Exhibit 10.4

 

PLAINS EXPLORATION & PRODUCTION COMPANY

LONG-TERM RETENTION AND DEFERRAL AGREEMENT

 

THIS AGREEMENT (“Agreement”) is made by and between Plains Exploration &
Production Company (the “Company”) and ______________________________________
(“Executive”) effective this _______ day of _________________, 2005 pursuant to
the terms of the Plains Exploration & Production Company Executives’ Long-Term
Retention and Deferred Compensation Arrangement (the “Plan”), and the Plains
Exploration & Production Company 2004 Stock Incentive Plan as amended from time
to time, or any successor plan (the “2004 Stock Plan”), which are incorporated
herein by reference. Terms used but not defined herein have the meanings
assigned to them in the Plan.

 

WHEREAS, effective as of June 9, 2004, Executive received an award of two
hundred and fifty thousand (250,000) Restricted Stock Units (the “2004 Award”);

 

NOW THEREFORE, the parties agree as follows:

 

1.      As of the last day of the calendar quarter in which Executive becomes
fully Vested in the 2004 Award, Executive shall have credited to his Account
under the Plan thirty-three thousand (33,000) Restricted Stock Units subject to
the terms of the Plan and the 2004 Plan (the “Initial Award Date”). Additional
awards of thirty-three thousand (33,000) Restricted Stock Units shall be
credited to Executive’s Account on each of the first and second anniversaries of
the Initial Award Date; provided, however, that the number of Restricted Stock
Units Executive shall be entitled to have credited to his Account on each such
date shall increase to fifty thousand (50,000) effective as of the first credit
date (each, an “Annual Credit Date”) immediately following the date that the
closing price per share of the Company’s common stock equals or exceeds $75.84
on any ten out of twenty consecutive trading days on the New York Stock Exchange
or such other exchange or market on which the shares primarily trade. If
Executive is still employed by the Company on the fourth anniversary of the
Initial Award Date (the “Second Award Date”), an additional 33,000 Restricted
Stock Units (or 50,000 Restricted Stock Units if the annual amount of Restricted
Stock Units shall have increased to 50,000 as provided above) shall be credited
to Executive’s Account on such Second Award Date and on each of the first and
second anniversaries of such Second Award Date. If Executive is still employed
by the Company on the fourth anniversary of the Second Award Date (the “Third
Award Date”), an additional 33,000 Restricted Stock Units (or 50,000 Restricted
Stock Units if the annual amount of Restricted Stock Units shall have increased
pursuant to the terms of Paragraph 1 above) shall be credited to Executive’s
Account on such Third Award Date and on each of the first and second
anniversaries of such Third Award Date. If Executive is still employed by the
Company on the first anniversary of the Third Award Date (the “Fourth Award
Date”), an additional 33,000 Restricted Stock Units (or 50,000 Restricted Stock
Units if the annual amount of Restricted Stock Units shall have increased to
50,000 as provided above) shall be credited to Executive’s Account on such
Fourth Award Date. The Initial Award Date, the Second Award Date, the Third
Award Date and the Fourth Award Date shall each be referred to herein as an
“Award Date.” Awards hereunder shall be made under the Company’s 2004 Stock Plan
or, if sufficient shares of Common Stock are not available under such plan, such
other plan or plans that the Company hereby agrees to adopt and to make all
required filings, obtain all approvals and take all other required regulatory
actions, as soon as administratively feasible, in order to make the foregoing
awards or the economic equivalent thereto. Each date on which Restricted

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Stock Units are credited to Executive’s Account, including any Award Date shall
be referred to as an “Annual Credit Date.”

 

2.      The Restricted Stock Units credited to Executive’s Account on each of
the first six Annual Credit Dates shall become Vested in full at 11:59 p.m. on
the fifth (5th) anniversary of each such Annual Credit Date. The Restricted
Stock Units credited to Executive’s Account on the seventh (7th), eighth (8th),
ninth (9th) and tenth (10th) Annual Credit Dates shall become Vested in full on
the fourth (4th), third (3rd), second (2nd) and first (1st) anniversaries of
each such Annual Credit Date, respectively (each such Vesting date, a “Retention
Award Vesting Date”). Except as set forth in this Agreement, the Plan or the
2004 Stock Plan, Executive must be an employee of the Company (or any parent or
subsidiary) on a Retention Award Vesting Date for the applicable Restricted
Stock Units to become Vested.

