Document:

Exhibit

Exhibit 10.38

Anadarko Petroleum Corporation
Deferred Compensation Plan
Amended and Restated effective as of December 31, 2019

Table of Contents
Page
ARTICLE 1 - DEFINITIONS    1
1.1    “Account”    1
1.2    “Administrator”    1
1.3    “Annual Retainer Fees”    1
1.4    “Base Pay”    1
1.5    “Base Pay Deferral Election Period”    2
1.6    “Beneficiary”    2
1.7    “Board”    2
1.8    “Bonus”    2
1.9    “Change of Control”    2
1.10    “Code”    4
1.11    “Company”    4
1.12    “Compensation Committee”    4
1.13    “Contingent Beneficiary”    4
1.14    “Director”    4
1.15    “Director Compensation”    4
1.16    “Director Compensation Deferral Election Period”    4
1.17    “Disabled” or “Disability”    4
1.18    “Effective Date”    4
1.19    “Eligible Employee”    5
1.20    “ERISA”    5
1.21    “Key Employee”    5
1.22    “Meeting Fees”    5
1.23    “Participant”    5
1.24    “Plan”    5
1.25    “Plan Year”    5
1.26    “Retirement”    6
1.27    “Section 16 Officer”    6
1.28    “Separation from Service”    6
1.29    “Unforeseeable Emergency”    6
1.30    “Valuation Date”    6

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ARTICLE 2 - PARTICIPATION    6
2.1    Participation    6
2.2    Cessation of Active Participation    6
ARTICLE 3 - DEFERRAL ELECTIONS    7
3.1    Deferral Agreement    7
3.2    Election to Defer Base Pay    7
3.3    Election to Defer Bonus    7
3.4    Election to Defer Director Compensation    8
3.5    Timing of Election to Defer    8
3.6    Election of Payment Schedule and Form of Payment    8
ARTICLE 4 - PARTICIPANT ACCOUNT    11
4.1    Individual Accounts    11
ARTICLE 5 - INVESTMENT OF CONTRIBUTIONS    11
5.1    Investment Options    11
5.2    Adjustment of Accounts    11
5.3    RESERVED    12
ARTICLE 6 - RIGHT TO BENEFITS    12
6.1    Vesting    12
6.2    Death    12
6.3    Disability    13
ARTICLE 7 - DISTRIBUTION OF BENEFITS    13
7.1    Amount of Benefits    13
7.2    Method and Timing of Distributions    13
7.3    Unforeseeable Emergency    13
7.4    Cashouts of Minimal Interests    14
7.5    Distribution to a Key Employee    14
ARTICLE 8 - AMENDMENT AND TERMINATION    14
8.1    Amendment by Company    14
8.2    Retroactive Amendments    15
8.3    Special Plan and Deferral Election Amendments    15
8.4    Plan Termination    15
8.5    Distribution Upon Termination of the Plan    16
ARTICLE 9 - THE TRUST    16

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9.1    Establishment of Trust    16
9.2    Grantor Trust    16
9.3    Investment of Trust Funds    16
9.4    Participants’ Rights under a Trust    17
ARTICLE 10 - MISCELLANEOUS    17
10.1    Unsecured General Creditor of the Company    17
10.2    Limitation of Rights    17
10.3    The Company’s Liability    17
10.4    Satisfaction of Benefit Obligation    17
10.5    Spend-thrift Provision    18
10.6    Incapacity of Participant or Beneficiary    18
10.7    Waiver    19
10.8    Notices    19
10.9    Tax Withholding    19
10.10    Governing Law    20
10.11    Intention to Comply with Code Section 409A    20
ARTICLE 11 - PLAN ADMINISTRATION    20
11.1    Powers and Responsibilities of the Administrator    20
11.2    Interpretation of the Plan    21
11.3    Claims and Review Procedures    21
11.4    Plan Administrative Costs    21

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PURPOSE
The Anadarko Petroleum Corporation Deferred Compensation Plan (the “Plan”) was originally established effective as of January 1, 2005, amended and restated effective as of January 1, 2012, and is hereby amended and restated effective as of December 31, 2019.  The purpose of the Plan is to permit eligible employees and non-employee directors to defer receipt of certain compensation into a subsequent tax year which would otherwise be payable to them in the then-current tax year.
The Plan is intended to be a “plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and shall be implemented and administered in a manner consistent therewith.  The Plan is also intended to (i) be exempt from the participation and vesting, funding, and fiduciary responsibility requirements of Title I of ERISA and (ii) qualify for simplified reporting under the U.S. Department of Labor Regulation Section 2520.104-23, as may be amended from time to time.
Effective as of December 31, 2019, the plan is closed to additional deferrals.
ARTICLE 1 - DEFINITIONS
Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the context clearly indicates otherwise.  Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context:
		
	1.1
	“Account” means an account established by the Administrator for the purpose of recording amounts credited on behalf of each Participant under the Plan, and any income, expenses, gains, losses or distributions included thereon.  The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to each Participant pursuant to the Plan.

		
	1.2
	“Administrator” means the Vice President, Human Resources, of Occidental Petroleum Corporation and delegates operating under the authority of the Vice President, Human Resources, including authorized third-party service providers, except that for all matters (including, without limitation, interpretation of the Plan) directly relating to participation, claims or benefits associated with individuals who are then Directors or Section 16 Officers, “Administrator” shall mean the Executive Compensation Committee of the Board of Directors of Occidental Petroleum Corporation, effective as of August 8, 2019.

		
	1.3
	“Annual Retainer Fees” means the annual fees (other than Meeting Fees) paid to a Director by the Company for service on the Board or committee(s) of the Board, including the Board retainer, lead director retainer, committee chair and member retainers and any other forms of retainer paid to a Director for service on the Board.

		
	1.4
	“Base Pay” means base compensation per payroll period paid by the Company to an Eligible Employee (including amounts which the Eligible Employee could have received in cash had he not elected to contribute to an employee benefit plan maintained by the Company), 

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excluding overtime pay, bonuses, employee benefits, added premiums, differentials, components of foreign service assignments, and any other form of incentive compensation.
		
	1.5
	“Base Pay Deferral Election Period” means, with respect to each Plan Year, a period established by the Administrator that ends before the commencement of such Plan Year. For example, with respect to the Plan Year that begins on January 1, 2015, the Administrator may establish a Base Pay Deferral Election Period of any duration during the preceding Plan Year provided such period ends no later than December 31, 2014. If the Administrator takes no action to establish a Base Pay Deferral Election Period with respect to a particular Plan Year, then the Base Pay Deferral Election Period for such Plan Year shall begin on December 1 and end on December 31 of the preceding Plan Year.

		
	1.6
	 “Beneficiary” means the persons, trusts, estates or other entities designated under Section 6.2 to receive benefits under the Plan upon the death of a Participant.  “Contingent Beneficiary” means the persons, trusts, estates or other entities designated under Section 6.2 to receive benefits under the Plan upon the death of a Participant and in the event that the designated Beneficiary predeceases a Participant.

		
	1.7
	“Board” means the Board of Directors of Anadarko Petroleum Corporation.

		
	1.8
	“Bonus” means the bonus otherwise payable currently to a Participant for the Plan Year under the Anadarko Petroleum Corporation 2012 Omnibus Incentive Compensation Plan, or any predecessor or successor plans thereto, or any other incentive or bonus arrangement implemented after the Effective Date by the Company if the Company designates payments under such program or arrangement as being Bonuses which may be deferred pursuant to this Plan.

		
	1.9
	“Change of Control” means that a Change of Control of the Company shall be deemed to have occurred on the date as of the first day any one or more of the following conditions shall have been satisfied:

		
	(a)
	The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition pursuant to a transaction which complies with clauses (i), (ii) or (iii) of Section 1.9(c); or

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	(b)
	Individuals who, as of January 1, 2010, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to January 1, 2010 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

		
	(c)
	Consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, twenty percent (20%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

		
	(d)
	Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.  Notwithstanding the foregoing provisions of this Section 1.9 or any provision of this Plan to the contrary, to the extent that any payment or acceleration of payment of any amount under the Plan is subject to, and not exempt under, Code Section 409A, then the determination of whether a Change of Control has occurred hereunder as affecting the payment, or timing of payment, of such 

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amount shall be made within the meaning of such term as set forth in Code Section 409A to the extent inconsistent with the foregoing provisions of this definition, as determined in the discretion of the Administrator.
		
	1.10
	“Code” means the Internal Revenue Code of 1986, as amended from time to time.  All references herein to any Section of the Code shall include any successor provision thereto and the Treasury Regulations and other authority issued under such Section by the appropriate governmental authority.

