Document:

Exhibit
10.4

 

NOBLE
AFFILIATES, INC.

DEFERRED COMPENSATION PLAN

 

THIS
PLAN, made and executed by NOBLE AFFILIATES, INC., a Delaware corporation (the
“Company”),

 

WITNESSETH THAT:

 

WHEREAS,
the Company has heretofore
established the Noble Affiliates Thrift Restoration Plan for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees of the Company
and its participating affiliates; and

 

WHEREAS,
the Company now desires to amend
the Noble Affiliates Thrift Restoration Plan to make certain changes;

 

NOW,
THEREFORE, in consideration of the premises and pursuant to the provisions of
Section 4.1 thereof, the Noble Affiliates Thrift Restoration Plan is hereby
amended by restatement in its entirety effective as of August 1, 2001, to read
as follows:

 

ARTICLE 1

 

Definitions

 

Unless
the context clearly indicates otherwise, when used in this Plan:

 

1.1           “Account” shall mean the account or
accounts established by an Employer for a particular Participant pursuant to
Article 3 of the Plan.

 

1.2           “Administrator” shall mean the Employee Benefits Committee or
such other person or persons appointed by the Board of Directors of the Company to administer the Plan
pursuant to Article 12 of the Plan.

 

1.3           “Applicable Employer” shall mean the
Employer that employs or last employed a Participant.

 

1.4           “Base Salary”  shall mean the annual base salary payable
to a Participant by an Employer excluding incentive and discretionary bonuses
and other non-regular forms of compensation, before reductions for
contributions to or deferrals under any pension, deferred compensation or
benefit plan sponsored by an Employer.

 

1.5           “Beneficiary”  shall mean the person(s) or entity
designated as such in accordance with Article 11 of the Plan.

 

1.6           “Bonus” shall mean amounts paid to the Participant by an
Employer under the Company’s
Short Term Incentive Plan or any other bonus designated by the Administrator
before reductions for contributions to or deferrals under any pension, deferred
compensation or benefit plan sponsored by an Employer.

 

 

1.7           A “Change in Control” shall be deemed
to have occurred if:

 

(a)           individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the “Incumbent Board”) cease for any reason
to constitute at least fifty-one percent (51%) of the Board of Directors of the
Company, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s stockholders
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be, for purposes of this Plan, considered as though
such person were a member of the Incumbent Board;

 

(b)           the stockholders of the Company shall approve a
reorganization, merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
outstanding voting securities representing at least fifty-one percent (51%) of
the combined voting power entitled to vote generally in the election of
directors (“Voting Securities”) of the reorganized, merged or consolidated
company;

 

(c)           the stockholders of the Company shall approve a
liquidation or dissolution of the Company or a sale of all or substantially all
of the stock or assets of the Company; or

 

(d)           any “person,” as that term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other
than the Company, any of its subsidiaries, any employee benefit plan of the
Company or any of its subsidiaries, or any entity organized, appointed or
established by the Company for or pursuant to the terms of such a plan),
together with all “affiliates” and “associates” (as such terms are defined in
Rule 12b-2 under the Exchange Act) of such person (as well as any “Person” or
“group” as those terms are used in Sections 13(d) and 14(d) of the Exchange
Act), shall become the “beneficial owner” or “beneficial owners” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
securities of the Company representing in the aggregate twenty-five percent
(25%) or more of either (1) the then outstanding shares of common stock, par
value $3.33-1/3 per share, of the Company (“Common Stock”) or (2) the Voting
Securities of the Company, in either such case other than solely as a result of
acquisitions of such securities directly from the Company.  Without limiting the foregoing, a person
who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares the power to vote, or to direct the
voting of, or to dispose, or to direct the disposition of, Common Stock or
other Voting Securities of the Company shall be deemed the beneficial owner of
such Common Stock or Voting Securities.

 

Notwithstanding the foregoing, a “Change in Control” of the Company
shall not be deemed to have occurred for purposes of subparagraph (d) of this
Section 1.7 solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities of the Company outstanding, increases (i) the proportionate number
of shares of Common Stock beneficially owned by any person to twenty-five
percent (25%) or more of the shares of Common Stock then outstanding or (ii)
the proportionate voting power represented by the Voting Securities of the
Company beneficially owned by any person to twenty-five percent (25%) or more
of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in clause (i) or (ii) of this
sentence shall thereafter become the

 

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beneficial
owner of any additional shares of Common Stock or other Voting Securities of
the Company (other than a result of a stock split, stock dividend or similar
transaction), then a Change in Control of the Company shall be deemed to have
occurred for purposes subparagraph (d) of this Section 1.7.

 

1.8           “Company” shall mean Noble Affiliates,
Inc., a Delaware corporation.

 

1.9           “Employer Qualified Plan Credit” shall mean the credit to Participant’s
Account established for such purposes pursuant to Section 3.2 of the Plan.

 

1.10         “Crediting Rate”  shall mean (i) for a month
commencing prior to January 1, 2002, the monthly rate that is equivalent to an
annual rate equal to 2% above the prime rate as published in The Wall Street
Journal on the first business day of such month, and (ii) for periods after
December 31, 2001, an effective annual yield equal to the greater of (1) 125%
of the 120-month rolling average of ten-year Treasury Notes or (2) the
120-month rolling average of the Prime Rate. 
The Crediting Rate for periods after December 31, 2001, shall be
determined annually by the Administrator as of the September preceding the
beginning of the Plan Year to which such rate shall apply and shall be
compounded monthly.

 

1.11         “Disability”
shall mean the total and permanent incapacity of a Participant to perform the
usual duties of his or her employment with an Employer as determined by the Administrator.  Such incapacity shall be deemed to exist
when certified by a physician acceptable to the Administrator.

 

1.12         “Eligible Employee” shall mean the President
of the Company and any other
employee of  an Employer who has been
designated by the President as an Eligible Employee for the purposes of this
Plan.

 

1.13         “Employer” shall include the Company
and any other incorporated or unincorporated trade or business that may adopt
both the Qualified Plan and this Plan.

 

1.14         “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

1.15         “Financial
Hardship” shall mean a severe financial hardship to a Participant that
results from a sudden and unexpected illness or accident of the Participant or
of the spouse or a dependent (as defined in Section 152(a) of the Internal
Revenue Code of 1986, as amended) of the Participant, the loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant that cannot be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the Participant’s
assets, to the extent that such liquidation would not itself cause severe
financial hardship, or (iii) by cessation of deferrals under this Plan.  Cash needs arising from foreseeable events
such as the purchase of a residence or education expenses for children shall
not, alone, be considered a Financial Hardship.

 

1.16         “Participant”
shall mean an Eligible Employee
or former Eligible Employee for whom an Account is being maintained under the
Plan.

 

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1.17         “Participant
Election Form” shall mean the form or forms which constitute a written
agreement to make a deferral and to elect the form of distributions under the
Plan submitted by the Participant to the Administrator on a timely basis
pursuant to Article 2 of the Plan.  The
Participant Election Form may take the form of an electronic communication
followed by appropriate written confirmation according to specifications
established by the Administrator.

 

1.18         “Plan
Year” shall mean the calendar year.

 

1.19         “Qualified
Plan” shall mean the Noble Affiliates Thrift and Profit Sharing Plan as
amended from time to time.

 

1.20         “Retirement”
shall mean Termination of Employment on or after the Retirement Eligibility
Date for any reason other than death or Disability.

 

1.21         “Retirement Eligibility Date”  shall
mean the earlier of (i) the date on which the Participant attains age
sixty-five (65), (ii) the date on which the Participant has both attained age
fifty-five (55) and completed at least five (5) Years of Service, or (iii) the
date on which the Participant has completed at least twenty (20) Years of
Service.

 

1.22         “Scheduled Withdrawal”  shall mean the distribution elected by
the Participant pursuant to Article 7 of the Plan.

 

1.23         “Settlement Date” shall mean the date by which a
lump sum payment shall be made or the date by which installment payments shall
commence. The Settlement Date for installment payments, a delayed Retirement
benefit or a Scheduled Withdrawal shall be the last day of January of the Plan
Year for which distribution is elected. 
The Settlement Date shall otherwise be within sixty (60) days following
the event triggering the payout.  In the
case of death, the event triggering payout shall be deemed to occur upon the
date the Administrator is provided with the documentation reasonably necessary
to establish the fact of the Participant’s death.

 

1.24         “Statutory
Limitations” shall mean any statutory, regulatory or administrative
limitation on or affecting salary reduction or matching contributions to the
Qualified Plan, or on compensation taken into account in calculating employer
or employee contributions to the Qualified Plan.

 

1.25         “Termination of Employment”  shall mean the date as of which a
Participant is no longer employed by any Employer.  Transfers of employment between Employers shall not be considered
to be a Termination of Employment for the purposes of this Plan.

 

1.26         “Unscheduled Withdrawal” shall mean a
distribution elected by the Participant pursuant to Article 8 of the Plan.

 

1.27         “Valuation
Date” shall mean the date specified by the Administrator that is no more
than sixty (60) days preceding the date a payment is to be made pursuant to the
Plan.

 

1.28         “Withdrawal Penalty” shall mean the ten percent
(10%) penalty deducted from an Account as a result of an Unscheduled Withdrawal
pursuant to Article 8 of the Plan.

 

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1.29         “Years of Service”  shall mean the cumulative consecutive
years of continuous full-time employment with the Employers, beginning on the
date the Participant first began service with an Employer, and counting each
anniversary thereof.  Transfers of employment between
Employers shall not be an interruption of continuous employment with the
Employers for the purposes of this Plan.

 

ARTICLE 2

 

Participation

 

2.1           Elective Deferral.  Each year an Eligible Employee  may elect to defer any whole percentage of
Base Salary and/or Bonus up to fifty percent (50%) of Base Salary and one
hundred percent (100%) of Bonus earned by the Participant during the Plan
Year.  If a Participant ceases to meet
the definition of an Eligible Employee, the Participant shall continue as a
Participant in the Plan but shall not be entitled to make further deferrals
under the Plan until such time as the Participant is again designated as an
Eligible Employee  by the President of the Company.

