Document:

EX-10.3

Exhibit 10.3

AMENDED AND RESTATED

NATIONAL FUEL GAS COMPANY

2007 ANNUAL AT RISK COMPENSATION INCENTIVE PLAN

1. Definitions

     As used with respect to At Risk Awards, the following terms shall have the following meanings:

     (a) “Acceleration Date” means (i) in the event of a Change in Ownership, the date on which
such change occurs, or (ii) with respect to an Eligible Employee who is eligible for treatment
under paragraph 8 hereof on account of the termination of his employment following a Change in
Control, the date on which such termination occurs.

     (b) “Award Notice” means a written notice from the Company to a Participant that sets forth
the terms and conditions of an Award in addition to the terms and conditions established by this
Plan and by the Committee’s exercise of its administrative powers.

     (c) “At Risk Award” means an award granted by the Committee to a Participant under this Plan,
and entitling the Participant to a cash payment based upon the extent to which specified
Performance Goals are attained for a specified Performance Period, pursuant to such terms and
conditions as the Committee may establish in an Award Notice. No Eligible Employee may receive more
than one At Risk Award under this Plan in any fiscal year. In no event will the maximum value of
any At Risk Award to any Eligible Employee in any fiscal year exceed the lower of (i) twice that
employee’s base salary for that fiscal year, or (ii) two million dollars. An At Risk Award may be
granted singly, in combination or in the alternative with other Awards granted under any Company
benefit plan.

     (d) “Board” means the Board of Directors of the Company.

     (e) “Cause” means (i) the willful and continued failure by a Participant to substantially
perform his duties with his employer after written warnings specifically identifying the lack of
substantial performance are delivered to him by his employer, or (ii) the willful engaging by a
Participant in illegal conduct which is materially and demonstrably injurious to the Company or a
Subsidiary.

     (f) “Change in Control” shall be deemed to have occurred at such time as (i) any “person”
within the meaning of Section 14(d) of the Exchange Act, other than the Company, a Subsidiary, or
any employee benefit plan or plans sponsored by the Company or any Subsidiary, is or has become the
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of
twenty percent (20%) or more of
the combined voting power of the outstanding securities of the Company ordinarily having the
right to vote at the election of directors, or (ii) approval by the shareholders of the Company of
(a) any consolidation or merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of stock of the

 

 

Company would be converted into
cash, securities or other property, other than a consolidation or merger of the Company in which
the common shareholders of the Company immediately prior to the consolidation or merger have
substantially the same proportionate ownership of common stock of the surviving corporation
immediately after the consolidation or merger as immediately before, or (b) any consolidation or
merger in which the Company is the continuing or surviving corporation but in which the common
shareholders of the Company immediately prior to the consolidation or merger do not hold at least a
majority of the outstanding common stock of the continuing or surviving corporation (except where
such holders of Common Stock hold at least a majority of the common stock of the corporation which
owns all of the Common Stock of the Company), or (c) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all the assets of
the Company, or (iii) individuals who constitute the Board on January 1, 2007 (the “Incumbent
Board”) have ceased for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to January 1, 2007 whose election, or nomination for election
by the Company’s shareholders, was approved by a vote of at least three-quarters (3/4) of the
directors comprising the Incumbent Board (either by specific vote or by approval of the proxy
statement of the Company in which such person is named as nominee for director without objection to
such nomination) shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board.

     (g) “Change in Ownership” means a change which results directly or indirectly in the Company’s
Common Stock ceasing to be actively traded on a national securities exchange or the National
Association of Securities Dealers Automated Quotation System.

     (h) “Code” means the Internal Revenue Code of 1986, and the rules, regulations and
interpretations promulgated thereunder, as amended from time to time.

     (i) “Committee” means the Compensation Committee of the Board, or such other committee
designated by the Board as authorized to administer this Plan with respect to At Risk Awards. The
Committee shall consist of not less than two members, each of whom shall be “outside directors” as
defined by Section 162(m) of the Code and the rules, regulations and interpretations promulgated
thereunder, as amended from time to time.

     (j) “Common Stock” means the common stock of the Company.