		
	1.11
	“Company” means Anadarko Petroleum Corporation and its wholly owned subsidiaries, unless the context requires otherwise (such as, for example, in Section 1.9 where the term “Company” shall refer solely to Anadarko Petroleum Corporation).

		
	1.12
	“Compensation Committee” means the Compensation and Benefits Committee of the Board, the composition of which may change from time to time.

		
	1.13
	“Contingent Beneficiary” shall have the definition set forth in Section 1.6.

		
	1.14
	“Director” means a non-employee member of the Board.

		
	1.15
	“Director Compensation” means Annual Retainer Fees and Meeting Fees.

		
	1.16
	“Director Compensation Deferral Election Period” means, with respect to each Plan Year, a period established by the Administrator that ends before the commencement of such Plan Year. For example, with respect to the Plan Year that begins on January 1, 2015, the Administrator may establish a Director Compensation Deferral Election Period of any duration during the preceding Plan Year provided such period ends no later than December 31, 2014. If the Administrator takes no action to establish a Director Compensation Deferral Election Period with respect to a particular Plan Year, then the Director Compensation Deferral Election Period for such Plan Year shall begin on December 1 and end on December 31 of the preceding Plan Year.

		
	1.17
	 “Disabled” or “Disability” means a Participant shall be deemed to have become permanently disabled if the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under a disability plan or an accident and health plan maintained by the Company, if applicable.

		
	1.18
	“Effective Date” means January 1, 2012, the effective date of this amendment and restatement of the Plan.

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	1.19
	“Eligible Employee” means an employee of the Company who is paid on the Company’s U.S. payroll and (i) is “a member of a select group of management or highly compensated employees” (within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA) and (ii) is designated by the Company in its complete discretion as being an Eligible Employee for purposes of the Plan.  An employee who does not satisfy these criteria is an “Ineligible Employee.”

		
	1.20
	“ERISA” means the Employee Retirement Income Security Act of 1974, as may be amended from time to time.  All references herein to any Section of ERISA shall include any successor provision thereto and the regulations and other authority issued under such Section by the appropriate governmental authority.

		
	1.21
	“Key Employee” means a Participant who is a “specified employee” as defined in Code Section 409A.  For purposes of this definition, a “specified employee” under Code Section 409A is an employee who, as of the date of his Separation from Service, is a “key employee” (within the meaning of Code Section 416(i) without regard to paragraph 5 thereof relating to beneficiaries) of the Company or any entity which is considered to be a single employer with the Company under Code Section 414(b) or 414(c) (the “Controlled Group”).  A Participant shall be a Key Employee if the Participant is (i) an officer of the Company having annual compensation greater than $165,000 for 2012 (and as indexed thereafter under Code Section 416(i)), (ii) a 5-percent (5%) owner of the Company, or (iii) a 1-percent (1%) owner of the Company having annual compensation of more than $150,000, at any time during the twelve (12) month period ending on December 31, but only if a Controlled Group member has any stock that is publicly traded on an established securities market or otherwise. A Participant will be considered to be a Key Employee for the period April 1 through March 31 following such December 31 determination.  The Company may apply an alternative method to identify Key Employees in accordance with Code Section 409A, provided that the alternative method (i) is reasonably designed to include all Key Employees, (ii) is an objectively determinable standard, and (iii) results in either all employees or no more than 200 employees being identified as Key Employees as of any date.

		
	1.22
	“Meeting Fees” means fees paid to a Director for attendance at meetings of the Board or meetings of the Board’s committees.

		
	1.23
	“Participant” means any Eligible Employee or any Director who becomes a participant in the Plan pursuant to Article 2.  An individual who becomes a Participant as provided in the preceding sentence shall remain a Participant until he no longer has an undistributed Account balance under the Plan.

		
	1.24
	“Plan” means the Anadarko Petroleum Corporation Deferred Compensation Plan, as amended and restated as set forth herein, and as it may be further amended from time to time.

		
	1.25
	“Plan Year” means the twelve (12) consecutive month period beginning January 1st and ending December 31st of any given year.

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	1.26
	“Retirement” means, in the case of an Eligible Employee who is eligible to retire under the Anadarko Retirement Plan (the “Anadarko Plan”), his Separation from Service; provided, however, that the Eligible Employee has, as of such date, both attained age fifty-five (55) and been credited with at least five (5) years of Credited Service as that term is defined under the Anadarko Plan.  Retirement means, in the case of an Eligible Employee who is eligible to retire under the Kerr-McGee Corporation Retirement Plan (the “KMG Plan”), his Separation from Service; provided, however, that the Eligible Employee has, as of such date, both attained age fifty-two (52) and been credited with at least ten (10) years of Credited Service as that term is defined under the KMG Plan.  Retirement means, in the case of a Director, Separation from Service from the Board after the first to occur of: (a) the Director having attained age sixty-five (65), (b) the Director having completed ten (10) years of service as a Director, or (c) the Director having attained both age fifty-five (55) and completed five (5) years of service as a Director.  A Director’s total years of service as a Director as of any date shall be determined by dividing his total completed full months of service as a Director by twelve (12).

		
	1.27
	“Section 16 Officer” means an Eligible Employee who is subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

		
	1.28
	“Separation from Service” means a “separation from service” of an Eligible Employee or Director within the meaning of Code Section 409A.

		
	1.29
	“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or a dependent (as defined in Code Section 152(a)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant.

		
	1.30
	“Valuation Date” means each business day of the Plan Year and such other date(s) as designated by the Company.

ARTICLE 2 - PARTICIPATION
		
	2.1
	Participation.  Each Eligible Employee and Director shall become a Participant in the Plan by executing a deferral agreement in accordance with the provisions of Article 3.

		
	2.2
	Cessation of Active Participation.  In the event that (i) the service on the Board of a Participant who is a Director terminates, or (ii) a Participant who is an Eligible Employee incurs a Separation from Service for any reason, such Director or Eligible Employee, as applicable, may not make deferral elections under Article 3 and any deferral election presently in effect for such Director or Eligible Employee shall terminate immediately; however, any compensation subject to a valid deferral election under the Plan and earned with respect to any period preceding the effective time of such cessation of the right to defer compensation hereunder shall be deferred pursuant to such election, even if such crediting of such amount to his Account occurs after such effective time. In the event that a Participant 

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becomes an Ineligible Employee for any reason other than Separation from Service (including, without limitation, by reason of the Company, in its sole discretion, designating a Participant as an Ineligible Employee), such Participant may not make deferral elections under Article 3 immediately after the Participant becomes an Ineligible Employee; however, any irrevocable deferral election made prior to the time that the Participant became an Ineligible Employee shall remain in effect, unless voided as stated herein in connection with a subsequent Separation from Service. At the discretion of the Company or the Administrator, an individual who has become a Participant in the Plan shall cease to be entitled to defer compensation hereunder at the time and in such manner as determined by the Company or the Administrator to be necessary or appropriate to comply with applicable law or regulations or to coordinate with other benefit plans of the Company; provided, however, that such cessation is permitted and consistent with the requirements of Code Section 409A.  Upon any termination of a Participant’s right to defer compensation hereunder, the provisions of Section 7.2 shall continue to apply to such Participant’s Account.
ARTICLE 3 - DEFERRAL ELECTIONS
		
	3.1
	Deferral Agreement.  Each Eligible Employee and Director may elect to defer compensation amounts otherwise payable to him currently for a Plan Year by executing a deferral agreement in accordance with (a) rules and procedures established by the Administrator, (b) the provisions of this Article 3, and (c) Code Section 409A.  The deferral agreement may separately specify for each discrete type of compensation (e.g., Base Pay, Bonus, Director Compensation, or individual components of each) the whole number percentage multiple (in one percent (1%) increments and subject to the percentage limitations otherwise described herein) that the Participant elects to defer, the payment schedule and form of payment of the deferred amount.

A new deferral agreement must be executed in a timely manner (as set forth in this Article 3) for each Plan Year during which the Eligible Employee or Director elects to defer compensation.  An Eligible Employee or Director who does not execute a deferral agreement in a timely manner shall be deemed to have elected zero deferrals for such Plan Year.
A deferral agreement may be changed or revoked at any time during the respective election periods specified in Section 3.5. A deferral agreement becomes irrevocable at the close of the respective election period. An irrevocable deferral election may be subsequently modified only as permitted in Section 7.2.
		
