Document:

ex10_2.htm

    SEVENTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     

    SEVENTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
entered into as of October 29, 2009, by and among PETROLEUM DEVELOPMENT
CORPORATION (the “Borrower”), CERTAIN
SUBSIDIARIES OF THE BORROWER, as Guarantors (the “Guarantors”), the
LENDERS party hereto (the “Lenders”) and
JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative
Agent”).  Unless the context otherwise requires or unless
otherwise expressly defined herein, capitalized terms used but not defined in
this Amendment have the meanings assigned to such terms in the Credit Agreement
(as defined below).

     

     

    WITNESSETH:

     

    WHEREAS, the Borrower, the
Guarantors, the Administrative Agent and the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of November 4, 2005 (as
the same has been and may hereafter be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);
and

     

    WHEREAS, the Borrower and the
Guarantors have requested that the Administrative Agent and the Lenders amend
the Credit Agreement in certain respects and the Administrative Agent and the
Lenders (or at least the required percentage thereof) have agreed to do so on
the terms and conditions hereinafter set forth.

     

    NOW, THEREFORE, for and in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the Borrower, the Guarantors, the Administrative
Agent and the Lenders hereby agree as follows:

     

    SECTION
1. Amendments to Credit
Agreement.  Subject to the satisfaction or waiver in writing of
each condition precedent set forth in Section 4 of this
Amendment, and in reliance on the representations, warranties, covenants and
agreements contained in this Amendment, the Credit Agreement shall be amended in
the manner provided in this Section
1.

     

    1.1 Additional
Definitions.  Section 1.01 of the
Credit Agreement shall be and it hereby is amended by inserting the following
definitions in appropriate alphabetical order:

     

    “Marcellus Joint
Venture” means that certain joint venture between Marcellus JV PDC
Partner and Marcellus JV Investor Partner pursuant to which the Borrower intends
to contribute the Marcellus Properties to PDC Mountaineer in accordance with and
as contemplated by the Marcellus JV Contribution Agreement, the Marcellus JV
Services Agreement and the other Marcellus JV Documents.

     

    “Marcellus JV Catch-Up
Period” has the meaning given to the term “Catch-Up Period” in the PDC
Mountaineer LLC Agreement.

     

    “Marcellus JV Contribution
Agreement” means that certain Contribution Agreement dated as of
October 29, 2009 by and between the Borrower and PDC Mountaineer relating
to the Marcellus Joint Venture.

     

    “Marcellus JV Contribution
Date” means the date the contribution of the Marcellus Properties to PDC
Mountaineer is consummated in accordance with the Marcellus JV
Documents.

     

    “Marcellus JV
Documents” means the Marcellus JV Services Agreement, the Marcellus JV
Contribution Agreement, the PDC Mountaineer LLC Agreement and any other
documents, agreements and instruments (including side letter agreements)
governing the Marcellus Joint Venture, in each case, as the same may be amended,
restated, modified or supplemented from to time to time to the extent permitted
hereunder.

     

    “Marcellus JV Investor
Partner” means an entity organized under the laws of the United States,
any state thereof or the District of Columbia that is not affiliated with the
Borrower and owns Equity Interests in PDC Mountaineer, as identified by the
Borrower to the Administrative Agent prior to the contribution of the Marcellus
Properties to PDC Mountaineer.

     

    “Marcellus JV PDC
Partner” means the Borrower or, if the Borrower shall have transferred
its Equity Interests in PDC Mountaineer to one of its wholly-owned Restricted
Subsidiaries in accordance with the PDC Mountaineer LLC Agreement, such
wholly-owned Restricted Subsidiary.

     

    “Marcellus JV Services
Agreement” means that certain Transition, Administrative and Marketing
Services Agreement dated as of October 29, 2009 among the Borrower, Riley
Natural Gas Company, PDC Eastern, PDC Mountaineer, PDC Mountaineer Operating,
LLC and Marcellus JV Investor Partner relating to the Marcellus Joint
Venture.

     

    “Marcellus JV
Withdrawal” means any “Special PDC Withdrawal” under and as defined in
the PDC Mountaineer LLC Agreement.

     

    “Marcellus Properties”
means the Oil and Gas Interests of the Borrower and PA PDC, LLC that are located
in Pennsylvania or West Virginia and contributed to PDC Mountaineer (whether
directly or through the contribution of the Equity Interests in PA PDC, LLC)
pursuant to the Marcellus JV Contribution Agreement in connection with the
Marcellus Joint Venture.

     

    “PDC Eastern” means
PDC Eastern Operations Company, LLC, a Delaware limited liability
company.

     

    “PDC Mountaineer”
means PDC Mountaineer, LLC, a Delaware limited liability company.

     

    “PDC Mountaineer LLC
Agreement” means that certain Limited Liability Company Agreement of PDC
Mountaineer dated as of October 29, 2009.

     

    “Seventh Amendment Effective
Date” means October 29, 2009.

     

    1.2 Amended
Definitions.  The following definitions in Section 1.01 of
the Credit Agreement shall be and they hereby are amended in their respective
entireties to read as follows:

     

    “Consolidated EBITDAX”
means, with respect to the Borrower and its Restricted Subsidiaries for any
period, Consolidated Net Income for such period; plus without
duplication and to the extent deducted in the calculation of Consolidated Net
Income for such period, the sum of (a) income or franchise Taxes paid or
accrued; (b) Consolidated Net Interest Expense; (c) amortization, depletion and
depreciation expense; (d) any non-cash losses or charges on any Swap Agreement
resulting from the requirements of FASB Statement 133 for that period; (e) oil
and gas exploration expenses (including all drilling, completion, geological and
geophysical costs) for such period; (f) losses from sales or other dispositions
of assets (other than Hydrocarbons produced in the ordinary course of business)
and other extraordinary or non-recurring losses; and (g) other non-cash charges
(excluding accruals for cash expenses made in the ordinary course of business);
minus, to the
extent included in the calculation of Consolidated Net Income, (h) the sum of
(i) any non-cash gains on any Swap Agreements resulting from the requirements of
FASB Statement 133 for that period; (ii) extraordinary or non-recurring gains
(including the Marcellus JV Withdrawal); and (iii) gains from sales or other
dispositions of assets (other than Hydrocarbons produced in the ordinary course
of business); provided that, with respect to the determination of Borrower’s
compliance with the leverage ratio set forth in Section 7.11(b) for any period,
Consolidated EBITDAX shall be adjusted to give effect, on a pro forma basis and
consistent with GAAP, to any Acquisitions or Dispositions made during such
period as if such Acquisition or Disposition, as the case may be, was made at
the beginning of such period.

     

    “Consolidated Funded
Indebtedness” means, as of any date, without duplication, Indebtedness of
the Borrower and its Restricted Subsidiaries of the type described in clauses
(a), (b), (c), (d), (e), (f), (g) or (h) of the definition of
Indebtedness.

     

    “Consolidated Net
Income” means for any period, the consolidated net income (or loss) of
the Borrower and its Restricted Subsidiaries, as applicable, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or loss) of any Person accrued prior to the date it
becomes a Restricted Subsidiary of the Borrower, or is merged into or
consolidated with the Borrower or any of its Restricted Subsidiaries, as
applicable, (b) the undistributed earnings of any Restricted Subsidiary of the
Borrower, to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under any Loan Document) or by
any law applicable to such Restricted Subsidiary and (c) the income (or loss) of
any Person in which any other Person (other than the Borrower or any of its
Restricted Subsidiaries) has an Equity Interest, except to the extent of the
amount of dividends or other distributions actually paid in cash to the Borrower
or any of its Restricted Subsidiaries during such period.

