AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Amended and
Restated Change of Control Severance Agreement (this
“Agreement”) between Newfield Exploration Company, a
Delaware corporation (the “Company”), and
(“Executive”) is made and entered into effective as of
March 15, 2007.
WHEREAS ,
Executive is a key executive of the Company;
WHEREAS ,
it is in the best interest of the Company and its stockholders if
key executives can approach material business development decisions
objectively and without concern for their personal
situation;
WHEREAS ,
the Company recognizes that the possibility of a Change of Control
(as defined below) of the Company may result in the early departure
of key executives to the detriment of the Company and its
stockholders;
WHEREAS ,
in order to help retain and motivate key management and to help
ensure continuity of key management, the Board of Directors of the
Company (the “Board”) authorized and directed the
Company to enter into a Change of Control Severance Agreement with
Executive (as amended, the “2005 Agreement”), which
agreement was entered into effective as of February 17, 2005
(the “Effective Date”); and
WHEREAS ,
Executive and the Company desire to further amend the 2005
Agreement to address restricted stock units and certain other
matters and to restate the 2005 Agreement;
NOW,
THEREFORE , for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and
Executive agree to amend and restate the 2005 Agreement as
follows:
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A.
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The
term of this Agreement (the “Term”) shall commence on
the Effective Date and shall continue in effect through the second
anniversary of the Effective Date; provided, however, commencing on
the first day following the Effective Date and on each day
thereafter, the Term of this Agreement shall automatically be
extended for one additional day unless the Board shall give written
notice to Executive that the Term shall cease to be so extended in
which event the Agreement shall terminate on the second anniversary
of the date such notice is given.
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B.
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Notwithstanding anything in this
Agreement to the contrary, if a Change of Control occurs during the
Term of this Agreement, the Term shall automatically be extended
for the 24-month period following the date of the Change of
Control; provided, however, that in no event shall such extension
of the Term expire prior to the end of the 30-day period described
in Section 2D below, if applicable.
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C.
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Termination of this Agreement shall
not alter or impair any rights of Executive arising hereunder on or
before such termination.
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A.
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“ Bonus ” shall
mean an amount equal to one-half of the total of all cash bonuses
(whether paid or deferred) awarded to Executive by the Company with
respect to (i) the two most recent calendar years ending prior
to Executive’s termination of employment or (ii) if
greater, the two most recent calendar years ending prior to the
Change of Control.
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B.
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“ Cause ” shall
mean:
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(i)
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the
willful and continued failure by Executive to substantially perform
Executive’s duties with the Company (other than any such
failure resulting from Executive’s incapacity due to physical
or mental illness);
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(ii)
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Executive’s conviction of or
plea of nolo contendre to a felony or a misdemeanor
involving moral turpitude;
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(iii)
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Executive willfully engages in gross
misconduct materially and demonstrably injurious to the
Company;
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(iv)
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Executive’s material violation
of any material policy of the Company; or
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(v)
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Executive’s having been the
subject of any order, judicial or administrative, obtained or
issued by the Securities and Exchange Commission, for any
securities violation involving fraud.
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For
purposes of clause (i) of this definition, no act, or failure
to act, on Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by
Executive not in good faith and without reasonable belief that
Executive’s act, or failure to act, was in the best interest
of the Company. The determination of whether Cause exists must be
made by a resolution duly adopted by the affirmative vote of a
majority of the entire membership of the Board at a meeting of the
Board that was called for the purpose of considering such
termination (after 10 days’ notice to Executive and an
opportunity for Executive, together with Executive’s counsel,
to be heard before the Board and, if possible, to cure the breach
that was the alleged basis for Cause prior to the meeting of the
Board) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct constituting Cause and specifying
the particulars thereof in detail.
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C.
