Document:

flme-ex101_75.htm

Exhibit 10.1

 

THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

PROMISSORY NOTE

	
 Principal Amount: $200,000
	
Dated as of October 31, 2022

	
 
	
Houston, Texas

 

Flame Acquisition Corp., a Delaware corporation (the “Maker”), promises to pay to the order of Flame Acquisition Sponsor LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of Two Hundred Thousand Dollars ($200,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below.  All payments on this promissory note (this “Note”) shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.

1.Principal

.  The entire unpaid principal balance of this Note shall be payable on the date (the “Maturity Date”) of the consummation of the Maker’s initial merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (a “Business Combination”). Payee understands that if a Business Combination is not consummated, this Note will not be repaid and all amounts owed hereunder will be forgiven except to the extent that the Maker has funds available to it outside of its trust account established in connection with its initial public offering of its securities (the “IPO” and such trust account, the “Trust Account”).  The principal balance may be prepaid at any time.  Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.

2.Drawdown Requests

.  Maker and Payee agree that Maker may request, from time to time, up to Two Hundred Thousand Dollars ($200,000) in drawdowns under this Note to be used for costs and expenses related to Maker’s IPO and continued working capital expenditures until the consummation of the Maker’s Business Combination.  Principal of this Note may be drawn down from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “Drawdown Request”).  Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000), unless otherwise agreed upon in writing by Maker and Payee.  Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Two Hundred Thousand Dollars ($200,000).  No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker

3.Interest

.  No interest shall accrue on the unpaid principal balance of this Note.

4.Application of Payments

.  All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.

5.Events of Default

.  The following shall constitute an event of default (“Event of Default”):

(a)Failure to Make Required Payments

.  Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of the date specified above.

 

 

(b)Voluntary Bankruptcy, Etc.

  The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.

(c) Involuntary Bankruptcy, Etc.

  The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.

6.Remedies

.

(a)Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.

(b)Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.

7.Waivers

.  Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.

8.Unconditional Liability

.  Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.

9.Notices

.  All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party.  Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.

10.Construction

.  THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

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11.Severability

.  Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.Trust Account Waiver

.  Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the Trust Account (including the underwriters’ marketing fee) described in greater detail in the registration statement and prospectus filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account related to this Note.

13.Amendment; Waiver

.  Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and the Payee.

14.Assignment

.  No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.

[Signature page follows]

 

 

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IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.

	
 
	
Flame Acquisition Corp.

 

	
 
	
 

	
 
	
By:
	
/s/ Gregory D. Patrinely

	
 
	
 
	
Name:
	
Gregory D. Patrinely

	
 
	
 
	
Title:
	
Chief Financial Officer & Secretary

 

[Signature Page to Promissory Note]

 

 

 

	
 
	
Accepted and agreed as of the date set forth above.

 

Flame Acquisition Sponsor LLC

 

	
 
	
 

	
 
	
By:
	
/s/ Gregory D. Patrinely

	
 
	
 
	
Name:
	
Gregory D. Patrinely

	
 
	
 
	
Title:
	
Chief Financial Officer & Secretary

	
 
						
	
 
						
	
 
						
	
 
						
	
 
	
 
	
 
	
 
	

 

[Signature Page to Promissory Note]a2022deferredcompplanfor

ONE GAS, INC.    DEFERRED COMPENSATION PLAN    FOR    NON-EMPLOYEE DIRECTORS    Effective July 18, 2022        ARTICLE I  ESTABLISHMENT OF PLAN    The Board of Directors of ONE Gas, Inc., an Oklahoma corporation  (the "Company"), on  February 18, 2014, established this ONE Gas, Inc. Deferred Compensation Plan for Non- Employee Directors (the "Plan), a non-qualified deferred compensation plan pursuant to which  any Director of the Company who is not an officer or present employee of the Company, and who  is in a position to contribute to its continued growth, development and future financial success,  may be offered an opportunity to defer all or a portion of his/her compensation under terms and  conditions that will represent a meaningful benefit to such Director.  The Plan is hereby amended  and restated effective July 18, 2022.  Amounts deferred for calendar years beginning prior to the  restated effective date will continue to be paid in accordance with the Elections and Plan terms  under which the amounts were deferred, except to the extent the time and form of payment are  changed by the Participant or the Company in accordance with this Plan restatement.      ARTICLE II  PURPOSE    The purpose of the Plan is to improve the Company's ability to attract and retain Non- Employee Directors who will contribute to the overall success of the Company.    ARTICLE III   DEFINITIONS    "Beneficiary" shall mean any person designated by a Participant on a form furnished by  the Plan Administrator.    "Board" shall mean the Board of Directors of the Company.    "Cash Deferral Option" shall mean the deferral option specified in Article IX of the Plan.    "Code" shall mean the Internal Revenue Code of 1986, as amended.    "Committee" shall mean the Executive Compensation Committee of the Board.    "Common Stock" shall mean the $0.01 par value common stock of the Company.    