     (k) “Company” means National Fuel Gas Company.

     (l) “Eligible Employee” means those employees of the Company or its Subsidiaries who are
expected to constitute “covered employees” within the meaning of Section 162(m) of the Code for the
applicable fiscal year(s), and any other key management
employee to whom an At Risk Award has been granted by the Committee.

     (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

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     (n) “Good Reason” means a good faith determination made by a Participant that there has been
any (i) material change by the Company of the Participant’s functions, duties or responsibilities
which change could cause the Participant’s position with the Company to become of less dignity,
responsibility, importance, prestige or scope, including, without limitation, the assignment to the
Participant of duties and responsibilities inconsistent with his positions, (ii) assignment or
reassignment by the Company of the Participant without the Participant’s consent, to another place
of employment more than 30 miles from the Participant’s current place of employment, or (iii)
reduction in the Participant’s total compensation or benefits or any component thereof, provided in
each case that the Participant shall specify the event relied upon for such determination by
written notice to the Board at any time within six months after the occurrence of such event.

     (o) “Participant” means any individual who is holding an At Risk Award granted by the
Committee under this Plan.

     (p) “Performance Period” means the period established by the Committee in the Award Notice,
for measurement of the extent to which a Performance Goal has been satisfied.

     (q) “Performance Goal” means the performance objectives of earnings per share, Subsidiary net
income and customer service/other goals, established by the Committee for each Eligible Employee
who receives an At Risk Award.

     (r) “Plan” means this Amended and Restated National Fuel Gas Company 2007 Annual At Risk
Compensation Incentive Plan, as amended from time to time. Any reference in this Plan to a
paragraph number refers to that portion of this Plan.

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

2. Administration

     With respect to At Risk Awards the Committee is given full authority to (a) make reasonable,
good faith interpretations of this Plan and of Section 162(m) of the Code, to the extent not
addressed by regulation, proposed regulation or publicly available interpretation of the Internal
Revenue Service; (b) determine who shall be Eligible Employees and select Eligible Employees to
receive At Risk Awards; (c) determine all the other terms and conditions of an At Risk Award,
including the time or times of making At Risk Awards to Eligible Employees, the Performance Period,
Performance Goals, and levels of At Risk Awards to be earned in relation to levels of achievement
of the Performance Goals, and such other measures as may be necessary or desirable to
achieve the purposes of this Plan; (d) determine whether At Risk Awards are to be granted
singly, in combination or in the alternative with other Awards under any other Company benefit
plans; (e) grant waivers of Plan terms and conditions, provided that any such waiver shall not be
inconsistent with Section 162(m) of the Code and the rules,

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regulations and interpretations
promulgated thereunder, as amended from time to time; and (f) accelerate the vesting, exercise or
payment of any At Risk Award or the Performance Period of an At Risk Award when any such action
would not cause compensation paid or payable under such At Risk Award to cease to be deductible by
the Company for federal income tax purposes. The Committee shall also have the authority to grant
At Risk Awards in replacement of Awards previously granted under this Plan or awards under any
other executive compensation or stock option plan of the Company or a Subsidiary.

     All determinations of the Committee shall be made by a majority of its members, and its
determinations shall be final, binding and conclusive. The Committee, in its discretion, may
delegate its authority and duties under this Plan with respect to At Risk Awards to the Company’s
Chief Executive Officer or to other senior officers of the Company, but only to the extent, if any,
permitted by Section 162(m) of the Code and notwithstanding any other provision of this Plan or an
Award Notice, under such conditions as the Committee may establish. For the avoidance of doubt,
neither the Committee nor any delegate thereof shall take any action under this Plan, including
without limitation pursuant to this paragraph 2 or paragraphs 6 or 7, which would result in the
imposition of an additional tax under section 409A of the Code on the Eligible Employee holding an
At Risk Award granted hereunder.

3. Grant of At Risk Awards

     At Risk Awards may be made to any Eligible Employee for each of the fiscal years of the
Company commencing with the 2007 fiscal year; provided, however, that At Risk Awards for a fiscal
year may only be made within the time allowed under Section 162(m) of the Code and the rules,
regulations and interpretations promulgated thereunder, as amended from time to time, applicable to
such fiscal year. At Risk Awards are made by means of an Award Notice.

