Document:

ogs10-k2020exhibit46

Exhibit 4.6    DESCRIPTION OF THE REGISTRANT’S SECURITIES  REGISTERED PURSUANT TO SECTION 12 OF THE  SECURITIES ACT OF 1934    We have provided below a summary description of our capital stock. This description is not complete and  is qualified in its entirety by the full text of our amended and restated certificate of incorporation and amended and  restated bylaws, each of which is filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.6 is  a part. You should read the full text of our amended and restated certificate of incorporation and amended and  restated bylaws, as well as the provisions of applicable Oklahoma law. Throughout this exhibit, references to the  “Company,” ”we,” “our,” and “us” refer to ONE Gas, Inc.    General    ONE Gas, Inc.’s authorized capital stock consists of (i) 250,000,000 shares of common stock, par value  $0.01 per share, and (ii) 50,000,000 shares of preferred stock, par value $0.01 per share.    On February 22, 2021, we had 53,243,986 outstanding shares of common stock.    No preferred stock has been issued as of February 22, 2021.    Common Stock    Voting Rights    Holders of our common stock are entitled to one vote for each share held by them on all matters submitted  to our shareholders. Holders of our common stock do not have cumulative voting rights in the election of directors.  Generally, all matters to be voted on by shareholders must be approved by a majority of the votes entitled to be cast  by the holders of common stock present in person or represented by proxy, voting together as a single class, subject  to any voting rights granted to holders of any preferred stock.    Dividend Rights    Holders of our common stock will share equally on a per share basis in any dividend declared by our board  of directors out of funds legally available for that purpose, subject to any preferential rights of holders of any  outstanding shares of preferred stock.    Other Rights    Upon voluntary or involuntary liquidation, dissolution or winding up of our company, after payment in full  of the amounts required to be paid to creditors and holders of any preferred stock that may be then outstanding, all  holders of common stock are entitled to share equally on a pro rata basis in all remaining assets. No shares of  common stock are subject to redemption or have preemptive rights to purchase additional shares of common stock  or other securities of our company. There are no other subscription rights or conversion rights and there are no  sinking fund provisions applicable to our common stock. All the outstanding shares of common stock are validly  issued, fully paid and nonassessable.    Preferred Stock    Our board of directors is authorized to issue shares of preferred stock, in one or more series or classes, and  to fix for each series or class the preferences, conversion or other rights, voting powers, restrictions, limitations as to  dividends, qualifications, or terms or redemption, as are permitted by Oklahoma law and as are stated in the  resolution or resolutions adopted by our board providing for the issuance of shares of that series or class.      

 

Amendment of Bylaws    Except as otherwise provided by law, our certificate of incorporation or our bylaws, our bylaws may be  amended, altered or repealed at (i) a meeting of the shareholders provided that notice of such amendment, alteration  or appeal is contained in the notice of such meeting or (ii) a meeting of our board of directors. All such amendments  must be approved by either the holders of at least 80 percent of the voting power of our then outstanding shares of  common stock or by a majority of our entire board of directors then in office.    Amendment of the Certificate of Incorporation    Any proposal to amend, alter, change or repeal any provision of our certificate of incorporation, except as  otherwise provided in our certificate of incorporation or as may be provided in the terms of any preferred stock,  requires approval by the affirmative vote of both a majority of the members of our board of directors then in office  and a majority vote of the voting power of all of the shares of our capital stock entitled to vote generally in the  election of directors, voting together as a single class. Our certificate of incorporation also requires the affirmative  vote of the holders of 80% of our then outstanding shares to amend, repeal or adopt provisions in our certificate of  incorporation relating to, among other things,    • the number of directors and the manner of electing those directors, including the election of directors to  newly created directorships and the classification of our board of directors;  • provisions relating to changes in the bylaws;  • a director’s personal liability to us or our shareholders;  • shareholder ratification of various contracts, transactions and acts; and  • voting requirements for approval of business combinations.    Shareholder Action; Special Meeting    Our certificate of incorporation eliminates the ability of our shareholders to act by written consent. Our  certificate of incorporation provides that special meetings of our shareholders may be called only by a majority of  the members of our board of directors.    Exculpation and Indemnification    Our certificate of incorporation provides that our directors and officers will not be personally liable for  monetary damages for any action taken, or any failure to take any action, unless:   • the director or officer has breached his or her duty of loyalty to the corporation or its shareholders;  • the breach or failure to perform constitutes an act or omission not in good faith or which involves  • intentional misconduct or a knowing violation of law;  • the director served at the time of payment of an unlawful dividend or an unlawful stock purchase or  • redemption, unless the director was absent at the time the action was taken or dissented from the  • action; or  • the director or officer derived an improper personal benefit from the transaction.    We will generally indemnify any person who was, is, or is threatened to be made, a party to a proceeding  by reason of the fact that he or she:  • is or was our director, officer, employee or agent; or  • while our director, officer, employee or agent is or was serving at our request as a director, officer,  employee or agent of another corporation, partnership, joint venture, trust or other enterprise.    Any indemnification of our directors, officers or others pursuant to the foregoing provisions for liabilities  arising under the Securities Act are, in the opinion of the SEC, against public policy as expressed in the Securities  Act and are unenforceable.          

