Document:

Exhibit 10.40

 

 

March 17, 2003

 

VIA CERTIFIED MAIL AND RETURN RECEIPT

 

Mr. John Happ

3541 Kahawalu Street

Honolulu, HI   96817

 

Dear

John:

 

                This

letter, upon your signature, will constitute a Separation Agreement

(“Agreement”) between you and Hawaiian Airlines, Inc. (“the Company”)  setting forth the terms of your

separation from employment with the Company.

 

1.                                       Your separation

from employment was effective as of February 15, 2003 (the “Separation

Date”).  You were paid your salary

through the Separation Date, with your final paycheck being on February 20,

2003.  You agreed that the Company could

issue your final paycheck in the regular payroll cycle on February 20, 2003,

and waived the provisions of Hawaii Revised Statutes Section 388-3, which

absent your waiver would have required your final paycheck to be given to you

on February 15, 2003.

 

2.                                       On or before

February 15, 2003, you returned to the Company any Company property you had in

your possession, including any information in any form that you had about the

Company’s practices, strategies, procedures or trade secrets, including but not

limited to, customer data, lists and accounts, personnel information, growth

plans, business plans, and marketing strategies (collectively, “the Company’s

Property and Information”).  You will

not retain any copies of the Company’s Property and Information in any form or

medium, except you may retain copies of personnel documents previously provided

to you regarding your own employment by the Company.

 

3.                                       In

consideration of your acceptance of the terms of this Agreement, the Company

will provide you with a lump sum of $15,000, less customary payroll deductions,

to be paid to you in the first regular paycheck following the date that you

sign this Agreement (“the Effective Date”) plus an additional sum of

$422,277.91, less customary payroll deductions, to be paid to you in thirty-six

equal semi-monthly installments on the 5th and 20th days

of each calendar month beginning on March 5, 2003, and continuing through

August 20, 2004.  The foregoing payments

are referred to herein as the Separation Payment.  The Company’s payment of this Separation Payment is conditioned

upon your compliance with the terms of this Agreement, which includes your

waiver of ALL CLAIMS you have or might have against the Company and the

below-described Company Releasees through the Effective Date.  In addition, you, your spouse, and your

 

 

eligible dependents will be entitled to travel benefits for eighteen

months after the Separation Date under conditions applicable to active Company

officers at the Senior Vice President level. You will also be covered under the

Company’s Accidental Death and Dismemberment and Group Life Insurance Stock

plans through August 31, 2004, under conditions applicable to active Company

officers at the Senior Vice President level. The Stock Option grants to you of

February 27, 1998, and June 30, 2000, as amended, (collectively “the Amended

Stock Option Grants”) shall  be as

provided in terms of the Amended Stock Option Grants, which are attached hereto

as Appendix “A” and incorporated herein as provisions of this Agreement.

 

4.                                       You waive,

release and forego ANY AND ALL CLAIMS that you have or might have through the

Effective Date of this Agreement against the Company and any of its

predecessors, related entities, officers, directors, shareholders, agents,

attorneys, employees, insurers, successors or assigns (collectively, “the

Company Releasees”) arising from or related to your employment with the

Company, and/or arising from or related to your separation from employment with

the Company, and/or arising from or related to any conduct, event, or failure

to act by any Company Releasee from the beginning of time through the Effective

Date (collectively, “the Released Claims”).

 

The

Released Claims include, but are not limited to, claims arising under statutory

or common law in the United States (including federal, state or local

jurisdictions) or any foreign country. 

The released claims include, but are not limited to, claims under anti-discrimination

statutes such as Title VII of the Civil Rights Act, the federal Age

Discrimination in Employment Act (“ADEA”), and Hawaii’s civil rights laws

(Hawaii Revised Statutes Chapter 368 and 378); claims under wage and hour laws;

claims under the laws of contract and tort (such as claims for breach of

contract, infliction of emotional distress, defamation, invasion of privacy,

wrongful termination, etc.); and claims for attorneys’ fees and/or costs.  The Released Claims further specifically

include any and all claims arising under or related to the terms of the

“Amended and Restated Employment Agreement” between you and the Company which

was effective as of September 1, 2002 (“the Employment Agreement” attached

hereto as Appendix “B”) and amended by letter dated October 2, 2002 (“the

Letter Amendment” attached hereto as Appendix “C.”  By agreeing to the terms of this Agreement, you understand and

agree that the Letter Amendment in its entirety and Paragraphs 1-4 and 6-7 of

the Employment Agreement are rescinded as of the Separation Date and that any

right or privilege you may have had under the Letter Amendment or Paragraphs

1-4 and 6-7 of the Employment Agreement ceased to exist as of the Separation

Date.  You further agree that the

provisions of Paragraphs 5 and 8-18 of the Employment Agreement shall continue

and are expressly incorporated by reference into this Agreement.