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“ Change of Control
” shall mean the occurrence of any of the
following:
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(i)
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the
Company is not the surviving Person (as such term is defined below)
in any merger, consolidation or other reorganization (or survives
only as a subsidiary of another Person);
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(ii)
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the
consummation of a merger or consolidation of the Company with
another Person pursuant to which less than 50% of the outstanding
voting securities of the surviving or resulting corporation are
issued in respect of the capital stock of the Company;
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(iii)
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the
Company sells, leases or exchanges all or substantially all of its
assets to any other Person;
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(iv)
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the
Company is to be dissolved and liquidated;
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(v)
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any
Person, including a “group” as contemplated by
Section13(d)(3) of the Securities Exchange Act of 1934, acquires or
gains ownership or control (including the power to vote) of more
than 50% of the outstanding shares of the Company’s voting
stock (based upon voting power); or
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(vi)
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as
a result of or in connection with a contested election of
directors, the Persons who were directors of the Company before
such election cease to constitute a majority of the
Board.
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Notwithstanding the foregoing, the
definition of “Change of Control” shall not include any
merger, consolidation, reorganization, sale, lease, exchange, or
similar transaction involving solely the Company and one or more
Persons that were wholly owned, directly or indirectly, by the
Company immediately prior to such event. For purposes of this
definition, “Person” shall mean any individual,
partnership, corporation, limited liability company, trust,
incorporated or unincorporated organization or association or other
legal entity of any kind.
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D.
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“ Good Reason ”
shall mean:
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(i)
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a
material reduction in Executive’s authority, duties, titles,
status or responsibilities from those in effect immediately prior
to the Change of Control or the assignment to Executive of duties
or responsibilities inconsistent in any material respect from those
of Executive in effect immediately prior to the Change of
Control;
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(ii)
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any
reduction in Executive’s annual rate of base
salary;
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(iii)
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any
failure by the Company to provide Executive with a combined total
of annual base salary and annual bonus compensation at a level at
least equal to the combined total of Executive’s annual rate
of base salary with the Company in effect immediately prior to
the
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Change of
Control and one-half of the total of all cash bonuses (whether paid
or deferred) awarded to Executive by the Company with respect to
the two most recent calendar years ending prior to the Change of
Control, with a failure being deemed to have occurred in the event
that payments are made to Executive in a form other than cash, base
salary is deferred at other than Executive’s election, bonus
compensation is not awarded within two and one-half months
following the end of the calendar year to which it relates, bonus
compensation is deferred at other than Executive’s election
at a rate in excess of the average ratio of deferred bonuses to
currently paid bonuses awarded to Executive with respect to the two
most recent calendar years ending prior to the Change of Control,
or bonus compensation is deferred at other than Executive’s
election in a manner that is not substantially similar in terms of
Executive’s vested rights and timing of payments to the
manner in which deferred bonuses were awarded to Executive with
respect to the two most recent calendar years ending prior to the
Change of Control;
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(iv)
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the
Company fails to obtain a written agreement from any successor or
assigns of the Company to assume and perform this Agreement as
provided in Section 6 hereof; or
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(v)
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the
relocation of the Company’s principal executive offices by
more than 50 miles from where such offices were located immediately
prior to the Change of Control or Executive is based at any office
other than the principal executive offices of the Company, except
for travel reasonably required in the performance of
Executive’s duties and reasonably consistent with
Executive’s travel prior to the Change of Control.
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Unless Executive terminates his
employment upon or within 30 days following the later of an
act or omission to act by the Company constituting a Good Reason
hereunder, Executive’s continued employment thereafter shall
constitute Executive’s consent to, and a waiver of
Executive’s rights with respect to, such act or failure to
act. Executive’s right to terminate Executive’s
employment for Good Reason shall not be affected by
Executive’s incapacity due to physical or mental illness.
Executive’s determination that an act or failure to act
constitutes Good Reason shall be presumed to be valid unless such
determination is deemed by an arbitrator to be unreasonable and not
to have been made in good faith by Executive.
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E.
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“ Protected Period
” shall mean the 24-month period beginning on the effective
date of a Change of Control; provided, however, that in no event
shall such period expire prior to the end of the 30-day period
described in Section 2D above, if applicable.
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F.
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“ Release ” shall
mean a comprehensive release and waiver agreement in substantially
the same form as that attached hereto as Exhibit A.
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G.