	3.2
	Election to Defer Base Pay.  An Eligible Employee may elect to defer Base Pay for a Plan Year in an amount not exceeding seventy-five percent (75%) of Base Pay. A Participant who is first designated as an Eligible Employee after the first day of the calendar month preceding the calendar month in which a Base Pay Deferral Election Period commences with respect to a Plan Year may not elect to defer his Base Pay for the Plan Year to which such period relates but may elect to defer his Base Pay for subsequent Plan Years.

		
	3.3
	Election to Defer Bonus.  An Eligible Employee may elect to defer up to one hundred percent (100%) of his Bonus for a Plan Year, subject to any limitation that may be established 

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by the Administrator and specified on the deferral agreement.  A Participant who is first designated as an Eligible Employee after January 1st of a Plan Year may not elect to defer his Bonus for that Plan Year but may elect to defer his Bonus for subsequent Plan Years.
		
	3.4
	Election to Defer Director Compensation.  A Director may elect to defer up to one hundred (100%) of his Director Compensation for a Plan Year. An individual who first becomes a Director on or after the first day of a Director Compensation Deferral Election Period with respect to a Plan Year may not elect to defer his Director Compensation for the Plan Year to which such period relates but may elect to defer his Director Compensation for subsequent Plan Years.

		
	3.5
	Timing of Election to Defer.  Each Eligible Employee who desires (and who is eligible pursuant to Section 3.2) to defer Base Pay otherwise payable during a Plan Year must execute a deferral agreement in accordance with the procedures established by the Administrator and within the Base Pay Deferral Election Period with respect to such Plan Year.  A deferral agreement that is timely and properly executed in accordance with the preceding sentence shall be irrevocable as of the last day of the applicable Base Pay Deferral Election Period. Each Eligible Employee who is eligible to defer a Bonus which may be earned with respect to services performed during a Plan Year pursuant to Section 3.3 and who desires to defer such Bonus must execute a deferral agreement in accordance with the rules and procedures established by the Administrator (but not later than December 31st immediately preceding such Plan Year except that if the plan or arrangement providing for such Bonus is “performance-based compensation based on services performed over a period of at least 12 months” (as described in Code Section 409A(a)(4)(B)(iii)), then such deferral election must be executed no later than the Bonus Deferral Deadline Date (as hereinafter defined) (provided that (a) the Eligible Employee performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date such election is made and (b) such compensation has not become readily ascertainable as of the date of such election), and such election will be irrevocable as of the earlier of the Bonus Deferral Deadline Date or the date upon which such compensation has become readily ascertainable). For purposes of the preceding sentence, the term “Bonus Deferral Deadline Date” means, with respect to a particular Bonus, the date six (6) months before the end of the performance period over which the Bonus is earned, or such earlier date as the Administrator may require in its sole discretion.

A Director who desires (and who is eligible pursuant to Section 3.4) to defer his Director Compensation otherwise payable during a Plan Year must execute a deferral agreement in accordance with the procedures established by the Administrator and within the Director Compensation Deferral Election Period with respect to such Plan Year. A deferral agreement that is timely and properly executed in accordance with the preceding sentence shall be irrevocable as of the last day of the applicable Director Compensation Deferral Election Period.
		
	3.6
	Election of Payment Schedule and Form of Payment.  At the time an Eligible Employee or Director completes a deferral agreement provided by the Administrator, the Eligible 

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Employee or Director may separately elect for each type of compensation being deferred (i.e., Base Pay, Bonus, Director Compensation, or individual components of each) the following items: (i) the date of distribution or commencement of distribution of each deferred amount, (ii) the form of payment in which each deferred amount will be distributed (e.g., lump sum or annual installments), and (iii) if applicable and as may be provided by the Administrator, whether the amount distributed will be in cash or a combination of cash. Subject to the provisions of Article 7, an Eligible Employee or Director may elect to receive distribution of his deferred amount in a single lump sum or annual installment distributions over a period certain not exceeding fifteen (15) years.  If the Participant should elect installment payments over a designated time period, each installment payment shall be considered a separate payment for purposes of Code Section 409A.
The portion of the Participant’s Account that has been earned and vested as of January 1, 2010 (as well as any subsequent earnings, expenses, gains and losses attributed to such balance) (“Pre-2010 Account”) shall be distributed as follows:
		
	(a)
	If the Participant’s Separation from Service occurs before he becomes eligible for Retirement, notwithstanding any other election, his distribution shall be made as follows:

		
	(1)
	If the Participant initially elected to be paid upon his Separation from Service following Retirement, his distribution shall be made in a lump-sum payment no later than ninety (90) days after the date of his Separation from Service; or

		
	(2)
	If the Participant initially elected to be paid upon an identified and specific date that is at least three (3) years after the date the deferral agreement was effective, then if payment has not already commenced, his distribution shall be made or shall commence on such identified and specific date; or

		
	(3)
	If the Participant initially elected to be paid upon the earlier of (A) Separation from Service following Retirement or (B) an identified and specific date that is at least three (3) years after the date the deferral agreement was effective, then if payment has not already been made or commenced, his distribution shall be made in a lump sum payment no later than ninety (90) days after the date of his Separation from Service.

		
	(b)
	If the Participant’s Separation from Service occurs after he becomes eligible for Retirement, then the distribution or commencement of distribution shall be one of the following options as previously elected by the Participant:

		
	(1)
	Separation from Service; or

		
	(2)
	an identified and specific date that is at least three (3) years after the date the deferral agreement was executed; or

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	(3)
	the earlier of (A) Separation from Service or (B) an identified and specific date that is at least three (3) years after the date the deferral agreement was executed.  This option (3) provides that the date of distribution specified in the deferral agreement will be honored unless a Separation from Service intervenes before the scheduled date of distribution, in which case payment will be made, in the form originally elected by the Participant, not later than the date that is ninety (90) days after the Separation from Service date.

The portion of the Participant’s Account that is earned and vested on and after January 1, 2010 (as well as any subsequent earnings, expenses, gains and losses attributed to such balance) (“Post-2009 Account”) shall be distributed as follows:
		
	(c)
	If the Participant’s Separation from Service occurs before he becomes eligible for Retirement, notwithstanding any other election, his distribution shall be made as follows:

		
	(1)
	If the Participant initially elected to be paid upon his Separation from Service following Retirement, his distribution shall be made in a lump-sum payment no later than ninety (90) days after the date of his Separation from Service; or

		
	(2)
	If the Participant initially elected to be paid upon an identified and specific date that is at least one (1) year after the date the deferral agreement was effective, then if payment has not already commenced, his distribution shall be made or shall commence on such identified and specific date; or

		
	(3)
	If the Participant initially elected to be paid upon the earlier of (A) Separation from Service following Retirement or (B) an identified and specific date that is at least one (1) year after the date the deferral agreement was effective, then if payment has not already been made or commenced, his distribution shall be made in a lump sum payment no later than ninety (90) days after the date of his Separation from Service.

		
	(d)
	If the Participant’s Separation from Service occurs after he becomes eligible for Retirement, then the distribution or commencement of distribution shall be one of the following options as previously elected by the Participant:

		
	(1)
	Separation from Service; or

		
	(2)
	an identified and specific date which is at least one (1) year after the date the deferral agreement was executed; or

		
	(3)
	the earlier of (A) Separation from Service or (B) an identified and specific date which is at least one (1) year after the date the deferral agreement was executed.  This option (3) provides that the date of distribution specified in the deferral agreement will be honored unless a Separation from Service 

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intervenes before the scheduled date of distribution, in which case payment will be made, in the form originally elected by the Participant, not later than the date that is ninety (90) days after the Separation from Service date.
In addition, regardless of whether Retirement is attained by the Participant, he may elect a “Change of Control Override.” A Change of Control Override election provides that the date and form of distribution specified in the deferral agreement will be honored unless a Change of Control intervenes before the scheduled date of distribution, in which case, payment will be made in a single lump sum within ninety (90) days after the effective date of the Change of Control without regard to whether Participant has incurred a Separation from Service.  Notwithstanding any provision in the Plan to the contrary, for purposes of effectuating an accelerated payment hereunder pursuant to a Change of Control Override, the term “Change of Control” shall mean a Change of Control (as defined in Section 1.9 of the Plan) but only to the extent that the event causing the Change of Control qualifies under Code Section 409A(a)(2)(A)(v).
ARTICLE 4 - PARTICIPANT ACCOUNT
		
	4.1
	Individual Accounts.  The Administrator will establish and maintain an Account for each Participant that reflects deferrals made pursuant to Article 3, together with earnings, expenses, gains and losses that are attributable to investments of such Account as provided in Article 5.  The amount a Participant elects to defer in accordance with Article 3 shall be credited to the Participant’s Account at the time the amount subject to the deferral election would otherwise have been payable to the Participant but for his deferral election.  The Administrator will establish and maintain such other accounts and records as it determines, in its discretion, to be reasonably required or appropriate to discharge its duties under the Plan.