 

Advance Notice Requirements for Shareholder Proposals    At any annual meeting of our shareholders, the only business that shall be brought before the meeting is  that which is brought:  • pursuant to our notice of meeting;  • by or at the discretion of our board of directors; or  • by any of our shareholders of record at the time the notice is given, who shall be entitled to vote at the  meeting and who complies with the notice procedures set forth herein.    For business to be properly brought before an annual meeting by a shareholder, the shareholder must have  given timely notice in writing to our secretary. To be timely, a shareholder’s notice must be received at our principal  executive offices not less than 120 calendar days before the anniversary of the date our proxy statement was released  to shareholders in connection with the previous year’s annual meeting; provided however, that if the date of the   meeting is changed by more than 30 days from the date of the previous year’s meeting, notice must be received no  later than the close of business on the 10th day following the earlier of the day on which notice of the date of the  meeting was mailed to shareholders or public disclosure of that date was made. The shareholder notice shall set forth  as to each matter the shareholder proposes to bring before the meeting:  • a brief description of and the reasons for proposing the matter at the meeting;  • with respect to the shareholder giving notice or the beneficial owner, if any on whose behalf the proposal is  made: (a) the name and address of such person, (b) the class or series and number of shares which are  owned beneficially and of record by such person, (c) the name of each nominee holder of shares owned  beneficially but not of record and the number of such shares held by each such nominee, (d) whether and  the extent to which any derivative instrument, swap, option or similar transaction was entered into by or on  behalf of such person or any of its affiliates or associates, and (e) whether and the extent to which any other  agreement has been made by or on behalf of such person or any of its affiliates or associates to mitigate  loss or manage risk of such person or to increase or decrease the voting power or other interest of such  person;  • a representation that the shareholder giving notice intends to appear in person or by proxy at the annual  meeting;  • any material interest of such shareholder of record or beneficial owner, if any, on whose behalf the proposal  is made, or any of their respective affiliates or associates, in such proposal;  • a description of all agreements between the shareholder, the beneficial owner, if any, on whose behalf the  proposal is made, or any of their respective affiliates or associates, in connection with the proposal of such  business by such shareholder; and  • all other information that would be required to be disclosed by such shareholder or the beneficial owner, if  any, on whose behalf the proposal is made in connection with solicitation of proxies for the election of  directors in a contested election, pursuant to Regulation 14A of the Exchange Act.    These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders.    Higher Vote for Some Business Combinations and Other Actions    Subject to various exceptions, including acquiring 85 percent of the outstanding shares less shares owned  by related persons in a single transaction, a business combination (including, but not limited to, a merger or  consolidation, the sale, lease, exchange, transfer or other disposition of our assets in excess of $5,000,000, various  issuances and reclassifications of securities and the adoption of a plan or proposal for liquidation or dissolution) with  or upon a proposal by a related person, who is a person that is the direct or indirect beneficial owner of more than 10  percent of the outstanding voting shares of our stock (subject to various exceptions), and any affiliates of that  person, shall require, in addition to any approvals required by law, the approval of the business combination by  either:  • a majority vote of all of the independent directors; or  • the holders of at least two-thirds of the outstanding shares otherwise entitled to vote as a single class with  the common stock to approve the business combination, excluding any shares owned by the related person.        

 