 

2.2           Participant Election Form.  In order to make a deferral, an Eligible Employee  must submit a Participant
Election Form to the Administrator during the enrollment period established by
the Administrator prior to the beginning of the period during which the Base
Salary or Bonus is earned, except that with respect to the first Plan Year to
which this amendment and restatement is applicable, the Participant shall submit
a Participant Election Form no later than thirty (30) days after the effective
date of this restatement. The Administrator may establish a special enrollment
period for an Eligible Employee  hired
during a Plan Year to allow deferrals of Base Compensation or Bonus earned
during the balance of such Plan Year after such enrollment period.  The Participant shall be required to submit
a new Participant Election Form on a timely basis in order to defer a
percentage of Bonus or to change the Participant’s deferral election with
respect to Base Salary for a subsequent Plan Year.  If no Participant Election Form is filed during the prescribed
enrollment period, the Participant’s election regarding deferral of Base Salary
for the prior Plan Year shall continue in force for the next Plan Year.  However, no election regarding Bonus shall
be applied to a subsequent Plan Year.

 

ARTICLE 3

 

Accounts

 

3.1           Participant Deferral Accounts.  Solely for recordkeeping purposes one or
more Participant Deferral Accounts (segregated based on form and timing of
payout) shall be maintained for each Participant and shall be credited with the
Participant’s deferrals directed to each Account at the time such amounts would
otherwise have been paid to the Participant. 
Amounts credited to a Participant’s Participant Deferral Account shall
be fully vested at all times and shall be deemed to be credited with notional
earnings at the Crediting Rate from the date credited to the Account through
the Valuation Date.

 

3.2           Employer Qualified Plan Credit Account.  For each Plan Year in which the Participant
makes a deferral under this Plan, the Participant’s Employer Qualified Plan
Credit Account shall be credited with an amount equal the maximum Employer
matching contributions that

 

5

 

would
have been provided to the Participant under the Qualified Plan had the
Participant’s elected deferral under the Qualified Plan been contributed to the
Qualified Plan without regard to the Statutory Limitations.  The Employer Qualified Plan Credit for each
Plan Year shall be reduced by the amount of Employer matching contributions, if
any, actually credited to the Participant under the Qualified Plan for such
Plan Year. The Employer Qualified Plan Credit shall be credited to the
Participant’s Employer Qualified Plan Credit Account as soon as is practicable
but in no event later than the first day of the Plan Year following the Plan
Year for which the Employer matching contribution was or would have been made
under the Qualified Plan. Amounts credited to a Participant’s Employer
Qualified Plan Credit Account shall vest at the time and under the conditions
such amounts would have vested under the Qualified Plan had such contributions
been made to the Qualified Plan, and shall be deemed to be credited with
notional earnings at the Crediting Rate from the date credited to the Account
through the Valuation Date. 
Notwithstanding the foregoing, upon a Change in Control, all amounts credited
to the Participant’s Employer Qualified Plan Credit Account (including notional
earnings thereon) shall be fully vested.

 

3.3           Prior Accounts.  The amount credited to a Participant’s
Deferral Account under the Noble Affiliates Thrift Restoration Plan as of July
31, 2001, shall be credited to his or her Participant Deferral Account under
this Plan as of August 1, 2001.  The
amount credited to a Participant’s Matching Account under the Noble Affiliates
Thrift Restoration Plan as of July 31, 2001, shall be credited to his or her
Employer Qualified Plan Credit Account under this Plan as of August 1, 2001.

 

3.4           Statement of Accounts.  The Administrator shall provide each
Participant with statements at least annually setting forth the Participant’s
Account balances as of the end of each year.

 

ARTICLE 4

 

Benefits

 

4.1           Retirement Benefits.  In the event of the Participant’s
Retirement, the Participant shall be entitled to receive an amount equal to the
total balance of the Participant’s Accounts credited with notional earnings as
provided in Article 3 through the Valuation Date.  The benefit payable pursuant to this Section 4.1 shall be paid in
a single lump sum unless the Participant has made an effective election to have
the benefit paid in annual installments over a period of not more than fifteen
(15) years as specified by the Participant in such election.  An installment distribution will be paid in
annual installments determined each year by dividing the then undistributed
total balance of the Participant’s Accounts, as adjusted on each December 31
during the installment period for interest for the year then ended using the
Crediting Rate applicable for such year, by the number of remaining
installments to be paid to or with respect to such Participant.  The benefit payable to a Participant pursuant
to this Section 4.1 shall be paid or commence being paid, as the case may be,
on the Settlement Date following his or her Retirement unless such Participant
has made an effective election to defer such payment or commencement of
payments to January of one of the following five (5) Plan Years.  For the purposes of this Section 4.1, an
installment distribution or deferred payment election (and any subsequent
revocation thereof or change with respect thereto) shall be made by a
Participant on a form prescribed by and filed with (or as directed by) the
Committee; provided, however, that no such election, revocation or change shall
become effective for the purposes of the Plan unless the Participant completes
thirteen (13) months of continuous

 

6

 

employment
with the Employers after the date of filing such election with (or as directed
by) the Committee.

 

4.2           Termination Benefit.  Upon Termination of Employment other than by
reason of Retirement, Disability or death, the Applicable Employer shall pay to
the Participant a termination benefit equal to the total vested balance of the
Participant’s Accounts credited with notional earnings as provided in Article 3
through the Valuation Date.  The
termination benefit shall be paid in a single lump sum on the Settlement Date
following the Participant’s Termination of Employment.

 

4.3           Small Benefit Exception.  Notwithstanding the foregoing, in the event
the sum of all Account balances payable to the Participant is less than fifty
thousand dollars ($50,000), the Applicable Employer may, in its sole
discretion, elect to pay such Account balances in a single lump sum payable on
the last day of the month in which such amounts first become payable.

 

ARTICLE 5

 

Death Benefits

 

5.1           Survivor Benefit Before Benefits
Commence.  If the Participant dies
prior to commencement of benefits under Articles 4, the Applicable Employer
shall pay to the Participant’s Beneficiary a death benefit equal to the total
balance on death of all of the Participant’s Accounts credited with notional
earnings as provided in Article 3 through the Valuation Date.  The death benefit shall be paid in a single
lump sum on the Settlement Date following the date the Participant’s death is
established by reasonable documentation.

 

5.2           Survivor Benefit After Benefits
Commence.  If the Participant dies
after benefits have commenced under Article 4, upon receiving reasonable
documentation of the Participant’s death the Applicable Employer shall pay to
the Participant’s Beneficiary an amount equal to the remaining benefits payable
to the Participant under the Plan over the same period such benefits would have
been paid to the Participant.  If the
Participant dies after benefits have commenced under Article 7 but prior to
complete distribution of such benefits, the remaining balance of benefits
payable under Article 7 shall be paid to the Participant’s Beneficiary in a
single lump sum on the Settlement Date following the date the Participant’s
death is established by reasonable documentation.

 

5.3           Small Benefit Exception.  Notwithstanding the foregoing, in the event
the sum of all Account balances payable to a Beneficiary is less than fifty
thousand dollars ($50,000), the Applicable Employer may, in its sole
discretion, elect to pay such Account balances in a single lump sum payable on
the last day of the month in which such amounts first become payable.

 

ARTICLE 6

 

Disability

 

6.1           Disability.  Upon a Participant’s Termination of
Employment by reason of Disability, the amounts credited to such Participant’s
Accounts shall be distributed  at the
time or times and in the manner applicable to a Retirement under the provisions
of Section 4.1 and 4.3.

 

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ARTICLE 7

 

Scheduled Withdrawal

 

7.1           Election.  The Participant may make an irrevocable
election on the Participant Election Form at the time of making a deferral of
Base Salary or Bonus to take a Scheduled Withdrawal from the Account
established by the Participant for such purpose, including any earnings
credited thereon.  The Participant may
elect to receive the Scheduled Withdrawal in any Plan Year that begins at least
two (2) years after the enrollment period in which such Scheduled Withdrawal is
elected, and may elect to have the Scheduled Withdrawal distributed over a
period of up to four (4) years.  The
Participant may irrevocably elect to make additional deferrals into such
Scheduled Withdrawal Account in subsequent Participant Election Forms that are
effective for Plan Years before the Plan Year in which the Scheduled Withdrawal
is to be made or commence being made, but may not elect another Scheduled
Withdrawal date or establish another Scheduled Withdrawal Account until all of
the amounts in the existing Scheduled Withdrawal Account have been paid
out.  No Scheduled Withdrawal shall be
available from an Employer Qualified Plan Credit Account.

 

7.2           Maximum Scheduled Withdrawal.  The Participant shall be entitled to elect a
Scheduled Withdrawal of any whole percentage up to one hundred percent (100%)
of the relevant deferral credited with notional earnings as provided in Article
3 through the Valuation Date.

 

7.3           Timing of Scheduled Withdrawal.  The Scheduled Withdrawal shall be paid by
the Applicable Employer to the Participant in the form elected beginning no
later than the last day of January of the Plan Year elected by the Participant
in the Participant Election Form unless such date is preceded by the
Participant’s Termination of Employment. In the event of a Participant’s
Termination of Employment prior to the date elected for the Scheduled
Withdrawal or prior to completion of all scheduled installment payments of such
Scheduled Withdrawal, the unpaid Scheduled Withdrawal shall be paid in the form
of a single lump sum on the Settlement Date following such Termination of
Employment.  In the event such
Termination of Employment is as a result of the Participant’s death, the
Scheduled Withdrawal shall be paid to the Participant’s beneficiary in a single
lump sum on the Settlement Date following the date the Participant’s death is
established by reasonable documentation.

