RETIREMENT AGREEMENT
Exhibit 10.23
This Retirement Agreement (this “Agreement”)
is made as of April 20, 2009 and is by and between Newfield Exploration
Company (the “Company”)
and Xxxxx X. Xxxxx (“Executive”).
WHEREAS, Executive has been
continuously employed by the Company for more than 10 years, and currently
serves as the Company’s Chairman and Chief Executive Officer;
WHEREAS, Executive has
notified the Company and its Board of Directors (“Board”)
that he intends to retire as an officer of the Company on May 7, 2009 (“Officer
Retirement Date”) and as an employee of the Company on May 31, 2009
(“Employment
Termination Date”), and the Company and the Board agree to such
dates;
WHEREAS, after the Employment
Termination Date, the Board desires for Executive to serve as non-employee
Chairman of the Board until the Company’s 2010 Annual Meeting of
Stockholders;
WHEREAS, the Company and
Executive desire to set forth certain agreements and understandings regarding,
among other things, (1) Executive’s termination of employment with the Company,
(2) certain benefits the Company has agreed to provide to Executive upon
termination of employment and (3) Executive’s release of any and all claims
against the Company;
NOW, THEREFORE, in
consideration of the mutual covenants and agreements in this Agreement, the
parties agree as follows:
1.
TERMINATION
OF EMPLOYMENT. Executive has decided to retire and resign his
position as an officer of the Company on the Officer Retirement
Date. Executive’s employment with the Company will terminate on the
Employment Termination Date.
2.
SEPARATION
BENEFITS. The Company will provide Executive with two kinds of
separation benefits at the time of termination of employment—regular separation
benefits, to which Executive is entitled as a result termination, and enhanced
separation benefits, which are being offered to Executive in recognition of his
past service as an officer of the Company and his significant contributions to
the success of the Company. Executive will receive the regular
separation benefits even if he declines to sign this Agreement and execute the
release of claims. The regular separation benefits are described in
Annex
A attached hereto and the enhanced separation benefits are described in
Annex B
attached hereto.
3. RESTRICTED
STOCK UNIT AWARD. In addition to the regular separation
benefits and the other enhanced separation benefits described in Annexes A
and B,
respectively, in recognition of Executive’s agreement to serve as non-executive
Chairman of the Board until the Company’s 2010 Annual Meeting of Stockholders
and his agreement to enter into the Non-Compete Agreement attached hereto as
Annex
D, upon execution of this Agreement and the Non-Compete Agreement by the
Company and Executive, the Compensation & Management Development Committee
of the Board will grant Executive an award of 100,000 restricted stock units
pursuant to the form of Restricted Stock Unit Agreement attached hereto as Annex
C.
4. RELEASE
OF CLAIMS. Executive hereby acknowledges that his relationship
with the Company is an “at-will employment relationship,” meaning that either
Executive or the Company could terminate the relationship with or without notice
and with or without cause, at any time. Nevertheless, in consideration for the
enhanced separation benefits described in Annex B
to this Agreement and the award of restricted stock units in the form of the
Restricted Stock Unit Agreement attached hereto as Annex C,
Executive hereby provides the Company with an irrevocable and unconditional
release and discharge of claims.
This
release and discharge of claims applies to (1) Newfield Exploration Company, (2)
each and all of its subsidiaries and affiliated companies (which, for purposes
of this section, shall together with Newfield Exploration Company collectively
be referred to as the Company), (3) the Company’s officers, agents, directors,
supervisors, employees, representatives, and their successors and assigns,
whether or not acting in the course and scope of employment, and (4) to all
persons acting by, through, under, or in concert with any of the foregoing
persons or entities.
The
claims subject to this release include, without limitation, any and all claims
related or in any manner incidental to Executive’s employment with the Company
or the termination of that employment relationship. The parties understand the
word “claims” to include all actions, claims, and grievances, whether actual or
potential, known or unknown, and specifically but not exclusively all claims
arising out of Executive’s employment with the Company and the termination of
such employment. All such claims (including related attorneys’ fees
and costs) are forever barred by this Agreement and without regard to whether
those claims are based on any alleged breach of a duty arising in a statute,
contract, or tort; any alleged unlawful act, including, without limitation, age
discrimination; any other claim or cause or cause of action; and regardless of
the forum in which it might be brought. This release applies to any
claims brought by any person or agency on behalf of Executive or any class
action pursuant to which Executive may have any right or benefit.
Executive
promises never to file a lawsuit asserting any claims that are released by
Executive and further promises not to accept any recoveries or benefits which
may be obtained on Executive’s behalf by any other person or agency or in any
class action and does hereby assign any such recovery or benefit to the
Company. If Executive sues the Company in violation of this
Agreement, Executive shall be liable to the Company for the Company’s reasonable
attorneys’ fees and other litigation costs incurred in defending against such a
suit. Additionally, if Executive sues the Company in violation of
this Agreement, the Company can require Executive to return all monies and other
benefits paid to Executive pursuant to this Agreement.
