking said Subsection and substituting in lieu
thereof the following:

	 	(1)	 	The total of all units paid to a Participant by an Employer for
personal services as reported on the Participant’s Federal Income Tax
Withholding Statement (Form W-2) plus any amounts excluded from such reporting
pursuant to Code Sections 125 , 401(k) and 132(f)(4), but excluding (i) expense
reimbursements, (ii) bonuses, (iii) any contributions made under this Plan, any
other plan of deferred compensation or any welfare benefit plan (other than
amounts contributed pursuant to such Sections 125 and 401(k)), and (iv) other
special payments of any kind that are unrelated to the Participant’s activities
associated with or in lieu of his performance of services for the Employer.
Notwithstanding any other provision of this Plan, Compensation shall include
any and all lump sum payments made to such Participant by an Employer.

     3. Subsection 2.01(j) is amended by adding the following Subsection 2.01(j)(4):

	 	(4)	 	Notwithstanding the preceding, for Plan Years beginning on or after
January 1, 2008, payments made within 2-1/2 months after “severance from
employment” (within the meaning of Code Section 401(k)(2)(B)(i)(I)) will be
Compensation within the meaning of Code Section 415(c)(3) if they are payments
that, absent a severance from employment, would have been paid to the Employee
while the Employee continued in the employment with the Employer and are
regular compensation for services during the Employee’s regular working hours,
compensation for services outside the Employee’s regular working hours(such as
overtime or shift differential), commissions, bonuses, or other similar
compensation, and payments for accrued bona fide sick, vacation or other leave,
but only if the Employee would have been able to use the leave if employment
had continued. Any payments not described above are not considered
Compensation if paid after severance from employment, even if they are paid
within 2-1/2 months following severance from employment, except for payments
to an individual who does not currently perform services for the Employer by
reason of qualified military service (within the meaning of Code Section
414(u)(1)) to the extent these payments do not exceed the amounts the
individual would have received if the individual had continued to perform
services for the Employer rather than entering qualified military service.

     4. Subsection 2.01(x) is amended by striking said Subsection and substituting in lieu thereof
the following:

	 	(x)	 	HIGHLY COMPENSATED EMPLOYEE: A Participant or Former Participant who is
a Highly Compensated Employee, as defined in Code Section 414(q). A Participant
or Former Participant is considered a Highly Compensated Employee if:

	 	(1)	 	during the Plan Year (the “Determination Year”) or
during the twelve month period immediately preceding the Determination
Year or, if the Company elects, the calendar year ending with or within
the Determination Year (the “Look Back Year”), the Participant or
former Participant was at any time a “five percent owner” as defined in
Section 5.04(a)(2)(C)(2) hereof; or

2

 

	 	(2)	 	for the preceding Plan Year the Participant or former
Participant had Compensation from the Employer in excess of $80,000,
as adjusted by the Secretary of the Treasury. The $80,000 amount shall be adjusted at
the same time and in the same manner as under Code Section 415(d),
except that the base period is the calendar quarter ending September
30, 1996.

	 	 	 	The Committee shall determine which Participants or Former Participants are
Highly Compensated Employees in a manner consistent with Code Section 414(q)
and regulations issued thereunder. The Employer may make a calendar year
election to determine the Highly Compensated Employees for the Look Back
Year, as prescribed by the applicable treasury regulations. A calendar year
election must apply to all plans and arrangements of the Employer.
	 
	 	 	 	A Former Participant who separated from Service, or is deemed to have
separated from Service under the applicable treasury regulations, prior to
the Plan Year, who performs no Service for the Employer during the Plan Year
and who was a Highly Compensated Employee either for the Separation Year or
any Plan Year ending on or after such former Participant attained age
fifty-five (55) years is considered a Highly Compensated Employee.
Generally, Separation Year means the Plan Year during which the Employee
separates from Service with the Employer.