 

7.4           Scheduled Withdrawal Upon Change
in Control.  Within fourteen (14)
days following the occurrence of a potential Change in Control, a Participant
may irrevocably elect, on a form prescribed by and filed with the
Administrator, to receive a distribution of the entire amount credited to each
of his or her Accounts if a Change in Control occurs during the twenty-four
(24) month period following the occurrence of said potential Change in
Control.  The distribution to be made to
a Participant pursuant to this Section shall be paid in a single lump sum no
later than sixty (60) days following the occurrence of a Change in Control
during the period to which such Participant’s election under this Section
pertains, and shall include notional earnings as provided in Article 3 through
the Valuation Date.  For the purposes of
this Section, a potential Change in Control shall be deemed to have occurred if
(i) the Company enters into an agreement or arrangement the consummation of
which would result in the occurrence of a Change in Control, (ii) any person
(within the meaning of Section 1.7(d)) publicly announces an intention to take
action the consummation of which would constitute a Change in Control, or (iii)
the Board of Directors of the

 

8

 

Company
authorizes the taking of action the consummation of which would constitute a
Change in Control.

 

ARTICLE 8

 

Unscheduled Withdrawal

 

8.1           Election.  A Participant (or, after the Participant’s
death, a Beneficiary) may take an Unscheduled Withdrawal from a fully vested
Account at any time.  The Unscheduled
Withdrawal shall be paid no later than the last day of the month following the
month in which the Unscheduled Withdrawal is requested.  After an Unscheduled Withdrawal, a
Participant’s deferrals shall cease and the Participant shall not be allowed to
make a new deferral election until the enrollment period following one full calendar
year from the date of the Unscheduled Withdrawal.  Only one Unscheduled Withdrawal shall be permitted in each Plan
Year.

 

8.2           Withdrawal Penalty.  There shall be a Withdrawal Penalty deducted
from the Account prior to an Unscheduled Withdrawal from such Account equal to
ten percent (10%) of the Unscheduled Withdrawal.

 

ARTICLE 9

 

Financial Hardship Distribution

 

9.1           Financial Hardship Distribution.  If the Administrator determines that a
Participant has incurred a Financial Hardship, the Administrator in its sole
discretion may accelerate distributions of benefits or approve reduction or
cessation of current deferrals under the Plan in the amount reasonably
necessary to alleviate such Financial Hardship.  After a Financial Hardship distribution, a Participant’s
deferrals shall cease and the Participant shall not be allowed to make a new
deferral election until the enrollment period following one full calendar year
from the date of the Financial Hardship distribution.  No distribution shall be made to a Participant pursuant to this
Section 9.1 unless such Participant requests such a distribution in writing and
provides to the Administrator such information and documentation with respect
to his or her Financial Hardship as may be requested by the Administrator.

 

9

 

ARTICLE 10

 

Amendment and Termination of Plan

 

10.1         Amendment or Termination of Plan.  At any time prior to a Change in Control,
the Board of Directors of the Company
may amend or terminate the Plan, provided, however, that (i) no such amendment
shall reduce the Crediting Rate applicable to a Participant’s Account balance
or installment distribution without the consent of such Participant (or, if
deceased, his or her Beneficiary), and (ii) no such amendment or termination
may reduce or further defer the payment of a Participant’s Account balance or
installment distribution without the consent of such Participant (or, if
deceased, his or her Beneficiary).  If
the Board of Directors of the Company
terminates the Plan, the date of such termination shall be treated as a
Termination of Employment for the purpose of calculating the Plan benefit
payable to a Participant, and the Applicable Employer shall pay to each
Participant or Beneficiary of a deceased Participant the benefit such
Participant or Beneficiary would be entitled to receive under Article 4 or 5 of
the Plan, except that such benefit shall be paid in a single lump sum on the
last day of the month following the month in which the termination of the Plan
occurs.  During the twenty-four (24)
month period following a Change in Control, no amendment or termination of the
Plan shall become effective with respect to a Participant or Beneficiary of a
deceased Participant without the prior written consent of such Participant or
Beneficiary.  After the twenty-four (24)
month period following a Change in
Control, the Board of Directors of the Company shall have the same right to amend or terminate the Plan
as such Board had prior to such Change
in Control.

 

ARTICLE 11

 

Beneficiaries

 

11.1         Beneficiary Designation.  The Participant shall have the right, at any time, to designate
any person or persons as Beneficiary (both primary and contingent) to whom
payment under the Plan shall be made in the event of the Participant’s
death.  The Beneficiary designation
shall be effective when it is submitted in writing to and acknowledged by the
Administrator during the Participant’s lifetime on a form prescribed by the
Administrator.

 

11.2         Revision of Designation.  The submission of a new Beneficiary designation shall cancel all
prior Beneficiary designations.  Any
finalized divorce or marriage (other than a common law marriage) of a
Participant subsequent to the date of a Beneficiary designation shall revoke
such designation, unless in the case of divorce the former spouse was not
designated as Beneficiary and unless in the case of marriage the Participant’s
new spouse has been designated as Beneficiary.

 

11.3         Successor Beneficiary.  If the primary Beneficiary dies prior to complete distribution of
the benefits provided in Article 5, the remaining Account balance shall be paid
to the contingent Beneficiary elected by the Participant in the form of a lump
sum payable no later than the last day of the month following the month in
which the primary Beneficiary’s death is established by reasonable
documentation.

 

10

 

11.4         Absence of Valid Designation.  If a Participant fails to designate a
Beneficiary as provided above, or if the Beneficiary designation is revoked by
marriage, divorce, or otherwise without execution of a new designation, or if
every person designated as Beneficiary predeceases the Participant or dies
prior to complete distribution of the Participant’s benefits, then the
Administrator shall direct the distribution of such benefits to the
Participant’s estate.

 

ARTICLE 12

 

Administration/Claims Procedures

 

12.1         Administration. 
The Plan shall be administered by the Administrator, which shall have
the exclusive right and full discretion to (i) interpret the Plan, (ii) decide
any and all matters arising hereunder (including the right to remedy possible
ambiguities, inconsistencies, or admissions), (iii) to make, amend and rescind
such rules as it deems necessary for the proper administration of the Plan, and
(iv) to make all other determinations necessary or advisable for the
administration of the Plan, including determinations regarding eligibility for
benefits payable under the Plan. All interpretations and determinations of the
Administrator with respect to Plan matters shall be final, conclusive and
binding on all persons affected thereby. 
No person or member of any committee acting as the Administrator shall
be liable for any determination, decision or action made or taken in good faith
with respect to the Plan.

 

12.2                 Claims
Procedure.  Any Participant, former
Participant or Beneficiary may file a written claim with the Administrator
setting forth the nature of the benefit claimed, the amount thereof, and the basis
for claiming entitlement to such benefit. 
The Administrator shall determine the validity of the claim and
communicate a decision to the claimant promptly and, in any event, not later
than ninety (90) days after receipt of the claim by the Administrator.  The claim may be deemed by the claimant to
have been denied for purposes of further review described below in the event a
decision is not furnished to the claimant within such ninety (90) day period.  If additional information is necessary to
make a determination on a claim, the claimant shall be advised of the need for
such additional information within forty-five (45) days after the date of the
claim.  The claimant shall have up to
one hundred and eighty (180) days to supplement the claim information, and the
claimant shall be advised of the decision on the claim within forty-five (45)
days after the earlier of the date the supplemental information is supplied or
the end of the one hundred and eighty (180) day period.  Every claim for benefits which is denied
shall be denied by written notice setting forth in a manner calculated to be
understood by the claimant (i) the specific reason or reasons for the denial,
(ii) specific reference to any provisions of the Plan (including any internal
rules, guidelines, protocols, criteria, etc.) on which the denial is based,
(iii) description of any additional material or information that is necessary
to process the claim, and (iv) an explanation of the procedure for further
reviewing the denial of the claim (including applicable time limits and a
statement of the claimant’s right to bring an action following an adverse
determination on review).

 

12.3         Review Procedures. 
Within sixty (60) days after the receipt of a denial on a claim, a
claimant or his/her authorized representative may file a written request for
review of such denial.  Such review
shall be undertaken by the Administrator and shall be a full and fair review.
The claimant shall have the right to review all pertinent documents.  The Administrator shall issue a decision not
later than sixty (60) days after receipt of a request for review from a
claimant unless special circumstances, such as the need to hold a hearing,
require a longer period of time, in which

 

11

 

case a decision shall be rendered as soon as
possible but not later than one hundred and twenty (120) days after receipt of
the claimant’s request for review.  The
decision on review shall be in writing and shall include specific reasons for
the decision written in a manner calculated to be understood by the claimant
with specific reference to any provisions of the Plan on which the decision is
based.

 

ARTICLE 13

 

Conditions Related to Benefits

 

13.1         Nature of Plan and Rights.  This Plan is unfunded and maintained by the Applicable Employers
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees of the Applicable Employers.  The Accounts established and maintained
under this Plan by an Applicable Employer are for its accounting purposes only,
and shall not be deemed or construed to create a trust fund or security
interest of any kind for or to grant a property interest of any kind to any
Participant, Beneficiary or estate.  The
amounts credited to Accounts maintained under this Plan by an Applicable
Employer are and for all purposes shall continue to be a part of the general
liabilities of such Applicable Employer, and to the extent that a Participant,
Beneficiary or estate acquires a right to receive a payment from an Applicable
Employer pursuant to this Plan, (i) such right shall be no greater than the
right of any unsecured general creditor of such Applicable Employer, and (ii)
such Participant, Beneficiary or estate shall have no claim against or right to
receive any payment hereunder from any other Employer.

 

13.2         Spendthrift Provision.  No Account balance or other right or interest under the Plan of a
Participant, Beneficiary or estate may be assigned, transferred or alienated,
in whole or in part, either directly or by operation of law, and no such
balance, right or interest shall be liable for or subject to any debt,
obligation or liability of such Participant, Beneficiary or estate.