4. Payment of at Risk Awards

     Each At Risk Award granted to a Participant shall entitle such Participant to receive a cash
payment based upon the extent to which such Participant’s Performance Goals for a particular
Performance Period are attained, as specified by the Committee in the Award Notice and certified in
writing by the Committee that such Participant’s Performance Goals have been attained. Payment of
earned At Risk Awards shall be made in cash promptly after such certification. The Company shall be
entitled to deduct from any payment under this Plan the amount of all applicable income and
employment taxes required by law to be withheld with respect to such payment or may require the
participant to pay to it such tax prior to and as a condition of the making of such payment.

5. Termination of Employment, Retirement, or Death of Participant

     (a) General Rule. If a Participant’s employment with the Company or a Subsidiary

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terminates
for a reason other than death, disability, retirement, or an approved reason, all unearned or
unpaid At Risk Awards shall be canceled or forfeited as the case may be, unless otherwise provided
in this Section or in the Eligible Employee’s Award Notice. The Committee shall have the authority
to promulgate rules and regulations to (i) determine what events constitute disability, retirement,
or termination for an approved reason for purposes of the Plan, and (ii) determine the treatment of
a Participant under this Plan in the event of his death, disability, retirement, or termination for
an approved reason.

     (b) In the event of the disability, retirement or termination for an approved reason of a
Participant during a Performance Period, his participation shall be deemed to continue to the end
of the Performance Period, and subject to and based upon the extent to which such Participant’s
Performance Goals for such Performance Period are attained (as specified by the Committee in the
Award Notice and certified in writing by the Committee), he shall be paid a percentage of the
amount earned, if any, according to the terms of the At Risk Award, proportionate to his period of
active service during that Performance Period.

     (c) In the event of the death of a Participant during a Performance Period, the Participant’s
designated beneficiary (or if none, then the Participant’s estate) shall be paid an amount
proportionate to the period of active service during the Performance Period, based upon the maximum
amount which could have been earned under the At Risk Award.

6. Amendments to at Risk Awards

     The Committee may, at any time, unilaterally amend any unearned or unpaid At Risk Award,
including At Risk Awards earned but not yet paid, to the extent it deems appropriate; provided,
however, that any such amendment which is adverse to the Participant shall require the
Participant’s consent; and provided further, however, that the Committee shall have no authority to
make any amendment which would cause compensation paid or payable under the At Risk Award to cease
to be deductible by the Company for federal income tax purposes.

7. Amendment to Plan

     Subject to the shareholder approval requirements of Section 162(m) of the Code, the Committee
may, from time to time, amend this Plan in any manner.

8. Change in Control and Change in Ownership

     (a) Background. All Participants shall be eligible for the treatment afforded by this
paragraph 8 if there is a Change in Ownership or if their employment terminates within three
years following a Change in Control, unless the termination is due to (i) death; (ii) disability
entitling the Participant to benefits under his employer’s long-term disability plan; (iii) Cause;
(iv) resignation by the Participant other than for Good Reason; or (v)

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retirement entitling the
Participant to benefits under his employer’s retirement plan.

     (b) Vesting. If a Participant is eligible for treatment under this paragraph 8, the provisions
of this paragraph shall determine the manner in which such At Risk Award shall be paid to him. For
purposes of making such payment, each “current performance period” (defined to mean a Performance
Period which period has commenced but not yet ended), shall be treated as terminating upon the
Acceleration Date, and for each such “current performance period” and each “completed performance
period” (defined to mean a Performance Period which has ended but for which the Committee has not,
on the Acceleration Date, made a determination as to whether and to what degree the Performance
Goals for such period have been attained), it shall be assumed that the Performance Goals have been
attained at a level of 100% or the equivalent thereof. If the Participant is participating in one
or more “current performance periods,” he shall be considered to have earned and, therefore, to be
entitled to receive, a prorated portion of the At Risk Awards previously granted to him for each
such Performance Period. Such prorated portion shall be determined by multiplying 100% of the At
Risk Award granted to the Participant by a fraction, the numerator of which is the total number of
whole and partial years (with each partial year being treated as a whole year) that have elapsed
since the beginning of the Performance Period, and the denominator of which is the total number of
years in such Performance Period. A Participant in one or more “completed performance periods”
shall be considered to have earned and, therefore, be entitled to receive 100% of the At Risk
Awards previously granted to him during each Performance Period.

