Document:

Restricted Stock Unit Award Agreement for Michael L. Jackson

 Exhibit 10.28 
  
 SUPERVALU INC. 
 2002 STOCK PLAN 
  
 RESTRICTED STOCK UNIT AWARD
AGREEMENT 
  
 This Restricted Stock Unit Award Agreement (this
“Agreement”), dated as of December 1, 2003, is entered into between SUPERVALU INC., a Delaware corporation (the “Company”), and Michael L. Jackson, a key employee of the Company (the “Participant”). 
  
 The Company, pursuant to its 2002 Stock Plan (the “Plan”), desires
to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company (“Common Stock”), subject to the terms and
conditions contained in this Agreement and in the Plan. Terms used in this Agreement, which are defined in the Plan, shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein. 
  
 Accordingly, in consideration of the premises and the agreements contained
herein, the parties hereto hereby agree as follows: 
  
 1.
Grant of Restricted Stock Units 
  
 The Company, effective
as of the date of this Agreement, hereby grants to the Participant Forty Thousand (40,000) Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to
the terms and conditions contained herein (the “Restricted Stock Units”). 
  
 2. Rights of the Participant with Respect to Restricted Stock Units 
  
 The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights
become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company’s Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the
Participant’s legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such
shares shall have been issued pursuant to Section 4 hereof. 
  
 3.
Vesting; Forfeiture 
  
 (a) Subject to the terms and
conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

  

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	 Date

	  	Percentage of
Restricted Stock Units Vested

	 
	 April 9, 2008
	  	71	%
	 April 9, 2009
	  	86	%
	 April 9, 2010
	  	100	%

  
 (b) Notwithstanding
the vesting provisions contained in Section 3(a) above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a “Change of Control” as defined in the Change of Control Severance Agreement,
dated February 12, 1999, or any successor agreement thereto, between the Company and the Participant (the “Severance Agreement”), prior to any termination of the Participant’s employment with the Company or a subsidiary of the
Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately. 
  
 (c) Upon the Participant’s termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested
pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value. 
  
 (d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age sixty-two (62), the Participant’s legal
representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so
vested by such date shall be forfeited and all associated rights shall lapse without value. 
  
 4. Payment of Restricted Stock Units; Issuance of Shares 
  
 (a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing
one share of the Company’s Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the “Payment Date”): 
  
 (i) the date the Participant reaches age 60; or 

 
 (ii) the first anniversary of the date of the
Participant’s termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant’s death, if earlier. 
  
 Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the
Participant, evidencing the shares issued in payment of the Restricted Stock Units. 
  
 (b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company’s 
  

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 Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the
consummation of a “Change of Control” as defined in the Severance Agreement (the “Change of Control Payment Date”). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock
certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units. 
  
 (c) If the Participant should die before reaching age sixty-two (62) and Restricted Stock Units shall have vested as of the date of such death as provided
in Section 3(d) above, then, notwithstanding the payment provisions of Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant’s legal representatives,
beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units. 
  
 (d) For purposes of this Agreement, the date of the Participant’s termination of employment shall be the date on which the Participant actually or
effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company’s personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness,
vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to his duties as an employee following the completion of such illness, vacation or other absence. 
  
 (e) The Participant shall also not be deemed to have terminated employment as
a result of a disability, which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in
Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), “disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan
of the Company. 
  
 5. Adjustments 
  
 In the event of any stock dividend or other distribution, recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of
Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units. 
  
 6. Covenant Not to Compete and Protection of Confidential Information

  
 (a) The Participant stipulates and represents that the
following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company’s primary business units; the Participant participates as a member of the Company’s senior executive staff; by virtue of his
position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation, the Company’s margins on products in all areas of its business, financial data and strategic
plans for all areas of the Company’s business, and the Participant has a business 
  

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 relationship with most if not all of the Company’s major customers and it is an important part of the
Participant’s responsibilities to cultivate and further those relationships. The Participant acknowledges that this information was gained by virtue of his employment at the Company, is confidential and secret information from which the Company
draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which the Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by
others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both
during and after the term of the Participant’s employment. 
  
 (b) The Participant agrees that he will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide
consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a
“Change of Control” as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company’s Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to
any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company’s reasonable desire to protect its business interest, but in its sole discretion. 
  
 (c) The Participant agrees that during his employment and at all times
thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and
data (including, but not limited to, processes, programs, trade “know how,” ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and
business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business
(“Confidential Data”), except upon the Company’s written consent or as required by the Participant’s duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together
with all copies thereof and notes and other references thereto, shall remain the sole property of the Company. 
  
 (d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in
concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the
Company. 
  

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 (e) The Participant agrees not to make disparaging statements about the Company, its officers, directors,
agents, employees, products or services which are false or misleading. 
  