 

13.3         Protective Provisions.  The Participant shall cooperate with the Applicable Employer by
furnishing any and all information requested by the Administrator in order to
facilitate the payment of benefits hereunder, taking such physical examinations
as the Administrator may deem necessary and taking such other actions as may be
requested by the Administrator.

 

13.4         Withholding. 
A Participant or Beneficiary shall make appropriate arrangements with
the Applicable Employer for satisfaction of any federal, state or local income,
employment or other tax withholding requirements applicable to the payment of
benefits under the Plan.  If no other
arrangements are made, the Applicable Employer may provide, at its discretion,
for such withholding and tax payments as may be required, including, without limitation,
by the reduction of Plan benefits or other amounts payable to the Participant
or Beneficiary.

 

13.5         Assumptions and Methodology.  The Administrator shall establish the
actuarial assumptions and method of calculation used in determining the present
or future value of benefits, earnings, payments, fees, expenses or any other
amounts required to be calculated under the terms of the Plan.  The Administrator shall also establish
reasonable procedures regarding the form and timing of installment payments.   Such assumptions and methodology shall be
outlined in detail in procedures established by the Administrator and made
available to Participants and may be changed from time to time by the
Administrator prior to a Change in
Control.  During the twenty-four
(24) month period following a Change in
Control, the Administrator shall not change such assumptions

 

12

 

and methodology without prior written consent
of a majority of the Participants and Beneficiaries of deceased Participants
who would be affected by such change. 
After the twenty-four (24) month period following a Change in Control, the Administrator
shall have the same right to change assumptions and methodology as it did prior
to such Change in Control.

 

ARTICLE 14

 

Miscellaneous

 

14.1         Successors of the Company.  The rights and obligations of an Applicable
Employer under the Plan shall inure to the benefit of, and shall be binding
upon, the successors and assigns of such Applicable Employer.

 

14.2         Employment Not Guaranteed.  Nothing contained in the Plan nor any action taken hereunder
shall be construed as a contract of employment or as giving any Participant any
right to continued employment with any Employer.

 

14.3         Gender, Singular and Plural.  All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. 
As the context may require, the singular may be read as the plural and
the plural as the singular.

 

14.4         Captions.  The
captions of the articles, paragraphs and sections of the Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

 

14.5         Validity.  In
the event any provision of the Plan is held invalid, void or unenforceable, the
same shall not affect, in any respect whatsoever, the validity of any other
provisions of the Plan.

 

14.6         Waiver of Breach. 
The waiver by an Employer of any breach of any provision of the Plan
shall not operate or be construed as a waiver of any subsequent breach by that
Participant or any other Participant.

 

14.7         Notice.  Any
notice required or permitted to be given under the Plan to an Employer, the
Administrator or a Participant or Beneficiary shall be sufficient if in writing
and hand-delivered, or sent by registered or certified mail, (i) in the case of
an Employer, to the principal office of such Employer, (ii) in the case of the
Administrator, to the principal office of the Company, directed to the
attention of the Administrator, and (iii) in the case of a Participant or
Beneficiary, to the last known address of the Participant or Beneficiary as
indicated on the records of the Administrator. 
Such notice shall be deemed given as of the date of delivery or, if delivery
is made by mail, as of the date shown on the postmark on the receipt for
registration or certification.  Notices
may also be given by electronic means in accordance with procedures established
by the Administrator.

 

14.8         Errors in Benefit Statement or Distributions.  In the event an error is made in a benefit
statement, such error shall be corrected on the next benefit statement
following the date such error is discovered. 
In the event of an error in a distribution, upon the discovery of such
error, the Participant’s Account shall immediately be adjusted to reflect such
underpayment or overpayment and, if possible, the next distribution shall be
adjusted upward or downward to correct such prior error.  If the remaining balance of a Participant’s
Account is insufficient to cover an erroneous overpayment, the Affiliated
Employer may, at its discretion, offset other amounts payable to the

 

13

 

Participant (including but not limited to
salary, bonuses, expense reimbursements, severance benefits or other employee
compensation benefit arrangements, as allowed by law) to recoup the amount of
such overpayment.

 

14.9         Special Accelerated Distributions.  If the Internal Revenue Service assesses an
income tax deficiency against a Participant on the grounds that an amount
credited to his or her Account (the “Taxable Amount”) is subject to federal
income tax prior to the time the payment of such amount otherwise would be made
to such Participant pursuant to this Plan, the Applicable Employer shall pay
the Taxable Amount to such Participant and deduct such amount from such
Account.

 

14.10       Applicable Law. 
The Plan shall be governed and construed in accordance with the internal
laws (and not the principles relating to conflicts of laws) of the State of
Texas, except where superseded by ERISA or other applicable federal law.

 

14.11       Arbitration. 
Any claim, dispute or other matter in question of any kind relating to
this Plan which is not resolved by the claims procedures under Article 12 shall
be settled by arbitration in accordance with the applicable Employment Dispute
Resolution Rules of the American Arbitration Association.  Notice of demand for arbitration shall be
made in writing to the opposing party and to the American Arbitration
Association within a reasonable time after the claim, dispute or other matter
in question has arisen.  In no event
shall a demand for arbitration be made after the date when the applicable
statute of limitations would bar the institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question.  The decision of the arbitrators shall be
final and may be enforced in any court of competent jurisdiction.  The arbitrators may award reasonable fees
and expenses to the prevailing party in any dispute hereunder and shall award
reasonable fees and expenses in the event that the arbitrators find that the
losing party acted in bad faith or with intent to harass, hinder or delay the
prevailing party in the exercise of its rights in connection with the matter
under dispute.

 

14.12       Administrator Release and Indemnity.  The Employers (i) hereby release each person
or member of a committee acting as the Administrator from any claim, cost,
expense (including reasonable attorneys’ fees and other expenses of defense),
judgment, loss or liability (including any amount paid in settlement of a claim
with the approval of the Company) incurred by an Employer, and (ii) shall joint
and severally indemnify and hold each person or member of a committee acting as
the Administrator harmless from and against any claim, cost, expense (including
reasonable attorneys’ fees and other expenses of defense), judgment, loss or
liability (including any amount paid in settlement of a claim with the approval
of the Company) incurred by such person or committee member, that arises out of
or results from any act or omission to act (including a negligent act or
omission to act) by such person or committee member relating to the performance
of his or her duties under the Plan, excluding, however, any such claim, cost,
expense, judgment, loss or liability that arises out of or results from his or
her willful misconduct or failure to act in good faith.

 

14

 

IN
WITNESS WHEREOF, the Company has
caused this Plan to be executed to be effective as of August 1, 2001.

 

 

	
   

  	
  NOBLE
  AFFILIATES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
     /s/
  Charles D. Davidson

  	
   

  
	
   

  	
  Its

  	
       President
  and CEO

  	
   

  

 

15Exhibit 10.5

 

NOBLE ENERGY, INC.

 

1992 STOCK OPTION AND RESTRICTED

STOCK PLAN

 

(As Amended Through January 27, 2003)

 

 

Section 1.  Purpose

 

The purpose of this Plan is to assist Noble Energy,

Inc., a Delaware corporation formerly known as Noble Affiliates, Inc., in

attracting and retaining, as officers and key employees of the Company and its

Affiliates, persons of training, experience and ability and to furnish

additional incentive to such persons by encouraging them to become owners of

Shares of the Company’s capital stock, by granting to such persons Incentive

Options, Nonqualified Options, Restricted Stock, or any combination of the

foregoing.

 

 

Section 2. 

Definitions

 

Unless the context otherwise requires, the following

words as used herein shall have the following meanings:

 

(a)           “Affiliate” means any corporation

(other than the Company) in any unbroken chain of corporations (i) beginning

with the Company if, at the time of the granting of the Option or award of

Restricted Stock, each of the corporations other than the last corporation in

the unbroken chain owns stock possessing 50 percent or more of the total

combined voting power of all classes of stock in one of the other corporations

in such chain, or (ii) ending with the Company if, at the time of the granting

of the Option or award of Restricted Stock, each of the corporations, other

than the Company, owns stock possessing 50 percent or more of the total

combined voting power of all classes of stock in one of the other corporations

in such chain.

 

(b)           “Agreement” means the written

agreement (i) between the Company and the Optionee evidencing the Option and

any SARs that relate to such Option granted by the Company and the

understanding of the parties with respect thereto or (ii) between the Company and

a recipient of Restricted Stock evidencing the restrictions, terms and

conditions applicable to such award of Restricted Stock and the understanding

of the parties with respect thereto.

 

(c)           “Board” means the Board of Directors

of the Company as the same may be constituted from time to time.

 

(d)           “Code” means the Internal Revenue

Code of 1986, as amended.

 

(e)           “Committee” means the Committee

provided for in Section 3 of the Plan as the same may be constituted from time

to time.

 

(f)            “Company” means Noble Energy, Inc.,

a Delaware corporation.

 

(g)           “Corporate Transaction” shall have

the meaning as defined in Section 8 of the Plan.

 

(h)           “Exchange Act” means the Securities

Exchange Act of 1934, as amended.

 

(i)            “Fair Market Value” means the fair

market value per Share as determined by the Committee in good faith; provided,

however, that if a Share is listed or admitted to trading on a securities

exchange registered under the Exchange Act, the Fair Market Value per Share

shall be the average of the reported high and low sales price on the date in

question (or if there was no reported sale on such date, on

 

 

the last preceding date on which any reported sale

occurred) on the principal securities exchange on which such Share is listed or

admitted to trading, or if a Share is not listed or admitted to trading on any

such exchange but is listed as a national market security on the National

Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”)

or any similar system then in use, the Fair Market Value per Share shall be the

average of the reported high and low sales price on the date in question (or if

there was no reported sale on such date, on the last preceding date on which

any reported sale occurred) on such system, or if a Share is not listed or

admitted to trading on any such exchange and is not listed as a national market

security on NASDAQ but is quoted on NASDAQ or any similar system then in use,

the Fair Market Value per Share shall be the average of the closing high bid

and low asked quotations on such system for such Share on the date in

question.  For purposes of valuing

Shares to be made subject to Incentive Options, the Fair Market Value per Share

shall be determined without regard to any restriction other than one which, by

its terms, will never lapse.

