Exhibit 10.25

THIRD AMENDED AND RESTATED

XTO ENERGY INC.

MANAGEMENT GROUP EMPLOYEE SEVERANCE PROTECTION PLAN

WHEREAS, the Amended and Restated XTO Energy Inc. Management Group Employee
Severance Protection Plan (the “Prior Plan”) was adopted by the Board of
Directors acting on behalf of XTO Energy Inc., a Delaware corporation (the
“Company”), effective as of August 20, 2002, and amended and restated effective
as of August 15, 2006; and

WHEREAS, pursuant to Section 8.02 of the Prior Plan, the Prior Plan generally
may be amended by resolution adopted by two-thirds ( 2/3) of the Board of
Directors of the Company; and

WHEREAS, pursuant to a resolution adopted by two-thirds ( 2/3) of the Board of
Directors of the Company, the Board of Directors of the Company desires to
replace the Prior Plan with this Plan and to amend and restate the Prior Plan to
reflect certain provisions of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) and any guidance issued thereunder. This amendment is
intended as good faith compliance with the requirements of Section 409A of the
Code and is to be construed in accordance with Section 409A of the Code and the
guidance issued thereunder; and

WHEREAS, the Board of Directors of the Company recognizes that the current
business environment makes it difficult to attract and retain highly qualified
employees unless a certain degree of security can be offered to such individuals
against organizational and personnel changes which could result from a Change in
Control (as defined below) of the Company; and

WHEREAS, even rumors of acquisitions or mergers may cause employees to consider
major career changes in an effort to ensure financial security for themselves
and their families; and

WHEREAS, the Company desires to ensure fair treatment of its employees, and
employees of certain subsidiaries of the Company which adopt this Plan as
Participating Employers in the event of a Change in Control and to allow them to
make critical career decisions without undue time pressure and financial
uncertainty, thereby increasing their willingness to remain with their Employer
notwithstanding the outcome of a possible Change in Control transaction; and

WHEREAS, the Company recognizes that its employees and employees of
Participating Employers will be involved in evaluating or negotiating any
offers, proposals or other transactions which could result in a Change in
Control of the Company and believes that it is in the best interest of the
Company and its stockholders for such employees to be in a position, free from
personal financial and employment considerations, to assess objectively and
pursue aggressively the interests of the Company and its stockholders in making
these evaluations and carrying on such negotiations; and

WHEREAS, the Board of Directors of the Company believes it is essential to
provide such employees with compensation arrangements upon a Change in Control
of the Company which provide such employees with individual financial security
and which are competitive with those of other corporations.

NOW, THEREFORE, in order to fulfill the above purposes, the following plan has
been developed and is hereby adopted.

 

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ARTICLE I.

ESTABLISHMENT OF PLAN

As of the Effective Date, the Company hereby amends and restates the Third
Amended and Restated XTO Energy Inc. Management Group Employee Severance
Protection Plan, as set forth in this document (the “Plan”).

ARTICLE II.

DEFINITIONS

As used herein, the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.

Section 2.01 Base Salary. The amount a Participant receives as wages or salary
on an annualized basis, calculated immediately prior to a Change in Control.

Section 2.02 Board. The Board of Directors of the Company.

Section 2.03 Bonus Amount. An amount equal to (i) the greater of a Participant’s
two most recent regular bonuses, if any, paid in the twelve (12) months prior to
the date of the Change in Control, multiplied by two, plus (ii) the amount, if
any, of the Participant’s monthly car allowance on the date of the Change in
Control, multiplied by twelve, plus (iii) the amount, if any, of any special
bonuses awarded to a Participant during the three years preceding the Change in
Control. A special bonus will include any bonus paid as a result of an
individual becoming an employee of the Company but will not include any bonus
paid related to moving expenses.