Notwithstanding
the foregoing, the release contained herein shall not apply to (1) any rights
that Executive may have under the Company’s retirement plans including the
Newfield Exploration Company 401(k) Plan, (2) any rights that Executive may have
under this Agreement, (3) Executive’s rights under applicable law (i.e., the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended) to continued
medical insurance coverage at your expense, and (4) Executive’s statutory right
to file a charge with the Equal Employment Opportunity Commission (“EEOC”) or
the Texas Commission on Human Rights (“TCHR”), to
participate in an EEOC or TCHR investigation or proceeding, or to challenge the
validity of the release, consistent with the requirements of 29 U.S.C. §
626(f)(4).
In
connection with this release, Executive understands and agrees
that:
(a) Executive
has a period of 21 days within which to consider whether to execute this
Agreement, that no one hurried Executive into executing this Agreement during
that 21 day period, and that no one coerced Executive into executing this
Agreement;
(b) Executive
has carefully read and fully understands all the provisions of the release set
forth in this Section 4 of this Agreement, and declares that the Agreement is
written in a manner that Executive understands;
(c) Executive
is, through this Agreement, releasing the Company from any and all claims that
Executive may have against the Company and the other parties specified above,
and that this Agreement constitutes a release and discharge of claims arising
under the Age Discrimination in Employment Act (“ADEA”), 29
U.S.C. § 621-634, including the Older Workers’ Benefit Protection Act, 29 U.S.C.
§ 626(f);
(d) Executive
declares that Executive’s agreement to all of the terms set forth in this
Agreement is knowing and voluntary;
(e) Executive
knowingly and voluntarily intends to be legally bound by the terms of this
Agreement;
(f) Executive acknowledges that the
Company is hereby advising Executive in writing to consult with an attorney of
Executive’s choice prior to executing this Agreement; and
(g) Executive
understands that rights or claims that may arise after the date this Agreement
is executed are not waived. Executive understands that Executive has
a period of seven days to revoke Executive’s agreement to give the Company a
complete release in exchange for the restricted stock unit award and other
enhanced separation benefits, and that Executive may deliver notification of
revocation by letter or facsimile addressed to the Company’s General
Counsel. Executive understands that this will not become effective
and binding, and that none of the separation benefits described above in Section
2 of this Agreement will be provided to Executive until after the expiration of
the revocation period. The revocation period commences when Executive
executes this Agreement and ends at 11:59 p.m. on the seventh calendar day after
execution, not counting the date on which Executive executes this Agreement.
Executive understands that if Executive does not deliver a written notice of
revocation to the Company’s General Counsel before the end of the seven-day
period described above, this Agreement will become final, binding and
enforceable.
The
Company’s decision to offer the restricted stock unit award and the other
enhanced separation benefits in exchange for a release of claims shall not be
construed as an admission by the Company of (1) any liability whatsoever, (2)
any violation of any of Executive’s rights or those of any person, or (3) any
violation of any order, law, statute, duty, or contract. The Company
specifically disclaims any liability to Executive or to any other person for any
alleged violation of any rights possessed by Executive or any other person, or
for any alleged violation of any order, law, statute, duty, or contract on the
part of the Company, its employees or agents or related companies or their
employees or agents.
Executive
represents and acknowledges that in executing this Agreement Executive does not
rely and has not relied upon any representation or statement made by the
Company, or by any of the Company’s agents, attorneys, or representatives with
regard to the subject matter, basis, or effect of the release set forth in this
Agreement, other than those specifically stated in this Agreement.
The
release set forth in this Section 4 of this Agreement shall be binding upon
Executive, and Executive’s heirs, administrators, representatives, executors,
successors, and assigns, and shall inure to the benefit of the Company as
defined above. Executive expressly warrants that Executive has not assigned,
transferred or sold to any person or entity any rights, causes of action, or
claims released in this Agreement.
5. INDEMNITY
PAYMENT. In view of uncertainties concerning the application
of section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”), if any
compensatory payments received or to be received by Executive under agreements
and arrangements of the Company (the “Total
Payments”) will be subject to an additional tax under Section 409A (“Additional 409A
Tax”) the
Company shall pay Executive an additional amount (the “Indemnity
Payment”) such that the net amount retained by Executive after the
deduction of any Additional 409A Tax on the Total Payments and any federal
income and employment taxes upon the Indemnity Payment shall be equal to the
Total Payments. The purpose of this Section 5 is to place
Executive in the same economic position such Executive would have been in had no
Additional 409A Tax been imposed with respect to the Total
Payments.
For
purposes of determining the amount of the Indemnity Payment, the Executive shall
be deemed to pay (1) federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Indemnity Payment is to be
made and (2) no state and local income taxes. The Company shall make
a payment to reimburse Executive in an amount equal to all federal taxes imposed
upon Executive that are described in this Section 5, including the amount of
additional taxes imposed upon Executive due to the Company’s payment of the
initial taxes on such amounts, by the end of Executive’s taxable year next
following Executive’s taxable year in which Executive remits the related taxes
to the taxing authority. Notwithstanding any provision of this
Agreement to the contrary, if Executive is a Specified Employee, any amounts to
which Executive would otherwise be entitled under this Section 5 during the
first six months following the date of Executive’s Separation From Service shall
be accumulated and paid to Executive on the date that is six months following
the date of his Separation From Service.