     5. Subsection 4.01(b) is amended by adding the following paragraph at the end of said
Subsection:

Effective for Plan Years beginning on and after January 1, 2008, a Participant for
whom Automatic Salary Reduction Contributions have been made to the Plan may elect
during the “Distribution Election Period” (defined below) to receive a distribution
of Automatic Salary Reduction Contributions, and earnings and losses attributable
thereto, made with respect to such Participant beginning with the first payroll
period for which Automatic Salary Reduction Contributions were made with respect to
the Participant and continuing through any succeeding payroll period beginning prior
to the effective date of the election, which shall be no later than the last day of
the final payroll period that begins prior to the expiration of the Distribution
Election Period. The Distribution Election Period shall be the ninety (90) day
period beginning on the payroll date that an Automatic Salary Reduction Contribution
is withheld from the Participant’s Compensation. Any such distribution of Automatic
Salary Reduction Contribution shall be considered an “Automatic Salary Reduction
Contribution Distribution” for purposes of the Plan and shall be made in accordance
with Code Section 414(w), and the applicable guidance issued thereunder. An
Automatic Salary Reduction Contribution Distribution shall not be subject to the
early distribution tax imposed by Code Section 72(p).

     6. Subsection 4.01(g) is amended by adding the following paragraph at the end of said
Subsection:

For Plan Years beginning on and after January 1, 2008, any Automatic Salary
Reduction Contribution that is distributed as an Automatic Salary Reduction
Contributions Distribution, as described in Section 4.01(b) of the Plan, shall not
be included as a Salary Reduction Contribution for purposes of determining whether
the limitations in this Section 4.01(g) are met.

3

 

     7. The first paragraph of Subsection 4.01(g)(3) is amended by striking said paragraph and
substituting in lieu thereof the following:

In the event that following the end of a Plan Year, it is determined by the
Committee that the Salary Reduction Contributions for Highly Compensated ADP
Employees exceed the limitations of Section 4.01(g)(1), then the amount in excess of
such limitation (“Excess Contributions”) (and the income thereon) (with the amount
of such Excess Contributions calculated by reducing the contributions made on behalf
of Highly Compensated ADP Employees in the order of the actual deferral percentages
beginning with the highest such percentage and continuing to reduce the Salary
Reduction Contributions of the Highly Compensated ADP Employees with the next
highest contribution percentages in a like manner in descending order based on rates
of contribution percentages until such percentages satisfy the test in Section
4.01(g)(1)) shall be distributed to the Highly Compensated ADP Employees,
notwithstanding any Plan provision to the contrary, no later than the last day of
the Plan Year following the close of the Plan Year in which such Excess
Contributions occurred. For Plan Years beginning prior to January 1, 2008, if such
Excess Contributions are distributed more than two and one half (2-1/2) months after
the last day of the Plan Year in which such Excess Contributions occurred, a ten
percent (10%) excise tax will be imposed on the Employer with respect to such
amounts. For Plan Years beginning on or after January 1, 2008, if such Excess
Contributions are distributed more than six (6) months after the last day of the
Plan Year in which such Excess Contributions occurred, a ten percent (10%) excise
tax will be imposed on the Employer with respect to such amounts.

     8. Subsection 4.01(g)(4)(c) is amended by striking said Subsection and substituting in lieu
thereof the following:

Effective for the Plan Year beginning on January 1, 2006, Excess Contributions shall
be adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Contributions is the sum of: (i) the income or loss
allocable to the Participant’s Salary Reduction Contribution Account for the taxable
year, multiplied by a fraction, the numerator of which is such Participant’s Excess
Contributions for such year and the denominator of which is the Participant’s Salary
Reduction Contribution Account balance attributable to the Salary Reduction
Contributions without regard to any income or loss occurring during such taxable
year; and (ii) ten percent (10%) of the amount determined under (i) multiplied by
the number of whole calendar months between the end of the Participant’s taxable
year and the date of distribution, counting the month of distribution as a whole
month if the distribution occurs after the 15th day of such month. This subsection
4.01(g)(4)(c) shall not apply for Plan Years beginning on or after January 1, 2008,
or for any Plan Year beginning prior to January 1, 2006.

