Exhibit 3.1
BY-LAWS
OF
ANADARKO PETROLEUM CORPORATION
Amended and Restated as of May 20, 2008
BY-LAWS
OF
ANADARKO PETROLEUM CORPORATION
TABLE OF CONTENTS
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ARTICLE I Office and Records
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1
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ARTICLE II Meetings of Stockholders
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1
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ARTICLE III Board of Directors
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9
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ARTICLE IV Meetings of the Board
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9
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ARTICLE V Committees of the Board
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10
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ARTICLE VI Compensation of Directors
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13
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ARTICLE VII Officers
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ARTICLE VIII Powers of Execution
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19
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ARTICLE IX Indemnification
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20
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ARTICLE X Stock Certificates and Transfer Thereof
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ARTICLE XI Checks, Drafts, Bank Accounts, Etc
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ARTICLE XII Miscellaneous
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24
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BY-LAWS
OF
ANADARKO PETROLEUM CORPORATION
ARTICLE I
OFFICE AND RECORDS
1.1. The Corporation shall maintain a registered office in Delaware, and may maintain such
other offices and keep its books, documents and records at such places within or without Delaware
as may from time to time be designated by the Board of Directors of the Corporation (hereinafter
the Board or the Board of Directors).
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1. All meetings of the stockholders of the Corporation shall be held at such place or
places, if any, within or without the State of Delaware, as may from time to time be fixed by the
Board of Directors, or as shall be specified or fixed in the respective notices or waivers of
notice thereof.
2.2. The Annual Meeting of Stockholders shall be held on such date and at such time as may be
fixed by the Board and stated in the notice thereof, for the purpose of electing directors and for
the transaction of only such other business as is properly brought before the meeting in accordance
with these By-Laws.
2.3. Special meetings of the stockholders for any purpose or purposes may be called at any
time by a majority of the Board, the Chairman of the Board, the Chief Executive Officer or the
President, but such special meetings may not be called by any other person or persons. The
business transacted at a special meeting shall be confined to the purposes specified in the notice
thereof. Special meetings shall be held at such date and at such time as the Board may designate.
2.4. Whenever stockholders are required or permitted to take any action at a meeting, a notice
of meeting of stockholders shall be given that shall state the place, if any, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes thereof. Unless otherwise
provided by law, the Restated Certificate of Incorporation or these By-Laws, the notice of any such
meeting shall be given not less than ten nor more than sixty days before the date of such meeting
to each stockholder entitled to vote at such meeting.
2.5. Unless otherwise provided by law, the Restated Certificate of Incorporation or these
By-Laws, the holders of a majority in voting power of the outstanding shares of capital stock of
the Corporation entitled to vote at the meeting, present either in person or by proxy, shall
constitute a quorum at such meeting. Whether or not a quorum is present, the holders of a
majority in voting power of the outstanding shares of capital stock of the Corporation
entitled to
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vote at the meeting, present in person or by proxy, may adjourn the meeting from time
to time to another time or place, at which time, if a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally scheduled. Notice need
not be given of the adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken, unless the adjournment is for more than thirty (30) days or, if
after the adjournment, a new record date is fixed for the adjourned meeting, in which event a
notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at
the meeting.
2.6. Except as otherwise provided by or pursuant to the provisions of the Restated Certificate
of Incorporation, each stockholder entitled to vote at any meeting shall be entitled, for each
share held of record on the record date for determining the stockholders entitled to vote at such
meeting, to one vote for each share of stock held by such stockholder who has voting power on the
question. Except as otherwise provided by these By-Laws, each director shall be elected by the
vote of a majority of the votes cast with respect to that directors election at any meeting for
the election of directors at which a quorum is present, provided that if, as of the tenth (10th)
day preceding the date the Corporation first mails its notice of meeting for such meeting to the
stockholders of the Corporation, the number of nominees exceeds the number of directors to be
elected (a Contested Election), the directors shall be elected by the vote of a plurality of the
votes cast. For purposes of this Section 2.6 of these By-Laws, a majority of votes cast shall mean
that the number of votes cast for a directors election exceeds the number of votes cast
against that directors election (with abstentions and broker nonvotes not counted as a vote
cast either for or against that directors election).
In order for any incumbent director to become a nominee of the Board of Directors for further
service on the Board of Directors, such person must submit an irrevocable resignation, contingent
on (i) that person not receiving a majority of the votes cast in an election that is not a
Contested Election, and (ii) acceptance of that resignation by the Board of Directors in accordance
with the policies and procedures adopted by the Board of Directors for such purpose. In the event
an incumbent director fails to receive a majority of the votes cast in an election that is not a
Contested Election, the nominating and governance committee, or such other committee designated by
the Board of Directors pursuant to these Bylaws, shall make a recommendation to the Board of
Directors as to whether to accept or reject the resignation of such incumbent director, or whether
other action should be taken. The Board of Directors shall act on the resignation, taking into
account the committees recommendation, and publicly disclose (by a press release and filing an
appropriate disclosure with the Securities and Exchange Commission) its decision regarding the
resignation and, if such resignation is rejected, the rationale behind the decision within ninety
(90) days following certification of the election results. The committee in making its
recommendation and the Board of Directors in making its decision each may consider any factors and
other information that they consider appropriate and relevant.
All other matters presented to the stockholders at a meeting at which a quorum is present
shall, unless otherwise provided by the Restated Certificate of Incorporation, these By-laws, the
rules and regulations of any stock exchange applicable to the Corporation, or applicable law or
pursuant to any regulation applicable to the Corporation or its securities, be decided by the
affirmative vote of the holders of a majority in voting power of the shares of capital stock of the
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Corporation entitled to vote at the meeting present in person or represented by proxy at the
meeting and entitled to vote on the subject matter.
Elections of directors need not be by ballot; provided however, that by resolution duly
adopted, a vote by ballot may be required.
2.7. Each stockholder entitled to vote at a meeting of stockholders may authorize another
person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer period. A proxy shall
be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy
which is not irrevocable by attending the meeting and voting in person or by delivering to the
Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.
2.8. The Corporation may, and shall if required by law, in advance of any meeting of
stockholders, appoint one or more inspectors of election, who may be employees of the Corporation,
to act at the meeting or any adjournment thereof and to make a written report thereof. The
Corporation may designate one or more persons as alternate inspectors to replace any inspector who
fails to act. In the event that no inspector so appointed or designated is able to act at a
meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before entering upon the discharge of his or her duties,
shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality
and according to the best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding
and the voting power of each such share, (ii) determine the shares of capital stock of the
Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all
votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of
any challenges made to any determination by the inspectors, and (v) certify their determination of
the number of shares of capital stock of the Corporation represented at the meeting and such
inspectors count of all votes and ballots. Such certification and report shall specify such other
information as may be required by law. In determining the validity and counting of proxies and
ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such
information as is permitted by applicable law. No person who is a candidate for an office at an
election may serve as an inspector at such election.
2.9.
Notice of Stockholder Business and Nominations
.
(A)
Annual Meetings of Stockholders
.
(1) Nominations of persons for election to the Board of Directors and the proposal of other
business to be considered by the stockholders may be made at an annual meeting of stockholders only
(a) pursuant to the Corporations notice of meeting (or any supplement thereto), (b) by or at the
direction of the Board of Directors or (c) by any stockholder of the Corporation who (i) was a
stockholder of record at the time of giving of notice provided for in this Section 2.9 and at the
time of the annual meeting, (ii) is entitled to vote at the meeting and (iii) complies with the
notice procedures set forth in this Section 2.9 as to such business or
nomination; clause (c) shall be the exclusive means for a stockholder to make nominations or
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submit other business (other than matters properly brought under Rule 14a-8 under the Securities
Exchange Act of 1934, as amended (the Exchange Act) and included in the Corporations notice of
meeting) before an annual meeting of stockholders.
(2) Without qualification, for nominations or any other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 2.9,
the stockholder must have given timely notice thereof in writing to the Secretary of the
Corporation and any such proposed business other than the nominations of persons for election to
the Board of Directors must constitute a proper matter for stockholder action. To be timely, a
stockholders notice shall be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the ninetieth (90
th
) day, nor
earlier than the close of business on the one hundred twentieth (120
th
) day, prior to
the first anniversary of the preceding years annual meeting (provided, however, that in the event
that the date of the annual meeting is more than thirty (30) days before or more than sixty (60)
days after such anniversary date, notice by the stockholder must be so delivered not earlier than
the close of business on the one hundred twentieth (120
th
) day prior to such annual
meeting and not later than the close of business on the later of the ninetieth (90
th
)
day prior to such annual meeting or , if the first public announcement of the date of such annual
meeting is less than one hundred (100) days prior to the date of such annual meeting, the tenth
(10
th
) day following the day on which public announcement of the date of such meeting is
first made by the Corporation). In no event shall any adjournment or postponement of an annual
meeting or the public announcement thereof commence a new time period (or extend any time period)
for the giving of a stockholders notice as described above. To be in proper form, a stockholders
notice must: (a) set forth, as to the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporations books, and of such beneficial owner, if any; (ii)
(A) the class or series and number of shares of the Corporation which are, directly or indirectly,
owned beneficially and of record by such stockholder and such beneficial owner, (B) any option,
warrant, convertible security, stock appreciation right, or similar right with an exercise or
conversion privilege or a settlement payment or mechanism at a price related to any class or series
of shares of the Corporation or with a value derived in whole or in part from the value of any
class or series of shares of the Corporation, whether or not such instrument or right shall be
subject to settlement in the underlying class or series of capital stock of the Corporation or
otherwise (a Derivative Instrument) directly or indirectly owned beneficially by such stockholder
and any other direct or indirect opportunity to profit or share in any profit derived from any
increase or decrease in the value of shares of the Corporation, (C) any proxy, contract,
arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote
any shares of any security of the Company, (D) any short interest in any security of the Company
(for purposes of this Section 2.9 a person shall be deemed to have a short interest in a security
if such person directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has the opportunity to profit or share in any profit derived from any
decrease in the value of the subject security), (E) any rights to dividends on the shares of the
Corporation owned beneficially by such stockholder that are separated or separable from the
underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation
or Derivative Instruments held, directly or indirectly, by a general or limited partnership in
which such stockholder is a general partner or,
directly or indirectly, beneficially owns an interest in a general partner and (G) any
performance-related fees (other than an asset-based fee)
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that such stockholder is entitled to based
on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if
any, as of the date of such notice, including without limitation any such interests held by members
of such stockholders immediate family sharing the same household (which information shall be
supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the
record date for the meeting to disclose such ownership as of the record date); (iii) any other
information relating to such stockholder and beneficial owner, if any, that would be required to be
disclosed in a proxy statement or other filings required to be made in connection with
solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a
contested election pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder; and (iv) a representation whether the stockholder or the beneficial owner,
if any, intends or is part of a group which intends (y) to deliver a proxy statement and/or form of
proxy to holders of at least the percentage of the Corporations outstanding capital stock required
to approve or adopt the proposal or elect the nominee and/or (z) otherwise to solicit proxies from
stockholders in support of such proposal or nomination, (b) if the notice relates to any business
other than a nomination of a director or directors that the stockholder proposes to bring before
the meeting, set forth (i) a brief description of the business desired to be brought before the
meeting (including the text of any resolutions proposed for consideration and in the event that
such business includes a proposal to amend the By-Laws of the Corporation, the language of the
proposed amendment), the reasons for conducting such business at the meeting and any material
interest of such stockholder and beneficial owner, if any, in such business and (ii) a description
of all agreements, arrangements and understandings between such stockholder and beneficial owner,
if any, and any other person or persons (including their names) in connection with the proposal of
such business by such stockholder; (c) set forth, as to each person, if any, whom the stockholder
proposes to nominate for election or reelection to the Board of Directors (i) all information
relating to such person that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for election of directors
in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder (including such persons written consent to being named in the proxy
statement as a nominee and to serving as a director if elected) and (ii) a description of all
direct and indirect compensation and other material monetary agreements, arrangements and
understandings during the past three years, and any other material relationships, between or among
such stockholder and beneficial owner, if any, and their respective affiliates and associates, or
others acting in concert therewith, on the one hand, and each proposed nominee, and his or her
respective affiliates and associates, or others acting in concert therewith, on the other hand,
including, without limitation all information that would be required to be disclosed pursuant to
Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any
beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate
thereof or person acting in concert therewith, were the registrant for purposes of such rule and
the nominee were a director or executive officer of such registrant; and (d) with respect to each
nominee for election or reelection to the Board of Directors, include a completed and signed
questionnaire, representation and agreement required by paragraph 2 of this Section 2.9. The
Corporation may require any proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed nominee
to serve as an independent director of the Corporation or that could be material to a
reasonable stockholders understanding of the independence, or lack thereof, of such nominee.
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(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 2.9 to
the contrary, in the event that the number of directors to be elected to the Board of Directors at
an annual meeting is increased and there is no public announcement by the Corporation naming the
nominees for the additional directorships at least one hundred (100) days prior to the first
anniversary of the preceding years annual meeting, a stockholders notice required by this Section
2.9 shall also be considered timely, but only with respect to nominees for the additional
directorships, if it shall be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the tenth (10
th
) day following the
day on which such public announcement is first made by the Corporation.
(B)
Special Meetings of Stockholders
. Only such business shall be conducted at a
special meeting of stockholders as shall have been brought before the meeting pursuant to the
Corporations notice of meeting. Nominations of persons for election to the Board of Directors may
be made at a special meeting of stockholders at which directors are to be elected pursuant to the
Corporations notice of meeting (1) by or at the direction of the Board of Directors or (2)
provided that the Board of Directors has determined that directors shall be elected at such
meeting, by any stockholder of the Corporation who (a) is a stockholder of record at the time of
giving of notice provided for in this Section 2.9 and at the time of the special meeting, (ii) is
entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in this
Section 2.9 as to such nomination. In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors to the Board of Directors, any such
stockholder entitled to vote in such election of directors may nominate a person or persons (as the
case may be) for election to such position(s) as specified in the Corporations notice of meeting,
if the stockholders notice required by paragraph (A)(2) of this Section 2.9 with respect to any
nomination (including the completed and signed questionnaire, representation and agreement required
by paragraph 2 of this Section 2.9) shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the close of business on the one hundred twentieth
(120
th
) day prior to such special meeting and not later than the close of business on
the later of the ninetieth (90
th
) day prior to such special meeting or if the first
public announcement of the date of such special meeting is less than one hundred (100) days prior
to the date of such special meeting, the tenth (10
th
) day following the day on which
public announcement is first made of the date of the special meeting and of the nominees proposed
by the Board of Directors to be elected at such meeting. In no event shall any adjournment or
postponement of a special meeting or the public announcement thereof commence a new time period (or
extend any time period) for the giving of a stockholders notice as described above.
(C)
General
. (1) Only such persons who are nominated in accordance with the
procedures set forth in this Section 2.9 shall be eligible to be elected at an annual or special
meeting of stockholders of the Corporation to serve as directors and only such business shall be
conducted at a meeting of stockholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section 2.9. Except as otherwise provided by law, the
Restated Certificate of Incorporation or these By-Laws, the chairman of the meeting shall have the
power and duty (a) to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this Section 2.9 (including whether the stockholder or beneficial owner, if
any, on whose behalf the nomination or proposal is made solicited (or is part of a group which
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solicited) or did not so solicit, as the case may be, proxies in support of such stockholders
nominee or proposal in compliance with such stockholders representation as required by clause
(A)(2)(a)(iv) of this Section 2.9) and (b) if any proposed nomination or business was not made or
proposed in compliance with this Section 2.9, to declare that such nomination shall be disregarded
or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions
of this Section 2.9, unless otherwise required by law, if the stockholder (or a qualified
representative of the stockholder) does not appear at the annual or special meeting of stockholders
of the Corporation to present a nomination or proposed business, such nomination shall be
disregarded and such proposed business shall not be transacted, notwithstanding that proxies in
respect of such vote may have been received by the Corporation. For purposes of this Section 2.9,
to be considered a qualified representative of the stockholder, a person must be authorized by a
writing executed by such stockholder or an electronic transmission delivered by such stockholder to
act for such stockholder as proxy at the meeting of stockholders and such person must produce such
writing or electronic transmission, or a reliable reproduction of the writing or electronic
transmission, at the meeting of stockholders.
(2) For purposes of this Section 2.9, public announcement shall include disclosure in a
press release reported by the Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations
promulgated thereunder.
(3) Notwithstanding the foregoing provisions of this Section 2.9, a stockholder shall also
comply with all applicable requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.9; provided, however, that any
references in these By-Laws to the Exchange Act or the rules promulgated thereunder are not
intended to and shall not limit the requirements applicable to nominations or proposals to any
other business to be considered pursuant to Section 2.9. Nothing in this Section 2.9 shall be
deemed to affect any rights (a) of stockholders to request inclusion of proposals or nominations in
the Corporations proxy statement pursuant to applicable rules and regulations promulgated under
the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors pursuant
to any applicable provisions of the Restated Certificate of Incorporation or these By-Laws.
2.10. Submission of Questionnaire, Representation and Agreement. To be eligible to be a
nominee for election or reelection as a director of the Corporation, a person must deliver (in
accordance with the time periods prescribed for delivery of notice under Section 1 of this By-Law)
to the Secretary of the Corporation at the principal executive offices of the Corporation a written
questionnaire with respect to the background and qualification of such person and the background of
any other person or entity on whose behalf the nomination is being made (which questionnaire shall
be provided by the Secretary upon written request) and a written representation and agreement (in
the form provided by the Secretary upon written request) that such person (A) is not and will not
become a party to (1) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person or entity as
to how such person, if elected as a director of the Corporation, will act or vote on any issue or
question (a Voting Commitment) that has not been disclosed to the Corporation or (2) any Voting
Commitment that could limit or interfere with such persons ability to comply, if elected
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as a
director of the Corporation, with such persons fiduciary duties under applicable law, (B) is not
and will not become a party to any agreement, arrangement or understanding with any person or
entity other than the Corporation with respect to any direct or indirect compensation,
reimbursement or indemnification in connection with service or action as a director that has not
been disclosed therein, and (C) in such persons individual capacity and on behalf of any person or
entity on whose behalf the nomination is being made, would be in compliance, if elected as a
director of the Corporation, and will comply with all applicable publicly disclosed corporate
governance, conflict of interest, confidentiality and stock ownership and trading policies and
guidelines of the Corporation.
2.11. The officer who has charge of the stock ledger shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting at least ten (10) days prior
to the meeting (i) on a reasonably accessible electronic network, provided that the information
required to gain access to such list is provided with the notice of meeting or (ii) during ordinary
business hours at the principal place of business of the Corporation. The list of stockholders
must also be open to examination at the meeting as required by applicable law. Except as otherwise
provided by law, the stock ledger shall be the only evidence as to who are the stockholders
entitled to examine the list of stockholders required by this Section 2.11 or to vote in person or
by proxy at any meeting of stockholders.
2.12. The date and time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting shall be announced at the meeting by the person presiding
over the meeting. The Board of Directors may adopt by resolution such rules and regulations for
the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent
inconsistent with such rules and regulations as adopted by the Board of Directors, the person
presiding over any meeting of stockholders shall have the right and authority to convene and to
adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts
as, in the judgment of such presiding person, are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or
prescribed by the presiding person of the meeting, may include, without limitation, the following:
(i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures
for maintaining order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the Corporation, their
duly authorized and constituted proxies or such other persons as the presiding person of the
meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (v) limitations on the time allotted for questions or comments by
participants. The presiding person at any meeting of stockholders, in addition to making any other
determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant,
determine and declare to the meeting that a matter or business was not properly brought
before the meeting and if such presiding person should so determine, such presiding person shall so
declare to the meeting and any such matter or business not properly brought before the meeting
shall not be transacted or considered. Unless and to the extent determined by the Board of
Directors or the person presiding over the meeting, meetings of stockholders shall not be required
to be held in accordance with the rules of parliamentary procedure.
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ARTICLE III
BOARD OF DIRECTORS
3.1. The business and affairs of the Corporation shall be managed by or under the direction of
a Board of Directors consisting of not less than six (6) nor more than fifteen (15) directors, the
exact number of directors to be determined from time to time by resolution adopted by affirmative
vote of a majority of the Board of Directors. The directors shall be divided into three classes,
designated Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the Board of Directors. If
the number of directors is changed, any increase or decrease shall be apportioned among the classes
so as to maintain the number of directors in each class as nearly equal as possible, and any
additional director of any class elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining term of that class, but in no
case will a decrease in the number of directors shorten the term of any incumbent director. A
director shall hold office until the Annual Meeting for the year in which his term expires and
until his successor shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office. Any vacancy on the Board of
Directors that results from an increase in the number of directors may be filled by a majority of
the Board of Directors then in office, provided that a quorum is present, and any other vacancy
occurring in the Board of Directors may be filled by a majority of the directors then in office,
even if less than a quorum, or by a sole remaining director. Any director elected to fill a
vacancy not resulting from an increase in the number of directors shall have the same remaining
term as that of his predecessor.
Any director may resign at any time by giving notice in writing or by electronic transmission
to the Board, the Chairman of the Board, the Chief Executive Officer, the President or the
Secretary of the Corporation. Such resignation shall take effect on the date of receipt of such
notice or at any later time specified therein; and the acceptance of such resignation, unless
otherwise required by the terms thereof, shall not be necessary to make it effective.
Subject to the rights of the holders of any series of Preferred Stock then outstanding, any
director may be removed, but only for cause, at any special meeting of the stockholders called for
that purpose, by the affirmative vote of the holders of a majority in number of shares of the
Corporation entitled to vote for the election of such director, and the vacancy in the Board caused
by any such removed may be filled by the stockholders at such meeting.
3.2. The Board of Directors may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by the laws of Delaware or by the Restated Certificate of
Incorporation directed or required to be exercised or done by the stockholders.
ARTICLE IV
MEETINGS OF THE BOARD
4.1. The first meeting of the Board of Directors after the Annual Meeting of Stockholders may
be held without notice, either immediately after said meeting of stockholders
9
and at the place
where it was held, or at such other time and place, whether within or without Delaware, as shall be
fixed by the Board of Directors, or by the consent of all the directors.
4.2. Regular meetings of the Board may be held without notice at such time and place, whether
within or without Delaware, as shall from time to time be determined by the Board.