Transactions with Interested Parties    Our certificate of incorporation provides that, in the absence of fraud, no contract or other transaction will  be affected or invalidated by the fact that any of our directors are in any way interested in or connected with any  other party to the contract or transaction or are themselves parties to the contract or transaction, provided that the  interest is fully disclosed or otherwise known to our board of directors at the meeting of our board of directors at  which the contract or transaction is authorized or confirmed, and provided further that a quorum of disinterested  directors is present at the meeting of our board of directors authorizing or confirming the contract or transaction and  the contract or transaction is approved by a majority of the quorum, and no interested director votes on the contract  or transaction. Any contract, transaction or act entered into or taken by us or our board or any committee thereof that  is ratified by a majority of a quorum of the shareholders having voting power at any annual meeting, or any special  meeting called for that purpose, will be valid and binding as though ratified by all of our shareholders. Any director  may vote upon any contract or other transaction between us and any subsidiary corporation without regard to the  fact that he is also a director of that subsidiary corporation. No contract or agreement between us and any other  corporation or party that owns a majority of our capital stock or any subsidiary of that other corporation shall be  made or entered into without the affirmative vote of a majority of the whole board of directors at a regular meeting  of the board.    Nomination of Directors    Subject to certain exceptions, only persons nominated in accordance with our bylaws may be eligible for  election as directors. Our bylaws provide that nominations may be made at any annual meeting of shareholders, or at  any special meeting of shareholders called for the purpose of electing directors:  • by or at the discretion of our board of directors or a committee thereof; or  • by any of our shareholders of record at the time the notice is given, who shall be entitled to vote at the  meeting and who complies with the notice procedures set forth herein.    For nominations to be properly brought before an annual meeting, or a special meeting called for the purpose of  electing directors, by a shareholder, the shareholder must have given timely notice in writing to our secretary. To be  timely, a shareholder’s notice must be received at our principal executive offices in the case of an annual meeting  not less than 120 calendar days before the anniversary of the date our proxy statement was released to shareholders  in connection with the previous year’s annual meeting; provided however, that if the date of the meeting is changed  by more than 30 days from the date of the previous year’s meeting, notice must be received no later than the close of  business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed to  shareholders or public disclosure of that date was made. In the case of a special meeting called for the purpose of  electing directors, to be timely, the shareholder’s notice must be received at our principal executive offices not later  than the 10th day following the earlier of the day on which notice of the date of the meeting was mailed to  shareholders or public disclosure of such date was made. The shareholder notice shall set forth:  • as to each person whom the shareholder proposes to nominate for election as a director: (a) the name, age,  business address and residence address of such person, (b) the principal occupation or employment of such  person, (c) the class or series and number of shares of the company that are owned beneficially or of record  by such person and any affiliates or associates of such person, (d) the name of each nominee holder of  shares owned beneficially but not of record and the number of such shares held by each such nominee, (e)  whether and the extent to which any derivative instrument, swap, option or similar transaction was entered  into by or on behalf of such person or any of its affiliates or associates, (f) whether and the extent to which  any other agreement has been made by or on behalf of such person or any of its affiliates or associates to  mitigate loss or manage risk of such person or to increase or decrease the voting power or other interest of  such person, and (g) all other information that would be required to be disclosed by such shareholder or the  beneficial owner, if any, on whose behalf the proposal is made in connection with solicitation of proxies for  the election of directors in a contested election, pursuant to Regulation 14A of the Exchange Act;  • with respect to the shareholder giving notice or the beneficial owner, if any on whose behalf the proposal is  made: (a) the name and address of such person, (b) the class or series and number of shares which are  owned beneficially and of record by such person, (c) the name of each nominee holder of shares owned  beneficially but not of record and the number of such shares held by each such nominee, (d) whether and  the extent to which any derivative instrument, swap, option or similar transaction was entered into by or on  behalf of such person or any of its affiliates or associates, (e) whether and the extent to which any other  

 

agreement has been made by or on behalf of such person or any of its affiliates or associates to mitigate  loss or manage risk of such person or to increase or decrease the voting power or other interest of such  person, (f) representation that the shareholder giving notice intends to appear in person or by proxy at the  annual meeting, (g) a description of all agreements between the shareholder, the beneficial owner, if any,  on whose behalf the proposal is made, or any of their respective affiliates or associates, in connection with  the proposal of such business by such shareholder, and (h) all other information that would be required to  be disclosed by such shareholder or the beneficial owner, if any, on whose behalf the proposal is made in  connection with solicitation of proxies for the election of directors in a contested election, pursuant to  Regulation 14A of the Exchange Act.    These provisions may impede shareholders’ ability to nominate persons for election as directors.    Oklahoma Law    Oklahoma Takeover Statute    We are subject to Section 1090.3 of the Oklahoma General Corporation Act. In general, Section 1090.3  prevents an “interested shareholder” from engaging in a “business combination” with an Oklahoma corporation for  three years following the date that person became an interested shareholder, unless:  • prior to the date that person became an interested shareholder, our board of directors approved the  transaction in which the interested shareholder became an interested shareholder or approved the business  combination;  • upon consummation of the transaction that resulted in the interested shareholder becoming an interested  shareholder, the interested shareholder owned at least 85 percent of our voting stock outstanding at the time  the transaction commenced, excluding stock held by directors who are also officers of the corporation and  stock held by certain employee stock plans; or  • on or subsequent to the date of the transaction in which that person became an interested shareholder, the  business combination was approved by our board of directors and authorized at a meeting of shareholders  by the affirmative vote of the holders of at least two-thirds of the outstanding voting stock of the  corporation not owned by the interested shareholder.    Section 1090.3 defines a “business combination” to include:  • any merger or consolidation involving the corporation and an interested shareholder;   • any sale, transfer, pledge or other disposition involving an interested shareholder of 10 percent or more  of the assets of the corporation;  • subject to limited exceptions, any transaction that results in the issuance or transfer by the corporation of  the stock of the corporation to an interested shareholder;  • any transaction involving the corporation that has the effect of increasing the proportionate share of the  stock of any class or series of the corporation beneficially owned by the interested shareholder; or  • the receipt by an interested shareholder of any loans, guarantees, pledges or other financial benefits  provided by or through the corporation.    For purposes of the description above and Section 1090.3, the term “corporation” also includes our majority- owned subsidiaries. In addition, Section 1090.3, defines an “interested shareholder” as an entity or person  beneficially owning 15 percent or more of our outstanding voting stock and any entity or person affiliated with or  controlling or controlled by that entity or person.    Oklahoma Control Share Provisions    Our certificate of incorporation provides that we are not subject to the control share provisions of the  Oklahoma General Corporation Act. With exceptions, this act prevents holders of more than 20 percent of the   voting power of the stock of an Oklahoma corporation from voting their shares. If we were to become subject to the  control share provisions of the Oklahoma General Corporation Act in the future, this provision may delay the time it  takes anyone to gain control of us.      