Section 2.04 Cause. The Employer shall have “Cause” to terminate a Participant
if the Participant (i) willfully and continually fails to substantially perform
his or her duties with the Employer (other than a failure resulting from the
Participant’s incapacity due to physical or mental illness) which failure
continues for a period of at least thirty (30) days after a written notice of
demand for substantial performance has been delivered to the Participant
specifying the manner in which the Participant has failed to substantially
perform, or (ii) willfully engages in illegal conduct, gross misconduct, or a
clearly established violation of Employer’s written policies and procedures,
which is demonstrably and materially injurious to the Employer, monetarily or
otherwise; provided, however, that no termination of the Participant’s
employment shall be for Cause until (x) there shall have been delivered to the
Participant a copy of a written notice specifying in detail the particulars of
the Participant’s conduct which violates either (i) or (ii) above, (y) the
Participant shall have been provided an opportunity to be heard by the Board
(with the assistance of the Participant’s counsel if the Participant so
desires), and (z) a resolution is adopted in good faith by two-thirds ( 2/3) of
the Board confirming said violation. No act, nor failure to act, on the
Participant’s part, shall be considered “willful” unless he or she has acted or
failed to act with an absence of good faith and without a reasonable belief that
his or her action or failure to act was in the best interest of the Employer.
Notwithstanding anything contained in this Plan to the contrary, no failure to
perform by the Participant after Notice of Termination is given by or to the
Participant shall constitute Cause.

Section 2.05 Change in Control. A “Change in Control” shall mean the occurrence
of one or more of the following events as objectively determined based upon all
of the facts and circumstances without the exercise of discretion by the Board:
(i) a Change in Ownership of the Company; (ii) a Change in Effective Control of
the Company; or (iii) a Change in the Ownership of a Substantial Portion of the
Assets of the Company. For purposes hereof:

 

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(a) “Acting as a Group” shall mean “acting as a group” as such phrase is defined
under Section 409A of the Code and the regulations or other guidance issued
thereunder.

(b) “Change in Ownership” shall mean that any one person or more than one person
Acting as a Group acquires ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than 50% of the total fair
market value or total voting power of the stock of the Company; provided,
however, that if any one person or more than one person Acting as a Group, is
considered to own more than 50% of the total fair market value or total voting
power of the stock of the Company, the acquisition of any additional stock by
the same person or persons shall not be considered a Change in Ownership or a
Change in Effective Control.

(c) “Change in Effective Control” shall mean that either:

(i) any one person or more than one person Acting as a Group acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of the stock of the Company
possessing 35% or more of the total voting power of the stock of the Company; or

(ii) a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election, provided
that for purposes of this paragraph (ii) the Company refers solely to the
“relevant corporation” (as such term is defined in Section 409A of the Code and
the regulations or other guidance issued thereunder) for which no other
corporation is a majority shareholder.

Notwithstanding the foregoing, if any one person or more than one person Acting
as a Group, is considered to effectively control the Company, the acquisition of
additional control by the same person or persons shall not be considered to
cause a Change in Effective Control.

(d) “Change in the Ownership of a Substantial Portion of the Assets” shall mean
any one person or more than one person Acting as a Group acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
Gross Fair Market Value equal to more than 40% of the total Gross Fair Market
Value of all of the assets of the Company immediately prior to such acquisition
or acquisitions.

A Change in the Ownership of a Substantial Portion of the Assets shall not be
deemed to have occurred if Company assets are transferred to:

(i) a shareholder of the Company (immediately before the asset transfer) in
exchange for or with respect to its stock;

(ii) an entity, 50% or more of the total value of voting power of which is
owned, directly or indirectly, by the Company;

(iii) a person, or more than one person Acting as a Group, that owns, directly
or indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company; or

 

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(iv) an entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly, by a person described in sub-paragraph (d)(iii).

For purposes of this paragraph and except as otherwise provided, a person’s
status is determined immediately after the transfer of assets.

(e) For purposes of this Section 2.05, “Gross Fair Market Value” shall mean the
value of the Company’s assets, or the value of the Company’s assets being
disposed of, determined without regard to any liabilities associated with such
assets.