4.3. Special meetings of the Board of Directors shall be called at the request in writing of
the Chairman of the Board, the Chief Executive Officer or the President or of any three directors.
Such request shall state the purpose or purposes of the proposed meeting. Such meetings may be
held at any place, whether within or without Delaware. Notice of each such meeting shall be given
to each director at least forty-eight (48) hours before the meeting. Such notice shall set forth
the time and place at which the meeting is to be held and the purpose or purposes thereof. No such
notice of any given meeting need be given to any director who files a waiver of notice thereof with
the Secretary, either before or after the meeting.
4.4. A quorum for the transaction of business at meetings of the Board of Directors shall
consist of the directors entitled to cast a majority of the votes of the directors then in office.
In the absence of a quorum at any duly scheduled or duly called meeting, a majority of the
directors present may adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present, at which time any business may be transacted which might
have been transacted at the meeting as originally scheduled. Except in cases in which the Restated
Certificate of Incorporation, these By-Laws or applicable law otherwise provides, a majority of the
votes entitled to be cast by the directors present at a meeting at which a quorum is present shall
be the act of the Board.
4.5. Members of the Board, or any committee designated by the Board, may participate in a
meeting thereof by means of conference telephone or other communications equipment by means of
which all persons participating in the meeting can hear each other, and participation in a meeting
pursuant to these By-Laws shall constitute presence in person at such meeting.
Unless otherwise restricted by the Restated Certificate of Incorporation or these By-Laws, any
action required or permitted to be taken at any meeting of the Board, or of any committee thereof,
may be taken without a meeting if all members of the Board or such committee, as the case may be,
consent thereto in writing or by electronic transmission and the writing or writings or electronic
transmission or transmissions are filed with the minutes of proceedings of the Board or such
committee in accordance with applicable law.
ARTICLE V
COMMITTEES OF THE BOARD
5.1.
General
.
(A) The Board of Directors may, by resolution passed by a majority vote of the Board,
designate one or more committees, each committee to consist of two or more directors. The Board
may designate one or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the
10
committee. Any such committee shall have and
may exercise such powers as are designated in the resolution of the Board or set forth in these
By-Laws.
(B) Resignations of members of a committee shall be effective upon delivery unless the
resignation specifies a later effective date or an effective date determined upon the happening of
an event or events. Any member of a committee may be removed at any time, with or without cause,
by a majority vote of the Board.
(C) Regular meetings of a committee may be held without notice at such time and place as shall
from time to time be determined by the committee. Special meetings of a committee shall be called
at the request of the Chairman of the committee or of any two members of the committee. Notice of
each special meeting of a committee shall be given by the Secretary of the Corporation or by the
directors or directors calling such meeting to each member of the committee. No such notice of any
meeting need be given to any member of a committee who attends the meeting or who files a waiver of
notice thereof with the Secretary, either before or after the meeting.
(D) Unless the Board of Directors otherwise provides, each committee designated by the Board
may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision
by the Board, a provision in the rules of such committee or a provision in the By-Laws to the
contrary, a majority of the entire number of members of such committee (not including any alternate
members unless such alternate members are attending such meeting for members of the committee that
are absent from such meeting) shall constitute a quorum for the transaction of business, and the
vote of a majority of the members present at a meeting at the time of such vote if a quorum is then
present shall be the act of such committee. If the Board has not designated alternate members of a
committee, or if all such alternates are absent or disqualified from voting, the member or members
of the committee present at any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may in the absence or disqualification of any member of the committee
unanimously appoint another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member.
(E) Each committee may designate a chairman of such committee by majority vote of the
committees full membership, unless designation of a chairman is otherwise specified in these
By-Laws or provided by resolution of the Board of Directors.
(F) Each committee shall keep regular minutes of proceedings, copies of which shall be made
available to each member of the Board of Directors.
5.2.
Executive Committee
.
The Board of Directors may designate an Executive Committee. During the intervals between
meetings of the Board, the Committee shall advise and aid the officers of the Corporation in all
matters concerning its interests and the management of its business, and generally perform such
duties as may be directed by the Board of Directors from time to time. The Committee shall have
and may exercise all the powers and authority of the Board in the management of the business and
affairs of the Corporation while the Board is not in session, and
11
may authorize the seal of the
Corporation to be affixed to all papers which may require it; but the Committee shall not have
power or authority in reference to amending the Restated Certificate of Incorporation or adopting
an agreement of merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporations property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution, amending the
By-Laws, filling newly created directorships and vacancies on the Board or any committee, or
(unless expressly authorized by resolution of the Board) declaring a dividend or authorizing the
issuance of stock.
5.3.
Audit Committee.
The Board of Directors shall designate annually an Audit Committee consisting of not less than
three directors as it may from time to time determine, none of whom shall be officers or employees
of the Corporation. The committee shall review with the independent accountants the Corporations
financial statements, basic accounting and financial policies and practices, adequacy of controls,
standard and special tests used in verifying the Corporations statements of account and in
determining the soundness of the Corporations financial condition, and the committee shall report
to the Board the results of such reviews; review the policies and practices pertaining to
publication of quarterly and annual statements to assure consistency with audited results and the
implementation of policies and practices recommended by the independent accountants; ensure that
suitable independent audits are made of the operations and results of subsidiary corporations and
affiliates; and monitor compliance with the Corporations code of business conduct and ethics. The
committee shall have such other duties, functions and powers as the Board may from time to time
prescribe.
5.4.
Compensation and Benefits Committee.
The Board of Directors shall designate annually a Compensation and Benefits Committee
consisting of not less than two directors as it may from time to time determine, none of whom shall
be officers or employees of the Corporation. The committee shall administer the Corporations
executive compensation plans and programs. In addition, the committee shall consider proposals
with respect to the creation of and changes to executive compensation plans and will review
appropriate criteria for establishing certain performance measures under applicable Corporation
plans and programs. The committee shall have such other duties, functions and powers as the Board
may from time to time prescribe.
5.5.
Nominating and Corporate Governance Committee.
The Board of Directors shall designate annually a Nominating and Corporate Governance
Committee consisting of not less than two directors as it may from time to time determine, none of
whom shall be officers or employees of the Corporation. The committee shall have responsibilities
relating to corporate governance and criteria for Board selection. The committee shall develop and
recommend to the Board a set of corporate governance principles or guidelines applicable to the
Corporation, identify individuals qualified to become members of the Board, consistent with
criteria approved by the Board, select, or recommend that the Board select, the director nominees
for the next annual meeting of stockholders, and consider any nominations submitted by the
stockholders to the Secretary in accordance with these By-Laws, the
12
Corporations corporate
governance guidelines or applicable law. The committee shall have such other duties, functions and
powers as the Board may from time to time prescribe.
ARTICLE VI
COMPENSATION OF DIRECTORS
6.1. Each director shall, in consideration of his serving as a director, be paid by the
Corporation such reasonable compensation as shall be fixed from time to time by resolution of the
Board of Directors or any duly authorized committee, together with travel, food, lodging and other
expenses incurred in attending meetings of the Board, provided that no director who is also an
employee of the Corporation shall be entitled to receive any compensation for his services as a
director.
6.2. Members of committees of the Board of Directors may receive such reasonable compensation
for their services as may be fixed from time to time by resolution of the Board of Directors,
provided that nothing herein contained shall be construed to preclude any member of any committee
from serving the Corporation in any other capacity and receiving compensation therefor.
ARTICLE VII
OFFICERS
7.1.
General
.
(A) The officers of the Corporation shall consist of such of the following as the Board of
Directors shall from time to time elect or appoint, or as the Chief Executive Officer may from time
to time appoint pursuant to Section 7.2 of this Article VII: a Chief Executive Officer, a Chairman
of the Board, a Vice Chairman of the Board, a President, a Chief Operating Officer, a Chief
Financial Officer, one or more Vice Presidents (one or more of whom may be designated Executive
Vice President, one or more of whom may be designated Group Vice President and one or more of whom
may be designated Senior Vice President), a Secretary, a Treasurer, a Controller, and a General
Counsel. The principal officers (except those who may be appointed by the Chief Executive Officer
as provided in Section 7.2 of this Article VII), if determined by the Board of Directors, shall be
elected each year at the first meeting of the Board of Directors after the annual meeting of the
stockholders of the Corporation. Two or more offices may be held by the same person. Officers of
the Corporation may simultaneously serve as officers of subsidiaries
or divisions thereof. The Chairman of the Board shall be chosen by the directors from their
own number and may be an officer of the Corporation as the Board may determine. The salaries of
the principal officers of the Corporation shall be fixed by the Board or a committee of the Board.
(B) The Board may appoint such other officers, assistant officers and agents as it shall deem
necessary, who shall hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined by the Board.
(C) Any elected or appointed officer may resign at any time upon written notice to the
Chairman of the Board, the Chief Executive Officer or the Secretary of the
13
Corporation. Such
resignation shall take effect upon the date of its receipt or at such later time as may be
specified therein, and unless otherwise required by the terms thereof, no acceptance of such
resignation shall be necessary to make it effective.
(D) Any elected or appointed officer may be removed, with or without cause, by the Board at
any regular or special meeting of the Board, and in the case of an officer appointed pursuant to
Section 7.2 of this Article VII, may be so removed by the Chief Executive officer. Any such
removal shall be without prejudice to the contractual rights of such officer, if any, with the
Corporation, but the election or appointment of any officer shall not itself create contractual
rights.
(E) Unless he resigns, dies or is removed prior thereto, each officer of the Corporation shall
hold office until his successor has been elected or appointed and has qualified.
7.2.
Chief Executive Officer.
(A) The Board of Directors shall designate the Chief Executive Officer of the Corporation.
(B) He shall preside at meetings of the stockholders or directors in the absence or disability
of the Chairman of the Board and the Vice Chairman, if any.
(C) All other officers of the Corporation shall be subordinate to the Chief Executive Officer
and shall from time to time report to him as he may direct. He shall have general supervision and
direction of the business of the Corporation and shall see that all orders and resolutions of the
Board are carried into effect.
(D) The Chief Executive Officer shall have authority to sign and acknowledge in the name and
on behalf of the Corporation all stock certificates, contracts or other documents and instruments,
except where the signing thereof shall be expressly delegated to some other officer or agent by the
Board or required by law to be otherwise signed or executed and, unless otherwise provided by law
or by the Board may authorize any officer, employee or agent of the corporation to sign, execute
and acknowledge in his place and stead all such documents and instruments; he shall fix the
compensation of officers of the Corporation, other than his own compensation, and the compensation
of officers of its principal operating subsidiaries reporting directly to him unless such authority
is otherwise reserved to the Board or a committee thereof;
and he shall approve proposed employee compensation and benefit plans of subsidiary companies
not involving the issuance or purchase of capital stock of the Corporation. He shall have the
power to appoint and remove any Vice President, Controller, Secretary or Treasurer of the
Corporation; provided that officers subject to Section 16 of the Securities Exchange Act of 1934,
as amended, shall be elected by the Board. He shall also have the power to appoint and remove such
associate or assistant officers of the Corporation with such titles and duties as he may from time
to time deem necessary or appropriate. He shall have such other powers and perform such other
duties as from time to time may be assigned to him by the Board or the Executive Committee of the
Board.
14
(E) The Chief Executive Officer shall have such power and authority as is usual, customary and
desirable to perform all the duties of the office (including, but not limited to, the approval of
payments or arrangements made in connection with the Corporations debt, interest, tax,
contractual, and regulatory obligations) necessary to, and consistent with, the businesses of the
Corporation and its subsidiaries. The Chief Executive Officer (and other officers of the
Corporation as delegated by the Chief Executive Officer or as authorized in these By-Laws) may
delegate the foregoing authorization to other officers, employees, and agents of the Corporation by
either written authorization (including powers of attorney) or otherwise, unless such authorization
is expressly reserved for the Chairman of the Board, the Chief Executive Officer or other officer,
as applicable.
(F) In the absence or disability of the Chairman of the Board and the Lead Director, or at
their request, the Chief Executive Officer may preside at any meeting of the stockholders or of the
Board and, in such circumstances, may exercise any of the other powers or perform any of the other
duties of the Chairman of the Board.
7.3.
Chairman of the Board.
(A) The Chairman of the Board shall preside at all meetings of the stockholders and of the
directors.
(B) He shall be a member and chairman of the Executive Committee.
(C) He shall have such other powers and perform such other duties as may be prescribed from
time to time by the Board of Directors.
7.4.
Vice Chairman of the Board.
(A) If the Board designates a Vice Chairman of the Board, he shall preside at meetings of the
stockholders or directors in the absence or disability of the Chairman of the Board.
(B) He shall have such other powers and perform such other duties as may be prescribed from
time to time by the Board of Directors.
7.5.
President.
The President shall have such powers and perform such duties as may be prescribed from time to
time by the Board of Directors or the Chief Executive Officer. Subject to the foregoing, the
President shall have direct management responsibility for the general business and affairs of the
Corporation, and over all subordinate officers, agents and employees of the Corporation, and he
shall have such powers and perform such duties as may be incident to the office of president of a
corporation, those duties assigned to him by other provisions of the By-Laws, and such other duties
as may from time to time be assigned to him either directly or indirectly by the Board, the
Chairman of the Board, or Chief Executive Officer, including the power to sign and acknowledge in
the name and on behalf of the Corporation all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments except when
15
the signing thereof shall be expressly
delegated to some other officer or agent by the Board, the Chairman of the Board or the Chief
Executive Officer or required by law to be otherwise signed or executed and, unless otherwise
provided by law or by the Board, may delegate to any officer, employee or agent of the Corporation
authority to sign, execute and acknowledge in his place and stead all such documents and
instruments.
7.6.
Chief Operating Officer.
If the Board designates a Chief Operating Officer, such officer shall have such powers and
perform such duties as may be prescribed from time to time by the Board of Directors or the Chief
Executive Officer. Subject to the foregoing, the Chief Operating Officer shall have direct
management responsibility for the general business operations of the Corporation, and he shall have
such powers and perform such duties as may be incident to the office of chief operating officer of
a corporation, those duties assigned to him by other provisions of the By-Laws, and such other
duties as may from time to time be assigned to him either directly or indirectly by the Board, the
Chairman of the Board, Chief Executive Officer or the President. Subject to delegations by the
Chief Executive Officer pursuant to Section 7.2 of this Article VII, the Chief Operating Officer
may sign or execute, in the name of the Corporation, all stock certificates, deeds, mortgages,
bonds, contracts or other documents and instruments, except in cases where the signing or execution
thereof shall be required by law or shall have been expressly delegated by the Board or these
By-Laws to some other officer or agent of the Corporation.
7.7.
Chief Financial Officer.
(A) The Chief Financial Officer shall have responsibility for development and administration
of the Corporations financial plans and all financial arrangements, its cash deposits and
short-term investments, its accounting policies and its federal and state tax returns. The Chief
Financial Officer shall also be responsible for the Corporations internal control procedures and
for its relationship with the financial community. The Chief Financial Officer shall perform all
the duties incident to the office of chief financial officer of a corporation, those duties
assigned to him by other provisions of these By-laws and such other duties as may be assigned to
him either directly or indirectly by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, or the Chief Operating Officer, or as may be provided by law.
(B) He shall, when requested, counsel with and advise the other officers of the
Corporation and shall perform such other duties as such officer may agree with the Chief
Executive Officer or as the Board of Directors may from time to time determine.
7.8.
Executive Vice President.
If the Board designates one or more Executive Vice Presidents, such officer or officers shall
have such powers and perform such duties as may be prescribed from time to time by the Board of
Directors or the Chief Executive Officer and shall be vested with all the powers and authorized to
perform all the duties of the Chairman of the Board, the Vice Chairman of the Board and the
President in the absence or disability of all of said officers. Each Executive Vice President
shall have all the powers and duties granted and delegated to each Group Vice President, Senior
Vice President and Vice President by these By-Laws.
16
7.9.
Group Vice President.
If the Board designates one or more Group Vice Presidents, such officer or officers shall have
general direction of and supervision over such operating offices of the Corporation or over such
departments of the Corporation and its subsidiaries as the Board of Directors or the Chief
Executive Officer may prescribe. Each Group Vice President shall have all the powers and duties
granted and delegated to each Vice President (other than the Executive Vice Presidents) by these
By-Laws and shall have such other powers and perform such other duties as may be prescribed from
time to time by the Board of Directors or the Chief Executive Officer. In the absence or
disability of the President and the Executive Vice Presidents, each Group Vice President shall be
vested with all the powers and authorized to perform all the duties of said officers.
7.10.
General Counsel
.
If the Board designates a General Counsel, the General Counsel shall be the principal legal
officer of the Corporation. He shall have general direction of and supervision over the legal
affairs of the Corporation and shall advise the Board of Directors and officers of the Corporation
on all legal matters. He shall have such other powers and perform such other duties as may be
prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.11.
Senior Vice President
.
If the Board designates one or more Senior Vice Presidents, such officer or officers shall
have such powers and perform such duties as may be prescribed from time to time by the Board of
Directors or the Chief Executive Officer. In the absence or disability of the President, the
Executive Vice Presidents and the Group Vice Presidents, each Senior Vice President shall be vested
with all the powers and authorized to perform all the duties of said officers.
7.12.
Vice President
.
Each Vice President shall have such powers and perform such duties as may be prescribed from
time to time by the Board of Directors or the Chief Executive Officer. In the absence or
disability of the President, the Executive Vice Presidents, the Group Vice Presidents and the
Senior Vice Presidents, each Vice President shall be vested with all the powers and authorized
to perform all the duties of said officers.
7.13.
Secretary
.
The Secretary shall attend all sessions of the Board and all meetings of the stockholders and
record all votes and the minutes of all proceedings in a book to be kept for that purpose. He
shall perform like duties for committees of the Board when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and of the Board of Directors, when notice is
required by these By-Laws. He shall have custody of the seal of the Corporation, and, when
authorized by the Board of Directors, or when any instrument requiring the corporate seal to be
affixed shall first have been signed by the Chairman of the Board, the Chief Executive Officer,
17
the
Vice Chairman of the Board, the President or any Vice President, shall affix the seal to such
instrument and shall attest the same by his signature. He shall have such other powers and perform
such other duties as may be prescribed from time to time by the Board of Directors or the Chief
Executive Officer.
7.14.
Assistant Secretary
.
If the Board appoints one or more Assistant Secretaries, each Assistant Secretary shall be
vested with all the powers and authorized to perform all the duties of the Secretary at the request
of or in the absence or disability of the Secretary. The performance of any act or the execution
of any instrument by an Assistant Secretary in any instance in which such performance or execution
would customarily have been accomplished by the Secretary shall constitute conclusive evidence of
the request, absence or disability of the Secretary. Each Assistant Secretary shall perform such
other duties as may be prescribed from time to time by the Board of Directors, the Chief Executive
Officer, or the Secretary.
7.15.
Treasurer
.
(A) The Treasurer shall have custody of the corporate funds and securities, and he shall keep
full and accurate accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the credit of the
Corporation, in such depositories as may be designated by the Board of Directors.
(B) He shall disburse the funds of the Corporation as ordered by the Board, taking proper
vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of
Directors, at the regular meetings of the Board, or whenever they may require it, an account of all
his transactions as Treasurer and of the financial condition of the Corporation.
(C) If required by the Board of Directors, he shall give the Corporation a bond in a sum and
with one or more sureties satisfactory to the Board, for the faithful performance of the duties of
his office, and for the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the Corporation.
(D) He shall have such other powers and perform such other duties as may be prescribed from
time to time by the Board of Directors, the Chief Executive Officer or the Chief Financial Officer.
7.16.
Assistant Treasurer
.
If the Board appoints one or more Assistant Treasurers, each Assistant Treasurer shall be
vested with all the powers and authorized to perform all the duties of the Treasurer at the request
of or in the absence or disability of the Treasurer. The performance of any act or the execution
of any instrument by an Assistant Treasurer in any instance in which such performance or execution
would customarily have been accomplished by the Treasurer shall constitute conclusive evidence of
the request, absence or disability of the Treasurer. Each Assistant
18
Treasurer shall perform such
other duties as may be prescribed from time to time by the Board of Directors, the Chief Executive
Officer, the Chief Financial Officer or the Treasurer.
7.17.
Controller
.
If determined by the Board of Directors, the Controller shall be the principal accounting
officer of the Corporation. He shall maintain adequate records of all assets, liabilities and
transactions of the Corporation and shall be responsible for the design, installation and
maintenance of accounting and cost systems and procedures throughout the Corporation. He shall
have such other powers and perform such other duties as may be prescribed from time to time by the
Board of Directors, the Chief Financial Officer or the Chief Executive Officer.
7.18.
Assistant Controller
.
If the Board appoints one or more Assistant Controllers, each Assistant Controller shall be
vested with all the powers and authorized to perform all duties of the Controller at the request of
or in the absence or disability of the Controller. The performance of any act or the execution of
any instrument by an Assistant Controller in any instance in which such performance or execution
would customarily have been accomplished by the Controller shall constitute conclusive evidence of
the request, absence or disability of the Controller. Each Assistant Controller shall perform such
other duties as may be prescribed from time to time by the Board of Directors, the Chief Executive
Officer, the Chief Financial Officer or the Controller.
7.19.
Duties of Officers May be Delegated
.
In case of the absence of any officer of the Corporation, or for any other reason that the
Board may deem sufficient, the Board, or the Chief Executive Officer with respect to officers
appointed pursuant to Section 7.2, may delegate, for the time being, the powers or duties, or any
of them, of such officer to any other officer, or to any director.
ARTICLE VIII
POWERS OF EXECUTION
8.1. All checks and other demands for money and notes and other instruments for the payment of
money shall be signed on behalf of the Corporation by such officer or officers or by such other
person or persons as the Board of Directors may from time to time designate. The signature of any
such officer or other person may be a facsimile if so authorized by the Board of Directors.
8.2. All contracts, deeds and other instruments to which the seal of the Corporation is
affixed shall be signed on behalf of the Corporation by the Chief Executive Officer, by the
President, by any Vice President, or by such other person or persons as the Board of Directors may
from time to time designate, and shall be attested by the Secretary or an Assistant Secretary.
8.3. All other contracts, deeds and instruments shall be signed on behalf of the Corporation
by the Chief Executive Officer, by the President, by any Vice President, or by such
19
other person or
persons as the Board of Directors or the Chief Executive Officer may from time to time designate.