     (c) Payment of Awards. If a Participant is eligible for treatment under this paragraph 8,
whether or not he is still employed by the Company or a Subsidiary, he shall be paid, in a single
lump sum cash payment, as soon as practicable but in no event later than 90 days after the
Acceleration Date, for all outstanding At Risk Awards.

     (d) Miscellaneous. Upon a Change in Control or a Change in Ownership, (i) the provisions of
paragraphs 5 and 9 hereof shall become null and void and of no force and effect insofar as they
apply to a Participant who has been terminated under the conditions described in (a) above; and
(ii) no action shall be taken which would affect the rights of any Participant or the operation of
this Plan with respect to any At Risk Award to which the Participant may have become entitled
hereunder on or prior to the date of the Change in Control or Change in Ownership or to which he
may become entitled as a result of such Change in Control or Change in Ownership.

     (e) Legal Fees. The Company shall pay all legal fees and related expenses incurred by a
Participant in seeking to obtain or enforce any payment, benefit or right he may be entitled to
under the Plan after a Change in Control or Change in Ownership; provided, however, the Participant
shall be required to repay any such amounts to the Company to
the extent a court of competent jurisdiction issues a final and non-appealable order setting
forth the determination that the position taken by the Participant was frivolous or advanced in bad
faith.

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9. Noncompetition Provision

     Notwithstanding anything contained in this Plan to the contrary, unless the Award Notice
specifies otherwise, a Participant shall forfeit all unearned, and/or unpaid At Risk Awards,
including At Risk Awards earned but not yet paid, and all interest, if any, accrued on the
foregoing if, (i) in the opinion of the Committee, the Participant, without the written consent of
the Company, engages directly or indirectly in any manner or capacity as principal, agent, partner,
officer, director, employee, or otherwise, in any business or activity competitive with the
business conducted by the Company or any Subsidiary; or (ii) the Participant performs any act or
engages in any activity which in the opinion of the Committee is inimical to the best interests of
the Company.

10. Nonassignability

     No Award under this Plan shall be subject in any manner to alienation, anticipation, sale,
transfer (except by will or the laws of descent and distribution or pursuant to a domestic
relations court order), assignment, pledge, or encumbrance. Following an approved transfer, any
such Award shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, and except as provided in the next sentence, the term “Participant”
shall be deemed to refer to the transferee. The events of termination of employment of paragraph 5
shall continue to be applied with reference to the original Participant and following the
termination of employment of the original Participant, the transferred Award shall be payable to
the transferee only to the extent, and for the periods specified in paragraph 5, that the original
Participant could have received payment of such Award. Except as expressly permitted by this
paragraph, an Award shall be payable during the Participant’s lifetime only to him.

11. No Right to Continued Employment or Grants

     Participation in this Plan shall not give any Participant any right to remain in the employ of
the Company or any Subsidiary. The Company or, in the case of employment with a Subsidiary, the
Subsidiary, reserves the right to terminate any Participant at any time. Further, the adoption of
this Plan shall not be deemed to give any person any right to be selected as a Participant or to be
granted an Award.

12. No Right, Title or Interest in Company Assets

     To the extent any person acquires a right to receive payments from the Company under this
Plan, such rights shall be no greater than the rights of an unsecured creditor of the Company.

13. Savings Provision

     This Plan is intended to comply with all the applicable conditions of Section 162(m) of the
Code, so that compensation paid or payable hereunder shall constitute qualified “performance-based
compensation” thereunder. To the extent any provision of this Plan

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or any action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by law.

14. Effective Date

     Upon approval by the shareholders of the Company as required by Section 162(m) of the Code,
this Plan shall become effective as of December 7, 2006. This Plan was amended and restated
effective as of September 24, 2008. The modifications made to the Plan by virtue of such amendment
and restatement did not require approval by the shareholders of the Company under Section 162(m).