ARTICLE 5 - INVESTMENT OF CONTRIBUTIONS
		
	5.1
	Investment Options.  The amount credited to a Participant’s Account shall be treated as invested in the investment options as designated for this purpose by the Administrator.  Such investment options may be different for Eligible Employees, Section 16 Officers and Directors, as determined by the Administrator in its discretion.

		
	5.2
	Adjustment of Accounts.  The amount credited to a Participant’s Account shall be adjusted for hypothetical investment earnings or losses in an amount equivalent to the earnings or losses reported by the investment options selected by the Participant or Beneficiary from among the investment options provided in Section 5.1. A Participant may, in accordance with rules and procedures established by the Administrator, change the investments to be used for the purpose of calculating future hypothetical investment adjustments to the Participant’s Account or to future Participant deferrals, which election change shall be effective as of the Valuation Date coincident with or next following notice to the Administrator.  The Account of each Participant shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical investment earnings and/or losses described above; (b) Participant deferrals; and (c) distributions or withdrawals from the Account.

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	5.3
	RESERVED.  

ARTICLE 6 - RIGHT TO BENEFITS
		
	6.1
	Vesting.  At all times, each Participant has a one hundred percent (100%) nonforfeitable interest in all amounts credited to his Account.  Notwithstanding the foregoing or any provision of the Plan to the contrary, if otherwise provided pursuant to a Company plan or program for which a benefit has been deferred under the Plan, a Participant may be subject to certain “claw back” or forfeiture of benefits in certain circumstances, in which case a Participant’s Account may be reduced in an amount necessary to satisfy such “claw back” or forfeiture.

		
	6.2
	Death.  Notwithstanding any prior election regarding the form or timing of his distribution, the balance or remaining balance credited to a Participant’s Account shall be paid to his Beneficiary in a single lump-sum cash payment within ninety (90) days following the Participant’s death.  If multiple Beneficiaries have been designated by the Participant, each Beneficiary shall receive a single lump-sum cash payment of his specified portion of the Participant’s Account balance within such ninety (90) day period.  If the Participant has not specified percentages for multiple Beneficiaries, his Account will be divided and distributed to them on a per capita basis.

A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries in accordance with rules and procedures established by the Administrator (including, but not limited to, the right to require the consent of a Participant’s spouse in the event the spouse is not named as the sole primary Beneficiary).
If a designated Beneficiary predeceases a Participant, the amount apportioned to that designated Beneficiary shall be payable to the designated Contingent Beneficiary, if any.  If a Beneficiary dies within thirty (30) days of the date the Participant dies, the Beneficiary shall be considered to have predeceased the Participant for purposes of this Section 6.2.
If the Administrator finds either that there is no designated Beneficiary for all or a portion of a Participant’s Account, or that the designated Beneficiary and any Contingent Beneficiary for all or a portion of a Participant’s account have predeceased the Participant, the amount in question shall be paid as follows: (a) if the Participant leaves a surviving spouse, the entire Account balance shall be paid to the surviving spouse, and (b) only if the Participant leaves no surviving spouse, the entire Account balance shall be paid (i) first to the executor or administrator of the Participant’s estate, or (ii) if there is no administration of his estate, to the Participant’s heirs at law, as determined by the Administrator.
Notwithstanding the preceding provisions of this Article 6 and to the extent not prohibited by state or federal law, if a Participant is divorced from his spouse and, at the time of his death, is not remarried to the person from whom he was divorced, any designation of such divorced spouse shall be null and void unless the contrary is expressly stated in a writing that is filed by the Participant with the Administrator and accepted by the Administrator.  The amount that would otherwise have been paid to such divorced spouse shall instead be 

12    

paid to the persons specified in accordance with the applicable provisions of this Article 6 as if such divorced spouse did not survive the Participant.
If the Administrator is in doubt as to the right of any person to receive any amount hereunder, the Administrator, in its discretion, may direct that the entire Account balance be paid into any court of competent jurisdiction in an interpleader action, and such payment shall be a full and complete discharge of any liability or obligation under the Plan to the full extent of such payment.
		
	6.3
	Disability.  Notwithstanding any prior election regarding the form or timing of his distribution, the balance or remaining balance credited to a Participant’s Account shall be paid to the Participant in a single lump-sum cash payment within ninety (90) days following the date the Participant is determined to be Disabled.

ARTICLE 7 - DISTRIBUTION OF BENEFITS
		
	7.1
	Amount of Benefits.  The amount credited to a Participant’s Account as determined under Articles 4, 5 and 6 shall determine and constitute the basis for the value of benefits payable to the Participant under the Plan.

		
	7.2
	Method and Timing of Distributions.  Subject to Sections 7.3 and 7.4, distributions under the Plan shall be made at the time and in the manner provided in Section 3.6. If allowed by the Administrator, a Participant may elect to further delay the payment date for a minimum period of sixty (60) months from the originally scheduled date of payment, provided that such election to delay payment (a) is made at least twelve (12) months before a scheduled date of payment and (b) is not effective until at least twelve (12) months after the date on which the election is made.  A re-deferral election must be made in accordance with procedures and rules established by the Administrator, which shall be construed and administered in accordance with Code Section 409A.  The Participant may, at the same time the date of payment is re-deferred, change the form of payment provided that such change in the form of payment does not effectuate an acceleration of payment.  Notwithstanding any provision contained herein to the contrary, a distribution made to a Key Employee due to his Separation from Service (for any reason except due to his death) shall not be made before the date which is six (6) months after the date the Key Employee has a Separation from Service unless otherwise permitted under Code Section 409A, such as in the event of his death.

		
	7.3
	Unforeseeable Emergency.  A Participant may request a distribution due to an Unforeseeable Emergency.  The request must be in writing and must be submitted to the Administrator along with evidence that the circumstances constitute an Unforeseeable Emergency.  The Administrator has the discretion to require whatever evidence it deems necessary to determine whether a distribution is warranted.  Whether a Participant has incurred an Unforeseeable Emergency will be determined by the Administrator on the basis of the relevant facts and circumstances in its sole discretion, but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the 

13    

Participant’s assets to the extent such liquidation would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Plan. A distribution due to an Unforeseeable Emergency must be limited to the amount reasonably necessary to satisfy the emergency need and may also include any amount necessary to pay any federal, state or local income taxes or penalties that are reasonably anticipated to result from the distribution.  The distribution will be made in the form of a single lump-sum cash payment without regard to any prior distribution election.  Any distribution under this Section 7.3 shall be deducted from the Participant’s Account balance as of the date of the distribution.
		
	7.4
	Cashouts of Minimal Interests.  If the amount credited to the Participant’s Account does not exceed the current dollar limitation under Code Section 402(g)(1)(B) ($17,000 in 2012, as adjusted under the Code in future years, or such higher dollar amount as Treasury Regulations may establish for cashouts of minimal interests under Code Section 409A), at the time he has a Separation from Service, and such Participant is not a Key Employee, the Company reserves the right to pay such amount to the Participant in accordance with the requirements of Code Section 409A in a single lump-sum cash payment within ninety (90) days following such Separation from Service, regardless of whether the Participant (i) had made a different election regarding time or form of payment or (ii) was receiving installment payments at the time of Separation from Service. In the case of a Key Employee, such cashout payment shall not be made before the date that is at least six (6) months from the date of his Separation from Service or such earlier date upon which such amount can be paid under Code Section 409A without being subject to taxation thereunder.

		
	7.5
	Distribution to a Key Employee.  Notwithstanding any provision of the Plan to contrary, any lump sum or installment payment distribution payable to a Participant who is a Key Employee due to his Separation from Service (for any reason except due to his death) shall not be made before the date that is six (6) months after the date of his Separation from Service.