     

    “Sponsored
Partnership” means any partnership or limited liability company meeting
each of the following requirements: (a) a Credit Party is the sole general
partner of such partnership or the sole manager of such limited liability
company, as the case may be, (b) such partnership or limited liability company
is organized pursuant to a partnership or operating agreement reasonably
satisfactory to the Administrative Agent and the Required Lenders
and  otherwise acceptable to the Administrative Agent in its sole
discretion, (c) such partnership or limited liability company is primarily
involved in oil and gas exploration, development, acquisition or production, and
owns no other material assets other than Oil and Gas Interests, (d) such
partnership or limited liability company is not an obligor, as a borrower, a
guarantor or otherwise, on any Indebtedness other than Indebtedness such
partnership or limited liability company is permitted to incur under this
Agreement and (e) a Credit Party is the operator of the Oil and Gas Interests
owned by such partnership or limited liability company.  For the
avoidance of doubt, PDC Mountaineer is not a Sponsored Partnership.

     

    “Subsidiary” means,
with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership (other than a Sponsored Partnership), more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.  Unless the context otherwise clearly requires,
references herein to a “Subsidiary” refer to a Subsidiary of the Borrower, other
than the Sponsored Partnerships.  Notwithstanding the foregoing, it is
understood and agreed that, for so long as the Borrower and its Restricted
Subsidiaries own less than 100% of the Equity Interests in PDC Mountaineer,
neither PDC Mountaineer nor any Subsidiary of PDC Mountaineer shall be a
Subsidiary of the Borrower for purposes of this Agreement and the other Loan
Documents.

     

    “Unrestricted
Subsidiary” means (a) any Subsidiary that at the time of determination
shall be designated an Unrestricted Subsidiary by the  Board of
Directors of the Borrower in the manner provided below and (b) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Borrower may designate
any Subsidiary (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries (i)
is a Material Domestic Subsidiary owning Oil and Gas Interests included in the
Borrowing Base Properties, (ii) is the operator, by contract or otherwise, of
any Oil and Gas Interests included in the Borrowing Base Properties or (iii)
guarantees any indebtedness, liabilities, or other obligations under any now
existing or hereafter outstanding Senior Notes.

     

    1.3 Amendment to
Definition.  The definition of “Permitted Encumbrances” in
Section 1.01 of
the Credit Agreement shall be and it hereby is amended by inserting the
following new clauses (k) and (l) at the end thereof immediately prior to the
proviso contained therein:

     

    (k)  rights
of PDC Mountaineer to acquire Oil and Gas Interests located in the AMI (as
defined in the Marcellus JV Documents) acquired by the Borrower or any of its
Restricted Subsidiaries pursuant to the terms of the Marcellus JV Documents;
and

     

    (l) (i)
the obligation of the Borrower to transfer all of the Equity Interests in PDC
Eastern to a third party purchaser pursuant to the PDC Mountaineer LLC Agreement
as in effect on the Seventh Amendment Effective Date and (ii)  the right of
PDC Mountaineer to purchase all of the Equity Interests in PDC Eastern pursuant
to the PDC Mountaineer LLC Agreement as in effect on the Seventh Amendment
Effective Date;

     

    1.4 Borrowing Base Reduction Upon
Contribution of Marcellus Properties.  The following shall be
and it hereby is added to the Credit Agreement as Section
3.08:

     

    Section
3.08.  Borrowing Base Reduction
Upon Contribution of the Marcellus Properties.  Effective upon
the Marcellus JV Contribution Date, the Marcellus Properties shall cease to be
Borrowing Base Properties and the Borrowing Base then in effect shall be reduced
by $45,000,000.  To the extent any Borrowing Base Deficiency occurs as
a result of such reduction in the Borrowing Base pursuant to this Section 3.08,
the Borrower shall, within two Business Days of the Marcellus JV Contribution
Date, prepay the Borrowings in an amount sufficient to eliminate such Borrowing
Base Deficiency.

     

    1.5 Oil and Gas
Interests.  Section 4.15 of the
Credit Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    Section
4.15.  Oil
and Gas Interests.  Each Credit Party has good and defensible
title to all proved reserves included in the Direct Interests (for purposes of
this Section 4.15, “proved Direct Interests”) described in the most recent
Reserve Report provided to the Administrative Agent (other than such proved
reserves that have been subsequently disposed of in compliance with this
Agreement), free and clear of all Liens except Liens permitted pursuant to
Section 7.02.  Each Sponsored Partnership has good and defensible
title to all proved reserves included in the Attributed Interests (for purposes
of this Section 4.15, “proved Attributed Interests”) described in the most
recent Reserve Report provided to the Administrative Agent (other than such
proved reserves that have been subsequently disposed of in compliance with this
Agreement), free and clear of all Liens except Liens permitted pursuant to
Section 7.02.  All such proved Oil and Gas Interests are valid,
subsisting, and in full force and effect in all material respects, and all
rentals, royalties, and other amounts due and payable in respect thereof have
been duly paid except for such rentals, royalties and other amounts that are
amounts being contested in good faith by appropriate proceedings and for which
the Borrower or the applicable Restricted Subsidiary or Sponsored Partnership
has set aside on its books adequate reserves.  Without regard to any
consent or non-consent provisions of any joint operating agreement covering any
Credit Party’s proved Direct Interests, or any Sponsored Partnership’s proved
Attributed Interests, such Credit Party’s share and such Sponsored Partnership’s
share, as the case may be, of (a) the costs for each proved Oil and Gas Interest
described in the Reserve Report (other than for such proved Oil and Gas
Interests that have been subsequently disposed of in compliance with this
Agreement) is not materially greater than the decimal fraction set forth in the
Reserve Report, before and after payout, as the case may be, and described
therein by the respective designations “working interests,” “WI,” “gross working
interest,” “GWI,” or similar terms (except in such cases where there is a
corresponding increase in the net revenue interest), and (b) production
from, allocated to, or attributed to each such proved Oil and Gas Interest is
not materially less than the decimal fraction set forth in the Reserve Report,
before and after payout, as the case may be, and described therein by the
designations “net revenue interest,” “NRI,” or similar terms.  The
wells drilled in respect of proved producing Oil and Gas Interests described in
the Reserve Report (other than wells drilled in respect of such proved producing
Oil and Gas Interests that have been subsequently disposed of in compliance with
this Agreement) (1) are capable of, and are presently, either producing
Hydrocarbons in commercially profitable quantities or in the process of being
worked over or enhanced, and the Credit Party or Sponsored Partnership that owns
such proved producing Oil and Gas Interests is currently receiving payments for
its share of production, with no funds in respect of any thereof being presently
held in suspense, other than any such funds being held in suspense pending
delivery of appropriate division orders, and (2) have been drilled, bottomed,
completed, and operated in compliance with all applicable laws, in the case of
clauses (1) and (2), except where any failure to satisfy clause (1) or to comply
with clause (2) would not have a Material Adverse Effect, and no such well which
is currently producing Hydrocarbons is subject to any material penalty in
production by reason of such well having produced in excess of its allowable
production.

     

    1.6 Use of
Proceeds.  Section 6.08 of the
Credit Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    Section
6.08.  Use
of Proceeds and Letters of Credit.  The proceeds of the Loans
will be used only to (a) pay the fees, expenses and transaction costs of the
Transactions, (b) make purchases of outstanding Equity Interests in Sponsored
Partnerships to the extent permitted under Section 7.04(b), (c) make investments
in the Equity Interests of PDC Mountaineer to the extent permitted under Section
7.04(k), (d) make investments consisting of loans to Marcellus JV Investor
Partner to the extent permitted under Section 7.04(l) and (e) finance the
working capital needs of the Borrower, including capital expenditures, and for
general corporate purposes of the Borrower and the Guarantors, in the ordinary
course of business, including the exploration, acquisition and development of
Oil and Gas Interests.  No part of the proceeds of any Loan will be
used, whether directly or indirectly, to purchase or carry any margin stock (as
defined in Regulation U issued by the Federal Reserve Board).  Letters
of Credit will be issued only to support general corporate purposes of the
Borrower and the Restricted Subsidiaries.

     

    1.7 Security.  The
phrase “Fifth Amendment Effective Date” in Section 6.09 of the
Credit Agreement shall be and it hereby is replaced with the phrase “Seventh
Amendment Effective Date (or such later date as the Administrative Agent may
agree in its sole discretion)”.