 

 2  "Company" shall mean ONE Gas, Inc., an Oklahoma corporation, or any successor thereto.     "Deferred Compensation" shall mean Director Compensation that is deferred by a Non- Employee Director pursuant to this Plan.    "Deferred Compensation Account" shall mean the deferred compensation account created  by the Company which is payable to a participating Non-Employee Director under the Plan.    "Deferred Compensation Agreement" shall mean a written agreement to defer  compensation as described in Article VII of the Plan.    "Determination Date" shall mean the last day of a Participant's term of service as a Non- Employee Director.    "Director" shall mean a member of the Board.    "Director Annual Cash Retainer Fee" shall mean an annual retainer fee paid in cash by the  Company to a Non-Employee Director for service in or for a Plan Year.    "Director Annual Stock Retainer Fee" shall mean an annual retainer fee paid in Common  Stock by Company to a Non-Employee Director for service in or for a Plan Year.    “Director Annual Chairman of the Board Cash Retainer Fee” shall mean an annual retainer  fee paid in cash by the Company to a Non-Employee Director for service as the chairperson of the  Board in or for a Plan Year.    "Director Annual Committee Chair Cash Retainer Fee" shall mean an annual retainer fee  paid in cash by the Company to a Non-Employee Director for service as the chairperson of a  committee of the Board in or for a Plan Year.    “Director Annual Lead Director Cash Retainer Fee” shall mean an annual retainer fee paid  in cash by the Company to a Non-Employee Director for service as the lead independent director  of the Board in or for a Plan Year.    "Director Compensation" shall mean the compensation paid or payable to an individual for  his/her services as a Non-Employee Director.    “Director Retainer Fees” means the Director annual retainer fees defined herein.    "Director Services Fee" shall mean such other fees or compensation as the Company may  pay to a Non-Employer Director, in cash or in Common Stock, in lieu of or in addition to Director  Retainer Fees.     "Disabled" and/or "Disability" shall mean that a Participant is unable to engage in  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 is, by reason of any medically determinable physical or mental  impairment which can be expected to result in death or expected to last for a continuous period of  

 

 3  not less than twelve (12) months, receiving income replacement benefits for a period of not less  than three (3) months under an accident or health plan covering employees of any employer by  whom such participant is employed.  A Participant will be deemed to be Disabled if such  Participant is determined to be totally disabled by the Social Security Administration.    "Distributable Balance" shall mean the balance of a Participant's Deferred Compensation  Account on the Determination Date as provided in paragraph XI of the Plan.    "Distribution Date" shall mean the date specified by a Participant in his or her Election or  Subsequent Election for all or a portion of such Participant’s Deferred Compensation Account to  be paid or commence payment, as permitted by Section 409A, the Treasury Regulations and other  guidance promulgated or issued thereunder.    "Dividend Reinvestment Plan" means the dividend reinvestment plan established and  maintained by or for the Company with respect to Common Stock.    "Election" shall mean an irrevocable written election to defer Director Compensation made  by a Non-Employee Director pursuant to the Plan that shall specify the time and form of  distribution of the Deferred Compensation.    "Employee" shall mean an individual who is employed by the Company or any subsidiary  or affiliate thereof.    "Equity Compensation Plan" shall mean the ONE Gas, Inc. Amended and Restated Equity  Compensation Plan (2018), as amended from time to time.    "Fair Market Value" shall mean on a particular date the average of the high and low sale  prices of a share of Common Stock in consolidated trading on the date in question as reported by  The Wall Street Journal or another reputable source designated by the Committee; provided that  if there were no sales on such date reported as provided above, the respective prices on the most  recent prior day for which a sale was so reported.     "Investment Return Rate" shall mean the deemed investment rate of return to be credited  to a Participant's Deferred Compensation Account pursuant to Articles X and XI of the Plan.    “Measurement Date” shall mean the regular payment date of the Director Compensation,  as applicable.    "Non-Employee Director" shall mean any Director who is not also an Employee of the  Company.    "Participant" shall mean any Non-Employee Director of the Company who elects to defer  compensation under the Plan.    "Phantom Stock Option" shall mean the deferral option specified in Article IX of the Plan.    “Phantom Stock Unit” shall mean the right to receive one share of Common Stock, subject  to the terms and conditions set forth in this Plan.  