 

Transfer Agent and Registrar    The transfer agent and registrar for our common stock is EQ Shareowner Services.    Listing    Shares of our common stock are listed on the NYSE under the ticker symbol “OGS”.ogs10-k2020exhibit1028

ONE GAS, INC.   RESTRICTED UNIT AWARD AGREEMENT  This Restricted Unit Award Agreement (this “Agreement”) is made and entered into as of  February 15, 2021 (the “Grant Date”) by and between ONE Gas, Inc., an Oklahoma corporation  (the “Company”) and %%FIRST_NAME%-% %%LAST_NAME%-% (the “Participant”).  WHEREAS, the Company has adopted the ONE Gas, Inc. Amended and Restated Equity  Compensation Plan (2018), as amended from time to time (the “Plan”), pursuant to which  Restricted Unit Awards may be granted; and  WHEREAS, the Executive Compensation Committee of the Board of Directors (the  “Committee”) has determined that it is in the best interests of the Company and its shareholders  to grant the Restricted Unit Award provided for herein.  NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:  1. Grant of Restricted Units. 1.1 The Company hereby grants to the Participant an award consisting of %%TOTAL_SHARES_GRANTED,'999,999,999'%-% Restricted Units (“Restricted Units”  or the “Award”) on the terms and conditions set forth in this Agreement and the Plan.  Each  Restricted Unit represents the right to receive one share of the Company’s common stock  (“Share”) or, at the Company’s option, an amount of cash as set forth in Section 6.3, in either  case, at the times and subject to the conditions set forth herein.  Capitalized terms that are used  but not defined herein have the meanings set forth in the Plan.  1.2 The Restricted Units shall be credited to a separate account maintained for the  Participant on the books and records of the Company (the “Account”). All amounts credited to  the Account shall continue for all purposes to be part of the general assets of the Company.  2. Consideration. The Award is granted in consideration of the Participant’s continued employment with the Company. 3. Vesting. 3.1 General.  Subject to Participant’s continuous employment with the Company during the period beginning on the Grant Date and ending on February 17, 2024 (the “Restricted  Period”) and subject to the terms of this Agreement, the Participant will vest in such amounts  and at such times as are set forth below:    Vesting Date Percentage of Award That Vests  February 17, 2024 100%  Exhibit 10.28 

 