     

    1.8 Indebtedness to Marcellus JV Investor
Partner.  The “and” at the end of clause (j) of Section 7.01 of the
Credit Agreement is hereby deleted, the “.” at the end of clause (k) of Section 7.01 of the
Credit Agreement is hereby replaced with “; and”, and the following shall be and
it hereby is added to the Credit Agreement as clause (l) of Section
7.01:

     

    (l)  Indebtedness
of Marcellus JV PDC Partner to Marcellus JV Investor Partner for the unfunded
portion of any capital contribution Marcellus JV PDC Partner is required to make
to PDC Mountaineer in accordance with the Marcellus JV Documents; provided that (i) the
aggregate principal amount of such Indebtedness shall not exceed $40,000,000 at
any time outstanding, (ii) on each date such Indebtedness is incurred, the
Borrower is in compliance with the financial covenants set forth in Section 7.11
as of the last day of the fiscal quarter most recently ended for which financial
statements are available, calculated on a pro forma basis after giving effect to
the incurrence of such Indebtedness as if such Indebtedness had been incurred on
the first day of such fiscal quarter, and (iii) Aggregate Revolving Commitment
Usage is less than eighty percent (80%) on each date such Indebtedness is
incurred.

     

    1.9 Liens on Equity Interests of PDC
Mountaineer.  The “and” at the end of clause (e) of Section 7.02 of the
Credit Agreement is hereby deleted, the “.” at the end of clause (f) of Section 7.02 of the
Credit Agreement is hereby replaced with “; and”, and the following shall be and
it hereby is added to the Credit Agreement as clause (g) of Section
7.02:

     

    (g)  Liens
in favor of Marcellus JV Investor Partner on the Equity Interests of PDC
Mountaineer owned by Marcellus JV PDC Partner; provided that (i) the
only Indebtedness secured by such Liens is the Indebtedness permitted by clause
(l) of Section 7.01, (ii) the only property or assets of the Borrower or any
Restricted Subsidiary encumbered by such Liens are such Equity Interests and the
proceeds thereof and (iii) except for the Liens permitted by this Section
7.02(g), no other Liens encumber such Equity Interests or the proceeds
thereof.

     

    1.10 Contribution of Marcellus
Properties.  The “and” at the end of clause (vi) of Section 7.03(a) of
the Credit Agreement is hereby replaced with a comma, and the following shall be
and it hereby is added to the end of clause (vii) of Section 7.03(a) of
the Credit Agreement immediately prior to the period at the end
thereof:

     

    ,
and (viii) on the Marcellus JV Contribution Date the Borrower and the Restricted
Subsidiaries may contribute, transfer or assign the Marcellus Properties and the
Equity Interests of PA PDC, LLC to PDC Mountaineer in accordance with the
Marcellus JV Contribution Agreement so long as the Borrower complies with the
provisions of Section 3.08 in connection with such contribution, transfer or
assignment.

     

    1.11 Investments in PDC
Mountaineer.  The “and” at the end of clause (i) of Section 7.04 of the
Credit Agreement is hereby deleted, the “.” at the end of clause (j) of Section 7.04 of the
Credit Agreement is hereby replaced with “;”, and the following shall be and it
hereby is added to the Credit Agreement as clauses (k) and (l) of Section
7.04:

     

    (k)  (i)
the investment made by the Borrower in the Equity Interests of PDC Mountaineer
in exchange for the Borrower’s contribution of the Marcellus Properties pursuant
to the Marcellus JV Contribution Agreement and (ii) so long as no Default shall
have occurred and be continuing or would be caused thereby, (A) additional cash
equity investments by the Borrower in the Equity Interests of PDC Mountaineer at
any time during the Marcellus JV Catch-Up Period not to exceed $40,000,000, and
(B) additional cash equity investments by the Borrower in the Equity Interests
of PDC Mountaineer at any time after the end of the Marcellus JV Catch-Up
Period; provided that, with
respect to each such cash equity investment made pursuant to this clause (B),
(1) the Borrower is in compliance with the financial covenants set forth in
Section 7.11 as of the last day of the fiscal quarter most recently ended for
which financial statements are available, calculated on a pro forma basis after
giving effect to such investment as if such investment had been made on the
first day of such fiscal quarter and (2) both immediately before and immediately
after giving effect to such investment, Aggregate Revolving Commitment Usage is
less than eighty percent (80%); and

     

    (l)  investments
consisting of loans to Marcellus JV Investor Partner for the unfunded portion of
any capital contribution Marcellus JV Investor Partner is required to make to
PDC Mountaineer in accordance with the Marcellus JV Documents; provided that (i) no
Default shall have occurred and be continuing or would be caused thereby, (ii)
the aggregate principal amount of such loans shall not exceed $40,000,000 at any
time outstanding, (iii) on the date each such loan is made, the Borrower shall
be in compliance with the financial covenants set forth in Section 7.11 as of
the last day of the fiscal quarter most recently ended for which financial
statements are available, calculated on a pro forma basis after giving effect to
such loan as if such loan had been made on the first day of such fiscal quarter,
and (iv) both immediately before and immediately after giving effect to each
such loan, Aggregate Revolving Commitment Usage is less than eighty percent
(80%).

     

    1.12 Swap
Agreements.  The following shall be and it hereby is added to
the end of Section
7.05 of the Credit Agreement:

     

    Notwithstanding
anything to the contrary in this Section 7.05, promptly after the Marcellus JV
Contribution Date and in any event no later than January 15, 2010, the Borrower
shall (1) sell, cancel, terminate, novate or otherwise unwind hedge transactions
(each a “Hedge
Adjustment”) to the extent necessary to cause the aggregate notional
volume of Hydrocarbons under all Swap Agreements of the Credit Parties then in
effect to be no greater than the percentages of forecasted production from
proved producing reserves permitted pursuant to this Section 7.05 as if a Credit
Party was entering into a new transaction under a Swap Agreement as of the date
of such contribution and (2) apply the net proceeds received as a result of each
Hedge Adjustment to prepay the Loans.

     

    1.13 Transactions with
Affiliates.  Section 7.07 of the
Credit Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    Section
7.07.  Transactions with
Affiliates.  The Borrower will not, nor will it permit any of
its Restricted Subsidiaries to, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates
(including any Sponsored Partnership), except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Borrower or such Restricted Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among the
Borrower and its Restricted Subsidiaries not involving any other Affiliate
(including any Sponsored Partnership), (c) transactions described on Schedule
7.07, (d) any Restricted Payment permitted by Section 7.06, (e) investments
permitted by Section 7.04 and (f) on and after the Marcellus JV Contribution
Date, transactions with PDC Mountaineer entered into in connection with the
Marcellus Joint Venture.

     

    1.14 Marcellus JV
Documents.  The following shall be and it hereby is added to
the Credit Agreement as Section
7.14:

     

    Section
7.14.  Marcellus JV
Documents.  Without the Administrative Agent’s prior written
consent, the Borrower will not, nor will it permit any Restricted Subsidiary to,
enter into or permit any supplement, modification or amendment of, or waive any
right or obligation of any Person under, any Marcellus JV Document on or after
the Marcellus JV Contribution Date if the effect thereof would be materially
adverse to the Administrative Agent and/or any Lender or would change the
definition of “AMI”, “Special PDC Withdrawal” or “Catch-Up Period”.

     

    SECTION
2. Unrestricted
Subsidiary.  The parties hereto acknowledge that PDC Eastern
Operations Company, LLC, a Delaware limited liability company (“PDC Eastern”) has
been designated as an Unrestricted Subsidiary as of the date hereof and that PDC
Eastern shall remain an Unrestricted Subsidiary unless it ceases to qualify as
an Unrestricted Subsidiary in accordance with the definition
thereof.

     

    SECTION
3. Release of PA PDC,
LLC.  On the date (the “Marcellus JV Contribution
Date”) that the Equity Interests of PA PDC, LLC are contributed to PDC
Mountaineer LLC, a Delaware limited liability company (“PDC Mountaineer”) in
accordance with that certain Contribution Agreement dated as of October 29, 2009
between Borrower and PDC Mountaineer (the “Marcellus JV Contribution
Agreement”) and provided such date occurs on or before November 29, 2009,
the Lenders hereby authorize the Administrative Agent, on the Marcellus JV
Contribution Date, to (a) release PA PDC, LLC from its obligations as a
Guarantor under the Credit Agreement and release all of the Liens on the Equity
Interests of, and all assets, including the Borrowing Base Properties owned by,
PA PDC, LLC that secure the Obligations and (b) amend the Security Agreement as
necessary to exclude from the Collateral the Equity Interests of PDC Mountaineer
and the Equity Interests of PDC Eastern.