ARTICLE 8 - AMENDMENT AND TERMINATION
		
	8.1
	Amendment by Company.  The Company reserves the right to amend the Plan through action of the Board.  An amendment must be in writing and executed by an officer authorized to take such action.  Each amendment shall not be effective prior to approval by the Board in its resolution, unless necessary to comply with applicable laws or regulations.  No amendment can directly or indirectly deprive any current or former Participant or Beneficiary of all or any portion of his Account balance that has accrued as of the date of such amendment.  Effective August 8, 2019, in addition to amendments made by the Board, the Chief Executive Officer of the Company or other officer designated by the Board (the “Authorized Officer”), may approve, adopt and execute any amendment to the Plan that is necessary for purposes of legal compliance, to clarify ambiguities in the Plan document, and to simplify non-material administrative processes, as the Authorized Officer may, in his best judgment, so determine; provided that the Authorized Officer may not terminate the Plan. The Authorized Officer may delegate to another officer of the Company or Occidental Petroleum Corporation the 

14    

authority to execute an amendment to the Plan that has been approved jointly by the Authorized Officers.
Notwithstanding the preceding paragraph of this Section 8.1, the Plan may be amended if required to ensure that the Plan is characterized as a “top-hat plan” of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA Sections 201(2), 301(a)(3), and 401(a)(1), or to conform the Plan to the requirements of ERISA for “top-hat plans” or the requirements of the Code for deferred compensation plans including Code Section 409A.  No such amendment for this exclusive purpose shall be considered prejudicial to the interest of a Participant or a Beneficiary hereunder.
		
	8.2
	Retroactive Amendments.  An amendment made by the Company in accordance with Section 8.1 may be made effective on a date prior to the first day of the Plan Year in which it is adopted if such amendment is necessary or appropriate to enable the Plan to satisfy the applicable requirements of the Code, ERISA or to any other change in federal law or to any regulations or ruling thereunder.  Any retroactive amendment by the Company shall be subject to the provisions of Section 8.1.

		
	8.3
	Special Plan and Deferral Election Amendments.  Notwithstanding Sections 8.1 or 8.2 or any other provision of the Plan or a deferral election agreement to the contrary, the Company has reserved the unilateral right and discretion to amend the Plan and a Participant’s deferral elections hereunder to the extent necessary to comply with Code Section 409A, or to be exempt from the application of Code Section 409A, to the maximum extent permitted under Code Section 409A.

		
	8.4
	Plan Termination.  The Plan has been adopted with the intention and expectation that it will be continued indefinitely.  The Company, however, reserves the right to terminate the Plan at any time without any liability for any such discontinuance or termination.

In the event of the termination of the Plan, no additional vesting shall accrue on a Participant’s behalf after the termination date.  In accordance with Code Section 409A, termination of the Plan shall not, by itself, create a distribution event.
Upon termination of the Plan, distribution of benefits shall be made to Participants and Beneficiaries in the same manner and at the same time as described in the Plan, unless one of the following termination events occurs, in which case, all such amounts shall be distributed in a lump sum upon termination, or upon the earliest date allowable under Code Section 409A:
		
	(a)
	the Company’s termination and liquidation of the Plan within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A);

		
	(b)
	the Company’s termination and liquidation of the Plan pursuant to irrevocable action taken by the Company within the thirty (30) days preceding or twelve (12) months 

15    

following a change of control event (within the meaning of Code Section 409A), provided that all agreements, methods, programs, and other arrangements sponsored by the Company or an affiliated entity that are aggregated under Code Section 409A are terminated and liquidated with respect to each Participant that experiences the change in control event; or
		
	(c)
	the Company’s termination and liquidation of the Plan, provided that (1) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; (2) the Company terminates and liquidates all agreements, methods, programs, and other arrangements sponsored by the Company that would be aggregated under Code Section 409A if the same Participant had deferrals of compensation under all of the agreements, methods, programs, and other arrangements sponsored by the Company that are terminated and liquidated; (3) no payments in liquidation of the Plan are made within twelve (12) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan other than payments that would have been payable absent the termination and liquidation; and (4) the Company does not adopt a new plan that would be aggregated with any terminated and liquidated plan under Code Section 409A if the same Participant participated in both plans, at any time within three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan.

		
	8.5
	Distribution Upon Termination of the Plan.  Upon termination of the Plan, no further contributions that have not accrued as of the termination date shall be made under the Plan.  Each Participant’s Account at the time of termination shall continue to be governed by the terms of the Plan until fully distributed in accordance with the terms of the Plan.

ARTICLE 9 - THE TRUST
		
	9.1
	Establishment of Trust.  The Company may, but is not required to, establish a trust, or use an existing trust, to hold amounts which the Company may contribute from time to time to correspond to some or all amounts credited to Participants under Section 4.1. If the Company elects to establish a trust, the provisions of Sections 9.2 and 9.3 shall be operative.

		
	9.2
	Grantor Trust.  The Company may establish a trust, or use an existing trust, between the Company and a trustee pursuant to a separate written trust agreement.  Any such trust shall be created as a grantor trust under the Code Sections 671-678, and the establishment of the trust shall not cause the Participant to realize current income on amounts contributed to the trust.  In the event that the Company establishes such a trust or uses an existing trust, the Company shall be under no obligation to place assets in such trust to secure the Company’s payment obligations under the Plan.

		
	9.3
	Investment of Trust Funds.  Any amounts contributed to a trust described in this Article 9 may be invested by the trustee in accordance with the provisions of the trust agreement and the instructions of the Administrator or the Company.  Trust investments need not reflect the hypothetical investments selected by Participants under Section 5.1 for the purpose of 

16    

adjusting Account balances, and the investment results of the trust shall not affect the hypothetical investment adjustments to Accounts under the Plan.
		
	9.4
	Participants’ Rights under a Trust.  The assets of any trust hereunder shall be held for the benefit of the Participants in accordance with the terms of the Plan and the trust agreement.  The assets of the trust shall remain subject to the claims of the general creditors of the Company, and the rights of the Participants to the amounts in the trust shall be limited in the event that the Company becomes insolvent.  No Participant or Beneficiary shall have any preferred claim to, or any beneficial ownership interest in, any assets of the trust fund.

ARTICLE 10 - MISCELLANEOUS
		
	10.1
	Unsecured General Creditor of the Company.  Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company as the result of participating in the Plan.  For purposes of the payment of benefits under the Plan, any and all of the Company’s assets shall be, and shall remain, the general, unpledged, unrestricted assets of the Company, and as such, shall remain subject to the claims of the general creditors of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay compensation in the future.

		
	10.2
	Limitation of Rights.  Nothing in this plan shall be construed to:

		
	(a)
	Give any individual who is employed by the Company any right to be a Participant unless and until such person is selected under the terms of the Plan;

		
	(b)
	Give any Participant any rights, other than as an unsecured general creditor of the Company;

		
	(c)
	Limit in any way the right of the Company to terminate an Eligible Employee’s employment;

		
	(d)
	Give a Participant or any other person any interest in any trust, fund or in any specific asset of the Company; or

		
	(e)
	Be evidence of any agreement or understanding, express or implied, that the Company will employ a Participant in any particular position, at any particular rate of remuneration, or for any particular time period.

		
	10.3
	The Company’s Liability.  The Company’s liability for the payment of benefits under the Plan shall be defined only by the Plan and by the deferral agreements, and form and timing of payment elections, as entered into between a Participant and the Company under the Plan.  The Company shall have no obligation or liability to a Participant under the Plan except as provided by the Plan.

		
	10.4
	Satisfaction of Benefit Obligation.  The Company may, but is not obligated, to purchase an annuity or other insurance/financial product to satisfy the payment of benefit obligations 

17    

for some or all of the Participants under the Plan.  In the event that such an annuity or other product is utilized and a Participant or his Beneficiary has received the benefits entitled under the Plan from such annuity or other product, then such benefit obligation under the Plan shall be considered satisfied.  Any annuity or other product used to provide funding under the Plan shall be an asset of the Company, and no Participant shall have any beneficial ownership interest in such asset of the Company.
In order to meet its contingent obligations under the Plan, the Company shall not set aside any assets or otherwise create any type of fund in which any Participant (or any person claiming under such Participant) has an interest other than that of an unsecured general creditor of the Company or that would provide any Participant, or any person claiming under such Participant, with a legally enforceable right to priority over any general creditor of the Company in the event that the Company becomes insolvent.
		
	10.5
	Spend-thrift Provision.  No amount payable or to become payable from the Plan will be subject to: (a) anticipation or assignment by any person entitled to receive benefits under the Plan; (b) attachment by, interference with, or control of any creditor of any person entitled to receive benefits under the Plan; or (c) being taken or reached by any legal or equitable process in satisfaction of any debt or liability of any person entitled to receive benefits under the Plan.  Any attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of the Plan, any part of it or any interest in it, by any person entitled to receive benefits under the Plan prior to distribution will be void, regardless of whether that conveyance, transfer, assignment, mortgage, pledge, or encumbrance is intended to be effective before or after any distribution of benefits under the Plan.  In addition, the Administrator shall not recognize any conveyance, transfer, assignment, mortgage, pledge or encumbrance by any person entitled to receive benefits under the Plan, and shall not pay any amount to any creditor or assignee of such person for any cause whatsoever.  However, this Section 10.5 shall not affect the provisions of Section 10.1 regarding the claims of general creditors of the Company.