 

3.      Except as otherwise provided in paragraph 4 below, if Executive ceases
to be employed by the Company (or any parent or subsidiary) for any reason at
any time prior to any Annual Credit Date or Retention Award Vesting Date, no
further credits will be made to Executive’s Account and any unvested Restricted
Stock Units shall be automatically forfeited upon such cessation of employment.

 

4.      In the event of a Change of Control, Executive’s Account shall be
immediately credited with all the Restricted Stock Units that could be credited
to Executive’s Account on each of the ten Annual Credit Dates under this
Agreement and shall be fully Vested. In the event of Executive’s death or
Disability or termination of Executive’s employment without Cause or for Good
Reason, both as defined under Executive’s employment agreement with the Company
dated as of June 9, 2004, Executive’s Account shall be immediately credited with
the Restricted Stock Units that would be credited to Executive’s Account on each
Annual Credit Date prior to the next Award Date and shall be fully Vested.

 

5.      Absent a Deferral Election or Payment Date change by Executive to a
later date or dates, the Payment Date with respect to the portion of Executive’s
Account applicable to the Vested Restricted Stock Units granted pursuant to this
Agreement shall be the earlier of:

 

  (i) the tenth anniversary of the Initial Credit Date;

 

  (ii) death of the Executive;

 

  (iii) Disability of the Executive;

 

  (iv) six months (or such shorter period as may be permitted pursuant to
regulations or interpretations of Section 409A of the Code) following the date
of Executive’s separation from service with the Company following a termination
without Cause, for Good Reason or at any time following a Change of Control that
James C. Flores is not Chief Executive Officer of the Company and Executive does
not report directly to James C. Flores; or

 

  (v) occurrence of an unforeseeable emergency (within the meaning of
Section 409A of the Code).

 

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6.      Executive may make a Deferral Election according to the terms of the
Plan with respect to all or any portion of the Restricted Stock Units to be
credited to Executive’s Account on any Annual Credit Date provided that such
election is made in the calendar year prior to the applicable Annual Credit
Date. Executive may elect to change the applicable Payment Date in accordance
with the terms of section 3.7(b) of the Plan.

 

7.      Subject to the provisions of section 3.10 of the Plan, Restricted Stock
Units shall be credited to Executive’s Account pursuant to the terms of the
Plains Exploration & Production Company 2004 Stock Incentive Plan as amended
from time to time or any successor plan of the Company. If, for any reason,
Restricted Stock Units may not be credited to Executive’s Account pursuant to
the 2004 Stock Incentive Plan or any successor plan of the Company as of any
Annual Credit Date, an amount of cash equal to the Fair Market Value of the
Restricted Stock Units shall be credited to Executive’s Account as of such date
pursuant to the provisions of section 3.10 of the Plan.

 

8.      In the event of any subdivision or consolidation of outstanding shares
of Common Stock, declaration of a dividend payable in shares of Common Stock or
other stock split, then (i) the number of Restricted Stock Units credited and to
be credited to Executive’s Account pursuant to this Agreement shall each be
proportionately adjusted to reflect such transaction. In the event of any other
recapitalization or capital reorganization of the Company, any consolidation or
merger of the Company with another corporation or entity, the adoption by the
Company of any plan of exchange affecting the Common Stock or any distribution
to holders of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Company shall make
appropriate adjustments to the number of Restricted Stock Units credited and to
be credited to Executive’s Account to give effect to such transaction; provided
that such adjustments shall only be such as are necessary to preserve, without
increasing, the value of such units. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Company shall be authorized to issue or assume units by means
of substitution of new units, as appropriate, for previously issued units or an
assumption of previously issued units as part of such adjustment.

 

9.      Tax withholding shall be made in accordance with the terms of the Plan.

 

IN WITNESS WHEREOF, the parties hereto have signed this to be effective as of
the last date of signature.

 

PLAINS EXPLORATION & PRODUCTION COMPANY

 

 

By:_________________________________________    Date:____________________
Name:_______________________________________     
Title:________________________________________     

 

EXECUTIVE

 

 

By:_________________________________________    Date:____________________

 

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