 

5.                                       The

Company and you agree that any inquiries regarding verification of your

employment will be handled through the Company’s People Services Group.  As is the 

 

 

Company’s practice, we

will only release information confirming your dates of employment and the title

of the last position you held with the Company.

 

6.                                       The Company agrees that neither its

officers nor its directors will make any disparaging, negative or derogatory

statements about you.  You agree that

you will not make any disparaging, negative or derogatory comments about the

Company or the Company Releasees.

 

7.                                       You further

agree as follows:

 

a.                                       Unless required

by law, you will not disclose to others or use the Company’s Property and

Information.  However, you may disclose

the terms of Paragraph 8 (“NONCOMPETITION PROVISIONS”) of the Employment

Agreement to any company or person with whom you seek or obtain employment

during the term of your noncompetition obligations under Paragraph 8.

 

b.                                      Unless required by law, you will not

disclose to others the terms of this Agreement or the benefits being paid under

it or the fact of their payment except that you may disclose this information

to your spouse or to your attorney, accountant or other professional advisor to

whom you must make the disclosure in order for them to render professional

services to you.  You will instruct anyone

to whom you make a permitted disclosure that he or she is to maintain the

confidentiality of this information just as you must.

 

c.                                         You agree to make yourself available at

reasonable times and locations to to assist the Company in the Irene Ross

litigation, with the Company to pay for any necessary and pre-authorized travel

expenses.

 

8.                                       To the extent permitted by law, if you

breach any of your obligations under this Agreement, the Company will be

entitled to recover the benefits paid under this Agreement and to obtain all

other relief provided by law or equity.

 

9.                                       You agree that you will not seek

reinstatement to the Company nor apply for employment with the Company or its

related entities.

 

10.                                 The following is required by

the Older Workers Benefit Protection Act:

 

This Agreement includes a waiver

of any claims you may have under the Age Discrimination in Employment Act

(“ADEA”) through the Effective Date of the Agreement. You have 21 days from

your receipt of this letter to accept the terms of this Agreement, although you

may accept it at any time within those 21 days.  To properly weigh the advantages and disadvantages of signing

this Agreement and waiving your ADEA claims, you are advised to consult an

attorney about this Agreement prior to 

 

 

signing.  If you want to accept the Agreement prior to

the expiration of the 21 days, you will need to indicate your waiver of the

21-day consideration period by signing in the space indicated below.  After your acceptance of this Agreement, you

will have an additional seven days in which to revoke the Agreement.

 

11.                                 This Agreement represents the complete

agreement of the parties and supersedes any and all prior agreements.  This Agreement may only be amended in

writing signed by both you and Company.

 

12.                                 You also

understand and agree that this Agreement is not intended to be and is not an

admission of any fact or wrongdoing or liability by the Company or the Company

Releasees.

 

                To accept this Agreement, please date and sign this

letter and return it to me.  Once

you do so, you will still have an additional seven days in which to revoke your

acceptance. To revoke, you must send me a written statement of revocation by

registered mail, return receipt requested. In order for you to revoke the

Agreement, I will need to receive your written notification of revocation no

later than 11:59 p.m. on the seventh day following the Effective Date.  The Agreement will not be effective and

enforceable until the revocation period has expired.

 

John, Please call with

questions at any time.  The Company and

I wish you every success in your future endeavors.

 

	

   

  	

  Sincerely,

  
	

   

  	

   

  
	

   

  	

  /s/ Ruthann S. Yamanaka

  
	

   

  	

   

  
	

   

  	

  Ruthann S. Yamanaka

  
	

   

  	

  Senior Vice President

  
	

   

  	

  People Services Group

  

 

 

Attachments

 

By signing this

letter, I acknowledge that I have had the opportunity to review this Agreement

carefully with an attorney of my choice; that I have read and understand the

terms of the Agreement; and that I voluntarily agree to them.

 

 

	

   

  	

  Dated:

  	

  April 3, 2003

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/ John B. Happ

  	

   

  

 

 

Pursuant to 29 C.F.R. § 1625.22(e)(6), I hereby knowingly

and voluntarily waive the twenty-one (21) day pre-execution consideration

period set forth in Older Workers Benefit Protection Act (29 U.S.C.

§ 626(f)(1)(F)(i)).

 

	

   

  	

  Dated:

  	

  4/3/03

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  John B. HappExhibit
10.1

 

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 9,250,000 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 200,000 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 9,250,000.

 

(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 having a Fair Market Value at least equal to the aggregate
option price payable in connection with such exercise, but only to the extent
that such Shares are “mature” as determined by the Corporation in accordance
with generally accepted accounting principles, 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;

 

8

 

(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 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, and was approved by the stockholders of the Company on April 29,
2003.

 

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

 

9

 

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.

 

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

 

10

 

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 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 Optionee 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,

 

11

 

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.

 

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

 

12

 

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 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.

 

13

 

(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.

 

(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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