NEWFIELD EXPLORATION COMPANY RESTRICTED STOCK AGREEMENT
NEWFIELD
EXPLORATION COMPANY
2006
TSR
THIS
2006 TSR RESTRICTED STOCK AGREEMENT (this
“Agreement”)
is
made as of February 14, 2006 and is by and between Newfield Exploration
Company (the
“Company”)
and
___________________________ (“Employee”).
1. GRANT.
(a) Restricted
Shares.
Pursuant to the Newfield Exploration Company 2004 Omnibus Stock Plan (as amended
from time to time, the “Plan”)
(i)
________ shares (the “Base
Restricted Shares”)
of
Common Stock (as defined in the Plan) and (ii) ________ shares (the
“Bonus
Restricted Shares”
and,
together with the Base Restricted Shares, the “Restricted
Shares”)
of
Common Stock shall be issued in Employee’s name. All of the Restricted Shares
shall be subject to the Forfeiture Restrictions (as defined below).
(b) Plan
Incorporated.
Employee acknowledges receipt of a copy of the Plan and agrees that the issuance
of the Restricted Shares pursuant to this Agreement shall be subject to all
of
the terms and conditions of the Plan, which terms and conditions are
incorporated herein for all purposes. Capitalized terms used but not defined
in
this Agreement shall have the meanings ascribed to such terms in the
Plan.
2. DEFINITIONS.
(a) “Change
of Control Bonus Shares”
means
the percentage of the Bonus Restricted Shares corresponding to the highest
TSR
Rank that would have been achieved pursuant to Section 3(d) of this Agreement
if
the Measurement Period had ended on the day immediately prior to the day on
which the relevant Change of Control occurs, rounded down to the next whole
share.
(b) “Disability”
means
permanent and total disability within the meaning of section 22(e)(3) of
the Code.
(c) “Fiscal
Quarter”
means
each of the three month periods ending (i) May 31, August 31 and November 30,
2006, 2007 and 2008, (ii) February 28, 2007 and 2009 and (iii) February 29,
2008.
(d) “Forfeiture
Restrictions”
means
the prohibition on transfer of the Restricted Shares and the obligations to
forfeit the Restricted Shares to the Company as set forth in Section 3 of
this Agreement.
(e) “Initial
Peer Group”
means
the following companies: Apache Corporation, Anadarko Petroleum Corporation,
Cabot Oil & Gas Corporation, Chesapeake Energy Corporation, Cimarex Energy
Co., Denbury Resources Inc., Devon Energy Corporation, Encana
Corporation,
EOG Resources, Inc., Forest Oil Corporation, ▇▇▇▇-▇▇▇▇▇ Corporation, ▇▇▇▇▇▇
Oil
Corporation, Nexen Inc., Noble Energy, Inc., Pioneer Natural Resources, Pogo
Producing Company, Questar Corporation, Range Resources Corporation,
Southwestern Energy Company, St. ▇▇▇▇ ▇▇▇▇ & Exploration Company, Stone
Energy Corporation, Swift Energy Company, The Houston Exploration Company,
Talisman Energy Inc., Ultra Petroleum Corp., Inc., Western Gas Resources, Inc.
and XTO Energy Inc.
(f) “Measurement
Period”
means
the period beginning on March 1, 2006 and ending on February 28,
2009.
(g) “Pro
Rata Base Shares”
means
that number of Base Restricted Shares equal to the total number of Base
Restricted Shares multiplied by a fraction, the numerator of which is the number
of full or partial Fiscal Quarters completed on or before the day on which
Employee’s employment with the Company and its subsidiaries is terminated as a
result of Employee’s death or Disability and the denominator of which is 12, and
then rounded down to the next whole share.
(h) “Qualified
Peer Group”
means
(i) the Dow ▇▇▇▇▇ Industrial Average Index, (ii) the S&P 500 Index and
(iii) each company included in the Initial Peer Group that has had its
primary common equity security listed or traded on a national securities
exchange or the Nasdaq National Market (or any successor thereto) throughout
the
Measurement Period.
(i) “Qualified
Retirement”
means
Employee retires on or after March 1, 2008 from employment with the Company
and
its subsidiaries in accordance with the policies of the Company and, at the
time
of such retirement, Employee is at least 60 years of age and has at least ten
years of continuous service with the Company or any of its
subsidiaries.
(j) “TSR
Rank”
means
the Company’s rank from one to one plus the total number of companies and
indices comprising the Qualified Peer Group, with the Company, each such other
company and each such index together ranked from best to worst based on the
Total Stockholder Return of the Company, each such other company and each such
index.
(k) “Total
Stockholder Return”
means
the rate of return (expressed as a percentage) achieved with respect to the
Common Stock, the primary common equity security of each company in the
Qualified Peer Group and each index included in the Qualified Peer Group if
(i) $100 was invested in each such security or index on the first day of
the Measurement Period based on the average closing price of each such security
or index for the 20 trading days immediately preceding such day, (ii) if
the record date for any dividend to be paid with respect to a particular
security occurs during the Measurement Period, such dividend was reinvested
in
such security as of the record date for such dividend (using the closing price
of such security on such record date) and (iii) the valuation of such
security or index at the end of the Measurement Period is based on the average
closing price of each such security or index for the 20 trading days immediately
preceding March 1, 2009.
