Document:

exv10w4

Exhibit 10.4

Form of Stock Appreciation Right Award Notice under the National Fuel
Gas Company 2010 Equity Compensation Plan

	 	 	 

	 

	 	[Date]

[Name]

[Address]

[Address]

Dear [Name]:

          I am pleased to inform you that on [date] the Compensation Committee (“Committee”) of the
Board of Directors of National Fuel Gas Company (the “Company”) granted to you (the “Grantee” or
“you”) a stock appreciation right, under the National Fuel Gas Company 2010 Equity Compensation
Plan, as amended (the “Plan”), in respect of an aggregate of [number] shares of the Company’s
Common Stock, $1.00 par value (the “Common Stock”).

          Your new stock appreciation right is described in the balance of this letter agreement (“Award
Notice”). The Plan and the Committee’s Administrative Rules (“Rules”) govern the operation of the
Plan, as well as the terms and conditions of your stock appreciation right granted under the Plan,
and are incorporated herein by reference. Capitalized terms not otherwise defined herein shall
have the meanings set forth for such terms in the Plan or the Rules.

	1.	 	Grant Price and Vesting Schedule

          The grant price (“Grant Price”) of your stock appreciation right is [$_____] per share (which
is the Fair Market Value of the Common Stock on the date of grant). Absent a Change in Control of
the Company, the stock appreciation right granted hereby is exercisable in accordance with the
following schedule:

[remainder of page intentionally left blank]

 

 

[Name]

Page 2

[Date]

	 	 	 
	 	 	Incremental Number of Shares Subject to SAR
	Date Exercisable	 	Exercisable
	[one year after date of grant]
	 	[one third of shares]
	 	 	 
	[two years after date of grant]
	 	[one third of shares]
	 	 	 
	[three years after date of grant]
	 	[one third of shares]

          In the event of a Change in Control of the Company, this stock appreciation right shall become
exercisable in accordance with the Plan, or its successor, unless the Committee determines in good
faith, prior to the occurrence of a Change in Control, that this stock appreciation right shall be
honored or assumed, or new rights substituted therefor (such honored, assumed or substituted award
hereinafter called an “Alternative Award”), by your employer (or the parent or an affiliate of your
employer) immediately following the Change in Control, provided that any such Alternative Award
must satisfy all the requirements of Section 12(b) of the Plan . Once such right has become
exercisable, this stock appreciation right may be exercised in whole at any time and in part from
time to time until the date of termination of the Grantee’s rights hereunder; provided, that in no
event shall this stock appreciation right be exercisable in whole or in part after [ten years after
date of grant].

	2.	 	Restriction on Exercise

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

	3.	 	Exercise

          This stock appreciation right may be exercised with respect to all or any part of the shares
of Common Stock then subject to such exercise in accordance with Section 1 pursuant to whatever
procedures may be adopted from time to time by the Company. Upon the exercise of this stock
appreciation right, in whole or in part, the Grantee shall be entitled to receive from the Company
payment, in cash, in shares of Common Stock or in a combination thereof, as determined by the
Committee, of an amount determined by multiplying:

 

 

[Name]

Page 3

[Date]

	 	(a)	 	the excess, if any, of the Fair Market Value at the date of exercise over the Grant Price

by

	 	(b)	 	the number of shares of Common Stock with respect to which the stock appreciation right
is then being exercised.

          The Committee’s current belief is that the Committee will elect to issue you Common Stock upon
the exercise of this stock appreciation right, but the Committee reserves the right to pay you in
any manner permitted by this Award Notice, the Plan or the Rules.