     9. Subsection 4.01(g)(5)(a) is amended by adding the following provision to the end of the
second paragraph:

For Plan Years beginning on and after January 1, 2008, any Automatic Salary
Reduction Contribution that is distributed as an Automatic Salary Reduction
Contributions Distribution, as described in Section 4.01(b) of the Plan, shall not
be included as a Salary Reduction Contribution for purposes of calculating ADP.

4

 

     10. Subsection 4.01(g)(5)(b) is amended by striking said Subsection in its entirety and
substituting in lieu thereof the following:

	 	(b)	 	“Total Compensation” as used in this Section 4.01(g) shall have the
same meaning as that set forth in Section 5.03(b) hereof.

     11. Section 4.02 is amended by adding the following Subsection 4.02(f):

	 	(f)	 	For Plan Years beginning on and after January 1, 2008, to the extent
that a Safeharbor Matching Contribution is made with respect to an Automatic
Salary Reduction Contribution that is distributed as an Automatic Salary
Reduction Contribution Distribution, as described in Section 4.01(b) of the
Plan, such Safeharbor Matching Contribution, and earnings and losses
attributable thereto, shall be forfeited and allocated to a forfeiture account
in the Plan and used to reduce future Employer contributions to the Plan. The
amount to be forfeited shall be deducted from the Non-ESOP portion (as defined
in Section 7.02 hereof) of the Participant’s Safeharbor Matching Contribution
Account, so long as there are amounts in such portion, and thereafter shall be
deducted from the ESOP portion of the Participant’s Safeharbor Matching
Contribution Account (as defined in Section 7.02 hereof) containing Company
Stock. If interests in more than one class of Company Stock have been
allocated to the ESOP portion of such Account, the forfeiture will be made in
the same proportion of each such class of Company Stock.

     12. Section 5.03 is amended by striking said Section in its entirety and substituting in lieu
thereof the following:

	 	5.03	 	Maximum Additions

	 	(a)	 	Notwithstanding anything contained herein to the
contrary, the total Additions made to the Salary Reduction Account,
Safeharbor Matching Contribution Account, Employer Contribution Account
and, if applicable, Matching Contribution Account of a Participant for
any Plan Year shall not exceed the lesser of:

	 	(1)	 	Forty Thousand Dollars ($40,000) (or
such higher amount to which such amount shall be adjusted by
the Secretary of the Treasury or his delegate pursuant to Code
Section 415(d)), or
	 
	 	(2)	 	one hundred percent (100%) of the
Participant’s total compensation for such Plan Year (even
though such Participant may not have been a Participant for the
entire Plan Year).
	 
	 	 	 	The compensation limit referred to in clause (2) above shall
not apply to any contribution for medical benefits after
separation from service (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an
Addition.

	 	(b)	 	For purposes of Section 5.03, a Participant’s “total
compensation” shall means:

5

 

	 	(1)	 	The sum of:

	 	(i)	 	All earned income, wages,
salaries, fees for professional service and other
amounts received for personal services actually rendered
in the course of employment with his Employer and any
Affiliates, without regard to whether or not an amount
is paid in cash, (including, but not limited to,
commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
nonaccountable plan (as described in Treasury Regulation
Section 1.62-2(c)) which are actually paid or made
available to an Employee during the Year;
	 
	 	(ii)	 	Any elective deferral (as
defined in Code Section 402(g)(3)) and any amount which
is contributed or deferred by the Employer at the
election of the Participant and which is not includable
in the gross income of the Participant by reason of Code
Sections 125 or 457; and
	 
	 	(iii)	 	Any elective amounts
which are not includable in the gross income of the
Participant by reason of Code Section 132(f)(4).

