Exhibit 10.7

CONCHO RESOURCES INC.

EXECUTIVE SEVERANCE PLAN

I.    INTRODUCTION

This Concho Resources Inc. Executive Severance Plan (this “Plan”) is being
adopted pursuant to the authorization of the Compensation Committee of the Board
for the benefit of certain executives of the Company. This Plan is intended to
provide severance benefits to certain executives who experience a Qualifying
Termination or a termination due to death or Disability.

II.    DEFINITIONS AND CONSTRUCTION

2.1    Definitions. Where the following words and phrases appear in this Plan,
they shall have the respective meanings set forth below, unless their context
clearly indicates otherwise.

(a) “Applicable Factor” shall mean the relevant factor specified as applicable
to the Executive, as set forth on the attached Schedule A.

(b) “Board” shall mean the Board of Directors of the Company.

(c) “Cause” shall mean the Executive (i) has engaged in gross negligence, gross
incompetence or willful misconduct in the performance of the Executive’s duties,
(ii) has refused, without proper reason, to perform the Executive’s duties,
(iii) has materially breached any material provision of this Plan or corporate
policy or code of conduct established by the Company, (iv) has willfully engaged
in conduct which is materially injurious to the Company or its subsidiaries
(monetarily or otherwise), (v) has committed an act of fraud, embezzlement or
willful breach of a fiduciary duty to the Company or an affiliate (including the
unauthorized disclosure of confidential or proprietary material information of
Company or an affiliate), (vi) has been convicted of (or pleaded no contest to)
a crime involving fraud, dishonesty or moral turpitude or any felony, or
(vii) has used Company securities owned or controlled by the Executive as
collateral for a securities margin account.

(d) “Change of Control” shall mean the first to occur of any of the following:

(i) a merger of the Company with another entity, a consolidation involving the
Company, or the sale of all or substantially all of the assets of the Company to
another entity if, in any such case, (1) the holders of equity securities of the
Company immediately prior to such transaction or event do not beneficially own
immediately after such transaction or event equity securities of the resulting
entity entitled to 50% or more of the votes then eligible to be cast in the
election of directors generally (or comparable governing body) of the resulting
entity in substantially the same proportions that they owned the equity
securities of the Company immediately prior to such transaction or event or
(2) the persons who were members of the Board immediately prior to such
transaction or event shall not constitute at least a majority of the board of
directors of the resulting entity immediately after such transaction or event;

(ii) the Company is dissolved and liquidated;

(iii) any person or entity, including a “group” as contemplated by section
13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains
ownership or control of (including, without limitation, the power to vote) more
than 30% of the outstanding shares of the Company’s voting stock (based upon
voting power); or

(iv) the individuals who, as of the original adoption date of this Plan,
constitute members of 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 such date whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered for purposes of this definition as though such individual was a
member of the Incumbent Board, but excluding, for these purposes, any such
individual whose initial assumption of office as a director 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 any individual, entity or group other than the
Board).

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(e) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(f) “Company” shall mean Concho Resources Inc., a Delaware corporation, and
shall include its successors and assigns.

(g) “Disability” shall mean that, as a result of the Executive’s incapacity due
to physical or mental illness, the Executive shall have been absent from the
full-time performance of the Executive’s duties for six consecutive months and
the Executive shall not have returned to full-time performance of the
Executive’s duties within 30 days after written notice of termination is given
to the Executive by the Employer (provided, however, that such notice may not be
given prior to 30 days before the expiration of such six-month period).

(h) “Employer” shall mean the Company and each of its subsidiaries and
affiliates that is treated as an Employer in accordance with the provisions of
Section 5.1.

(i) “Executive” shall mean an individual who is in one of the positions
specified on Schedules A and B who has entered into a Participation Agreement
with the Company in substantially the form set forth on the attached Schedule C.

(j) “Good Reason” shall mean, with respect to each Executive, the occurrence of
any one or more of the following: (i) a material reduction in the nature or
scope of the Executive’s position, authority, duties or responsibilities; (ii) a
reduction in the Executive’s annual base salary or target annual cash incentive
opportunity; or (iii) a required change in the location of the Executive’s
principal place of employment by 50 miles or more from the location where the
Executive was previously principally employed. In each such case of Good Reason,
the Executive shall provide the Company with written notice of the grounds for a
Good Reason termination within thirty (30) days of the initial occurrence
thereof, and the Company shall have a period of thirty (30) days to cure after
receipt of the written notice (the “Cure Period”). Resignation by the Executive
following the Company’s cure or before the expiration of the Cure Period shall
constitute a voluntary resignation and not a termination or resignation for Good
Reason and shall not entitle the Executive to any benefits under this Plan.