8.4. The Chief Executive Officer or any other officer of the Corporation authorized by the
Board of Directors or by the Chief Executive Officer is authorized to vote, represent and exercise
on behalf of the Corporation all rights incident to any and all shares of any other corporation or
corporations standing in the name of the Corporation. The authority herein granted may be
exercised either by such person directly or by any other person authorized to do so by proxy or
power of attorney duly executed by the person having such authority.
ARTICLE IX
INDEMNIFICATION
9.1.
Right to Indemnification
. The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may hereafter be amended,
any person (a Covered Person) who was or is made or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a proceeding), by reason of the fact that he or she, or a person for whom he or
she is the legal representative, is or was a director or officer of the Corporation or, while a
director or officer of the Corporation, is or was serving at the request of the Corporation as a
director, officer, employee or agent of another Corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect to employee benefit plans,
against all liability and loss suffered and expenses (including attorneys fees) reasonably
incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise
provided in Section 9.3, the Corporation shall be required to indemnify a Covered Person in
connection with a proceeding (or part thereof) commenced by such Covered Person only if the
commencement of such proceeding (or part thereof) by the Covered Person was authorized in the
specific case by the Board of Directors. The Corporation may, in its discretion and on terms as
the Corporation may determine, indemnify any person who was or is a party to or is threatened to be
made a party to a proceeding by reason of the fact that he or she is or was or has agreed to become
an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request
of the Corporation as an employee or agent of another Corporation, or of a partnership, joint
venture, trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses (including
attorneys fees) reasonably incurred by such employee or agent.
9.2.
Prepayment of Expenses
. The Corporation shall to the fullest extent not
prohibited by applicable law pay the expenses (including attorneys fees) incurred by a Covered
Person in defending any proceeding in advance of its final disposition, provided, however, that, to
the extent required by law, such payment of expenses in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all
amounts advanced if it should be ultimately determined that the Covered Person is not entitled to
be indemnified under this Article IX or otherwise. The Corporation may, in its discretion, pay the
expenses (including attorneys fees) incurred by an employee or agent of the Corporation, such
expenses may be so paid upon such terms and conditions, if any, as the Corporation deems
appropriate.
20
9.3.
Claims
. If a claim for indemnification (following the final disposition of such
action, suit or proceeding) or advancement of expenses under this Article IX is not paid in full
within thirty (30) days after a written claim therefor by the Covered Person has been received by
the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and,
if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving that the Covered Person
is not entitled to the requested indemnification or advancement of expenses under applicable law.
9.4.
Nonexclusivity of Rights
. The rights conferred on any Covered Person by this
Article IX shall not be exclusive of any other rights which such Covered Person may have or
hereafter acquire under any statute, provision of the Restated Certificate of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.
9.5.
Other Sources
. The Corporations obligation, if any, to indemnify or to advance
expenses to any Covered Person who was or is serving at its request as a director, officer,
employee or agent of another Corporation, partnership, joint venture, trust, enterprise or
nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification
or advancement of expenses from such other Corporation, partnership, joint venture, trust,
enterprise or non-profit enterprise.
9.6.
Amendment or Repeal
. Any repeal or modification of the foregoing provisions of
this Article IX shall not adversely affect any right or protection hereunder of any Covered Person
in respect of any act or omission occurring prior to the time of such repeal or modification.
9.7.
Other Indemnification and Prepayment of Expenses
. This Article IX shall not
limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify
and to advance expenses to persons other than Covered Persons when and as authorized by appropriate
corporate action.
ARTICLE X
STOCK CERTIFICATES AND TRANSFER THEREOF
10.1.
Certificates of Stock; Uncertificated Shares
.
Every holder of stock in the corporation shall be entitled to have a certificate; provided
that the Board of Directors may provide by resolution or resolutions that some or all of any or all
classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to the Corporation.
Every holder of shares of the Corporation represented by certificates shall be entitled to a
certificate, signed by or in the name of the corporation by the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer or any Vice President and by
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares, and the class and series thereof, owned by him in the
Corporation. Any and all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect as if he were such
officer, transfer agent or
21
registrar at the date of issue. The Board or the Chief Executive
Officer shall determine the form of stock certificate of the Corporation.
10.2.
Transfers of Stock
.
Transfer of shares of the capital stock of the corporation shall be made only on the books
(whether physically or electronically) of the Corporation by the holder thereof, or by his attorney
duly authorized, and on surrender of the certificate or certificates for such shares duly endorsed
or accompanied by proper evidence of succession, assignment, or authority to transfer (or, with
respect to uncertificated shares, by delivery of duly executed instructions or any other manner
permitted by applicable law); provided, however, that such succession, assignment, or transfer is
not prohibited by the Restated Certificate of Incorporation, these By-Laws, applicable law, or
contract. A person in whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof as regards the Corporation, and the Corporation shall not, except as
expressly required by statute, be bound to recognize any equitable or other claim to, or interest
in, such shares on the part of any other person whether or not it shall have express or other
notice thereof.
10.3.
Transfer Agents and Registrars.
The Board, the Chairman of the Board, or the Chief Executive Officer, as appropriate, may
appoint responsible banks or trust companies from time to time to act as transfer agents and
registrars of the stock of the Corporation, as may be required by and in accordance with applicable
laws, rules and regulations. Except as otherwise provided by the Board, the Chairman of the Board,
or the Chief Executive Officer, as appropriate, in respect of temporary certificates, no
certificates for shares of capital stock of the Corporation shall be valid unless countersigned by
a transfer agent and registered by one of such registrars.
10.4.
Additional Regulations.
The Board, the Chairman of the Board, or the Chief Executive Officer, as appropriate, may make
such additional rules and regulations as they may deem expedient concerning the issue, transfer and
registration of certificates for shares of the capital stock of the Corporation.
10.5.
Lost, Stolen or Destroyed Certificates.
The Board, the Chairman of the Board, or the Chief Executive Officer may provide for the
issuance of new certificates or uncertificated shares of stock to replace certificates of stock
lost, stolen or destroyed, or alleged to be lost, stolen or destroyed, upon such terms and in
accordance with such procedures as the Board or the Chief Executive Officer shall deem proper and
prescribe.
22
10.6.
Registered Stockholders
.
The Corporation shall be entitled to treat the holder of record of any share or shares of
capital stock as the holder in fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other person, whether or
not it shall have express or other notice thereof, save as expressly provided by the laws of
Delaware.
ARTICLE XI
CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
11.1.
Checks, Drafts, Etc.; Loans.
All checks, drafts or other orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as shall, from time to time, be determined by
resolution of the Board or the Executive Committee. No loans shall be contracted on behalf of the
Corporation unless authorized by the Board or the Executive Committee. Such authority may be
general or confined to specific circumstances. No loans shall be made by the Corporation to any
officer unless specifically approved by the Board, and such loan would not violate any applicable
laws.
11.2.
Deposits.
All funds of the Corporation shall be deposited, from time to time, to the credit of the
Corporation in such banks, trust companies or other depositories as the Board, the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer or the Treasurer may select, or as
may be selected by such other officer or officers, agent or agents of the Corporation to whom such
power may, from time to time, be delegated by the Board; and for the purpose of such deposit, the
Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President,
any Vice President, the Treasurer or any Assistant Treasurer, or any other officer or agent to whom
such power may be delegated by the Board, may endorse, assign and deliver checks, drafts and other
order for the payment of money which are payable to the order of the Corporation.
11.3.
Safe Deposit Boxes
.
The Corporation may rent such safe deposit boxes, and may deposit therein such securities,
documents and articles, as the Board of Directors, the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer or the Treasurer may designate from time to time. Access to
such safe deposit boxes shall be granted only (i) to any two of the following officers of the
Corporation attending together: Chief Executive Officer, President, a Vice President, Secretary,
Treasurer and Controller, or (ii) to any one of the foregoing officers and either an Assistant
Secretary or an Assistant Treasurer, attending together.
23
11.4.
Custodian Accounts
.
Any or all of the securities owned by this Corporation may be deposited with such custodian or
custodians as the Board of Directors may designate from time to time. The custodian shall not be
authorized to negotiate such securities or to take any other action with respect thereto except
upon written directions signed (i) by any two of the following officers of the Corporation: Chief
Executive Officer, President, a Vice President, Secretary, Treasurer and Controller, or (ii) by any
one of the foregoing officers and either an Assistant Secretary or an Assistant Treasurer.
ARTICLE XII
MISCELLANEOUS
12.1.
Date for Determining Stockholders of Record
.
In order that the Corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which record date: (1) in the
case of determination of stockholders entitled to vote at any meeting of stockholders or
adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less
than ten (10) days before the date of such meeting; and (2) in the case of any other action, shall
not be more than sixty (60) days prior to such other action. If no record date is fixed: (1) the
record date for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next preceding the day on which
the meeting is held; and (2) the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting
of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board
may fix a new record date for the adjourned meeting.
12.2.
Dividends
.
(A) Dividends upon the capital stock of the Corporation may be declared by the Board of
Directors at any regular or special meeting as provided by the laws of Delaware and the Restated
Certificate of Incorporation.
(B) Before payment of any dividend or making any distribution of profits, there may be set
aside out of the surplus or net profits of the Corporation such sum or sums as the directors from
time to time, in their absolute discretion, deem proper as a reserve fund to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for
such other purposes as the directors shall deem conducive to the interests of the Corporation.
24
(C) Dividends may be paid in cash, in property, or in shares of the capital stock of
the Corporation.
12.3.
Seal
.
The Corporation may have a corporate seal which shall have inscribed thereon the name of the
Corporation, the year of its organization and the words Corporate Seal, Delaware. The corporate
seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
12.4.
Notices
.
(A) To Directors. Except as otherwise provided herein or permitted by applicable law, notices
to directors may be given by personal delivery, mail, telegram, express courier service (including,
without limitation, FedEx or UPS), facsimile transmission (directed to the facsimile transmission
number at which the director has consented to receive notice), electronic mail (directed to the
electronic mail address at which the director has consented to receive notice), or other form of
electronic transmission pursuant to which the director has consented to receive notice
.
(B) To Stockholders. Notice to stockholders may be given by personal delivery, mail, or, with
the consent of the stockholder entitled to receive notice, by facsimile or other means of
electronic transmission. If mailed, such notice shall be delivered by postage prepaid envelope
directed to each stockholder at such stockholders address as it appears in the records of the
Corporation and shall be deemed given when deposited in the United States mail. Notice given by
electronic transmission pursuant to this subsection shall be deemed given: (1) if by facsimile
telecommunication, when directed to a facsimile telecommunication number at which the stockholder
has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail
address at which the stockholder has consented to receive notice; (3) if by posting on an
electronic network together with separate notice to the stockholder of such specific posting, upon
the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other
form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary
or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the
notice has been given by personal delivery, by mail, or by a form of electronic transmission
shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
12.5.
Amendments to By-Laws
.
Except as otherwise provided by law, these By-Laws or the Restated Certificate of
Incorporation, these By-Laws may be altered, amended or repealed (i) at any regular or special
meeting of the stockholders by the affirmative vote of the holders of a majority in voting power of
the shares of capital stock of the Corporation issued and outstanding and entitled to vote thereat
or (ii) at any regular or special meeting of the Board of Directors by affirmative vote of a
majority of the directors; provided, however, that notice of the proposed alteration or amendment
shall have been contained in the notice of the meeting.
25
12.6.
Fiscal Year
.
The fiscal year of the Corporation shall be the calendar year.
12.7.
Construction of Words
.
All references and uses herein of the masculine pronouns he, his or chairman shall have
equal applicability to and shall also mean their feminine counterpart pronouns, such as she,
her or chairwoman.
26
Exhibit 10.1
ANADARKO PETROLEUM CORPORATION
2008 OMNIBUS INCENTIVE COMPENSATION PLAN
Effective as of May 20, 2008
TABLE OF CONTENTS
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SECTION 1 PURPOSE
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1
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SECTION 2 DEFINITIONS
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1
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2.1 Award
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1
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2.2 Award Agreement
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1
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2.3 Beneficiary
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1
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2.4 Board
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2
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2.5 Cash Awards
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2
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2.6 Cause
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2
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2.7 Change in Capitalization
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2
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2.8 Change of Control
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2
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2.9 Code
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4
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2.10 Common Stock
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4
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2.11 Company
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4
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2.12 Covered Employee
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4
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2.13 Effective Date
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4
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2.14 Employer
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4
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2.15 Exchange Act
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4
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2.16 Fair Market Value
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5
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2.17 Full Value Award
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5
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2.18 Incentive Award
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5
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2.19 Incentive Stock Option
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5
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2.20 Management Committee
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5
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2.21 Maximum Annual Employee Grant
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5
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2.22 Nonqualified Option
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5
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2.23 Option
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6
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2.24 Option Price
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6
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2.25 Other Stock-Based Award
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6
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2.26 Participant
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6
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2.27 Performance Goals
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6
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2.28 Performance Period
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7
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2.29 Performance Shares
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7
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2.30 Performance Units
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8
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2.31 Permitted Transferee
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8
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2.32 Plan
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8
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2.33 Plan Administrator
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8
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2.34 Prior Plans
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8
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2.35 Restricted Stock
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8
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2.36 Restricted Stock Units
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8
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2.37 Restriction Period
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8
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2.38 Rule 16b-3
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8
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2.39 Section 16 Insider
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9
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i
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2.40 Section 162(m)
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9
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2.41 Section 409A
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9
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2.42 Specified Employee
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9
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2.43 Stock Appreciation Right
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9
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2.44 Subsidiary
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9
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SECTION 3 ADMINISTRATION
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9
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3.1 Plan Administrator
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9
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3.2 Authority of Plan Administrator
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10
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3.3 Indemnification of Plan Administrator
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11
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3.4 Delegation to Management Committee
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11
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SECTION 4 ELIGIBILITY
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11
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SECTION 5 SHARES AVAILABLE FOR THE PLAN
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12
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5.1 Aggregate Shares
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12
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5.2 Limitations
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13
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5.3 Adjustments in Authorized Shares
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14
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5.4 Effect of Certain Transactions
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14
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SECTION 6 STOCK OPTIONS
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15
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6.1 Grant of Options
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15
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6.2 Special Provisions Applicable to Incentive Stock Options
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16
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6.3 Terms of Options
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17
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SECTION 7 STOCK APPRECIATION RIGHTS
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19
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7.1 Grant of Stock Appreciation Rights
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19
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7.2 Exercise of Stock Appreciation Rights
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20
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7.3 Special Provisions Applicable to Stock Appreciation Rights
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20
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7.4 No Repricing
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21
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SECTION 8 PERFORMANCE SHARES AND PERFORMANCE UNITS
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21
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8.1 Grant of Performance Shares and Performance Units
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21
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8.2 Value of Performance Shares and Performance Units
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21
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8.3 Payment of Performance Shares and Performance Units
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22
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8.4 Form and Timing of Payment
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22
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SECTION 9 RESTRICTED STOCK
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22
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9.1 Grant of Restricted Stock
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22
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9.2 Restriction Period
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23
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9.3 Other Restrictions
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23
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9.4 Voting Rights; Dividends and Other Distributions
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23
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9.5 Issuance of Shares; Settlement of Awards
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23
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SECTION 10 RESTRICTED STOCK UNITS
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24
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10.1 Grant of Restricted Stock Units
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24
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10.2 Restriction Period
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24
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10.3 Other Restrictions
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24
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10.4 Dividend Equivalents
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24
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10.5 Issuance of Shares; Settlement of Awards
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25
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SECTION 11 INCENTIVE AWARDS
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25
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11.1 Incentive Awards
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25
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11.2 Performance Goal Certification
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25
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11.3 Discretion to Reduce Awards; Participants Performance
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25
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ii
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11.4 Required Payment of Incentive Awards
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26
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11.5 Restricted Stock Election
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26
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SECTION 12 CASH AWARDS AND OTHER STOCK-BASED AWARDS
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27
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12.1 Grant of Cash Awards
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27
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12.2 Other Stock-Based Awards
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27
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12.3 Value of Cash Awards and Other Stock-Based Awards
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27
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12.4 Payment of Cash Awards and Other Stock-Based Awards
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27
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SECTION 13 DEFERRAL ELECTIONS
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28
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SECTION 14 TERMINATION OF EMPLOYMENT
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28
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SECTION 15 EFFECT OF A CHANGE OF CONTROL
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28
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SECTION 16 REGULATORY APPROVALS AND LISTING
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29
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SECTION 17 GENERAL PROVISIONS
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30
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17.1 Forfeiture Events and Nontransferability
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30
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17.2 No Individual Rights
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31
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17.3 Other Compensation
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31
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17.4 Leaves of Absence
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31
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17.5 Transfers
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31
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17.6 Unfunded Obligations
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32
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17.7 Beneficiaries
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32
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17.8 Governing Law
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32
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17.9 Satisfaction of Tax Obligations
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32
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17.10 Participants in Foreign Jurisdictions
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33
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SECTION 18 REGULATORY COMPLIANCE
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33
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18.1 Rule 16b-3 of the Exchange Act and Section 162(m) of the Code
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33
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18.2 Section 409A of the Code
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34
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SECTION 19 ESTABLISHMENT AND TERM OF PLAN
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34
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SECTION 20 AMENDMENT, TERMINATION OR DISCONTNUANCE OF THE PLAN
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34
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20.1 Amendment of Plan
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34
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20.2 Termination or Suspension of Plan
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35
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20.3 Code Section 162(m) Approval
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35
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iii
ANADARKO PETROLEUM CORPORATION
2008 OMNIBUS INCENTIVE COMPENSATION PLAN
SECTION 1
PURPOSES
The purposes of the Anadarko Petroleum Corporation 2008 Omnibus Incentive Compensation Plan
(the Plan) are to promote the interests of Anadarko Petroleum Corporation (the Company) and its
stockholders by strengthening its ability to attract, retain and motivate salaried employees of the
Company and any Subsidiary by furnishing suitable recognition of their ability and experience, to
align their interests and efforts to the long-term interests of the Companys stockholders, and to
provide them with a direct incentive to achieve the Companys strategic and financial goals. In
furtherance of these purposes, the Plan provides for the grant of Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Incentive
Awards, Cash Awards, and Other Stock-Based Awards to Participants in accordance with the terms and
conditions set forth below.
SECTION 2
DEFINITIONS
Unless otherwise required by the context, the following terms when used in the Plan shall have
the meanings set forth in this Section 2:
2.1 Award
Any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance
Share, Performance Unit, Incentive Award, Cash Award or Other Stock-Based Award, in each case
payable in cash or in Common Stock as may be designated by the Plan Administrator.
2.2 Award Agreement
The written agreement setting forth the terms and conditions applicable to an Award granted
under the Plan (which, in the discretion of the Plan Administrator, need not be countersigned by a
Participant). The Plan Administrator may, in its discretion, provide for the use of electronic,
internet or other non-paper Award Agreements.
2.3 Beneficiary
The person or persons designated by the Participant pursuant to Section 6.3(f) or Section 17.7
of this Plan to whom payments are to be paid pursuant to the terms of the Plan in the event of the
Participants death.
1
2.4 Board
The Board of Directors of the Company.
2.5 Cash Awards
As defined in Section 12.1.
2.6 Cause
Cause shall have the meaning ascribed thereto in any employment or similar agreement between
a Participant and an Employer, or, in the absence of such agreement, a termination of a
Participants employment with the Company and its Subsidiaries resulting from (a) substandard work
performance or repeated unreliability that has not been cured to the Employers satisfaction; (b)
workplace misconduct; (c) excessive absenteeism; (d) violation of safety rules; (e) violation of
Employers policies, including without limitation, the Employers Code of Business Conduct and
Ethics; (f) fraud or other dishonesty against the Employer; (g) engagement in conduct that the
Participant knows or should know is materially injurious to the business or reputation of the
Employer; (h) falsifying Employer or employee records (including an employment application); (i)
on-the-job intoxication or being under the influence of alcohol or an illegal narcotic or a drug
not being used as prescribed; (j) unauthorized use of Employer equipment or confidential
information of an Employer or third party who has entrusted such information to the employer; or
(k) conviction of a felony or misdemeanor involving moral turpitude. Whether a Participant has
been terminated for Cause will be determined by the Employer in the exercise of its discretion.
2.7 Change in Capitalization
Any increase or reduction in the number of shares of Common Stock, any change (including,
without limitation, in the case of a spin-off, dividend or other distribution in respect of shares,
a change in value) in the shares of Common Stock or any exchange of shares of Common Stock for a
different number or kind of shares of Common Stock or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants, rights or debentures, stock dividend,
stock split or reverse stock split, extraordinary cash dividend, property dividend, combination or
exchange of shares, repurchase of shares, change in corporate structure or otherwise.
2.8 Change of Control
The occurrence of any of the following after the Effective Date:
(a) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a Person) acquires beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding
shares of Common Stock of the Company (the Outstanding
2
Company Common Stock) or (B) 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:
(1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (4) any acquisition pursuant to a
transaction which complies with clauses (A), (B) and (C) of Section 2.8(c); or
(b) individuals who, as of the Effective Date, 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 the Effective Date whose
election, or nomination for election by the Companys 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, (A) 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 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 Companys 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, (B) 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, 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 (C) 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
3
(d) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.
Notwithstanding the foregoing, with respect to an Award that is (i) subject to Section 409A
and (ii) a Change of Control would accelerate the timing of payment thereunder, the term
Change of Control shall mean a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the Company as
defined in Section 409A and the authoritative guidance issued thereunder, but only to the
extent inconsistent with the above definition, and only to the minimum extent necessary to
comply with Section 409A as determined by the Committee.
2.9 Code
The Internal Revenue Code of 1986, as amended and in effect from time to time, and the
temporary or final regulations of the Secretary of the U.S. Treasury adopted pursuant to the Code.
2.10 Common Stock
The Common Stock of the Company, $0.10 par value per share, or such other class of shares or
other securities as may be applicable pursuant to the provisions of Section 5.
2.11 Company
As defined in Section 1.
2.12 Covered Employee
With respect to any grant of an Award, a Participant who the Plan Administrator deems is or
may be or become a covered employee as defined in Section 162(m) of the Code for any year.
2.13 Effective Date
The effective date of the Plan is May 20, 2008, the date on which it was approved by the
stockholders of the Company.