 (f) The Participant agrees that except as otherwise provided in Section 6(b) above, the foregoing covenants contained in this Section 6 shall continue in effect: 
  

	 	(i)	For two (2) years after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs prior to April 9, 2008; or

  

	 	(ii)	Until the later of age sixty (60) or one (1) year after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination
occurs after April 8, 2008. 

  
 (g) The Participant
acknowledges that damages, which may arise from a breach of any of the foregoing covenants contained in this Section 6, are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units
shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such
breach, without further proof of damage. 
  
 (h) To the extent any
provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be
unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that
which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. 
  
 (i) Nothing in this Section 6 shall amend, limit, terminate or replace any
other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company. 
  
 7. Transferability 
  
 The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without
limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the
Restricted Stock Units shall be void. 
  

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 8. Taxes 
  

(a) The Participant acknowledges that he will consult with his personal tax advisor regarding the income tax consequences of the vesting and payment of
the Restricted Stock Units or any other matters related to this Agreement. In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from the Participant. 
  
 (b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment
of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the
Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the
Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4
hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of
taxes to be withheld is determined. 
  
 9. No Right to
Employment 
  
 Nothing in this Agreement or in the Plan shall
be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to
terminate the Participant’s employment at any time, with or without cause. 
  
 10. General Provisions 
  
 (a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request. 
  
 (b) This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units. 
  
 (c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities
exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules
(including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied. 
  

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 (d) The validity, construction and effect of this Agreement, and any rules and regulations relating to
this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable. 
  
 (e) If any provision of this Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any applicable jurisdiction, 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 purpose or intent of this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect. 
  
 (f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material
or relevant to the construction or interpretation of this Agreement or any provision hereof. 
  
 IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written. 
  

			
	SUPERVALU INC.
		
	 By:
	 	 /s/ Jeffrey Noddle

	 	 	 Jeffrey Noddle

	 Its:
	 	 Chairman and Chief Executive Officer

	
	PARTICIPANT
	
	 /s/ Michael L. Jackson

	 Michael L. Jackson

  

 - 7 -Material Contracts

 EXHIBIT 10.1 
  

  
 XTO ENERGY INC. 
  
 1998 STOCK INCENTIVE PLAN

  
 Amended as of March 17, 2004 
  

  

 XTO ENERGY INC. 
  

1998 STOCK INCENTIVE PLAN 
  
 ARTICLE 1. GENERAL 
  
 Section 1.1 Purpose. The purposes of this 1998 Stock Incentive Plan (the “Plan”) are to: (1) associate the interests of the management of
XTO ENERGY INC. and its subsidiaries and affiliates (collectively referred to as the “Company”) closely with the stockholders to generate an increased incentive to contribute to the Company’s future success and prosperity, thus
enhancing the value of the Company for the benefit of its stockholders; (2) provide management with a proprietary ownership interest in the Company commensurate with Company performance, as reflected in increased stockholder value; (3) maintain
competitive compensation levels thereby attracting and retaining highly competent and talented directors and employees; and (4) provide an incentive to management for continuous employment with the Company. Certain capitalized terms are defined in
Section 6.7. 
  
 Section 1.2. Administration.  

 
 (a) The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company or a subcommittee thereof (the “Committee”), which shall consist solely of two or more members of the Board of Directors who are not employees or officers of the Company, and at least two
of which are Outside Directors as defined in Section 6.7(j). 
  
 (b) The Committee shall have the authority in its sole discretion and from time to time to: 
  
 (i) designate the executive employees (as defined in Section 1.3) of the Company eligible to participate in the Plan; 
  
 (ii) grant Awards provided in the Plan in such form and
amount as the Committee shall determine; 
  
 (iii) impose such limitations, restrictions and conditions, not inconsistent with this Plan, upon any such Award as the Committee shall deem appropriate; and 
  
 (iv) interpret the Plan and any agreement, instrument or other document executed in connection with the
Plan, adopt, amend and rescind rules and regulations relating to the Plan, and make all other determinations and take all other action necessary or advisable for the implementation and administration of the Plan. 
  
  

 1 

 (c) Decisions and determinations of the Committee on all matters relating to the Plan
shall be in its sole discretion and shall be final, conclusive and binding upon all persons, including the Company, any participant, any stockholder of the Company and any employee. A majority of the members of the Committee may determine its
actions and fix the time and place of its meetings. No member of the Committee shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. 
  
 Section 1.3. Eligibility for Participation. Participants in the Plan
shall be selected by the Committee from the executive employees of the Company or its Subsidiaries. For the purposes of this Plan, (i) the term “executive employee” shall include only employees who are officers, or who are determined by
the Committee, in its discretion, to be key professional, managerial, administrative, or technical employees or supervisors, and (ii) the term “Subsidiary” means any corporation or other entity of which at least 50% of the voting
securities are owned by the Company directly or through one or more other corporations, each of which is also a Subsidiary. With respect to non-corporate entities, Subsidiary shall mean an entity managed or controlled by the Company or any
Subsidiary and with respect to which the Company or any Subsidiary is allocated more than half of the profits and losses thereof. 
  