(k) “Payment Date” shall mean the first regularly scheduled payroll date that is
at least sixty (60) days following the effective date of the Qualifying
Termination.

(l) “Protection Period” shall mean the period commencing on the consummation of
a Change of Control and ending on the second anniversary of such Change of
Control.

(m) “Qualifying Termination” shall mean a termination of the Executive’s
employment by the Company without Cause, and not by reason of death or
Disability, or a resignation by the Executive for Good Reason.

(n) “Restricted Period” shall mean, the period of the Executive’s employment
with the Employer and a period of one year following the termination of the
Executive’s employment with the Employer for any reason or such applicable
shorter period as may be specified pursuant to Section 4.2.

(o) “Section 409A” means section 409A of the Code and the Department of Treasury
rules and regulations issued thereunder.

(p) “Specified Employee” means a person who is, as of the date of the person’s
termination of employment, a “specified employee” within the meaning of
Section 409A, taking into account the elections made and procedures established
by the Company.

2.2    Number and Gender. Wherever appropriate herein, a word used in the
singular shall be considered to include the plural and the plural to include the
singular. The masculine gender, where appearing in this Plan, shall be deemed to
include the feminine gender.

2.3    Headings. The headings of Articles and Sections herein are included
solely for convenience and if there is any conflict between such headings and
the text of this Plan, the text shall control.

 

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III.    SEVERANCE BENEFITS

3.1    Payments and Benefits upon a Qualifying Termination (Unrelated to a
Change of Control). Subject to the further provisions of this Article III and
the Executive’s continued compliance with his or her obligations under Article
IV hereof, upon an Executive’s Qualifying Termination that does not occur within
the Protection Period:

(a) the Employer shall pay or provide to the Executive the Executive’s unpaid
base salary through the date of termination, any unreimbursed business expenses,
and any amount arising from the Executive’s participation in, or benefits under,
any employee benefit plans, programs or arrangements, which amounts shall be
payable in accordance with the requirements of applicable law and the terms and
conditions of such employee benefit plans, programs or arrangements;

(b) the Employer shall continue to pay to the Executive his base salary, as in
effect immediately prior to the Qualifying Termination (or immediately prior to
any event constituting Good Reason, if applicable), for the number of months
that applies to the Executive as specified in Schedule B following such
Qualifying Termination, which amount shall be payable in accordance with the
normal payroll practices of the Employer;

(c) the Employer shall pay to the Executive an amount in cash equal to the
Executive’s target annual bonus for the year that includes the date of
termination pro-rated to reflect the number of days that the Executive was
employed by the Company and its subsidiaries during such calendar year, and
which shall be payable on the first regularly scheduled payroll date that is at
least sixty (60) days following the effective date of termination;

(d) during the portion, if any, of the 18-month period commencing on the date of
termination that the Executive properly elects continuation coverage for himself
and/or his eligible dependents under the Company’s or a subsidiary’s group
health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, the Employer shall promptly reimburse the Executive on a monthly
basis for the cost of such coverage;

(e) the Employer shall reimburse the Executive, up to a maximum cumulative
amount of $15,000, for the reasonable fees of an outplacement or similar service
provider engaged by the Executive to assist in finding employment opportunities
for such Executive; provided that the Executive submits documentation of such
expenses to the Employer within thirty (30) days following the date of
termination;

(f) a pro-rated portion of each outstanding unvested time-based equity-based
compensation award held by the Executive shall vest immediately as of the date
of termination based on the number of days that the Executive was employed by
the Company and its subsidiaries during the vesting period applicable to the
unvested portion of such award divided by the total number of days in such
vesting period; and

(g) a pro-rated portion of each outstanding unvested performance-based
equity-based compensation award held by the Executive shall vest immediately as
of the date of termination at the lower of the target level of achievement of
any applicable performance conditions or the actual level of achievement of any
applicable performance conditions as of the date of termination, and, in either
case, based on the number of days that the Executive was employed by the Company
and its subsidiaries during the vesting period applicable to such award divided
by the total number of days in such vesting period.

