Document:

EX-10.2

 

Exhibit 10.2

[Date]

Name

Address

Address

Dear [Name]:

     I am pleased to inform you that on [date] the Compensation Committee (“Committee”) of the Board of
Directors of National Fuel Gas Company (the “Company”) granted to you (the “Grantee”) a stock
appreciation right, under the National Fuel Gas Company 1997 Award and Option Plan, as amended (the
“Plan”), in respect of an aggregate of [               ] shares of the Company’s Common Stock, $1.00 par
value (the “Common Stock”).

     Your new stock appreciation right is described in the balance of this letter agreement (“Award
Notice”). The Plan and the Committee’s Administrative Rules (“Rules”) govern the operation of the
Plan, as well as the terms and conditions of your stock appreciation right granted under the Plan,
and are incorporated herein by reference.

1. Performance Conditions

     The base
price (“Base Price”) of your stock appreciation right
is [$______] per share (which
is the Fair Market Value of the Common Stock on the date of grant). Absent a Change in Control of
the Company or Change in Ownership of the Company, the stock appreciation right granted hereby is
exercisable in accordance with the following schedule, subject to the performance conditions set
forth in the schedule:

	 	 	 	 	 
	Date Exercisable

	 	Performance Condition
	 	Incremental Number of
Shares Subject to SAR
Exercisable
	 
	 	 	 	 
	[one year after date
of grant]

	 	Fiscal [year] diluted
earnings per share,
as reported, equal to
or greater than
[$              ]
	 	[1/3 of aggregate
number of shares
subject to SAR]

 

 

[Name]

Page 2

[Date]

	 	 	 	 	 
	[two years after date
of grant]

	 	Fiscal [year] diluted
earnings per share,
as reported, equal to
or greater than
[$___]
	 	[1/3 of aggregate
number of shares
subject to SAR]
	 
	 	 	 	 
	[three years after
date of grant]

	 	Fiscal [year] diluted
earnings per share,
as reported, equal to
or greater than
[$___]
	 	[1/3 of aggregate
number of shares
subject to SAR]

     As used in the foregoing schedule, the term “diluted earnings per share, as reported” for a given
fiscal year means the Company’s Net Income Available for Common Stock, as reported under the
headings “Earnings Per Common Share” and “Diluted” in the Company’s Consolidated Statements of
Income and Earnings Reinvested in the Business in the Company’s Form 10-K filed with the Securities
and Exchange Commission for such fiscal year, or such comparable headings as may hereafter be used
in the Company’s Form 10-K. In the event the performance condition for a given fiscal year is not
met, the incremental number of shares associated with such performance condition shall be
automatically forfeited.

     In the event of a Change in Control of the Company or Change in Ownership of the Company, this
stock appreciation right shall become exercisable in accordance with the Plan, or its successor.
Once such right has become exercisable, this stock appreciation right may be exercised in whole at
any time and in part from time to time until the date of termination of the Grantee’s rights
hereunder; provided, that, in no event shall this stock appreciation right be exercisable in whole
or in part after [ten years after date of grant].

2. Restriction on Exercise

     Notwithstanding any other provision hereof, this stock appreciation right shall not be exercised if
at such time such exercise or the delivery of certificates representing shares of Common Stock
purchased pursuant hereto shall constitute a violation of any rule of the Company, any provision of
any applicable Federal or State statute, rule or regulation, or any rule or regulation of any
securities exchange on which the Common Stock may be listed.

3. Exercise

     This stock appreciation right may be exercised with respect to all or any part of the shares of
Common Stock then subject to such exercise in accordance with Section 1 pursuant to whatever
procedures may be adopted from time to time by the Company. Upon the exercise of this stock
appreciation right, in whole or in part, the Grantee shall be entitled to receive from the Company
a number of shares of Stock equal in value to the

2

 

[Name]

Page 3

[Date]

excess of the Fair Market Value (on the date of
exercise) of one share of Stock over the Base Price, multiplied by the number of shares in respect
of which the stock appreciation right is being exercised (the “Payout”). The number of
shares to be issued shall be calculated on the basis of the Fair Market Value of the shares on the
date of exercise, with any fractional share being payable in cash based on the Fair Market Value on
the date of exercise.