8EX-10.4

Exhibit 10.4

NATIONAL FUEL GAS COMPANY

EXECUTIVE ANNUAL CASH INCENTIVE PROGRAM

     NATIONAL FUEL GAS COMPANY (the “Company”) hereby establishes this NATIONAL FUEL GAS COMPANY
EXECUTIVE ANNUAL CASH INCENTIVE PROGRAM (the “Program”) as of this 1st day of October, 2008, in
accordance with the terms provided herein.

     Section 1. Incentive Program Purpose. The purposes of the Program are to enable the
Company and its majority-owned subsidiaries (the “Subsidiaries”) to attract, retain, motivate and
reward officers and key employees by providing them with short-term incentive opportunities
directly linked to the Company’s and the individual’s performance.

     Section 2. Eligibility. Except for those executive officers who are participating
for the same period in the National Fuel Gas Company Annual At Risk Compensation Incentive Plan,
each officer of the Company and its Subsidiaries who has been designated by the Board as an
“executive officer” for purposes of the Securities Exchange Act of 1934, as amended, shall
participate in this Program (each, an “Executive Participant”). In addition, the Chief Executive
Officer of the Company (the “CEO”), at his sole discretion, may select other officers or key
employees of the Company and its Subsidiaries to participate in the Program (each, a “Designated
Participant”).

     Section 3. Performance Periods and Target Incentives. With respect to each Executive
Participant and each Designated Participant (each, a “Participant”), the CEO shall establish a
target incentive opportunity (the “Target Incentive”) applicable to such Participant with respect
to any Performance Period, which shall be a percentage of base salary; provided that, the Target
Incentive with respect to each Executive Participant shall be subject to the approval of the
Compensation Committee of the Company of the Board of Directors (the “Committee”). A “Performance
Period” shall be the then-current fiscal year of the Company. In the event that an employee
becomes an officer or an executive officer after the commencement of any Performance Period
(including by reason of having first been hired after the commencement of the Performance Period),
the CEO shall determine the basis, if any, on which such person shall be permitted to participate
in the Program for such Performance Period (including, but not limited to, whether the
Participant’s Target Incentive will be pro-rated to reflect his or her eligibility for only a
portion of the Performance Period).

     Section 4. Performance Conditions and Performance Levels.

     (a) Establishment of Performance Conditions. No later than ninety days following the
beginning of the Performance Period, the CEO shall establish the performance objectives (the
“Performance Conditions”) which must be achieved for a Participant to receive payment in respect of
his or her Target Incentive (or a specified multiple thereof) for that Performance Period; provided
that the Performance Conditions and the levels of achievement for an Executive Participant shall be
approved by the Committee. The Performance Conditions may be based on the performance of the
Company or one or more of its Subsidiaries, either on an absolute or comparative basis, and/or upon
individual performance criteria established for the Participant or a
class of Participants. The Performance Conditions need not be the same for each Participant, or
for the same Participant with respect to different Performance Periods. Where more than one

 

 

Performance Condition is established, the Performance Conditions shall allocate the Target
Incentive among the Performance Conditions, provided that, for this purpose, multiple Performance
Conditions may be combined and treated as a single Performance Condition. At least seventy-five
percent (75%) of a Participant’s Target Incentive will be dependent on objective Performance
Conditions. Twenty-five percent (25%) of a Participant’s Target Incentive may be designated as
discretionary.

     (b) Threshold, Target and Maximum Performance Levels. With respect to each
Performance Period, the CEO shall establish, at a minimum, a threshold level of performance (or the
portion thereof allocable to a particular Performance Condition or Conditions (the “Allocable
Portion”)) at which 100% of the Target Incentive shall be payable and a maximum level of
performance at which 200% of the Target Incentive will be payable, subject in each case to the
CEO’s discretion to reduce the amount payable to any Participant based on such factors as the CEO
shall determine. For performance levels between two established performance levels, the percent
of Target Incentive (or any Allocable Portion) payable will be determined by mathematical
interpolation, where appropriate.