Notwithstanding the foregoing provisions of this Section 2.05, if a
Participant’s employment with the Employer is terminated by the Employer other
than for “Cause” prior to the date on which a Change in Control occurs, and it
is reasonably demonstrated that such termination (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control, or (ii) otherwise arose in connection with a Change in Control, then
for all purposes hereof, such termination shall be deemed to have occurred
immediately following a Change in Control.

Notwithstanding the foregoing provisions of this Section 2.05, in the event a
benefit provided upon the occurrence of a Change in Control is subject to
Section 409A of the Code, then, in lieu of the foregoing definition and to the
extent necessary to comply with the requirements of Section 409A of the Code,
the definition of “Change in Control” for purposes of such benefit shall be the
definition provided for under Section 409A of the Code and the regulations or
other guidance issued thereunder.

Notwithstanding anything herein to the contrary, under no circumstances will a
change in the constitution of the board of directors of any Subsidiary, a change
in the beneficial ownership of any Subsidiary, the merger or consolidation of a
Subsidiary with any other entity, the sale of all or substantially all of the
assets of any Subsidiary or the liquidation or dissolution of any Subsidiary
constitute a “Change in Control” under this Plan.

Section 2.06 Company. XTO Energy Inc., a Delaware corporation.

Section 2.07 Effective Date. The date the Plan is approved by the Board, or such
other date as the Board shall designate in its resolution approving the Plan.

Section 2.08 Employer. The Company and any Subsidiary of the Company which
adopts this Plan as a Participating Employer. With respect to a Participant who
is not an employee of the Company, any reference under this Plan to such
Participant’s “Employer” shall refer only to the employer of the Participant,
and in no event shall be construed to refer to the Company as well.

Section 2.09 Good Reason. “Good Reason” shall mean the occurrence of any of the
following events or conditions:

(a) a material diminution in the Participant’s authority, duties, or
responsibilities (including reporting responsibilities), except in connection
with the termination of his or her employment for Cause, as a result of his or
her disability or death, or by the Participant other than for Good Reason;

(b) a material diminution in the Participant’s Base Salary; or

(c) Employer’s requiring the Participant (without the consent of the
Participant) to be based at any place outside a twenty-five (25) mile radius of
his or her place of employment

 

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immediately prior to such proposed relocation, except for reasonably required
travel on Employer’s business which is not materially greater than such travel
requirements prior thereto.

The Participant must provide notice to the Employer of the existence of the
condition constituting “Good Reason” within a period not to exceed ninety
(90) days of the initial existence of the condition, upon the notice of which
the Employer must be provided a period of at least thirty (30) days during which
it may remedy the condition and not be required to pay the amount. The
separation from service must occur within the first two years following the
initial existence of one or more of the Good Reason conditions arising without
the consent of the Participant.

Section 2.10 Management Group Employee. Each employee of the Employer who has
been designated by his or her Employer as member of the Management Group or the
Management Group II, except those employees that have a written employment
contract with Employer or a Participating Employer.

Section 2.11 Notice of Termination. A notice which indicates the specific
provisions in this Plan relied upon as the basis for any termination of
employment which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Participant’s employment under
the provision so indicated; no purported termination of employment shall be
effective without such Notice of Termination.

Section 2.12 Participant. A Participant who meets the eligibility requirements
of Article III.

Section 2.13 Participating Employer. A Subsidiary of the Company which adopts
this Plan in accordance with Section 8.04 below.

Section 2.14 Payment Date. For a Participant, the date on which he or she is
entitled to a Retention Benefit after a Change in Control pursuant to
Section 4.02; the Payment Date for Participants are as follows: for the
Executive and Senior Vice Presidents of the Company, forty-five (45) days after
the date of the Change in Control; for all other officers of the Company, ninety
(90) days after the date of the Change in Control; and for all other
Participants, one hundred eighty (180) days after the date of the Change in
Control.

Section 2.15 Plan Benefit. The benefits payable in accordance with Article IV of
the Plan.