3.2    Severance Benefits upon a Qualifying Termination (Related to a Change of
Control). Subject to the further provisions of this Article III, upon an
Executive’s Qualifying Termination that occurs within the Protection Period, the
Executive shall receive all of the payments and benefits described in
Section 3.1 above, except that the following payments shall be substituted for
their respective counterparts in Sections 3.1(b), 3.1(f), and 3.1(g):

(a) in lieu of any payment under Section 3.1(b), the Employer shall pay to the
Executive in a single lump sum on the Payment Date an amount in cash equal to
(1) the sum of (i) the Executive’s annualized base salary as in effect
immediately prior to the Qualifying Termination (or immediately prior to any
event constituting Good Reason, if applicable), plus (ii) the average of the
annual bonuses, if any, paid or payable to the Executive for the three-year
period (or for any shorter period of the Executive’s employment, if such
Executive has not been employed for three years) immediately preceding the date
of termination, (2) multiplied by the Applicable Factor that applies to the
Executive;

(b) in lieu of any vesting acceleration under Section 3.1(f), each outstanding
unvested time-based equity-based compensation award held by the Executive shall
vest in full as of the date of termination; and

(c) in lieu of any vesting acceleration under Section 3.1(g), each outstanding
unvested performance-based equity-based compensation award held by the Executive
shall vest in full as of the date of termination at the actual level of
achievement of any applicable performance conditions as of the date of the
Change of Control.

 

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3.3    Payments upon a Termination of Employment Due to Death or
Disability. Subject to the further provisions of this Article III, upon an
Executive’s termination of employment with the Company due to death or
Disability:

(a) the Employer shall pay or provide to the Executive or his personal
representative or estate, the Executive’s unpaid base salary through the date of
termination, any unreimbursed business expenses, and any amount arising from the
Executive’s participation in, or benefits under, any employee benefit plans,
programs or arrangements, which amounts shall be payable in accordance with the
requirements of applicable law and the terms and conditions of such employee
benefit plans, programs or arrangements;

(b) the Employer shall pay to the Executive or his or her personal
representative or estate, in a single lump sum cash payment on the first
regularly scheduled payroll date that is at least sixty (60) days following the
effective date of termination, an amount equal to the sum of (i) the Executive’s
annualized base salary as in effect immediately prior to termination plus
(ii) the Executive’s target annual bonus for the year that includes the date of
termination pro-rated to reflect the number of days that the Executive was
employed by the Company and its subsidiaries during such calendar year;

(c) each outstanding unvested time-based equity-based compensation award held by
the Executive shall vest in full as of the date of termination; and

(d) each outstanding unvested performance-based equity-based compensation award
held by the Executive shall vest in full as of the date of termination at the
higher of the target level of achievement of any applicable performance
conditions or the actual level of achievement of any applicable performance
conditions as of the date of termination.

3.4    Release and Full Settlement; Payment Delay; Repayment Obligations. Any
provision of this Plan to the contrary notwithstanding, the payment of any
amounts or provision of any benefits under Sections 3.1(b) through (g), 3.2(a)
through 3.2(c), 3.3(b) or Section 4.2 hereof shall be subject to the Executive’s
(or, if applicable, his personal representative or estate’s) execution, within
forty five (45) days following receipt (or such shorter period as set forth in
such release), of a waiver and general release of claims in the form provided by
the Company, and such waiver and general release of claims becoming effective
and irrevocable in accordance with its terms within sixty (60) days following
the date of termination. Except as set forth in the following sentence, any
payments pursuant to Sections 3.1(b) through (g), 3.2(a) through 3.2(c), 3.3(b)
or Section 4.2 hereof that would otherwise be payable in the first sixty
(60) days following the date of termination shall be withheld and become payable
in a lump sum on the date that is sixty (60) days following the date of
termination. However, if the Executive is a Specified Employee, any payments
hereunder that constitute a “deferral of compensation” within the meaning of
Section 409A and to which the Executive would otherwise be entitled during the
first six months following the date of termination shall be accumulated and paid
to the Executive on the date that is six months following the date of
termination (or if earlier, to the Executive’s estate or personal representative
upon the Executive’s death). Furthermore, the payment of any amounts or
provision of any benefits under Sections 3.1(b) through (g) or Section 4.2
hereof shall be subject to the Executive’s continued compliance with his or her
obligations under Article IV hereof, and, in the event of any breach of such
obligations by the Executive, the Executive agrees to promptly repay the
Employer the gross amount or value of any payments or benefits provided under
Sections 3.1(b) through (g) or Section 4.2 hereof.