6. BONUS
ELIGIBILITY. During the fourth quarter of 2009, Executive will
be eligible for consideration for a discretionary pro-rated bonus in recognition
of his service to the Company during 2009. The amount of such bonus,
if any, will be determined in the sole discretion of the Compensation &
Management Development Committee of the Board. Such bonus will be
paid on the date that is six months following the date of Executive’s Separation
From Service.
7. MISCELLANEOUS.
(a) Exclusive Rights and
Benefits. Except as otherwise provided in this Agreement, the
benefits described in this Agreement supersede, negate and replace any other
benefits owed to or offered by the Company to Executive. This
Agreement will be administered by the Company’s General Counsel, who will also
resolve any issues regarding the interpretation, implementation, or
administration of the benefits described above. However, this provision shall
not be construed to limit Executive’s legal rights if a disagreement exists to
contest the decision of the Company’s General Counsel.
(b) Entire
Agreement. This Agreement sets forth the entire agreement
between Executive and the Company with respect to each and every issue addressed
in this Agreement, and that entire, integrated agreement fully supersedes any
and all prior agreements or understandings, oral or written, between Executive
and the Company pertaining to the subject matter of this Agreement.
(c) Exclusive Choice of
Law. This Agreement constitutes an agreement that has been
executed and delivered in the State of Texas, and the validity, interpretation,
performance, and enforcement of that agreement shall be governed by the laws of
that State, without giving effect to principles of conflict of law.
(d) Severability and
Headings. The invalidity or unenforceability of a term or
provision of this Agreement shall not affect the validity or enforceability of
any other term or provision of this Agreement, which shall remain in full force
and effect. Any titles or headings in this Agreement are for convenience only
and shall have no bearing on any interpretation of this Agreement.
(e) Certain
Definitions. For purposes of this Agreement, the terms “Separation From
Service” and “Specified
Employee” shall have the meanings ascribed to such terms under Section
409A and the final Department of Treasury Regulations issued
thereunder.
(f) Amendment; Modification;
Waiver. No amendment or modification of this Agreement, nor
any waiver of any rights under this Agreement, shall be effective unless in
writing signed by the parties to this Agreement. No single waiver of
any of the provisions of this Agreement shall be deemed to or shall constitute,
absent an express statement otherwise, a continuous waiver of such provision or
a waiver of any other provision hereof (whether or not similar).
IN WITNESS
WHEREOF, the Company has caused this Agreement to be duly executed by an
authorized officer and Executive has executed this Agreement, in Houston, Texas
as of April 20, 2009.
NEWFIELD EXPLORATION
COMPANY
By: /s/
Xxx X.
Xxxxxxx
Xxx X.
Xxxxxxx
President
/s/ Xxxxx
X.
Xxxxx
Xxxxx X.
Xxxxx
Annex A
Xxxxx
X. Xxxxx
Summary
of Regular Separation Benefits
The
following is a summary of the regular separation benefits applicable to all
eligible retiring participants. The Company’s Human Resources
Department will provide you with a packet describing the benefits referenced
below.
Employment Termination
Date: May 31,
2009
Health & Welfare
Programs: Executive meets the eligibility requirements for
“Qualified Retirement” under the Newfield Exploration Company Self Funded
Medical Plan. Accordingly, he (and his dependents) may receive, until
age 65, or such other age he becomes eligible for Medicare (or its successor),
continued medical, dental and vision coverage. It will be offered at the
same premium rate paid by an active Company employee for either family or, as
the case may be, single coverage. However, (1) Executive must make any
enrollment changes within 30 days of his Employment Termination Date and (2) he
will be responsible to pay his portion of the monthly premiums on or before the
first day of each
month directly to our Third Party Administrator, Group Resources.
Prescription drugs will be handled in the same manner as if the retiree were an
active employee. If any of such medical, dental or vision benefits are
taxable to the Executive and are not exempt from Section 409A, the following
provisions shall apply to the reimbursement or provision of such
benefits. Executive shall be eligible for reimbursement for covered
welfare expenses, or for the provision of such benefits on an in-kind basis,
during the period commencing on the Employment Termination Date and ending on
the date he becomes eligible for Medicare (or its successor). The
amount of such welfare benefit expenses eligible for reimbursement or the
in-kind benefits provided during the Executive's taxable year will not affect
the expenses eligible for reimbursement, or the benefits to be provided, in any
other taxable year (with the exception of applicable lifetime maximums
applicable to medical expenses or medical benefits described in section 105(b)
of the Internal Revenue Code of 1986, as amended). Executive's right
to such reimbursement or direct provision of such benefits is not subject to
liquidation or exchange for another benefit. To the extent that such
benefits provided to Executive are taxable to the Executive and are not
otherwise exempt from Section 409A, any such reimbursement amounts to which
Executive would otherwise be entitled during the first six months following the
date of the Executive's Separation From Service shall be accumulated and paid to
Executive on the date that is six months following the date of his Separation
From Service. All such reimbursements by the Company shall be paid no
later than the earlier of (1) the time periods specified in the plans and
(2) the last day of Executive's taxable year following the taxable year in
which the expense was incurred.
Executive
will not be able to participate in the Section 125 Cafeteria Plan / Flexible
Spending Accounts (FSA) after the Employment Termination Date.