 Section 1.4. Types of Awards Under the Plan. Awards under the Plan may be in the form of any one or more of the following: 
  
 (i) Stock Options, as described in Article II; 

 
 (ii) Incentive Stock Options, as described in Article
III; and/or 
  
 (iii) Performance Shares, as
described in Article IV. 
  
 Awards under the Plan shall be evidenced by an Award
Agreement between the Company and the recipient of the Award, in form and substance satisfactory to the Committee, and not inconsistent with this Plan. Award Agreements may provide such vesting schedules for Stock Options and Incentive Stock
Options, performance targets for Performance Shares, and such other terms, conditions and provisions as are not inconsistent with the terms of this Plan. Subject to the express provisions of the Plan, and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Award Agreements, or accept the surrender of outstanding Awards and authorize the granting of new Awards in substitution therefor. However, except as provided in this Plan, no modification of an
Award shall impair the rights of the holder thereof without his consent. 
  

 2 

 Section 1.5. Aggregate Limitation on Awards. 
  
 (a) The maximum number of shares of Common Stock which may
be issued pursuant to Awards issued under the Plan shall be 22,500,000, of which 11,250,000 may be issued as Performance Shares. In the aggregate with any other stock incentive plan of the Company, the Company may not grant Options or Performance
Shares such that the total number of shares of Common Stock subject to outstanding Options and unvested Performance Shares exceeds 6% of the total number of shares of Common Stock that the Company has issued and are outstanding at the time any
grants are made. In addition, the maximum number of shares that may be issued to any individual hereunder pursuant to Options or Performance Shares issued hereunder during any one year shall be 2,250,000 and 1,125,000, respectively, and the maximum
number that may be issued to any individual pursuant to Options or Performance Shares issued hereunder during the life of the Plan shall be 4,500,000 and 2,250,000, respectively. 
  
 (b) For purposes of calculating the maximum number of shares of Common Stock which may be issued under the
Plan in total or to any individual: 
  
 (i) only
the net shares issued (e.g., excluding shares delivered or withheld for payment of an Option exercise or for tax withholding requirements) under the Plan shall be counted when issued upon exercise of a Stock Option or Incentive Stock Option
or vesting of Performance Shares; 
  
 (ii) only
the net shares issued as Performance Shares shall be counted as issued (shares reacquired by the Company because of failure to achieve a performance target or failure to become fully vested for any other reason shall again be available for issuance
under the Plan); and 
  
 (iii) any shares of
Common Stock subject to a Stock Option or Incentive Stock Option which for any reason is terminated, unexercised or expires shall again be available for issuance under the Plan. 
  
 Section 1.6. Effective Date and Term of Plan.  
  
 (a) The Plan shall become effective on the date adopted by the Board of Directors, subject to approval by
the holders of a majority of the votes of shares of Common Stock and Preferred Stock present in person or represented by proxy and entitled to vote at the Annual Meeting of stockholders of the Company held in 1998. 
  
 (b) No Awards shall be made under the Plan after the tenth
anniversary of the effective date of this Plan; provided, however, that the Plan and all Awards made under the Plan prior to such date shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the
terms of such Awards. 
  
  

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 Section 1.7. Transferability. The Committee may, in its discretion, authorize all or a portion of
the Stock Options to be granted under Article II or the Performance Shares to be granted under Article IV to be on terms which permit transfer by the recipient of such a grant to (i) the spouse, children or grandchildren of the recipient
(“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, or (iii) a partnership in which (a) the recipient, (b) such Immediate Family Members, (c) corporations, the only owners of
which are such Immediate Family Members or the recipient, or (d) trusts whose only beneficiaries are such Immediate Family Members or the recipient, are the only partners, provided that (x) there may be no consideration for any such transfer, (y)
the Award Agreement pursuant to which such Stock Options or Performance Shares are granted must be approved by the Committee, and must expressly provide for the transferability in a manner consistent with this Section, and (z) subsequent transfers
of transferred Stock Options or Performance Shares shall be prohibited except by will or by the law of descent and distribution. Following transfer, such Stock Options or Performance Shares shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that for purposes of Sections 2.2 and 4.1 hereof, the terms “Optionee” and “participant,” respectively, shall be deemed to refer to the transferee. The events
of termination of employment of Sections 2.7 and 4.7 hereof shall continue to be applied with respect to the original Optionee and participant, respectively, following which the Stock Options shall be exercisable by the transferee only to the extent
and for the periods specified in Section 2.7, and Performance Shares shall vest only to the extent provided in the Award Agreement. 
  