  2     For purposes of this Agreement, employment with any Subsidiary of the Company shall be  treated as employment with the Company.  Likewise, a termination of employment shall not be  deemed to occur by reason of a transfer of employment between the Company and any  Subsidiary.  Restricted Units that vest pursuant to the terms of this Agreement, including Sections 3.2 and 3.3  below, are referred to as “Vested Units” and the date upon which the Restricted Units vest is  referred to as a “Vesting Date.”  Unless and until the Restricted Units have vested, Participant  will have no right to receive any Shares subject thereto.  Prior to the actual delivery of any  Shares, the Award will represent an unsecured obligation of the Company, payable only from the  Company’s general assets.      3.2 Termination of Employment.    (a) If the Participant's employment with the Company is terminated prior to  the end of the Restricted Period by the Company without Cause or on account of the  Participant’s Retirement, Total Disability or death, the Participant will vest in a pro-rata portion  of the Restricted Units as of the Participant’s termination date.  The pro-rata portion of the  Restricted Units that vest will be determined by multiplying the number of Restricted Units  granted hereunder by a fraction, which fraction shall be equal to the number of full months  which have elapsed under the Restricted Period at the time of such termination of employment  by the number of full months in the Restricted Period.  If the Participant’s employment with the  Company terminates for any other reason, Participant shall immediately forfeit any and all  Restricted Units that have not vested or do not vest on or prior to the Participant’s termination  date and neither the Company nor any Subsidiary shall have any further obligations to the  Participant under this Agreement.   For purposes of this Agreement:  (i) “Cause” will mean any of the following:  (i) the Participant’s  conviction in a court of law of a felony, or any crime or offense involving  misuse or misappropriation of money or property, (ii) the Participant’s  violation of any covenant, agreement or obligation not to disclose  confidential information regarding the business of the Company (or  Subsidiary), (iii) any violation by the Participant of any covenant not to  compete with the Company (or Subsidiary), (iv) any act of dishonesty by the  Participant which adversely effects the business of the Company (or  Subsidiary), (v) any willful or intentional act of the Participant which  adversely affects the business of, or reflects unfavorably on the reputation of  the Company (or Subsidiary), (vi) the Participant’s use of alcohol or drugs  which interferes with the Participant’s duties as an employee of the  Company (or Subsidiary), or (vii) the Participant’s failure or refusal to  perform the specific directives of the Company’s Board, or its officers  

 

  3  which directives are consistent with the scope and nature of the Participant’s  duties and responsibilities with the existence and occurrence of all of such  causes to be determined by the Company, in its sole discretion; provided,  that nothing contained in the foregoing provisions of this Section shall be  deemed to interfere in any way with the right of the Company (or  Subsidiary), which is hereby acknowledged, to terminate the Participant’s  employment at any time without Cause.  (ii) “Retirement” means a voluntary termination of employment of the  Participant with the Company by the Participant if at the time of such  termination of employment the Participant has both completed five (5) years  of service with the Company and attained age fifty (50).  (iii) “Total Disability” means that the Participant is permanently and totally  disabled and unable to engage in any substantial gainful activity by reason  of a medically determinable physical or mental impairment which can be  expected to result in death or which has lasted or can be expected to last for  a continuous period of not less than twelve (12) months, and has established  such disability to the extent and in the manner and form as may be required  by the Committee.   3.3 Change in Control.  If a Change in Control occurs prior to the end of the  Restricted Period and the Participant is employed by the Company at the time of the Change in  Control, but subsequently terminates prior to the end of the Restricted Period based on an  involuntary termination (without cause) or a voluntary termination with “good reason” within 24  months of the Change in Control date, then the Participant shall become one hundred percent  (100%) vested in the Award upon the date of the termination due to the Change in Control. Good  reason includes:   Demotion or material reduction of authority or responsibility;   Material reduction in base salary;   Material reduction in annual incentive or LTI targets;   Relocation of greater than 35 miles; or   Failure of a successor company to assume the change-in-control plan.  Notwithstanding the foregoing, the provisions set forth in the Plan applicable to a Change in  Control shall apply to the Award, and in the event of a Change in Control, the Committee, in its  sole discretion and to the extent permitted by Section 409A, may take such actions as it deems  appropriate pursuant to the Plan.  For purposes of this Agreement, the term “Change in Control”  shall have the same meaning as provided in the Plan unless the Award is or becomes subject to  Code Section 409A, in which event “Change in Control” shall have the meaning provided in  Code Section 409A and the related Treasury Regulations.    4. Transfer Restrictions.    

 