     

    SECTION
4. Conditions.  The
amendments to the Credit Agreement contained in Section 1 of
this Amendment shall each be effective upon the satisfaction of each of the
conditions set forth in this Section 4.

     

    4.1 Execution and
Delivery.  Each Credit Party, the Lenders, and the
Administrative Agent shall have executed and delivered this Amendment and each
other required document, all in form and substance satisfactory to the
Administrative Agent.

     

    4.2 No Default.  No
Default shall have occurred and be continuing or shall result from the
effectiveness of this Amendment.

     

    4.3 Authorization and Good
Standing.  The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
each Credit Party, the authorization of this Amendment and any other legal
matters relating to the Credit Parties or this Amendment, all in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel.

     

    4.4 Governmental
Approvals.  All governmental and third party approvals
necessary or, in the discretion of the Administrative Agent, advisable in
connection with the financing contemplated by the Credit Agreement, as amended
to date, and by this Amendment and the continuing operations of the Borrower and
its Subsidiaries shall have been obtained and be in full force and
effect.

     

    4.5 Marcellus JV
Documents.  The Administrative Agent shall have received all of
the agreements, instruments and documents relating to the formation of the joint
venture between Borrower and any other holder of Equity Interests of PDC
Mountaineer, including the Limited Liability Company Agreement of PDC
Mountaineer, the Marcellus JV Contribution Agreement and the Transition,
Administrative and Marketing Services Agreement dated as of the date hereof,
among the Borrower, Riley Natural Gas Company, PDC Mountaineer and the other
parties thereto, and all such documents shall be in form and substance
reasonably satisfactory to the Administrative Agent.

     

    4.6 Other
Documents.  The Administrative Agent shall have received such
other instruments and documents incidental and appropriate to the transaction
provided for herein as the Administrative Agent or its special counsel may
reasonably request, and all such documents shall be in form and substance
satisfactory to the Administrative Agent.

     

    SECTION
5. Representations and Warranties of
Credit Parties.  To induce the Lenders to enter into this
Amendment, each Credit Party hereby represents and warrants to the Lenders as
follows:

     

    5.1 Reaffirmation of Representations and
Warranties/Further Assurances.  After giving effect to the
amendments contained herein, each representation and warranty of such Credit
Party contained in the Credit Agreement or in any other Loan Document is true
and correct in all material respects on the date hereof (except to the extent
such representations and warranties relate solely to an earlier date, in which
case they are true and correct as of such earlier date).

     

    5.2 Corporate Authority; No
Conflicts.  The execution, delivery and performance by such
Credit Party of this Amendment and all documents, instruments and agreements
contemplated herein are within such Credit Party’s corporate or other
organizational powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any court or agency of government
and do not violate or constitute a default under any provision of any applicable
law or other agreements binding upon such Credit Party or result in the creation
or imposition of any Lien upon any of the assets of such Credit
Party.

     

    5.3 Enforceability.  This
Amendment constitutes the valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditor’s rights generally, and (ii) the availability of equitable remedies may
be limited by equitable principles of general application.

     

    5.4 No Default.  As of
the date hereof, both before and immediately after giving effect to this
Amendment, no Default or Event of Default has occurred and is
continuing.

     

    5.5 Marcellus Joint Venture Permitted
Under Indenture.  The consummation of the Marcellus Joint
Venture and the contribution by the Borrower of the Marcellus Properties to PDC
Mountaineer are not prohibited under either the Indenture or the Senior Notes
outstanding on the date hereof.

     

    SECTION
6. Miscellaneous.

     

    6.1 Reaffirmation of Loan Documents and
Liens.  Any and all of the terms and provisions of the Credit
Agreement and the Loan Documents shall, except as amended and modified hereby,
remain in full force and effect and are hereby in all respects ratified and
confirmed by each Credit Party.  Each Credit Party hereby agrees that
the amendments and modifications herein contained shall in no manner affect or
impair the liabilities, duties and obligations of any Credit Party under the
Credit Agreement and the other Loan Documents or the Liens securing the payment
and performance thereof.

     

    6.2 Parties in
Interest.  All of the terms and provisions of this Amendment
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.

     

    6.3 Legal
Expenses.  Each Credit Party hereby agrees to pay all
reasonable fees and expenses of counsel to the Administrative Agent incurred by
the Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment and all related documents.

     

    6.4 Counterparts.  This
Amendment may be executed in one or more counterparts and by different parties
hereto in separate counterparts each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.  Delivery of
photocopies of the signature pages to this Amendment by facsimile or electronic
mail shall be effective as delivery of manually executed counterparts of this
Amendment.

     

    6.5 Complete
Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

     

    6.6 Headings.  The
headings, captions and arrangements used in this Amendment are, unless specified
otherwise, for convenience only and shall not be deemed to limit, amplify or
modify the terms of this Amendment, nor affect the meaning thereof.

     

    6.7 Governing Law.  This
Amendment shall be construed in accordance with and governed by the law of the
State of Illinois.

     

    [Remainder
of Page Intentionally Blank.  Signature Pages Follow.]

     

    
      
        
          

           

          Seventh
Amendment to

           

          Amended
and Restated Credit Agreement

           

          65328825.8

        

         

      

      
         

        
        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have caused this Amendment to be duly executed as of the date first
above written.

     

    BORROWER:

     

     

    PETROLEUM
DEVELOPMENT CORPORATION

     

    

     

    

    By: /s/ Gysle R.
Shellum                                                                           

    Name:
Gysle R. Shellum

    Title:   Chief
Financial Officer

    

    

     

    GUARANTORS:

     

    RILEY
NATURAL GAS COMPANY

    

     

    By: /s/ Darwin L.
Stump                                                                           

     

    Name:
Darwin L. Stump

     

    Title:   Treasurer

     

    

     

    UNIOIL

    

     

    By: /s/ Darwin L.
Stump                                                                           

     

    Name:
Darwin L. Stump

     

    Title:   Secretary
and Treasurer

    

     

    PA PDC,
LLC

     

    

    By: /s/ Darwin L.
Stump                                                                           

    Name:
Darwin L. Stump

    Title:   Treasurer

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, N.A. (Illinois)), as Administrative Agent and
as a Lender

     

    By:        /s/ Jo Linda
Papadakis                                                                

    Name: Jo Linda
Papadakis

    Title:   Vice
President

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    BNP
PARIBAS,

     

    as a
Lender and as Syndication Agent

    

    

    

    By:        /s/ Betsy
Jocher                                                                

    Name: Betsy Jocher

    Title:   Director

    

    

    

    By:        /s/ Polly
Schott                                                                

    Name: Polly Schott

    Title:   Director

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    BANK OF AMERICA, N.A., as a
Lender

     

    and as a
Co-Documentation Agent

    

    

    By:        /s/ Stephen J.
Hoffman                                                                    

    Name:
Stephen J. Hoffman

    Title:   Managing
Director

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    CALYON
NEW YORK BRANCH,

     

    as a
Lender and as a Co-Documentation Agent

     

    

     

    By: /s/ Mark A.
Roche                                                                           

     

    Name:
Mark A. Roche

     

    Title:   Managing
Director

     

    By: /s/ Michael D.
Willis                                                                           

     

    Name:
Michael D. Willis

     

    Title:   Managing
Director

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    BANK OF MONTREAL, as a
Lender

     

    and as a
Co-Documentation Agent

     

    

     

    By: /s/ Gumaro
Tijerina                                                                           

     

    Name:
Gumaro Tijerina

     

    Title:   Director

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    WACHOVIA BANK, N.A., as a
Lender

    

    