     Section 5. Performance Achievement. Payment of any compensation under the Program is
expressly contingent upon achievement, in whole or in part, of the Performance Conditions for such
Performance Period. The amount payable to a Participant with respect to his or her Target
Incentive (or the Allocable Portion) with respect to any Performance Conditions will be determined
based on the assessment of achievement against such Performance Conditions with respect to such
Performance Period. To the extent that any Performance Condition is based on the individual
performance of a Participant that is not otherwise objectively determinable by application of a
formula or other mathematical or statistical measure, the level of achievement of such Performance
Condition shall be determined based on the CEO’s subjective determination of the individual’s
performance.

     Section 6. Payment of Cash. Except as provided in Section 8, any amount payable to a
Participant in respect of any Performance Period shall be paid to the Participant (or, where
applicable, the Participant’s beneficiary or legal representative) in a single lump sum cash amount
not later than 21/2 months after the end of the calendar year in which the
relevant Performance Period ends.

     Section 7. Employment Conditions to Payment.

     (a) Full Award Requires Service for Entire Performance Period. To be entitled to
payment in full of any amount payable in respect of any Target Incentive, a Participant must be in
the continuous employ of the Company or a Subsidiary from the date he or she is selected as a
Participant through the last day of the applicable Performance Period. Except as provided in
Section 7(b), if a Participant’s employment terminates for any reason during a Performance Period
(including, but not limited to, the Participant’s voluntary resignation), such Participant shall be
entitled to receive payment of the amount, if any, determined pursuant to Section 7(c).

     (b) Termination for Cause or Termination Before Six Months of the Performance Period Have
Passed. If a Participant’s employment is terminated (i) for “Cause” at any time prior

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to payment of any amount in respect of any Target Incentive under Section 6, or (ii) for any other
reason and fewer than six months of the Performance Period have passed, then such Participant shall
forfeit any right to receive any payment in respect of his or her Target Incentive for that
Performance Period (regardless of whether the Performance Period shall have been completed and an
amount would otherwise have been payable to the Participant in respect of his or her Target
Incentive). For purposes of this Plan, the term “Cause” means (i) the
Participant’s failure to follow or comply with a reasonable and lawful written directive of the
Board of Directors or the CEO, (ii) the Participant’s failure to perform the substantial
responsibilities of his or her position, (iii) any act of dishonesty, gross negligence, or
misconduct by the Participant, including any violation of a material Company policy or breach of
fiduciary duty owed by the Participant to the Company (even if no harm results from such act),
(iv) the Participant’s conviction of or entering a plea of guilty or nolo contendere to a
crime constituting a felony or the Participant’s willful violation of any law, rule or regulation,
or (v) the Participant engages in, or is interested in, (as owner, partner, shareholder, employee,
director, agent, consultant or otherwise), any business which is a “competitor” of the Company.
“Competitor” of the Company is any corporation, sole proprietorship, partnership, joint venture,
syndicate, trust or any other form of organization or parent, subsidiary or division of any of the
foregoing, which is engaged in the transportation, purchase, brokering, marketing or trading of
natural gas or other energy products or services which are competitive to the Company’s products or
services, any of which is engaged in within 50 miles of the geographic area in which the Company is
engaged in such competitive business, provided that a present or future investment in the
securities of companies listed on a national securities exchange or traded on the over-the-counter
market to the extent such investments do not exceed 2% of the total outstanding shares of such
company will not constitute engagement or interest in a “competitor.”