 

 4    "Plan" shall mean this ONE Gas, Inc. Deferred Compensation Plan for Non-Employee  Directors as set forth in its entirety in this document as it may be amended from time to time.    "Plan Administrator" shall mean the Executive Compensation Committee of the Board or  any other committee appointed by the Board to act in that capacity.    "Plan Year" shall mean the calendar year.    "Section 409A" shall mean section 409A of the Code.    "Subsequent Election" shall mean an irrevocable written election made by a Participant to  delay the time of distribution or change the form of payment for all or a portion of the Participant’s  Deferred Compensation that is made at any time after the initial Election and Deferred  Compensation Agreement with respect to such Deferred Compensation.    ARTICLE IV  EFFECTIVE DATE    The Plan was adopted, established and effective February 18, 2014.  The Plan is hereby  amended and restated effective July 18, 2022.    ARTICLE V  ELIGIBILITY     All Non-Employee Directors of the Company shall be eligible to participate in the Plan.    ARTICLE VI  NON-EMPLOYEE DIRECTOR COMPENSATION DEFERRAL    Non-Employee Directors of the Company are customarily paid annual Director  Compensation by the Company in the form of Director Retainer Fees.  The Company may from  time to time pay other kinds or amounts of compensation to Non-Employee Directors of the  Company.  The Plan allows the Non-Employee Directors to elect to defer all, part, or none of their  Director Compensation, and to have two (2) deemed investment options, either the Cash Deferral  Option or the Phantom Stock Option, from which to choose as more specifically provided below.    ARTICLE VII  ELECTION TO DEFER DIRECTOR COMPENSATION    A. Participant Elections.  The Plan is a voluntary participation plan, pursuant to which  a Non-Employee Director may make an Election to defer all or a portion of his/her Director  Compensation for a Plan Year by written instrument filed with the Committee in such form as it  may prescribe, subject to the following:      1. An Election and Deferred Compensation Agreement by a Non-Employee Director  to defer his/her Director Compensation for services performed during a Plan Year shall be made  no later than December 31 of the preceding Plan Year.    

 

 5    2. A separate Election and Deferred Compensation Agreement shall be made for each  Plan Year that a Non-Employee Director elects to defer his/her Director Compensation under the  Plan; provided, however, if a Non-Employee Director has made an Election and Deferred  Compensation Agreement for a Plan Year, such Election and Deferred Compensation Agreement  shall remain in effect and be irrevocable for subsequent Plan Years if a new and separate Election  and Deferred Compensation Agreement is not made and entered into on or before December 31 of  the preceding Plan Year.    3. In the case of the first Plan Year in which a Non-Employee Director becomes  eligible to participate in the Plan, the Non-Employee Director may make an initial Election and  Deferred Compensation Agreement within thirty (30) days after the date the Non-Employee  Director became eligible to participate in the Plan, with respect to Director Compensation payable  for services performed after the date of such Election and Deferred Compensation Agreement.   Any such initial Election shall be effective for the Plan Year in which it is made, and thereafter  such new Non-Employee Director shall make his/her Election to defer for subsequent Plan Years  pursuant to Article VII, paragraph A.1.    4. A Non-Employee Director who is to participate in the Plan and defer Director  Compensation must elect the amount, if any, to be deferred, the type of deferral option, and the  time and form of payment, all of which are more specifically described below.    B. Participant Subsequent Elections.  A Participant may make a Subsequent Election  for Deferred Compensation by written instrument filed with the Committee in such form as it may  prescribe, subject to the following:    1. A Subsequent Election must satisfy the following requirements:  a. The Subsequent Election shall not take effect until at least twelve (12)  months after the date on which it is made.    b. In the case of a Subsequent Election related to a payment to be made upon  separation from service of a Participant, at a specified time or pursuant to a  fixed schedule, the payment with respect to which the Subsequent Election  is made shall be deferred for a period of not less than five (5) years from the  date such payment would otherwise have been made (or in the case of  installment payments, five (5) years from the date the first amount was  scheduled to be paid).  c. Any Subsequent Election related to a payment at a specified time or  pursuant to a fixed schedule may not be made less than twelve (12) months  prior to the date the payment is scheduled to be paid (or in the case of  installment payments, twelve (12) months before the date the first amount  was scheduled to be paid).    2. A Subsequent Election that fails to comply with the provisions of Section 409A and  the Treasury Regulations thereunder shall be void and not allowed under the Plan.  