  4  4.1 Except as provided in Section 4.2, during the Restricted Period and until such  time as the Shares underlying the Vested Units have been issued, the Restricted Units, related  Shares or the rights relating thereto may not be sold, pledged, assigned, transferred or otherwise  disposed of by the Participant in any manner other than by will or by laws of descent and  distribution.   Except as provided in Section 4.2, any attempt to sell, pledge, assign, transfer or  otherwise dispose of the Restricted Units, related Shares or the rights relating thereto shall be  wholly ineffective and, if any such attempt is made, the Restricted Units, related Shares or the  rights relating thereto will be forfeited by the Participant and all of the Participant's rights to such  units or related Shares shall immediately terminate without any payment or consideration by the  Company.  4.2 Notwithstanding the foregoing, the Participant may transfer any part or all of the  Participant’s rights in the Restricted Units to members of the Participant’s immediate family, or  to one or more trusts for the benefit of such immediate family members, or partnerships in which  such immediate family members are the only partners if the Participant does not receive any  consideration for the transfer.  In the event of any such transfer, Restricted Units shall continue  to be subject to the same terms and conditions otherwise applicable hereunder and under the Plan  immediately prior to transfer, except that such rights shall not be further transferable by the  transferee inter vivos, except for transfer back to the Participant.  For any such transfer to be  effective, the Participant must provide prior written notice thereof to the Committee and the  Participant shall furnish to the Committee such information as it may request with respect to the  transferee and the terms and conditions of any such transfer.  For purposes of this Agreement,  “immediate family” shall mean the Participant’s spouse, children and grandchildren.  5. Dividend Equivalents.  During the Restricted Period, the Participant's Account shall be  credited with an amount equal to all ordinary cash dividends (“Dividend Equivalents”) that  would have been paid to the Participant if one Share had been issued on the Grant Date for each  Restricted Unit granted to the Participant as set forth in this Agreement.   The Dividend  Equivalents credited to the Participant’s Account will be deemed to be reinvested in additional  Restricted Units and will be subject to the same terms and conditions as the Restricted Units to  which they are attributable and shall vest or be forfeited (if applicable) and settled at the same  time as the Restricted Units to which they are attributable. Such additional Restricted Units shall  also be credited with additional Dividend Equivalents as any further dividends are declared.    6. Settlement of Vested Units; Distribution or Payment.    6.1 Vested Units shall be settled and distributed in Shares (either in book-entry form  or otherwise) or, at the Company’s option, paid in an amount of cash as set forth in Section 6.3.   All distributions in Shares shall be in the form of whole Shares, and any fractional Share shall be  distributed in cash in an amount equal to the value of such fractional Share determined based on  the Fair Market Value of a Share on the Vesting Date.  

 

  5  6.2 Subject to Section 9 and Section 22.2, the Company shall distribute to the  Participant the number of Shares equal to the number of Vested Units within 75 days after the  applicable Vesting Date.  6.3 If the Company elects to settle the Participant’s Vested Units in cash, the amount  of cash payable with respect to each Vested Unit shall be equal to the Fair Market Value of a  Share on the Vesting Date.     6.4 To the extent that the Participant does not vest in any Restricted Units on or  before the end of day of the Restricted Period, all interest in such Restricted Units and any  additional Restricted Units attributable to Dividend Equivalents shall be forfeited.  The  Participant has no right or interest in any Restricted Units that are forfeited.  7. Conditions to Issuance or Transfer of Shares.  The issuance and transfer of Shares shall  be subject to compliance by the Company and the Participant with all applicable laws, rules and  regulations (“Applicable Laws”) and also to such approvals by governmental agencies as may be  deemed appropriate to comply with relevant securities laws and regulations.  No Shares shall be  issued or transferred unless and until any then applicable requirements of Applicable Laws and  regulatory agencies have been fully complied with to the satisfaction of the Company and its  counsel.      8. Tax Withholding.  Participant shall be required to pay to the Company, and the Company  shall have the right to deduct from any compensation paid to the Participant pursuant to the Plan,  the amount of any required federal, state and local taxes, domestic or foreign, including payroll  taxes, in respect of the Award and to take all such other action as the Committee deems  necessary to satisfy all obligations for the payment of such withholding taxes.  The Company  shall have no obligation to issue any Shares to any Participant unless and until the Participant has  made arrangements, satisfactory to the Company in its sole discretion, to satisfy the Participant’s  tax liability resulting from the vesting or settlement of the Vested Units.  The amount of such  withholding shall be determined by the Company.  The Committee, in its sole discretion, may  permit or require the Participant to satisfy any such tax withholding obligation by any of, or a  combination of, the following means:   8.1 tendering a cash payment or check payable to the Company.  8.2 authorizing the Company to withhold an amount from any cash amounts  otherwise due or to become due from the Company to the Participant.  8.3 authorizing the Company to withhold Shares from the Shares otherwise issuable  to the Participant as a result of the vesting of the Restricted Units; provided, however, that no  Shares shall be withheld with a Fair Market Value exceeding the maximum amount of tax  required to be withheld by Applicable law.  

 

