Exhibit 10.4

EXECUTIVE SEVERANCE AGREEMENT

This agreement (this “Agreement”) is made as of the ___ day of _____, 20__,
between Southwestern Energy Company, a Delaware corporation with its principal
offices at 2350 N. Sam Houston Parkway East, Suite 125, Houston, TX 77032
(hereinafter called the “Company”), and ________________ (hereinafter called the
“Employee”).

WITNESSETH THAT:

WHEREAS, should the Company or shareholders of the Company receive any proposal
from a third person concerning a possible business combination with the Company
or an acquisition of equity securities of the Company, the Board of Directors of
the Company (hereinafter called the “Board”) believes it imperative that the
Company and the Board be able to rely upon the Employee to continue in his
position, and that the Company and the Board be able to receive and rely upon
his advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that he might be distracted or that his advice
might be affected by the personal uncertainties and risks created by such a
proposal;

WHEREAS, the Company desires to provide the compensation and benefits provided
for herein in order to enable it to attract and retain qualified executives such
as the Employee, without a current expense to the Company;

NOW, THEREFORE, to assure the Company that it will have the continued dedication
of the Employee and the availability of his advice and counsel notwithstanding
the possibility, threat or occurrence of a bid to take over control of the
Company and to induce the Employee to remain in the employ of the Company, and
for other good and valuable consideration, the Company and the Employee hereby
agree as follows:

 

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1.

Definitions.

(i)

“Cause”, when used in connection with the termination of the Employee’s
employment by the Company, shall mean (a) the willful and continued failure by
the Employee substantially to perform his duties and obligations to the Company
(other than any such failure resulting from his Disability) which failure
continues after the Company has given notice thereof to the Employee or (b) the
willful engaging by the Employee in misconduct which is materially injurious to
the Company.  For purposes of this definition, no act, or failure to act, on the
Employee’s part shall be considered “willful” unless done, or omitted to be
done, by the Employee in bad faith and without reasonable belief that his action
or omission was in the best interests of the Company.

(ii)

“Change in Control” shall mean the occurrence of any of the following:

(a)

any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”), an “Acquiring Person”) becomes the
“beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company’s then outstanding
securities, provided, however, that any acquisition by (x) the Company or any of
its subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (y) any corporation with
respect to which, immediately following such acquisition, more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power

 

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of the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, in the aggregate by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the outstanding
Company common stock and Company voting securities immediately prior to such
acquisition in substantially the same proportion as their ownership, immediately
prior to such acquisition, of the outstanding Company common stock and Company
voting securities, as the case may be, shall not constitute a Change in Control;

(b)

consummation by the Company of a reorganization, merger or consolidation (a
“Business Combination”), in each case, with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the outstanding Company common stock and Company voting
securities immediately prior to such Business Combination do not in the
aggregate, immediately following such Business Combination, beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination in
substantially the same proportion as their ownership immediately prior to such
Business Combination of the outstanding Company common stock and Company voting
securities, as the case may be;

 

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(c)

any individual who is nominated by the Board for election to the Board on any
date fails to be so elected as a direct or indirect result of any proxy fight or
contested election for positions on the Board;

(d)

a “change in control” of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act occurs;

(e)

(i) a complete liquidation or dissolution of the Company;

(ii) the sale or other disposition of all or substantially all the assets of the
Exploration and Production business segment other than to a corporation with
respect to which, immediately following such sale or disposition, more than 80%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, in the aggregate by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the outstanding
Company common stock and Company voting securities immediately prior to such
sale or disposition in substantially the same proportion as their ownership of
the outstanding Company common stock and Company voting securities, as the case
may be, immediately prior to such sale or disposition; or

(f)

a majority of the Board determines in its sole and absolute discretion that
there has been a Change in Control of the Company or that there will be a Change
in Control of the Company upon the occurrence of certain specified events and
such events occur.