Section 2.16 Retention Benefit. The benefits payable in accordance with
Section 4.02 of the Plan.

Section 2.17 Severance Benefit. The benefits payable in accordance with
Section 4.03 of the Plan.

Section 2.18 Subsidiary. Any subsidiary of the Company, and any wholly or
partially owned partnership, joint venture, limited liability company,
corporation, and other form of investment by the Company.

Section 2.19 Termination Date. The date on which a Participant incurs a
“separation from service” as defined by Section 409A of the Code in accordance
with Section 5.02.

A pronoun or adjective in the masculine gender includes the feminine gender, and
the singular includes the plural, unless the context clearly indicates
otherwise.

 

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ARTICLE III.

ELIGIBILITY AND PARTICIPATION

Section 3.01 Participation. Each Management Group Employee shall automatically
become a Participant in the Plan as of the Effective Date, or the date he or she
satisfies the definition of a Management Group Employee, whichever occurs later.

Section 3.02 Duration of Participation. A Participant shall cease to be a
Participant in the Plan upon the first to occur of: (i) the date he or she
ceases to be a Management Group Employee of the Employer at any time prior to a
Change in Control; (ii) the date his or her employment is terminated following a
Change in Control under circumstances where he or she is not entitled to a
benefit under the terms of Article IV of the Plan; or (iii) the date on which he
or she has received all of the benefits to which he or she is entitled under
this Plan.

ARTICLE IV.

BENEFITS

Section 4.01 Right to Benefits.

(a) After a Change in Control has occurred, a Participant shall be entitled to
receive a Retention Benefit from the Employer in the amount provided in
Section 4.02 if he or she (i) remains employed by the Employer on the Payment
Date or (ii) incurs a “separation from service” as defined by Section 409A of
the Code prior to such Participant’s Payment Date for any reason other than
(A) termination by the Employer for Cause or (B) termination by the Participant
for other than Good Reason.

(b) A Participant shall also be entitled to receive from the Employer a
Severance Benefit in the amount provided in Section 4.03 if, within two
(2) years after a Change in Control, the Participant incurs a “separation from
service” as defined by Section 409A of the Code for any reason other than
(i) termination by the Employer for Cause or (ii) termination by the Participant
other than for Good Reason.

(c) Notwithstanding any other provision of the Plan, the sale, divestiture, or
other disposition of a Subsidiary shall not be deemed to be a termination of
employment of employees employed by such Subsidiary, and such employees shall
not be entitled to benefits from the Company or any Participating Employer under
this Plan as a result of such sale, divestiture, or other disposition, or as a
result of any subsequent termination of employment.

Section 4.02 Amount of Retention Benefit. After a Participant is entitled to
receive a Retention Benefit in accordance with Section 4.01(a), the Employer
shall pay to the Participant an amount in cash equal to:

(a) for the Company’s Executive Vice Presidents and Senior Vice Presidents, two
and one-half (2- 1/2) times the sum of (i) the Participant’s Base Salary and
(ii) the Bonus Amount, to be paid on or before ten (10) days after the Payment
Date;

(b) for all other officers of Company, two (2) times the sum of (i) the
Participant’s Base Salary and (ii) the Bonus Amount, to be paid on or before ten
(10) days after the Payment Date; and

 

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(c) for all other Management Group Employees, one and one-half (1.5) times the
sum of (i) the Participant’s Base Salary and (ii) the Bonus Amount, to be paid
on or before ten (10) days after the Payment Date.

Notwithstanding Section 2.01, for purposes of this Section 4.02, “Base Salary”
shall mean the greatest of the Participant’s base salary on (i) the date of the
Change in Control, (ii) the Payment Date, or (iii) if the Participant incurs a
“separation from service” as defined by Section 409A of the Code prior to the
Payment Date, the Participant’s Termination Date.