	4.	 	Termination of Employment

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

	5.	 	Adjustments in Common Stock

          In the event of an Adjustment Event, including any stock dividend, stock split, merger,
consolidation, reorganization, recapitalization or other similar event affecting the Common Stock,
the Committee shall equitably adjust, in its discretion, the number of shares subject to this stock
appreciation right and the Grant Price. To the extent deemed equitable and appropriate by the
Committee and subject to any required action by shareholders of the Company or of any successor in
interest to the Company or any direct or indirect parent corporation of the Company or any such
successor, in any Adjustment Event that is a merger, consolidation, reorganization, liquidation,
dissolution or similar transaction, this stock appreciation right shall be deemed to pertain to the
securities and other property, including cash, to which a holder of the number of shares of Common
Stock covered by this Award Notice would have been entitled to receive in connection with such
Adjustment Event. Any determination made by the Committee pursuant to this Section 5 shall be
final, binding and conclusive.

	6.	 	Non-Transferability of Stock Appreciation Right

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

	7.	 	Authority of Committee

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

 

 

[Name]

Page 4

[Date]

	8.	 	Miscellaneous

     (a) This stock appreciation right (i) shall be binding upon and inure to the benefit of
the Company (and its successors and assigns) and you (and your heirs, legal representatives
and estate), and (ii) shall be governed by the laws of the State of New York, and any
applicable laws of the United States. No contract or right of employment shall be implied
by this stock appreciation right.

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

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

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

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

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

 

 

[Name]

Page 5

[Date]

	9.	 	Tax Withholding

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

	10.	 	Securities Law Requirements

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

	11.	 	Stock Appreciation Right Subject to Plan and Rules

          This stock appreciation right shall be subject to all the terms and provisions of the Plan and
the Rules and the Grantee shall abide by and be bound by such terms and provisions and all rules,
regulations and determinations of the Board or the Committee now or hereafter made in connection
with the administration of the Plan.

	12.	 	American Jobs Creation Act

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

 

 

[Name]

Page 6

[Date]

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

	 	 	 	 	 
	 	Very truly yours,

NATIONAL FUEL GAS COMPANY

 	 
	 	By:  	 	 
	 	 	[Name] 	 
	 	 	[Title] 	 
	 

AGREED TO AND ACCEPTED

this                      day of    
                   
                  ,  
                   

	 	 	 	 	 

	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Granteeexv10w5

Exhibit 10.5

Administrative Rules

of the

Compensation Committee

of the

Board of Directors

of

National Fuel Gas Company

As amended and restated

effective December 8, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	I. Meetings	 	 	1	 
	II. Quorum and Voting; Delegation	 	 	2	 
	III. Grants and Awards Under the Plans	 	 	2	 
	 	 	A. General Rules Regarding Awards Under the 1997 and 2010 Plans	 	 	3	 
	 	 	 	 	 	 	1. Making of An Award	 	 	3	 
	 	 	 	 	 	 	2. Contemporaneous Awards	 	 	3	 
	 	 	 	 	 	 	3. Stock-Based Awards	 	 	3	 
	 	 	 	 	 	 	 	a. Source	 	 	 	 	 	3	 
	 	 	 	 	 	 	 	b. Cash Dividends and Cash Dividend Equivalents	 	 	3	 
	 