 

(j)            “Incentive Option” means an Option

that is intended to satisfy the requirements of Section 422(b) of the Code and

Section 17 of the Plan.

 

(k)           “Nonqualified Option” means an Option

that does not qualify as a statutory stock option under Section 422 or 423 of

the Code.

 

(l)            “Non-Employee Director” means a

director of the Company who satisfies the definition thereof under Rule 16b-3

promulgated under the Exchange Act.

 

(m)          “Option” means an option to purchase

one or more Shares granted under and pursuant to the Plan.  Such Option may be either an Incentive

Option or a Nonqualified Option.

 

(n)           “Optionee” means a person who has

been granted an Option and who has executed an Agreement with the Company.

 

(o)           “Outside Director” means a director

of the Company who is an outside director within the meaning of Section 162(m)

of the Code and the regulations promulgated thereunder.

 

(p)           “Plan” means this Noble Energy, Inc.

1992 Stock Option and Restricted Stock Plan, as amended from time to time.

 

(q)           “Restricted Stock” means Shares

issued or transferred pursuant to Section 20 of the Plan.

 

(r)            “Retirement” means a termination of

employment with the Company or an Affiliate either (i) on a voluntary

basis by a person who (A) is at least 55 years of age with five years of

credited service with the Company or one or more Affiliates or (B) has at least

20 years of credited service with the Company or one or more Affiliates,

immediately prior to such termination of employment or (ii) otherwise with the

written consent of the Committee in its sole discretion.

 

(s)           “SARs” means stock appreciation

rights granted pursuant to Section 7 of the Plan.

 

(t)            “Securities Act” means the

Securities Act of 1933, as amended.

 

(u)           “Share” means a share of the Company’s

present common stock, par value $3.33-1/3 per share, and any share or shares of

capital stock or other securities of the Company hereafter issued or issuable

in respect of or in substitution or exchange for each such present share.  Such Shares may be unissued or reacquired

Shares, as the Board, in its sole and absolute discretion, shall from time to

time determine.

 

2

 

Section 3. 

Administration

 

The Plan shall be administered by, and the decisions concerning

the Plan shall be made solely by, a Committee of two or more directors of the

Company, all of whom are (a) Non-Employee Directors, and (b) not later than

immediately after the first meeting of stockholders of the Company at which its

directors are elected that occurs after December 31, 1996, Outside

Directors.   Each member of the

Committee shall be appointed by and shall serve at the pleasure of the

Board.  The Board shall have the sole

continuing authority to appoint members of the Committee.  In making grants or awards, the Committee

shall take into consideration the contribution the person has made or may make

to the success of the Company or its Affiliates and such other considerations

as the Board may from time to time specify.

 

The Committee shall elect one of its members as its

chairman and shall hold its meetings at such times and places as it may

determine.  A majority of the members of

the Committee shall constitute a quorum. 

All decisions and determinations of the Committee shall be made by the

majority vote or decision of the members present at any meeting at which a

quorum is present; provided, however, that any decision or determination

reduced to writing and signed by all members of the Committee shall be as fully

effective as if it had been made by a majority vote or decision at a meeting

duly called and held.  The Committee may

appoint a secretary (who need not be a member of the Committee) who shall keep

minutes of its meetings.  The Committee

may make any rules and regulations for the conduct of its business that are not

inconsistent with the express provisions of the Plan, the bylaws or certificate

of incorporation of the Company or any resolutions of the Board.

 

All questions of interpretation or application of the

Plan, or of a grant of an Option and any SARs that relate to such Option or an

award of Restricted Stock, including questions of interpretation or application

of an Agreement, shall be subject to the determination of the Committee, which

determination shall be final and binding upon all parties.

 

Subject to the express provisions of the Plan, the

Committee shall have the authority, in its sole and absolute discretion, (a) to

adopt, amend or rescind administrative and interpretive rules and regulations

relating to the Plan; (b) to construe the Plan; (c) to make all other

determinations necessary or advisable for administering the Plan; (d) to

determine the terms and provisions of the respective Agreements (which need not

be identical), including provisions defining or otherwise relating to (i) the

term and the period or periods and extent of exercisability of the Options,

(ii) the extent to which the transferability of Shares issued upon exercise of

Options or any SARs that relate to such Options is restricted, (iii) the effect

of termination of employment upon the exercisability of the Options, and (iv)

the effect of approved leaves of absence (consistent with any applicable

regulations of the Internal Revenue Service) upon the exercisability of such

Options; (e) subject to Sections 9 and 11 of the Plan, to accelerate, for any

reason, regardless of whether the Agreement so provides, the time of

exercisability of any Option and any SARs that relate to such Option that have

been granted or the time of the lapsing of restrictions on Restricted Stock;

(f) to construe the respective Agreements; and (g) to exercise the powers

conferred on the Committee under the Plan. 

The Board may correct any defect or supply any omission or reconcile any

inconsistency in the Plan in the manner and to the extent it shall deem

expedient to carry it into effect, and it shall be the sole and final judge of

such expediency.  The determinations of

the Committee or Board, as the case may be, on the matters referred to in this

Section 3 shall be final and conclusive.

 

 

Section 4.  Shares

Subject to the Plan

 

(a)           The total number of Shares that may

be purchased pursuant to Options, issued or transferred pursuant to the

exercise of SARs or awarded as Restricted Stock shall not exceed a maximum of

6,500,000 in the aggregate, and the total number of shares for which Options

and SARs may be granted, and which may be awarded as Restricted Stock, to any

one person during a calendar year is 80,000 in the aggregate; provided that

each such maximum number of Shares shall be increased or decreased as provided

in Section 13 of the Plan.

 

3

 

(b)           At any time and from time to time

after the Plan takes effect, the Committee, pursuant to the provisions herein

set forth, may grant Options and any SARs that relate to such Options and award

Restricted Stock until the maximum number of Shares shall be exhausted or the

Plan shall be sooner terminated; provided, however, that no Incentive Option

and any SARs that relate to such Option shall be granted after December 9,

2006.

 

(c)           Shares subject to an Option that

expires or terminates prior to exercise and Shares that had been previously

awarded as Restricted Stock that have since been forfeited shall be available

for further grant of Options or award as Restricted Stock.  No Option shall be granted and no Restricted

Stock shall be awarded if the number of Shares for which Options have been

granted and which pursuant to this Section are not again available for Option

grant, plus the number of Shares that have been awarded as Restricted Stock,

would, if such Option were granted or such Restricted Stock were awarded,

exceed 6,500,000.

 

(d)           Any Shares withheld pursuant to

Section 19(c) of the Plan shall not be available after such withholding for

being optioned or awarded pursuant to the provisions hereof.

 

(e)           Unless the Shares awarded as

Restricted Stock are Shares that have been reacquired by the Company as

treasury shares, Restricted Stock shall be awarded only for services actually

rendered, as determined by the Committee.

 

 

Section 5. 

Eligibility

 

The persons who shall be eligible to receive grants of

Options and any SARs that relate to such Options, and to receive awards of

Restricted Stock, shall be regular salaried officers or other employees of the

Company or one or more of its Affiliates.

 

 

Section 6.  Grant of

Options

 

(a)           From time to time while the Plan is

in effect, the Committee may, in its sole and absolute discretion, select from

among the persons eligible to receive a grant of Options under the Plan

(including persons who have already received such grants of Options) such one

or more of them as in the opinion of the Committee should be granted

Options.  The Committee shall thereupon,

likewise in its sole and absolute discretion, determine the number of Shares to

be allotted for option to each person so selected.

 

(b)           Each person so selected shall be

offered an Option to purchase the number of Shares so allotted to him, upon

such terms and conditions, consistent with the provisions of the Plan, as the

Committee may specify.  Each such person

shall have a reasonable period of time, to be fixed by the Committee, within

which to accept or reject the proffered Option.  Failure to accept within the period so fixed may be treated as a

rejection.

 

(c)           Each person who accepts an Option

offered to him shall enter into an Agreement with the Company, in such form as

the Committee may prescribe, setting forth the terms and conditions of the

Option, whereupon such person shall become a participant in the Plan.  In the event a person is granted both one or

more Incentive Options and one or more Nonqualified Options, such grants shall

be evidenced by separate Agreements, one for each Incentive Option grant and

one for each Nonqualified Option grant. 

The date on which the Committee completes all action constituting an

offer of an Option to a person, including the specification of the number of

Shares to be subject to the Option, shall constitute the date on which the

Option covered by such Agreement is granted. 

In no event, however, shall an Optionee gain any rights in addition to

those specified by the Committee in its grant, regardless of the time that may

pass between the grant of the Option and the actual signing of the Agreement by

the Company and the Optionee.

 

4

 

(d)           Each Agreement that includes SARs in

addition to an Option shall comply with the provisions of Section 7 of the

Plan.

 

 

Section

7.  Grant of SARs

 

The Committee may from time to time grant SARs in

conjunction with all or any portion of any Option either (i) at the time of the

initial Option grant (not including any subsequent modification that may be

treated as a new grant of an Incentive Option for purposes of Section 424(h) of

the Code) or (ii) with respect to Nonqualified Options, at any time after the

initial Option grant while the Nonqualified Option is still outstanding.  SARs shall not be granted other than in

conjunction with an Option granted hereunder.

 

SARs granted hereunder shall comply with the following

conditions and also with the terms of the Agreement governing the Option in

conjunction with which they are granted:

 

(a)           The SAR shall expire no later than

the expiration of the underlying Option.

 

(b)           Upon the exercise of an SAR, the

Optionee shall be entitled to receive payment equal to the excess of the

aggregate Fair Market Value of the Shares with respect to which the SAR is then

being exercised (determined as of the date of such exercise) over the aggregate

purchase price of such Shares as provided in the related Option.  Payment may be made in Shares, valued at

their Fair Market Value on the date of exercise, or in cash, or partly in

Shares and partly in cash, as determined by the Committee in its sole and absolute

discretion.