3.5    Parachute Payments. Anything to the contrary herein notwithstanding, if
an Executive is a “disqualified individual” (as defined in section 280G(c) of
the Code), and the severance benefits provided for in Sections 3.1 or 3.2,
together with any other payments or benefits which the Executive has the right
to receive from the Employer, would constitute a “parachute payment” (as defined
in section 280G(b)(2) of the Code), then the severance benefits provided
hereunder shall be either (a) reduced (but not below zero) so that the present
value of such total amounts received by the Executive from the Employer will be
one dollar ($1.00) less than three times the Executive’s “base amount” (as
defined in section 280G(b)(3) of the Code) and so that no portion of such
amounts received by the Executive shall be subject to the excise tax imposed by
section 4999 of the Code or (b) paid in full, whichever produces the better net
after-tax position to the Executive (taking into account any applicable excise
tax under section 4999 of the Code and any applicable income tax). The
determination as to whether any such reduction in the amount of the severance
benefits is necessary shall be made by the Board (or any committee appointed by
the Board) in good faith and any such reduction shall be implemented in a manner
consistent with the requirements of Section 409A of the Code. If a reduced cash
payment is made and through error or otherwise that payment, when aggregated
with other payments or benefits from the Employer (or its affiliates) used in
determining if a “parachute payment” exists, exceeds

 

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one dollar ($1.00) less than three times the Executive’s base amount, the
Executive shall immediately repay such excess to the Employer upon notification
that an overpayment has been made. Nothing in this Section 3.5 shall require the
Employer to be responsible for, or have any liability or obligation with respect
to, any Executive’s excise tax liabilities under section 4999 of the Code.

3.6    Coordination with Certain Other Agreements. The benefits under and
participation in this Plan are intended to supersede and replace the severance
and separation benefits to which an Executive may be entitled under any other
plan, policy, agreement or arrangement. By executing a Participation Agreement
with the Company to participate in this Plan, an Executive shall waive any right
to severance or separation benefits under any other plan, policy, agreement or
arrangement of any Employer.

3.7    No Mitigation. An Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Article III or Section 4.2 by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Article III or Section 4.2 be reduced by any
compensation or benefit earned by the Executive as the result of employment by
another employer.

IV.    RESTRICTIVE COVENANTS

4.1    Non-Competition and Non-Solicitation Obligations. In consideration of the
payments and benefits that may be paid or provided to the Executive hereunder
and to protect the trade secrets and confidential information of the Company
that have been and will in the future be disclosed or entrusted to the
Executive, the business goodwill of the Company or its affiliates, and the
business opportunities that have been and will in the future be disclosed or
entrusted to the Executive by the Company or its affiliates, the Company and the
Executive agree to the provisions of this Article IV. The Executive agrees that
during the Restricted Period, the Executive will not:

(a) directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder, partner
or in any other individual or representative capacity whatsoever, either for the
Executive’s own benefit or for the benefit of any other person or entity either
(i) hire, contract or solicit, or attempt any of the foregoing with respect to
hiring any employee of the Company or its affiliates, or (i) induce or otherwise
counsel, advise, or encourage any employee of the Company or its affiliates to
leave the employment of the Company or its affiliates; or

(b) within any geographic area or market where the Company or any of its
affiliates are conducting any business or have, during the twelve months
preceding the termination of the Executive’s employment with Company, conducted
such business or proposed to conduct business, as applicable:

(i) directly or indirectly participate in the ownership, management, operation
or control of, or be connected as an officer, employee, partner, director,
contractor or otherwise with, or have any financial interest in or aid or assist
anyone else in the conduct of, any business similar to that conducted by the
Company or its affiliates or provide or sell a service or product that is the
same, substantially similar to or otherwise competitive with the products and
services provided or sold by the Company or its affiliates (each, a “Competitive
Operation”); provided, however, that this provision shall not preclude the
Executive from owning less than 2% of the equity securities of any publicly held
Competitive Operation so long as the Executive does not serve as an employee,
officer, director or consultant to such business;

(ii) directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder, partner
or in any other individual or representative capacity whatsoever, either for the
Executive’s own benefit or for the benefit of any other person or entity call
upon, solicit, divert or take away, any customer or vendor of the Company or its
affiliates with whom the Executive dealt, directly or indirectly, during the
Executive’s engagement with Company or its affiliates, in connection with a
Competitive Operation; or

(iii) call upon any prospective acquisition candidate on the Executive’s own
behalf or on behalf of any Competitive Operation, which candidate is a
Competitive Operation or which candidate was, to the Executive’s knowledge after
due inquiry, either called upon by the Company or for which the Company or any
of its affiliates made an acquisition analysis, for the purpose of acquiring
such entity.