4. Termination of Employment

     In the event your employment with the Company or its Subsidiaries terminates, then, depending upon
the circumstances of the termination,
this stock appreciation right may become exercisable prior to the dates set forth in Section 1, may
remain exercisable after your termination date, or may be terminated, as set forth in the Plan and
the Rules.

5. Adjustments in Common Stock

     In the event of a Stock dividend, Stock split, merger, consolidation, reorganization,
recapitalization or other change in the corporate structure, appropriate adjustments shall be made
by the Board or the Compensation Committee of the Board in the number of shares, class or classes
of securities and the base price per share applicable in respect to the stock appreciation rights
subject to this Agreement. The Board or the Compensation Committee shall, in its discretion,
determine the manner in which any adjustment pursuant to the immediately preceding sentence shall
be effected, with the purpose and intent of avoiding any diminution or infringement of the
Grantee’s rights hereunder by reason of any of the events referenced in such sentence.

6. Non-Transferability of Stock Appreciation Right

     The Grantee has no right to assign or transfer this stock appreciation right, except by will, by
the laws of descent and distribution, or as otherwise permitted in the Plan or the Rules. During
the lifetime of the Grantee this stock appreciation right may be exercised only by him or her
(unless otherwise determined by the Board or the Committee).

7. Authority of Committee 

     The Committee has the authority to interpret the Plan and all stock appreciation rights granted
thereunder, to establish rules and regulations relating to the Plan and to make all other
determinations it believes necessary or advisable for the administration of the Plan. The scope of
the Committee’s authority is more fully described in the Plan. All determinations and actions of
the Committee are final, conclusive and binding on you.

8. Miscellaneous

     (a) This stock appreciation right (i) shall be binding upon and inure to the benefit
of the Company (and its successors and assigns) and you (and your

3

 

[Name]

Page 4

[Date]

heirs, legal
representatives and estate), and (ii) shall be governed by the laws of the State of New
York, and any applicable laws of the United States. No contract or right of employment
shall be implied by this stock appreciation right.

     (b) This stock appreciation right may be unilaterally amended or modified by the
Committee, as permitted by the Plan or the Rules, to the extent it deems appropriate, but
may not be amended or modified without your consent if such amendment or modification is
adverse to you. Except as otherwise provided in the preceding sentence, this stock
appreciation right may not be amended or modified, nor may any term or condition, or breach
of any term or condition, be waived, except in writing signed by the person or persons
sought to be bound by such amendment, modification or waiver. Any waiver of any term or
condition or
breach thereof shall not be a waiver of any other term or condition, or of the same
term or condition for the future, or of any subsequent breach.

     (c) If this stock appreciation right is assumed or a new stock appreciation right is
substituted therefor in any corporate reorganization (including, but not limited to, any
transaction of the type referred to in Section 424(a) of the Internal Revenue Code of 1986, as
amended), employment by such assuming or substituting company or by a parent company or a
subsidiary thereof shall be considered for all purposes of this stock appreciation right to be
employment by the Company.

     (d) In consideration of the Grantee’s privilege to participate in the Plan, the Grantee agrees
(i) not to disclose any trade secrets of, or other confidential/restricted information of the
Company to any unauthorized party, (ii) not to make any unauthorized use of such trade secrets or
confidential or restricted information during his or her employment with the Company or its
Subsidiaries or after such employment is terminated, and (iii) not to solicit any then current
employees of the Company or any other subsidiaries of the Company to join the Grantee at his or her
new place of employment after his or her employment with the Company or its Subsidiaries is
terminated.

     (e) This Award Notice, together with the Plan and the Rules, constitutes the entire agreement
between the parties with respect to the subject matter hereof. You hereby acknowledge that you
have been provided with a copy of the Plan and the Rules, and understand the terms and conditions
of these documents and of this Award Notice. In the event of any conflict between this Award
Notice and the terms of the Plan and the Rules, the Plan and the Rules will govern and control.

     (f) In the event of the invalidity of any part or provision of this agreement, such invalidity
shall not affect the enforceability of any other part or provision hereof.