 

(c)           SARs shall be exercisable (i) only at

such time or times and only to the extent that the Option to which they relate

shall be exercisable, (ii) only when the Fair Market Value of the Shares

subject to the related Option exceeds the purchase price of the Shares as

provided in the related Option, and (iii) only upon surrender of the related

Option or any portion thereof with respect to the Shares for which the SARs are

then being exercised.

 

(d)           Upon exercise of an SAR, a

corresponding number of Shares subject to option under the related Option shall

be canceled.  Such canceled Shares shall

be charged against the Shares reserved for the Plan, as provided in Section 4

of the Plan, as if the Option had been exercised to such extent and shall not

be available for future Option grants or Restricted Stock awards hereunder.

 

 

Section 8.  Option

Price

 

The option price for each Share covered by an

Incentive Option shall not be less than the greater of (a) the par value of

such Share or (b) the Fair Market Value of such Share at the time such Option

is granted.  The option price for each

Share covered by a Nonqualified Option shall not be less than the greater of

(a) the par value of such Share or (b) 100 percent of the Fair Market

Value of such Share at the time the Option is granted, except that the minimum

option price may be equal to or greater than 85 percent of the Fair Market

Value of such Share at the time the Option is granted if and to the extent the

discount from Fair Market Value is expressly granted in lieu of a reasonable

amount of salary or cash bonus. 

Notwithstanding the two immediately preceding sentences, if the Company

or an Affiliate agrees to substitute a new Option under the Plan for an old

Option, or to assume an old Option, by reason of a corporate merger,

consolidation, acquisition of property or stock, separation, reorganization, or

liquidation (any of such events being referred to herein as a “Corporate

Transaction”), the option price of the Shares covered by each such new Option

or assumed Option may be other than the Fair Market Value of the Shares at the

time the Option is granted as determined by reference to a formula, established

at the time of the Corporate Transaction, which will give effect to such

substitution or assumption; provided, however, in no event shall:

 

(a)           the excess of the aggregate Fair

Market Value of the Shares subject to the Option immediately after the

substitution or assumption over the aggregate option price of such Shares be

more

 

5

 

than the excess of the aggregate Fair Market Value of

all Shares subject to the Option immediately prior to the substitution or

assumption over the aggregate option price of such Shares;

 

(b)           in the case of an Incentive Option,

the new Option or the assumption of the old Option give the Optionee additional

benefits that he would not have under the old Option; or

 

(c)           the ratio of the option price to the

Fair Market Value of the stock subject to the Option immediately after the

substitution or assumption be more favorable to the Optionee than the ratio of

the option price to the Fair Market Value of the stock subject to the old

Option immediately prior to such substitution or assumption, on a Share by

Share basis.

 

Notwithstanding the above, the provisions of this Section 8 with

respect to the option price in the event of a Corporate Transaction shall, in

the case of an Incentive Option, be subject to the requirements of Section

424(a) of the Code and the Treasury regulations and revenue rulings promulgated

thereunder.  In the case of an Incentive

Option, in the event of a conflict between the terms of this Section 8 and the

above cited statute, regulations and rulings, or in the event of an omission in

this Section 8 of a provision required by said laws, the latter shall control

in all respects and are hereby incorporated herein by reference as if set out

at length.

 

 

Section 9.  Option

Period and Terms of Exercise

 

(a)           Each Option shall be exercisable

during such period of time as the Committee may specify, but in no event for

longer than 10 years from the date when the Option is granted; provided,

however, that

 

(i)            All rights to exercise an Option and

any SARs that relate to such Option shall, subject to the provisions of subsection

(c) of this Section 9, terminate one year after the date the Optionee ceases to

be employed by at least one of the employers in the group of employers

consisting of the Company and its Affiliates, for any reason other than death,

becoming disabled (within the meaning of Section 22(e)(3) of the Code) or

Retirement, except that, in the event of the termination of employment of the

Optionee on account of (a) fraud or intentional misrepresentation, or

(b) embezzlement, misappropriation or conversion of assets or

opportunities of the Company or its Affiliates, the Option and any SARs that

relate to such Option shall thereafter be null and void for all purposes.  Employment shall not be deemed to have

ceased by reason of the transfer of employment, without interruption of

service, between or among the Company and any of its Affiliates.

 

(ii)           If the Optionee ceases to be employed

by at least one of the employers in the group of employers consisting of the

Company and its Affiliates, by reason of his death, becoming disabled (within

the meaning of Section 22(e)(3) of the Code) or Retirement, all rights to

exercise such Option and any SARs that relate to such Option shall, subject to

the provisions of subsection (c) of this Section 9, terminate five years thereafter.

 

(b)           If an Option is granted with a term

shorter than 10 years, the Committee may extend the term of the Option and any

SARs that relate to such Option, but for not more than 10 years from the date

when the Option was originally granted.

 

(c)           In no event may an Option or any SARs

that relate to such Option be exercised after the expiration of the term

thereof.

 

6

 

 

Section 10. 

Transferability of Options and SARs

 

Except as provided in this Section 10, no Option or

any SARs that relate to an Option shall be (i) transferable otherwise than by

will or the laws of descent and distribution, or (ii) exercisable during the

lifetime of the Optionee by anyone other than the Optionee.  A Nonqualified Option granted to an

Optionee, and any SARs that relate to such Nonqualified Option, may be

transferred by such Optionee to a permitted transferee (as defined below),

provided that (i) there is no consideration for such transfer (other than

receipt by the Optionee of interests in an entity that is a permitted

transferee); (ii) the Optionee (or such Optionee’s estate or representative)

shall remain obligated to satisfy all income or other tax withholding

obligations associated with the exercise of such Nonqualified Option or SARs;

(iii) the Optionee shall notify the Company in writing that such transfer has

occurred and disclose to the Company the name and address of the permitted

transferee and the relationship of the permitted transferee to the Optionee;

and (iv) such transfer shall be effected pursuant to transfer documents in a

form approved by the Committee.  A

permitted transferee may not further assign or transfer any such transferred

Nonqualified Option or any SARs that relate to such Nonqualified Option otherwise

than by will or the laws of descent and distribution.  Following the transfer of an Nonqualified Option and any SARs

that relate to such Nonqualified Option to a permitted transferee, such

Nonqualified Option and SARs shall continue to be subject to the same terms and

conditions that applied to them prior to their transfer by the Optionee, except

that they shall be exercisable by the permitted transferee to whom such

transfer was made rather than by the transferring Optionee.  For the purposes of the Plan, the term

“permitted transferee” means, with respect to an Optionee, (i) any child,

stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,

sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,

daughter-in-law, brother-in-law or sister-in-law of the Optionee, including

adoptive relationships, (ii) any person sharing the Optionee’s household (other

than a tenant or an employee), (iii) a trust in which the persons described in

clauses (i) and (ii) above have more than fifty percent of the beneficial

interest, (iv) a foundation in which the Optionee and/or persons described in

clauses (i) and (ii) above control the management of assets, and (v) any other

entity in which the Optionee and/or persons described in clauses (i) and (ii)

above own more than fifty percent of the voting interests.

 

 

Section 11.  Exercise

of Options and SARs

 

(a)           In the event of an Optionee’s death,

any then exercisable portion of an Option that has been granted to such

Optionee, and any SARs that relate to such Option, may be exercised, within the

period ending with the earlier of the fifth anniversary of the date of the

Optionee’s death or the date of the termination of such Option, by the duly

authorized representative of the deceased Optionee’s estate or the permitted

transferee to whom such Option and SARs have been transferred.

 

(b)           At any time, and from time to time,

during the period when any Option and any SARs that relate to such Option, or a

portion thereof, are exercisable, such Option or SARs, or portion thereof, may

be exercised in whole or in part; provided, however, that the Committee may

require any Option or SAR that is partially exercised to be so exercised with

respect to at least a stated minimum number of Shares.

 

(c)           Each exercise of an Option, or a

portion thereof, shall be evidenced by a notice in writing to the Company

accompanied by payment in full of the option price of the Shares then being

purchased.  Payment in full shall mean

payment of the full amount due:  (i) in

cash, (ii) by certified check or cashier’s check, (iii) with Shares owned

by the exercising Optionee or permitted transferee (including Shares received

upon exercise of the Option) having a Fair Market Value at least equal to the

aggregate option price payable in connection with such exercise, or (iv) by any

combination of clauses (i) through (iii). 

If the exercising Optionee or permitted transferee chooses to remit

Shares in payment of all or any portion of the option price, then (for purposes

of payment of the option price) those Shares shall be deemed to have a cash

value equal to their aggregate Fair Market Value determined as of the date the

exercising Optionee or permitted transferee exercises such Option.

 

7

 

Notwithstanding anything

contained herein to the contrary, at the request of an exercising Optionee or

permitted transferee and to the extent permitted by applicable law, the

Committee shall approve arrangements with a brokerage firm or firms under which

any such brokerage firm shall, on behalf of the exercising Optionee or

permitted transferee, make payment in full to the Company of the option price

of the Shares then being purchased, and the Company, pursuant to an irrevocable

notice in writing from the exercising Optionee or permitted transferee, shall

make prompt delivery of one or more certificates for the appropriate number of

Shares to such brokerage firm.  Payment

in full for purposes of the immediately preceding sentence shall mean payment

of the full amount due, either in cash or by certified check or cashier’s

check.

 

(d)           Each exercise of SARs, or a portion

thereof, shall be evidenced by a notice in writing to the Company.

 

(e)           No Shares shall be issued upon

exercise of an Option until full payment therefor has been made, and an

exercising Optionee or permitted transferee shall have none of the rights of a

shareholder until Shares are issued to him.