	 	 	 	 	 	 	 	 	i. Stock Based Awards Other Than Restricted Stock	 	3	 
	 
	 	 	 	 	 	 	 	 	ii. Restricted Stock Awards 	 	4	 
	 	 	 	 	 	 	 	c. Payment	 	 	4	 
	 	 	 	 	 	 	4. Withholding Taxes	 	 	4	 
	 	 	 	 	 	 	5. Deferral of Payment	 	 	5	 
	 	 	B. Stock Options Under the 1997 and 2010 Plans	 	 	5	 
	 	 	 	 	 	 	1. Designation	 	 	5	 
	 	 	 	 	 	 	2. Price	 	 	6	 
	 	 	 	 	 	 	3. Exercise Period/Duration	 	 	6	 
	 	 	 	 	 	 	 	a. Non-Qualified Stock Options Under the 1997 and 2010 Plans	 	 	6	 
	 	 	 	 	 	 	 	b. Incentive Stock Options Under the 1997 and 2010 Plans	 	 	6	 
	 	 	 	 	 	 	 	c. Suspension of Rights to Exercise	 	 	6	 
	 	 	 	 	 	 	 	d. Delegation of Authority	 	 	7	 
	 	 	 	 	 	 	4. Death or Other Termination of Employment	 	 	7	 
	 	 	 	 	 	 	 	a. Definitions	 	 	7	 
	 	 	 	 	 	 	 	b. Non-Qualified Stock Options Under the 1997 and 2010 Plans	 	 	8	 
	 	 	 	 	 	 	 	c. Extension of Incentive Stock Options Under the 1997 and 2010 Plans	 	 	8	 
	 	 	 	 	 	 	5. Mechanics of Exercise	 	 	9	 
	 	 	 	 	 	 	6. Reload Options	 	 	10	 
	 	 	C. SARs Under the 1997 and 2010 Plans	 	 	10	 
	 	 	D. Restricted Stock and Restricted Stock Units Under the 1997 and 2010 Plans	 	 	10	 

ii

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	1. Restrictions on Transferability; Vesting	 	 	10	 
	 	 	 	 	 	 	2. Mechanics of Grant	 	 	11	 
	IV. Procedures For Exercising Stock Options and SARs	 	 	11	 
	 	 	A. Authority and Scope	 	 	11	 
	 	 	B. Notice of Exercise	 	 	11	 
	 	 	 	 	 	 	1. Form and Delivery	 	 	11	 
	 	 	 	 	 	 	2. Exercise Date	 	 	12	 
	 	 	C. Payment of Exercise Price	 	 	12	 
	 	 	 	 	 	 	1. Cash Payment	 	 	12	 
	 	 	 	 	 	 	2. Payment with Existing Company Stock	 	 	13	 
	 	 	 	 	 	 	3. Additional Time to Pay Exercise Price	 	 	13	 
	 	 	 	 	 	 	4. Cashless Exercise	 	 	14	 
	 	 	D. Restrictions Relating to Possession of Material Nonpublic Information	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

iii

 

ADMINISTRATIVE

RULES OF THE

COMPENSATION COMMITTEE

OF THE

BOARD OF DIRECTORS

OF

NATIONAL FUEL GAS COMPANY

As amended and restated

effective December 8, 2010

I. MEETINGS

     Each meeting (“Meeting”) of the Compensation Committee (“Committee”) of the Board of Directors
of National Fuel Gas Company (“Company”) shall be held as indicated in a notice made in accordance
with these rules. Notice of each Meeting, stating the place, date and hour thereof, shall be given
to each member of the Committee (“Member”) by mailing written notice (including by e-mail to the
address provided by such Member) not less than five days before the Meeting to each Member, or by
telegraphing, telephoning or delivering oral or written notice to each Member personally not less
than one day before the Meeting. The attendance of any Member at a Meeting without protesting
prior to the end of the Meeting the lack of notice of such meeting shall constitute a waiver of
notice by that Member.

     Any one or more Members of the Committee may participate in a Meeting by means of a conference
telephone or similar equipment. Participation by such means shall constitute presence in person at
a Meeting.

     The Committee may also take action by unanimous written consent.

 

 

II. QUORUM AND VOTING; DELEGATION

     At all Meetings, a quorum shall be required for the transaction of business and shall consist
of a majority of the entire Committee. The majority vote of the Members at a Meeting at which a
quorum is present shall decide any question that may come before the meeting.

     Consistently with limitations imposed by the Plans (as defined below), the Committee may
delegate in these rules or by resolution any or all of its authority to the Chief Executive
Officer, to the Secretary and to any other officer of the Company (individually, “Delegate”), so
long as the Delegate has no potential conflict of interest which would cause him or her not to
exercise his or her good faith independent business judgment in respect of a delegated matter.
Subject to such limitations, the Committee hereby delegates the power to implement its decisions to
appropriate officers of the Company.