4

 

[Name]

Page 5

[Date]

9. Tax Withholding

     The Grantee agrees that upon exercise of the stock appreciation right evidenced hereby, in
whole or in part, any and all applicable income, employment or other tax withholding shall be
satisfied at the minimum required level using shares of Common Stock otherwise deliverable upon
exercise of such stock appreciation right. The number of shares to be withheld shall be determined
by the Company in accordance with the policies and procedures in effect from time to time under the
Plan applicable with respect to stock withholding.

10. Securities Law Requirements

     The Company shall not be required to issue shares upon the exercise of this stock appreciation
right unless and until (a) such shares have been duly listed upon each stock exchange on which the
Company’s Stock is then registered and (b) a registration statement under the Securities Act of
1933 with respect to such shares is then effective. The Board may require the Grantee to furnish to
the Company, prior to the issuance of any shares of Stock in connection with the exercise of this
stock appreciation right, an agreement, in such form as the Board may from time to time deem
appropriate, in which the Grantee represents that the shares acquired by him upon such exercise are
being acquired for investment and not with a view to the sale or distribution thereof.

11. Stock Appreciation Right Subject to Plan and Rules

     This stock appreciation right shall be subject to all the terms and provisions of the Plan and the
Rules and the Grantee shall abide by and be bound by such terms and provisions and all rules,
regulations and determinations of the Board or the Committee now or hereafter made in connection
with the administration of the Plan. Capitalized terms not otherwise defined herein shall have the
meanings set forth for such terms in the Plan or the Rules.

12. American Jobs Creation Act

     In addition to amendments permitted by Section 8(a) above, amendments to this Agreement may be made
by the Company, without the Grantee’s consent, in order to ensure compliance with the American Jobs
Creation Act of 2004. And, further, amendments may be made to the Plan to ensure such compliance,
which amendments may impact this Agreement.

5

 

[Name]

Page 6

[Date]

     If the foregoing is acceptable to you, kindly acknowledge your acceptance by signing both copies of
this letter and returning one to [Secretary of the Company].

	 	 	 	 	 
	 	Very truly yours,

NATIONAL FUEL GAS COMPANY

 	 
	 	By:  	 	 
	 	 	       [Name] 	 
	 	 	       [Title] 	 
	 

AGREED TO AND ACCEPTED

this                     day of                                         ,                    
 

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Grantee	 	 

6EX-10.3

 

Exhibit 10.3

Administrative Rules

of the

Compensation Committee

of the

Board of Directors

of

National Fuel Gas Company

As amended and restated

effective February 20, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	I.	 	Meetings	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	II.	 	Quorum and Voting; Delegation	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	III.	 	Grants and Awards Under the Plans	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	General Rules Regarding Awards Under
the 1997 and 1993 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	 	 	4	 
	 	 	 	 	6.	 	 	Performance Goals	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Stock Options Under the 1997 and 1993 Plans	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.	 	 	Designation	 	 	6	 
	 	 	 	 	2.	 	 	Price	 	 	7	 
	 	 	 	 	3.	 	 	Exercise Period/Duration	 	 	7	 
	 	 	 	 	 	 	 	a.	 	Non-Qualified Stock Options Under
the 1997 and 1993 Plans	 	 	7	 
	 	 	 	 	 	 	 	b.	 	Incentive Stock Options Under the
1997 and 1993 Plans	 	 	7	 
	 	 	 	 	 	 	 	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 1993 Plans	 	 	8	 
	 	 	 	 	 	 	 	c.	 	Incentive Stock Options Under the
1997 and 1993 Plans	 	 	9	 
	 	 	 	 	 	 	 	d.	 	Extension of Incentive Stock Options Under the
1997 and 1993 Plans	 	 	9	 
	 	 	 	 	5.	 	 	Mechanics of Exercise	 	 	11	 
	 	 	 	 	6.	 	 	Reload Options	 	 	11	 

ii 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	SARs Under the 1997 Plan	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	D.	 	Restricted Stock Under the 1997 and 1993 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	 

iii 

 

ADMINISTRATIVE

RULES OF THE

COMPENSATION COMMITTEE

OF THE

BOARD OF DIRECTORS

OF

NATIONAL FUEL GAS COMPANY

As amended and restated

effective February 20, 2008

	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 mailing written notice not less than five days before
the Meeting to each Member, or by telegraphing, telephoning or delivering oral or written notice to
each Member personally not less than one day before the Meeting.

     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.