 

(f)            Nothing herein or in any Agreement

shall require the Company to issue any Shares upon exercise of an Option or SAR

if such issuance would, in the opinion of counsel for the Company, constitute a

violation of the Securities Act or any similar or superseding statute or

statutes, or any other applicable statute or regulation, as then in effect.  Upon the exercise of an Option or SAR (as a

result of which the exercising Optionee or permitted transferee receives

Shares), or portion thereof, the exercising Optionee or permitted transferee

shall give to the Company satisfactory evidence that he is acquiring such

Shares for the purposes of investment only and not with a view to their

distribution; provided, however, if or to the extent that the Shares delivered

to the exercising Optionee or permitted transferee shall be included in a

registration statement filed by the Company under the Securities Act, such

investment representation shall be abrogated.

 

 

Section 12.  Delivery

of Stock Certificates

 

As promptly as may be practicable after an Option or

SAR (as a result of the exercise of which the exercising Optionee or permitted

transferee receives Shares), or a portion thereof, has been exercised as

hereinabove provided, the Company shall make delivery of one or more

certificates for the appropriate number of Shares.  In the event that an Optionee exercises both (i) an Incentive

Option or SARs that relate to such Option (as a result of which the Optionee

receives Shares), or a portion thereof, and (ii) a Nonqualified Option or SARs

that relate to such Option (as a result of which the Optionee receives Shares),

or a portion thereof, separate stock certificates shall be issued, one for the

Shares subject to the Incentive Option and one for the Shares subject to the

Nonqualified Option.

 

 

Section 13.  Changes

in Company’s Shares and Certain Corporate Transactions

 

If at any time while the Plan is in effect there shall

be any increase or decrease in the number of issued and outstanding Shares of

the Company effected without receipt of consideration therefor by the Company,

through the declaration of a stock dividend or through any recapitalization or

merger or otherwise in which the Company is the surviving corporation,

resulting in a stock split-up, combination or exchange of Shares of the

Company, then and in each such event:

 

(a)           An appropriate adjustment shall be made

in the maximum number of Shares then subject to being optioned or awarded as

Restricted Stock under the Plan, to the end that the same proportion of the

Company’s issued and outstanding Shares shall continue to be subject to being

so optioned and awarded;

 

(b)           Appropriate adjustment shall be made

in the number of Shares and the option price per Share thereof then subject to

purchase pursuant to each Option previously granted and then outstanding, to

 

8

 

the end that the same proportion of the Company’s

issued and outstanding Shares in each such instance shall remain subject to

purchase at the same aggregate option price; and

 

(c)           In the case of Incentive Options, any

such adjustments shall in all respects satisfy the requirements of Section

424(a) of the Code and the Treasury regulations and revenue rulings promulgated

thereunder.

 

Except as is otherwise expressly provided herein, the

issue by the Company of shares of its capital stock of any class, or securities

convertible into shares of capital stock of any class, either in connection

with a direct sale or upon the exercise of rights or warrants to subscribe

therefor, or upon conversion of shares or obligations of the Company

convertible into such shares or other securities, shall not affect, and no

adjustment by reason thereof shall be made with respect to, the number of or

option price of Shares then subject to outstanding Options granted under the

Plan.  Furthermore, the presence of

outstanding Options granted under the Plan shall not affect in any manner the

right or power of the Company to make, authorize or consummate (i) any or all

adjustments, recapitalizations, reorganizations or other changes in the

Company’s capital structure or its business; (ii) any merger or consolidation

of the Company; (iii) any issue by the Company of debt securities or preferred

stock that would rank above the Shares subject to outstanding Options granted

under the Plan; (iv) the dissolution or liquidation of the Company; (v) any

sale, transfer or assignment of all or any part of the assets or business of

the Company; or (vi) any other corporate act or proceeding, whether of a

similar character or otherwise.

 

 

Section 14.  Effective

Date

 

The Plan was originally adopted by the Board on

January 28, 1992, and approved by the stockholders of the Company on April 28,

1992.  The Plan was amended and restated

on December 10, 1996, and was approved by the stockholders of the Company on

April 22, 1997.  The Plan was amended

and restated on February 1, 2000, and was approved by the stockholders of the

Company on April 25, 2000.  The Plan as

amended and restated through January 29, 2002, was approved and adopted by the

Board on January 29, 2002, to be effective as of that date.  The Plan was amended by the Board on January

27, 2003, to be effective as of that date.

 

 

Section 15. 

Amendment, Suspension or Termination

 

The Board may at any time amend, suspend or terminate

the Plan; provided, however, that after the shareholders have approved and

ratified the Plan in accordance with Section 14 of the Plan, the Board may not,

without approval of the shareholders of the Company, amend the Plan so as to

(a) increase the maximum number of Shares subject thereto, as specified in

Sections 4(a) and 13 of the Plan, (b) reduce the option price for Shares

covered by Options granted hereunder below the price specified in Section 8 of

the Plan or (c) permit the “repricing” of Options and any SARs that relate to

such new Options in contravention of Section 18 of the Plan; and provided

further, that the Board may not modify, impair or cancel any outstanding Option

or SAR that relates to such Option, or the restrictions, terms or conditions

applicable to Shares of Restricted Stock, without the consent of the holder

thereof.

 

 

Section 16. 

Requirements of Law

 

Notwithstanding anything contained herein or in any

Agreement to the contrary, the Company shall not be required to sell or issue

Shares under any Option or SAR if the issuance thereof would constitute a

violation by the Optionee or the Company of any provision of any law or

regulation of any governmental authority or any national securities exchange;

and as a condition of any sale or issuance of Shares upon exercise of an Option

or SAR, the Company may require such agreements or undertakings, if any, as the

Company may deem necessary or advisable to assure compliance with any such law

or regulation.

 

9

 

Section 17.  Incentive

Options

 

The Committee may, in its sole and absolute

discretion, designate any Option granted under the Plan as an Incentive Option

intended to qualify under Section 422(b) of the Code.  Any provision of the Plan to the contrary notwithstanding, (a) no

Incentive Option shall be granted to any person who, at the time such Incentive

Option is granted, owns stock possessing more than 10 percent of the total

combined voting power of all classes of stock of the Company or any Affiliate

unless the option price under such Incentive Option is at least 110 percent of

the Fair Market Value of the Shares subject to the Incentive Option at the date

of its grant and such Incentive Option is not exercisable after the expiration

of five years from the date of its grant; and (b) the aggregate Fair Market

Value of the Shares subject to an Incentive Option and the aggregate Fair

Market Value of the shares of stock of the Company or any Affiliate (or a

predecessor corporation of the Company or an Affiliate) subject to any other

incentive stock option (within the meaning of Section 422(b) of the Code) of

the Company and its Affiliates (or a predecessor corporation of any such

corporation), that may become first exercisable in any calendar year, shall not

(with respect to any Optionee) exceed $100,000, determined as of the date the

Incentive Option is granted.

 

 

Section 18. 

Modification of Options and SARs

 

Subject to the terms and conditions of and within the

limitations of the Plan, the Committee may modify, extend or renew outstanding

Options and any SARs that relate to such Options granted under the Plan.  The Committee shall not have authority to

accept the surrender or cancellation of any Options and any SARs that relate to

such Options outstanding hereunder (to the extent not theretofore exercised)

and grant new Options and any SARs that relate to such new Options hereunder in

substitution therefor (to the extent not theretofore exercised) at an Option

Price that is less than the Option Price of the Options surrendered or

canceled.  Notwithstanding the foregoing

provisions of this Section 18, no modification of an outstanding Option and any

SARs that relate to such Option granted hereunder shall, without the consent of

the Optionee, alter or impair any rights or obligations under any Option and

any SARs that relate to such Option theretofore granted hereunder to such

Optionee, except as may be necessary, with respect to Incentive Options, to

satisfy the requirements of Section 422(b) of the Code.

 

 

Section 19.  Agreement

Provisions

 

(a)           Each Agreement shall contain such

provisions (including, without limitation, restrictions or the removal of

restrictions upon the exercise of the Option and any SARs that relate to such

Option and the transfer of shares thereby acquired) as the Committee shall deem

advisable.  Each Agreement relating to

an Option shall identify the Option evidenced thereby as an Incentive Option or

Nonqualified Option, as the case may be. 

Incentive Options and Nonqualified Options may not both be covered by a

single Agreement.  Each such Agreement

relating to Incentive Options shall contain such limitations and restrictions

upon the exercise of the Incentive Option as shall be necessary for the

Incentive Option to which such Agreement relates to constitute an incentive

stock option, as defined in Section 422(b) of the Code.

 

(b)           Each Agreement shall recite that it

is subject to the Plan and that the Plan shall govern where there is any

inconsistency between the Plan and the Agreement.

 

(c)           Each Agreement shall contain a

covenant by the Optionee, in such form as the Committee may require in its

discretion, that he consents to and will take whatever affirmative actions are

required, in the opinion of the Committee, to enable the Company or appropriate

Affiliate to satisfy its Federal income tax and FICA and any applicable state

and local withholding obligations incurred as a result of such Optionee’s (or

his permitted transferee’s) exercise of an Option granted to such Optionee or

any SARs that relate to such Option. 

Upon the exercise of an Option or SARs requiring tax withholding, an

exercising Optionee or permitted transferee may (i) direct the Company to

withhold from the Shares to be issued to the exercising Optionee or permitted

transferee the number of Shares (based upon the aggregate Fair Market Value of

the Shares at the date of exercise) necessary to satisfy the Company’s

 

10

 

obligation to withhold taxes, (ii) deliver to the

Company sufficient Shares (based upon the aggregate Fair Market Value of the

Shares at the date of exercise) to satisfy the Company’s tax withholding

obligations, (iii) deliver sufficient cash to the Company to satisfy the

Company’s tax withholding obligations, or (iv) any combination of clauses (i)

through (iii).  In the event the

Committee subsequently determines that the aggregate Fair Market Value (as

determined above) of any Shares withheld as payment of any tax withholding

obligation is insufficient to discharge that tax withholding obligation, then

the Optonee to whom the Option and SARs in question were granted shall pay (or

cause the permitted transferee to whom such Option and SARs were transferred to

pay) to the Company, immediately upon the Committee’s request, the amount of

that deficiency.