Participation in the Health Care Reimbursement Account will cease. He will
be able to submit claims for health care expenses incurred up to his Employment
Termination Date. In order to be eligible for reimbursement of
medical/dependent care claims, they must be filed no later than April 30,
2010.
Long-Term Disability and
Term/Voluntary Life Insurance: All long-term disability and
term life insurance coverage ends on the Employment Termination
Date. Executive can convert the Hartford Life term life insurance
coverage to an individual whole life policy if he so chooses or he can port the
coverage as a term life policy. Executive must apply for individual
coverage within 31 days from the Employment Termination Date. If he does
not apply within 31 days, the option to convert will no longer be
available.
Accidental Death and Dismemberment
Insurance: All accidental death and dismemberment insurance
coverage ends on the Employment Termination Date.
Vacation: All
accrued (earned) and unused vacation will be paid out on the Employment
Termination Date.
Employee Stock Purchase
Plan: Executive’s participation in the Employee Stock Purchase
Plan will automatically cease on the Employment Termination Date. This
will result in automatic withdrawal from the plan and return of any
contributions made during the current option period through the Employment
Termination Date because the current option period (January through June) will
not have been completed.
401(k)
Plan: Executive has the option of leaving his funds in the
Newfield Exploration Company 401(k) Plan. Executive also has the
option to rollover all or a portion of a distribution of his funds into an
Individual Retirement Account (XXX) of his choice.
Deferred Compensation
Plan: Since Executive is a Specified
Employee under the Newfield Exploration Company Deferred Compensation Plan,
payment will be made in accordance with Executive’s form of payment elections,
beginning on a date that is six months after his Separation From Service, as
provided in the plan.
Incentive Compensation
Plan: As provided in the plan, Executive will not be eligible
to receive a Current Award with respect to the 2009 Performance
Period. Executive will be vested in the full amount (including
interest to the date of payment) remaining in all of his Deferred Award Accounts
at the Employment Termination Date and such amounts will be paid to Executive at
the same time that such amounts would have been paid in the absence of his
retirement.
Equity Awards:
Restricted
Stock: On February 14, 2007, Executive was awarded 66,668
shares of performance-based restricted stock under the 2004 Omnibus Stock
Plan. Since Executive is retiring in accordance with the Company’s
policies, Executive’s retirement meets the definition of “Qualified Retirement”
and the award will continue for the remainder of its term as provided in the
award agreement. The award shall remain subject to the achievement of
the performance goals specified in the award agreement.
Restricted Stock
Units: On February 14, 2007, Executive also was awarded 16,666
time-based vesting restricted stock units under the 2004 Omnibus Stock Plan,
11,112 of which remain unvested. Since Executive is retiring in
accordance with the Company’s policies, Executive’s retirement meets the
definition of “Qualified Retirement.” By executing this Agreement,
Executive agrees that he will not be paid shares of the Company’s common stock
under his February 14, 2007 restricted stock unit award agreement granting such
restricted stock units until the date that is six months following
the date of his Separation From Service.
Change of Control
Arrangements: Executive is a participant in the Company’s
Change of Control Severance Plan and also has a Change of Control Severance
Agreement with the Company. After the Employment Termination Date,
Executive will no longer be eligible to receive benefits under the Company’s
Change of Control Severance Plan or Executive’s Change of Control Severance
Agreement since each document requires both (1) a termination of employment and
(2) a Change of Control to be eligible for benefits.
Annex B
Xxxxx
X. Xxxxx
Summary
of Enhanced Separation Benefits
Employment Termination
Date: May 31,
2009
Equity
Awards:
Stock
Options: The table below sets forth Executive’s outstanding
nonqualified stock option awards.
|
Grant
Date
|
Shares
Subject to Stock Option (#)
|
Exercise
Price ($)
|
Expiration
Date
|
Plan
|
||||
|
02/10/00
|
60,000
|
14.91
|
02/10/10
|
2000
Omnibus Stock Plan
|
||||
|
02/09/01
|
40,000
|
19.02
|
02/09/11
|
2000
Omnibus Stock Plan
|
||||
|
02/07/02
|
40,000
|
16.87
|
02/07/12
|
2000
Omnibus Stock Plan
|
||||
|
11/26/02
|
40,000
|
17.84
|
11/26/12
|
2000
Omnibus Stock Plan
|
||||
|
02/07/08
|
72,000
|
48.45
|
02/07/18
|
2000
Omnibus Stock Plan
|
||||
|
02/07/08
|
63,000
|
48.45
|
02/07/18
|
2007
Omnibus Stock Plan
|
The
awards granted on February 10, 2000, February 9, 2001, February 7, 2002 and
November 26, 2002 each are 100% vested. As an enhanced separation
benefit, the Company agrees that the awards granted on February 10, 2000,
February 9, 2001, February 7, 2002 and November 26, 2002 each shall remain
exercisable until their respective expiration dates as set forth in the table
above. Absent this enhanced separation benefit, pursuant to the award
agreement governing each such award, Executive would have three months after the
Employment Termination Date to exercise each such award.