Section 4.03 Amount of Severance Benefit. If a Participant’s employment is
terminated in circumstances entitling him or her to a Severance Benefit as
provided in Section 4.01(b), such Participant shall be entitled to the following
benefits:

(a) For a period of eighteen (18) months subsequent to the Participant’s
Termination Date, the Employer shall at its sole expense continue on behalf of
the Participant and his or her covered dependents and beneficiaries, all
medical, dental, vision, and health benefits and insurance coverage that were
being provided to the Participant immediately prior to his or her Termination
Date. The benefits provided in this Section 4.03(a) shall be no less favorable
to the Participant, in terms of amounts and deductibles and costs to him or her,
than the coverage provided the Participant under the plans providing such
benefits at the time Notice of Termination is given. The Employer’s obligation
hereunder to provide a benefit shall terminate if the Participant obtains
comparable coverage under a subsequent employer’s benefit plan. For purposes of
the preceding sentence, benefits will not be comparable during any waiting
period for eligibility for such benefits or during any period during which there
is a preexisting condition limitation on such benefits. The Employer also shall
pay a lump sum equal to the amount of any additional income tax payable by the
Participant and attributable to the benefits provided under this Section 4.03(a)
at the time such tax is imposed upon the Participant. In the event that the
Participant’s participation in any such coverage is barred under the general
terms and provisions of the plans and programs under which such coverage is
provided, or any such coverage is discontinued or the benefits thereunder are
materially reduced, the Employer shall provide benefits to the Participant, or
ensure that such benefits are provided to the Participant, that are
substantially similar to those which the Participant was entitled to receive
under such coverage immediately prior to the Notice of Termination. At the end
of the period of coverage set forth above, the Participant shall have the option
to have assigned to him or her at no cost to the Participant and with no
apportionment of prepaid premiums, any assignable insurance owned by the
Employer and relating specifically to the Participant, and the Participant shall
be entitled to all health and similar benefits that are or would have been made
available to the Participant under law.

(b) The Employer shall transfer to the Participant, within thirty (30) days
after the Participant’s Termination Date, any right, title or ownership in any
club memberships provided by the Employer for use by the Participant.

(c) The Employer shall transfer to the Participant, within thirty (30) days
after the Participant’s Termination Date, any right, title or ownership in any
life insurance owned by the Employer on the Participant’s life.

Section 4.04 Vesting of Stock Plans. In the event of a Change in Control, each
Participant shall be entitled to the following benefits:

 

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(a) Unless otherwise specifically provided to the contrary in any option
agreement, restricted stock agreement, or other agreement relating to
equity-type compensation between the Participant and the Employer, all units,
stock options, incentive stock options, performance shares, stock appreciation
rights and royalty trust options (under the XTO Energy Inc. Amended and Restated
2004 Stock Incentive Plan, as amended or any other plan or arrangement)
(hereafter sometimes referred to as the “Rights”) held by the Participant
immediately prior to the Change in Control, and any such Rights received by the
Participant after such Change in Control (whether or not received in exchange
for or in substitution for existing Rights), shall immediately become one
hundred percent (100%) vested and exercisable, and the Participant shall become
one hundred percent (100%) vested in all shares of restricted stock held by or
for the benefit of the Participant; provided, however, that to the extent the
Employer is unable to provide for such acceleration of vesting with respect to
any such Rights or shares of restricted stock, the Employer shall provide in
lieu thereof a lump-sum cash payment within thirty (30) days after the Change in
Control, equal to the difference between the total value of such unaccelerated
Rights or shares of restricted stock (the “Stock Rights”) as of the Change in
Control and the total value if such Stock Rights had accelerated vested. The
value of such accelerated vesting in the Participant’s Stock Rights shall be
determined by the Board in good faith based on a valuation performed by an
independent consultant selected by the Board; any such Stock Rights which are
not in existence on the Change in Control shall be valued as of the date of the
Change in Control.