2.14 Employer
As to any Participant on any date, the Company or a Subsidiary that employs the Participant on
such date.
2.15 Exchange Act
The Securities Exchange Act of 1934, as amended and rules promulgated thereunder.
4
2.16 Fair Market Value
As of any given date, the closing sales price at which Common Stock is sold on such date as
reported in the NYSE-Composite Transactions by
The Wall Street Journal
or any other comparable
service the Plan Administrator may determine is reliable for such date, or if no Common Stock was
traded on such date, on the next preceding day on which Common Stock was so traded. If the Fair
Market Value of the Common Stock cannot be determined pursuant to the preceding provisions, the
Fair Market Value of the Common Stock shall be determined by the Plan Administrator in such a
manner as it deems appropriate, consistent with the requirements of Section 409A.
2.17 Full Value Award
An Award other than of Options or Stock Appreciation Rights, which is settled by the issuance
of Common Stock
.
2.18 Incentive Award
A percentage of base salary, a fixed dollar amount or other measure of compensation which
Participants are eligible to receive, in cash and/or other Awards under the Plan, at the end of a
Performance Period if certain performance measures are achieved.
2.19 Incentive Stock Option
An option intended to meet the requirements of a qualified stock option as defined in
Section 422 of the Code, as in effect at the time of grant of such Option, or any statutory
provision that may hereafter replace such section.
2.20 Management Committee
A committee designated by the Board (either by resolution or by provisions contained in this
Plan) and consisting of the Chief Executive Officer, provided that such officer is a member of the
Board, and such other members of the Board as the Board may determine from time to time.
2.21 Maximum Annual Employee Grant
The Maximum Annual Employee Grant set forth in Section 5.2.
2.22 Nonqualified Option
An Option which is not intended to meet the requirements of a qualified stock option as
defined in Section 422 of the Code.
5
2.23 Option
An Incentive Stock Option or a Nonqualified Option.
2.24 Option Price
The price per share of Common Stock at which an Option is exercisable.
2.25. Other Stock-Based Award
As defined in Section 12.2.
2.26 Participant
An eligible employee of an Employer to whom Awards are granted under the Plan as set forth in
Section 4.
2.27 Performance Goals
The Plan Administrator may grant Awards subject to one or more Performance Goals set forth in
the table below (collectively the Performance Goals) to any Participant, including, without
limitation, to any Covered Employee. As to any such Awards, the Plan Administrator shall establish
one or more of the Performance Goals for each Performance Period in writing. Each Performance Goal
selected for a particular Performance Period shall include any one or more of the following, either
individually, alternatively or in any combination, applied to either the Company as a whole or to a
Subsidiary or a business unit of the Company or any Subsidiary, either individually, alternatively
or in any combination, and measured either annually or cumulatively over a period of time, on an
absolute basis or relative to the pre-established target, to previous years results or to a
designated comparison group, in each case as specified by the Plan Administrator:
|
|
|
|
|
|
|
Financial Goals
|
|
Earnings
|
|
Earnings per share
|
|
Net income
|
|
|
Revenues
|
|
Cash
flow from operations
|
|
Free
cash flow
|
|
|
Debt level
|
|
Equity
ratios
|
|
Expenese
|
|
|
Cost
reduction targets
|
|
Capital
expended
|
|
Working
capital
|
|
|
Interest-sensitivity
gap levels
|
|
Weighted
average cost of capital
|
|
Operating
or profit margin
|
|
|
EBITDAX
|
|
Return
on assets
|
|
Return
on equity or capital employed
|
|
|
|
|
Debt/proved
developed reserves (PDP)
|
|
Debt/proved
reserves
|
|
Operating Goals
|
|
Amount of the oil
and gas reserves
|
|
Oil and gas reserve
additions
Costs of finding oil
and gas reserves
|
|
Oil and gas replacement ratios
Natural gas and/or
oil production
|
6
|
|
|
|
|
|
|
Corporate and Other
Goals
|
|
Total shareholder
return
Asset quality levels
Investments
Satisfactory
internal or
external audits
Achievement of
balance sheet or
income statement
objectives
|
|
Market share
Assets
Asset sale targets
Value of assets
Employee
retention/attrition
rates
Improvement of
financial ratings
|
|
Charge-offs
Non-performing assets
Fair Market Value
of
Common Stock
Regulatory compliance
Safety targets
Economic value added
|
The Plan Administrator may adjust the Performance Goals to include or exclude extraordinary
charges, gains or losses on the disposition of business units, losses from discontinued operations,
restatements and accounting changes and other unplanned special charges such as restructuring
expenses, acquisitions, acquisition expenses, including expenses related to goodwill and other
intangible assets, stock offerings, stock repurchases and loan loss provisions. The Plan
Administrator may also provide for the manner in which performance will be measured against the
Performance Goals (or may adjust the Performance Goals) to reflect the impact of specified
corporate transactions, a Change in Capitalization, special charges, accounting policy changes and
tax law changes. In addition, the Plan Administrator may make such adjustments to the Performance
Goals applicable to Participants who are not Covered Employees as it determines are appropriate.
Such adjustments may occur at the time of the granting of an Award, or at any time thereafter, but,
in the case of Covered Employees, only to the extent permitted by Section 162(m). Performance
Goals may include a threshold level of performance below which no Awards shall be earned, target
levels of performance at which specific Awards will be earned, and a maximum level of performance
at which the maximum level of Awards will be earned.
In establishing Performance Goals with respect to Covered Employees, the Plan Administrator
shall ensure such Performance Goals (i) are established no later than the end of the first 90 days
of the Performance Period (or such other time permitted by the Internal Revenue Service), and (ii)
satisfy all other applicable requirements imposed by Section 162(m), including the requirement that
such Performance Goals be stated in terms of an objective formula or standard, and the Plan
Administrator may not in any event increase the amount of compensation payable to a Covered
Employee upon the satisfaction of any Performance Goal. Prior to the payment of any
performance-based compensation within the meaning of Section 162(m), the Plan Administrator shall
certify in writing the extent to which the applicable Performance Goals were, in fact, achieved and
the amounts to be paid, vested or delivered as a result thereof;
provided
, that the Plan
Administrator may reduce, but not increase, such amount.
2.28 Performance Period
That period of time during which Performance Goals are evaluated to determine the vesting or
granting of Awards under the Plan, as the Plan Administrator may determine.
7
2.29 Performance Shares
An Award granted under the Plan representing the right to receive a number of shares of Common
Stock for each Performance Share granted, as the Plan Administrator may determine.
2.30 Performance Units
An Award granted under the Plan representing the right to receive a payment (either in cash or
Common Stock) equal to the value of a Performance Unit, as the Plan Administrator may determine.
2.31 Permitted Transferee
As defined in Section 6.3(f).
2.32 Plan
As defined in Section 1.
2.33 Plan Administrator
Those committees appointed and authorized pursuant to Section 3 to administer the Plan.
2.34 Prior Plans
The Anadarko Petroleum Corporation 1999 Stock Incentive Plan, as amended and the Anadarko
Petroleum Corporation Annual Incentive Plan, as amended.
2.35 Restricted Stock
Common Stock granted under the Plan that is subject to the requirements of Section 9 and such
other restrictions as the Plan Administrator deems appropriate. References to Restricted Stock in
this Plan shall include Restricted Stock awarded in conjunction with Incentive Awards pursuant to
Section 11, unless the context otherwise requires.
2.36 Restricted Stock Units
An Award granted under the Plan representing a right to receive a payment (either in cash or
Common Stock) equal to the value of a share of Common Stock.
2.37 Restriction Period
As defined in Sections 9.2 and 10.2.
2.38 Rule 16b-3
Rule 16b-3 of the General Rules and Regulations under the Exchange Act.
8
2.39 Section 16 Insider
Any person who is selected by the Plan Administrator to receive an Award pursuant to the Plan
and who is or may be or become subject to the requirements of Section 16 of the Exchange Act, and
the rules and regulations promulgated thereunder.
2.40 Section 162(m)
Section 162(m) of the Code, and regulations promulgated thereunder.
2.41 Section 409A
Section 409A of the Code, and regulations promulgated thereunder.
2.42 Specified Employee
As defined in Section 18.2.
2.43 Stock Appreciation Right
Any right granted under Section 7.
2.44 Subsidiary
An entity that is designated by the Plan Administrator as a subsidiary for purposes of the
Plan and that is a corporation, partnership, joint venture, limited liability company, limited
liability partnership, or other entity in which the Company owns directly or indirectly, fifty
percent (50%) or more of the voting power or profit interests, or as to which the Company or one of
its affiliates serves as general or managing partner or in a similar capacity. Notwithstanding the
foregoing, for purposes of Options intended to qualify as Incentive Stock Options, the term
Subsidiary shall mean a corporation (or other entity treated as a corporation for tax purposes)
in which the Company directly or indirectly holds more than fifty percent (50%) of the voting
power.
SECTION 3
ADMINISTRATION
3.1 Plan Administrator
(a) The Compensation and Benefits Committee of the Board of Directors shall be the Plan
Administrator with respect to all Covered Employees and all Section 16 Insiders. As to these
officers, the Plan Administrator shall be constituted at all times so as to (i) be independent as
such term is defined pursuant to the rules of any stock exchange on which the Common Stock may then
be listed, and (ii) meet the non-employee director standards of Rule
16b-3 and the outside director requirements of Section 162(m), so long as any of the
9
Companys
equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act.
(b) Other than as set forth in Section 3.1(a) and subject to Section 3.4 (and subject to
applicable law), the Management Committee shall be the Plan Administrator. The Board may from time
to time remove members from, or add members to, the Management Committee.
(c) Notwithstanding Sections 3.1(a) and 3.1(b), the Board of Directors may designate itself or
the Compensation and Benefits Committee of the Board of Directors as the Plan Administrator as to
any Participant or groups of Participants.
(d) The above committees may rely on officers, employees or other agents of the Company to
handle the day-to-day administrative matters of the Plan.
3.2 Authority of Plan Administrator
Subject to the express terms and conditions set forth herein, the Plan Administrator shall
have the power from time to time to:
(a) determine those individuals to whom Awards shall be granted under the Plan and the
number of shares or amount of cash subject to such Awards and prescribe the terms and
conditions (which need not be identical) of each such Awards, including, in the case of
stock Options and Stock Appreciation Rights, the Option Price, vesting schedule and
duration;
(b) set the terms and conditions of any Award consistent with the terms of the Plan
(which may be based on Performance Goals or other performance measures as the Plan
Administrator shall determine), and make any amendments, modifications or adjustments to
such Awards as are permitted by the Plan;
(c) construe and interpret the Plan and the Awards granted hereunder and establish,
amend and revoke rules and regulations for the administration of the Plan, including,
without limitation, correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Award Agreement, in the manner and to the extent it
shall deem necessary or advisable, including so that the Plan and the operation of the Plan
comply with Rule 16b-3, the Code to the extent applicable and other applicable law, and
otherwise to make the Plan fully effective;
(d) exercise its discretion with respect to the powers and rights granted to it as set
forth in the Plan; and
(e) generally, exercise such powers and perform such acts as are deemed necessary or
advisable to promote the best interests of the Company with respect to the Plan.
10
All decisions and determinations by the Plan Administrator in the exercise of the above powers
shall be final, binding and conclusive upon the Company, a Subsidiary, the Participants and all
other persons having or claiming any interest therein. The Plan Administrator shall cause the
Company at the Companys expense to take any action related to the Plan which may be necessary to
comply with the provisions of any federal, state or foreign law or any regulations issued
thereunder, which the Plan Administrator determines are intended to be complied with.
Notwithstanding the foregoing, the Plan Administrator shall not be entitled to exercise any
discretion otherwise authorized hereunder with respect to any Awards held by Covered Employees if
the ability to exercise such discretion or the exercise of such discretion itself would cause the
compensation attributable to such Awards to fail to qualify as performance-based compensation under
Section 162(m).
3.3 Indemnification of Plan Administrator
Each member of any committee acting as Plan Administrator, while serving as such, shall be
entitled, in good faith, to rely or act upon any advice of the Companys independent auditors,
counsel or consultants hired by the committee, or other agents assisting in the administration of
the Plan. The Plan Administrator and any officers or employees of the Company acting at the
direction or on behalf of the Company shall not be personally liable for any action or
determination taken or made, or not taken or made, in good faith with respect to the Plan, and
shall, to the extent permitted by law, be fully indemnified and protected under the Companys
charter or by-laws with respect to any such action or determination.
3.4 Delegation to Management Committee
To the maximum extent permitted by applicable law, the Board of Directors and the Compensation
and Benefits Committee hereby delegates to the Management Committee the authority (i) to designate
the officers and employees who shall be Participants, (ii) to determine the Awards to be granted to
any such Participants or (iii) both (i) and (ii);
provided
,
however
, that the
Management Committee shall not have the authority to grant Awards to any member of the Management
Committee and shall be subject to such other limitations set forth in this Plan. This provision
shall be deemed to constitute a delegation from the Board to the Management Committee without
further action by the Board. However, the Board or the Compensation and Benefits Committee shall,
from time to time, limit the total number of shares Common Stock subject to such delegation.
SECTION 4
ELIGIBILITY
To be eligible for selection by the Plan Administrator to participate in the Plan, an
individual must be an employee (other than an employee who is a member of a unit covered by a
collective bargaining agreement) of an Employer, as of the date on which the Plan Administrator
grants to such individual an Award under the Plan or any other employee who, in the judgment of the
Plan Administrator, holds a position of responsibility and is able to contribute substantially
11
to the Companys continued success. Members of the Board of Directors who are full-time
employees shall be eligible to participate in the Plan. Members of the Board of Directors who are
not employees are not eligible to participate in the Plan. Each grant of an Award under the Plan
shall be evidenced by an Award Agreement.
SECTION 5
SHARES AVAILABLE FOR THE PLAN
5.1 Aggregate Shares
(a)
Share Authorization
Subject to adjustment as provided in Section 5.3, the maximum number of shares of Common Stock
available for grant to Participants under this Plan on or after the Effective Date shall be
33,000,000 shares of Common Stock, which shall consist of (i) a number of shares of Common Stock
not previously authorized for issuance under any plan, plus (ii) the number of shares of Common
Stock remaining available for issuance under the Prior Plans but not subject to outstanding awards
as of the Effective Date, plus (iii) the number of shares of Common Stock subject to awards
outstanding under the Prior Plans as of the Effective Date, but only to the extent such outstanding
awards are forfeited, expire, or otherwise terminate without issuance of such shares of Common
Stock.
(b)
Limit on Full Value Awards Flexible Share Pool
To the extent that a share of Common Stock is issued pursuant to the grant or exercise of a
Full Value Award, it shall reduce the share authorization by 2.27 shares of Common Stock; and to
the extent that a share of Common Stock is issued pursuant to the grant or exercise of an Award
other than a Full Value Award, it shall reduce the share authorization by one (1) share of Common
Stock.
(c)
Share Usage
Shares of Common Stock covered by an Award shall only be counted as used to the extent they
are actually issued. Any shares of Common Stock related to Awards which terminate by expiration,
forfeiture, cancellation, or otherwise without the issuance of such shares of Common Stock, are
settled in cash in lieu of shares of Common Stock, or are exchanged with the Committees
permission, prior to the issuance of shares of Common Stock, for Awards not involving shares of
Common Stock, shall be available again for grant under this Plan. However, the full number of
Stock Appreciation Rights granted that are to be settled by the issuance of shares of Common Stock
shall be counted against the number of shares of Common Stock available for award under the Plan,
regardless of the number of shares of Common Stock actually issued upon settlement of such Stock
Appreciation Rights. Furthermore, any shares of Common Stock withheld to satisfy tax withholding
obligations on an Award issued under the Plan, shares of Common Stock tendered to pay the exercise
price of an Award under the Plan, and shares of Common Stock repurchased on the open market with
the proceeds of an Option exercise will no
12
longer be eligible to be again available for grant under this Plan. The shares of Common
Stock available for issuance under this Plan may be authorized and unissued shares of Common Stock
or treasury shares of Common Stock.
5.2 Limitations
Subject to adjustment as provided in Section 5.3, the following limitations shall apply:
(a) Options: The maximum aggregate number of shares subject to Options granted in any one
calendar year to any one Participant shall be 2,500,000.
(b) Stock Appreciation Rights: The maximum number of shares subject to Stock Appreciation
Rights granted in any one calendar year to any one Participant shall be 2,500,000.
(c) Performance Shares or Performance Units: The maximum aggregate grant with respect to
Performance Shares or Performance Units that a Participant may receive in any one calendar year
shall be 1,500,000 shares, or equal to the value of 1,500,000 shares, determined as of the date of
vesting or payout, as applicable.
(d) Restricted Stock or Restricted Stock Units: The maximum aggregate grant with respect to
Awards of Restricted Stock or Restricted Stock Units in any one calendar year to any one
Participant shall be 1,500,000 shares, or equal to the value of 1,500,000 shares, determined as of
the date of vesting or payout, as applicable.
(e) Incentive Awards: The maximum aggregate amount awarded or credited in any one calendar
year with respect to an Incentive Award shall be $10,000,000.
(f) Cash Awards: The maximum aggregate amount awarded to or credited with respect to Cash
Awards to any one Participant in any one calendar year may not exceed the greater of $10,000,000
dollars or the value of 1,500,000 shares, determined as of the date of vesting or payout, as
applicable.
(g) Other Stock-Based Awards: The maximum aggregate grant with respect to Other Stock-Based
Awards in any one calendar year to any one Participant shall be 1,500,000 shares.
13
5.3 Adjustments in Authorized Shares
(a) In the event of a Change in Capitalization, the Plan Administrator shall make such
adjustments, if any, as it determines are appropriate and equitable to (a) the maximum number and
class of shares of Common Stock or other stock or securities with respect to which Awards may be
granted under the Plan, (b) the maximum number and class of shares of Common Stock or other stock
or securities that may be issued upon exercise of Nonqualified Options and Incentive Stock Options,
(c) the Maximum Annual Employee Grants, (d) the number and class of shares of Common Stock or other
stock or securities which are subject to outstanding Awards granted under the Plan and the Option
Price or exercise price therefore, if applicable and (e) the Performance Goals; provided, however,
that in the case of an equity restructuring (within the meaning of the Financial Standards Board
Statement of Financial Accounting Standards No. 123 (revised 2004), the Board shall make an
equitable or appropriate adjustment to outstanding Awards to reflect such equity restructuring.
Any such adjustment shall be final, binding and conclusive on all persons claiming any right or
interest under the Plan.
(b) Any such adjustment in the shares of Common Stock or other stock or securities (x) subject
to outstanding Incentive Stock Options (including any adjustments in the exercise price) shall be
made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code
and only to the extent otherwise permitted by Sections 422 and 424 of the Code or (y) subject to
outstanding Awards that are intended to qualify as performance-based compensation under Section
162(m) shall be made in such a manner as not to adversely affect the treatment of the Awards as
performance-based compensation.
(c) If, by reason of a Change in Capitalization, a Participant shall be entitled to, or shall
be entitled to exercise an Option or Stock Appreciation Right with respect to, new, additional or
different shares of stock or securities of the Company or any other corporation, such new,
additional or different shares shall thereupon be subject to all of the conditions, restrictions
and performance criteria which were applicable to the shares of Common Stock that such shares
replaced or to the Option or Stock Appreciation Right, as the case may be, prior to such Change in
Capitalization.
(d) No adjustments made under this Section 5 shall be made if such adjustment would result in
adverse taxation to a Participant under Section 409A.
5.4 Effect of Certain Transactions
Following (a) the liquidation or dissolution of the Company or (b) a merger or consolidation
of the Company (a Transaction), (i) each outstanding Award shall be treated as provided for in
the agreement entered into in connection with the Transaction (which treatment may be different as
among different types of Awards and different holders thereof) or (ii) if not so provided in such
agreement, each Participant shall be entitled to receive in respect of each share of Common Stock
subject to any outstanding Awards, upon exercise of any Option or Stock Appreciation Right or
payment or transfer in respect of any other Award, the same number and kind of stock, securities,
cash, property or other consideration that each holder of a share of Common Stock was entitled to
receive in the Transaction in respect of a share of Common
14
Stock; provided, however, that such stock, securities, cash, property, or other consideration
shall remain subject to all of the conditions, restrictions and performance criteria which were
applicable to Awards prior to such Transaction, but giving effect to any applicable provision of
this Plan or any Award Agreement if the Transaction is a Change of Control. Without limiting the
generality of the foregoing, the treatment of outstanding Options and Stock Appreciation Rights
pursuant to clause (i) of this Section 5.4 in connection with a Transaction in which the
consideration paid or distributed to the Companys stockholders is not entirely shares of common
stock of the acquiring or resulting corporation may include the cancellation of outstanding Options
and Stock Appreciation Rights upon consummation of the Transaction provided either (x) the holders
of affected Options and Stock Appreciation rights have been given a period of at least fifteen (15)
days prior to the date of the consummation of the Transaction to exercise the Options and Stock
Appreciation Rights (whether or not they were otherwise exercisable) or (y) the holders of the
affected Options and Stock Appreciation Rights are paid (in cash or cash equivalents) in respect of
each share of Common Stock covered by the Options or Stock Appreciation Rights being cancelled an
amount equal to the excess, if any, of the per share price paid or distributed to stockholders in
the Transaction (the value of any non-cash consideration to be determined by the Plan Administrator
in its sole discretion) over the exercise price thereof. For avoidance of doubt, (1) the
cancellation of Options and Stock Appreciation Rights pursuant to clause (y) of the preceding
sentence may be effected notwithstanding anything to the contrary contained in this Plan or any
Award Agreement and (2) if the amount determined pursuant to clause (y) of the preceding sentence
is zero or less, the affected Options and Stock Appreciation Rights may be cancelled without any
payment therefore. The treatment of any Award as provided in this Section 5.4 shall be
conclusively presumed to be appropriate for purposes of Section 5.3.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options
Options may be granted to eligible employees in such number, and at such times during the term
of the Plan as the Plan Administrator shall determine, the Plan Administrator taking into account
the duties of the respective employees, their present and potential contributions to the success of
the Company or its Subsidiaries, and such other factors as the Plan Administrator shall deem
relevant in accomplishing the purposes of the Plan. The Plan Administrator may grant an Option or
provide for the grant of an Option, either from time to time in the discretion of the Plan
Administrator or automatically upon the occurrence of specified events, including, without
limitation, the achievement of Performance Goals or other performance measures, the satisfaction of
an event or condition within the control of the recipient of the Option or within the control of
others. The granting of an Option shall take place when the Plan Administrator by resolution,
written consent or other appropriate action determines to grant such an Option to a particular
Participant at the Option Price.