 

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4.2    Limitations on Non-Competition. Notwithstanding the provisions of
Section 4.1, if the Executive provides written notice to the Company that the
Executive will terminate employment with the Employer pursuant to a resignation
by the Executive that does not constitute a Qualifying Termination, then, solely
for purposes of Section 4.1(b)(i), the Restricted Period shall end on a date
selected by the Company and set forth in a written notice provided by the
Company to the Executive; provided, however, that (i) the date selected by the
Company shall be a whole number of months (not in excess of 12) after the last
day of the Executive’s employment with the Employer and (ii) subject to the
provisions of Section 3.4 hereof, the Employer shall pay to the Executive an
amount equal to one-twelfth of the Executive’s annualized base salary for each
month of the Restricted Period following the last day of the Executive’s
employment with the Employer, which amount shall be paid on or about the last
day of each month of the Restricted Period following the last day of the
Executive’s employment with Company. The Executive hereby delegates to the
Company the right to select and determine in good faith the duration of the
Restricted Period as provided in this Section 4.2.

4.3    Non-Disparagement. During and following the Executive’s employment with
the Employer, the Executive agrees not to disparage, either orally or in
writing, the Company, any of Company’s affiliates, business, products, services
or practices, or any of Company’s or its affiliates’ directors, officers,
agents, representatives, stockholders, or employees. During and following the
Executive’s employment with the Employer, the Employer agrees not to disparage,
either orally or in writing, the Executive.

V.    GENERAL PROVISIONS

5.1    Other Participating Employers. It is contemplated that subsidiaries and
affiliates of the Company may adopt this Plan, with the approval of the Board or
the Compensation Committee thereof, and thereby become an “Employer” hereunder.
Any such entity, whether or not presently existing, may become an “Employer” by
appropriate action of its board of directors or non-corporate counterpart. The
provisions of this Plan shall apply separately and equally to each Employer and
its employees in the same manner as is expressly provided for the Company and
its employees, except that the determination of whether a Change of Control has
occurred shall be made based solely on the Company. Transfer of employment among
the Company and other participating Employers shall not be considered a
Qualifying Termination hereunder unless such transfer otherwise constitutes a
Good Reason event. Subject to the provisions of Section 5.2, any participating
Employer may, by appropriate action of its board of directors or non-corporate
counterpart, terminate its participation in this Plan. Amounts payable hereunder
shall be paid by the Employer that employs the particular Executive.

5.2    Termination and Amendment. This Plan may be amended from time to time or
terminated at the discretion of the Board or the Compensation Committee thereof;
provided, however, that notwithstanding the foregoing, (a) any amendment or
termination of this Plan prior to a Change of Control will only become
effective, to the extent it would adversely affect the benefits or rights to
benefits (contingent or otherwise) of any Executive under this Plan, on the date
that is six (6) months following adoption thereof by the Board or the
Compensation Committee thereof and (b) this Plan may not be amended on or
following a Change of Control to adversely affect the benefits or rights to
benefits (contingent or otherwise) of any Executive under this Plan or
terminated on or following a Change of Control until there are no longer any
benefits potentially payable under this Plan. Further, a participating Employer
may not terminate its participation in this Plan on or following a Change of
Control unless and until it no longer employs any Executives and has otherwise
satisfied its obligations to pay benefits under this Plan.

5.3    Funding; Cost of Plan. The benefits provided herein shall be unfunded and
shall be provided from the Employers’ general assets. No Executive shall have
any right to, or interest in, any assets of any Employer that may be applied by
the Employer to the payment of amounts due hereunder.

5.4    Nonalienation; Successors. This Plan shall be binding upon the Employer
and any successor of the Employer, by merger, consolidation, acquisition or
similar transaction, and shall inure to the benefit of and be enforceable by the
Employer’s Executives. Executives shall not have any right to pledge,
hypothecate, anticipate or assign benefits or rights under this Plan, except by
will or the laws of descent and distribution. An Executive’s rights and
interests hereunder shall inure to the benefit of and be enforceable by the
Executive’s personal representative.

 

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5.5    Not Contract of Employment. The adoption and maintenance of this Plan
shall not be deemed to be a contract of employment between the Employer and any
person or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to (a) give any person the right to be retained in the
employ of the Employer, (b) restrict the right of the Employer to discharge any
person at any time, (c) give the Employer the right to require any person to
remain in the employ of the Employer, or (d) restrict any person’s right to
terminate his employment at any time.