    By:        /s/ Suzanne F.
Ridenhour                                                                

    Name:
Suzanne F. Ridenhour

    Title:   Senior
Portfolio Manager

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    COMPASS BANK as successor in
interest to GUARANTY BANK, FSB,
as a Lender

    

    

    By:        /s/ Kathleen J.
Bowen                                                                    

    Name:
Kathleen J. Bowen

    Title:   Senior
Vice President

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    THE ROYAL BANK OF SCOTLAND plc,
as a Lender

    

    

    By:        /s/ John
Preece                                                                    

    Name:
John Preece

    Title:   Senior
Vice President

    
      
        
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Amendment to

          Amended
and Restated Credit Agreement

          65328825

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Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    BANK OF OKLAHOMA, as a
Lender

    

    

    By:        /s/ Wes
Webb                                                                    

    Name: Wes
Webb

    Title:   Senior
Vice President

    

    
      
        
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Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    COMPASS
BANK,

     

    as a
Lender

     

    

     

    By: /s/ Kathleen J.
Bowen                                                                           

     

    Name:
Kathleen J. Bowen

     

    Title:   Senior
Vice President

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

          Signature
Page

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    THE
BANK OF NOVA SCOTIA,

     

    as a
Lender

     

    

     

    By: /s/ Keith
Buchanan                                                                           

     

    Name:
Keith Buchanan

     

    Title:   Managing
Director

    
      
        
          Seventh
Amendment to

          Amended
and Restated Credit Agreement

          65328825

           

          Signature Pageex101.htm

    Exhibit
10.1

    
      TEXAS
INSTRUMENTS 2009 LONG-TERM INCENTIVE PLAN

      
        As
amended September 17, 2009

         

            SECTION
1 .  Purpose.

         

            The Texas
Instruments 2009 Long-Term Incentive Plan is intended as a successor plan to the
Company’s 2000 Long-Term Incentive Plan, 2003 Long-Term Incentive Plan and the
predecessors thereto.  This Plan is designed to enhance the ability of
the Company to attract and retain exceptionally qualified individuals and to
encourage them to acquire a proprietary interest in the growth and performance
of the Company.

         

            SECTION
2 .  Definitions.

         

            As used in
the Plan, the following terms shall have the meanings set forth in this Section
2.  Any definition of a performance measure used in connection with an
Award described by Section 11(f) shall have the meaning commonly ascribed to
such term by generally acceptable accounting principles as practiced in the
United States.

         

            (a)
“Affiliate” shall mean (i) any
entity that, directly or indirectly, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, in either case as
determined by the Committee.

         

            (b) “Award” shall mean any Option,
award of Restricted Stock, Restricted Stock Unit, Performance Unit or Other
Stock-Based Award granted under the Plan.

         

            (c) “Award Agreement” shall mean
any written agreement, contract or other instrument or document evidencing an
Award granted under the Plan, which may, but need not, be executed or
acknowledged by a Participant.  An Award Agreement may be in
electronic form.

         

            (d) “Board” shall mean the board of
directors of the Company.

           

            (e)
“Cash Flow” for a period shall
mean net cash provided by operating activities.

         

            (f) “Change in Control” shall mean
an event that will be deemed to have occurred:

        
          

          
            	
                     
      

                  	
                    (i)

                  	
                    On
      the date any Person, other than (1) the Company or any of its
      Subsidiaries, (2) a trustee or other fiduciary holding stock under an
      employee benefit plan of the Company or any of its Affiliates, (3) an
      underwriter temporarily holding stock pursuant to an offering of such
      stock, or (4) a corporation owned, directly or indirectly, by the
      stockholders of the Company in substantially the same proportions as their
      ownership of stock of the Company, acquires ownership of stock of the
      Company that, together with stock held by such Person, constitutes more
      than 50 percent of the total fair market value or total voting power of
      the stock of the Company.  However, if any Person is considered
      to own more than 50 percent of the total fair market value or total voting
      power of the stock of the Company, the acquisition of additional stock by
      the same Person is not considered to be a Change in
    Control;

                  

          

          

          
            	
                     
      

                  	
                    (ii)

                  	
                    On
      the date a majority of members of the Board is replaced during any
      12-month period by directors whose appointment or election is not endorsed
      by a majority of the Board before the date of the appointment or election;
      or

                  

          

          

          
            	
                     
      

                  	
                    (iii)

                  	
                    On
      the date any Person acquires (or has acquired during the 12-month period
      ending on the date of the most recent acquisition by such Person) assets
      from the Company that have a total gross fair market value equal to or
      more than 80 percent of the total gross fair market value of all of the
      assets of the Company immediately before such acquisition or
      acquisitions.  For this purpose, gross fair market value means
      the value of the assets of the Company or the value of the assets being
      disposed of, determined without regard to any liabilities associated with
      such assets.  However, there is no Change in Control when there
      is such a sale or transfer to (i) a stockholder of the Company
      (immediately before the asset transfer) in exchange for or with respect to
      the Company’s then outstanding stock; (ii) an entity, at least 50 percent
      of the total value or voting power of the stock of which is owned,
      directly or indirectly, by the Company; (iii) a Person that owns, directly
      or indirectly, at least 50 percent of the total value or voting power of
      the outstanding stock of the Company; or (iv) an entity, at least 50
      percent of the total value or voting power of the stock of which is owned,
      directly or indirectly, by a Person that owns, directly or indirectly, at
      least 50 percent of the total value or voting power of the outstanding
      stock of the Company.

                  

          

          

          
            	
                     
      

                  	
                    (iv)

                  	
                    For
      purposes of (i), (ii) and (iii) of this Section
  2(f),

                  

          

          

          
            	
                     
      

                  	
                    (A)

                  	
                    “Affiliate”
      shall have the meaning set forth in Rule 12b-2 promulgated under Section
      12 of the Securities Exchange Act of 1934, as
  amended;

                  

          

          

          
            	
                     
      

                  	
                    (B)

                  	
                    “Person”
      shall have the meaning given in Section 7701(a)(1) of the
      Code.  Person shall include more than one Person acting as a
      group as defined by the Final Treasury Regulations issued under Section
      409A of the Code; and

                  

          

          

          
            	
                     
      

                  	
                    (C)

                  	
                    “Subsidiary”
      means any entity whose assets and net income are included in the
      consolidated financial statements of the Company audited by the Company’s
      independent auditors and reported to stockholders in the annual report to
      stockholders.

                  

          

          

          
            	
                     
      

                  	
                    (v)

                  	
                    Notwithstanding
      the foregoing, in no case will an event in (i), (ii) or (iii) of this
      Section 2(f) be treated as a Change in Control unless such event also
      constitutes a “change in control event” with respect to the Company within
      the meaning of Treas. Reg. § 1.409A-3(i)(5) or any successor
      provision.

                  

          

           

              (g) “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time.

           

              (h) “Committee” shall mean a
committee of the Board designated by the Board to administer the
Plan.  Unless otherwise determined by the Board, the Compensation
Committee designated by the Board shall be the Committee under the
Plan.

           

              (i) “Company” shall mean Texas
Instruments Incorporated, together with any successor thereto.

           

              (j) “Cycle Time” shall mean the
actual time a specific process relating to a product or service of the Company
takes to accomplish.

           

              (k) “Earnings Before Income Taxes”
shall mean income from continuing operations plus provision for income
taxes.

           

              (l) “Earnings Before Income Taxes,
Depreciation and Amortization” or “EBITDA” shall mean income from
continuing operations plus 1) provision for income taxes, 2) depreciation
expense and 3) amortization expense.

           

              (m) “Earnings Per Share” for a
period shall mean diluted earnings per common share from continuing operations
before extraordinary items.

           

              (n) “Executive Group” shall mean
every person who is expected by the Committee to be both (i) a “covered
employee” as defined in Section 162(m) of the Code as of the end of the taxable
year in which an amount related to or arising in connection with the Award may
be deducted by the Company, and (ii) the recipient of taxable compensation of
more than $1,000,000 for that taxable year.

           

              (o) “Fair Market Value” shall mean,
with respect to any property (including, without limitation, any Shares or other
securities), the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the
Committee.