The
awards granted on February 7, 2008 are 33 1/3% vested. As an enhanced
separation benefit, the Company agrees to deem Executive’s retirement on the
Employment Termination Date to be a “Qualified Retirement” under the award
agreements governing the stock option awards granted to Executive on February 7,
2008. As a result, the awards granted to Executive on February 7,
2008 may be exercised in full by Executive at any time during the five-year
period following the Employment Termination Date, as provided in the award
agreements.
Restricted
Stock: The table below sets forth Executive’s outstanding
restricted stock awards that are not covered in Annex X.
|
Xxxxx
Date
|
Shares
of Restricted Stock
Granted
(#)
|
Shares
Vested (#)
|
Shares
Unvested (#)
|
Plan
|
||||
|
02/12/03
|
100,000
|
33,333
|
66,667
|
2000
Omnibus Stock Plan
|
||||
|
02/08/05
|
80,000
|
--
|
80,000
|
2004
Omnibus Stock Plan
|
The award
granted on February 12, 2003 is 33 1/3% vested. As an enhanced
separation benefit, the Company agrees to fully vest the award on the Employment
Termination Date. Absent this enhanced separation benefit, pursuant
to the award agreement governing the February 12, 2003 award, Executive would
forfeit the unvested shares on the Employment Termination Date.
The award
granted on February 8, 2005 is subject to performance-based vesting criteria,
and will vest or be forfeited on February 1, 2010, depending on the Company’s
TSR rank as provided in the award agreement.
On the
Employment Termination Date, Executive shall forfeit 10,826 of the shares
subject to the restricted stock award granted to him by the Company on February
8, 2005. As an enhanced separation benefit, the Company agrees that
Executive will not forfeit on the Employment Termination Date 69,174 of the
unvested shares subject to the restricted stock award granted to him by the
Company on February 8, 2005; and, instead, such restricted shares shall continue
in effect but shall be subject to forfeiture in full upon Executive’s ceasing to
serve as Chairman of the Board of the Company prior to February 1,
2010. Such award, as amended, shall remain subject to the achievement
of the performance goals specified in the agreement awarding the restricted
shares.
Absent
this enhanced separation benefit, pursuant to the award agreement governing the
February 8, 2005 award, Executive would forfeit all of the unvested shares on
the Employment Termination Date.
Restricted Stock
Units: On February 7, 2008, Executive was awarded 20,000
time-vesting restricted stock units under the 2007 Omnibus Stock Plan, all of
which remain unvested. As an enhanced separation benefit, the Company
agrees to fully vest the award on the Employment Termination
Date. Absent this enhanced separation benefit, pursuant to the award
agreement governing the February 7, 2008 award, Executive would either (1)
forfeit the unvested shares on his termination date unless Executive provided
six months prior written notice of his retirement to the Board or (2) if
Executive provided six months prior written notice of his retirement to the
Board, Executive would forfeit a pro rata portion of the unvested shares
pursuant to the formula set forth in the award agreement. By
executing this Agreement, Executive agrees that he will not be paid shares of
the Company’s common stock under his February 7, 2008 restricted stock unit
award agreement granting such restricted stock units until the date that is six
months following the date of his Separation From Service.
As an
enhanced separation benefit, the Company will grant the restricted stock unit
award contemplated in Section 3 of this Agreement.
Executive
will sign an agreement not to compete for a period of 24 months after the
Employment Termination Date in the form attached hereto as Annex
D.
Annex C
NEWFIELD
EXPLORATION COMPANY
RESTRICTED
STOCK UNIT AWARD AGREEMENT
|
Xxxxx
X. Xxxxx
|
Awardee
|
|
Date
of Award:
|
April
20, 2009
|
|
Number
of Restricted Stock Units:
|
100,000
|
AWARD
OF RESTRICTED STOCK UNITS
The Compensation & Management
Development Committee (the “Committee”) of the Board of
Directors of Newfield Exploration Company, a Delaware corporation (the “Company”), pursuant to the
Newfield Exploration Company 2007 Omnibus Stock Plan (the “Plan”), hereby awards to you,
the above-named awardee, effective as of the Date of Award set forth above, that
number of restricted stock units set forth above (the “Restricted Stock Units”), on
the following terms and conditions:
The Restricted Stock Units shall be
subject to the prohibitions and restrictions set forth herein with respect to
the sale or other disposition of such Restricted Stock Units and the obligation
to forfeit and surrender such Restricted Stock Units to the Company
(the “Forfeiture
Restrictions”). The Forfeiture Restrictions shall lapse as to
the Restricted Stock Units that are awarded hereby in accordance with the
following schedule provided that you serve as Chairman of the Board of the
Company until April 30, 2010 (the “Vesting Date”):
On the
Vesting Date, the Forfeiture Restrictions shall lapse as to all of the
Restricted Stock Units subject to this Agreement.
If a Change of Control of the Company
occurs or you cease to continue to serve as Chairman of the Board of the Company
before the Vesting Date your rights to the Restricted Stock Units under this
Agreement will be determined as provided in the attached Terms and Conditions
(the “Terms and
Conditions”).