     (c) Termination for Any Other Reason and the Passing of Six or More Months of the
Performance Period. Subject to the last sentence of this Section 7(c), if a Participant’s
employment terminates during a Performance Period for any reason other than Cause and six or more
months of the Performance Period have passed, the amount payable to the Participant in respect of
the Participant’s Target Incentive for any Performance Period shall be equal to the product of
(x) the amount that would have been payable in respect of the Participant’s Target
Incentive had such Participant been employed for the entire Performance Period (as determined in
accordance with Section 5 based on the CEO’s assessment of the achievement of the Performance
Conditions for the Performance Period) multiplied by (y) the Participant’s Pro-Rata
Fraction. With respect to any Participant, the “Pro-Rata Fraction” is a fraction, the
numerator of which is the number of days in the Performance Period completed prior to and including
the date of Participant’s termination of employment, and the denominator of which is the total
number of days in the Performance Period. To the extent a Participant becomes entitled to receive
any payment as provided in this Section 7(c), such payment shall be made not later than 2 1/2 months
after the end of the calendar year in which the relevant Performance Period ends. Any payment to a
Participant pursuant to this Section 7(c) shall be subject to the CEO’s discretion described in
Section 4(b), as well as such terms and conditions (including, but not limited to, the execution of
a release and/or certain restrictive covenants in favor of the Company) as the CEO shall determine
not later than the date of such Participant’s termination of employment.

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     Section 8. Change of Control. In the event of a Change of Control, all then in
progress Performance Periods shall be deemed to have ended as of the end of the last fiscal quarter
of the Company ended prior to the occurrence of such Change of Control and the rights of each
Participant to receive payment in respect of any outstanding Target Incentive shall be determined
in the following manner: (i) the Performance Period shall be deemed to have ended as of the
end of the fiscal quarter ended coincident with or immediately prior to the occurrence of such
Change of Control; (ii) the CEO, as determined immediately prior to such Change of Control,
shall certify the amount payable with respect to each Target Incentive based on achievement of the
Performance Conditions through the end of the truncated Performance Period, but annualizing the
performance for the then current fiscal year and subject to such other adjustments, if any,
specified by the Committee at the time such Performance Conditions are first established; and
(iii) the amount payable to each Participant shall be equal to the product of (A)
the amount determined pursuant to subclause (ii) and (B) a fraction, the numerator of which
is the number of days in the Performance Period completed prior to, and including, the Change of
Control and the denominator of which is the total number of days in the Performance Period.

     For purposes of this Plan, a “Change in Control” shall mean:

     (i) either (a) receipt by the Company of a report on Schedule 13D, or an
amendment to such a report, filed with the Securities and Exchange Commission (the “SEC”)
pursuant to Section 13(d) of the 1934 Act disclosing that any person (as such term is used
in Section 13(d) of the 1934 Act) (“Person”), is the beneficial owner, directly or
indirectly, of twenty (20) percent or more of the outstanding stock of the Company or
(b) actual knowledge by the Company of facts, on the basis of which any Person is
required to file such a report on Schedule 13D, or to make an amendment to such a report,
with the SEC (or would be required to file such a report or amendment upon the lapse of the
applicable period of time specified in Section 13(d) of the 1934 Act) disclosing that such
Person is the beneficial owner, directly or indirectly, of twenty (20) percent or more of
the outstanding stock of the Company;

     (ii) purchase by any Person, other than the Company, a Subsidiary or any employee
benefit plan of the Company or any Subsidiary, of shares pursuant to a tender or exchange
offer to acquire any stock of the Company (or securities convertible into stock) for cash,
securities or any other consideration, provided that, after consummation of the offer, such
Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of twenty (20) percent or more of the outstanding stock of the Company
(calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of
rights to acquire stock);

     (iii) consummation of (a) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or pursuant to which shares of
stock of the Company would be converted into cash, securities or other property, other than
a consolidation or merger of the Company in which holders of its stock immediately prior to
the consolidation or merger have substantially the same proportionate ownership of common
stock of the surviving corporation immediately after the consolidation or merger as
immediately before, or (b) any consolidation or merger in which the Company is the
continuing or surviving corporation but in which the common shareholders of the Company

4

 

immediately prior to the consolidation or merger do not hold at least a majority of the
outstanding common stock of the continuing or surviving corporation (except where such
holders of common stock hold at least a majority of the common stock of the corporation
which owns all of the common stock of the Company), or (c) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the Company; or

     (iv) a change in the majority of the members of the Board of Directors within a
24-month period unless the election or nomination for election by the Company’s shareholders
of each new director was approved by the vote of at least two-thirds of the directors then
still in office who were in office at the beginning of the 24-month period.