           

              (p) “Free Cash Flow” for a period
shall mean net cash provided by operating activities of continuing operations
less additions to property, plant and equipment.

           

              (q) “Gross Profit” for a period
shall mean net revenue less cost of revenue.

           

              (r) “Gross Profit Margin” for a
period shall mean Gross Profit divided by net revenue.

           

              (s) “Incentive Stock Option” shall
mean an option granted under Section 6 that is intended to meet the
requirements of Section 422 of the Code, or any successor provision
thereto.

           

              (t) “Involuntary Termination”
shall mean a Termination of Employment, other than for cause, due to the
independent exercise of unilateral authority of TI to terminate the
Participant’s services, other than due to the Participant’s implicit or explicit
request, where the Participant was willing and able to continue to perform
services, in accordance with Treas. Reg. § 1.409A-1(n)(1) or any successor
provision.

           

              (u) “Manufacturing Process Yield”
shall mean the good units produced as a percent of the total units
processed.

           

              (v) “Market Share” shall mean the
percent of sales of the total available market in an industry, product line or
product attained by the Company or one or more of its business units, product
lines or products during a time period.

           

              (w) “Net Revenue Per Employee” in a
period shall mean net revenue divided by the average number of employees, with
average defined as the sum of the number of employees at the beginning and
ending of the period divided by two.

           

              (x) “Non-Qualified Stock Option”
shall mean an option granted under Section 6 that is not intended to be an
Incentive Stock Option.

           

              (y) “Option” shall mean an
Incentive Stock Option or a Non-Qualified Stock Option.

           

              (z) “Other Stock-Based Award” shall
mean any right granted under Section 10.

           

              (aa) “Participant” shall mean an
individual granted an Award under the Plan.

           

              (bb) “Performance Unit” shall mean
any right granted under Section 8.

           

              (cc) “Plan” shall mean this Texas
Instruments 2009 Long-Term Incentive Plan.

           

              (dd) “Operating Profit” shall mean
revenue less (i) cost of revenue, (ii) research and development expense and
(iii) selling, general and administrative expense.

           

              (ee) “Restricted Stock” shall mean
any Share granted under Section 7.

           

              (ff) “Restricted Stock Unit” shall
mean a contractual right granted under Section 7 that is denominated in Shares,
each of which represents a right to receive the value of a Share (or a
percentage of such value, which percentage may be higher than 100%) on the terms
and conditions set forth in the Plan and the applicable Award
Agreement.

           

              (gg) “Return on Assets” for a
period shall mean net income divided by average total assets, with average
defined as the sum of the amount of assets at the beginning and ending of the
period divided by two.

           

              (hh) “Return on Capital” for a
period shall mean net income divided by stockholders’ equity.

           

              (ii) “Return on Common Equity” for
a period shall mean net income divided by total stockholders’ equity, less
amounts, if any, attributable to preferred stock.

           

              (jj) “Return on Invested Capital”
for a period shall mean net income divided by the sum of stockholders’ equity
and long-term debt.

           

              (kk) “Return on Net Assets” for a
period shall mean net income divided by the difference of average total assets
less average non-debt liabilities, with average defined as the sum of assets or
liabilities at the beginning and ending of the period divided by
two.

           

              (ll) “Revenue Growth” shall mean
the percentage change in revenue from one period to another.

           

              (mm) “Shares” shall mean shares of
the common stock of the Company, $1.00 par value.

           

              (nn) “Specified Employee” shall
mean an employee who is a “specified employee” (as defined in Section
409A(2)(b)(i) of the Code) for the applicable period, as determined by the
Committee in accordance with Treas. Reg. § 1.409A-1(i) or any successor
provision.

           

              (oo) “Stock Appreciation Right” or
“SAR” shall mean any
right granted pursuant to Section 9 to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one Share on the
date of exercise or any date or dates during a specified period before the date
of exercise over (ii) the grant price of the right, which grant price,
except in the case of Substitute Awards, shall not be less than the Fair Market
Value of one Share on the date of grant of the right.

           

              (pp) “Substitute Awards” shall mean
Awards granted in assumption of, or in substitution for, outstanding awards
previously granted by a company acquired by the Company or with which the
Company combines.

           

              (qq) “Termination of Employment”
shall mean the date on which the Participant has incurred a “separation from
service” within the meaning of Treas. Reg. §  1.409A-1(h) or any
successor provision.

           

              (rr) “TI” shall mean and include
the Company and its Affiliates.

           

              (ss) “Total Stockholder Return”
shall mean the sum of the appreciation in stock price and dividends paid on
common stock over a given period of time.

           

              SECTION
3 .  Eligibility.

           

              (a) Any
individual who is employed by the Company or any Affiliate, and any individual
who provides services to the Company or any Affiliate as an independent
contractor, including any officer or employee-director, shall be eligible to be
selected to receive an Award under the Plan.

           

              (b) An
individual who has agreed to accept employment by, or to provide services to,
the Company or an Affiliate shall be deemed to be eligible for Awards hereunder
as of commencement of employment.

           

              (c) Directors
who are not full-time or part-time officers or employees are not eligible to
receive Awards hereunder.

           

              (d) Holders
of options and other types of Awards granted by a company acquired by the
Company or with which the Company combines are eligible for grant of Substitute
Awards hereunder.

           

              SECTION
4 .  Administration.

           

              (a) The Plan
shall be administered by the Committee.  The Committee shall be
appointed by the Board.  A director may serve as a member or alternate
member of the Committee only during periods in which the director is (i)
independent within the meaning of the rules of the New York Stock Exchange and
the Company’s director independence standards and (ii) an “outside director” as
described in Section 162(m) of the Code.

           

              (b) Subject
to the terms of the Plan and applicable law, the Committee shall have full power
and authority to: (i) designate Participants; (ii) determine the type or types
of Awards (including Substitute Awards) to be granted to each Participant under
the Plan; (iii) determine the number of Shares to be covered by (or with respect
to which payments, rights, or other matters are to be calculated in connection
with) Awards; (iv) determine the terms and conditions of any Award (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards, or other property, or
canceled, forfeited or suspended, and the method or methods by which Awards may
be settled, exercised, canceled, forfeited or suspended; (vi) determine,
consistent with Section 11(g), whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan, including adopting
sub-plans and addenda for Participants outside the United States to achieve
favorable tax results or facilitate compliance with applicable laws; (ix)
determine whether and to what extent Awards should comply or continue to comply
with any requirement of statute or regulation; and (x) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.

           

              (c) All
decisions of the Committee shall be final, conclusive and binding upon all
parties, including the Company, the stockholders and the
Participants.

           

              SECTION
5 .  Shares
Available for Awards.

           

              (a) Subject
to adjustment as provided in this Section 5, the number of Shares available for
issuance under the Plan shall be 75,000,000 shares.  Notwithstanding
the foregoing and subject to adjustment as provided in Section 5(e), no
Participant may receive Options and SARs under the Plan in any calendar year
that relate to more than 4,000,000 Shares.

           

              (b) If, after
the effective date of the Plan, (i) any Shares covered by an Award, or to which
such an Award relates, are forfeited or (ii) any Award expires or is cancelled
or otherwise terminated, then the number of Shares available for issuance under
the Plan shall increase, to the extent of any such forfeiture, expiration,
cancellation or termination.  For purposes of this Section 5(b),
awards and options granted under any previous option or long-term incentive plan
of the Company (other than a Substitute Award granted under any such plan) shall
be treated as Awards.  For the avoidance of doubt, the number of
Shares available for issuance under the Plan shall not be increased by:
(i) the withholding of Shares as a result of the net settlement of an
outstanding Option or SAR; (ii) the delivery of Shares to pay the exercise
price or withholding taxes relating to an Award; or (iii) the repurchase of
Shares on the open market using the proceeds of an Option’s
exercise.

           

              (c) Any
Shares underlying Substitute Awards shall not be counted against the Shares
available for granting Awards.

           

              (d) Any
Shares delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares, of treasury Shares or of both.