(b) Unless otherwise specifically provided to the contrary in any option
agreement between the Participant and the Employer, any previously unexercised
options under any such option agreement shall not terminate or be forfeited and
shall remain outstanding until the latest date on which the option would
otherwise expire under the terms of such agreement had the Participant’s
employment not terminated. However, with respect to any option (or portion of an
option) for which either (i) the Employer is unable to provide for the extension
of the post-termination exercise period as provided in the preceding sentence,
or (ii) providing for the extension would cause an option (or a portion of an
option) to be subject to Section 409A of the Code, then the option (or portion
of an option) shall not be so extended and the Employer shall make a lump-sum
cash payment to the Participant, within thirty (30) days after the Participant’s
Termination Date, equal to the value, as of the Participant’s Termination Date,
of the extension of the post-termination exercise periods for all options (or
portions of options) which cannot be so extended. The value of such extension
shall be determined by the Board in good faith based on a valuation performed by
an independent consultant selected by the Board. Notwithstanding the foregoing,
if, in accordance with the foregoing, the post-termination exercise periods of
an incentive stock option held by the Participant may be extended without
causing application of Section 409A of the Code, the extension of such options
under this Section 4.04(b) shall only be applicable if the Participant has not
exercised such option within three (3) months after the Participant’s
Termination Date, and, in that event, such options shall immediately convert to
nonqualified stock options.

Section 4.05 Mitigation or Set-off of Amounts Payable Hereunder. The Participant
shall not be required to mitigate the amount of any payment provided for in this
Article IV by seeking other employment or otherwise, and except at otherwise
provided in Section 4.03(a), nor shall the amount of any payment provided for in
this Article IV be reduced by any compensation earned by the Participant as the
result of employment by the Company or any successor after the Payment Date or
by another employer after the Termination Date, or otherwise. The Employer’s
obligations hereunder also shall not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right or action which the Employer may have
against the Participant.

 

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Section 4.06 Company Guarantee of Plan Benefits. In the event a Participant
becomes entitled to receive from the Employer a benefit under this Article IV
and such Employer fails to pay such benefit, the Company shall assume the
obligation of such Employer to pay such benefit. In consideration of the
Company’s assumption of the obligation to pay any such Plan Benefits, the
Company (as the source of payment of benefits under the Plan) shall be
subrogated to any recovery (irrespective of whether there is recovery from the
third party of the full amount of all claims against the third party) or right
to recovery of either a Participant or his or her legal representative against
the Employer or any other person or entity. The Participant or his or her legal
representative shall cooperate in doing what is reasonably necessary to assist
the Company in exercising such rights, including but not limited to notifying
the Company of the institution of any claim for such Plan Benefits, and
notifying the defendant of the Company’s subrogation rights. Neither the
Participant nor his or her legal representative shall do anything after a loss
to prejudice such rights.

In its sole discretion, the Company reserves the right to prosecute an action in
the name of the Participant or his or her legal representative against any party
potentially liable to the Participant for such Plan Benefits. The Company shall
have the absolute discretion to settle subrogation claims on any basis it deems
warranted and appropriate under the circumstances.

The Company shall be entitled, to the extent of any payments made to or on
behalf of a Participant, to be paid first from the proceeds of any settlement or
judgment that may result from the exercise of any rights of recovery asserted by
or on behalf of a Participant or his or her legal representative against any
party liable for such Plan Benefits. The Company shall be reimbursed by the
Participant or his or her legal representative an amount of money equal to all
sums paid by the Employer under the Plan to or on behalf of the Participant. If
the Company prosecuted such action, it shall be entitled to reimbursement for
all attorneys’ fees, costs and expenses incurred in such prosecution. The right
is also hereby given the Company to receive directly from the Employer or any
third party(ies), attorney(s) or insurance company(ies) an amount equal to the
amount paid to the Participant.

Section 4.07 Election of Plan Benefits. A Participant who is entitled to
severance benefits under an employment agreement with the Employer may elect, in
writing within ten (10) days after his or her Termination Date, to receive the
Plan Benefits provided under this Plan in lieu of, but not in addition to, such
other severance benefits as may be provided by such other agreement. In the
event that no election is made, the Participant shall forego his or her right to
receive the Plan Benefits provided under this Plan. In the event a Participant’s
election (or right to make an election) under this Section 4.07 would result in
a violation of Section 409A of the Code and as a result the Participant would be
subject to the taxes described in Section 409A(a)(1) of the Code, the
Participant shall not be entitled to make an election and the Participant shall
forego his or her right to receive the Plan Benefits provided under this Plan.