 

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Notwithstanding the foregoing, a Change in Control shall not occur with respect
to the Employee by reason of any event which would otherwise constitute a Change
in Control if, immediately after the occurrence of such event, individuals
including such Employee who were executive officers of the Company immediately
prior to the occurrence of such event, own, directly or indirectly, on a fully
diluted basis, (i) 15% or more of the then outstanding shares of common stock of
the Company or any acquiror or successor to substantially all of the business of
the Company or, in the case of an event described in Section 1(ii)(f) relating
to a sale of a business segment, the entity acquiring the business segment or
(ii) 15% or more of the combined voting power of the then outstanding voting
securities of the Company or any acquiror or successor to substantially all of
the business of the Company or, in the case of an event described in Section
1(ii)(f) relating to a sale of a business segment, the entity acquiring the
business segment entitled to vote generally in the election of directors.  For
greater clarity, it is understood and agreed that a “Change in Control” pursuant
to Section 1(ii)(f) is contingent upon the actual occurrence of a “Change in
Control”, including as a result of the specified events.

(iii)

“Committee” shall mean the Compensation Committee of the Board.

(iv)

“Compensation” shall mean the sum of the highest annual base salary of the
Employee in effect at any time during the year preceding the Termination Date
and the maximum cash bonus opportunity available to the Employee under the
Company’s Incentive Compensation Plan(s) at any time during the year prior to
the Termination Date.

(v)

“Contract Period” shall mean the period defined in Section 2 hereof.

(vi)

“Disability” shall mean a physical or mental incapacity of the Employee which
entitles the Employee to compensation and benefits at least equal to two-thirds
of his base

 

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salary during the period of such incapacity under any long term disability plan
applicable to him and maintained by the Company as in effect immediately prior
to a Change in Control.

(vii)

“Good Reason,” when used with reference to a termination by the Employee of his
employment with the Company, shall mean:

(a)

the assignment to the Employee of any duties inconsistent with, or the reduction
of powers or functions associated with, his positions, duties, responsibilities
and status with the Company immediately prior to a Change in Control, or any
removal of the Employee from, or any failure to reelect the Employee to, any
positions or offices the Employee held immediately prior to a Change in Control,
except in connection with the termination of the Employee’s employment by the
Company for Cause or on account of Disability pursuant to the requirements of
this Agreement;

(b)

a reduction by the Company of the Employee’s base salary as in effect
immediately prior to a Change in Control, except in connection with the
termination of the Employee’s employment by the Company for Cause or on account
of Disability pursuant to the requirements of this Agreement;

(c)

a change in the Employee’s principal work location to a location more than forty
(40) miles from the Employee’s principal work location immediately prior to a
change in control, except for required travel on the Company’s business to an
extent substantially consistent with the Employee’s business travel obligations
immediately prior to a Change in Control;

 

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(d)

(1)  the failure by the Company to continue in effect any employee benefit plan,
program or arrangement (including without limitation, “employee benefit plans”
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974 and any incentive or equity-based plans) in which the Employee was
participating immediately prior to a Change in Control (or substitute plans,
programs or arrangements providing the Employee with substantially similar
compensation and benefits), (2) the taking of any action, or the failure to take
any action, by the Company which could (A) adversely affect the Employee’s
participation in, or materially reduce the Employee’s benefits under, any of
such plans, programs or arrangements, (B) materially adversely affect the basis
for computing benefits under any of such plans, programs or arrangements or (C)
deprive the Employee of any material fringe benefit enjoyed by the Employee
immediately prior to a Change in Control or (3) the failure by the Company to
provide the Employee with the number of paid vacation days to which the Employee
was entitled immediately prior to a Change in Control in accordance with the
Company’s vacation policy applicable to the Employee then in effect, except  in
each case, in connection with the termination of the Employee’s employment by
the Company for Cause or on account of Disability pursuant to the requirements
of this Agreement;

(e)

the failure by the Company to pay the Employee any portion of the Employee’s
current compensation, or any portion of the Employee’s compensation deferred
under any plan, agreement or arrangement of or with the Company, within seven
(7) days of the date such compensation is due;

 

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(f)

a material increase in the required working hours of the Employee from that
required prior to a Change in Control;

(g)

the failure by the Company to obtain an assumption of the obligations of the
Company under this Agreement by any successor to the Company pursuant to Section
8(i) hereof; or

(h)

any termination of the Employee’s employment by the Company during the Contract
Period which is not effected pursuant to the requirements of this Agreement.

(viii)

“Termination Date” shall mean the effective date as provided hereunder of the
termination of the Employee’s employment.

2.