 ARTICLE II. STOCK OPTIONS 
  
 Section 2.1. Award of Stock Options. The Committee may from time to time, and subject to the provisions of the Plan and such other terms and
conditions as the Committee may prescribe, grant to any participant in the Plan one or more options to purchase the number of shares of Common Stock (“Stock Options”) allotted by the Committee. The date a Stock Option is granted shall mean
the date selected by the Committee as of which the Committee allots a specific number of shares to a participant pursuant to the Plan. 
  
 Section 2.2. Stock Option Agreements. The grant of a Stock Option shall be evidenced by a written Award Agreement, executed by the Company and the
Optionee, stating the number of shares of Common Stock subject to the Stock Option evidenced thereby, and in such form as the Committee may from time to time determine. 
  
 Section 2.3. Stock Option Price. The option price per share of Common Stock deliverable upon the exercise of a Stock
Option shall be not less than 100% of the fair market value of a share of Common Stock on the date the Stock Option is granted. 
  
 Section 2.4. Term and Exercise. A Stock Option may be exercised during the Option Term and may be subject to such vesting schedule as the Committee
may provide in an Award Agreement. No Stock Option shall be exercisable after the expiration of its Option Term. 
  
  

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 Section 2.5. Manner of Payment. Each Award Agreement providing for a Stock Option shall set forth
the procedure governing the exercise of the Stock Option granted thereunder, and shall provide that, upon such exercise in respect of any shares of Common Stock subject thereto, the Optionee shall pay to the Company, in full, the option price for
such shares with cash. Unless otherwise provided in the Award Agreement, the Optionee may also pay to the Company, in full, the option price with Common Stock owned by the Optionee on the date of exercise or Common Stock acquired pursuant to such
exercise, valued at the fair market value of a share of Common Stock on the date the Stock Option is exercised, provided that the Optionee provides satisfactory evidence, in the opinion of the Secretary or any Assistant Secretary of the Company,
that the Optionee directly owns on the date of exercise shares of Common Stock sufficient to pay the option price, and that the Optionee has owned such shares for at least six months. 
  
 Section 2.6. Delivery of Certificates. As soon as practicable after exercise of the Stock Option and receipt of
payment, the Company shall deliver to the Optionee a certificate or certificates for such shares of Common Stock. The Optionee shall become a stockholder of the Company with respect to Common Stock represented by share certificates so issued and as
such shall be fully entitled to receive dividends, to vote and to exercise all other rights of a stockholder. 
  
 Section 2.7. Death, Retirement and Termination of Employment of Optionee. Unless otherwise provided in an Award Agreement or otherwise agreed to by
the Committee: 
  
 (a) Upon the death of the
Optionee, any Stock Option to the extent exercisable on the date of death may be exercised by the Optionee’s estate, or by a person who acquires the right to exercise such Stock Option by bequest or inheritance or by reason of the death of the
Optionee, provided that such exercise occurs within both (i) the remaining Option Term and (ii) one year after such death. The provisions of this Section shall apply notwithstanding that the Optionee’s employment may have terminated prior to
death, but only to the extent of any rights exercisable on the date of termination of the Optionee’s employment. 
  
 (b) Upon termination of the Optionee’s employment by reason of retirement or permanent disability (as each is determined by the
Committee), the Optionee may exercise any Stock Option to the extent exercisable on the date of termination of the Optionee’s employment, provided such option exercise occurs within both (i) the remaining Option Term and (ii) one year (in the
case of permanent disability) or three months (in the case of retirement) after such termination. 
  
 (c) In the event of the termination of the Optionee’s employment for cause (as determined by the Committee), all Stock Options shall
terminate immediately upon the termination of the Optionee’s employment. 
  
 (d) Upon termination of the Optionee’s employment by reason other than death, disability or cause (as each is determined by the Committee), the Optionee may exercise any Stock Option, to the extent exercisable on
the date of termination of the Optionee’s 
  

 5 

 employment, provided such option exercise occurs within both (i) the remaining Option Term and (ii) 30
days of the date of termination. 
  
 ARTICLE III. INCENTIVE STOCK
OPTIONS 
  
 Section 3.1. Award of Incentive Stock Options.
The Committee may, from time to time and subject to the provisions of the Plan and such other terms and conditions as the Committee may prescribe, grant to any participant in the Plan one or more “incentive stock options” (intended to
qualify as such under the provisions of Section 422 of the Code) (“Incentive Stock Options”) to purchase the number of shares of Common Stock allotted by the Committee. The date an Incentive Stock Option is granted shall mean the date
selected by the Committee as of which the Committee allots a specific number of shares to a participant pursuant to the Plan. Notwithstanding the foregoing, Incentive Stock Options shall not be granted to any owner of 10% or more of the total
combined voting power of all classes of stock of the Company or its subsidiaries, unless the Incentive Stock Options (i) have an exercise price of 110% of the fair market value of the Common Stock on the date of grant, and (ii) the Option Term may
not be longer than five years. 
  