In the event that any Participant’s or Beneficiary’s benefits hereunder are attempted to be garnished or attached by order of any court, the Company, in its discretion, may bring an action or a declaratory judgment in a court of competent jurisdiction to determine the proper recipient of the benefits to be paid under the Plan.
		
	10.6
	Incapacity of Participant or Beneficiary.  If the Administrator determines, in its discretion, that any Participant or Beneficiary to whom a payment is payable under the Plan is unable to care for his affairs because of illness or accident or is under a legal disability, any payment due (unless a prior claim therefore shall have been made by a duly appointed legal representative), at the discretion of the Administrator, may be paid to the spouse, child, parent, sibling of such Participant or Beneficiary or to any person whom the Administrator has determined has incurred expense for such Participant or Beneficiary. In the event that a guardian, conservator or other person legally vested with the care of any person receiving a benefit under the Plan is appointed by a court of competent jurisdiction, payments shall be made to such guardian, conservator or other person, provided that proper proof of 

18    

appointment is furnished in a form and manner acceptable to the Administrator.  Any payment made in accordance with this Section 10.6 shall be a complete discharge of the obligations of the Company under the Plan.
		
	10.7
	Waiver.  No term or condition of the Plan shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of the Plan, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

		
	10.8
	Notices.  Any notice or other communication in connection with the Plan shall be deemed delivered in writing if addressed as provided below and if either actually delivered at said address or, in the case of a letter, five (5) business days shall have elapsed after the same shall have been deposited in the U.S. mails, first-class postage prepaid and registered or certified:

		
	(a)
	The Company or Administrator — If the notice is sent to the Company or Administrator, it must be sent to the then-current corporate headquarters address of the Company, provided that the envelope includes “Attn: Benefits Department — Human Resources”; or

		
	(b)
	Participant — The mailing or electronic address of the Participant as reflected in the then-current records of the Company.  Each Participant is responsible for ensuring that the Company or Administrator has the Participant’s current mailing address under the procedure for updating mailing addresses utilized by the Company or Administrator.

		
	10.9
	Tax Withholding.  The Company shall have the right to deduct from all payments or deferrals made under the Plan any tax required by law to be withheld.  If the Company concludes that tax is owing with respect to any deferral or payment hereunder, the Company shall withhold such amounts from any payments due the Participant, as permitted by law, or otherwise make appropriate arrangements with the Participant or his Beneficiary for satisfaction of such obligation.  A tax, for purposes of this Section 10.9 means any federal, state, local or any other governmental income tax, employment or payroll tax, excise tax, or any other tax or assessment that is owed with respect to amounts deferred (and any earnings thereon) and any payments made to Participants under the Plan.

With respect to deferred compensation elections under the Plan, the Company shall withhold the required share of FICA, FUTA and other applicable employment and payroll taxes from the other non-deferred compensation of an Eligible Employee who is a Participant.  These required payroll taxes shall be withheld at the same time that the deferred compensation contributions are credited to his Account.

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	10.10
	Governing Law.  The Plan will be construed, administered and enforced according to ERISA, the Code and other controlling federal law, and to the extent not preempted thereby, the laws of the State of Texas without regard to its conflicts of law principles.

		
	10.11
	Intention to Comply with Code Section 409A.  The Plan is intended to comply with Code Section 409A and any ambiguous provision will be construed in a manner that is compliant with, or exempt from, the application of Code Section 409A.  It is intended that since January 1, 2009, the Plan will comply with provisions of Code Section 409A and the final regulations and other authoritative guidance thereunder.  It is also intended that during the period beginning January 1, 2005 and ending December 31, 2008, the Plan was operated in reasonable good faith compliance with the provisions of Code Section 409A and the interim authoritative guidance thereunder.  If any provision of the Plan would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company may reform such provision to comply with Code Section 409A to the maximum extent permitted under Code Section 409A as determined by the Company.

ARTICLE 11 - PLAN ADMINISTRATION
		
	11.1
	Powers and Responsibilities of the Administrator.  The Administrator has the full power, full discretion and the full responsibility to administer the Plan in all of its details, subject, however, to the applicable requirements of applicable law.  The Administrator’s powers and responsibilities include, but are not limited to, the following:

		
	(a)
	To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan;

		
	(b)
	To interpret the Plan, its interpretation thereof in good faith to be final and conclusive on all persons claiming benefits under the Plan;

		
	(c)
	To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;

		
	(d)
	To administer the claims and review procedures specified in Section 11.3, including determining all facts pertaining to a claim;

		
	(e)
	To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan;

		
	(f)
	To determine the person or persons to whom such benefits will be paid;

		
	(g)
	To authorize the payment of benefits;

		
	(h)
	To comply with the reporting and disclosure requirements of Part I. of Subtitle B of Title I of ERISA;

		
	(i)
	To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;

20    

		
	(j)
	By written instrument, to allocate and delegate its responsibilities hereunder to designated persons or entities, including without limitation, to employees of the Company; and

		
	(k)
	To address and resolve any and all matters that may arise with regard to the Plan and its administration.

		
	11.2
	Interpretation of the Plan.  The Administrator shall interpret, construe and construct the Plan, including correcting any defect, supplying any omission or reconciling any inconsistency.  The Administrator shall have all powers necessary or appropriate to implement and administer the terms and provisions of the Plan, including the power to make findings of fact.  The determination of the Administrator as to the proper interpretation, construction, or application of any term or provision of the Plan shall be final, binding, and conclusive with respect to all Participants and other interested persons.

		
	11.3
	Claims and Review Procedures.  Claims for Plan benefits and reviews of appeals of benefit claims arising under the Plan that have been denied or modified are to be processed in accordance with written Plan claims procedures established by the Administrator and adopted by the Company.  The Plan’s claims and appeal procedures shall be established and administered in accordance with the applicable requirements for such procedures under ERISA.

		
	11.4
	Plan Administrative Costs.  Unless otherwise determined by the Administrator, all reasonable costs and expenses (including legal, accounting, and employee communication fees) incurred by the Administrator in administering the Plan shall be paid by the Company.

21    

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused the amended and restated Plan to be adopted on this 27th day of December, 2019, to be effective as of December 31, 2019.
ANADARKO PETROLEUM CORPORATION
By:    /s/ Darin S. Moss    
Darin S. Moss    
Vice President, Human Resources

22ex_168886.htm

Exhibit 4.9

 

Description of the Registrant’s Securities

Registered Pursuant to Section 12 of the

Securities Exchange Act of 1934

 

KemPharm, Inc. (“we,” “our,” or “us”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, our common stock, par value $0.0001 per share, or common stock. The following description of our capital stock is a summary and does not purport to be complete. It is qualified in its entirety by, and should be read in conjunction with, our amended and restated certificate of incorporation, amended and restated bylaws and applicable Delaware law.

 

General

 

Under our amended and restated certificate of incorporation we are authorized to issue up to 250,000,000 shares of common stock and 10,000,000 shares of preferred stock, $0.0001 par value per share, of which 9,578 shares have been designated Series A preferred stock, or the Series A Preferred Stock, 1,576 shares have been designated as Series B-1 preferred stock, or the Series B-1 Preferred Stock, and 27,000 shares have been designated as Series B-2 preferred stock, or the Series B-2 Preferred Stock (and together with the Series B-1 Preferred Stock, the Series B Preferred Stock). Our board of directors may establish the rights and preferences of the undesignated preferred stock from time to time.

 

Common Stock 

 

Voting Rights

 

Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Under our amended and restated certificate of incorporation and amended and restated bylaws, our stockholders do not have cumulative voting rights. Because of this, the holders of a majority of the shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.

 

Dividends

 

Subject to preferences that may be applicable to any then-outstanding preferred stock, holders of our common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds.

 

Liquidation

 

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.

 

Rights and Preferences

 

Holders of our common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate in the future.

 

Preferred Stock 

 

Undesignated

 

Pursuant to our amended and restated certificate of incorporation, our board of directors has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of us and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock.