Application of Agreement.  This Agreement shall apply only to a termination of
employment of the Employee during a period (the “Contract Period”) commencing on
the date immediately preceding the date of a Change in Control and terminating
on the third anniversary of the date of the Change in Control; provided,
however, that such Change in Control occurs during the period commencing as of
the date hereof and terminating on the first anniversary of the date hereof or
as further extended pursuant to the following sentence.  On the first
anniversary of the date hereof, and on each anniversary of the date hereof
thereafter, the period during which this Agreement shall apply shall
automatically be extended for one additional year, unless at least six months
before such anniversary the Company notifies the Employee that it elects not to
extend such period.  If the Company elects not to extend such period, then such
period shall end two years after the next anniversary of the date hereof that
follows the date of such notice.  Notwithstanding anything in this Agreement to
the contrary, if, within six months prior to the date on which a Change in
Control occurs, the Employee’s

 

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employment with the Company is terminated by the Company other than by reason of
the Employee’s death, Disability or circumstances that would constitute Cause or
the terms and conditions of the Employee’s employment are adversely changed in a
manner which would constitute grounds for a termination of employment by the
Employee for Good Reason, and it is reasonably demonstrated that such
termination of employment or adverse change (i) was at the request of a third
party who has taken steps reasonably calculated to effect the Change in Control
of (ii) otherwise arose in connection with or in anticipation of the Change in
Control, then for all purposes of this Agreement such termination of employment
shall be deemed to have occurred during the Contract Period and shall be
considered either termination of the Employee’s employment without Cause by the
Company or termination of the Employee’s employment by the Employee for Good
Reason, as the case may be.  Any reference herein to the Employee’s employment
or termination of employment by or with the Company shall include the Employee’s
employment or termination of employment by or with any subsidiary or affiliated
company of the Company.

3.

Termination of Employment of the Employee By the Company During the Contract
Period.

(i)

During the Contract Period, the Company shall have the right to terminate the
Employee’s employment hereunder for Cause, for Disability or without Cause by
following the procedures hereinafter specified.

(ii)

Termination of the Employee’s employment for Disability shall become effective
thirty (30) days after a notice of intent to terminate the Employee’s
employment,

 

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specifying Disability as the basis for such termination, is given to the
Employee by the Committee.

(iii)

The Employee may not be terminated for Cause unless and until a notice of intent
to terminate the Employee’s employment for Cause, specifying the particulars of
the conduct of the Employee forming the basis for such termination, is given to
the Employee by the Committee and, subsequently, a majority of the Board finds,
after reasonable notice to the Employee (but in no event less than fifteen (15)
days’ prior notice) and an opportunity for the Employee and his counsel to be
heard by the Board, that termination of the Employee’s employment for Cause is
justified.  Termination of the Employee’s employment for Cause shall become
effective after such finding has been made by the Board and five (5) business
days after the Board gives to the Employee notice thereof, specifying in detail
the particulars of the conduct of the Employee found by the Board to justify
such termination for Cause.

(iv)

The Company shall have the absolute right to terminate the Employee’s employment
without Cause at any time during the Contract Period by vote of a majority of
the Board.  Termination of the Employee’s employment without Cause shall be
effective five (5) business days after the Board gives to the Employee notice
thereof, specifying that such termination is without Cause.

(v)

Upon a termination of the Employee’s employment for Cause during the Contract
Period, the Employee shall have no right to receive any compensation or benefits
hereunder (other than those compensation and benefits provided in Paragraph (i)
(a) of Section 5 hereof).  Upon a termination of the Employee’s employment
without Cause or for Disability during the Contract Period, the Employee shall
be entitled to receive the compensation and

 

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benefits provided in Section 5 hereof.  Except as provided in Section 2, this
Agreement shall not apply to, and the Employee shall have no right to receive
any compensation or benefits hereunder in connection with any termination of the
Employee’s employment by the Company other than during the Contract Period.

4.

Termination of Employment By the Employee During the Contract Period.  During
the Contract Period, the Employee shall be entitled to terminate his employment
with the Company, and shall be entitled to the compensation and benefits
hereunder as follows.  

(i)

If the Employee terminates his employment with the Company during the
twelve-month period beginning immediately preceding the date of a Change in
Control other than for Good Reason, the Employee shall have no right to receive
any compensation or benefits hereunder (other than those provided in Paragraph
(i) (a) of Section 5 hereof).  

(ii)

If the Employee shall terminate his employment with the Company at any time
during the Contract Period for Good Reason, the Employee shall be entitled to
receive the benefits provided in Section 5 hereof.