Section 4.08 Section 409A of the Code; Delay of Payments. The terms of this Plan
have been designed to comply with the requirements of Section 409A of the Code,
as amended, where applicable, and shall be interpreted and administered in a
manner consistent with such intent. Notwithstanding anything to the contrary in
this Plan, (i) if upon the Participant’s Termination Date, the Participant is a
“specified employee” within the meaning of Section 409A of the Code, and the
deferral of any amounts otherwise payable under this Plan as a result of the
Participant’s termination of employment is necessary in order to prevent any
accelerated or additional tax to the Participant under Section 409A of the Code,
then the Employer will delay the payment of any such amounts hereunder until the
date that is six (6) months following the Participant’s Termination Date at
which time any such delayed amounts will be paid to the Participant in a single
lump sum, with interest from the date otherwise payable, at the prime rate as
published in The Wall Street Journal on the Participant’s Termination Date, and
(ii) if any other payments of money or other benefits due to the Participant
hereunder could cause the application of an accelerated or additional tax under
Section 409A of the Code, such payments or other benefits shall be

 

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delayed if such delay will make such payment or other benefits compliant under
Section 409A of the Code.

ARTICLE V.

TERMINATION OF EMPLOYMENT

Section 5.01 Written Notice Required. Any purported termination of employment,
either by the Employer or by the Participant, shall be communicated by written
Notice of Termination to the other.

Section 5.02 Termination Date. In the case of the Participant’s death, the
Participant’s Termination Date shall be his or her date of death. In all other
cases, the Participant’s Termination Date shall be the date specified in the
Notice of Termination subject to the following:

(a) If the Participant’s employment is terminated by the Employer for Cause, the
date specified in the Notice of Termination shall be at least thirty (30) days
from the date the Notice of Termination is given to the Participant; and

(b) If the Participant terminates his or her employment for Good Reason: (i) the
Notice of Termination shall be given to the Employer within ninety (90) days
after the occurrence of the event or condition on which the Participant may
terminate his or her employment for Good Reason; (ii) upon receipt of the Notice
of Termination, the Employer must be provided a period of at least thirty
(30) days during which it may remedy the condition; and (iii) the Participant’s
Termination Date shall be no earlier than thirty (30) days after the Employer’s
receipt of the Notice of Termination, but no later than two years after the
initial occurrence of the event or condition constituting Good Reason.

ARTICLE VI.

ADDITIONAL PAYMENTS BY THE COMPANY

Section 6.01 Gross-Up Payment. In the event it shall be determined that any
payment or distribution of any type by the Employer to or for the benefit of the
Participant, whether paid or payable or distributed or distributable pursuant to
the terms of this Plan or otherwise (the “Total Payments”), would be subject to
the excise tax imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the “Excise Tax”), then
the Participant shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that, after payment by the Participant of all taxes
(including additional excise taxes under said Section 4999 and any interest, and
penalties imposed with respect to any taxes) imposed upon the Gross-Up Payment,
the Participant shall have an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Total Payments. The Company shall pay the Gross-Up Payment
to the Participant within twenty (20) business days after the Payment Date or
the Termination Date, whichever is applicable.

Section 6.02 Determination By Accountant. All determinations required to be made
under this Article VI, including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall be made by the independent accounting
firm retained by the Company on the date of Change in Control (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Participant within fifteen (15) business days of the Payment Date or
Termination Date, whichever is applicable, or such earlier time as is requested
by the Company. If the Accounting Firm determines that no Excise Tax is payable
by the Participant, it shall furnish the Participant with an opinion that he or
she has substantial authority not to report any Excise Tax on his or her federal
income tax return. Any determination by the Accounting Firm shall be binding
upon the Company and the

 

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Participant. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 6.03 and the Participant thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Participant. Notwithstanding the foregoing, in no event shall the Underpayment
be paid to the Participant later than the end of the calendar year next
following the calendar year in which such taxes are remitted.