     Section 9. Administration. The CEO (or such other officer or officers to whom the
CEO shall delegate such responsibility (each, a “Delegate”)) shall administer and interpret the
Plan. The CEO shall establish the Performance Conditions for any Performance Period in accordance
with Section 4 and determine whether such Performance Conditions have been obtained with respect to
such Performance Period in accordance with Section 5. Any determination made by the CEO under the
Plan shall be final and conclusive. The CEO (or any Delegate) may employ such legal counsel,
consultants and agents (including counsel or agents who are employees of the Company or a
Subsidiary) as it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant or agent and any computation received from
such consultant or agent. All expenses incurred in the administration of the Plan, including,
without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the
Company. Neither the CEO nor any Delegate shall be liable for any action or determination made in
good faith under the Program or with respect to any Target Incentive awarded or payable thereunder.

     Section 10. Nonassignment. A Participant shall not be permitted to assign, alienate
or otherwise transfer any interest in his or her Target Incentive and any attempt to do so shall be
void. A Participant’s interests under this Plan shall not be subject to garnishment or execution
or levy of any kind, and any attempt to cause any benefits to be so subjected shall not be
recognized. This Plan shall be an unfunded plan and a Participant shall have only the rights of a
general creditor of the Company with respect to such Participant’s interest under this Plan.

     Section 11. Impact on Benefit Plans. Payments under the Program shall be considered
as earnings for purposes of any of the Company’s employee benefit plans, programs or arrangements,
including, but not limited to, its qualified retirement plans or non-qualified retirement plans or
for any other retirement or benefit plan, unless otherwise excluded under the terms of any such
plan. Nothing herein shall prevent the Company from maintaining additional compensation plans and
arrangements, provided however that no payments shall be made under such plans and
arrangements if the effect thereof would be the payment of compensation otherwise payable under
this Program regardless of whether the applicable Performance Condition was attained.

     Section 12. Successors. The obligation of the Company under the Program shall be
binding upon the successors and assigns of the Company.

5

 

     Section 13. Applicable Law. This Program shall be governed by and construed under
the laws of the State of New York without regard to its conflict of law provisions.

     Section 14. Severability. In the event that any one or more of the provisions of
this Program shall be held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     Section 15. Tax Withholding. The Company shall have the power to withhold from any
amount payable hereunder an amount sufficient to satisfy federal, state and local or non-U.S.
withholding tax requirements on any amount payable under this Program.

     Section 16. No Voluntary Election to Defer. Unless and to the extent expressly
permitted by the Company on such terms and conditions as it shall deem necessary or appropriate, no
amount payable under the Program may be electively deferred by a Participant past the date as of
which such amount would otherwise be paid hereunder. Notwithstanding the foregoing, the Company
may defer payment of any amount payable in respect of any Target Incentive if and to the extent
such payment would, if made at the time otherwise required under the Program, not be deductible by
the Company or any Subsidiary by reason of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”). Notwithstanding anything in this Program to the contrary, any deferral of
payment permitted or required in accordance with this Section 16 shall at all times comply with the
applicable provisions of Section 409A of the Code and all determinations with respect thereto shall
be made in a manner intended to avoid the imposition on any Participant of the additional taxes set
forth in such Section 409A.

     Section 17. No Guarantee of Employment. Nothing in this Plan shall interfere with or
limit in any way the right of the Company or a Subsidiary to terminate any Participant’s employment
at any time, nor confer upon any Participant any right to continue in the employ of the Company or
a Subsidiary.

     Section 18. Headings. The descriptive headings of the Sections of this Program are
inserted for convenience of reference only and shall not constitute a part of this Program. Except
when otherwise indicated by the context, the singular shall be read and interpreted as the plural
(when appropriate), and the plural shall include the singular.

     Section 19. Amendment or Termination of this Program. This Program may be amended,
suspended or terminated by the Company at any time upon approval by the Compensation Committee of
the Board of Directors (or such other committee of that the Board shall authorize to take such
action). Notwithstanding the foregoing, no amendment, suspension or termination shall adversely
affect a Participant’s rights with respect to any Target Incentive previously established, except
as provided herein.

6

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