EXHIBIT 10.2

 

AWARD AGREEMENT

PHANTOM PERFORMANCE SHARES

 

THIS AGREEMENT is entered into this 18th day of June, 2004, between XTO Energy
Inc., a Delaware corporation (herein called “Company”), and Bob R. Simpson
(herein called “Grantee”), pursuant to resolutions adopted by the Compensation
Committee of the XTO Energy Inc. Board of Directors. The Compensation Committee
(the “Committee”) has determined that it is in the best interests of the Company
that Grantee be awarded phantom performance shares and, to carry out its
purposes, has this day authorized the grant of the phantom performance shares
set forth below to Grantee.

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
parties do hereby agree as follows:

 

  1. Grant of Phantom Performance Shares. Subject to all of the terms,
conditions, and provisions of the Agreement and certain provisions of the 1998
Stock Incentive Plan of the Company (the “Plan”) described in Section 6 below,
the Company hereby grants to Grantee 112,500 phantom performance shares which
shall be payable in cash equal to the fair market value of the common stock of
the Company, of the par value of one cent ($0.01) per share (“Common Stock”), on
the date of vesting.

 

  2. Vesting. All of the phantom performance shares granted herein shall vest
when the Common Stock trades at or above $29.86 on the New York Stock Exchange.

 

  3.

Dividends. The Grantee will be entitled to receive cash payments equal to any
cash dividends and other distributions paid with respect to a corresponding
number of shares of Common Stock, provided that if any such dividends or
distributions are paid in shares

 

1

--------------------------------------------------------------------------------

 

of Common Stock, the fair market value (as defined in the Plan) of such shares
of Common Stock, on the effective date of the distribution shall be paid to
Grantee in cash.

 

  4. Grantee’s Agreement. Grantee expressly ad specifically agrees that:

 

  (a) With respect to the calendar year in which such phantom performance shares
are vested Grantee shall include in his gross income for federal income tax
purposes the fair market value of the phantom performance shares.

 

  (b) The grant of the phantom performance shares is special incentive
compensation which will not be taken into account as “wages” or “salary” in
determining the amount of payment or benefit to Grantee under any pension,
thrift, stock, or deferred compensation plan of the Company.

 

  (c) In behalf of Grantee’s beneficiary, such grant shall not affect the amount
of any life insurance coverage available to such beneficiary under any life
insurance plan covering employees of the Company or any subsidiary.

 

  (d) The Company may withhold any federal state, or local tax liability owed as
a result of the performance shares vesting.

 

  5. Rights as Stockholder. Grantee will not have any voting or any other rights
as a stockholder of the Company with respect to the phantom performance shares.

 

  6.

Other Terms, Conditions, and Provisions. The performance shares herein granted
by the Company to Grantee are granted subject to all of the terms, conditions,
and provisions of this Agreement as well as to certain provisions of the 1998
Stock Incentive Plan of the Company. To the extent not inconsistent with the
terms in this Agreement, the parties agree that Sections 1.7, 4.5, 6.1, 6.2 6.3,
6.4, 6.7 (to the extent applicable to the other

 

2

--------------------------------------------------------------------------------

 

sections incorporated herein), 6.8, 6.10, 6.11, and 6.12, of the 1998 Stock
Incentive Plan of the Company (the “Plan”) be, and they hereby are incorporated
herein by reference as fully as if copied herein in full. Grantee acknowledges
receiving a copy of the Plan, including the provisions referenced above.
Reference to the sections of the Plan listed above is therefore made for a full
description of the rights of Grantee and of all of the other provisions, terms,
and conditions of the Plan applicable to the phantom performance shares granted
herein. If any of the provisions of this Agreement shall vary from or be in
conflict with the Plan, the provisions of this Agreement shall be controlling.

 

  7. No Employment Commitment. Grantee acknowledges that neither the grant of
phantom performance shares nor the execution of this Agreement by the Company
will be interpreted or construed as imposing upon the Company an obligation to
retain Grantee’s services for any stated period of time, which employment shall
continue to be at the pleasure of the Company as such compensation as it shall
determine, unless otherwise, provided in a written employment agreement signed
by the Company and Grantee.

 

  8. Amendment. This Agreement may be amended only by a writing executed by the
Company and Grantee which specifically states that it is amending this
Agreement.

 

  9. Other Agreements.

 

  (a) Phantom performance shares granted under this Agreement will vest in
accordance wit the provisions of Section 4.4 of the XTO Energy Inc. Management
Group Employee Severance Protection Plan (“Severance Plan”) in the event of a
Change in Control as defined in the Severance Plan.

 

3

--------------------------------------------------------------------------------

  (b) The phantom performance shares granted under this Agreement will reduce
the number of performance shares that will be awarded to Grantee under the
agreement for Grant of Performance Shares (relating to change in control) dated
February 20, 2001, between the Company and the Grantee (“Change in Control
Performance Share Agreement”) in accordance with Section 2.1 of Change in
Control Performance Share Agreement if the phantom performance shares granted
hereunder have not been forfeited prior to the change in control as defined in
the Change in Control Performance Share Agreement.

 

IN WITNESS WHEREOF, this Agreement is executed and entered into effective on the
date and year first above expressed.

 

ATTEST:

         

XTO ENERGY INC.

/S/ VIRGINIA N. ANDERSON       By:   /S/ ROBERT C. MYERS

Virginia N. Anderson

     

Name: Robert C. Myers

Vice President, Corporate Secretary

     

Title: Vice President-Human Resources

           

GRANTEE

            /S/ BOB R. SIMPSON        

Bob R. Simpson

 

4