(iii)

The Employee shall give the Company notice of voluntary termination of
employment pursuant to this Section 4, which notice need specify only the
Employee’s desire to terminate his employment and, if such termination is for
Good Reason, set forth in reasonable detail the facts and circumstances claimed
by the Employee to constitute Good Reason.  Termination of the Employee’s
employment by the Employee pursuant to this Section 4 shall be effective five
(5) business days after the Employee gives notice thereof to the Company.
 Except as provided in Section 2, this Agreement shall not apply to, and the
Employee shall have no right to receive, any compensation or benefits hereunder
in connection with any termination of the

 

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Employee’s employment by the Employee other than during the Contract Period.
 This Agreement shall not apply to, and the Employee shall have no right to
receive, any compensation or benefits hereunder in connection with a termination
of the Employee’s employment on account of the Employee’s death, whether or not
during the Contract Period.

5.

Compensation and Benefits Upon Termination in Certain Circumstances.  (i)  Upon
the termination of the employment of the Employee by the Company pursuant to
3(iv) (termination without Cause) hereto or by the Employee as described in
Section 4(ii) hereof, the Employee shall be entitled to receive the compensation
and benefits in Subparagraphs (a) and (b) of this Paragraph (i).  Upon the
termination of the employment of the Employee by the Company pursuant to Section
3(ii) (termination by reason of Disability) or Section 3(iii) (termination for
Cause) or by the Employee pursuant to Section 4(i), the Employee shall be
entitled to the compensation and benefits in Subparagraph (a) of this Paragraph
(i).

(a)

The Company shall pay to the Employee, not later than the Termination Date, a
lump sum cash amount equal to the sum of (I) the full base salary earned by the
Employee through the Termination Date and unpaid at the Termination Date,
calculated at the highest rate of base salary in effect at any time during the
twelve months immediately preceding the Termination Date, (II) the amount of any
base salary attributable to vacation earned by the Employee but not taken before
the Termination Date, (III) any annualized bonus accrued to the Employee through
the Termination Date and unpaid at the Termination Date, plus (IV) all other
amounts earned by the Employee and unpaid at the Termination Date.

 

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(b)

The Company shall pay to the Employee, not later than the Termination Date, a
lump sum cash amount equal to the product of the Employee’s Compensation times
____.

(ii)

If the Employee’s employment is terminated by the Company pursuant to Section
3(ii) (termination by reason of Disability) or 3(iv) (termination without Cause)
hereof, or by the Employee pursuant to Section 4(ii) hereof, the Employee shall
be entitled to receive the following compensation and benefits:

(a)

The Company shall maintain in full force and effect for the Employee’s continued
benefit all life, medical, dental, prescription drug and long- and short-term
disability plans, programs or arrangements, whether group or individual, in
which the Employee was entitled to participate at any time during the twelve 12
month-period prior to the Termination Date, until the earliest to occur of (I)
three years after the Termination Date; (II) the Employee’s death (provided that
compensation and benefits payable to his beneficiaries shall not terminate upon
his death); or (III) with respect to any particular plan, program or
arrangement, the date he is afforded a comparable benefit at a comparable cost
to the Employee by a subsequent employer.  In the event that the Employee’s
participation in any such plan, program or arrangement of the Company is
prohibited the Company shall arrange to provide the Employee with compensation
and benefits substantially similar to those which the Employee is entitled to
receive under such plan, program or arrangement for such period.

(b)

The Company shall pay to the Employee all legal fees and expenses (including
legal fees and expenses incurred in connection with an arbitration proceeding

 

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engaged in pursuant to Section 10 hereof) incurred by the Employee as a result
of such termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided to the Employee by this Agreement or
under any other plan, program or arrangement of the Company or agreement with
the Company), as and when such fees and expenses become due.

(iii)

The Employee shall not be required to mitigate the amount of any payment or
benefit provided for in this Section 5 by seeking other employment or otherwise.

(iv)

The amount of any payment or benefit provided for in this Section 5 shall not be
reduced by any compensation, benefits or other amounts paid to or earned by the
Employee as the result of employment with another employer after the Termination
Date or otherwise, except as specifically provided in Section 5(ii)(a)(III).