Upon the lapse of the Forfeiture
Restrictions applicable to the Restricted Stock Units, the Company shall issue
to you one share of the Company’s Common Stock, $.01 par value per share (the
“Common Stock”), in
exchange for each Restricted Stock Unit and thereafter you shall have no further
rights with respect to such Restricted Stock Unit. The Company shall
cause to be delivered to you a stock certificate representing those shares of
the Common Stock issued in exchange for the Restricted Stock Units, and such
shares of the Common Stock shall be transferable by you (except to the extent
that any proposed transfer would, in the opinion of counsel satisfactory to the
Company, constitute a violation of applicable federal or state securities
law).
If during the period in which you hold
the Restricted Stock Units the Company pays a dividend in shares of the Common
Stock with respect to the outstanding shares of the Common Stock, then the
Company will increase the Restricted Stock Units that have not then been
exchanged by the Company for shares of the Common Stock by an amount equal to
the product of (a) the Restricted Stock Units that have not been forfeited
to the Company or exchanged by the Company for shares of the Common Stock and
(b) the number of shares of the Common Stock paid by the Company per share
of the Common Stock (collectively, the “Stock Dividend Restricted Stock
Units”). Each Stock Dividend Restricted Stock Unit will be
subject to same Forfeiture Restrictions and other restrictions, limitations and
conditions applicable to the Restricted Stock Unit for which such Stock Dividend
Restricted Stock Unit was awarded and will be exchanged for shares of the Common
Stock at the same time and on the same basis as such Restricted Stock
Unit.
The Restricted Stock Units may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred,
encumbered or disposed of (other than by will or the applicable laws of descent
and distribution). Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of
this Agreement shall be void and the Company shall not be bound
thereby. Any shares of Common Stock issued to you in exchange for the
Restricted Stock Units may not be sold or otherwise disposed of in any manner
that would constitute a violation of any applicable federal or state securities
laws. You also agree that (a) the Company may refuse to cause
the transfer of any such shares of the Common Stock to be registered on the
stock register of the Company if such proposed transfer would in the opinion of
counsel satisfactory to the Company constitute a violation of any applicable
federal or state securities law and (b) the Company may give related
instructions to the transfer agent, if any, to stop registration of the transfer
of such shares of the Common Stock.
The shares of Common Stock that may be
issued under the Plan are registered with the Securities and Exchange Commission
under a Registration Statement on Form S-8.
Capitalized terms that are not defined
herein shall have the meaning ascribed to such terms in the Plan or the Terms
and Conditions.
In accepting the award of Restricted
Stock Units set forth in this Agreement you accept and agree to be bound by all
the terms and conditions of the Plan, this Agreement and the Terms and
Conditions.
NEWFIELD
EXPLORATION COMPANY
NEWFIELD
EXPLORATION COMPANY
TERMS
AND CONDITIONS
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1.
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CESSATION OF SERVICE/CHANGE OF
CONTROL. The following provisions will apply in the
event you cease to serve as Chairman of the Board of the Company prior to
the Vesting Date, or a Change of Control of the Company occurs prior to
the Vesting Date under the Restricted Stock Unit Award Agreement awarded
to you (the “Agreement”):
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1.1 Cessation of Service
Generally. If you cease to serve as Chairman of the Board of
the Company prior to the Vesting Date for any reason other than one of the
reasons described in Sections 1.2 through 1.5 below, the Forfeiture
Restrictions then applicable to the Restricted Stock Units shall not lapse and
the number of Restricted Stock Units then subject to the Forfeiture Restrictions
shall be forfeited to the Company on the date you cease to serve as Chairman of
the Board of the Company.
1.2 Change of
Control. The provisions of this Section 1.2 shall apply rather
than the provisions of Paragraph X(d) of the Plan for purposes of determining
the effect of a Change of Control upon the Restricted Stock Units. If a Change
of Control of the Company occurs on or before the Vesting Date and you do not
cease to serve as Chairman of the Board of the Company before the date the
Change of Control of the Company occurs, then all remaining Forfeiture
Restrictions shall lapse at the time specified below. All remaining
Forfeiture Restrictions shall lapse (a) on the date the Change of Control of the
Company occurs if the Change of Control of the Company qualifies as a change in
the ownership or effective control of the corporation, or in the ownership of a
substantial portion of the assets of the corporation, within the meaning of the
Internal Revenue Code of 1986, as amended and the final Department of Treasury
Regulations issued thereunder (“Section 409A”), or (b) on
the Vesting Date, if the Change of Control of the Company does not so
qualify.
1.3 Disability. Notwithstanding
any other provision of the Agreement or these Terms and Conditions to the
contrary, if you become permanently disabled before the Vesting Date and while
serving as Chairman of the Board of the Company, all remaining Forfeiture
Restrictions shall immediately lapse on the date you cease to serve as Chairman
of the Board of the Company due to your incurring a Disability. For
purposes of this Section 1.3, “Disability” means the
inability to perform duties and services as a director of the Company by reason
of a medically determined physical or mental impairment supported by medical
evidence that in the opinion of the Nominating & Corporate Governance
Committee of the Board of Directors can be expected to result in death or which
can be expected to last for a continuous period of not less than 12
months.
1.4 Death. Notwithstanding
any other provision of the Agreement or these Terms and Conditions to the
contrary, if you die before the Vesting Date and while serving as Chairman of
the Board of the Company, all remaining Forfeiture Restrictions shall
immediately lapse on the date you cease to serve as Chairman of the Board due to
death.