 

 

 

 

Series A Preferred Stock

 

In October 2018, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, or the Series A Certificate of Designation, with the Secretary of State of the State Delaware, setting forth the preferences, rights and limitations of the Series A Preferred Stock. Our board of directors designated 9,578 shares of preferred stock as Series A Preferred Stock. As of December 31, 2019, there were no shares of Series A Preferred Stock outstanding

 

Each share of Series A Preferred Stock has an aggregate stated value of $1,000 and is convertible into shares of our common stock at a per share price equal to $3.00 per share (subject to adjustment to reflect stock splits and similar events). The Series A Preferred Stock is convertible at any time at the option of the holders thereof, provided that the holders of Series A Preferred Stock are prohibited from converting shares of Series A Preferred Stock into shares of our common stock if, as a result of such conversion, such holders (together with certain affiliates and “group” members of such holders) would beneficially own more than 4.985% of the total number of shares of our common stock then issued and outstanding. The Series A Preferred Stock is not redeemable. In the event of our liquidation, dissolution or winding up, the holders of our Series A Preferred Stock will receive an amount equal to $0.0001 per share, plus any declared but unpaid dividends, and thereafter will share ratably in any distribution of our assets with the holders of our common stock, on an as-converted basis. With respect to rights upon liquidation, the Series A Preferred Stock ranks senior to our common stock and junior to existing and future indebtedness. Except as otherwise required by law (or with respect to approval of certain actions involving our organizational documents that materially and adversely affect the holders of Series A Preferred Stock), the Series A Preferred Stock does not have voting rights. The Series A Preferred Stock is not subject to any price-based anti-dilution protections and does not provide for any accruing dividends, but provides that holders of Series A Preferred Stock will participate in any dividends on our common stock on an as-converted basis (without giving effect to the limitation on conversion described above). The Series A Certificate of Designation also provides for partial liquidated damages in the event that we fail to timely convert shares of Series A Preferred Stock into shares of our common stock in accordance with the Series A Certificate of Designation. 

 

Series B-1 Preferred Stock and Series B-2 Preferred Stock

 

In September 2019, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series B-1 Convertible Preferred Stock, or the Series B-1 Certificate of Designation, and a Certificate of Designation of Preferences, Rights and Limitations of Series B-2 Convertible Preferred Stock, or the Series B-2 Certificate of Designation, in each case with the Secretary of State of the State Delaware, setting forth the preferences, rights and limitations of the Series B-1 Preferred Stock and the Series B-2 Preferred Stock, respectively. Our board of directors designated 1,576 shares of preferred stock as Series B-1 Preferred Stock and 27,000 shares of preferred stock as Series B-2 Preferred Stock. As of December 31, 2019, there were no shares of Series B-1 Preferred Stock or Series B-2 Preferred Stock outstanding.

 

Each share of Series B-1 Preferred Stock has an aggregate stated value of $1,000 and is convertible into shares of our common stock at a per share price equal to $0.9494 per share (subject to adjustment to reflect stock splits and similar events). Each share of Series B-2 Preferred Stock has an aggregate stated value of $1,000 and is convertible into shares of our common stock at a per share price equal to the greater of (i) $0.60 (subject to adjustment to reflect stock splits and similar events), or (ii) the average of the volume-weighted average prices of our common stock on the Nasdaq Capital Market on each of the 15 trading days immediately preceding such exchange.

 

The Series B Preferred Stock is convertible at any time at the option of the holders thereof; provided that such holders are prohibited from converting shares of Series B Preferred Stock into shares of our common stock if, as a result of such conversion, such holders (together with certain affiliates and “group” members of such holders) would beneficially own more than 4.985% of the total number of shares of our common stock then issued and outstanding. The Series B Preferred Stock is not redeemable. In the event of our liquidation, dissolution or winding up, the holders of Series B Preferred Stock will receive an amount equal to $0.0001 per share, plus any declared but unpaid dividends, and thereafter will share ratably in any distribution of our assets with the holders of our common stock and with the holders of any shares of any other class or series of our capital stock entitled to share in such remaining assets (including the holders of the Series A Preferred Stock) on an as-converted basis. With respect to rights upon liquidation, the Series B Preferred Stock ranks senior to our common stock, on parity with the Series A Preferred Stock and junior to existing and future indebtedness. Except as otherwise required by law (or with respect to approval of certain actions involving our organizational documents that materially and adversely affect the holders of Series B Preferred Stock), the Series B Preferred Stock does not have voting rights. The Series B Preferred Stock is not subject to any price-based anti-dilution protections and does not provide for any accruing dividends, but provides that holders of Series B Preferred Stock will participate in any dividends on our common stock on an as-converted basis (without giving effect to the limitation on conversion described above). The Series B-1 Certificate of Designation and the Series B-2 Certificate of Designation also provide for partial liquidated damages in the event that the Company fails to timely convert shares of Series B-1 Preferred Stock or Series B-2 Preferred Stock, respectively, into shares of our common stock in accordance with the applicable Certificate of Designation.

 

 

 

 

Convertible Notes

 

In June 2014, we issued to Deerfield Private Design Fund III, L.P., or Deerfield, a secured convertible note in the principal amount of $10.0 million, or the Deerfield Note. As of December 31, 2019, the outstanding principal amount of the Deerfield Note was approximately $7.0 million. In December 2019 and January 2020, we issued senior secured convertible promissory notes, or the Senior Secured Notes, to Deerfield, Deerfield Special Situations Fund, L.P., Delaware Street Capital Master Fund, L.P. and M. Kingdon Offshore Master Fund, LP in the aggregate principal amount of $74.5 million. We refer to the Deerfield Note and the Senior Secured Notes together as the Convertible Notes. The Convertible Notes bear interest at 6.75% per annum. The Convertible Notes are convertible into shares of our common stock at an initial conversion price of $5.85 per share, subject to adjustment in accordance with the terms of the Convertible Notes. The conversion price of the Convertible Notes will be adjusted downward if we issue or sell any shares of our common stock, convertible securities, warrants or options at a sale or exercise price per share less than the greater of the conversion price of the Convertible Notes or the closing sale price of our common stock as reported on the Nasdaq Capital Market on the last trading date immediately prior to such issuance, or, in the case of a firm commitment underwritten offering, on the date of execution of the underwriting agreement between us and the underwriters for such offering. If we effect an “at the market offering” as defined in Rule 415 of the Securities Act of our common stock, the conversion price of the Convertible Notes will be adjusted downward pursuant to this anti-dilution adjustment only if such sales are made at a price less than $5.85 per share, provided that this anti-dilution adjustment will not apply to any sales made (x)  the Purchase Agreement, dated February 17, 2020, by and between us and Lincoln Park Capital Fund, LLC, (y) that certain Common Stock Sales Agreement, dated as of September 4, 2018, by and between the Company and RBC Capital Markets, LLC, or (z) the September 2019 Exchange Agreement and Amendment to Facility Agreement, dated as of September 3, 2019, by and among us, Deerfield and Deerfield Special Situations Fund, L.P. (as amended). Notwithstanding anything in the contrary in the Convertible Notes, the anti-dilution adjustment of the Convertible Notes shall not result in the conversion price of the Convertible Notes being less than $0.583 per share. The Convertible Notes are convertible at any time at the option of the holders thereof, provided that each holder is prohibited from converting the Convertible Notes into shares of our common stock if, as a result of such conversion, such holder (together with certain affiliates and “group” members of such holder) would beneficially own more than 4.985% of the total number of shares of our common stock then issued and outstanding. However, the Convertible Note issued to Delaware Street Capital Master Fund, L.P., due to the fact Delaware Street Capital Master Fund, L.P. was a beneficial owner of more than 4.985% of the total number of shares of our common stock then issued and outstanding, has a beneficial ownership cap equal to 19.985% of the total number of shares of the Company’s common stock then issued and outstanding. Pursuant to the Convertible Notes, the holders thereof have the option to demand repayment of all outstanding principal, and any unpaid interest accrued thereon, in connection with a Major Transaction (as defined in the Convertible Notes), which shall include, among others, any acquisition or other change of control of us; a liquidation, bankruptcy or other dissolution of us; or if at any time after March 31, 2021, shares of our common stock are not listed on an Eligible Market (as defined in the Convertible Notes). The Convertible Notes are subject to specified events of default, the occurrence of which would entitle the holders thereof to immediately demand repayment of all outstanding principal and accrued interest on the Convertible Notes. Such events of default include, among others, failure to make any payment under the Convertible Notes when due, failure to observe or perform any covenant under the Facility Agreement (as defined in the Convertible Notes) or the other transaction documents related thereto (subject to a standard cure period), our failure to be able to pay debts as they come due, the commencement of bankruptcy or insolvency proceedings against us, a material judgement levied against us and a material default by us under the Warrant or the Notes (each as defined in the Facility Agreement).