(v)

In the event that any payment hereunder, together with any other payment or the
value of any benefit received in connection with a Change in Control or the
termination or the Employee’s employment pursuant to this Agreement or any plan,
agreement or other arrangement between the Company and the Employee (or any
member of Company’s affiliated group (“Affiliated Group”) as such term is
defined in Section 1504 of the Internal Revenue Code of 1986, as amended (the
“Code”), without regard to Section 1504(b) thereof) (“Change in Control
Payments”) would result in the imposition of an excise tax (“Excise Tax”) under
Section 4999 of the Code, the payment hereunder may, at the election of the
Employee, be reduced by the amount necessary to prevent the imposition of such
excise tax  (the “Payment Reduction”).

 

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(a)

All  determinations required to be made under this Paragraph (v), including
whether a Payment Reduction is required to avoid the taxes described in the
preceding paragraph, the amount of any such Payment Reduction, and the
assumptions to be used in determining such conclusions, shall be made by the
Company’s certified public accountants (the “Accountants”) which shall provide
detailed supporting calculations both to the Company and the Employee within
fifteen days of the Termination Date, if applicable.  All fees and expenses of
the Accountants shall be borne solely by the Company.  Within five (5) days
after receipt of such supporting detail, the Employee may, by filing a written
notice with the Company, elect a Payment Reduction.  The Payment Reduction, if
any, shall then be made by the Company within five days of the receipt of the
Employee’s election.  If the Accountants determine that no Excise Tax is payable
by the Employee, it shall furnish the Employee with a written opinion that
failure to report the Excise Tax on Employee’s applicable U.S. Federal income
tax return for the applicable year would not result in the imposition of a
negligence or similar penalty.  Any determination by the Accountants shall be
binding on both the Employee and the Company.

(b)

If it is determined that the Payment Reductions which were not made by the
Company should have been made (“Overpayment”), or, if such Payment Reductions
which were made should not have been made (“Underpayment”), (I) the Company
shall, in the case of any such Underpayment, make a further payment to Employee,
within thirty days notice of such Underpayment, in the amount of such
Underpayment, including interest accrued with respect thereto, provided however,
such further payment shall not

 

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include any such amounts (including such interest) that would result, either
alone, or in combination with any Change in Control Payment in any Excise Tax
after giving effect to such payment by the Company to the Employee on account of
such Underpayment, or (II) in the case of an Overpayment, then Employee shall
pay an amount equal to such Overpayment, including any interest accrued with
respect thereto, such that the net effect, after such payment of such
Overpayment (including interest) from Employee to the Company would be that no
Excise Tax would be imposed on the Employee.  For purposes of this Paragraph
(v), the Accountants shall determine the amount of such Overpayment or
Underpayment.

6.

Payment Obligations Absolute.  The Company’s obligation to pay the Employee the
amounts provided for hereunder 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 Company may have
against him or anyone else and, including without limitation, any defense or
claim based on a breach by the Employee of the covenants contained herein.  All
amounts payable by the Company hereunder shall be paid without notice or demand.
 Except as expressly provided herein, the Company waives all rights which it may
now have or may hereafter have conferred upon it, by statute or otherwise, to
amend, terminate, cancel or rescind this Agreement in whole or in part.  Subject
to the right of the Company to seek arbitration under Section 10 hereof and
recover any payment made hereunder, each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Employee or from whomsoever may be entitled
thereto, for any reason whatsoever.

 

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7.

Covenant Not to Solicit.

(i)

In the event the Employee’s employment is terminated by the Company pursuant to
Section 3(iv) hereof (termination without Cause) or by the Employee pursuant to
Section 4 hereof, the Employee agrees during the three-year period following the
Termination Date not to:

(a)

offer employment to any officer or employee of the Company or any subsidiary or
affiliated company of the Company or attempt to induce any such officer or
employee to leave the employ of the Company or any subsidiary or affiliated
company of the Company; or

(b)

attempt to persuade or induce, or persuade or induce, any officer, director,
agent, customer, client or supplier of the Company or any subsidiary or
affiliated company of the Company to discontinue his or her relationship with
the Company or any subsidiary or affiliated company of the Company.

(ii)

In the event of any breach of the foregoing covenant, the Employee acknowledges
that the Company’s remedy at law is inadequate and that the Company shall be
entitled to seek injunctive relief.

8.

Successors; Binding Agreement.