           

              (e) In the
event that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall equitably adjust any or
all of (i) the number and type of Shares (or other securities or property) which
thereafter may be made the subject of Awards, including the aggregate and
individual limits specified in Section 5(a), (ii) the number and type of Shares
(or other securities, cash or property) subject to outstanding Awards, and (iii)
the grant, purchase, or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award; provided, however, that the number of
Shares subject to any Award denominated in Shares shall always be a whole
number.  Any such adjustment with respect to a “stock right”
outstanding under the Plan, as defined in Section 409A of the Code, shall be
made in a manner that is intended to avoid the imposition of any additional tax
or penalty under Section 409A.

           

              SECTION
6 .  Options.

           

              (a) The
Committee is hereby authorized to grant Options to Participants with the terms
and conditions described in this Section 6 and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine.

           

              (b) The
purchase price per Share under an Option shall be determined by the Committee;
provided, however, that, except in the
case of Substitute Awards, such purchase price shall not be less than the Fair
Market Value of a Share on the date of grant of such Option.

           

              (c) The term
of each Option shall be fixed by the Committee but shall not exceed 10 years;
provided, however, that
the Committee may provide for a longer term to accommodate regulations in
non-U.S. jurisdictions that require a minimum exercise or vesting period
following a Participant’s death to achieve favorable tax results or comply with
local law.

           

              (d) The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part, and the method or methods by which, and the form or forms
(including, without limitation, cash, Shares, other Awards, or other property,
or any combination thereof, having a Fair Market Value on the exercise date
equal to the relevant exercise price) in which, payment of the exercise price
with respect thereto may be made or deemed to have been made.

           

              (e) The terms
of any Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision thereto, and any regulations promulgated thereunder, but the Company
makes no representation that any options will qualify, or continue to qualify as
an Incentive Stock Option and makes no covenant to maintain Incentive Stock
Option status.

           

              SECTION
7 .  Restricted
Stock and Restricted Stock Units.

           

              (a) The
Committee is hereby authorized to grant Awards of Restricted Stock and
Restricted Stock Units to Participants with the terms and conditions described
in this Section 7 and with such additional terms and conditions, in either case
not inconsistent with the provisions of the Plan, as the Committee shall
determine.

           

              (b) Shares of
Restricted Stock and Restricted Stock Units shall be subject to such
restrictions as the Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock or the right to
receive any dividend or other right or property), which restrictions may lapse
separately or in combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.

           

              (c) Any share
of Restricted Stock granted under the Plan may be evidenced in such manner as
the Committee may deem appropriate including, without limitation, book-entry
registration or issuance of a stock certificate or certificates.  In
the event any stock certificate is issued in respect of shares of Restricted
Stock granted under the Plan, such certificate shall be registered in the name
of the Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

             

              (d) Except as
otherwise determined by the Committee, upon termination of employment or
cessation of the provision of services (as determined under criteria established
by the Committee) for any reason during the applicable restriction period, all
Shares of Restricted Stock and all Restricted Stock Units still, in either case,
subject to restriction shall be forfeited and reacquired by the Company; provided, however, that the Committee
may, when it finds that a waiver would be in the best interests of the Company,
waive in whole or in part any or all remaining restrictions with respect to
Shares of Restricted Stock or Restricted Stock Units.

           

              SECTION
8 .  Performance
Units.

           

              (a) The
Committee is hereby authorized to grant Performance Units to Participants with
terms and conditions as the Committee shall determine not inconsistent with the
provisions of the Plan.

           

              (b) Subject
to the terms of the Plan, a Performance Unit granted under the Plan (i) may be
denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards, or other property and (ii)
shall confer on the holder thereof rights valued as determined by the Committee
and payable to, or exercisable by, the holder of the Performance Unit, in whole
or in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish.  Subject to the
terms of the Plan, the performance goals to be achieved during any performance
period, the length of any performance period, the amount of any Performance Unit
granted and the amount of any payment or transfer to be made pursuant to any
Performance Unit shall be determined by the Committee.

           

              SECTION
9 .  Stock
Appreciation Rights (SARs).

           

              (a) The
Committee is hereby authorized to grant SARs to Participants with terms and
conditions as the Committee shall determine not inconsistent with the provisions
of the Plan.

           

              (b) The term
of each SAR shall be fixed by the Committee but shall not exceed 10 years; provided, however, that the
Committee may provide for a longer term to accommodate regulations in non-U.S.
jurisdictions that require a minimum exercise or vesting period following a
Participant’s death.

           

              SECTION
10 .  Other
Stock-based Awards.

           

              The Committee
is hereby authorized to grant to Participants such other Awards that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares) as are deemed by the Committee to be
consistent with the purposes of the Plan.  Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such
Awards.  Shares or other securities delivered pursuant to a purchase
right granted under this Section 10 shall be purchased for such consideration,
which may be paid by such method or methods and in such form or forms,
including, without limitation, cash, Shares, other securities, other Awards, or
other property, or any combination thereof, as the Committee shall determine,
the value of which consideration, as established by the Committee, shall, except
in the case of Substitute Awards, not be less than the Fair Market Value of such
Shares or other securities as of the date such purchase right is
granted.

           

              SECTION
11 .  General
Provisions Applicable to Awards.

           

              (a) Awards
shall be granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.

           

              (b) Awards
may, in the discretion of the Committee, be granted either alone or in addition
to or in tandem with any other Award or any award granted under any other plan
of the Company.  Awards granted in addition to or in tandem with other
Awards, or in addition to or in tandem with awards granted under any other plan
of the Company, may be granted either at the same time as or at a different time
from the grant of such other Awards or awards.

           

              (c) Subject
to the terms of the Plan, payments or transfers to be made by the Company upon
the grant, exercise or settlement of an Award may be made in such form or forms
as the Committee shall determine including, without limitation, cash, Shares,
other securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with Section 11(g) and rules and
procedures established by the Committee.  Such rules and procedures
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or, with respect only to
Awards other than Options and SARs, the grant or crediting of dividend
equivalents in respect of installment or deferred payments.

           

              (d) Unless
the Committee shall otherwise determine, (i) no Award, and no right under
any such Award, shall be assignable, alienable, saleable or transferable by a
Participant otherwise than by will or by the laws of descent and distribution;
provided, however, that, if so
determined by the Committee, a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Participant, and to receive any property distributable, with respect to any
Award upon the death of the Participant; (ii) each Award, and each right
under any Award, shall be exercisable during the Participant’s lifetime only by
the Participant or, if permissible under applicable law, by the Participant’s
guardian or legal representative; and (iii) no Award, and no right under
any such Award, may be pledged, alienated, attached, or otherwise encumbered,
and any purported pledge, alienation, attachment or encumbrance thereof shall be
void and unenforceable against the Company.  The provisions of this
paragraph shall not apply to any Award which has been fully exercised, earned or
paid, as the case may be, and shall not preclude forfeiture of an Award in
accordance with the terms thereof.

           

              (e) All
certificates for Shares or other securities delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities are
then listed, and any applicable Federal, state or foreign securities laws, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.

           

              (f) Every
Award (other than an Option or SAR) to a member of the Executive Group that the
Committee intends to constitute “qualified performance-based compensation” for
purposes of Section 162(m) of the Code shall include a pre-established formula,
such that payment, retention or vesting of the Award is subject to the
achievement during a performance period or periods, as determined by the
Committee, of a level or levels, on an absolute basis or relative to other
companies, as determined by the Committee, of one or more of the following
performance measures:  (i) Cash Flow, (ii) Cycle Time, (iii) Earnings
Before Income Taxes, (iv) Earnings Per Share, (v) EBITDA, (vi) Free Cash Flow,
(vii) Gross Profit, (viii) Gross Profit Margin, (ix) Manufacturing Process
Yield, (x) Market Share, (xi) net income, (xii) Net Revenue Per Employee, (xiii)
Operating Profit, (xiv) Return on Assets, (xv) Return on Capital, (xvi) Return
on Common Equity, (xvii) Return on Invested Capital, (xviii) Return on Net
Assets, (xix) Revenue Growth or (xx) Total Stockholder Return.  For
any Award subject to any such pre-established formula, no more than $5,000,000
can be paid in satisfaction of such Award to any Participant, provided, however, that if the performance
formula relating to such Award is expressed in Shares, the maximum limit shall
be 4,000,000 Shares in lieu of such dollar limit.