 Section 3.2. Incentive Stock
Option Agreements. The grant of an Incentive Stock Option shall be evidenced by a written Award Agreement, executed by the Company and the Optionee, stating the number of shares of Common Stock subject to the Incentive Stock Option evidenced
thereby and in such form as the Committee may from time to time determine. 
  
 Section 3.3. Incentive Stock Option Price. The option price per share of Common Stock deliverable upon the exercise of an Incentive Stock Option shall be not less than 100% of the fair market value of a share
of Common Stock on the date the Incentive Stock Option is granted. 
  
 Section 3.4. Term and Exercise. Each Incentive Stock Option may be exercised during the Option Term and may be subject to such vesting schedule as the Committee may provide in an Award Agreement. No Incentive Stock Option shall be
exercisable after the expiration of its Option Term. 
  
 Section 3.5. Maximum Amount of Incentive Stock Option Grant. The aggregate fair market value (determined on the date the Incentive Stock Option is granted) of Common Stock with respect to which Incentive Stock Options first become
exercisable by an Optionee during any calendar year (under all plans of the Optionee’s employer corporation and its parent and subsidiary corporations) shall not exceed $100,000. 
  
 Section 3.6. Death of Optionee.  
  
 (a) Upon the death of the Optionee, any Incentive Stock Option to the extent exercisable on the date of
death may be exercised by the Optionee’s estate or by a person who acquires the right to exercise such Incentive Stock Option by bequest or inheritance or by reason of the death of the Optionee, provided that such exercise occurs within both
(i) the remaining Option Term and (ii) one year after the Optionee’s death. 
  
  

 6 

 (b) The provisions of this Section shall apply notwithstanding that the Optionee’s
employment may have terminated prior to death, but only to the extent of any Incentive Stock Options exercisable on the date of termination of the Optionee’s employment. 
  
 Section 3.7. Retirement or Disability. Unless otherwise provided in an Award Agreement or otherwise agreed to by the
Committee, upon the termination of the Optionee’s employment by reason of permanent disability or retirement (as each is determined by the Committee), the Optionee may exercise any Incentive Stock Option, to the extent exercisable on the date
of termination of the Optionee’s employment, provided such option exercise occurs within both (i) the remaining Option Term and (ii) one year (in the case of permanent disability) or three months (in the case of retirement) after such
termination. Notwithstanding the terms of an Award Agreement, the tax treatment available pursuant to Section 422 of the Code upon the exercise of an Incentive Stock Option shall not be available to an Optionee who exercises any Incentive Stock
Options more than (i) one year after the date of termination of employment due to permanent disability or (ii) three months after the date of termination of employment due to retirement. 
  
 Section 3.8. Termination for Other Reasons. Except as provided in Sections 3.6 and 3.7 or except as otherwise
determined by the Committee in an Award Agreement, all Incentive Stock Options shall terminate immediately upon the termination of the Optionee’s employment. 
  
 Section 3.9. Applicability of Stock Options Section. Sections 2.5, Manner of Payment, and 2.6, Delivery of Share
Certificates, applicable to Stock Options, shall apply equally to Incentive Stock Options. Said Sections are incorporated by reference in this Article III, as though fully set forth herein. 
  
 ARTICLE IV. PERFORMANCE SHARE AWARDS 
  
 Section 4.1. Awards Granted by Committee. Coincident with or following
designation for participation in the Plan, a participant may be granted Performance Shares. Certificates representing Performance Shares shall be issued to the participant effective as of the date of the Award. A holder of Performance Shares shall
have such voting, dividend and other rights of stockholders of the Company as shall be provided in the Award Agreement. 
  
 Section 4.2. Amount of Award. The Committee shall establish a maximum amount of a participant’s Award, which amount shall be denominated in
shares of Common Stock. 
  
 Section 4.3. Communication of
Award. Written notice of the maximum amount of a participant’s Award and the Performance Cycle determined by the Committee, if any, shall be given to a participant as soon as practicable after approval of the Award by the Committee. The
grant of Performance Shares shall be evidenced by a written Award Agreement, executed by the Company and the recipient of Performance Shares, in such form as the Committee may from time to time determine, providing for the terms of such grant.