(i)

This Agreement shall be binding upon any successor (whether direct or indirect,
by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the business and/or assets of the Company.  Additionally,
the Company shall require any such successor expressly to agree to assume and to
assume all of the obligations of the Company

 

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under this Agreement upon or prior to such succession taking place.  A copy of
such assumption and agreement shall be delivered to the Employee promptly after
its execution by the successor.  Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall constitute “Good
Reason.”  As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and or assets as
aforesaid, whether or not such successor executes and delivers the agreement
provided for in this Section 8(i).

(ii)

This Agreement is personal to the Employee and the Employee may not assign or
transfer any part of his rights or duties hereunder, or any compensation due to
him hereunder, to any other person, except that this Agreement shall inure to
the benefit of and be enforceable by the Employee’s personal or legal
representatives, executors, administrators, heirs, distributees, devises,
legatees or beneficiaries.  No payment pursuant to any will or the laws of
descent and distribution shall be made hereunder unless the Company shall have
been furnished with a copy of such will and/or such other evidence as the Board
may deem necessary to establish the validity of the payment.

9.

Modification; Waiver.  No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in a
writing signed by the Employee and such director or officer as may be
specifically designated by the Board.  Waiver by any party of any breach of or
failure to comply with any provision of this Agreement by the other party shall
not be construed as, or constitute, a continuing waiver of such provision, or a
waiver of any other breach of, or failure to comply with, any other provision of
this Agreement.

 

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10.

Arbitration of Disputes.

(i)

Any disagreement, dispute, controversy or claim arising out of or relating to
this Agreement or the interpretation or validity hereof shall be settled
exclusively and finally by arbitration except that in the event of the
Employee’s breach of the covenant contained in Section 7 hereof, the Company
shall be entitled to seek injunctive relief pursuant to Section 7(ii) hereof.
 It is specifically understood and agreed that any disagreement, dispute or
controversy which cannot be resolved between the parties, including without
limitation any matter relating to the interpretation of this Agreement, may be
submitted to arbitration irrespective of the magnitude thereof, the amount in
controversy or whether such disagreement, dispute or controversy otherwise would
be considered justiciable or ripe for resolution by a court or arbitral
tribunal.

(ii)

The arbitration shall be conducted in accordance with the Commercial Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”).

(iii)

The arbitral tribunal shall consist of one arbitrator.  The parties to the
arbitration jointly shall directly appoint such arbitrator within 30 days of
initiation of the arbitration.  If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules and shall be a person who (a) maintains his
principal place of business within 30 miles of the City of Houston, Texas, and
(b) has had substantial experience (whether practical or academic) in mergers
and acquisitions or, if no such person is available, in employee compensation
and benefits.  The Company shall pay all of the fees, if any, and expenses of
such arbitrator.

 

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(iv)

The arbitration shall be conducted within 30 miles of the City of Houston,
Texas, or in such other city in the United States of America as the parties to
the dispute may designate by mutual written consent.

(v)

At any oral hearing of evidence in connection with the arbitration, each party
thereto or its legal counsel shall have the right to examine its witnesses and
to cross-examine the witnesses of any opposing party.  No evidence of any
witness shall be presented unless the opposing party or parties shall have the
opportunity to cross-examine such witness, except as the parties to the dispute
otherwise agree in writing or except under extraordinary circumstances where the
interests of justice require a different procedure.

(vi)

Any decision or award of the arbitral tribunal shall be final and binding upon
the parties to the arbitration proceeding.  The parties hereto hereby waive, to
the extent permitted by law, any rights to appeal or to seek review of such
award by any court or tribunal.  The parties hereto agree that the arbitral
award may be enforced against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon the arbitral award
may be entered in any court having jurisdiction.

(vii)

Nothing herein contained shall be deemed to give the arbitral tribunal any
authority, power, or right to alter, change, amend, modify, add to, or subtract
from any of the provisions of this Agreement.

11.

Notice.  All notices, requests, demands and other communications required or
permitted to be given by either party to the other party by this Agreement
(including, without limitation, any notice of termination of employment and any
notice under the Arbitration Rules of an intention to arbitrate) shall be in
writing and shall be deemed to have been duly given

 

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when delivered personally or received by certified or registered mail, return
receipt requested, postage prepaid, at the address of the other party, as
follows:

If to the Company, to:

Southwestern Energy Company

2350 N. Sam Houston Parkway E., Suite 125
Houston, Texas  77032
Attention:  Board of Directors and Secretary

If to the Employee, to:

[                                   ]

2350 N. Sam Houston Pkwy. E., Suite 125

Houston, Texas  77032

Either party hereto may change its address for purposes of this Section 11 by
giving fifteen (15) days’ prior notice to the other party hereto.