	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, 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, and so long as such delegation
would not result in the requirement under applicable law that the Delegate’s name appear beneath
the Committee’s report required to be included in Company filings with the Securities and Exchange
Commission. 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”) and shares of restricted stock (“Restricted Stock”)
under the Company’s 1997 Award and Option Plan (“1997 Plan”) and 1993 Award and Option Plan (“1993
Plan”) (together, as amended, 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.

2

 

	 	A.	 	GENERAL RULES REGARDING AWARDS UNDER THE 1997 AND 1993 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 or Restricted Stock. An Award Notice within the meaning of these rules means a written
notice from the Company to a Participant that sets forth the terms and conditions of an Award in
addition to those established in the applicable Plan and by the Committee’s exercise of its
administrative powers.

	 	2.	 	Contemporaneous Awards

                         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 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 carries with it the
entitlement to receive cash 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.

3

 

                              (ii) Restricted Stock Awards. Notwithstanding clause (i) of this paragraph (b) or §26 of the
1993 Plan or the 1997 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 or Restricted Stock
granted under the Plans, or the exercise or surrender of the same, 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 withholding tax requirements. A
Participant may pay, in whole or in part, such tax withholding amounts 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 having a Fair Market Value less than or equal to the
amount of such required withholding taxes (with the remainder payable in cash).

	 	5.	 	Deferral of Payment

                         The Committee intends to permit Participants to elect, at any time prior to one year before
the date of exercise, 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

4

 

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.

	 	6.	 	Performance Goals

                         Awards of stock options, SARs or Restricted Stock made by the Committee on or after February
20, 2008 shall, unless the Award Notice provides otherwise and the minutes of the Committee meeting
reflect the Committee’s reasoning, vest or become exercisable only upon the attainment of
performance goals established by the Committee, except that awards that have not been forfeited or
cancelled will vest or become exercisable earlier, without such attainment, as follows:

                         a. upon the death of the Participant after the
grant date;

                         b. six months after the grant date, if the Participant has voluntarily resigned on or after
his 60th birthday, after the grant date, and before such six months;

                         c. on the date of the Participant’s voluntary resignation on or after his 60th
birthday and at least six months after the grant date;

                         d. upon a Change of Control or Change in Ownership in the same manner as provided in Sections
1 and 23 of the National Fuel Gas Company 1997 Award and Option Plan as amended and restated as of
February 15, 2007;

                         e. if the Award Notice so provides, on an earlier date for awards as part of the Participant’s
initial inducement to join the Company or a subsidiary; or

5

 

                         f. if the Award Notice so provides, on an earlier date for awards made in connection with a
merger or acquisition to a Participant who joins the Company or a subsidiary as a result of the
merger or acquisition.

	 	B.	 	STOCK OPTIONS UNDER THE 1997 AND 1993 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 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 President and Chief
Executive Officer of the Company 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 to a Participant who is younger than 60 on the grant date shall
be deemed to be an award of ISOs to the maximum extent permitted in accordance with Section 422 of
the Internal Revenue Code, with the remainder awarded as NSOs;

                         b. an award of stock options to a Participant who is 60 or older on the grant date shall be
deemed to be awards of NSOs only; and

                         c. an award of stock options after December 12, 2006 shall be deemed to be NSOs regardless of
the language of the award.

6

 

	 	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 1993 Plans. A non-qualified stock option
granted under the 1997 Plan or the 1993 Plan first may be exercised twelve months after the date of
grant, or, if earlier, on the date of the optionee’s death.

                         b. Incentive Stock Options Under the 1997 and 1993 Plans. An ISO granted under the 1997 Plan
or the 1993 Plan first may be exercised twelve months after the date of grant, or, if earlier, on
the date of the optionee’s death.

                         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 19 of the 1993 Plan or Section 18 of the 1997 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

7

 

exercise stock options during the periods described in Section III(B)(4)(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.

	 	4.	 	Death or Other Termination of Employment

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

                              (i) “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.

                              (ii) “Principal Subsidiary” shall mean a Subsidiary that has a net income of at least
$5,000,000 as of the end of the most recent fiscal year.

                              (iii) “Retirement” shall mean that the Participant has commenced receiving retirement benefits
under the Retirement Plan at or after attaining age 65.