15
6.2 Special Provisions Applicable to Incentive Stock Options
Each provision of the Plan and each Incentive Stock Option granted thereunder shall be
construed so that each such Option shall qualify as an Incentive Stock Option, and any provision
thereof that cannot be so construed shall be disregarded, unless the Participant agrees otherwise.
Incentive Stock Options, in addition to complying with the other provisions of the Plan relating to
Options generally, shall be subject to the following conditions:
(a)
Ten Percent (10%) Stockholders
A Participant must not, immediately before an Incentive Stock Option is granted to him
or her, own stock representing more than ten percent (10%) of the voting power or value of
all classes of stock of the Company or of a Subsidiary. This requirement is waived if (i)
the Option Price of the Incentive Stock Option to be granted is at least one hundred ten
percent (110%) of the Fair Market Value of the stock subject to the Option, determined at
the time the Option is granted, and (ii) the Option is not exercisable more than five (5)
years from the date the Option is granted.
(b)
Annual Limitation
To the extent that the aggregate Fair Market Value (determined at the time of the grant
of the option) of the stock with respect to which Incentive Stock Options are exercisable
for the first time by the Participant during any calendar year exceeds One Hundred Thousand
Dollars ($100,000), such Options shall be treated as Nonqualified Options. In applying the
limitation in the preceding sentence in the case of multiple Option grants, unless otherwise
required by applicable law, Options which were intended to be Incentive Stock Options shall
be treated as Nonqualified Options according to the order in which they were granted such
that the most recently granted Options are first treated as Nonqualified Options.
(c)
Additional Terms
Any other terms and conditions which the Plan Administrator determines, upon advice of
counsel, must be imposed for the Option to be an Incentive Stock Option.
(d)
Notice of Disqualifying Disposition
If a Participant shall make any disposition of shares of Common Stock issued pursuant
to an Incentive Stock Option under the circumstances described in Section 421(b) of the Code
(relating to disqualifying distributions), the Participant shall notify the Company of such
disposition within twenty (20) days thereof.
16
6.3 Terms of Options
Except as otherwise provided in Section 6.2, all Incentive Stock Options and Nonqualified
Options under the Plan shall be granted subject to the following terms and conditions:
(a)
Option Price
The Option Price shall be determined by the Plan Administrator in any reasonable
manner, but shall not be less than the Fair Market Value of the Common Stock on the date the
Option is granted, except in the case of Options that are granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a company acquired by the
Company or a Subsidiary, or (ii) a company with which the Company or a Subsidiary combines.
(b)
Duration of Options
Options shall be exercisable at such time and under such conditions as set forth in the
Award Agreement, but in no event shall any stock option (whether a Nonqualified Option or an
Incentive Stock Option) be exercisable later than the tenth (10th) anniversary of the date
of its grant.
(c)
Exercise of Options
Common Stock covered by an Option may be purchased at one time or in such installments
over the option period as may be provided in the Award Agreement. Any Common Stock not
purchased on an applicable installment date may be purchased thereafter at any time prior to
the expiration of the Option in accordance with its terms. To the extent that the right to
purchase Common Stock has accrued thereunder, an Option may be exercised from time to time
by written notice to the Company setting forth the amount of Common Stock with respect to
which the Option is being exercised.
(d)
Payment
The purchase price of Common Stock purchased under Options shall be paid in full to the
Company upon the exercise of the Option by delivery of consideration equal to the product of
the Option Price and the Common Stock purchased (the Purchase Price). Such consideration
may be either (i) in cash or (ii) at the discretion of the Plan Administrator, in Common
Stock (by either actual delivery of Common Stock or by attestation presenting satisfactory
proof of beneficial ownership of such Common Stock) already owned by the Participant, or any
combination of cash and Common Stock. The Fair Market Value of such Common Stock as
delivered shall be valued as of the day of exercise. The Plan Administrator can determine
that additional forms of payment will be permitted. To the extent permitted by the Plan
Administrator and applicable laws and regulations (including, without limitation, federal
tax and securities laws, regulations and state corporate law), an Option may also be
exercised in a cashless exercise by delivery
17
of a properly executed exercise notice together with irrevocable instructions to a
broker approved by the Company to promptly deliver to the Company sufficient proceeds to pay
the Purchase Price. A Participant shall have none of the rights of a stockholder until the
Common Stock is issued to the Participant.
The Plan Administrator may permit a Participant to pay all or a portion of the Purchase
Price by having Common Stock with a Fair Market Value equal to all or a portion of the
Purchase Price be withheld from the shares issuable to the Participant upon the exercise of
the Option. The Fair Market Value of such Common Stock as is withheld shall be determined
as of the same day as the exercise of the Option.
(e)
Restrictions
The Plan Administrator shall determine and reflect in the Award Agreement, with respect
to each Option, the nature and extent of the restrictions, if any, to be imposed on the
Common Stock which may be purchased thereunder, including, without limitation, restrictions
on the transferability of such Common Stock acquired through the exercise of such Options
for such periods as the Plan Administrator may determine and, further, that in the event a
Participants employment by the Company, or a Subsidiary, terminates during the period in
which such Common Stock is nontransferable, the Participant shall be required to sell such
Common Stock back to the Company at such prices as the Plan Administrator may specify. In
addition, to the extent permitted by applicable laws and regulations, the Plan Administrator
may require that a Participant who wants to effectuate a cashless exercise of Options be
required to sell the Common Stock acquired in the associated exercise to the Company, or in
the open market through the use of a broker selected by the Company, at such price and on
such terms as the Plan Administrator may determine at the time of grant, or otherwise.
Without limiting the foregoing, the Plan Administrator may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and manner of any
resales by the Participant or other subsequent transfers by the Participant of any Common
Stock issued as a result of the exercise of an Option, including without limitation (i)
restrictions under an insider trading policy, (ii) restrictions designed to delay and/or
coordinate the timing and manner of sales by one or more Participants and (iii) restrictions
as to the use of a specified brokerage firm for such resales or other transfers.
(f)
Transferability of Options
Notwithstanding Section 17.1 and only as provided by the Plan Administrator,
Nonqualified Options may be transferred to a Participants immediate family members,
directly or indirectly or by means of a trust, corporate entity or partnership (a person who
thus acquires this option by such transfer, a Permitted Transferee). A transfer of a
Nonqualified Option may only be effected by the Company at the request of the Participant
and shall become effective upon the Permitted Transferee agreeing to such terms as the Plan
Administrator may require and only when recorded in the Companys record of outstanding
Options. In the event an Option is transferred as contemplated hereby, the Option may not
be subsequently transferred by the Permitted Transferee
18
except a transfer back to the Participant or by will or the laws of descent and
distribution. A transferred Option may be exercised by a Permitted Transferee to the same
extent as, and subject to the same terms and conditions as, the Participant (except as
otherwise provided herein), as if no transfer had taken place. As used herein, immediate
family member shall mean, with respect to any person, such persons child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, and shall include adoptive
relationships. In the event of exercise of a transferred Option by a Permitted Transferee,
any amounts due to (or to be withheld by) the Company upon exercise of the Option shall be
delivered by (or withheld from amounts due to) the Participant, the Participants estate or
the Permitted Transferee, in the reasonable discretion of the Company.
In addition, to the extent permitted by applicable law and Rule 16b-3, the Plan
Administrator may permit a recipient of a Nonqualified Option to designate in writing during
the Participants lifetime a Beneficiary to receive and exercise the Participants
Nonqualified Options in the event of such Participants death.
(g)
Purchase for Investment
The Plan Administrator shall have the right to require that each Participant or other
person who shall exercise an Option under the Plan, and each person into whose name the
Common Stock shall be issued pursuant to the exercise of an Option, represent and agree that
any and all Common Stock purchased pursuant to such Option is being purchased for investment
only and not with a view to the distribution or resale thereof and that such Common Stock
will not be sold except in accordance with such restrictions or limitations as may be set
forth in the Option or by the Plan Administrator. This Section 6.3(g) shall be inoperative
during any period of time when the Company has obtained all necessary or advisable approvals
from governmental agencies and has completed all necessary or advisable registrations or
other qualifications of the Common Stock as to which Options may from time to time be
granted as contemplated in Section 16.
(h)
No Repricing
Except in connection with a Change in Capitalization or approval of the Companys
stockholders, the Option Price shall not be reduced to less than the Fair Market Value on
the date such Stock Options were granted.
SECTION 7
STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights
Stock Appreciation Rights may be granted to eligible employees in such number, and at such
times during the term of the Plan as the Plan Administrator shall determine, the Plan
19
Administrator taking into account the duties of the respective employees, their present and
potential contributions to the success of the Company or a Subsidiary, and such other factors as
the Plan Administrator shall deem relevant in accomplishing the purposes of the Plan. The Plan
Administrator may grant a Stock Appreciation Right or provide for the grant of a Stock Appreciation
Right, either from time to time in the discretion of the Plan Administrator or automatically upon
the occurrence of specified events, including, without limitation, the achievement of Performance
Goals or other performance measures, the satisfaction of an event or condition within the control
of the recipient of the Stock Appreciation Right or within the control of others. The granting of
a Stock Appreciation Right shall take place when the Plan Administrator by resolution, written
consent or other appropriate action determines to grant such a Stock Appreciation Right to a
particular Participant at a particular price. A Stock Appreciation Right may be granted
freestanding or in tandem or in combination with any other Award under the Plan.
7.2 Exercise of Stock Appreciation Rights
A Stock Appreciation Right may be exercised upon such terms and conditions and for such term
as the Plan Administrator shall determine;
provided
,
however
, no Stock Appreciation
Right shall be exercisable later than the tenth (10th) anniversary of the date of its grant. Upon
exercise of a Stock Appreciation Right, a Participant shall be entitled to receive Common Stock
with an aggregate Fair Market Value determined by multiplying (i) the difference between the Fair
Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right
over the price determined by the Plan Administrator on the date of grant (which price shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, except in
the case of Stock Appreciation Rights that are granted in assumption of, or in substitution for,
outstanding awards previously granted by (x) a company acquired by the Company or a Subsidiary, or
(y) a company with which the Company or a Subsidiary combines) times (ii) the number of shares of
Common Stock with respect to which the Stock Appreciation Right is exercised. The value of any
fractional shares shall be paid in cash.
7.3 Special Provisions Applicable to Stock Appreciation Rights
Stock Appreciation Rights are subject to the following restrictions:
(a) A Stock Appreciation Right granted in tandem with any other Award under the Plan shall
be exercisable at such time or times as the Award to which it relates shall be exercisable,
or at such other times as the Plan Administrator may determine.
(b) The right of a Participant to exercise a Stock Appreciation Right granted in tandem with
any other Award under the Plan shall be canceled if and to the extent the related Award is
exercised or canceled. To the extent that a Stock Appreciation Right is exercised, the
related Award shall be deemed to have been surrendered unexercised and canceled.
20
(c) A holder of Stock Appreciation Rights shall have none of the rights of a stockholder
until the Common Stock, if any, is issued to such holder pursuant to such holders exercise
of such rights.
(d) The acquisition of Common Stock pursuant to the exercise of a Stock Appreciation Right
shall be subject to the same restrictions as would apply to the acquisition of Common Stock
acquired upon exercise of an Option, as set forth in Section 6.3.
7.4 No Repricing
Except in connection with a Change in Capitalization or approval of the Companys
stockholders, the price at which Stock Appreciation Rights may be exercised shall not be reduced to
less than the Fair Market Value on the date such Stock Appreciation Rights were granted.
SECTION 8
PERFORMANCE SHARES AND PERFORMANCE UNITS
8.1 Grant of Performance Shares and Performance Units
Subject to the limitations in Section 5.2, Performance Shares or Performance Units may be
granted to eligible employees at any time and from time to time as the Plan Administrator shall
determine. The Plan Administrator shall have complete discretion in determining the number of
Performance Shares or Performance Units granted to each Participant and the terms and conditions
thereof, taking into account the duties of the respective Participants, their present and potential
contributions to the success of the Company or a Subsidiary, and such other factors as the Plan
Administrator shall deem appropriate. Performance Shares and Performance Units may be granted
alone or in combination with any other Award under the Plan.
8.2 Value of Performance Shares and Performance Units
The Plan Administrator shall establish Performance Goals for any specified Performance
Periods. Prior to each grant of Performance Shares or Performance Units, the Plan Administrator
shall establish an initial amount of Common Stock for each Performance Share and an initial value
for each Performance Unit granted to each Participant for that Performance Period. Prior to each
grant of Performance Shares or Performance Units, the Plan Administrator also shall set the
Performance Goals that will be used to determine the extent to which the Participant receives
Common Stock for the Performance Shares or payment of the value of the Performance Units awarded
for such Performance Period. With respect to each such Performance Goal utilized during a
Performance Period, the Plan Administrator may assign percentages or other relative values to
various levels of performance which shall be applied to determine the extent to which the
Participant shall receive a payout of the number of Performance Shares or value of Performance
Units awarded.
21
8.3 Payment of Performance Shares and Performance Units
After a Performance Period has ended, the holder of a Performance Share or Performance Unit
shall be entitled to receive the value thereof as determined by the Plan Administrator. The Plan
Administrator shall make this determination by first determining the extent to which the
Performance Goals set pursuant to Section 8.2 have been met. The Plan Administrator shall then
determine the applicable percentage or other relative value to be applied to, and will apply such
percentage or other relative value to, the number of Performance Shares or value of Performance
Units to determine the payout to be received by the Participant. In addition, with respect to
Performance Shares and Performance Units granted to each Participant, no payout shall be made
hereunder except upon written certification by the Plan Administrator that the applicable
Performance Goals have been satisfied to a particular extent.
8.4 Form and Timing of Payment
The payment described in Section 8.3 shall be made in Common Stock, or in cash, or partly in
Common Stock and partly in cash, at the discretion of the Plan Administrator and set forth in the
Award Agreement. The value of any fractional shares shall be paid in cash. Payment shall be made
in a lump sum or installments as prescribed by the Plan Administrator or the Award Agreement, as
applicable, and consistent with Section 409A. If Common Stock is to be converted into an amount of
cash on any date, or if an amount of cash is to be converted into Common Stock on any date, such
conversion shall be done at the then-current Fair Market Value of the Common Stock on such date.
SECTION 9
RESTRICTED STOCK
9.1 Grant of Restricted Stock
Subject to the limitations in Section 5.2, Restricted Stock may be granted to eligible
employees in such number and at such times during the term of the Plan as the Plan Administrator
shall determine, the Plan Administrator taking into account the duties of the respective
Participants, their present and potential contributions to the success of the Company or a
Subsidiary, and such other factors as the Plan Administrator shall deem relevant in accomplishing
the purposes of the Plan. The Plan Administrator may grant Restricted Stock or provide for the
grant of Restricted Stock, either from time to time in the discretion of the Plan Administrator or
automatically upon the occurrence of specified events.
22
9.2 Restriction Period
Except as permitted by the Plan Administrator and specified in the Award Agreement, during a
period following the date of grant, as determined by the Plan Administrator, which in no event
shall be less than three (3) years with respect to Restricted Stock subject to restrictions based
upon time and one (1) year with respect to Restricted Stock subject to restrictions based upon the
achievement of specific Performance Goals or other performance measures (the Restriction Period)
the Restricted Stock shall be subject to Section 17.1. During the Restriction Period, the Plan
Administrator shall evidence the restrictions on the shares of Restricted Stock in such a manner as
it determines is appropriate (including, without limitation, (i) by means of appropriate legends on
shares of Restricted Stock that have been certificated and (ii) by means of appropriate
stop-transfer orders on shares of Restricted Stock credited to book-entry accounts).
9.3 Other Restrictions
The Plan Administrator shall impose such other restrictions on Restricted Stock granted
pursuant to the Plan as it may deem advisable, including Performance Goals or other performance
measures. The Plan Administrator may require, under such terms and conditions as it deems
appropriate or desirable, that the certificates for Restricted Stock delivered under the Plan may
be held in custody by a bank or other institution, or that the Company may itself hold such shares
in custody until the Restriction Period expires or until restrictions thereon otherwise lapse, and
may require, as a condition of any issuance of Restricted Stock that the Participant shall have
delivered a stock power endorsed in blank relating to the shares of Restricted Stock.
9.4 Voting Rights; Dividends and Other Distributions
A Participant receiving a grant of Restricted Stock shall be recorded as a stockholder of the
Company. Each Participant who receives a grant of Restricted Stock shall have all the rights of a
stockholder with respect to such shares (except as provided in the restrictions on
transferability), including the right to vote the shares and receive dividends and other
distributions paid with respect to the underlying shares of Restricted Stock.
9.5 Issuance of Shares; Settlement of Awards
When the restrictions imposed by Section 9.2 expire or otherwise lapse with respect to one or
more shares of Restricted Stock, the Participant shall be obligated to return to the Company any
certificate(s) representing shares of Restricted Stock (if applicable), and the Company shall
deliver to the Participant one (1) share of Common Stock (which may be delivered in book-entry or
certificated form) in satisfaction of each share of Restricted Stock, which shares so delivered
shall not contain any legend. The delivery of shares pursuant to this Section 9.5 shall be subject
to any required share withholding to satisfy tax withholding obligations pursuant to Section 17.9.
Any fractional shares subject to such Restricted Stock shall be paid to the Participant in cash.
23
SECTION 10
RESTRICTED STOCK UNITS
10.1 Grant of Restricted Stock Units
Subject to the limitations in Section 5.2, Restricted Stock Units may be granted to eligible
employees in such number and at such times during the term of the Plan as the Plan Administrator
shall determine, the Plan Administrator taking into account the duties of the respective
Participants, their present and potential contributions to the success of the Company or a
Subsidiary, and such other factors as the Plan Administrator shall deem relevant in accomplishing
the purposes of the Plan. The Plan Administrator may grant Restricted Stock Units or provide for
the grant of Restricted Stock Units, either from time to time in the discretion of the Plan
Administrator or automatically upon the occurrence of specified events.
10.2 Restriction Period
Except as permitted by the Plan Administrator and specified in the Award Agreement, during a
period following the date of grant, as determined by the Plan Administrator, which in no event
shall be less than three (3) years with respect to Restricted Stock Units subject to restrictions
based upon time and one (1) year with respect to Restricted Stock Units subject to restrictions
based upon the achievement of specific Performance Goals or other performance measures (the
Restriction Period) the Restricted Stock Units shall be subject to Section 17.1.
10.3 Other Restrictions
The Plan Administrator shall impose such other restrictions on Restricted Stock Units granted
pursuant to the Plan as it may deem advisable, including the requirement that certain
pre-established Performance Goals be met. A Participant receiving a grant of Restricted Stock
Units shall not be recorded as a stockholder of the Company and shall not acquire any rights of a
stockholder unless or until the Participant is issued shares of Common Stock in settlement of such
Restricted Stock Units.
10.4 Dividend Equivalents
The Plan Administrator may provide that Restricted Stock Units awarded under the Plan shall be
entitled to an amount per Restricted Stock Unit equal in value to the cash dividend, if any, paid
per share of Common Stock on issued and outstanding shares, on the dividend payment dates occurring
during the period between the date on which the Restricted Stock Units are granted to the
Participant and the date on which such Restricted Stock Units are settled, cancelled, forfeited,
waived, surrendered or terminated under the Plan. Such paid amounts called dividend equivalents
shall be (i) paid in cash or Common Stock or (ii) credited to the Participant as additional
Restricted Stock Units, or any combination thereof, as the Plan Administrator shall determine. A
Restricted Stock Unit credited to a Participant as a dividend equivalent shall vest and be settled
at such time as the Restricted Stock Unit to which it relates vests and is settled. In the event
the dividend equivalents are deferred, they shall be payable in accordance with the requirements of
Section 409A.
24
10.5 Issuance of Shares; Settlement of Awards
When the restrictions imposed by Section 10.2 expire or otherwise lapse with respect to one or
more Restricted Stock Units, Restricted Stock Units shall be settled (i) in cash or (ii) by the
delivery to the Participant of the number of shares of Common Stock equal to the number of the
Participants Restricted Stock Units that are vested (less any units or value withheld to satisfy
applicable tax withholding obligations), or any combination thereof, as the Plan Administrator
shall determine and in accordance with Section 409A. The delivery of shares pursuant to this
Section 10.5 shall be subject to any required share withholding to satisfy tax withholding
obligations pursuant to Section 17.9. Any fractional shares subject to such Restricted Stock Units
shall be paid to the Participant in cash.
SECTION 11
INCENTIVE AWARDS
11.1 Incentive Awards
Prior to the beginning of each Performance Period, or not later than ninety (90) days
following the commencement of the relevant fiscal year, the Plan Administrator shall establish
Performance Goals or other performance measures which must be achieved for any Participant to
receive an Incentive Award for that Performance Period. The Performance Goals or other performance
measures may be based on any combination of corporate and business unit Performance Goals or other
performance measures. The Plan Administrator may also establish one or more Company-wide
Performance Goals or other performance measures which must be achieved for any Participant to
receive an Incentive Award for that Performance Period. Such Performance Goals or other
performance measures may include a threshold level of performance below which no Incentive Award
shall be earned, target levels of performance at which specific Incentive Awards will be earned,
and a maximum level of performance at which the maximum level of Incentive Awards will be earned.
Each Incentive Award shall specify the amount of cash and the amount of any other Awards subject to
such Incentive Award.
11.2 Performance Goal Certification
An Incentive Award shall become payable to the extent provided herein in the event that the
Plan Administrator certifies in writing prior to payment of the Incentive Award that the
Performance Goals or other performance measures selected for a particular Performance Period have
been attained. In no event will an Incentive Award be payable under this Plan if the threshold
level of performance set for each Performance Goal or other performance measure for the applicable
Performance Period is not attained.