  
  

 7 

 Section 4.4. Amount of Award Payable. Performance Shares may be granted based upon past
performance or future performance. In addition to any other restrictions the Committee may place on Performance Shares, the Committee may, in its discretion, provide that Performance Shares shall vest upon the satisfaction of performance targets to
be achieved during an applicable Performance Cycle. Failure to satisfy the performance targets may result, in the Committee’s discretion as set forth in an Award Agreement, in the forfeiture of the Performance Shares by the participant and the
return of such shares to the Company or have any other consequence as determined by the Committee. Performance targets established by the Committee may relate to corporate, group, unit or individual performance and may be established in terms of
market price of Common Stock, cash flow or cash flow per share, reserve value or reserve value per share, net asset value or net asset value per share, earnings, or such other measures or standards determined by the Committee. Multiple performance
targets may be used and the components of multiple performance targets may be given the same or different weight in determining the amount of an Award earned, and may relate to absolute performance or relative performance measured against other
groups, units, individuals or entities. Certificates representing Performance Shares shall bear a legend restricting their transfer and requiring the forfeiture of the shares to the Company if any performance targets or other conditions to vesting
are not met. The Committee may also require a participant to deliver certificates representing unvested Performance Shares to the Company in escrow until the Performance Shares vest. Notwithstanding the discretion allocated to the Committee under
this Section 4.4, any award of Performance Shares to the Chief Executive Officer or any other named executive officer, as listed in the prior year’s proxy statement, will comply with the requirements for qualified performance-based compensation
under Section 162(m) of the Code and the Treasury regulations promulgated thereunder. 
  
 Section 4.5. Adjustments. At any time prior to vesting of a Performance Share, the Committee may adjust previously established performance targets or other terms and conditions to reflect events such as changes
in laws, regulations or accounting practice, or mergers, acquisitions, divestitures or any other event determined by the Committee. 
  
 Section 4.6. Payments of Awards. Following the conclusion of each Performance Cycle, the Committee shall determine the extent to which performance
targets have been attained and the satisfaction of any other terms and conditions with respect to vesting an Award relating to such Performance Cycle. Subject to the provisions of Section 6.3, to the extent the Committee determines Performance
Shares have vested, the Company shall issue to the participant certificates representing vested shares free of any legend regarding performance targets or forfeiture in exchange for such participant’s legended certificates. Upon election of the
participant on the date of vesting, and upon approval by the Committee, the Company may purchase some or all of the participant’s vested Performance Shares at the fair market value on the date the Committee determines that the Performance
Shares have vested. Within seven business days after receipt of the participant’s election, the Committee will inform the participant of its decision whether to approve the purchase of such Performance Shares. 
  
 Section 4.7. Termination of Employment. Unless the Award Agreement
provides for vesting upon death, disability, retirement or other termination of employment, upon any such termination of employment of a participant prior to vesting of Performance Shares, all outstanding and unvested 
  

 8 

 Awards of Performance Shares to such participant shall be canceled, shall not vest and shall be returned to the Company.

  
 ARTICLE V. AUTOMATIC GRANTS 
  
 Section 5.1. Grant. Each director who is not an employee of the
Company, its subsidiaries, affiliates and managers (“Non-Employee Director”) shall be granted, on the first business day following the first Board of Directors meeting for each year, 2,500 performance shares to be vested immediately, and
each Non-Employee Director that is an advisory director shall be granted 1,250 performance shares to be vested immediately. Automatic grants of Stock Options to Non-Employee Directors will cease as of August 20, 2002. 
  
 Section 5.2. Applicable Provisions. The provisions of Section 2.7(a)
relating to the death of an Optionee shall apply to options granted to Non-Employee Directors under Section 5.1, and the Committee may not agree to the contrary in an Award Agreement or otherwise. The provisions of Subsections 2.7(b), (c) and (d)
relating to disability and other termination of employment shall not apply to options granted under Section 5.1. 
  
 Section 5.3. Continuation as Director. In the event a Non-Employee Director stands for re-election as a director of the Company but fails to be
re-elected, such failure shall not affect the Stock Options granted under this Article V. In all other events where a Non-Employee Director does not continue as a director of the Company (except for death), the Non-Employee Director may thereafter
exercise only those Stock Options that were exercisable upon the date that he or she ceased to be a director and only during the period occurring within two years after such date (but not after the expiration of the Option Term). 
  
 Section 5.4. Effect of Prior Plans. Prior stock incentive plans of the
Company have provided for similar automatic grants to the Non-Employee Directors, but it is the intent of the Company that duplicate automatic grants shall not be made. 
  
 ARTICLE VI. MISCELLANEOUS 
  
 Section 6.1. General Restriction. Each Award under the Plan shall be subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or Federal law, or (ii) the consent or approval of any government regulatory body, or (iii)
an agreement by the grantee of an Award with respect to the disposition of shares of Common Stock, is necessary or desirable as a condition of, or in connection with the granting of such Award or the issue or purchase of shares of Common Stock
thereunder, such Award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee.