1.5 Removal. Notwithstanding
any other provision of the Agreement or these Terms and Conditions to the
contrary, if the Board of Directors requests you to resign as Chairman of the
Board of Directors prior to the Vesting Date the Forfeiture Restrictions
applicable to the Restricted Stock Units will lapse on the Vesting
Date.
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2.
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NONTRANSFERABILITY. The
Agreement is not transferable by you otherwise than by will or by the laws
of descent and distribution.
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3.
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CAPITAL ADJUSTMENTS AND
REORGANIZATIONS. The existence of the Restricted Stock
Units shall not affect in any way the right or power of the Company or any
company the stock of which is awarded pursuant to the Agreement to make or
authorize any adjustment, recapitalization, reorganization or other change
in its capital structure or its business, engage in any merger or
consolidation, issue any debt or equity securities, dissolve or liquidate,
or sell, lease, exchange or otherwise dispose of all or any part of its
assets or business, or engage in any other corporate act or
proceeding.
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4.
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RESTRICTED STOCK UNITS DO NOT
AWARD ANY RIGHTS OF A STOCKHOLDER. You shall not have
the voting rights or any of the other rights, powers or privileges of a
holder of the Common Stock with respect to the Restricted Stock Units that
are awarded hereby. Only after a share of the Common Stock is
issued in exchange for a Restricted Stock Unit will you have all of the
rights of a stockholder with respect to such share of Common Stock issued
in exchange for a Restricted Stock
Unit.
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5.
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SECURITIES ACT
LEGEND. If you are an officer or affiliate of the
Company under the Securities Act of 1933, you consent to the placing on
any certificate for the shares of the Common Stock issued under the
Agreement an appropriate legend restricting resale or other transfer of
such shares except in accordance with such Act and all applicable rules
thereunder.
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6.
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LIMIT OF
LIABILITY. Under no circumstances will the Company or
any Affiliate be liable for any indirect, incidental, consequential or
special damages (including lost profits) of any form incurred by any
person, whether or not foreseeable and regardless of the form of the act
in which such a claim may be brought, with respect to the
Plan.
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7.
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FUNDING. You
shall have no right, title, or interest whatsoever in or to any assets of
the Company or any investments which the Company may make to aid it in
meeting its obligations under this Agreement. Your right to
receive payments under this Agreement shall be no greater than the right
of an unsecured general creditor of the
Company.
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8.
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RETIREMENT
AGREEMENT. In addition to the vesting conditions imposed
under the Agreement, you will forfeit your Restricted Stock
Units granted under the Agreement if you do not sign and deliver to the
Company the Retirement Agreement delivered to you by the Company or if you
revoke the Retirement Agreement.
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9.
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MISCELLANEOUS. The
Agreement is awarded pursuant to and is subject to all of the provisions
of the Plan, including amendments to the Plan, if any. In the
event of a conflict between these Terms and Conditions and the Plan
provisions, the Plan provisions will control. The term “you” and “your” refer to the
Awardee named in the Agreement. Capitalized terms that are not
defined herein shall have the meanings ascribed to such terms in the Plan
or the Agreement.
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Annex D
NON-COMPETE
AGREEMENT
THIS NON-COMPETE AGREEMENT
(this “Agreement”)
is dated as of April 20, 2009 and is by and between Newfield Exploration
Company, a Delaware corporation (the “Company”)
and Xxxxx X. Xxxxx (“Executive”).
R
E C I T A L S:
WHEREAS, Executive has been
continuously employed by the Company for more than 10 years, and currently
serves as the Company’s Chairman and Chief Executive Officer;
WHEREAS, Executive has
notified the Company and its Board of Directors (“Board”)
that he intends to retire as an officer of the Company on May 7, 2009 (“Officer
Retirement Date”) and as an employee of the Company on May 31, 2009
(“Employment
Termination Date”), and the Company and the Board agree to such
dates;
WHEREAS, after the Employment
Termination Date, the Board desires for Executive to serve as non-employee
Chairman of the Board until the Company’s 2010 Annual Meeting of
Stockholders;
WHEREAS, in his capacities as
an employee through the Employment Termination Date and as Chairman of the
Board, Executive shall have access to, and the Company shall furnish Executive,
confidential information concerning the Company and/or its affiliates (“Confidential
Information”);
WHEREAS, the Company and
Executive are entering into a Retirement Agreement (the “Retirement
Agreement”) simultaneously herewith to set forth certain agreements and
understandings regarding, among other things, (1) Executive’s termination of
employment with the Company, (2) certain benefits the Company has agreed to
provide to Executive upon termination of employment and (3) Executive’s release
of any and all claims against the Company;
WHEREAS, as part of the
Retirement Agreement, Executive is being granted an award of Restricted Stock
Units by the Company;
WHEREAS, it is a condition to
Executive being entitled to benefits described in the Retirement Agreement,
including the award of Restricted Stock Units, that Executive enter into a
Non-Compete Agreement substantially in the form of this Agreement;
NOW, THEREFORE, in
consideration of the premises, the Confidential Information to be provided by
the Company to Executive, the benefits to be provided to Executive under the
Retirement Agreement and the award of Restricted Stock Units and the other
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions;
Rules of Construction.