11.3 Discretion to Reduce Awards; Participants Performance
The Plan Administrator, in its sole and absolute discretion and only prior to a Change of
Control, may reduce the amount of any Incentive Award otherwise payable to a Participant upon
25
attainment of any Performance Goal or other performance measure for the applicable Performance
Period. A Participants individual performance must be satisfactory, regardless of the Companys
performance and the attainment of Performance Goals or other performance measures, before he or she
may be paid an Incentive Award. In evaluating a Participants performance, the Plan Administrator
shall consider the Performance Goals or other performance measures, the Participants
responsibilities and accomplishments, and such other factors as it deems appropriate.
11.4 Required Payment of Incentive Awards
The Plan Administrator shall make a determination as soon as administratively possible after
the information that is necessary to make such a determination is available for a particular
Performance Period whether the Performance Goals or other performance measures for the Performance
Period have been achieved and the amount of the Incentive Award for each Participant. The Plan
Administrator shall certify the foregoing determinations in writing. In the absence of an election
by the Participant pursuant to Section 11.5 and Section 13, the Incentive Award shall be paid as
soon as practicable after the end of the calendar year, but in no event later than March 15
following the end of the calendar year in which the foregoing determinations have been made as
follows:
(a) Participants shall receive their Incentive Awards in any combination of cash and/or other
Awards under the Plan as determined by the Plan Administrator.
(b) Because the Participant bears forfeiture, price fluctuation, and other attendant risks
during the Restriction Period associated with Restricted Stock and Restricted Stock Units, the Plan
Administrator may determine, as set forth in the Award Agreement, that Participants who are awarded
Restricted Stock or Restricted Stock Units as part of their Incentive Award shall be awarded
additional Restricted Stock or Restricted Stock Units up to the amount of Restricted Stock or
Restricted Stock Units which a Participant is awarded pursuant to Section 11.4(a). No additional
Restricted Stock or Restricted Stock Units are required to be awarded pursuant to this Section
11.4(b).
11.5 Restricted Stock Election
To the extent permitted by applicable law, in lieu of receiving all or any portion of cash
awarded as part of a Participants Incentive Award pursuant to Section 11.4(a), the Plan
Administrator may determine, as set forth in the Award Agreement, that Participants may elect to
receive Restricted Stock or Restricted Stock Units with a value equal to the portion of the
Incentive Award which the Participant would otherwise have received in cash, but has elected to
receive in Restricted Stock or Restricted Stock Units (Restricted Stock Election). Participants
must make their Restricted Stock Election at such time and in such a manner as prescribed by the
Plan Administrator and in accordance with Section 409A of the Code. The Plan Administrator may
determine, if set forth in the Award Agreement, that each Participant who makes the Restricted
Stock Election shall be awarded additional shares of Restricted Stock or Restricted Stock Units
granted pursuant to Section 11.4(b) up to the amount of the Participants Restricted
26
Stock Election. Notwithstanding the foregoing, no additional Restricted Stock or Restricted
Stock Units are required to be awarded pursuant to this Section 11.5.
SECTION 12
CASH AWARDS AND OTHER STOCK-BASED AWARDS
12.1 Grant of Cash Awards
Subject to the terms and provisions of this Plan, the Plan Administrator, at any time and from
time to time, may grant cash awards to Participants in such amounts and upon such terms, including
the achievement of Performance Goals or other specific performance measures, as the Plan
Administrator may determine (each, a Cash Award).
12.2 Other Stock-Based Awards
The Plan Administrator may grant other types of equity-based or equity-related Awards not
otherwise described by the terms of this Plan (including the grant or offer for sale of
unrestricted shares of Common Stock) in such amounts and subject to such terms and conditions, as
the Plan Administrator shall determine (each, an Other Stock-Based Award). Such Other
Stock-Based Awards may involve the transfer of Common Stock to Participants, or payment in cash or
otherwise of amounts based on the value of Common Stock.
12.3 Value of Cash Awards and Other Stock-Based Awards
Each Cash Award granted pursuant to this Section 12 shall specify a payment amount or payment
range as determined by the Plan Administrator. Each Other Stock-Based Award shall be expressed in
terms of Common Stock or units based on Common Stock, as determined by the Plan Administrator. The
Plan Administrator may establish performance measures applicable to such Awards in its discretion.
If the Plan Administrator exercises its discretion to establish performance measures, the number
and/or value of such cash awards or Other Stock-Based Awards that will be paid out to the
Participant will depend on the extent to which the performance measures are met.
12.4 Payment of Cash Awards and Other Stock-Based Awards
Payment, if any, with respect to a Cash Award or an Other Stock-Based Award shall be made in
accordance with the terms of the Award, in cash or Common Stock as the Plan Administrator
determines and in accordance with Section 409A so as not to be treated as payment made pursuant to
a nonqualified deferred compensation plan. The value of any fractional shares shall be paid in
cash.
27
SECTION 13
DEFERRAL ELECTIONS
The Plan Administrator may, to the extent permitted by applicable law, permit Participants to
defer Awards under the Plan. Any such deferrals shall be subject to such terms, conditions and
procedures that the Plan Administrator may establish from time to time in its sole discretion and
consistent with the advance and subsequent deferral election requirements of Section 409A.
SECTION 14
TERMINATION OF EMPLOYMENT
The Award Agreement applicable to each Award shall set forth the effect of a termination of
the Participants employment upon such Award;
provided
,
however
, that, unless
explicitly set forth otherwise in an Award Agreement or as determined by the Plan Administrator,
(1) all of a Participants unvested and/or unexercisable Awards shall automatically be forfeited
upon termination of the Participants employment for any reason, and, as to Awards consisting of
stock Options or Stock Appreciation Rights, the Participant shall be permitted to exercise the
vested portion of the Option or Stock Appreciation Right for at least three months following
termination of his or her employment, and (2) all of a Participants Awards (whether vested or
unvested, exercisable or unexercisable) shall automatically be forfeited upon termination of the
Participants employment for Cause. Provisions relating to the effect of a termination of
employment upon an Award shall be determined in the sole discretion of the Plan Administrator and
need not be uniform among all Awards or among all Participants. Unless the Plan Administrator
determines otherwise in accordance with Section 409A, the transfer of employment of a Participant
as between the Company and a Subsidiary shall not constitute a termination of employment. The Plan
Administrator shall have the discretion to determine the effect, if any, that a sale or other
disposition of a Participants Employer will have on the Participants Awards.
SECTION 15
EFFECT OF A CHANGE OF CONTROL
Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of
Control and as of the date such Change of Control is determined to have occurred:
|
(a)
|
|
Any Options and Stock Appreciation Rights outstanding as of the date of the
Change of Control, and which are not then exercisable and vested, shall become fully
exercisable and vested.
|
|
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(b)
|
|
The restrictions applicable to any Restricted Stock or Restricted Stock Unit
Award as of the date of the Change of Control which is not performance based shall
lapse and such Restricted Stock or Restricted Stock Unit shall become free of all
restrictions and become fully vested and transferable.
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28
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(c)
|
|
Except as otherwise set forth in a Participants Award Agreement, as of the
date of the Change of Control, the restrictions applicable to any Performance Share or
Performance Unit Award and any performance-based Restricted Stock or Restricted Stock
Unit Award granted pursuant to Sections 8, 9, or 10 shall become free of all
restrictions and become fully vested and transferable.
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(d)
|
|
Any restrictions applicable to Cash Awards and Other Stock-Based Awards shall
immediately lapse and become payable within twenty (20) days.
|
In addition to the Boards authority set forth in Sections 5.3, in order to maintain the
Participants rights in the event of any Change of Control, the Board, as constituted before such
Change of Control, is hereby authorized, and has sole discretion, as to any Award, either at the
time such Award is made hereunder or any time thereafter, to take any one or more of the following
actions: (i) provide for the purchase of any such Award for an amount of cash equal to the amount
that could have been attained upon the exercise of such Award or realization of the Participants
rights had such Award been currently exercisable or payable, as long as such purchase does not
result in taxation to the Participant under Section 409A; (ii) make such adjustment to any such
Award then outstanding as the Board deems appropriate to reflect such Change of Control; or (iii)
cause any such Award then outstanding to be assumed, or new rights substituted therefore, by the
acquiring or surviving corporation after such Change of Control. The Board may, in its discretion,
include such further provisions and limitations in any Award Agreement, as it may deem equitable
and in the best interests of the Company.
SECTION 16
REGULATORY APPROVALS AND LISTING
The Company shall not be required to issue any certificate for shares of Common Stock under
the Plan prior to:
(a) obtaining any approval or ruling from the Securities and Exchange Commission, the Internal
Revenue Service or any other governmental agency which the Company, in its sole discretion, shall
determine to be necessary or advisable;
(b) listing of such shares on any stock exchange on which the Common Stock may then be listed;
and
(c) completing any registration or other qualification of such shares under any federal or
state laws, rulings or regulations of any governmental body which the Company, in its sole
discretion, shall determine to be necessary or advisable.
All certificates, or book-entry accounts, for shares of Common Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other restrictions as the Plan Administrator
may deem advisable under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which Common Stock is then listed and any applicable
federal or state securities laws, and the Plan Administrator may cause a
29
legend or legends to be placed on any such certificates, or notations on such book-entry
accounts, to make appropriate reference to such restrictions. The foregoing provisions of this
paragraph shall not be effective if and to the extent that the shares of Common Stock delivered
under the Plan are covered by an effective and current registration statement under the Securities
Act of 1933, as amended, or if and so long as the Plan Administrator determines that application of
such provisions are no longer required or desirable. In making such determination, the Plan
Administrator may rely upon an opinion of counsel for the Company. Without limiting the foregoing,
the Plan Administrator may impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other subsequent
transfers by a Participant of any shares of Common Stock issued under this Plan, including without
limitation (i) restrictions under an insider trading policy, (ii) restrictions designed to delay
and/or coordinate the timing and manner of sales by one or more Participants and (iii) restrictions
as to the use of a specified brokerage firm for such resales or other transfers.
SECTION 17
GENERAL PROVISIONS
17.1 Forfeiture Events and Nontransferability
(a) If the Company is required to prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with any financial reporting requirement
under the securities laws, and if a Participant knowingly engaged in the misconduct, was grossly
negligent with respect to such misconduct, or knowingly or grossly negligently failed to prevent
the misconduct (whether or not the Participant is one of the individuals subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002), the Plan Administrator may
determine that such Participant shall reimburse the Company the amount of any payment in settlement
of an Award earned or accrued during the twelve-month period following the first public issuance or
filing with the United States Securities and Exchange Commission (whichever first occurred) of the
financial document embodying such financial reporting requirement.
(b) The Plan Administrator may specify in an Award Agreement or otherwise that a Participants
rights, payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an Award. Such events
may include, without limitation, termination of employment for Cause, violation of material
policies that may apply to the Participant, breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the Participant, or other conduct by the Participant that
is detrimental to the business or reputation of the Company or a Subsidiary.
(c) Unless otherwise provided in the Plan, the right of a Participant or Beneficiary to the
payment of any Award granted under the Plan and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will
or by the applicable laws of descent and distribution unless the Participant has
30
received the Plan Administrators prior written consent. Except as otherwise provided for
under the Plan, if any Participant attempts to transfer, assign, pledge, hypothecate or otherwise
dispose of any Award under the Plan or of any right or privilege conferred thereby, contrary to the
provisions of the Plan or such Award, or suffers the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, all affected Awards held by such
Participant shall be immediately forfeited.
17.2 No Individual Rights
Nothing contained in the Plan, or in any Award granted pursuant to the Plan, shall confer upon
any employee any right with respect to continuance of employment by the Company or a Subsidiary,
nor interfere in any way with the right of the Company or a Subsidiary to terminate the employment
of such employee at any time with or without assigning any reason therefor.
17.3 Other Compensation
Unless determined otherwise by the Plan Administrator or required by contractual obligations,
the grant, vesting or payment of Awards under the Plan shall not be considered as part of a
Participants salary or used for the calculation of any other pay, allowance, pension or other
benefit unless otherwise permitted by other benefit plans provided by the Company or a Subsidiary,
or required by law or by contractual obligations of the Company or a Subsidiary.
17.4 Leaves of Absence
Leaves of absence for such periods and purposes conforming to the personnel policy of the
Company, or of a Subsidiary, as applicable, shall not be deemed terminations or interruptions of
employment, unless a Participant commences a leave of absence from which he or she is not expected
to return to active employment with the Company or a Subsidiary. The foregoing notwithstanding,
with respect to Incentive Stock Options, employment shall not be deemed to continue beyond the
first ninety (90) days of such leave unless the Participants reemployment rights are guaranteed by
statute or contract. With respect to any Participant who, after the date an Award is granted under
this Plan, ceases to be employed by the Company or a Subsidiary on a full-time basis but remains
employed on a part-time basis, the Plan Administrator may make appropriate adjustments, as
determined in its sole discretion, as to the number of shares issuable under, the vesting schedule
of, or the amount payable under any unvested Awards held by such Participant.
17.5 Transfers
In the event a Participant is transferred from the Company to a Subsidiary, or
vice versa,
or
is promoted or given different responsibilities, Awards granted to the Participant prior to such
date shall not be affected.
31
17.6 Unfunded Obligations
Any amounts (deferred or otherwise) to be paid to Participants pursuant to the Plan are
unfunded obligations. Neither the Company nor any Subsidiary is required to segregate any monies
from its general funds, to create any trusts or to make any special deposits with respect to this
obligation. The Plan Administrator, in its sole discretion, may direct the Company to share with a
Subsidiary the costs of a portion of the Incentive Awards paid to Participants who are executives
of those companies. Beneficial ownership of any investments, including trust investments which the
Company may make to fulfill this obligation, shall at all times remain in the Company. Any
investments and the creation or maintenance of any trust or any Participant account shall not
create or constitute a trust or a fiduciary relationship between the Plan Administrator, the
Company or any Subsidiary and a Participant, or otherwise create any vested or beneficial interest
in any Participant or the Participants Beneficiary or the Participants creditors in any assets of
the Company or a Subsidiary whatsoever. The Participants shall have no claim against the Company
for any changes in the value of any assets which may be invested or reinvested by the Company with
respect to the Plan.
17.7 Beneficiaries
The designation of a Beneficiary shall be on a form provided by the Company, executed by the
Participant (with the consent of the Participants spouse, if required by the Company for reasons
of community property or otherwise), and delivered to a designated representative of the Company.
A Participant may change his or her Beneficiary designation at any time. A designation by a
Participant under any predecessor plans shall remain in effect under the Plan unless such
designation is revoked or changed under the Plan. If no Beneficiary is designated, if the
designation is ineffective, or if the Beneficiary dies before the balance of a Participants
benefit is paid, the balance shall be paid to the Participants spouse, or if there is no surviving
spouse, to the Participants lineal descendants, pro rata, or if there is no surviving spouse or
any lineal descendant, to the Participants estate. Notwithstanding the foregoing, however, a
Participants Beneficiary shall be determined under applicable state law if such state law does not
recognize Beneficiary designations under plans of this sort and is not preempted by laws which
recognize the provisions of this Section 17.7.
17.8 Governing Law
The Plan shall be construed and governed in accordance with the laws of the State of Texas.
17.9 Satisfaction of Tax Obligations
Appropriate provision shall be made for all taxes required to be withheld in connection with
the exercise, grant, vesting or other taxable event of Awards under the applicable laws and
regulations of any governmental authority, whether federal, state or local and whether domestic or
foreign, including, without limitation, the required withholding of a sufficient amount of Common
Stock otherwise issuable to a Participant to satisfy the said required minimum tax withholding
obligations. To the extent provided by the Plan Administrator, a Participant is
32
permitted to deliver Common Stock (including shares acquired pursuant to the exercise of an
Option or Stock Appreciation Right other than the Option or Stock Appreciation Right currently
being exercised, to the extent permitted by applicable regulations) for payment of withholding
taxes on the exercise of an Option or Stock Appreciation Right, upon the grant or vesting of
Restricted Stock or Restricted Stock Units or upon the payout of Performance Shares, Performance
Units or Incentive Awards. Common Stock may be required to be withheld from the shares issuable to
the Participant upon the exercise of an Option or Stock Appreciation Right, upon the vesting of
Restricted Stock or Restricted Stock Units or upon the payout of Performance Shares or Performance
Units to satisfy such minimum required tax withholding obligations. The Fair Market Value of
Common Stock as delivered pursuant to this Section 17.9 shall be determined as of the day of
release, and shall be calculated in accordance with Section 2.16.
Any Participant who makes a Section 83(b) election under the Code shall, within ten (10) days
of making such election, notify the Company in writing of such election and shall provide the
Company or such Participants Employer with a copy of such election form filed with the Internal
Revenue Service.
A Participant is solely responsible for obtaining, or failing to obtain, tax advice with
respect to participation in the Plan prior to the Participants (i) entering into any transaction
under or with respect to the Plan, (ii) designating or choosing the times of distributions under
the Plan, or (iii) disposing of any Common Stock issued under the Plan.
17.10 Participants in Foreign Jurisdictions
The Plan Administrator shall have the authority to adopt such modifications, procedures and
subplans as may be necessary or desirable to comply with provisions of the laws of any countries in
which the Company or any Subsidiary may operate to ensure the viability of the benefits from Awards
granted to Participants employed in such countries, to meet the requirements of local laws that
permit the Plan to operate in a qualified or tax-efficient manner, to comply with applicable
foreign laws and to meet the objectives of the Plan.
SECTION 18
REGULATORY COMPLIANCE
18.1 Rule 16b-3 of the Exchange Act and Section 162(m) of the Code
The Companys intention is that, so long as any of the Companys equity securities are
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply in all
respects with the rules of any exchange on which the Common Stock is traded and with Rule 16b-3.
In addition, it is the Companys intention that, as to Covered Employees, unless otherwise
indicated in an Award Agreement, stock Options, Stock Appreciation Rights, Performance Shares,
Performance Units and Incentive Awards shall qualify as performance-based compensation under
Section 162(m). If any Plan provision is determined not to be in
33
compliance with the foregoing intentions, that provision shall be deemed modified as necessary to
meet the requirements of any such exchange, Rule 16b-3 and Section 162(m).
18.2 Section 409A of the Code
The Plan is intended to be administered, operated and construed in compliance with Section
409A and any guidance issued thereunder. Notwithstanding this or any other provision of the Plan
to the contrary, the Board may amend the Plan in any manner, or take any other action, that either
of them determines, in its sole discretion, is necessary, appropriate or advisable to cause the
Plan to comply with Section 409A and any guidance issued thereunder. Any such action, once taken,
shall be deemed to be effective from the earliest date necessary to avoid a violation of Section
409A and shall be final, binding and conclusive on all Participants and other individuals having or
claiming any right or interest under the Plan.
Notwithstanding the provisions of the Plan or any Award Agreement, no payment pursuant to an
Award that is subject to Section 409A shall be made to a Participant as a result of such
Participants separation from service (within the meaning of such phrase in Section 409A), within
the six-month period following such separation from service (or, if earlier, the date of death of
the employee), if the Participant is a Specified Employee. For purposes of the previous sentence
the term Specified Employee is defined in Section 409A and the authoritative guidance thereunder.
SECTION 19
ESTABLISHMENT AND TERM OF PLAN
The Plan was adopted by the Board of Directors on February 12, 2008, and is subject to
approval by the Companys stockholders. If approved by the stockholders, this Plan will replace
the Prior Plans, and no further Awards will be made under the Prior Plans. This Plan shall become
effective on the Effective Date, and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Section 20, until all Common Stock subject
to it shall have been purchased or acquired according to the provisions herein. However, in no
event may an Award be granted under the Plan on or after the tenth (10th) anniversary of the
Effective Date. After this Plan is terminated, no future Awards may be granted pursuant to the
Plan, but Awards previously granted shall remain outstanding in accordance with their applicable
terms and conditions and this Plans terms and conditions.
SECTION 20
AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN
20.1 Amendment of Plan
Subject to the Board of Directors, the Plan Administrator may from time to time make such
amendments to the Plan as it may deem proper and in the best interest of the Company, including,
without limitation, any amendment necessary to ensure that the Company may obtain
34
any regulatory approval referred to in Section 16;
provided
,
however
, that
(a) to the extent required by applicable law, regulation or stock exchange rule, stockholder
approval shall be required, and (b) except as otherwise provided in the Plan, no change in any
Award previously granted under the Plan may be made without the consent of the Participant if such
change would impair the right of the Participant under the Award to acquire or retain Common Stock
or cash that the Participant may have acquired as a result of the Plan.
20.2 Termination or Suspension of Plan
The Board of Directors may at any time suspend the operation of or terminate the Plan with respect to any Common Stock or rights which are not at that time subject to any Award outstanding under the Plan.
20.3 Code Section 162(m) Approval
If so determined by the Plan Administrator, the provisions of the Plan relating to Incentive
Awards (or any other Award subject to Code Section 162(m)) shall be disclosed to, and reapproved
by, the Companys stockholders no later than the first stockholder meeting that occurs in the fifth
year following the year in which the Effective Date occurs in order for Incentive Awards (and other
Awards subject to Code Section 162(m)) granted after such time to be exempt from the deduction
limitations of Code Section 162(m).
IN WITNESS WHEREOF, the Company has caused the Plan to be executed effective as of May 20,
2008.