III. GRANTS AND AWARDS UNDER THE PLANS

     The following rules and regulations shall apply with respect to grants and awards of stock
options, stock appreciation rights (“SARs”), shares of restricted stock (“Restricted Stock”) and
restricted stock units (“Restricted Stock Units”) under the Company’s 1997 Award and Option Plan
(“1997 Plan”) or the Company’s 2010 Equity Compensation Plan (“2010 Plan”) (as amended, each
individually a “Plan;” together the “Plans”).

     Any capitalized term not defined in these rules shall have the same meaning as in the
applicable Plan. The following rules are intended to supplement the Plans and, to the extent that
any rule is determined to be inconsistent with any Plan, the Plan shall control.

     These rules may be amended by the Committee at any time and from time to time. Except to the
extent otherwise specified in the particular Award Notice or at the time these rules
are amended, any grant or award under the Plans shall be subject to these rules as in effect on the
date of the grant or award.

2

 

     A. GENERAL RULES REGARDING AWARDS UNDER THE 1997 AND 2010 PLANS

          1. Making of An Award

               An Award within the meaning of these rules occurs upon the grant by the Committee of any stock
option, SAR, Restricted Stock or Restricted Stock Unit. An Award Notice within the meaning of
these rules means a written notice from the Company to a Participant (including a notice provided
to the recipient in an electronic form or by a link to cite of the notice) that sets forth the
terms and conditions of an Award in addition to those conditions established in the applicable Plan
and by the Committee’s exercise of its administrative powers.

          2. Contemporaneous Awards

               Unless the Committee shall otherwise expressly provide at the time of grant, an Award of one
type granted contemporaneously with an Award of any other type shall be treated as having been
granted in combination, and not in the alternative, with the Award of the other type.

          3. Stock-based Awards

               a. Source. Stock-based Awards, to the extent actually paid in Common Stock, shall reduce
treasury shares first and thereafter authorized but unissued shares.

               b. Cash Dividends and Cash Dividend Equivalents.

                    (i) Stock-Based Awards Other Than Restricted Stock. No stock-based Award other than
Restricted Stock carries with it the entitlement to receive cash dividends or cash dividend
equivalents until such stock-based Award is exercised (in the case of
a stock option or stock-settled SAR) or earned. If a stock-based Award is exercised or earned
prior to or on the record date for determination of stockholders entitled to receive a cash
dividend, then such stock-based Award or the securities resulting from the exercise thereof, as

3

 

the case may be, shall be entitled to receive such cash dividend (or, if the shares related thereto
have not been issued as of the record date, to receive a dividend equivalent in respect thereof).

                    (ii) Restricted Stock Awards. Notwithstanding clause (i) of this paragraph (b) or Section 24
of the 1997 Plan or Section 14(e) of the 2010 Plan, dividends shall be payable with respect to each
outstanding Award of Restricted Stock whether or not the restrictions in such Award have been
satisfied or have lapsed.

               c. Payment. Payment of stock-based Awards shall be made with Common Stock.

          4. Withholding Taxes

               At the time a Participant is taxable with respect to stock options, SARs, Restricted Stock or
Restricted Stock Units granted under the Plans, or the exercise or surrender of the same, the
Company (or, if applicable, an employer other than the Company) shall have the right to withhold
from amounts payable to the Participant under the Plan or from other compensation payable to the
Participant in its sole discretion, or require the Participant to pay to it, an amount sufficient
to satisfy all federal, state and/or local (including foreign) withholding tax requirements. A
Participant may, subject to Section IV(D) below, pay such tax withholding amounts in whole or in
part by requesting that the Company withhold such amounts of taxes from the amounts owed to the
Participant, or by delivering as payment to the Company shares of Common Stock to be canceled
having a Fair Market Value less than or equal to the amount of such required withholding taxes
(with the remainder payable in cash); provided, however, that to
the extent that such withholding is satisfied by the Company’s withholding and/or canceling any
shares of Common Stock, in no event may the Fair Market Value of the Common Stock withheld and/or
canceled exceed the maximum amount required to be withheld at law.