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“ Termination Base
Salary ” shall mean Executive’s annual base salary
with the Company at the rate in effect immediately prior to the
Change of Control or, if a greater amount, Executive’s annual
base salary at the rate in effect at any time
thereafter.
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Change of
Control Severance Benefits
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3.
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Severance Benefits
. If (a) Executive
terminates his employment with the Company during the Protected
Period for a Good Reason event or (b) the Company terminates
Executive’s employment during the Protected Period other than
(i) for Cause or (ii) due to Executive’s inability
to perform the primary duties of his position for at least 180
consecutive days due to a physical or mental impairment, Executive
shall receive the following compensation and benefits from the
Company, provided that, in the cases of Section 3A, 3C and 3D,
Executive executes and does not revoke the Release:
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A.
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Within 10 business days after the
date of his execution of the Release and delivery of the same to
the Company, the Company shall pay to Executive in a lump sum, in
cash, an amount equal to two times the sum of Executive’s
(i) Termination Base Salary and (ii) Bonus; provided,
however, that such payment shall not be made prior to the first
business day coincident with or next following the date that is six
months following Executive’s termination of employment with
the Company if earlier payment would be subject to the additional
tax imposed by Section 409A(a)(1)(B) of the Internal Revenue
Code of 1986.
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B.
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Except to the extent specifically
set forth in a grant agreement under any employee stock incentive
plan of the Company, as of the date of Executive’s
termination of employment (i) all restricted shares of Company
stock of Executive (whether granted before or after the Effective
Date) shall become 100% vested and all restrictions thereon shall
lapse and the Company shall promptly deliver to Executive
unrestricted shares of Company stock, (ii) all restricted
stock units of Executive (whether granted before or after the
Effective Date) shall become 100% vested and all restrictions
thereon shall lapse and the Company shall settle such units in the
manner provided in the applicable grant agreement and
(iii) each then outstanding Company stock option of Executive
(whether granted before or after the Effective Date) shall become
100% exercisable; provided, however, that settlement of restricted
stock units as contemplated by clause (ii) above shall not be
made prior to the first business day coincident with or next
following the date that is six months following Executive’s
termination of employment with the Company if earlier settlement
would be subject to the additional tax imposed by Section
409A(a)(1)(B) of the Internal Revenue Code of 1986.
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C.
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For
the 24-month period beginning on the date of his termination of
employment (the “Continuation Period”), the Company
shall provide Executive and Executive’s eligible family
members with the most favorable medical and dental health benefits
that are provided to active executives of the Company or any of its
affiliates (or any parent thereof) during the Continuation Period,
provided Executive pays a monthly premium for such coverage equal
to the monthly premium charged to such active executives for such
coverage. Notwithstanding the foregoing, if Executive receives
medical and dental benefits under another employer’s group
health plans during this Continuation Period, the Company’s
obligations under this Section C shall be reduced to the
extent benefits are actually received by Executive under such other
plans during such period, and any such benefits actually received
by Executive under such other plans shall be promptly reported by
Executive to the Company. In the event Executive is ineligible
under the terms of the applicable medical and dental plans to be so
covered, or in the event the benefits to be provided to Executive
under such plans would not be excluded from Executive’s gross
income, the Company shall provide Executive with substantially
equivalent coverage through other sources that provide Executive
with benefits that are not includable in Executive’s gross
income or will provide Executive with a lump sum payment in such
amount that, after all taxes on that amount, shall be equal to the
cost to Executive of Executive’s obtaining such equivalent
coverage from another source for Executive and Executive’s
eligible family members. The lump sum shall be determined on a
present value basis using the interest rate provided in
Section 1274(b)(2)(B) of the Internal Revenue Code on the date
of termination.
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D.
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Throughout the term of the
Continuation Period or until Executive begins other full-time
employment with a new employer, whichever occurs first, Executive
shall be entitled to receive ongoing outplacement services, paid by
the Company up to an aggregate cost not in excess of $30,000, with
a nationally prominent executive outplacement service firm selected
by the Company and reasonably acceptable to Executive.
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