(a) Definitions. The following
capitalized terms shall have the meaning given to it below:
“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person and, if such specified Person
is a natural person, the immediate family members of such specified
Person. “Control” (including the terms “controlled by” and “under
common control with”), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, as general
partner or manager, by contract or otherwise, including the ownership, directly
or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
“Competing
Business” means any business involved in the acquisition or development
of, or exploration for, crude oil or natural gas or any rights in or with
respect to crude oil or natural gas within the Covered Area; provided, however, that
“Competing Business” shall not include any business that provides services
solely to assist other Persons in the acquisition or development of, or
exploration for, crude oil or natural gas or any rights in or with respect to
crude oil or natural gas but does not itself acquire or develop, or explore for,
crude oil or natural gas or any rights in or with respect to crude oil or
natural gas within the Covered Area.
“Covered
Area” means (a) the United States of America and (b) any foreign
jurisdiction (i) in which the Company is operating or (ii) with respect to which
the Company is actively considering for operations, in the case of clause (b)
only, as of the date hereof.
“Person”
means any individual, partnership, corporation, limited liability company,
trust, incorporated or unincorporated organization or association or other legal
entity of any kind.
“Term”
means the period from the Employment Termination Date until the date that is 24
months after the Employment Termination Date.
(b) Rules of
Construction. For purposes of this Agreement (i) unless the
context otherwise requires, (A) “or” is not exclusive; (B) words applicable to
one gender shall be construed to apply to each gender; (C) the terms “hereof,”
“herein,” “hereby,” “hereto” and derivative or similar words refer to this
entire Agreement and (D) the term “Section” refers to the specified Section of
this Agreement, (ii) the Section and other headings and titles contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement, (iii) a reference to any Person
includes such Person’s successors and assigns.
2. Non-Competition
and Non-Solicitation. During the Term,
Executive covenants and agrees with the Company that Executive shall not,
directly or indirectly, individually, through an Affiliate or otherwise
(including as an officer, director, employee or consultant) own an interest or
engage in, participate with or provide any financial or other support,
assistance or advice to any Competing Business; provided, however, that Executive may
(i) when taken together with the ownership, directly or indirectly, of all of
his Affiliates, own, solely as an investment, up to 5% of any class of
securities of any Person if such securities are listed on any national
securities exchange or traded on the Nasdaq Stock Market so long as Executive is
not a director, officer, employee of, or analogously employed or engaged by,
such Person or any of such Person’s Affiliates or (ii) own securities issued by
the Company. In addition, Executive agrees that during the Term he shall not,
directly or indirectly: (1) interfere with the relationship of the Company or
any Affiliate of the Company, or endeavor to entice away from the Company or any
Affiliate of the Company, any individual or entity who was or is a material
customer or material supplier of, or who has maintained a material business
relationship with, the Company or its Affiliates, (2) establish (or take
preliminary steps to establish) a business with, or cause or attempt to cause
others to establish (or take preliminary steps to establish) a business with,
any employee or agent of the Company or any of its Affiliates, if such business
competes with or will compete with the Company or any of its Affiliates, or (3)
employ, engage as a consultant or adviser, or solicit employment, engagement as
a consultant or adviser, of any employee or agent of the Company or any of its
Affiliates, or cause or attempt to cause any individual or entity to do any of
the foregoing. The Company has provided Executive, and agrees to provide
Executive, Confidential Information. Executive agrees that the
restrictions contained in this Section 2 are necessary to protect Confidential
Information the Company has provided to Executive in his confidential
relationship as an officer of the Company, and that which the Company will
provide Executive in his capacities as an employee through the Employment
Termination Date and as Chairman of the Board.
4. Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
The parties agree to cooperate in any revision of this Agreement that may be
necessary to meet the requirements of law.
5. Amendment;
Modification; Waiver. No amendment or modification of the
terms or provisions of this Agreement shall be binding unless the same shall be
in writing and duly executed by the Company and Executive, except that any of
the terms or provisions of this Agreement may be waived in writing at any time
by the party that is entitled to the benefits of such waived terms or
provisions. No single waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute, absent an express statement
otherwise, a continuous waiver of such provision or a waiver of any other
provision hereof (whether or not similar).
6. Failure
or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any covenant or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement
are cumulative with, and not exclusive of, any rights or remedies otherwise
available.
7. No Affect
on Executive’s Obligations. This Agreement shall in no way
affect any other duties or obligations Executive owes to the Company by
contract, law or otherwise.
8. Legal
Fees. If either party hereto institutes any legal proceedings
against the other for breach of any provision hereof, the losing party shall be
liable for the costs and expenses of the prevailing party, including without
limitation its reasonable attorneys’ fees.
9. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10. Governing
Law; Consent to Jurisdiction. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas applicable to
agreements made and to be performed wholly within that
jurisdiction.
[Signature page
follows.]
IN WITNESS WHEREOF, the
Company has caused this Agreement to be duly executed by an authorized officer
and Executive has executed this Agreement, in each case, as of the day and year
first above written.
NEWFIELD EXPLORATION
COMPANY
By:
Xxx
X. Xxxxxxx
President
EXECUTIVE
_________________________________
Xxxxx X.
Xxxxx