4

 

          5. Deferral of Payment

               The Committee intends to permit Participants to elect, at such time or times as the Committee
shall permit, to defer the receipt of payment of Awards that are payable in cash; provided,
however, that (1) under the then applicable income tax rules the Participant is not in constructive
receipt of, and subject to income tax on, the payment prior to its actual receipt, (2) such
deferral does not result in any of the Plans being subject to the Employee Retirement Income
Security Act of 1974, as amended, (3) if the Participant is an Executive Officer (i.e., is subject
to Section 16 of the Securities Exchange Act of 1934, including a retired officer who is, at the
relevant time, a director), such election shall comply with Rule 16b-3 promulgated pursuant to the
Securities Exchange Act of 1934, as then in effect, and (4) such election would not result in the
imposition of an additional tax under Section 409A of the Code on the Participant. The Committee
hereby delegates to the Chief Executive Officer, President, Treasurer, Secretary and General
Counsel of the Company, and each of them, the Committee’s authority to establish the time or times
at which deferral elections may be permitted in respect of any Award.

     B. STOCK OPTIONS UNDER THE 1997 AND 2010 PLANS

          1. Designation

               The Award Notice setting forth the terms and conditions of a grant of a stock option shall
indicate the applicable Plan under which the stock option is granted and whether the stock option
is an incentive stock option (within the meaning of Section 422 of the
Code, an “ISO”) or a non-qualified stock option (“NSO”). The Committee hereby delegates to the
Chief Executive Officer, President, Treasurer, Secretary and General Counsel of the Company, and
each of them, the authority to prepare, execute and deliver Award Notices consistent with actions
taken by the Committee. The Committee hereby directs that any action

5

 

taken by the Committee granting stock options without specifying whether the stock options are ISOs be interpreted as
follows:

               a. an award of stock options under the 1997 Plan or the 2010 Plan shall be deemed to be awards
of NSOs only; and

               b. an award of stock options after December 12, 2006 under the 1997 Plan shall be deemed to be
NSOs regardless of the language of the award.

          2. Price

               The price at which Common Stock may be purchased upon exercise of a stock option (the
“exercise price”) shall be the Fair Market Value of the Common Stock on the date of the Award.

          3. Exercise Period/Duration

               a. Non-Qualified Stock Options Under the 1997 and 2010 Plans. Except as may otherwise be
expressly provided in the Plan, a non-qualified stock option granted under the 1997 Plan or the
2010 Plan first may be exercised twelve months after the date of grant, or, if earlier, on the date
of the optionee’s death.

               b. Incentive Stock Options Under the 1997 and 2010 Plans. Except as may otherwise be
expressly provided in the Plan, an ISO granted under the 1997 Plan or the 2010 Plan first may be
exercised twelve months after the date of grant, or, if earlier, on the date of the optionee’s
death.

               c. Suspension of rights to exercise. The Committee may, among other things, suspend or limit
the right of any Participant to exercise stock options during any period:

6

 

                    (i) for which counsel for the Company advises in writing that such stock option exercises
would violate federal or state securities laws or other applicable laws, rules, regulations,
judgments, or orders; or

                    (ii) during which management is investigating an allegation that the Participant has engaged
in any act which would permit the Committee to forfeit the Participant’s stock options pursuant to
Section 18 of the 1997 Plan or Section 14(c) of the 2010 Plan.

               d. Delegation of Authority. The Committee hereby delegates to the Chief Executive Officer,
President, Treasurer, Secretary and General Counsel of the Company, and each of them, the
Committee’s authority to suspend Participants’ rights to exercise stock options during the periods
described in Section III(B)(3)(c) above. Management shall report to the Committee at each
Committee meeting any suspension actions taken or ongoing since the previous meeting, and the
Committee shall adopt a resolution ratifying, continuing and/or discontinuing each such suspension.