 

 6  3. A Participant who has made a Subsequent Election under the Plan shall be allowed  to make another Subsequent Election with respect to the same Deferred  Compensation, in accordance with this Article VII., paragraph B., and other  provisions of the Plan.  4. Notwithstanding the foregoing provisions, the Committee, in its sole discretion,  shall be authorized to determine, from time to time and/or in the particular case of  any one or more Participants, that a Subsequent Election is not allowed to be made.    ARTICLE VIII  AMOUNT OF DEFERRAL; DIRECTOR COMPENSATION DEFERRALS    A. Deferral Amounts.  A Non-Employee Director who elects to participate in the Plan,  may defer all, a portion or none of the following types of Director Compensation for a Plan Year,  as applicable:      1. Director Annual Stock Retainer Fee    2. Director Annual Cash Retainer Fee    3. Director Annual Committee Chair Cash Retainer Fee    4. Director Annual Chairman of the Board Cash Retainer Fee    5. Director Annual Lead Director Cash Retainer Fee    6. Any other Director Services Fees    B. Designation.  The deferral of Director Compensation shall be designated in the  Non-Employee Director’s Election as a percentage of the form and amount of the type of Director  Compensation to which it applies.      ARTICLE IX  DEFERRAL OPTIONS    A. Deferral Options.  A Non-Employee Director who makes an Election to defer  his/her Director Compensation for a Plan Year may elect either:    1. A Cash Deferral Option; or     2. A Phantom Stock Option.      All amounts deferred are subject to the terms of the option elected.  The Election shall be  made as part of the Election procedure described in Article VII, above.    B.  Cash Deferral Option.  Under the Cash Deferral Option, a participating Non- Employee Director may elect to defer all or a portion of their eligible Director Compensation  payable in cash.  Interest will accrue at the rate defined in Article X, below.  

 

 7    C.  Phantom Stock Option    1. Under the Phantom Stock Option, a participating Non-Employee Director may  elect to defer and convert to Phantom Stock Units all or a portion of their eligible Director  Compensation.      2. The Director Compensation deferred under the Phantom Stock Option shall be  converted into Phantom Stock Units as of the Measurement Date.  The number of Phantom Stock  Units credited to the Participant’s Deferred Compensation Account as a result of the conversion  shall be determined by dividing the dollar amount of the Director Compensation being converted  by the Fair Market Value of a share of Common Stock on the Measurement Date.      3.  Fractional Phantom Stock Units will be accounted for as non-interest bearing cash  based on the Fair Market Value of a share of Common Stock.    4.  Dividend reinvestment attributable to such Phantom Stock Units shall be credited  as provided in Article X, below.     ARTICLE X  DEFERRED COMPENSATION ACCOUNT    A. General.  The Company shall establish a separate Deferred Compensation Account  for each Non-Employee Director who becomes a Participant in the Plan and elects to defer Director  Compensation under the Plan and shall credit such Deferred Compensation Account with the  Director Compensation deferred by the Non-Employee Director.      B. Interest Rate.  The amount deferred under the Cash Deferral Option (including  interest earned thereon) will earn interest at the Investment Return Rate determined annually by  the Committee which shall be the Moody’s Bond Indices Corporate AAA, or comparable index  on the first business day of the Plan Year, plus 100 basis points.  Interest will be credited quarterly  (on the 1st day of April, July, October and January) at the applicable Investment Return Rate.      C. Deemed Dividends.  The Deferred Compensation Account of a Non-Employee  Director who has elected the Phantom Stock Option, shall have phantom or deemed "dividends"  on the Phantom Stock Units in his/her Deferred Compensation Account credited to such account  in an amount equal to the dividends paid on Common Stock.  The deemed dividend equivalent  received will be treated in a manner similar to the treatment of dividends under the Dividend  Reinvestment Plan when a Participant therein elects to have dividends reinvested in Common  Stock, and will be deemed to be used to purchase additional Phantom Stock Units based on the  closing price of the Common Stock on the date the Common Stock dividend is paid.  Any fractional  Phantom Stock Units will be accounted for as non-interest bearing cash based on the Fair Market  Value of a share of Common Stock.  The Deferred Compensation Account shall also be adjusted  for any stock dividends, stock splits, etc.  In the event the Dividend Reinvestment Plan is modified  in any way, such deemed dividends credited through this Plan will be handled in accordance with  said modification.  If the Dividend Reinvestment Plan is terminated, such deemed dividends  credited through this Plan will continue to be reinvested in accordance with the provisions of the  terminated Dividend Reinvestment Plan.  