  
 Section 6.2. Non-Assignability. Except as permitted by
Section 1.7 hereof, no Award under the Plan shall be assignable or transferable by the recipient thereof, except by will or by the laws of 
  

 9 

 descent and distribution, and during the life of the recipient, such Award shall be exercisable only by such person or by
such person’s guardian or legal representative. 
  
 Section 6.3. Withholding Taxes. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the grantee to remit to the Company in cash amounts
sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificates for such shares. Alternatively, the Company may allow the participant to submit shares of Common Stock to satisfy the
withholding requirement or may issue, transfer or vest only such number of shares of Common Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred. 
  
 Section 6.4. Right to Terminate Employment. Nothing in the Plan or in any Agreement entered into pursuant to the Plan shall confer upon any participant the right to continue in the employment of the Company or affect any right which
the Company may have to terminate the employment of such participant. 
  
 Section 6.5. Non-Uniform Determinations. The Committee’s determinations under the Plan (including, without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

  
 Section 6.6. Rights as a Stockholder. The recipient of
any Award under the Plan shall have no rights as a stockholder with respect thereto unless and until certificates for shares of Common Stock are issued to him (except as to Performance Shares as provided under Section 4.1). 
  
 Section 6.7. Definitions. In this Plan the following definitions shall
apply: 
  
 (a) “Award” shall mean a
grant of Stock Options, Incentive Stock Options or Performance Shares under the Plan. 
  
 (b) “Change in Control” means any one of the following: 
  
 (i) “Continuing Directors” no longer constitute a majority of the Board of Directors of the
Company; the term “Continuing Director” means any individual who is a member of the Board of Directors of the Company on the date hereof or was nominated for election as a director by, or whose nomination as a director was approved by, the
Board of Directors of the Company with the affirmative vote of a majority of the Continuing Directors; 
  
 (ii) any person or group of persons (as defined in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) together with his or its affiliates, becomes the beneficial owner, directly or indirectly, of 25% or more of the voting power of the Company’s then outstanding securities 

  

 10 

 
entitled generally to vote for the election of the Company’s directors; 
  
 (iii) the merger or consolidation to which the Company is a party if the shareholders of the Company
immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the combined voting power to vote for the election of directors of the surviving
corporation or other entity following the effective date of such merger or consolidation; or 
  
 (iv) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company. 
  
 (c) “Code” shall mean the Internal Revenue Code of
1986, as amended. 
  
 (d) “Common
Stock” shall mean shares of stock which may be issued under the Plan that are authorized and unissued or treasury shares of common stock, par value of one cent, of the Company. 
  
  
 (e) “Fair market
value” as of any date and in respect of any share of Common Stock means the average of the high and low sales price on such date or on the next business day, if such day is not a business day, or if no trading occurred on such day, then on the
first day preceding such day on which trading occurred, of a share of Common Stock traded on the New York Stock Exchange or any other public securities market selected by the Committee, provided that, if shares of Common Stock shall not have been
traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the fair market value of shares of Common Stock shall be as
determined by the Committee in such other manner as it may deem appropriate. In no event shall the fair market value of any share of Common Stock be less than its par value. 
  
 (f) “Option” means a Stock Option or Incentive Stock Option. 
  
 (g) “Optionee” shall mean the holder of a Stock
Option or an Incentive Stock Option. 
  
 (h)
“Option price” means the purchase price per share of Common Stock deliverable upon the exercise of a Stock Option or Incentive Stock Option. 
  
 (i) “Option Term” shall mean a period of ten years from the date of grant thereof in which an Option may be exercised, unless a
shorter period is provided by the Committee or by another Section of this Plan. 
  
 (j) “Outside Director” means a director of the Company who (i) is not a current employee of the Company; (ii) is not a former
employee of the Company who receives compensation from the Company for prior services (other than benefits under a tax-qualified retirement plan); (iii) has not been an officer of the Company; (iv) does not receive 
  

 11 

 remuneration from the Company, either directly or indirectly, in any capacity other than as a director;
and (v) does not possess an interest in a transaction, or is engaged in a business relationship, that would require disclosure under Item 404(a) or (b) of Regulation S-K promulgated by the Securities and Exchange Commission. 
  
 (k) “Performance Cycle” means the period of time,
if any, as specified by the Committee over which Performance Shares are vested. 
  
 Section 6.8. Leaves of Absence. The Committee shall be entitled to make such rules, regulations and determinations as it deems appropriate under the Plan in respect of any leave of absence taken by the
recipient of any Award. Without limiting the generality of the foregoing, the Committee shall be entitled to determine (i) whether or not any such leave of absence shall constitute a termination of employment within the meaning of the Plan and (ii)
the impact, if any, of any such leave of absence on Awards under the Plan theretofore made to any recipient who takes such leave of absence. 
  
 Section 6.9. Newly Eligible Employees. The Committee shall be entitled to make such rules, regulations, determinations and Awards as it deems
appropriate in respect of any employee who becomes eligible to participate in the Plan or any portion thereof after the commencement of an Award or incentive period. 
  