          4. Death or Other Termination of Employment

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

                    (i) For purposes of the 1997 Plan, “Disability” shall mean that the Participant is eligible to
receive disability benefits under Article 3 of The National Fuel Gas Company Retirement Plan
(“Retirement Plan”), as from time to time amended.

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

7

 

                    (iii) “Subsidiary” shall mean a corporation or other business entity in which the Company
directly or indirectly has an ownership interest of fifty percent (50%) or more.

               b. Non-Qualified Stock Options Under the 1997 and 2010 Plans. With respect to the President
and Chief Executive Officer of the Company and the Presidents of each Principal Subsidiary, if
termination of employment occurs by reason of death, Disability or retirement, each NSO awarded
under the 1997 Plan or the 2010 Plan shall remain exercisable for five years from such termination
or the balance of its unexpired term, whichever is less. If termination occurs by reason of
discharge by the Company for cause or voluntary resignation of the Participant prior to age 60,
each such NSO shall lapse unless extended by the Committee in its discretion. If termination of
any such officer occurs for any other reason, each such NSO shall remain exercisable for five years
from such termination (or in the case of NSOs awarded under the 1997 Plan, such greater period as
the Committee deems appropriate) or the balance of its unexpired term, whichever is less.

     For all other Participants, if termination of employment occurs by reason of death, Disability
or retirement at or after age 60, each NSO awarded under the 1997 Plan or the 2010 Plan shall
remain exercisable for five years from such termination or the balance of its unexpired term,
whichever is less. If termination occurs for any other reason, each NSO issued under the 1997 Plan
shall lapse unless extended by the Committee in its discretion, and each NSO issued under the 2010
Plan shall terminate as described in Section 11 of that Plan.

               c. Extension of Incentive Stock Options Under the 1997 and 2010 Plans. The Committee hereby
determines that:

                    (i) With respect to any Participant, if termination of employment occurs by reason of death,
Disability or Retirement, an officer of the Company

8

 

other than such Participant shall, within
thirty days of such termination, offer in writing to extend the period during which any ISO granted
to such optionee may be exercised, to the date which is the earlier of five years from such
termination of employment or the date on which the ISO would have otherwise expired absent such
termination of employment.

                    (ii) If termination of such Participant’s employment occurs for any other reason, an officer
of the Company other than such Participant, if the Committee so authorizes, shall, within thirty
days of such termination, offer to extend the period during which any ISO granted to such optionee
may be exercised to the date specified in the offer, which shall not be later than the earlier of
five years from such termination of employment or the date on which the ISO would have otherwise
expired absent such termination of employment.

                    (iii) The written offer shall notify the optionee, or the optionee’s estate or the person to
whom the optionee’s rights under the ISO are transferred by will or the laws of descent and
distribution, of the right to accept the offer by consenting to the extension, in writing, within
thirty days of the offer. If such consent is timely received the ISO may be exercised during the
period specified in the offer, but not later than the expiration of the exercise period specified
in the Award Notice.

          5. Mechanics of Exercise

               To exercise a stock option, the Participant shall provide a signed exercise notice to an
appropriate officer or other designee of the Company, which notice shall indicate
which stock options are being exercised, how the exercise price is to be paid and any other
appropriate information. Appropriate delivery of a signed notice of exercise binds the Participant
to pay the exercise price. Part IV of these Rules contains procedures for exercising stock
options.

9

 

          6. Reload Options

               No optionee shall be issued a new stock option automatically upon exercise of a stock option.
However, if the Award Notice provides for the issuance of such new stock option, the new stock
option shall have an exercise price equal to the Fair Market Value of the Common Stock on the date
the new stock option is issued and shall otherwise be subject, as nearly as possible, to the same
terms and conditions as the exercised stock option.