  6  8.4 delivering to the Company previously owned and unencumbered Shares having a  then current Fair Market Value not exceeding the maximum amount of tax required to be  withheld by Applicable Law.    9. Rights as Shareholder. Except as otherwise provided in the Agreement, the Participant  shall not have any of the rights or privileges of a shareholder with respect to the Shares  underlying the Restricted Units unless and until the Restricted Units vest and certificates  representing such Shares (which may be in book-entry form) have been issued and recorded on  the Company’s records, and delivered to the Participant or to an escrow account for the  Participant’s benefit.  After such issuance, recordation and delivery, Participant will have the  rights of a shareholder of the Company with respect to such Shares, including without limitation,  voting rights and the right to receipt of dividends and distributions on such Shares.      10. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon  the Participant any right to serve as an employee or other service provider of the Company or a  Subsidiary.  Further, nothing in the Plan or this Agreement shall be construed to limit the  discretion of the Company or a Subsidiary to terminate the services of the Participant at any  time, with or without cause.   11. Adjustments. In the event of a change in capitalization described in Section 13 of the Plan  prior to the end of the Restricted Period, other than a dividend described in Section 5 above, the  Restricted Units shall be equitably adjusted or terminated in any manner contemplated by the  Plan to reflect the effect of such event or change in the Company’s capital structure in such a  way as to preserve the value of the Award.    12. Required Participant Repayment/Reduction Provision.  Notwithstanding anything in the  Plan or this Agreement to the contrary, all or a portion of the Award made to the Participant  under this Agreement is subject to being called for repayment to the Company or reduced in any  situation required by law or specified by Company policy in effect at the time of the request for  repayment or reduction is made.  In any event, even if not required by law or Company policy, in  any situation where the Board or a committee thereof determines that fraud, negligence, or  intentional misconduct by the Participant was a contributing factor to the Company having to  restate all or a portion of its financial statement(s), the Committee may request repayment or  reduction. The Committee may determine whether the Company shall effect any such repayment  or reduction: (i) by seeking repayment from the Participant, (ii) by reducing (subject to  Applicable Law and the Plan’s terms and conditions or any other applicable plan, program, or  arrangement) the amount that would otherwise be awarded or payable to the Participant under  the Award, the Plan or any other compensatory plan, program, or arrangement maintained by the  Company, (iii) by withholding payment of future increases in compensation (including the  payment of any discretionary bonus amount) or grants of compensatory awards that would  otherwise have been made in accordance with the Company's otherwise applicable compensation  practices, or (iv) by any combination of the foregoing. The determination regarding the  Participant’s conduct, and repayment or reduction under this provision shall be within the  Committee’s sole discretion and shall be final and binding on the Participant and the Company.  

 

  7  The Participant, in consideration of the grant of the Award, and by the Participant's execution of  this Agreement, acknowledges the Participant's understanding and agreement to this provision,  and hereby agrees to make and allow an immediate and complete repayment or reduction in  accordance with this provision in the event of a call for repayment or other action by the  Company or Committee to effect its terms with respect to the Participant, the Award and/or any  other compensation described herein.  13. Company Policies.  The Participant agrees that the Award will be subject to any  applicable insider trading policies, retention policies and other policies that may be implemented  by the Board, from time to time.  14. Participant Undertaking.  The Participant agrees to take whatever additional actions and  execute whatever additional documents the Company may in its reasonable judgment deem  necessary or advisable in order to carry out or effect one or more of the obligations or restrictions  imposed on the Participant pursuant to the terms of this Agreement.  It is intended by the  Company that the Plan and Shares covered by the Award are to be registered under the Securities  Act of 1933, as amended, prior to the grant date; provided that in the event such registration is  for any reason not effective for such Shares, the Participant agrees that all Shares acquired  pursuant to the grant will be acquired for investment and will not be available for sale or tender  to any third party.  15. Beneficiary.  The Participant may designate a Beneficiary to receive any rights of the  Participant which may become vested in the event of the Participant’s death under procedures  and in the form established by the Committee; and in the absence of such designation of a  Beneficiary, any such rights shall be deemed to be transferred to the Participant’s estate.    16. Notices. Any notice required to be delivered to the Company under this Agreement shall  be in writing and addressed to the Senior Vice President-Administration and Chief Information  Officer, or his successor in charge of compensation and benefits in Human Resources, of the  Company at the Company's principal corporate offices. Any notice required to be delivered to  the Participant under this Agreement shall be in writing and addressed to the Participant at the  Participant's address as shown in the records of the Company.   Either party may designate  another address in writing (or by such other method approved by the Company) from time to  time.  17. Incorporation of the Plan; Conflicts. The Restricted Units and the Shares issued to  Participant hereunder are subject to the terms and conditions set forth in this Agreement and the  Plan, which is incorporated herein by reference. In the event of any inconsistency between (1)  the Plan and this Agreement, the Plan will control, or (2) the resolutions and records of the Board  or Committee and this Agreement, the resolutions and records of the Board or Committee will  control.    18. Successors and Assigns. The Company may assign any of its rights under this  Agreement, and this Agreement will be binding upon and inure to the benefit of the Company’s  

 