 Section 6.10. Adjustments. 
  

(a) In the event of any change in the outstanding Common Stock by reason of a stock dividend or distribution, recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like, the Committee may appropriately adjust the number of shares of Common Stock which may be issued under the Plan as Options or Performance Shares and the limitations on the maximum
number that may be issued to any individual during any one year or the life of the Plan, the number of shares of Common Stock subject to Options or Performance Shares theretofore granted under the Plan, and any and all other matters deemed
appropriate by the Committee. 
  
 (b) In the
event of a subdivision or consolidation of shares or other increase or reduction in the number of shares of the Common Stock outstanding without receiving compensation therefor in money, services or property, then (i) in the event of an increase in
the number of such shares outstanding, the number of shares of Common Stock purchasable pursuant to a Stock Option granted automatically pursuant to Section 5.1 after the date of increase, and the number of Performance Shares granted automatically
pursuant to Section 5.1 after the date of such increase, shall be proportionately increased; and (ii) in the event of a decrease in the number of such shares outstanding, the number of shares of Common Stock purchasable pursuant to a Stock Option
granted automatically pursuant to Section 5.1 after the date of decrease, and the number of Performance Shares granted automatically pursuant to Section 5.1 after the date of such decrease, shall be proportionately decreased. 
  
 (c) In the event of the payment or distribution to holders
of Common Stock of an extraordinary cash dividend or a dividend or distribution consisting of any assets of the 
  

 12 

 Company other than cash, the Committee, at its discretion as it deems appropriate, may adjust the number
of shares of Common Stock subject to any outstanding Options previously granted under the Plan (provided that the number of shares of Common Stock subject to any Option shall be a whole number), adjust the exercise price per share of such
outstanding Options, and adjust such other provisions of any outstanding Options previously granted under the Plan as the Committee shall determine to be appropriate. 
  
 (d) Any such adjustment in outstanding Options will be made with a corresponding adjustment in the exercise
price per share so that the total exercise price applicable to such Options will not change. 
  
 Section 6.11. Changes in the Company’s Capital Structure.  
  
 (a) The existence of outstanding Options or Performance Shares shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalization, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. 
  
 (b) After a merger of one or more corporations into the Company, or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, (i) each holder of an
outstanding Option shall, at no additional cost, be entitled upon exercise of such Option to receive (subject to any required action by stockholders) in lieu of the number of shares as to which such Option shall then be so exercisable, the number
and class of shares of stock, other securities or consideration to which such holder would have been entitled to receive pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, such
holder had been the holder of record of a number of shares of the Company equal to the number of shares as to which such Option had been exercisable and (ii) unless otherwise provided by the Committee, the number of shares of Common Stock, other
securities or consideration to be received with respect to unvested Performance Shares shall continue to be subject to the Award Agreement, including any vesting provisions thereof. 
  
 (c) Except as herein provided, the issuance by the Company of Common Stock or any other shares of capital
stock or securities convertible into shares of capital stock, for cash, property, services performed or other consideration, shall not adversely affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares
of Common Stock then subject to outstanding Options. 
  
 Section 6.12. Change in Control. If a Change in Control occurs while unvested Performance Shares or unexercised Options remain outstanding, the Committee shall waive any limitations set forth in this Plan or any Award Agreement with
respect to such Option or Performance Share such 

  

 13 

 
that such Option shall become fully exercisable and such Performance Share shall vest upon a Change in Control. 
  
 Section 6.13. Amendment of the Plan.  
  
 (a) The Committee may, without further action by the
stockholders and without receiving further consideration from the participants, amend this Plan or condition or modify Awards under this Plan in response to changes in securities or other laws or rules, regulations or regulatory interpretations
thereof applicable to this Plan or to comply with stock exchange rules or requirements. 
  
 (b) The Committee may at any time and from time to time terminate or modify or amend the Plan in any respect, except that without
stockholder approval the Committee may not (i) increase the maximum number of shares of Common Stock which may be issued under the Plan or to any individual (other than increases pursuant to Sections 6.10 and 6.11), or (ii) change the employees or
class of employees eligible to participate in the Plan. The termination or any modification or amendment of the Plan, except as provided in subsection (a), shall not, without the consent of a participant, adversely affect his or her rights under an
Award previously granted to him or her. 
  
 The undersigned hereby
certifies that this is a true and correct copy of the XTO Energy Inc. 1998 Stock Incentive Plan, as adopted by the Company’s Board of Directors on April 13, 1998, and the Company’s stockholders on May 19, 1998, as subsequently amended.

  

			
	 
		
	By:	 	/S/ VIRGINIA ANDERSON
	 	 	

	 	 	 Virginia Anderson, Secretary

  

 14

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