12.

Severability.  If any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

13.

Headings.  The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
this Agreement.

14.

Counterparts.  This Agreement may be executed in several counterparts, each of
which shall be deemed an original.

 

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15.

Governing Law.  This Agreement has been executed and delivered in the State of
Delaware and shall in all respects be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.

16.

Payroll and Withholding Taxes.  The Company may withhold from any amounts
payable to the Employee hereunder all federal, state, city or other taxes that
the Company may reasonably determine are required to be withheld pursuant to any
applicable law or regulation, provided however, that the Company’s
determinations respecting matters described in Paragraph 5(v) shall be based
upon and shall be consistent with the determinations by the Accountants.

17.

Entire Agreement.  Except as explicitly provided for herein, this Agreement
supersedes any and all other oral or written agreements heretofore made relating
to the subject matter hereof between the Company and the Employee, and
constitutes the entire agreement of the parties relating to the subject matter
hereof; provided, that, this Agreement shall not supersede or limit or in any
way affect the amount of compensation or benefits to which the Employee would be
entitled under any other agreement, plan, program or arrangement with the
Company including any such agreement, plan, program or arrangement providing for
compensation and benefits in the nature of severance pay.

18.

Application of Section 409A of the Code.

(a)

General.  To the extent applicable, it is intended that this Agreement comply
with the provisions of Section 409A of the Code, so as to prevent inclusion in
gross income of any amounts payable or benefits provided hereunder in a taxable
year that is prior to the taxable year or years in which such amounts or
benefits would otherwise actually be

 

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distributed, provided or otherwise made available to the Employee.  This
Agreement shall be construed, administered, and governed in a manner consistent
with this intent and the following provisions of this paragraph shall control
over any contrary provisions of this Agreement.  

(b)

Restrictions on Specified Employees.  If the Company determines that the
Employee is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code and delayed payment of any amount or commencement
of any benefit under this Agreement is required to avoid a prohibited
distribution under Section 409A(a)(2) of the Code, then, to such extent as
required, deferred compensation payable hereunder in connection with the
Employee’s termination of employment will be delayed and paid, with interest at
the short term applicable federal rate as in effect as of the termination date,
in a single lump sum six months and one day thereafter (or if earlier, the date
of the Employee’s death).  The Committee shall determine whether the Employee is
a “specified employee” based on the procedures adopted by the Company in
writing, which procedures shall comply with the applicable limitations under
Section 409A of the Code, and the rules prescribed in Treasury Regulation
§1.409A-1(i).

(c)

Separation from Service.  Amounts payable hereunder upon the Employee’s
termination or severance of employment with the Company that constitute deferred
compensation under Section 409A of the Code shall not be paid prior to the
Employee’s “separation from service” within the meaning of Section 409A of the
Code.

(d)

Installments.  For purposes of Section 409A of the Code, any right to a series
of installment payments under this Agreement shall be treated as a right to a
series of separate payments so that each payment is designated as a separate
payment for purposes of Section 409A of the Code.

 

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(e)

Reimbursements.  All reimbursements and in-kind benefits provided under this
Agreement which constitute a payment of nonqualified deferred compensation under
Section 409A of the Code, including any payments provided under Section 5 and,
shall be made or provided in accordance with the requirements of Section 409A of
the Code, including, where applicable, the requirements that:

(i)

any reimbursement is for expenses incurred during an extended period of time
following termination of employment;

(ii)

the amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year;

(iii)

the reimbursement of an eligible expense will be made on or before the last day
of the calendar year following the year in which the expense is incurred; and

(iv)

the right to reimbursement or in kind benefits is not subject to liquidation or
exchange for another benefit.

(f)

References to Section 409A.  References in this Agreement to Section 409A of the
Code include both that section of the Code itself and any guidance promulgated
thereunder.

(g)

Application of Section 409A.  The Company makes no representation or warranty
and shall have no liability to the Employee or any other person if any
provisions of this Agreement are determined to constitute deferred compensation
subject to Section 409A of the Code but do not satisfy an exemption from, or the
conditions of, such section.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

Southwestern Energy Company

By:___________________________

Chairman of the Compensation Committee
Southwestern Energy Company

By:___________________________

President and Chief Executive Officer
Southwestern Energy Company

_______________________________