For Years beginning on or after January 1, 2008, payments
made within 21/2 months after “severance from employment”
(within the meaning of Code Section 401(k)(2)(B)(i)(I)) will
be included in “total compensation” if they are payments
that, absent a severance from employment, would have been
paid to the Employee while the Employee continued in the
employment with the Employer and are regular compensation for
services during the Employee’s regular working hours,
compensation for services outside the Employee’s regular
working hours(such as overtime or shift differential),
commissions, bonuses, or other similar compensation, and
payments for accrued bona fide sick, vacation or other leave,
but only if the Employee would have been able to use the
leave if employment had continued. Any payments not
described above are not considered Compensation if paid after
severance from employment, even if they are paid within 2 1/2
months following severance from employment, except for
payments to an individual who does not currently perform
services for the Employer by reason of qualified military
service (within the meaning of Code Section 414(u)(1)) to the
extent these payments do not exceed the amounts the
individual would have received if the individual had
continued to perform services for the Employer rather than
entering qualified military service.

	 	(2)	 	Total compensation shall exclude the
following:

6

 

	 	(i)	 	Employer contributions to
a plan of deferred compensation to the extent that,
prior to the application of the limitations of Code
Section 415 to the Plan, the contributions are not included in the gross income of a Participant for the
taxable year in which contributed;
	 
	 	(ii)	 	Employer contributions on
behalf of a Participant to a simplified employee pension
plan under Code Section 219(b)(7) to the extent the
contributions are deductible by the Participant;
	 
	 	(iii)	 	Any distributions from a
plan of deferred compensation other than an unfunded
nonqualified plan of deferred compensation, whether or
not includable in the gross income of the Participant
when distributed;
	 
	 	(iv)	 	Amounts realized from the
exercise of a nonqualified stock option, or when
restricted stock (or property) held by a Participant
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
	 
	 	(v)	 	amounts realized from the
sale, exchange or other disposition of stock acquired
under a qualified stock option; and
	 
	 	(vi)	 	other amounts which
receive special tax benefits, or contributions made by
an Employer (whether or not under a salary reduction
agreement) for the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of
the Participant).

Notwithstanding the foregoing, total compensation shall not include
any Compensation in excess of Two Hundred Thousand Dollars
($200,000) or such larger amount as results from the adjustment
provided for in Code Section 401(a)(17)(B). The adjustments under
Code Section 401(a)(17)(B) in effect for a calendar year shall apply
to Compensation for the Plan Year beginning with or within such
calendar year.

	 	(c)	 	If such Additions exceed the limitation set forth in
Section 5.03(a) above, such excess Additions shall be corrected in
accordance with the applicable provisions of Revenue Procedure 2006-27,
or such subsequent guidance issued by the Internal Revenue Service
describing the Employee Plans Compliance Resolution System, or similar
correction program. In the event that any Participant in this Plan is
also a participant under any other defined contribution plan maintained
by an Employer or an Affiliate (whether or not terminated), the total
amount of Additions to such Participant’s accounts under all such
defined contribution plans for the Year shall not exceed the
limitations set forth in Subsection 5.03(a) above. If such total
amount of Additions to a Participant’s accounts under all such defined
contribution 

7

 

	 	 	 	plans for the Year does exceed the limitations set forth
in Subsection 5.03(a) above, then the excess Additions to such
Participant’s accounts shall corrected in accordance with this Section 5.03(c).
	 
	 	(d)	 	Notwithstanding the foregoing, in the case of a
Participant (i) who is permanently and totally disabled (as provided in
Code Section 415(c)(3)(C)), (ii) who was not a Highly Compensated
Employee immediately prior to becoming permanently and totally disabled
(as provided in Code Section 415(c)(3)(C)), and (iii) with respect to
whom the Company elects to have this Section 5.03(d) apply, the term
“total compensation” shall mean the compensation the Participant would
have received for the Plan Year if the Participant had been paid at the
rate of compensation paid immediately before becoming permanently and
totally disabled, provided that such amount is greater than the
Participant’s total compensation would have been without the
application of this Section 5.03(d). Section 5.03(d) shall apply only
to the extent that contributions made with respect to amounts treated
as total compensation under this Section 5.03(d) are nonforfeitable
when made.