 

The foregoing information is qualified entirely by reference to the applicable provisions of the terms of the Facility Agreement and the Convertible Notes, which are each incorporated by reference and included as exhibits to the Annual Report on Form 10-K to which this exhibit is a part.

 

Warrants

 

As of December 31, 2019, we had outstanding immediately exercisable warrants to purchase 2,423,077 shares of our common stock at a weighted average exercise price of $5.12 per share and which expire between October 24, 2023 and June 2, 2024. The warrants include a net exercise provision and contain provisions for the adjustment of the exercise price and the number of shares issuable upon the exercise of each warrant in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations. We have also granted registration rights to Deerfield, as more fully described below under “—Registration Rights.”

 

 

 

 

In June 2014, in connection with our entering into the Facility Agreement we issued to Deerfield a warrant, or the Deerfield Warrant, to purchase 14,423,076 shares of Series D redeemable convertible preferred stock at an exercise price of $0.78 per share, which is exercisable until June 2, 2024. Upon completion of our initial public offering, the Deerfield Warrant automatically converted into a warrant to purchase 1,923,077 shares of our common stock at an exercise price of $5.85 per share. According to the terms of the Deerfield Warrant, in no event may Deerfield exercise this warrant if such exercise would result in Deerfield beneficially owning more than 4.985% of the then issued and outstanding shares of our common stock. This exercise limitation may not be waived and any purported exercise that is inconsistent with this exercise limitation is null and void. This exercise limitation will not apply to any exercise made immediately prior to a change of control transaction. If Deerfield is only able to exercise the Deerfield Warrant for a limited number of shares due to this exercise limitation, the Deerfield Warrant could subsequently become exercisable to purchase the remainder of the shares as a result of a variety of events. This could occur, for example, if we issue more shares or Deerfield sells some of its existing shares. The Deerfield Warrant includes a net exercise provision and contains provisions for the adjustment of the exercise price and the number of shares issuable upon the exercise of the warrant in the event of certain stock dividends, stock splits, recapitalizations, reclassifications and consolidations. Under the Deerfield Warrant, Deerfield also has the right to demand upon the occurrence of specified events, including a merger, asset sale or other change of control transaction, that we redeem the Deerfield Warrant for a cash amount equal to the Black-Scholes value of the portion of the Deerfield Warrant to be redeemed. If Deerfield chooses not to redeem the Deerfield Warrant upon the occurrence of such an event, we may not enter into any such transaction unless our successor entity assumes in writing all our obligations under both the Deerfield Warrant and the Deerfield facility and provides Deerfield with certain registration rights.

 

The Deerfield Warrant includes certain exercise price protection provisions pursuant to which the exercise price of the Deerfield Warrant will be adjusted downward on a broad-based weighted average basis if we issue or sell any shares of common stock, convertible securities, warrants or options, including in this offering, at a sale or exercise price per share less than the greater of the Deerfield Warrant’s exercise price or the closing sale price of our common stock as reported on the Nasdaq Capital Market on the last trading date immediately prior to such issuance or, in the case of a firm commitment underwritten offering, on the date of execution of the underwriting agreement between us and the underwriters for such offering. The sale price for purposes of this adjustment is measured after giving effect to any underwriting discounts and commissions. This exercise price adjustment does not apply to any offering deemed by the SEC to constitute an “at the market offering” as defined in Rule 415 of the Securities Act of our common stock, the conversion price of the Deerfield Warrant will be adjusted downward pursuant to this anti-dilution adjustment only if such sales are made at a price less than $5.85 per share, provided that this anti-dilution adjustment will not apply to any sales made under (x) the purchase agreement, dated February 17, 2020, by and between us and Lincoln Park Capital Fund, LLC, (y) that certain Common Stock Sales Agreement, dated as of September 4, 2018, by and between the Company and RBC Capital Markets, LLC, or (z) the September 2019 Exchange Agreement and Amendment to Facility Agreement, dated as of September 3, 2019, by and among us, Deerfield and Deerfield Special Situations Fund, L.P. (as amended).

 

The foregoing information is qualified entirely by reference to the applicable provisions of the terms of the warrants, which are each incorporated by reference and included as exhibits to the Annual Report on Form 10-K to which this exhibit is a part.

 

Registration Rights

 

We and the holders of shares of our common stock issued upon the conversion or reclassification of our redeemable convertible preferred stock have entered into an investors’ rights agreement. The registration rights provisions of this agreement expired as to all holders of our capital stock, other than Deerfield, on the second anniversary of our initial public offering. The registration rights provisions of our investors’ rights agreement currently provide Deerfield with the registration rights described in more detail below. The following information is qualified entirely by reference to the applicable provisions of the investors’ rights agreement, which is incorporated by reference and included as an exhibit to the Annual Report on Form 10-K to which this exhibit is a part.

 

Piggyback Registration Rights

 

If we propose to register any of our securities under the Securities Act either for our own account or for the account of other stockholders, Deerfield will be entitled to include its shares of common stock in the registration statement. These piggyback registration rights are subject to specified conditions and limitations, including the right of the underwriters to limit the number of shares included in any such registration under specified circumstances.

 

 

 

 

Registration on Form S-3 

 

Deerfield is entitled, upon its written request, to have such shares registered by us on a Form S-3 registration statement at our expense, subject to other specified conditions and limitations.

 

Expenses of Registration

 

We will pay all expenses relating to any demand, piggyback or Form S-3 registration, other than underwriting discounts and commissions, subject to specified conditions and limitations.

 

Termination of Registration Rights

 

The registration rights granted under the investors’ rights agreement terminated as to all the holders of our capital stock, other than Deerfield, on the two-year anniversary of our initial public offering. These registration rights will terminate as to Deerfield upon the earliest to occur of (i) written consent of Deerfield, (ii) such time that the Deerfield Warrant and Deerfield Note have been exercised or converted, as applicable, in full and Rule 144 or another similar exemption under the Securities Act of 1933, as amended,  is available for the sale of all shares of our capital stock held by Deerfield without limitation during a three-month period without registration or (iii) six-months following the later to occur of (x) the expiration of the Deerfield Warrant and (y) payment in full or termination of the Deerfield Note.

 

Anti-Takeover Effects of Provisions of Delaware Law and Our Charter Documents 

 

Section 203 of the Delaware General Corporation Law

 

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

 

	
			 

				
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			before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

			
	 	 	 
	
			 

				
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			upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

			
	 	 	 
	
			 

				
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			on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

			

 

In general, Section 203 defines a “business combination” to include the following:

 

	
			 

				
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			any merger or consolidation involving the corporation and the interested stockholder;

			
	 	 	 
	
			 

				
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			any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

			
	 	 	 
	
			 

				
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			subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

			
	 	 	 
	
			 

				
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			any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

			
	 	 	 
	
			 

				
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			the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.

			

 

 

 

 

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

 

Certificate of Incorporation and Bylaws

 

Our amended and restated certificate of incorporation provides for our board of directors to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors. Our amended and restated certificate of incorporation and our amended and restated bylaws also provide that directors may be removed by the stockholders only for cause upon the vote of 66 2/3% or more of our outstanding common stock. Furthermore, the authorized number of directors may be changed only by resolution of the board of directors, and vacancies and newly created directorships on the board of directors may, except as otherwise required by law or determined by the board, only be filled by a majority vote of the directors then serving on the board, even though less than a quorum.

 

Our amended and restated certificate of incorporation and amended and restated bylaws also provide that all stockholder actions must be effected at a duly called meeting of stockholders and eliminate the right of stockholders to act by written consent without a meeting. Our amended and restated bylaws also provide that only our chairman of the board, chief executive officer or the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors may call a special meeting of stockholders.

 

Our amended and restated bylaws also provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely advance notice in writing, and specify requirements as to the form and content of a stockholder’s notice.

 

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the stockholders cannot amend many of the provisions described above except by a vote of 66 2/3% or more of our outstanding common stock.

 

The combination of these provisions make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.

 

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

 

Choice of Forum

 

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for:

 

	
			 

				
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			any derivative action or proceeding brought on our behalf;

			
	 	 	 
	
			 

				
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			any action asserting a breach of fiduciary duty;

			
	 	 	 
	
			 

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			any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or

			
	 	 	 
	
			 

				
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			any action asserting a claim against us that is governed by the internal affairs doctrine;

			

 

 

 

 

except that these choice of forum provisions do not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.

 

The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A. The transfer agent’s address is 144 Fernwood Avenue, Edison, NJ 08837.

 

Listing on the Nasdaq Capital Market

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “KMPH.”

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