5.6    Indemnification. If an Executive shall obtain any money judgment relating
to this Plan or otherwise prevails with respect to any litigation brought by
such Executive or the Employer to enforce or interpret any provision contained
herein, the Employer, to the fullest extent permitted by applicable law, hereby
indemnifies such Executive for his reasonable attorneys’ fees and disbursements
incurred in such litigation and hereby agrees to pay in full all such fees and
disbursements. Such payments shall be made within ten (10) business days after
the delivery of the Executive’s written request for the payment (on or following
the date on which he obtains a money judgment relating to this Plan or otherwise
prevails with respect to litigation brought by him to enforce or interpret any
provision contained herein) accompanied by such evidence of such fees and
expenses incurred as the Company may reasonably require. In any event the
Employer shall pay the Executive such legal fees and expenses by the last day of
the Executive’s taxable year following the taxable year in which the Executive
incurred such legal fees and expenses. The legal fees or expenses that are
subject to reimbursement pursuant to this Section 5.6 shall not be limited as a
result of when the fees or expenses are incurred. The amount of legal fees or
expenses that are eligible for reimbursement pursuant to this Section 5.6 during
a given taxable year of the Executive shall not affect the amount of expenses
eligible for reimbursement in any other taxable year of the Executive. The right
to reimbursement pursuant to this Section 5.6 is not subject to liquidation or
exchange for another benefit.

5.7    Payment Obligations Absolute. The Employer’s obligation to pay an
Executive the amounts provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the Employer or
any of its subsidiaries may have against such Executive or anyone else. All
amounts payable by the Employer shall be paid without notice or demand.

5.8    Withholding. Any benefits or amounts paid or provided pursuant to this
Plan shall be subject to all applicable taxes and withholdings.

5.9    Severability. Any provision in this Plan that is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

5.10    Compliance With Section 409A. To the maximum extent permitted by
applicable law, amounts payable under this Plan are intended to be exempt from
Section 409A or in compliance with the requirements of Section 409A and this
Plan shall be administered accordingly. No amounts payable under this Plan that
constitute a “deferral of compensation” within the meaning of Section 409A shall
be payable unless the Executive’s termination of employment constitutes a
“separation from service” within the meaning of Treas. Reg. § 1.409A-1(h). Each
payment under this Plan is intended to be a “separate payment” and not a series
of payments for purposes of Section 409A. Any payments or reimbursements of any
expenses provided for under this Plan shall be made in accordance with Treas.
Reg. § 1.409A-3(i)(1)(iv).

5.11    Governing Law. This Plan shall be construed and enforced under and be
governed in all respects by the laws of the State of Texas, without regard to
the conflict of laws principles thereof.

 

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SCHEDULE A

The Applicable Factor is determined based on the position of the Executive as
follows:

 

Position

  

Applicable Factor

Chief Executive Officer    3.0 President    2.75 Executive Vice President    2.5
Senior Vice President    2.25 Vice President    2.0

 

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SCHEDULE B

The number of months that base salary will continue to be paid upon a Qualifying
Termination outside of the Protection Period is determined based on the position
of the Executive as follows:

 

Position

  

Number of Months

Chief Executive Officer    24 President    21 Executive Vice President    18
Senior Vice President    15 Vice President    12

 

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SCHEDULE C

PARTICIPATION AGREEMENT

CONCHO RESOURCES INC.

EXECUTIVE SEVERANCE PLAN

This Participation Agreement (the “Agreement”) is made and entered into by and
between                              (the “Executive”) and Concho Resources
Inc., a Delaware corporation (the “Company”), effective as of January 1, 2019
(the “Effective Date”).

The Company maintains the Concho Resources Inc. Executive Severance Plan (the
“Plan”) to provide for specified severance benefits in connection with certain
Qualifying Terminations (as defined in the Plan). The Executive hereby
acknowledges that he has read and understands the terms of the Plan and agrees
to participate in the Plan. The Executive also expressly acknowledges and agrees
that participation in the Plan replaces and supersedes the Employment Agreement
made by and between the Company and the Executive dated
                                , and that such Employment Agreement shall be
terminated and the Executive will no longer be entitled to any benefits under
such Employment Agreement upon execution of this Agreement and participation in
the Plan.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

CONCHO RESOURCES INC.       EXECUTIVE By:                     Executive
Signature Title:          

 

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