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ANADARKO PETROLEUM CORPORATION
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/s/ Robert G. Gwin
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Robert G. Gwin
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Senior Vice President
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35
Exhibit 10.2
ANADARKO PETROLEUM CORPORATION
2008 DIRECTOR COMPENSATION PLAN
Effective as of May 20, 2008
TABLE OF CONTENTS
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SECTION 1
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PURPOSE
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1
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1.1
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Purpose
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1
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SECTION 2
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DEFINITIONS
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1
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2.1
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Award
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1
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2.2
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Award Agreement
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1
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2.3
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Beneficiary
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1
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2.4
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Board
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2
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2.5
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Cash Deferral
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2
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2.6
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Change in Capitalization
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2
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2.7
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Change of Control
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2
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2.8
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Code
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4
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2.9
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Committee
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4
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2.10
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Common Stock
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4
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2.11
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Company Stock Deferral
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4
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2.12
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Company
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4
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2.13
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Compensation
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4
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2.14
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Conversion Premium
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4
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2.15
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Effective Date
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4
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2.16
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Eligible Director
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4
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2.17
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Exchange Act
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5
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2.18
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Fair Market Value
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5
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2.19
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Full Value Award
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5
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2.20
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Memorandum Deferred Account
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5
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2.21
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Option Price
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5
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2.22
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Other Stock-Based Award
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5
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2.23
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Participant
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5
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2.24
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Payment Date
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5
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2.25
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Permanent Disability
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5
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2.26
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Permitted Transferee
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6
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2.27
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Plan
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6
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2.28
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Plan Quarter
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6
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2.29
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Purchase Price
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6
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2.30
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Restricted Stock
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6
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2.31
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Restricted Stock Units
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6
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2.32
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Restriction Period
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6
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2.33
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Rule 16b-3
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6
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2.34
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Section 409A
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6
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2.35
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Stock Appreciation Right
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6
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2.36
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Stock Option
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6
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SECTION 3
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ADMINISTRATION
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7
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3.1
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Committee
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7
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3.2
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Indemnification of Committee
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7
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SECTION 4
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PARTICIPATION
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7
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4.1
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Participants
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7
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SECTION 5
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SHARES AVAILABLE FOR THE PLAN
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8
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5.1
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Maximum Number of Shares
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8
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5.2
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Adjustment in Authorized Shares
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8
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i
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SECTION 6
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STOCK OPTIONS
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9
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6.1
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Grant of Stock Options
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9
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6.2
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Terms of Stock Options
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9
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SECTION 7
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STOCK APPRECIATION RIGHTS
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12
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7.1
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Grant of Stock Appreciation Rights
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12
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7.2
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Exercise of Stock Appreciation Rights
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13
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7.3
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Special Provisions Applicable to Stock Appreciation Rights
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13
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7.4
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No Repricing
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13
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SECTION 8
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RESTRICTED STOCK
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14
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8.1
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Grant of Restricted Stock
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14
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8.2
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Restriction Period
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14
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8.3
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Voting Rights; Dividends and Other Distributions
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14
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8.4
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Issuance of Shares; Settlement of Awards
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14
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SECTION 9
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RESTRICTED STOCK UNITS
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15
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9.1
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Grant of Restricted Stock Units
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15
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9.2
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Restriction Period
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15
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9.3
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Other Restrictions
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15
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9.4
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Dividend Equivalents
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15
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9.5
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Issuance of Shares; Settlement of Awards
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16
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SECTION 10
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OTHER STOCK-BASED AWARDS
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16
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SECTION 11
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COMPENSATION
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16
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11.1
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Amount of Compensation
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16
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11.2
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Compensation Election
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16
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SECTION 12
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DEFERRED COMPENSATION
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17
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12.1
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Deferred Cash
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17
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12.2
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Deferred Common Stock
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17
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12.3
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Memorandum Deferred Account
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18
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SECTION 13
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CESSATION OF SERVICE
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18
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SECTION 14
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EFFECT OF A CHANGE OF CONTROL
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19
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SECTION 15
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PAYMENT OF DEFERRED COMPENSATION
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19
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15.1
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Payment of Deferred Cash
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19
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15.2
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Payment of Deferred Common Stock
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20
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15.3
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Acceleration of Payment of Deferred Cash and Deferred Common Stock
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20
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SECTION 16
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GENERAL PROVISIONS
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21
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16.1
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Issuance of Common Stock
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21
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16.2
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Unfunded Obligation
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22
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16.3
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Beneficiary
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22
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16.4
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Permanent Disability
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23
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16.5
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Incapacity of Participant or Beneficiary
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23
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16.6
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Nonassignment
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23
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16.7
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Termination and Amendment
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23
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16.8
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Applicable Law
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24
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16.9
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Effective Date and Term of the Plan
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24
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16.10
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Compliance With Section 16(b) of the Exchange Act
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24
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16.11
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Section 409A
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24
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ii
ANADARKO PETROLEUM CORPORATION
2008 DIRECTOR COMPENSATION PLAN
SECTION 1
PURPOSE
1.1 Purpose
The purpose of the Anadarko Petroleum Corporation 2008 Director Compensation Plan (the Plan)
is to provide a compensation program for non-employee Directors of Anadarko Petroleum Corporation
(the Company) that will attract and retain experienced and knowledgeable non-employees to serve
as members of the Companys Board of Directors. The Plan provides for (i) the payment of an annual
retainer, meeting fees (if any), committee assignment fees (if any), and other Board of Director
retainer fees in the form of cash, deferred cash, Common Stock, or deferred shares of Common Stock
or any combination of the foregoing; and (ii) the award of Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units and Other Stock-Based Awards.
SECTION 2
DEFINITIONS
Unless otherwise required by the context, the following terms when used in the Plan shall have
the meanings set forth in this Section 2:
2.1 Award
Any Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit or any Other Stock-Based Award, in each case payable in cash or in shares of Common Stock as may be designated by the Committee.
2.2 Award Agreement
The written agreement setting forth the terms and conditions applicable to an Award granted under the Plan (which, in the discretion of the Committee, need not be countersigned by a Participant). The Committee may, in its discretion, provide for the use of electronic, internet or other non-paper Award Agreements.
2.3 Beneficiary
The person or persons designated by a Participant pursuant to Section 16.3 of this Plan to whom payments (either in cash or shares of Common Stock) are to be paid pursuant to the terms of this Plan in the event of the Participants death.
1
2.4 Board
The Board of Directors of the Company.
2.5 Cash Deferral
Any Compensation deferred by a Participant in the form of cash.
2.6 Change in Capitalization
Any increase or reduction in the number of shares of Common Stock, any change (including,
without limitation, in the case of a spin-off, dividend or other distribution in respect of shares,
a change in value) in the shares of Common Stock or any exchange of shares of Common Stock for a
different number or kind of shares of Common Stock or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants, rights or debentures, stock dividend,
stock split or reverse stock split, extraordinary cash dividend, property dividend, combination or
exchange of shares, repurchase of shares, change in corporate structure or otherwise.
2.7 Change of Control
The occurrence of any of the following after the Effective Date:
a) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a Person) acquires beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding
shares of Common Stock of the Company (the Outstanding Company Common Stock) or (B) 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: (1) any acquisition directly from
the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any corporation controlled
by the Company or (4) any acquisition pursuant to a transaction which complies with clauses
(A), (B), and (C) of this Section 2.7(c); or
(b) individuals who, as of the Effective Date of the Plan, 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 the
effective date of the Plan whose election, or nomination for election by the Companys
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
2
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, (A) 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 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 Companys 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, (B) 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, 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 (C) 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, with respect to an Award that is (i) subject to Section 409A
and (ii) a Change of Control would accelerate the timing of payment thereunder, the term
Change of Control shall mean a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the Company as
defined in Section 409A and the authoritative guidance issued thereunder, but only to the
extent inconsistent with the above definition, and only to the minimum extent necessary to
comply with Section 409A as determined by the Committee.
3
2.8 Code
The Internal Revenue Code of 1986, as amended and in effect from time to time, and the temporary or final regulations of the Secretary of the U.S. Treasury adopted pursuant to the Code.
2.9 Committee
A committee consisting of two or more Eligible Directors, as designated by the Board. In the absence of a specific Board designation to the contrary, the committee shall consist of the same members of the Boards Compensation and Benefits Committee.
2.10 Common Stock
The Common Stock of the Company, $0.10 par value per share, or such other class of shares or other securities as may be applicable pursuant to the provisions of Section 5.
2.11 Common Stock Deferral
Any Compensation deferred by a Participant in the form of Common Stock.
2.12 Company
As defined in Section 1.
2.13 Compensation
The cash value of a Participants annual retainer, meeting fees (if any), committee assignment fees (if any) and other Board retainer fees related to a Participants service on the Board.
2.14 Conversion Premium
As defined in Section 12.2(a).
2.15 Effective Date
The effective date of the Plan is May 20, 2008, the date on which it was approved by the stockholders of the Company.
2.16 Eligible Director
Each member of the Board, who is not an employee of the Company or any of its subsidiaries.
4
2.17 Exchange Act
The Securities and Exchange Act of 1934, as amended, and rules promulgated thereunder.
2.18 Fair Market Value
As of any given date, the closing sales price at which Common Stock is sold on such date as
reported in the NYSE-Composite Transactions by
The Wall Street Journal
or any other comparable
service the Committee may determine is reliable for such date, or if no Common Stock was traded on
such date, on the next preceding day on which Common Stock was so traded. If the Fair Market Value
of the Common Stock cannot be determined pursuant to the preceding provisions, the Fair Market
Value of the Common Stock shall be determined by the Committee in such a manner as it deems
appropriate, consistent with the requirements of Section 409A.
2.19 Full Value Award
An Award other than of Stock Options or Stock Appreciation Rights, which is settled by the issuance of Common Stock.
2.20 Memorandum Deferred Account
As defined in Section 12.3.
2.21 Option Price
The price per share of Common Stock at which a Stock Option is exercisable.
2.22 Other Stock-Based Award
As defined in Section 10.
2.23 Participant
Each Eligible Director of the Board to whom Awards are granted or Compensation is paid under the Plan.
2.24 Payment Date
As defined in Section 11.1.
2.25 Permanent Disability
As defined in Section 16.4.
5
2.26 Permitted Transferee
As defined in Section 6.2(f).
2.27 Plan
As defined in Section 1.
2.28 Plan Quarter
Each calendar quarter.
2.29 Purchase Price
As defined in Section 6.2(d).
2.30 Restricted Stock
Common Stock granted under the Plan that is subject to the requirements of Section 8 and such other restrictions as the Board or the Committee deems appropriate.
2.31 Restricted Stock Units
An award granted under the Plan representing a right to receive a payment (either in cash or Common Stock) equal to the value of a share of Common Stock.
2.32 Restriction Period
As defined in Sections 8.2 and 9.2.
2.33 Rule 16b-3
Rule 16b-3 of the General Rules and Regulations under the Exchange Act.
2.34 Section 409A
Section 409A of the Code, and regulations promulgated thereunder.
2.35 Stock Appreciation Right
Any right granted under Section 7.
2.36 Stock Option
A stock option which is not intended to meet the requirements of an incentive stock option as
defined in Section 422 of the Code.
6
SECTION 3
ADMINISTRATION
3.1 Committee
Subject to Section 16.7, the Plan shall be administered by the Committee. The Committee shall
interpret the Plan, shall prescribe, amend and rescind rules relating to it from time to time as it
deems proper and in the best interests of the Company, and shall take any other action necessary
for the administration of the Plan. Any decision or interpretation adopted by the Committee shall
be final and conclusive and shall be binding upon all Participants. The Committee may rely on
officers, employees or other agents of the Company to handle the day-to-day administrative matters
of the Plan.
3.2 Indemnification of Committee
Each member of the Committee, while serving as such, shall be entitled, in good faith, to rely
or act upon any advice of the Companys independent auditors, counsel or consultants hired by the
Committee, or other agents assisting in the administration of the Plan. The Committee and any
officers or employees of the Company acting at the direction or on behalf of the Company shall not
be personally liable for any action or determination taken or made, or not taken or made, in good
faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and
protected under the Companys restated certificate of incorporation or by-laws with respect to any
such action or determination.
SECTION 4
PARTICIPATION
4.1 Participants
Each person who is an Eligible Director of the Company on the Effective Date of the Plan shall
become a Participant in the Plan on the Effective Date. Thereafter, each Eligible Director of the
Company shall become a Participant immediately upon election to the Board.
7
SECTION 5
SHARES AVAILABLE FOR THE PLAN
5.1 Maximum Number of Shares
(a)
Share Authorization
Subject to adjustment as provided in Section 5.2, the maximum number of shares of Common Stock
available for grant to Participants under this Plan on or after the Effective Date shall be
1,500,000 shares.
(b)
Limit on Full Value Awards Flexible Share Pool
To the extent that a share of Common Stock is issued pursuant to the grant or exercise of a
Full Value Award, it shall reduce the share authorization by 2.27 shares of Common Stock; and to
the extent that a share of Common Stock is issued pursuant to the grant or exercise of an Award
other than a Full Value Award, it shall reduce the share authorization by one (1) share of Common
Stock.
(c)
Share Usage
Shares of Common Stock covered by an Award shall only be counted as used to the extent they
are actually issued. Any shares of Common Stock related to Awards which terminate by expiration,
forfeiture, cancellation, or otherwise without the issuance of such shares of Common Stock, are
settled in cash in lieu of shares of Common Stock, or are exchanged with the Committees
permission, prior to the issuance of shares of Common Stock, for Awards not involving shares of
Common Stock, shall be available again for grant under this Plan. However, the full number of
Stock Appreciation Rights granted that are to be settled by the issuance of shares of Common Stock
shall be counted against the number of shares of Common Stock available for award under the Plan,
regardless of the number of shares of Common Stock actually issued upon settlement of such Stock
Appreciation Rights. Furthermore, any shares of Common Stock withheld to satisfy tax withholding
obligations on an Award issued under the Plan, shares of Common Stock tendered to pay the exercise
price of an Award under the Plan, and shares of Common Stock repurchased on the open market with
the proceeds of an Option exercise will no longer be eligible to be again available for grant under
this Plan. The shares of Common Stock available for issuance under this Plan may be authorized and
unissued shares of Common Stock or treasury shares of Common Stock.
5.2 Adjustment in Authorized Shares
In the event of recapitalization, stock split, stock dividend, exchange of shares, merger,
reorganization, change in corporate structure or shares of the Company or similar event, the Board
shall make such adjustments, if any, as it determines are appropriate and equitable to (i) the
number of shares authorized for issuance under the Plan, (ii) the number of shares allocated under
the Common Stock Deferral, and (iii) the number of
8
shares of Common Stock which is subject to outstanding Awards granted under the Plan and the
Option Price, if applicable. In the case of an equity restructuring (within the meaning of the
Financial Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), the
Board shall make an equitable or appropriate adjustment to outstanding Awards to reflect such
equity restructuring. Any such adjustment shall be final, binding and conclusive on all persons
claiming any right or interest under the Plan. No adjustments made under this Section 5 shall be
made if such adjustment would result in adverse taxation to the Participant under Section 409A.
SECTION 6
STOCK OPTIONS
6.1 Grant of Stock Options
(a) Stock Options may be granted to Eligible Directors in such number, and at such times
during the term of the Plan as the Committee may determine, and as evidenced by an Award Agreement.
The granting of a Stock Option shall take place when the Committee by resolution, written consent
or other appropriate action determines to grant such a Stock Option to a particular Participant on
a particular date for which the Fair Market Value shall be used for the Option Price.
6.2 Terms of Stock Options
All Stock Options under the Plan shall be granted subject to the following terms and
conditions, as specifically set out in the Award Agreement:
(a)
Option Price
The Option Price shall be determined by the Committee in any reasonable manner, but
shall not be less than the Fair Market Value of the Common Stock on the date the Stock
Option is granted, except in the case of Stock Options that are granted in assumption of, or
in substitution for, outstanding Awards previously granted by (i) a company acquired by the
Company or a subsidiary, or (ii) a company with which the Company or a subsidiary combines.
(b)
Duration of Stock Options
Stock Options shall be exercisable at such time and under such conditions as set forth
in the Award Agreement, but in no event shall any Stock Option be exercisable later than the
tenth (10th) anniversary of the date of its grant.
9
(c)
Exercise of Stock Options
Shares of Common Stock covered by a Stock Option may be purchased at one time or in
such installments over the term of the Stock Option, as may be provided in the Award
Agreement. Any shares not purchased on an applicable installment date may be purchased
thereafter at any time prior to the expiration of the Stock Option in accordance with its
terms. To the extent that the right to purchase shares has accrued thereunder, Stock
Options may be exercised from time to time by written notice to the Company setting forth
the number of shares with respect to which the Stock Option is being exercised.
(d)
Payment
The Purchase Price of shares purchased under Stock Options shall be paid in full to the
Company upon the exercise of the Stock Option by delivery of consideration equal to the
product of the Option Price and the number of shares of Common Stock purchased (the
Purchase Price). Such consideration may be either (i) in cash or (ii) at the discretion
of the Committee, in Common Stock (by either actual delivery of Common Stock or by
attestation presenting satisfactory proof of beneficial ownership of such Common Stock)
already owned by the Participant, or any combination of cash and Common Stock. The Fair
Market Value of such Common Stock as delivered shall be valued as of the day of exercise.
The Committee can determine that additional forms of payment will be permitted. To the
extent permitted by the Committee and applicable laws and regulations (including, without
limitation, federal tax and securities laws, regulations and state corporate law), an option
may also be exercised in a cashless exercise by delivery of a properly executed exercise
notice together with irrevocable instructions to a broker approved by the Company to
promptly deliver to the Company sufficient proceeds to pay the Purchase Price. A
Participant shall have none of the rights of a stockholder until the shares of Common Stock
are issued to the Participant.
The Committee may permit a Participant to pay all or a portion of the Purchase Price by
having shares of Common Stock with a Fair Market Value equal to all or a portion of the
Purchase Price be withheld from the shares issuable to the Participant upon the exercise of
the Stock Option. The Fair Market Value of such Common Stock as is withheld shall be
determined as of the same day as the exercise of the Stock Option.
(e)
Restrictions
The Committee shall determine and reflect in the Award Agreement, with respect to each
Stock Option, the nature and extent of the restrictions, if any, to be imposed on the shares
of Common Stock which may be purchased thereunder, including, without limitation,
restrictions on the transferability of such shares acquired through the exercise of such
Stock Options for such periods as the
10
Committee may determine and, further, that in the event of a Participants cessation
from service as a member of the Board during the time period in which such Common Stock is
nontransferable, the Participant shall be required to sell such Common Stock back to the
Company at such prices as the Committee may specify. In addition, to the extent permitted
by applicable laws and regulations, the Committee may require that a Participant who wants
to effectuate a cashless exercise of Stock Options be required to sell the shares of
Common Stock acquired in the associated exercise to the Company, or in the open market
through the use of a broker selected by the Company, at such price and on such terms as the
Committee may determine at the time of grant, or otherwise. Without limiting the
foregoing, the Committee may impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by the Participant or
other subsequent transfers by the Participant of any shares issued as a result of the
exercise of a Stock Option, including without limitation (i) restrictions under an insider
trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner
of sales by one or more Participants and (iii) restrictions as to the use of a specified
brokerage firm for such resales or other transfers.
(f)
Transferability of Stock Options
Notwithstanding Section 16.6, and only as provided by the Committee, Stock Options may
be transferred to a Participants immediate family members, directly or indirectly or by
means of a trust, corporate entity or partnership (a person who thus acquires Stock Options
by such transfer, a Permitted Transferee). A transfer of a Stock Option may only be
effected by the Company at the request of the Participant and shall become effective upon
the Permitted Transferee agreeing to such terms as the Committee may require and only when
recorded in the Companys record of outstanding Stock Options. In the event a Stock Option
is transferred as contemplated hereby, the Stock Option may not be subsequently transferred
by the Permitted Transferee except a transfer back to the Participant or by will or the
laws of descent and distribution. A transferred Stock Option may be exercised by a
Permitted Transferee to the same extent as, and subject to the same terms and conditions
as, the Participant (except as otherwise provided herein), as if no transfer had taken
place. As used herein, immediate family member shall mean, with respect to any person,
such persons child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, and shall include adoptive relationships. In the event of exercise of a
transferred Stock Option by a Permitted Transferee, any amounts due to (or to be withheld
by) the Company upon exercise of the option shall be delivered by (or withheld from amounts
due to) the Participant, the Participants estate or the Permitted Transferee, in the
reasonable discretion of the Company.
In addition, to the extent permitted by applicable law and Rule 16b-3, and
notwithstanding Section 16.6, the Committee may permit a recipient of a Stock
11
Option to designate in writing during the Participants lifetime a Beneficiary to
receive and exercise the Participants Stock Options in the event of such Participants
death.
(g)
Purchase for Investment
The Committee shall have the right to require that each Participant or other person
who shall exercise a Stock Option under the Plan, and each person into whose name shares of
Common Stock shall be issued pursuant to the exercise of a Stock Option, represent and
agree that any and all shares of Common Stock purchased pursuant to such Stock Option are
being purchased for investment only and not with a view to the distribution or resale
thereof and that such shares will not be sold except in accordance with such restrictions
or limitations as may be set forth in the Stock Option or by the Committee. This
Section 6.2(g) shall be inoperative during any period of time when the Company has obtained
all necessary or advisable approvals from governmental agencies and has completed all
necessary or advisable registrations or other qualifications of shares of Common Stock as
to which Stock Options may from time to time be granted as contemplated in Section 16.
(h)
No Repricing
Except in connection with a Change in Capitalization or approval of the Companys
stockholders, the Option Price shall not be reduced to less than the Fair Market Value on
the date such Stock Options were granted.
SECTION 7
STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights
Stock Appreciation Rights may be granted to Eligible Directors in such number, and at such
times during the term of the Plan as the Committee shall determine, and as evidenced by the Award
Agreement. The Committee may grant a Stock Appreciation Right or provide for the grant of a Stock
Appreciation Right, either from time to time in the discretion of the Committee or automatically
upon the occurrence of specified events. The granting of a Stock Appreciation Right shall take
place when the Committee by resolution, written consent or other appropriate action determines to
grant such a Stock Appreciation Right to a particular Participant at a particular price. A Stock
Appreciation Right may be granted freestanding or in tandem or in combination with any other Award
under the Plan.
12
7.2 Exercise of Stock Appreciation Rights
A Stock Appreciation Right may be exercised upon such terms and conditions and for such term
as the Committee shall determine;
provided
,
however
, no Stock Appreciation Right
shall be exercisable later than the tenth (10th) anniversary of the date of its grant. Upon
exercise of a Stock Appreciation Right, a Participant shall be entitled to receive Common Stock
with an aggregate Fair Market Value determined by multiplying (i) the difference between the Fair
Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right
over the price determined by the Committee on the date of grant (which price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date of grant, except in the case
of Stock Appreciation Rights that are granted in assumption of, or in substitution for, outstanding
awards previously granted by (x) a company acquired by the Company or a subsidiary, or (y) a
company with which the Company or a subsidiary combines) multiplied by (ii) the number of shares of
Common Stock with respect to which the Stock Appreciation Right is exercised. The value of any
fractional shares shall be paid in cash.
7.3 Special Provisions Applicable to Stock Appreciation Rights
Stock Appreciation Rights are subject to the following restrictions:
(a) A Stock Appreciation Right granted in tandem with any other Award under the Plan shall
be exercisable at such time or times as the Award to which it relates shall be exercisable,
or at such other times as the Committee may determine.