                              (iv) “Subsidiary” shall mean a corporation or other business entity in which the Company
directly or indirectly has an ownership interest of eighty percent (80%) or more.

                         b. Non-Qualified Stock Options Under the 1997 and
1993 Plans.

                         With respect to the President and Chief Executive Officer of the Company and the Presidents of
each Principal Subsidiary, if termination of employment occurs by reason of death, Disability or
Retirement, each NSO awarded under the 1997 Plan or the 1993 Plan shall remain exercisable for the
balance of its unexpired term. If termination occurs by reason of discharge by the Company for
cause or voluntary resignation of the Participant prior to age 60, each such NSO shall lapse unless
extended by the Committee in its discretion. If termination of

8

 

any such officer occurs for any other reason, each such NSO shall remain exercisable for five
years from such termination (or in the case of NSOs awarded under the 1997 Plan, such greater
period as the Committee deems appropriate) or the balance of its unexpired term, whichever is less.

                         For all other Participants, if termination of employment occurs by reason of death, Disability
or retirement at or after age 60, each NSO awarded under the 1997 Plan or the 1993 Plan shall
remain exercisable for five years from such termination or the balance of its unexpired term,
whichever is less. If termination occurs for any other reason, each such NSO shall lapse unless
extended by the Committee in its discretion.

                         c. Incentive Stock Options Under the 1997 and 1993
Plans.

                         Pursuant to §16(a) of the 1997 Plan and the 1993 Plan, the Committee hereby establishes that,
with respect to an ISO granted under the 1997 Plan or the 1993 Plan which has not theretofore
expired, upon termination of employment by reason of the optionee’s Disability, the optionee may
within one year after the date of termination of employment, exercise all or part of the ISO which
the optionee was entitled to exercise on the date of termination of employment.

                         d. Extension of Incentive Stock Options Under the
1997 and 1993 Plans.

                         Pursuant to the last paragraph of §16(b) of the 1997 Plan and the 1993 Plan, the Committee
hereby determines that:

                              (i) With respect to the President and Chief Executive Officer of the Company and the
Presidents of each Principal Subsidiary, if termination of employment occurs by reason of death,
Disability or Retirement, another officer of the Company shall, within thirty days of such
termination, offer in writing to extend the period during which any ISO

9

 

granted to such optionee under the 1997 Plan or the 1993 Plan may be exercised to the date on
which the ISO would have otherwise expired absent such termination of employment.

                                   If termination of any such officer’s employment occurs for any other reason, another officer
of the Company, if the Committee so authorizes, shall, within thirty days of such termination,
offer in writing to extend the period during which any ISO granted to such optionee may be
exercised to the date specified in the offer, which shall not be later than the date on which the
ISO would have otherwise expired absent such termination of employment;

                              (ii) With respect to all Participants other than the President and Chief Executive Officer of
the Company and the Presidents of each Principal Subsidiary, if termination of employment occurs by
reason of death, Disability or Retirement, 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 or the 1993 Plan may be exercised, to the date
which is the earlier of five years from such termination or the balance of the unexpired term of
such ISO.

                                   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 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.

                                   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

10

 

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.

	 	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 PLAN

                         The base 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 1997 Plan, and (iii) by these Rules upon either SARs or
NSOs (except that no exercise price is due upon exercise of a SAR). 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

11

 

accordance with paragraph 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 procedures for
exercising SARs.

	 	 	 	D. RESTRICTED STOCK UNDER THE 1997 AND 1993 PLANS

	 	1.	 	Restrictions on Transferability; Vesting

                         The restrictions on transferability and vesting and all other terms and conditions of
Restricted Stock granted under the 1997 and 1993 Plans shall be specified in the Award Notice. All
shares of Restricted Stock 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 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.

12

 

	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 1993 Plan, the 1997 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 or fax) 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. An optional form of Notice of Exercise is 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:

13

 

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

                         (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.

                         (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). 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

                         The exercise price of a stock option cannot be paid with Company stock that was both (i)
issued later than six months before the date of the exercise, and (ii) issued as a result of a
stock option exercise. 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

14

 

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
	 
	 	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.
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 Administrative Rules,

then 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

15

 

time to pay the exercise price as is reasonably necessary to accommodate the travel or disability
of the Participant.

	 	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. 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.

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]