     13. Subsection 5.04(d) is amended by striking said Subsection and substituting in lieu thereof
the following:

	 	(d)	 	“Total Compensation” Defined. The term “total compensation” as used in
this Section 5.04 shall have the same meaning as that set forth in Section
5.03(b) hereof.

     14. Subsection 6.04(f)(2) is amended by adding the following provision to the end of said
Subsection:

Effective January 1, 2008, notwithstanding the foregoing definition of “Eligible
Retirement Plan”, if the distributee is a designated Beneficiary who is not the
surviving spouse of the deceased Participant, “Eligible Retirement Plan” shall mean
only an individual retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section 408(b) that is established
in the name of the deceased Participant for the benefit of the such designated
Beneficiary.

     15. Subsection 6.04(f)(3) is amended by adding the following provision to the end of said
Subsection:

Effective January 1, 2008, distributee shall also mean a designated Beneficiary who
is not the surviving spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p).

     16. Subsection 6.06(a)(1)(a) is amended by striking said Subsection and substituting in lieu
thereof the following:

	 	(a)	 	for Plan Years (i) beginning prior to January 1, 2006, medical expenses
(as described in Code Section 213(d)) incurred by the Participant, his spouse
or any of his dependents, (ii) beginning on and after January 1, 2006, expenses
for (or necessary to obtain) medical care that would be deductible under Code
Section

8

 

	 	 	 	213(d) (determined without regard to whether the expenses exceed 7.5%
of adjusted gross income), (iii) beginning on and after January 1, 2008, in
addition to expenses described in Section 6.06(a)(1)(a)(ii), expenses for (or
necessary to obtain) medical care, as defined in Code Section 2.13(d) for a Participant’s designated
Beneficiary;

     17. Subsection 6.06(a)(1)(c) is amended by striking said Subsection and substituting in lieu
thereof the following:

	 	(c)	 	for Plan Years (i) beginning prior to January 1, 2006, the payment of
tuition and room and board for the next twelve (12) months of post- secondary
education for the Participant, the Participant’s spouse, children or
dependents, (ii) beginning on and after January 1, 2006, payment of tuition,
related educational fees and room and board expenses for up to the next twelve
(12) months of post secondary education for the Participant or such
Participant’s spouse, children or dependents (as defined in Code Section 152
without regard to Code Section 152(b)(1), (b)(2) and (d)(1)(B)), (iii)
beginning on and after January 1, 2008, in addition to expenses described in
Section 6.06(a)(1)(c)(ii), payment of tuition, related educational fees and
room and board expenses for up to the next twelve (12) months of post secondary
education for the Participant’s designated Beneficiary;

     18. Subsection 6.06(a)(1)(e) is amended by striking said Subsection and substituting in lieu
thereof the following:

	 	(e)	 	for Plan Years (i) beginning on and after January 1, 2006, payment for
a funeral or burial expenses for the Participant’s deceased parent, spouse,
child or dependent (as defined in Code Section 152 without regard to Code
Section 152(b)(1), (b)(2) and (d)(1)(B)), (ii) beginning on and after January
1, 2008, in addition to expenses described in Section 6.06(a)(1)(e)(i), payment
for a funeral or burial expenses for the Participant’s deceased designated
Beneficiary; or

     19. Effective with respect to amendments adopted after August 9, 2006, Section 10.01 is
amended by striking said Section and substituting in lieu thereof the following:

The Company reserves the right to make from time to time any amendment or amendments
to this Plan which do not cause any part of the Trust Fund to be used for, or
diverted to, any purpose other than the exclusive benefit of Participants, Former
Participants or their Beneficiaries; provided, however, that the Company may make
any amendment it determines necessary or desirable, with or without retroactive
effect, to comply with ERISA. In addition, no amendment hereof, unless made to
secure the approval of the Internal Revenue Service or other governmental bureau or
agency shall operate retroactively to reduce or divest the then vested interest
hereunder of any Participant, Former Participant or Beneficiary or to reduce or
divest any benefit payable hereunder. Notwithstanding the foregoing, effective for
Plan Years beginning on an after January 1, 2005, the foregoing requirement shall
not apply to an amendment that eliminates or restricts the ability of a Participant
to receive payment of his or her account balance under a particular optional form of
benefit if the Plan after the amendment provides a single-sum distribution form that
is otherwise identical to the optional form of benefit being eliminated or
restricted. For purposes of this Section 15.04, a single-sum distribution form is
otherwise identical only if the single-sum distribution form is identical in all
respects to the eliminated or restricted

9

 

optional form of benefit (or would be identical except that it provides greater rights to the Participant) except with
respect to the timing of payments after commencement.

No amendment shall be made hereunder which would increase the duties and liabilities
of the Trustee without the Trustee’s express written consent.

Under no condition shall any amendment impose a vesting schedule, or subsequently
change the vesting schedule to one which would result in the nonforfeitable
percentage of the accrued benefit derived from Company contributions (determined as
of the later of the date of the adoption of the amendment or of the effective date
of the amendment) of any Participant being less than such nonforfeitable percentage
computed under the Plan without regard to such amendment. No amendment shall change
the vesting schedule unless each Participant with three (3) or more years of Service
as of the expiration date of the election period described below, is permitted to
elect, within the election period described below, to have his nonforfeitable
percentage computed under the Plan without regard to the amendment.

The election period described herein shall begin no later than the date upon which
the amendment is adopted and shall end no later than the latest of the following
dates:

	 	(a)	 	the date which is sixty (60) days after the day the amendment is adopted,

	 	(b)	 	the date which is sixty (60) days after the day the amendment becomes
effective, or

	 	(c)	 	the date which is sixty (60) days after the day the Participant is issued a
written notice of the amendment by the Company.

     IN WITNESS WHEREOF, the Company has caused this AMENDMENT NO. THREE TO THE ATMOS ENERGY
CORPORATION RETIREMENT SAVINGS PLAN AND TRUST AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005
to be executed in its name on its behalf this 31st day of January, 2008, effective as of
the dates set forth herein.

	 	 	 	 	 
	 	ATMOS ENERGY CORPORATION

 	 
	 	By:  	/s/ ROBERT W. BEST
 	 
	 	 	Robert W. Best 	 
	 	 	Chairman, President and

Chief Executive Officer 	 
	 

10exv10w2

Exhibit 10.2

AMENDED AND RESTATED

MANAGEMENT STABILITY AGREEMENT

     This Amended and Restated Management Stability Agreement is dated June 16, 2008 between Tesoro
Corporation, a Delaware corporation (the “Company”), and Otto C. Schwethelm (“Employee”), and
supersedes and replaces that certain Management Stability Agreement dated as of February 2, 2005.

Recitals:

     WHEREAS, the Board of Directors of the Company has determined that it is in the best interest
of the Company to reduce uncertainty to certain key employees of the Company in the event of
certain fundamental events involving the control or existence of the Company;

     WHEREAS, the Board of Directors of the Company has determined that an agreement protecting
certain interests of key employees of the Company in the event of certain fundamental events
involving the control or existence of the Company is in the best interest of the Company because it
will assist the Company in attracting and retaining key employees such as this Employee; and

     WHEREAS, the Employee is relying on this Agreement and the obligations of the Company
hereunder in continuing to work for the Company.

     NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

     1. Termination Following Change of Control.

     Should Employee at any time within two years of a change of control cease to be an employee of
the Company (or its successor), by reason of (i) involuntary termination by the Company (or its
successor) other than for “cause” (following a change of control), “cause” shall be limited to the
conviction of or a plea of nolo contendere to the charge of a felony (which,
through lapse of time or otherwise, is not subject to appeal), a material breach of fiduciary duty
to the Company through the misappropriation of Company funds or property) or (ii) voluntary
termination by Employee for “good reason upon change of control” (as defined below), the Company
(or its successor) shall pay to Employee within ten days of such termination the following
severance payments and benefits:

(a)  A lump-sum payment equal to two and one-half times the base salary of
the Employee at the then current rate; and

(b)  A lump-sum payment equal to (i) two and one-half times the sum of the
target bonuses under all of the Company’s incentive bonus plans applicable
to the Employee for the year in which the termination occurs or the year in
which the change of control occurred, whichever is greater, and (ii) if
termination occurs in the fourth quarter of a calendar year, the sum of the
target bonuses under all of the Company’s incentive bonus plans applicable
to Employee for the year in which the termination occurs prorated daily
based on the number of days from the beginning of the calendar year in which
the termination occurs to and including the date of termination.

The Company (or its successor) shall also provide continuing coverage and benefits comparable to
all life, health and disability plans of the Company for a period of 30 months from the date of
termination, and Employee shall receive two and one-half years additional service credit under the
current non-qualified supplemental pension plans, or successors thereto, of the Company applicable
to the Employee on the date of termination.

 

 

     For purposes of this Agreement, a “change of control” shall be deemed to have occurred if
(i) there shall be consummated (A) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common
Stock would be converted into cash, securities or other property, other than a merger of the
Company where a majority of the Board of Directors of the surviving corporation are, and for a two
year period after the merger continue to be, persons who were directors of the Company immediately
prior to the merger or were elected as directors, or nominated for election as directors, by a vote
of at least two-thirds of the directors then still in office who were directors of the Company
immediately prior to the merger, or (B) any sale, lease, exchange or transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets of the Company, or
(ii) the shareholders of the Company shall approve any plan or proposal for the liquidation or
dissolution of the Company, or (iii) (A) any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the
Company or a subsidiary thereof or any employee benefit plan sponsored by the Company or a
subsidiary thereof, shall become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company representing 20 percent or more of the combined voting
power of the Company’s then outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, and
(B) at any time during a period of one year thereafter, individuals who immediately prior to the
beginning of such period constituted the Board of Directors of the Company shall cease for any
reason to constitute at least a majority thereof, unless the election or the nomination by the
Board of Directors for election by the Company’s shareholders of each new director during such
period was approved by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.

     For purposes of this Section 1, “good reason upon change of control” shall exist if any of the
following occurs:

(i) without Employee’s express written consent, the assignment to Employee
of any duties inconsistent with the employment of Employee immediately prior
to the change of control, or a significant diminution of Employee’s
positions, duties, responsibilities and status with the Company from those
immediately prior to a change of control or a diminution in Employee’s
titles or offices as in effect immediately prior to a change of control, or
any removal of Employee from, or any failure to reelect Employee to, any of
such positions;

(ii) a reduction by the Company in Employee’s base salary in effect
immediately prior to a change of control;

(iii) the failure by the Company to continue in effect any thrift, stock
ownership, pension, life insurance, health, dental and accident or
disability plan in which Employee is participating or is eligible to
participate at the time of the change of control (or plans providing
Employee with substantially similar benefits), except as otherwise required
by the terms of such plans as in effect at the time of any change of control
or the taking of any action by the Company which would adversely affect
Employee’s participation in or materially reduce Employee’s benefits under
any of such plans or deprive Employee of any material fringe benefits
enjoyed by Employee at the time of the change of control or the failure by
the Company to provide the Employee with the number of paid vacation days to
which Employee is entitled in accordance with the vacation policies of the
Company in effect at the time of a change of control;

(iv) the failure by the Company to continue in effect any incentive plan or
arrangement (including without limitation, the Company’s Incentive
Compensation Plan and similar incentive compensation benefits) in which
Employee is participating at the time of a change of control (or to
substitute and continue other plans or arrangements providing the Employee
with substantially

 