     C. SARs UNDER THE 1997 OR 2010 PLAN

          The base price or grant price of a SAR shall be the Fair Market Value of the Common Stock on
the date of the grant of the SAR. Each SAR shall otherwise be subject to the terms and conditions
imposed (i) by the Award Notice upon the SAR, (ii) by the applicable Plan, and (iii) by these Rules
upon either SARs or NSOs (except that no exercise price is due upon exercise of a SAR). A SAR
shall be outstanding and exercisable during the entire exercise period otherwise applicable to an
NSO if the NSO had been granted on the same day as the SAR (as adjusted in accordance with Section
III(B)(4) above in the event of death or other termination of employment).

          To exercise a SAR, the Participant shall deliver a signed exercise notice to an appropriate
officer or other designee of the Company, which notice shall indicate which SARs are being
exercised, and any other appropriate information. Part IV of these Rules contains procedures for
exercising SARs.

     D. RESTRICTED STOCK AND RESTRICTED STOCK UNITS UNDER THE 1997 AND 2010
PLANS

          1. Restrictions on Transferability; Vesting

               The restrictions on transferability and vesting and all other terms and conditions of
Restricted Stock and Restricted Stock Units granted under either the 1997 Plan or the 2010 Plan
shall be specified in the Award Notice. All shares of Restricted Stock and all

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Restricted Stock Units shall be subject to the Participant’s continued employment with the Company or a Subsidiary
until vesting. The Committee may accelerate the vesting of Restricted Stock or Restricted Stock
Units on its own motion as it deems appropriate and in the best interests of the Company.

          2. Mechanics of Grant

               The Committee hereby delegates to appropriate officers of the Company the authority to
establish and revise appropriate procedures with respect to the issuance of certificates
representing Restricted Stock and the payment of dividends thereon.

IV.PROCEDURES FOR EXERCISING STOCK OPTIONS AND SARS

     A. AUTHORITY AND SCOPE

          Notwithstanding any provision of any award letter issued before 1998, these are the exercise
procedures for ISOs, NSOs and SARs issued under the 1997 Plan, the 2010 Plan, and (unless the
Compensation Committee specifically orders otherwise) any other compensation plan which in the
future is adopted by the Company.

     B. NOTICE OF EXERCISE

          1. Form and Delivery

               A Participant holding stock options or SARs granted under any of the Plans elects to exercise
stock options or SARs by delivering (by personal delivery, fax or e-mail) to the office of the
Company’s Secretary or Assistant Secretary a Notice of Exercise. A Notice of Exercise is a writing
signed by the Participant indicating that the Participant thereby elects to exercise the stock
options or SARs identified in the Notice (including the quantity and either the stock option
exercise price or the SAR base price), and describing the method by which the Participant will pay
the exercise price of the stock options (since there is no exercise price payment due in connection
with the exercise of a SAR). Appropriate delivery of a Notice of

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Exercise binds the Participant to pay the exercise price. Optional forms of Notice of Exercise are attached to these Rules (see
Exhibit A).

          2. Exercise Date

               The effective date of a Notice of Exercise is the “Exercise Date”. An exercise will be
effective as of the date the Notice of Exercise is received by the office of the Secretary or
Assistant Secretary; provided, however, that:

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

                    (ii) a Notice of Exercise may validly designate the Exercise Date to be any date later
than the date the Notice of Exercise is received.

                    (iii) if the exercise of a stock option is accomplished through a “cashless exercise” as
described in Section IV(C)(4) below, the Exercise Date shall be the date the broker sells Company
stock into the market regarding that exercise.

     C. PAYMENT OF EXERCISE PRICE

          1. Cash Payment

               To pay the exercise price of a stock option in cash, a Participant must deliver to the
Secretary or Assistant Secretary payment in full, in cash or by check payable in immediately
available U.S. funds to the Company, within three business days after the Exercise Date (except as
additional time may be allowed under Section IV(C)(3) below). For purposes of these rules, the
term “business day” shall mean any day other than a Saturday, Sunday, federal holiday or day on
which the Company’s principal office is closed for business. Subject to Section IV(D) below,
payment of the exercise price may be partly in cash and partly in Company

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stock as described in Section IV(C)(2) below, or may be accomplished through a “cashless exercise” as described in
Section IV(C)(4) below.