  8  successors and assigns. Subject to the restrictions on transfer set forth herein and the Plan, this  Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal  representatives, successors and assigns of the parties hereto.    19. No Impact on Other Benefits. The Company does not intend for the value of the Award  or any Vested Units to be included in the Participant’s normal or expected compensation for  purposes of calculating any severance, retirement, welfare, insurance or similar employee  benefit; provided, however, that if there is any inconsistency between this Agreement and the  terms of another benefit plan, the benefit plan document will control.    20. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled  or terminated by the Board at any time, in its discretion. The grant of the Restricted Units in this  Agreement does not create any contractual right or other right to receive any Restricted Units or  other awards in the future. Future awards, if any, will be at the Committee’s sole discretion. Any  amendment, modification, or termination of the Plan shall not constitute a change or impairment  of the terms and conditions of the Participant's employment with the Company.   21. Amendment. In accordance with the Plan, the Committee may amend or otherwise  modify, suspend, discontinue or terminate this Agreement at any time, prospectively or  retroactively.      22. Section 409A.   22.1 This Award and Agreement is intended to comply with Section 409A or an  exemption thereunder and shall be construed and interpreted in a manner that is consistent with  the requirements for avoiding additional taxes or penalties under Section 409A.    Notwithstanding any other provision of the Agreement, any distributions or payments due  hereunder may only be made upon an event and in a manner that complies with Section 409A or  an applicable exemption. Any distributions or payments due hereunder upon a termination of  employment shall only be made upon a "separation from service" as defined in Section 409A.   The right to a series of installment payments under this Agreement shall be treated as a right to a  series of separate payments.  In no event may the Participant, directly or indirectly, designate the  calendar year of settlement, distribution or payment.     22.2 If an Award is subject to Section 409A and Participant becomes entitled to  settlement of the Award on account of a separation from service and is a “specified employee”  within the meaning of Section 409A on the date of the separation from service, then to the extent  necessary to prevent any accelerated or additional tax under Section 409A, such settlement will  be delayed until the earlier of: (a) the date that is six months following the Participant's  separation from service and (b) the Participant’s death (the “Delayed Payment Date”) and the  accumulated amounts shall be distributed or paid in a lump sum payment on the Delayed  Payment Date.   

 

  9  22.3 The Company does not represent that the Award or this Agreement complies with  Section 409A and in no event shall the Company be liable for all or any portion of any taxes,  penalties, interest or other expenses that may be incurred by the Participant on account of non- compliance with Section 409A.   22.4 To the extent that any provision of the Agreement would cause a conflict with the  requirements of Section 409A, or would cause the administration of the Agreement to fail to  satisfy Section 409A, such provision shall be deemed null and void to the extent permitted by  Applicable Law.  23. Entire Agreement.  The Plan and this Agreement (including any exhibit hereto) constitute  the entire agreement of the parties and supersede in their entirety all prior undertakings and  agreements of the Company and the Participant with respect to the subject matter hereof.   24. Severability. The invalidity or unenforceability of any provision of the Plan or this  Agreement shall not affect the validity or enforceability of any other provision of the Plan or this  Agreement, and each provision of the Plan and this Agreement shall be severable and  enforceable to the extent permitted by law.  25. Governing Law. This Agreement will be construed and interpreted in accordance with the  laws of the State of Oklahoma without regard to the conflict of laws provisions thereof.   26. Counterparts. This Agreement may be executed in one or more counterparts, including by  way of electronic signature, subject to Applicable Law, each of which shall be deemed an  original and all of which together will constitute one instrument.   27. Administration of Award; Acceptance. As a condition of receiving this Award, the  Participant agrees that the Committee shall have full and final authority to construe and interpret  the Plan and this Agreement, and to make all other decisions and determinations as may be  required under the Plan or this Agreement as they may deem necessary or advisable for  administration of the Plan or this Agreement, and that all such interpretations, decisions and  determinations shall be final and binding on the Participant, the Company and all other interested  persons.  Any dispute regarding the interpretation of this Agreement shall be submitted by the  Participant or the Company to the Committee for review.  The resolution of such dispute by the  Committee shall be final and binding on the Participant and the Company.  Day-to-day authority  and responsibility has been delegated to the Company’s ONE Gas, Inc. Benefits Committee and  its authorized representatives, and all actions taken thereby shall be entitled to the same  deference as if taken by the Committee itself.    The Participant hereby acknowledges receipt of this Agreement and a copy of the  Plan.  Participant agrees to be bound by all of the provisions set forth in this Agreement  and the Plan and acknowledges that there may be adverse tax consequences upon the  vesting or settlement of the Restricted Units or disposition of the underlying Shares and  that Participant has been advised to consult a tax advisor prior to such vesting, settlement  

 

  10  or disposition.  Participant accepts the Award under the terms and conditions stated in this  Agreement, subject to all terms and provisions of the Plan, by electronic acceptance of the  grant.

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