(b) The right of a Participant to exercise a Stock Appreciation Right granted in tandem
with any other Award under the Plan shall be canceled if and to the extent the related
Award is exercised or canceled. To the extent that a Stock Appreciation Right is
exercised, the related Award shall be deemed to have been surrendered unexercised and
canceled.
(c) A holder of Stock Appreciation Rights shall have none of the rights of a stockholder
until the Common Stock, if any, is issued to such holder pursuant to such holders exercise
of such rights.
(d) The acquisition of Common Stock pursuant to the exercise of a Stock Appreciation Right
shall be subject to the same restrictions as would apply to the acquisition of Common Stock
acquired upon exercise of a Stock Option, as set forth in Section 6.2.
7.4 No Repricing
Except in connection with a Change in Capitalization or approval of the Companys
stockholders, the price at which Stock Appreciation Rights may be exercised
13
shall not be reduced to less than the Fair Market Value on the date such Stock Appreciation
Rights were granted.
SECTION 8
RESTRICTED STOCK
8.1 Grant of Restricted Stock
Restricted Stock may be granted to Participants in such number and at such times during the
term of the Plan as the Committee shall determine and as evidenced by an Award Agreement. The
granting of Restricted Stock shall take place when the Committee by resolution, written consent or
other appropriate action determines to grant such Restricted Stock to a particular Participant.
8.2 Restriction Period
Except as otherwise provided in this Plan, determined by the Committee or specified in the
Award Agreement, Restricted Stock shall be subject to a time vesting period of no less than one (1)
year from the date of grant (the Restriction Period). During the Restriction Period, the
Restricted Stock is subject to Section 16.6. During the Restriction Period, the Committee shall
evidence the restrictions on the shares of Restricted Stock in such a manner as it determines is
appropriate (including, without limitation, (i) by means of appropriate legends on shares of
Restricted Stock that have been certificated and (ii) by means of appropriate stop-transfer orders
on shares of Restricted Stock credited to book-entry accounts).
8.3 Voting Rights; Dividends and Other Distributions
A Participant receiving a grant of Restricted Stock shall be recorded as a stockholder of the
Company. Each Participant who receives a grant of Restricted Stock shall have all the rights of a
stockholder with respect to such shares (except as provided in the restrictions on
transferability), including the right to vote the shares and receive dividends and other
distributions paid with respect to the underlying shares of Restricted Stock;
provided
,
however
, that no Participant awarded Restricted Stock shall have any right as a stockholder
with respect to any shares subject to the Participants Restricted Stock grant prior to the date of
issuance to the Participant of a certificate or certificates, or the establishment of a book-entry
account, for such shares.
8.4 Issuance of Shares; Settlement of Awards
When the restrictions imposed by Section 8.2 expire or otherwise lapse with respect to one or
more shares of Restricted Stock, the Company shall deliver to the Participant one (1) share of
Common Stock in satisfaction of each share of Restricted Stock, which shares so delivered shall not
contain any legend. Such delivery of shares may be in the form of either a physical stock
certificate or certificates or the
14
establishment of a book-entry account on behalf of such Participant. Any fractional shares
subject to such Restricted Stock shall be paid to the Participant in cash.
SECTION 9
RESTRICTED STOCK UNITS
9.1 Grant of Restricted Stock Units
Restricted Stock Units may be granted to Participants in such number and at such times during
the term of the Plan as the Committee shall determine and as evidenced by an Award Agreement. The
granting of Restricted Stock Units shall take place when the Committee by resolution, written
consent or other appropriate action determines to grant such Restricted Stock Units to a particular
Participant.
9.2 Restriction Period
Except as otherwise provided in this Plan, determined by the Committee or specified in the
Award Agreement, Restricted Stock Units shall be subject to a time vesting period of no less than
one (1) year from the date of grant (the Restriction Period). During the Restriction Period, the
Restricted Stock Units are subject to Section 16.6.
9.3 Other Restrictions
The Committee may impose such other restrictions on Restricted Stock Units granted pursuant to
the Plan as it deems necessary or appropriate. A Participant receiving a grant of Restricted Stock
Units shall not be recorded as a stockholder of the Company and shall not acquire any rights of a
stockholder unless or until the Participant is issued shares of Common Stock in settlement of such
Restricted Stock Units.
9.4 Dividend Equivalents
The Board or the Committee may provide that Restricted Stock Units awarded under the Plan
shall be entitled to an amount per Restricted Stock Unit equal in value to the cash dividend, if
any, paid per share of Common Stock on issued and outstanding shares, on the dividend payment dates
occurring during the period between the date on which the Restricted Stock Units are granted to the
Participant and the date on which such Restricted Stock Units are settled, cancelled, forfeited,
waived, surrendered or terminated under the Plan. Such paid amounts called dividend equivalents
shall be (i) paid in cash or Common Stock or (ii) credited to the Participant as additional
Restricted Stock Units, or any combination thereof, as the Board or the Committee, as appropriate,
shall determine. A Restricted Stock Unit credited to a Participant as a dividend equivalent shall
vest and be settled at such time as the Restricted Stock Unit to which it relates vests and is
settled.
15
9.5 Issuance of Shares; Settlement of Awards
When the restrictions imposed by Sections 9.2 and 9.3 expire or otherwise lapse with respect
to one or more Restricted Stock Units, Restricted Stock Units shall be settled (i) in cash or
(ii) by the delivery to the Participant of the number of shares of Common Stock equal to the number
of the Participants Restricted Stock Units that are vested, or any combination thereof, as set
forth in the Award Agreement. Any fractional shares subject to such Restricted Stock Units shall
be paid to the Participant in cash.
SECTION 10
OTHER STOCK-BASED AWARDS
The Board or Committee is hereby authorized to grant to an Eligible Director an Other
Stock-Based Award, which shall consist of a right (i) which is not an Award or right described in
Sections 6, 7, 8 or 9 and (ii) which is denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Common Stock (including without limitation,
securities convertible into Common Stock), as are deemed by the Board or Committee to be consistent
with the purposes of the Plan; provided, that any such rights must comply, with applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the Board or Committee shall
determine the terms and conditions of any such Other Stock-Based Award, including but not limited
to dividend equivalents.
SECTION 11
COMPENSATION
11.1 Amount of Compensation
Each Participants Compensation shall be determined by the Committee and shall be paid, unless
deferred pursuant to Section 12, within thirty (30) day after the end of each Plan Quarter in which
it is earned (the Payment Date). The Committee, if necessary, may determine prior to the
beginning of the applicable Plan Quarter for which Compensation is to be paid whether payment of
Compensation shall be made at a date later than the Payment Date.
11.2 Compensation Election
(a) By December 31 of a calendar year, or at such later time as may be provided by
Section 409A, each Participant may elect to receive his or her Compensation for the following year
in the form of cash, deferred cash, Common Stock, deferred Common Stock or any combination of the
foregoing, by submitting a written notice to the Company in the manner prescribed by the Committee.
In the case of a newly-elected Eligible Director, such election may be made within thirty
(30) days of the Directors election to the Board with respect to Compensation for services
performed during the
16
portion of the applicable calendar year that is subsequent to the election. Any combination
of the alternatives may be elected, provided the aggregate of the alternatives elected may not
exceed one hundred percent (100%) of the Participants Compensation, except as provided in
Section 12.2(a). Unless otherwise provided under the terms of the Compensation, if no election is
received by the Company, the Participant shall be deemed to have made an election to receive his or
her Compensation in undeferred cash. An election under this Section 11.2 shall be irrevocable and
shall apply to the Compensation earned during the calendar year for which the election is
effective.
(b) Notwithstanding any other provision to the contrary, deferred cash elections are only
available pursuant to this Plan if an Eligible Director is not otherwise eligible to participate in
one of the Companys other deferred compensation plans or programs with respect to their cash
Compensation.
SECTION 12
DEFERRED COMPENSATION
12.1 Deferred Cash
If a Participant elects pursuant to Section 11.2 to make a Cash Deferral, such Cash Deferral
shall be recorded in a Memorandum Deferred Account as of the date the Compensation otherwise would
have been paid.
12.2 Deferred Common Stock
(a) If a Participant elects pursuant to Section 11.2 to have all or a specified percentage of
his or her cash Compensation deferred in Common Stock, then an amount shall be recorded in a
Memorandum Deferred Account, in the form of shares of Common Stock, as determined in
subsection (b) below, as of the date the Compensation otherwise would have been paid. The Common
Stock Deferral credited to the Participants Memorandum Deferred Account in such case shall be
equal to the amount actually deferred plus a premium (the Conversion Premium). The Conversion
Premium shall be a percentage of the Compensation actually deferred as determined by the Committee.
(b) The number of shares of Common Stock credited to a Participants Memorandum Deferred
Account shall equal the Common Stock Deferral divided by the Fair Market Value of the Common Stock
on the applicable Payment Date.
(c) Subject to Section 16.1, each Participant who elects deferred Common Stock shall, once the
shares of Common Stock have been credited to his or her Memorandum Deferred Account, receive
dividend equivalents and other distributions on such shares, subject to applicable laws. The Board
or Committee may determine that dividend equivalents and other distributions shall be paid in cash
on a current basis or reinvested promptly in additional shares of Common Stock and such additional
shares shall be credited to the Memorandum Deferred Account.
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(d) The deferred Common Stock balance in the Memorandum Deferred Account shall be payable to
the Participant in Common Stock.
12.3 Memorandum Deferred Account
The Company shall establish a ledger account (the Memorandum Deferred Account) for each
Participant for the purpose of recording the Companys obligation to pay the Compensation as
provided in Sections 15.1 and 15.2.
(a) The Committee shall determine the rate of interest or earnings/losses credited to the
Memorandum Deferred Account periodically and in so doing may take into account such factors it
deems appropriate.
(b) The Company shall promptly credit each Participants Memorandum Deferred Account with the
number of shares of Common Stock calculated in accordance with Section 12.2(b) and (c).
SECTION 13
CESSATION OF SERVICE
The Award Agreement applicable to each Award shall set forth the effect of a Participants
cessation of service as a member of the Board. However, unless explicitly set forth otherwise in
an Award Agreement to the contrary, all of a Participants unvested and/or unexercisable Awards
shall automatically be forfeited when a Participants ceases to serve as a director of the Board;
provided that such Participant shall be permitted to exercise the vested portion of any Stock
Options for at least three months following such cessation date. Upon a Participants cessation of
service as a member of the Board, Compensation attributed to the Plan Quarter during which
cessation occurred shall be earned by the Participant in an amount equal to the meeting fees earned
and a pro rata amount for the quarterly retainer and shall be paid or deferred pursuant to a valid
election for the year during which such cessation has occurred. The Committee may, when it finds
that a waiver would be in the best interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participants Awards. Unrestricted Shares, evidenced
in such manner as the Committee shall deem appropriate, shall be issued to the holder of Restricted
Stock, Restricted Stock Units or Other-Stock Based Awards, as applicable, promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
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SECTION 14
EFFECT OF A CHANGE OF CONTROL
In the event of a Change of Control:
(a) all Stock Options and Stock Appreciation Rights then held by the Participant shall become
fully vested and/or exercisable;
(b) the Restriction Periods applicable to all shares of Restricted Stock and all Restricted
Stock Units then held by the Participant shall immediately lapse; and
(c) all Stock-Based Awards, Cash Deferrals and Common Stock Deferrals under this Plan
(irrespective of payment elections at the time of such deferrals) shall be paid to a Participant
(or his or her Beneficiary in the case of his or her death) within thirty (30) days after the date
of the Change of Control, or at such later time as may be required to enable the Eligible Director
to avoid liability under Section 16(b) of the Exchange Act.
Notwithstanding Sections 14(b) and (c) above, no such Awards shall be paid to a Participant
who continues to serve as a member of the Board of the Company or upon the board of directors of
the Companys successor, until such time said Awards would otherwise be paid.
SECTION 15
PAYMENT OF DEFERRED COMPENSATION
15.1 Payment of Deferred Cash
When a Participant ceases to be a member of the Board, the Company shall pay to the
Participant (or the Participants Beneficiary in the case of the Participants death) an amount
equal to the deferred cash balance of his or her Memorandum Deferred Account, plus interest (at a
rate determined pursuant to Section 12.3) on the outstanding deferred cash account balance to the
date of distribution, as follows:
(a) a lump sum cash payment (payable within 30 days),
(b) a lump sum cash payment made at a date certain in the future as determined at the time the
deferral election is made pursuant to Section 11.2, or
(c) in periodic installments over a period of years as determined at the time the deferral
election is made under Section 11.2.
Payment of deferred cash shall be made or, in the case of installments over a period of years,
shall begin to be made, in the month following the date on which a Participant ceases to be a
member of the Board.
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15.2 Payment of Deferred Common Stock
When a Participant ceases to be a member of the Board, the Company shall distribute Common
Stock to the Participant (or the Participants Beneficiary in the case of the Participants death)
in an amount equal to the number of whole shares of Common Stock in a Participants Memorandum
Deferred Account, as follows:
(a) a lump sum distribution (payable within 30 days),
(b) a lump sum cash payment made at a date certain in the future as determined at the time the
deferral election is made pursuant to Section 11.2, or
(c) in annual installments over a period of years as determined at the time the deferral
election is made under Section 11.2.
Any fractional shares of Common Stock held in the Participants account shall be paid to the
Participant (or the Participants Beneficiary in the case of the Participants death) in a lump sum
cash payment based on the Common Stocks Fair Market Value on the day preceding the date of such
payment.
Payment of deferred Common Stock shall be made or, in the case of installments over a period
of years, shall begin to be made, in the month following the date on which a Participant ceases to
be a member of the Board, or such later date as may be necessary to comply with Section 16(b) of
the Exchange Act.
15.3 Acceleration of Payment of Deferred Cash and Deferred Common Stock
(a) In the event of a Participants death or Permanent Disability, notwithstanding the
Participants elections made with respect to form of distribution under Section 15.1 and 15.2, the
balance of the Participants Memorandum Deferred Account shall be distributed in full as soon as
practicable (but in no event later than thirty (30) days) following the Participants death or
Permanent Disability.
(b) Subject to Section 409A, in case of an unforeseeable emergency, a Participant may request
a distribution from the Participants Memorandum Deferred Account earlier than the date to which it
was deferred.
For purposes of this Section 15.3(b), an unforeseeable emergency shall be limited to a
severe financial hardship to the Participant resulting from an illness or accident of the
Participant, the Participants spouse, or a dependent (as defined in Section 152(a) of the Code) of
the Participant, loss of the Participants property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the
Participant. The circumstances that will constitute an unforeseeable emergency will depend upon
the facts of each case, but, in any case, amounts distributed with respect to an unforeseeable
emergency may not exceed amounts necessary to satisfy such emergency, plus amounts necessary to pay
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taxes reasonably anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved: (i) through reimbursement or compensation by
insurance or otherwise or (ii) by liquidation of the Participants assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship.
The Committee shall consider any requests for payment on the basis of an unforeseeable
emergency under this Section 15.3(b) on a uniform and nondiscriminatory basis and in accordance
with the standards of interpretation described in Section 457 of the Code and the regulations
thereunder.
SECTION 16
GENERAL PROVISIONS
16.1 Issuance of Common Stock
The Company shall not be required to issue any certificate for shares of Common Stock under
the Plan prior to:
(a) obtaining any approval or ruling from the Securities and Exchange Commission, the Internal
Revenue Service or any other governmental agency which the Company, in its sole discretion, shall
determine to be necessary or advisable;
(b) listing of such shares on any stock exchange on which the Common Stock may then be
listed; and
(c) completing any registration or other qualification of such shares under any federal or
state laws, rulings or regulations of any governmental body which the Company, in its sole
discretion, shall determine to be necessary or advisable.
All certificates, or book-entry accounts, for shares of Common Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which Common Stock is then listed and any applicable federal or
state securities laws, and the Committee may cause a legend or legends to be placed on any such
certificates, or notations on such book-entry accounts, to make appropriate reference to such
restrictions. The foregoing provisions of this paragraph shall not be effective if and to the
extent that the shares of Common Stock delivered under the Plan are covered by an effective and
current registration statement under the Securities Act of 1933, as amended, or if and so long as
the Committee determines that application of such provisions are no longer required or desirable.
In making such determination, the Committee may rely upon an opinion of counsel for the Company.
Without limiting the foregoing, the Committee may impose such restrictions, conditions or
limitations as it determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by a Participant
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of any shares issued under this Plan, including without limitation (i) restrictions under an
insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner
of sales by one or more Participants and (iii) restrictions as to the use of a specified brokerage
firm for such resales or other transfers.
16.2 Unfunded Obligation
Any amounts (deferred or otherwise) to be paid to Participants pursuant to the Plan are
unfunded obligations. The Company is not required to segregate any monies from its general funds,
to create any trusts or to make any special deposits with respect to this obligation. Beneficial
ownership of any investments, including trust investments which the Company may make to fulfill
this obligation, shall at all times remain in the Company. Any investments and the creation or
maintenance of any trust or any Participant account shall not create or constitute a trust or a
fiduciary relationship between the Committee or the Company and a Participant, or otherwise create
any vested or beneficial interest in any Participant or the Participants Beneficiary or the
Participants creditors in any assets of the Company whatsoever. The Participants shall have no
claim against the Company for any changes in the value of any assets which may be invested or
reinvested by the Company with respect to the Plan.
16.3 Beneficiary
The designation of a Beneficiary shall be on a form provided by the Company, executed by the
Participant (with the consent of the Participants spouse, if required by the Company for reasons
of community property or otherwise), and delivered to a designated representative of the Company.
A Participant may change his or her Beneficiary designation at any time. A designation by a
Participant under a predecessor plan shall remain in effect under this Plan unless it is revoked or
changed under this Plan. If no Beneficiary is designated, if the designation is ineffective, or in
the event the Beneficiary dies before the balance of the Memorandum Deferred Account is paid, the
balance shall be paid to the Participants spouse, or if there is no surviving spouse, to his or
her lineal descendants, pro rata, or if there is no surviving spouse or lineal descendants, to the
Participants legal representatives, the Participants estate or the person or persons to whom the
deceaseds rights under the Plan shall have passed by will or the laws of descent and distribution
(unless the Committee for a given year has designated investment in an annuity, in which case the
payment options selected by the Participant with respect thereto shall govern).
16.4 Permanent Disability
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
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continuous period of not less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under an accident and health plan of the Company.
16.5 Incapacity of Participant or Beneficiary
If the Committee finds that any Participant or Beneficiary to whom a payment is payable under
the Plan is unable to care for his or her affairs because of illness or accident or is under a
legal disability, any payment due (unless a prior claim therefor shall have been made by a duly
appointed legal representative), at the discretion of the Committee, may be paid to the spouse,
child, parent, brother or sister of such Participant or Beneficiary or to any person whom the
Committee has determined has incurred expense for such Participant or Beneficiary. Any such
payment shall be a complete discharge of the obligations of the Company under the provisions of the
Plan.
16.6 Nonassignment
Unless otherwise provided in the Plan, the right of a Participant or Beneficiary to the
payment of any Award granted under the Plan and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will
or by the applicable laws of descent and distribution unless the Participant has received the
Companys prior written consent. Except as otherwise provided for under the Plan, if any
Participant attempts to transfer, assign, pledge, hypothecate or otherwise dispose of any Award
under the Plan or of any right or privilege conferred thereby, contrary to the provisions of the
Plan or such Award, or suffers the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, all affected Awards held by such Participant shall be
immediately forfeited.
16.7 Termination and Amendment
Except as otherwise determined by the Board, the Committee may from time to time make such
amendments to the Plan as it may deem proper and in the best interest of the Company, including,
but not limited to, any amendment necessary to ensure that the Company may obtain any regulatory
approval referred to above; provided, however, that to the extent required by applicable law,
regulation or stock exchange rule, stockholder approval shall be required. Subject to
Section 409A, the Board may at any time suspend the operation of or terminate the Plan. No
amendment, suspension or termination may impair the right of a Participant or the Participants
designated Beneficiary to receive benefits accrued prior to the effective date of such amendment,
suspension or termination.
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16.8 Applicable Law
The Plan shall be construed and governed in accordance with the laws of the State of Texas.
16.9 Effective Date and Term of the Plan
The Plan was adopted by the Board on February 12, 2008, and is subject to approval by the
Companys stockholders. If approved by the stockholders, this Plan will replace the 1998 Director
Stock Plan (as amended) and no further awards will be made under that plan. This Plan shall become
effective on the Effective Date, and shall remain in effect, subject to the right of the Board to
terminate the Plan at any time pursuant to Section 16.7, until the date immediately preceding the
tenth (10th) anniversary of the Effective Date of the Plan. No Awards shall be granted under this
Plan after such date.
16.10 Compliance With Section 16(b) of the Exchange Act
The Companys intention is that, so long as any of the Companys equity securities are
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, with respect to awards of Common
Stock, the Plan shall comply in all respects with any exemption pursuant to Section 16(b)
promulgated under Section 16 of the Exchange Act. If any Plan provision is later found not to be
in compliance with such exemptions available pursuant to Section 16(b) of the Exchange Act, that
provision shall be deemed modified as necessary to meet the requirements of Section 16(b).
16.11 Section 409A
The Plan is intended to be administered, operated and construed in compliance with Section
409A and any guidance issued thereunder. Notwithstanding this or any other provision of the Plan
to the contrary, the Board and the Committee may amend the Plan in any manner, or take any other
action, that either of them determines, in its sole discretion, is necessary, appropriate or
advisable to cause the Plan to comply with Section 409A and any guidance issued thereunder. Any
such action, once taken, shall be deemed to be effective from the earliest date necessary to avoid
a violation of Section 409A and shall be final, binding and conclusive on all Participants and
other individuals having or claiming any right or interest under the Plan. With respect to any
Award granted under the Plan that is subject to Section 409A, cessation of service or ceasing to
be a member of the Board shall mean the Eligible Directors separation from service, as defined
in Section 1.409A-1(h) of the Final Treasury Regulations promulgated under Section 409A, including
the default presumptions thereunder.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed effective as of May 20,
2008.
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ANADARKO PETROLEUM CORPORATION
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/s/ James T. Hackett
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James T. Hackett
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Chairman, President and Chief Executive Officer
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