          2. Payment with Existing Company Stock

                   
   To pay the exercise price in shares of Company stock already owned by a Participant, the
Participant must surrender to the Company shares having a total Fair Market Value (as of the
Exercise Date) of at least the total exercise price, or pay any shortfall in cash. The Participant
must, within three business days after the Exercise Date (except as additional time may be allowed
under Section IV(C)(3) below) do one or both of the following:

	 	a.	 	regarding shares in the Company’s Direct
Registration System, comply with the Company’s procedures (including
signature
guarantee requirements) for transferring book-entry shares to the
Company; or
	 
	 	b.	 	regarding shares that are evidenced by a paper
stock certificate, deliver the certificate to the Secretary or
Assistant Secretary. Each certificate delivered must have a guaranteed
signature either on the back or on a stock power to be attached. The
recommended procedure for mailing certificates is to mail the
certificate and signed stock power separately.

          3. Additional Time to Pay Exercise Price

                   
   If, at any time the Participant’s payment of the exercise price would otherwise be required
pursuant to Section IV(C)(1) or (2) above, a Participant is either

	 	a.	 	traveling away from his or her usual place of
Company employment, or

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	 	b.	 	“disabled”, as defined in the applicable Plan
or these Administrative Rules,

then, to the extent permitted by applicable law, the Participant may pay the exercise price on or
before the first business day after the Participant’s return to his or her usual place of NFG
employment, but no later than the tenth business day after the Exercise Date. However, the
President, Chief Executive Officer, Treasurer or General Counsel of the Company shall have the
authority to grant such additional time to pay the exercise price as is reasonably necessary to
accommodate the travel or disability of the Participant.

          4. Cashless Exercise

               The broker-assisted method of exercising stock options described in this Section IV(C)(4)
(“cashless exercise”) requires no cash outlay by the Participant. A Participant wishing to do a
cashless exercise must first establish a trading account with a registered securities
broker-dealer. Establishing that trading account will likely include the Participant’s commitment
to pay the broker as described in their agreement. Upon request by a Participant, the Secretary or
Assistant Secretary will provide information that may help the Participant find a broker who has
previously done cashless exercises with the Company and/or may be willing to do so at a discounted
commission rate. The Participant must provide the Secretary or Assistant Secretary with the
Participant’s broker’s name, firm, address, telephone and fax numbers.

               To do a cashless exercise, the Participant must deliver a Notice of Exercise as described in
Section IV(B)(1), and notify the Participant’s broker to proceed with the exercise and to notify
the Company of the date the stock is sold. The Participant’s broker will sell Company stock for
the Participant’s account and pay to the Company the exercise price, plus any necessary tax
withholding. The Company will have share certificates delivered to the Participant’s broker within
three business days after the Exercise Date, unless the Company

14

 

elects to retain the certificates pending receipt of the exercise price. The Participant will be required to pay the Participant’s
broker according to the agreement between them, typically a few days’ interest on the exercise
price plus a commission on the shares sold.

     D. RESTRICTIONS RELATING TO POSSESSION OF MATERIAL NON-PUBLIC INFORMATION

          Notwithstanding anything to the contrary provided above in these rules, a Participant may not,
while in possession of material nonpublic information relating to the
Company, (i) pay the exercise price of a stock option with Company stock, (ii) pay tax withholding
in connection with the exercise or vesting of any Award by having Company stock withheld and/or
canceled, (iii) exercise SARs, or (iv) effect a cashless exercise of stock options; provided,
however, that a Participant may effect such transactions pursuant to a pre-established trading plan
pre-approved by the Company’s Legal Department and meeting the requirements of Rule 10b5-1(c) under
the Securities Exchange Act of 1934. The restrictions in this Section IV(D) shall also apply,
during any quarterly or other “blackout period” imposed under the Company’s Policy on Insider
Trading in National Fuel Stock, to any Participant who is then subject to such blackout period.

15

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