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3. RESTRICTIONS.
Employee
hereby accepts the Restricted Shares when issued and agrees with respect thereto
as follows:
(a) No
Transfer.
Except
as specifically set forth in this Section 3 or as otherwise provided in
Paragraph IX of the Plan, the Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred. The Forfeiture
Restrictions shall be binding upon and enforceable against any permitted
transferee of the Restricted Shares.
(b) Forfeiture.
Employee (or his or her estate, as applicable) shall, for no consideration,
forfeit to the Company all Restricted Shares that, after taking into account
paragraphs (c) and (d) of this Section 3, remain subject to the Forfeiture
Restrictions (i) at the time of Employee’s termination of employment with the
Company and its subsidiaries for any reason (including as described in the
last
sentence of Paragraph XI(b) of the Plan) other than as a result of
Employee’s Qualified Retirement or (ii) on March 1, 2009.
(c) Death
or Disability.
If not
previously forfeited, the Forfeiture Restrictions with respect to the Pro Rata
Base Shares shall lapse upon the death or Disability of Employee.
(d) Total
Stockholder Return.
If not
previously forfeited, on March 1, 2009, the Forfeiture Restrictions shall lapse
with respect to that percentage of the Base Restricted Shares and that
percentage of the Bonus Restricted Shares corresponding to the highest “TSR
Rank” (with Top 6 being the highest, Top 7 being the second highest, etc.)
achieved, as set forth in the table below, rounded down to the next whole share
in each such case.
|
TSR
Rank
|
Percentage
of Base Restricted Shares as to which Forfeiture Restrictions
Lapse
|
Percentage
of Bonus Restricted Shares as to which Forfeiture Restrictions
Lapse
|
|
Top
6
Top
7
Top
8
Top
9
Top
10
Top
11
Top
12
Top
13
Top
14
Top
15
Top
16
Top
17
Top
18
Top
19
Top
20
Below
20
|
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
90%
80%
70%
60%
50%
0%
|
100%
87½%
75%
62½%
50%
40%
30%
20%
10%
0%
0%
0%
0%
0%
0%
0%
|
(e) Change
of Control.
If a
Change of Control occurs while any unforfeited Restricted Shares remain subject
to the Forfeiture Restrictions (i) the Forfeiture Restrictions with respect
to
the Base Restricted Shares shall lapse immediately prior to such Change of
Control
3
and
(ii) if such Change of Control occurs
(A) prior to March 1, 2008, Employee shall, for no consideration, forfeit
to the Company upon such Change of Control all of the Bonus Restricted Shares
or
(B) on or after March 1, 2008, the Forfeiture Restrictions with respect to
the
Change of Control Bonus Shares shall lapse immediately prior to such Change
of
Control and Employee shall, for no consideration, forfeit to the Company upon
such Change of Control all of the Bonus Restricted Shares that remain subject
to
Forfeiture Restrictions at such time.
(f) Certificates.
A
certificate evidencing the Restricted Shares shall be issued by the Company
in
Employee’s name, pursuant to which Employee shall have voting rights and receive
dividends. The certificate may bear a legend reciting or incorporating the
Forfeiture Restrictions and any other legends the Company believes are
appropriate, and the Company may cause the certificate to be delivered upon
issuance to the Secretary of the Company (or such other person as may be
designated by the Committee) as a depositary for safekeeping until the
Forfeiture Restrictions lapse or forfeiture occurs pursuant to the terms of
the
Plan and this Agreement. At the Company’s request, Employee shall execute and
deliver a stock power, in blank, with respect to the Restricted Shares, and
the
Company may exercise such stock power in the event of forfeiture. Upon the
lapse
of the Forfeiture Restrictions without forfeiture, the Company shall cause
a new
certificate or certificates to be issued without legend in the name of
Employee.
4. COMMUNITY
INTEREST OF SPOUSE.
The
community interest, if any, of any spouse of Employee in any of the Restricted
Shares shall be subject to all of the terms, conditions and restrictions of
this
Agreement and the Plan, and shall be forfeited and surrendered to the Company
upon the occurrence of any of the events requiring Employee’s interest in such
Restricted Shares to be so forfeited and surrendered pursuant to this
Agreement.
5. TAX
ELECTION.
If
Employee makes the election authorized by section 83(b) of the Code,
Employee shall submit to the Company a copy of the statement filed by Employee
to make such election.
6. BINDING
EFFECT.
This
Agreement shall be binding upon and inure to the benefit of any successors
to
the Company and all persons lawfully claiming under Employee.
4
IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be duly executed by an authorized officer
and Employee has executed this Agreement, all as of the date first above
written.
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NEWFIELD
EXPLORATION COMPANY
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By:
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|
▇▇▇▇▇
▇. ▇▇▇▇▇
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President
and Chief Executive Officer
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[Employee]
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