 

similar benefits), except as otherwise required by the terms of such plans
as in effect at the time of any change of control;

(v) the failure by the Company to continue in effect any plan or arrangement
with respect to securities of the Company (including, without limitation,
any plan or arrangement to receive and exercise stock options, stock
appreciation rights, restricted stock or grants thereof or to acquire stock
or other securities of the Company) in which Employee is participating at
the time of a change of control (or to substitute and continue plans or
arrangements providing the Employee with substantially similar benefits),
except as otherwise required by the terms of such plans as in effect at the
time of any change of control or the taking of any action by the Company
which would adversely affect Employee’s participation in or materially
reduce Employee’s benefits under any such plan;

(vi) the relocation of the Company’s principal executive offices to a
location outside the San Antonio, Texas, area, or the Company’s requiring
Employee to be based anywhere other than at the location of the Company’s
principal executive offices, except for required travel on the Company’s
business to an extent substantially consistent with Employee’s present
business travel obligations, or, in the event Employee consents to any such
relocation of the Company’s principal executive or divisional offices, the
failure by the Company to pay (or reimburse Employee for) all reasonable
moving expenses incurred by Employee relating to a change of Employee’s
principal residence in connection with such relocation and to indemnify
Employee against any loss (defined as the difference between the actual sale
price of such residence and the higher of (a) Employee’s aggregate
investment in such residence or (b) the fair market value thereof as
determined by a real estate appraiser reasonably satisfactory to both
Employee and the Company at the time the Employee’s principal residence is
offered for sale in connection with any such change of residence;

(vii) any failure by the Company to obtain the assumption of this Agreement
by any successor or assign of the Company;

     In the event of a change of control as “change of control” is defined in any stock option plan
or stock option agreement pursuant to which the Employee holds options to purchase common stock of
the Company, Employee shall retain the rights to all accelerated vesting and other benefits under
the terms thereof.

     The Company shall pay any attorney fees incurred by Employee in reasonably seeking to enforce
the terms of this Paragraph 1.

     2. Complete Agreement.

     This Agreement constitutes the entire agreement between the parties and cancels and supersedes
all other agreements between the parties which may have related to the subject matter contained in
this Agreement.

     1. Modification; Amendment; Waiver.

     No modification, amendment or waiver of any provisions of this Agreement shall be effective
unless approved in writing by both parties. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of either party thereafter to enforce each and every provision hereof in
accordance with its terms.

 

 

     3. Governing Law; Jurisdiction.

     This Agreement and performance under it, and all proceedings that may ensue from its breach,
shall be construed in accordance with and under the laws of the State of Texas.

     4. Severability.

     Whenever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement shall be held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

     5. Assignment.

     The rights and obligations of the parties under this Agreement shall be binding upon and inure
to the benefit of their respective successors, assigns, executors, administrators and heirs,
provided, however, that the Company may not assign any duties under this Agreement without the
prior written consent of the Employee.

     6. Limitation.

     This Agreement shall not confer any right or impose any obligation on the Company to continue
the employment of Employee in any capacity, or limit the right of the Company or Employee to
terminate Employee’s employment.

     7. Notices.

     All notices and other communications under this Agreement shall be in writing and shall be
given in person or by telegraph, facsimile or first class mail, certified or registered with return
receipt requested, and shall be deemed to have been duly given when delivered personally or three
days after mailing or one day after transmission of a telegram or facsimile, as the case may be, to
the representative persons named below:

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	Corporate Secretary
	 	 
	 

	 	 	 	Tesoro Corporation	 	 
	 

	 	 	 	300 Concord Plaza Drive	 	 
	 

	 	 	 	San Antonio, Texas 78216-6999	 	 
	 
	 	 	 	 	 	 
	 

	 	If to the Employee:
	 	Otto C. Schwethelm	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	TESORO CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Bruce A. Smith	 	 
	 	 	 	 	Chairman of the Board of Directors,	 	 
	 	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	Otto C. Schwethelm

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}]]