 

(d)           Each Agreement relating to an

Incentive Option shall contain a covenant by the Optionee immediately to notify

the Company in writing of any disqualifying disposition (within the meaning of

Section 421(b) of the Code) of Shares received upon the exercise of an

Incentive Option.

 

 

Section 20. 

Restricted Stock

 

(a)           The Committee may from time to time,

in its sole and absolute discretion, award Shares of Restricted Stock to such

persons as it shall select from among those persons who are eligible under

Section 5 of the Plan to receive awards of Restricted Stock.  Any award of Restricted Stock shall be made

from Shares subject hereto as provided in Section 4 of the Plan.

 

(b)           A Share of Restricted Stock shall be

subject to such restrictions, terms and conditions, including forfeitures, if

any, as may be determined by the Committee, which may include, without

limitation, the rendition of services to the Company or its Affiliates for a

specified time or the achievement of specific goals, and to the further

restriction that no such Share may be sold, assigned, transferred, discounted,

exchanged, pledged or otherwise encumbered or disposed of until the terms and

conditions set by the Committee at the time of the award of the Restricted

Stock have been satisfied; provided, however, that the minimum restriction

period shall be three years from the date of award (one year in the case of

Shares of Restricted Stock awarded with performance-based conditions).  Each recipient of an award of Restricted

Stock shall enter into an Agreement with the Company, in such form as the

Committee shall prescribe, setting forth the restrictions, terms and  conditions of such award, whereupon such

recipient shall become a participant in the Plan.

 

If a person is awarded

Shares of Restricted Stock, whether or not escrowed as provided below, the

person shall be the record owner of such Shares and shall have all the rights

of a shareholder with respect to such Shares (unless the escrow agreement, if

any, specifically provides otherwise), including the right to vote and the

right to receive dividends or other distributions made or paid with respect to

such Shares.  Any certificate or

certificates representing Shares of Restricted Stock shall bear a legend

similar to the following:

 

The shares represented by

this certificate have been issued pursuant to the terms of the Noble Energy,

Inc. 1992 Stock Option and Restricted Stock Plan and may not be sold, assigned,

transferred, discounted, exchanged, pledged or otherwise encumbered or disposed

of in any manner except as set forth in the terms of the agreement embodying

the award of such shares dated

                              ,

        .

 

In order to enforce the

restrictions, terms and conditions that may be applicable to a person’s Shares

of Restricted Stock, the Committee may require the person, upon the receipt of

a certificate or certificates representing such Shares, or at any time

thereafter, to deposit such certificate or certificates, together with stock

powers and other instruments of transfer, appropriately endorsed in blank, with

the Company or an escrow agent designated by the Company under an escrow

agreement in such form as by the Committee shall prescribe.

 

11

 

After the satisfaction of

the restrictions, terms and conditions set by the Committee at the time of an

award of Restricted Stock to a person, a new certificate, without the legend

set forth above, for the number of Shares that are no longer subject to such

restrictions, terms and conditions shall be delivered to the person.

 

If a person to whom

Restricted Stock has been awarded dies after satisfaction of the restrictions,

terms and conditions for the payment of all or a portion of the award but prior

to the actual payment of all or such portion thereof, such payment shall be

made to the person’s beneficiary or beneficiaries at the time and in the same

manner that such payment would have been made to the person.

 

The Committee shall have

the authority (and the Agreement evidencing an award of Restricted Stock may so

provide) to cancel all or any portion of any outstanding restrictions prior to

the expiration of such restrictions with respect to any or all of the Shares of

Restricted Stock awarded to a person hereunder on such terms and conditions as the

Committee may deem appropriate.

 

(c)           Without limiting the provisions of

the first paragraph of subsection (b) of this Section 20, if a person to whom

Restricted Stock has been awarded ceases to be employed by at least one of the

employers in the group of employers consisting of the Company and its

Affiliates, for any reason, prior to the satisfaction of any terms and

conditions of an award, any Restricted Stock remaining subject to restrictions

shall thereupon be forfeited by the person and transferred to, and reacquired

by, the Company or an Affiliate at no cost to the Company or the Affiliate;

provided, however, if the cessation is due to the person’s death, disability or

Retirement, the Committee may, in its sole and absolute discretion, deem that

the terms and conditions have been met for all or part of such remaining

portion.  In the event of such

forfeiture, the person, or in the event of his death, his personal

representative, shall forthwith deliver to the Secretary of the Company the

certificates for the Shares of Restricted Stock remaining subject to such

restrictions, accompanied by such instruments of transfer, if any, as may

reasonably be required by the Secretary of the Company.

 

(d)           In case of any consolidation or

merger of another corporation into the Company in which the Company is the

surviving corporation and in which there is a reclassification or change

(including a change to the right to receive cash or other property) of the

Shares (other than a change in par value, or from par value to no par value, or

as a result of a subdivision or combination, but including any change in such

shares into two or more classes or series of shares), the Committee may provide

that payment of Restricted Stock shall take the form of the kind and amount of

shares of stock and other securities (including those of any new direct or

indirect parent of the Company), property, cash or any combination thereof

receivable upon such consolidation or merger.

 

 

Section 21.  General

 

(a)           The proceeds received by the Company

from the sale of Shares pursuant to Options shall be used for general corporate

purposes.

 

(b)           Nothing contained in the Plan or in

any Agreement shall confer upon any Optionee or recipient of Restricted Stock

the right to continue in the employ of the Company or any Affiliate, or

interfere in any way with the rights of the Company or any Affiliate to

terminate his employment at any time, with or without cause.

 

(c)           Neither the members of the Board nor

any member of the Committee shall be liable for any act, omission or

determination taken or made in good faith with respect to the Plan or any

Option and any SARs that relate to such Option granted hereunder or any

Restricted Stock awarded hereunder; and the members of the Board and the

Committee shall be entitled to indemnification and reimbursement by the Company

in respect of any claim, loss, damage or expenses (including counsel fees)

arising therefrom to

 

12

 

the full extent permitted by law and under any

directors’ and officers’ liability or similar insurance coverage that may be in

effect from time to time.

 

(d)           Any payment of cash or any issuance

or transfer of Shares to an exercising Optionee or permitted transferee, or to

his legal representative, heir, legatee or distributee, in accordance with the

provisions hereof, shall, to the extent thereof, be in full satisfaction of all

claims of such persons hereunder.  The

Committee may require an exercising Optionee or permitted transferee, legal

representative, heir, legatee or distributee, as a condition precedent to such

payment, to execute a release and receipt therefor in such form as it shall

determine.

 

(e)           Neither the Committee, the Board nor

the Company guarantees the Shares from loss or depreciation.

 

(f)            All expenses incident to the

administration, termination or protection of the Plan, including, but not

limited to, legal and accounting fees, shall be paid by the Company or its

Affiliates.

 

(g)           Records of the Company and its

Affiliates regarding a person’s period of employment, termination of employment

and the reason therefor, leaves of absence, re-employment and other matters

shall be conclusive for all purposes hereunder, unless determined by the

Committee to be incorrect.

 

(h)           Any action required of the Company

shall be by resolution of its Board or by a person authorized to act by

resolution of the Board.  Any action

required of the Committee shall be by resolution of the Committee or by a

person authorized to act by resolution of the Committee.

 

(i)            If any provision of the Plan or any

Agreement is held to be illegal or invalid for any reason, the illegality or

invalidity shall not affect the remaining provisions of the Plan or such

Agreement, as the case may be, but such provision shall be fully severable and

the Plan or such Agreement, as the case may be, shall be construed and enforced

as if the illegal or invalid provision had never been included herein or

therein.

 

(j)            Whenever any notice is required or

permitted hereunder, such notice must be in writing and personally delivered or

sent by mail.  Any notice required or

permitted to be delivered hereunder shall be deemed to be delivered on the date

on which it is personally delivered, or, whether actually received or not, on

the third business day after it is deposited in the United States mail,

certified or registered, postage prepaid, addressed to the person who is to

receive it at the address which such person has theretofore specified by

written notice delivered in accordance herewith.  The Company, an Optionee or a recipient of Restricted Stock may

change, at any time and from time to time, by written notice to the other, the

address that it or he had theretofore specified for receiving notices.  Until changed in accordance herewith, the

Company and each Optionee and recipient of Restricted Stock shall specify as

its and his address for receiving notices the address set forth in the

Agreement pertaining to the Shares to which such notice relates.

 

(k)           Any person entitled to notice

hereunder may waive such notice.

 

(l)            The Plan shall be binding upon the

Optionee or recipient of Restricted Stock, his heirs, legatees, distributees,

legal representatives and permitted transferees, upon the Company, its

successors and assigns, and upon the Committee, and its successors.

 

(m)          The titles and headings of Sections

and paragraphs are included for convenience of reference only and are not to be

considered in the construction of the provisions hereof.

 

(n)           All questions arising with respect to

the provisions of the Plan shall be determined by application of the laws of

the State of Texas except to the extent Texas law is preempted by Federal law.

 

13

 

(o)           Words used in the masculine shall

apply to the feminine where applicable, and wherever the context of the Plan

dictates, the plural shall be read as the singular and the singular as the

plural.

 

 

Section

22.  UK Sub-Plan

 

Any provision of this Plan to the contrary

notwithstanding, the Committee may grant to the employees of the Company or one

of its Affiliates whose compensation from the Company or such Affiliate is

subject to taxation under the laws of the United Kingdom Options which (i) will

terminate one year after the Optionee’s death, (ii) cannot be transferred to a

permitted transferee pursuant to the provisions of Section 10, (iii) cannot be

exercised using a means of payment other than cash or a certified check or

cashier’s check, and (iv) will not be adjusted pursuant to Section 13 without

the approval of the Board of Inland Revenue of the United Kingdom.

 

14

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