 

 8    D. Amount of Account.  The amount equal to the balance in the Deferred  Compensation Account of the Participant, taking into account all credits, shall be the amount a  Participant shall be entitled to receive under the terms of the Plan; provided, that with respect to  all deferrals converted to Phantom Stock Units, the Phantom Stock Units will be settled in shares  of Common Stock made available under the Equity Compensation Plan.    E. Statement of Account.  The Company shall furnish or cause to be furnished to each  Participant in the Plan an annual statement of his/her Deferred Compensation Account.    ARTICLE XI  DISTRIBUTIONS AND PAYMENTS     A. Requirements for Distributions and Payments.  Notwithstanding anything to the  contrary expressed or implied herein, the following requirements shall apply to the Plan, to all  Elections or Subsequent Elections made by Participants under the Plan, and to all distributions  and payments made pursuant to the Plan.     1. Any compensation deferred under the Plan shall not be distributed earlier than:      a. separation from service of the Participant,      b. the date the Participant becomes Disabled,      c. death of the Participant, or    d. a specified time (or pursuant to a fixed schedule) specified under the Plan  at the date of deferral of such compensation.     2. No acceleration of the time or schedule of any distribution or payment under the  Plan shall be permitted or allowed, except to the extent provided in Treasury Regulations issued  under Section 409A.     3. If a Subsequent Election is made pursuant to the Plan, payment shall be made or  commence on the Distribution Date specified in such Subsequent Election.  If a Subsequent  Election changes the form of payment, the form of payment must be a form of payment otherwise  permitted under this Plan.    B. Distribution Options.  Participants shall specify a time and form of payment in their  Election for their Deferred Compensation covered by the Election (including any interest or  deemed dividends attributable thereto), in accordance with the following:    1.  Participants may elect for payment to be made (or commence, in the case of  installments) on their Determination Date or a Distribution Date following their Determination  Date; provided that, the Participant must select from among the available Distribution Date(s)  designated by the Committee and set forth in the Election.    

 

 9  2. With respect to the Cash Deferral Option, Participants may elect for payment to be  made in a lump sum or in monthly installments over a specified number of years; provided that, if  the Participant elects to have amounts paid in installments, the Participant must select from among  the permissible installment schedules selected by the Committee and set forth in the Election.   Payments under the Cash Deferral Option shall be made in cash.    3. With respect to the Phantom Stock Option, Participants may elect for payment to  be made in a lump sum or annual installments over a specified number of years; provided that, if  the Participant elects to have amounts paid in installments, the Participant must select from among  the permissible installment schedules selected by the Committee and set forth in the Election.   Payments under the Phantom Stock Option shall be paid in shares of Common Stock, except for  fractional Phantom Stock Units, which shall be paid in cash based on the Fair Market Value of a  share of Common Stock on the payment date.    4. In the absence of a valid Election with respect to the time and form of payment,  amounts will be paid in a lump sum on the Participant’s Determination Date.    C. Distributable Balance; Cash Deferral Option.  The Distributable Balance in the  Deferred Compensation Account of a Participant for any deferrals under the Cash Deferral Option  is the cash balance of such Deferred Compensation Account at the Participant's Determination  Date.      D. Distributable Balance; Phantom Stock Option.  The Distributable Balance in the  Deferred Compensation Account of a Participant for any deferrals under the Phantom Stock Option  shall be the number of shares of Common Stock equal to the number of Phantom Stock Units plus  any cash amounts held in respect of fractional Phantom Stock Units at the Participant’s  Determination Date.    E. Valuation.  At the Determination Date of a Participant, such Participant's Deferred  Compensation Account Distributable Balance for all Plan Years shall be valued.  From that  Determination Date forward, any remaining cash balance in the Participant’s Deferred  Compensation Account (e.g., balance during the time of installment payments) shall bear interest  at the Investment Return Rate and any remaining Phantom Stock Unit balance shall continue to be  credited with "dividends" as provided in Article X, paragraph C above.  In the event a Participant  elects payment of all or a portion of the Participant's Deferred Compensation Account in  installments, each installment shall be calculated by dividing that portion of the Deferred  Compensation Account which is payable in installments by the number of installments remaining  as of such date.  With respect to installments payable in shares of Common Stock, the resulting  number of shares of Common Stock to be distributed shall be rounded down to the next whole  number, except that the final installment shall be rounded up to the next whole number.  That part  of the Participant's Deferred Compensation Account that consists of Phantom Stock Units and  phantom dividends, which is payable in shares of Common Stock, shall be issued to the  Participants under the Company's Equity Compensation Plan on the Distribution Date, and in the  form, elected by the Participant.    F. Distribution; Disability or Death of Participant.  Distribution of a Participant's  Distributable Balance shall commence immediately upon the occurrence of the Disability or death  of the Participant, if such event occurs prior to the Distribution Date, and such distribution shall  