           

              (g) Unless
the Committee expressly determines otherwise in the Award Agreement, any Award
of an Option, SAR, or Restricted Stock is intended to qualify as a stock right
exempt under Section 409A of the Code, and the terms of the Award Agreement and
any related rules and procedures adopted by the Committee shall reflect such
intention.  Unless the Committee expressly determines otherwise in the
Award Agreement, with respect to any other Award that would constitute deferred
compensation within the meaning of Section 409A of the Code, the Award Agreement
shall set forth the time and form of payment and the election rights, if any, of
the holder in a manner that is intended to avoid the imposition of additional
taxes and penalties under Section 409A.  The Company makes no
representation or covenant that any Award granted under the Plan will comply
with Section 409A.

           

              (h) The
Committee shall not have the authority to provide in any Award granted hereunder
for the automatic award of an Option upon the exercise or settlement of such
Award.

           

              (i) This
Section 11(i) applies with respect to Awards granted on or after January 1,
2010.   If a Participant experiences an Involuntary Termination
within 24 months after a Change in Control, then unless specifically provided to
the contrary in any Award Agreement or the Committee otherwise determines under
authority granted elsewhere in the Plan,

          
            (1)  Awards
held by the Participant shall become fully vested and exercisable, and any
restrictions applicable to the Awards shall lapse, upon the effective date of
such termination;

            
              (2)  to
the extent permitted without additional tax or penalty by Section 409A of the
Code, the shares underlying Restricted Stock Units, Performance Units or other
Stock-Based Awards held by the Participant will be issued on, or as soon as
practicable (but no later than 60 days) after, the
Participant’s  Involuntary Termination, provided,
however,  that if the Participant is a Specified Employee upon such
termination, the shares will be issued on, or as soon as practicable (but no
more than 10 days) after, the first day of the seventh month following such
Involuntary Termination; and

              
                (3)  to
the extent that the issuance of shares as specified in (2) above is not
permitted without additional tax or penalty by Section 409A, the Award will
continue to full term and the shares will be issued at the issuance date
specified in the Award Agreement as if the Participant were still an employee of
TI on such date.

                 

                    SECTION
12 .  Amendment
and Termination.

                 

                    (a) Unless
otherwise expressly provided in an Award Agreement or in the Plan, the Board may
amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof
at any time; provided,
however, that no such
amendment, alteration, suspension, discontinuation or termination shall be made
without (i) stockholder approval if such approval is necessary to comply
with the listing requirements of the New York Stock Exchange or (ii) the consent
of the affected Participants, if such action would adversely affect the rights
of such Participants under any outstanding Award.  Notwithstanding
anything to the contrary herein, the Committee may amend the Plan in such manner
as may be necessary to enable the Plan to achieve its stated purposes in any
jurisdiction outside the United States in a tax-efficient manner and in
compliance with local rules and regulations.

                 

                    (b) The
Committee may waive any conditions or rights under, or amend, alter, suspend,
discontinue or terminate, any Award theretofore granted, prospectively or
retroactively, without the consent of any relevant Participant or holder or
beneficiary of an Award, provided, however, that (i) no such
action shall impair the rights of any affected Participant or holder or
beneficiary under any Award theretofore granted under the Plan; (ii) except as
provided in Section 5(e), no such action shall reduce the exercise price of any
Option or SAR established at the time of grant thereof; and (iii) except in
connection with a corporate transaction involving the Company (including an
event described in Section 5(e), an Option or SAR may not be terminated in
exchange for (x) a cash amount greater than the excess, if any, of the Fair
Market Value of the underlying Shares on the date of cancellation over the
exercise price times the number of Shares outstanding under the Award (the
“Award Value”), (y) another Option or SAR with an exercise price that is less
than the exercise price of the cancelled Option or SAR, or (z) any other type of
Award.  For avoidance of doubt, in connection with a corporate
transaction involving the Company (including an event described in Section
5(e)), any Award may be terminated in exchange for a cash payment, and such
payment is not required to exceed the Award Value.  Notwithstanding
the foregoing, the Committee may terminate Awards granted in any jurisdiction
outside the United States prior to their expiration date for consideration
determined by the Committee when, in the Committee’s judgment, the
administrative burden of continuing Awards in such locality outweighs the
benefit to the Company.  Any such action taken with respect to an
Award intended to be a stock right exempt under Section 409A of the Code shall
be consistent with the requirements for exemption under Section 409A, and any
such action taken with respect to an Award that constitutes deferred
compensation under Section 409A shall be in compliance with the requirements of
Section 409A.  The Committee also may modify any outstanding Awards to
comply with Section 409A without consent from Participants.  The
Company makes no representation or covenant that any action taken pursuant to
this Section 12(b) will comply with Section 409A.

                 

                    (c) The
Committee shall be authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of changes in applicable
laws, regulations or accounting principles, whenever the Committee determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.  Any such action taken with respect to an Award
intended to be a stock right exempt under Section 409A of the Code shall be
consistent with the requirements for exemption under Section 409A, and any such
action taken with respect to an Award that constitutes deferred compensation
under Section 409A shall be in compliance with the requirements of Section
409A.  However, the Company makes no representation or covenants that
Awards will comply with Section 409A.

                 

                    (d) The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

                 

                    SECTION
13 .  Miscellaneous.

                 

                    (a) No
employee, independent contractor, Participant or other person shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of employees, independent contractors, Participants, or
holders or beneficiaries of Awards, either collectively or individually, under
the Plan.  The terms and conditions of Awards need not be the same
with respect to each recipient.

                 

                    (b) The
Committee may delegate to another committee of the Board, one or more officers
or managers of the Company, or a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend or terminate Awards held by, employees who are
not officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended; provided, however, that any such
delegation to management shall conform with the requirements of the General
Corporation Law of Delaware, as in effect from time to time.

                 

                    (c) The
Company shall be authorized to withhold from any Award granted or any payment
due or transfer made under any Award or under the Plan or from any compensation
or other amount owing to a Participant the amount (in cash, Shares, other
securities, other Awards, or other property) of withholding taxes (including
income tax, social insurance contributions, payment on account and other taxes)
due in respect of an Award, its exercise, or any payment or transfer of Shares,
cash or property under such Award or under the Plan and to take such other
action (including, without limitation, providing for elective payment of such
amounts in cash, Shares, other securities, other Awards or other property by the
Participant) as may be necessary in the opinion of the Company to satisfy all
obligations of the Company for the payment of such taxes.

                 

                    (d) Nothing
contained in the Plan shall prevent the Company from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific
cases.

                 

                    (e) The grant
of an Award shall not be construed as giving a Participant the right to be
retained in the employ or service of the Company or any
Affiliate.   Further, the Company or the applicable Affiliate may
at any time dismiss a Participant from employment or terminate the services of
an independent contractor, free from any liability, or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement or in
any other agreement binding the parties.

                   

                    (f) If any
provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction, or as to any person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, person
or Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.

                 

                    (g) Neither
the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company and a
Participant or any other person.  To the extent that any person
acquires a right to receive payments from the Company pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

                 

                    (h) No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional Shares, or
whether such fractional Shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.

                 

                    SECTION
14 .  Effective
Date of the Plan.

                 

                    The Plan
shall be effective as of the date of its approval by the stockholders of the
Company.

                 

                    SECTION
15 .  Term
of the Plan.

                   

                    No Award
shall be granted under the Plan after the tenth anniversary of the effective
date.  However, unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award theretofore granted may extend beyond
such date, and the authority of the Committee and the Board under Section 12 to
amend, alter, adjust, suspend, discontinue, or terminate any such Award, or to
waive any conditions or rights under any such Award, and to amend the Plan,
shall extend beyond such date.

                   

                    SECTION
16 .  Governing
Law.

                 

                    The Plan
shall be construed in accordance with and governed by the laws of the State of
Texas without giving effect to the principles of conflict of laws
thereof.

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