 

 10  be made in the form elected by the Participant.  In such a case, the Distributable Balance in the  Deferred Compensation Account of the Participant shall be determined as of the date of such event  in like manner as if such event was a Determination Date for such Participant.    G. Distributions Continued; Disability or Death of Participant.  Distribution of the  Distributable Balance in the form elected by the Participant shall continue in the event of Disability  or death of the Participant on or after the Distribution Date.    H. Distribution Recipient; Disability.  Distribution of the Distributable Balance in the  form elected by the Participant shall be made to the Participant in the event of Disability of such  Participant; provided, that the Committee may, in its sole discretion, direct that such distribution  instead be made to a guardian or other representative of a Participant who is disabled.    I. Distribution Recipient; Death of Participant.  Each Participant shall also designate  a Beneficiary to receive the unpaid balance in the Participant's Deferred Compensation Account  in the event of the Participant's death prior to complete distribution of their Deferred Compensation  Account.  The unpaid balance shall be paid in the form elected by the Participant.  If no Beneficiary  is designated, then the Participant's Deferred Compensation Account shall be distributed to the  estate of the deceased Participant.    J. Section 409A Compliance.  This Plan is intended to comply with Section 409A of  the Code or an exemption therefrom and shall be construed and interpreted in a manner that is  consistent with the requirements for avoiding additional taxes or penalties under Section 409A of  the Code.     ARTICLE XII  NON-ASSIGNABILITY    The right of a Non-Employee Director or Beneficiary to receive payments under this Plan  shall not be pledged, assigned, transferred or subject to garnishment attachment or other legal  process by creditors of such Non-Employee Director or Beneficiary.     ARTICLE XIII  ADMINISTRATION OF THE PLAN    The Plan shall be administered by the Executive Compensation Committee of the Board,  or by such other Committee as may be appointed and designated by the Board to administer the  Plan from time to time.  The Executive Compensation Committee shall supervise and direct the  administration and operation of the Plan, and shall have such powers and duties as are specified in  the Plan, or are otherwise necessary and appropriate thereto.  The Committee, in its sole discretion,  may establish rules and procedures governing the administration of the Plan, and shall have the  power to interpret provisions of the Plan, and construe and determine the effect of Participant  Elections and other instruments pertaining to the Plan, and all actions taken by the Executive  Compensation Committee pursuant to the foregoing shall be binding on all Participants,  Beneficiaries and other persons.  Day-to-day authority and responsibility for administration of the  Plan may be delegated to the Company’s Benefits Committee and its authorized representatives,  and all actions taken thereby shall be entitled to the same deference as if taken by the Committee  itself.  

 

 11    ARTICLE XIV   FUNDING    A. Company Obligation.  The amounts of compensation deferred by any Non- Employee Director under this Plan shall constitute an unfunded and unsecured promise by the  Company to pay such Non-Employee Director the deferred compensation from the general assets  of the Company in the future.    B. Nonqualified Trust.  Although the Company may make, in its sole discretion,  investments for the purpose of providing funds to pay such unsecured obligations made by it to  the Plan, any such investments shall remain the sole and exclusive property of the Company subject  to claims of its creditors generally; provided, that the Company may, at its option, create a grantor  or rabbi trust to pay part or all of its obligations under the Plan as it determines to the extent  permissible without changing the unfunded and unsecured nature of its deferred compensation  obligations to Participants under the Plan.    ARTICLE XV  STATE LAWS GOVERNING PLAN    This Plan shall be governed by the laws of the State of Oklahoma.    ARTICLE XVI   AMENDMENT OR TERMINATION OF PLAN    This Plan shall continue in effect until amended or terminated by the Board of Directors.   Any such amendment or termination shall not adversely affect any Deferred Compensation  Account of a Participant then in existence under the Plan or any rights of a Participant under a  Deferred Compensation Agreement entered into prior to such amendment or termination.

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