Section 6.03 Notification Required. The Participant shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10) business days
after the Participant knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Participant shall not pay such claim prior to the expiration of the thirty
(30)-day period following the date on which he or she gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Participant in
writing prior to the expiration of such period that it desires to contest such
claim, the Participant shall:

(a) give the Company any information reasonably requested by the Company
relating to such claim,

(b) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(c) cooperate with the Company in good faith in order to effectively contest
such claim,

(d) permit the Company to participate in any proceedings relating to such claim,
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Participant harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 6.03, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Participant to pay the tax claimed and sue for a refund, or contest the
claim in any permissible manner, and the Participant agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Participant to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Participant, on an interest-free basis and shall indemnify and
hold the Participant harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Participant
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the
contest

 

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shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Participant shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

Section 6.04 Repayment. If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 6.03, the Participant becomes
entitled to receive any refund with respect to such claim, the Participant shall
(subject to the Company’s complying with the requirements of Section 6.03)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Participant of an amount advanced by the Company pursuant to
Section 6.03, a determination is made that the Participant shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Participant in writing of its intent to contest such denial of refund prior to
the expiration of thirty days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

ARTICLE VII.

SUCCESSORS TO COMPANY

Section 7.01 Successors. This Plan shall bind any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, in the same
manner and to the same extent that the Company would be obligated under this
Plan if no succession had taken place. In the case of any transaction in which a
successor would not, by the foregoing provision or by operation of law, be bound
by this Plan, the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company’s obligations under
this Plan, in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. As used herein, the
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 7.01 or which otherwise becomes bound by
all the terms and provisions hereof by operation of law.

ARTICLE VIII.

DURATION, AMENDMENT, PLAN TERMINATION

AND ADOPTION BY SUBSIDIARIES

Section 8.01 Duration. This Plan shall continue in effect until terminated in
accordance with Section 8.02. If a Change in Control occurs, this Plan shall
continue in full force and effect, and shall not terminate or expire, until
after all Participants who have become entitled to a Plan Benefit hereunder
shall have received all of such benefits in full.

Section 8.02 Amendment and Termination. The Plan may be terminated or amended in
any respect by resolution adopted by two-thirds ( 2/3) of the Board; provided,
however, that except to the extent necessary to prevent the current taxation of
a Participant under Section 409A of the Code and any guidance issued thereunder
as so determined by two-thirds ( 2/3) of the Board in its sole discretion, no
such amendment or termination of the Plan may be made if such amendment or
termination would adversely affect any right of a Participant who became a
Participant prior to the later of (a) the date of adoption of any such amendment
or termination, or (b) the effective date of any such amendment or termination.
The Plan shall not be subject to amendment, change, substitution, deletion,
revocation, or, except as provided in Section 8.01 above, termination in any
respect whatsoever following a Change in Control; provided, however, that the
Board may amend, change, substitute, delete, revoke, or otherwise modify the
terms of this Plan if the Board determines, in its sole discretion, that such
amendment, change,

 

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substitution, deletion, revocation or modification is necessary for purposes of
compliance with or exemption from the requirements of Section 409A of the Code
or applicable law.

Section 8.03 Form of Amendment. The form of any amendment or termination of the
Plan shall be a written instrument signed by a duly authorized officer or
officers of the Company, certifying that the amendment or termination has been
approved by the Board.

Section 8.04 Adoption by Subsidiaries. Any Subsidiary of the Company may, with
the approval of the Board, adopt and become an Employer under this Plan by
executing and delivering to the Company an appropriate instrument agreeing to be
bound as an Employer by all of the terms of the Plan (as it may be amended from
time to time) with respect to its eligible employees. The adoptive instrument
may contain such changes and amendments in the terms and provisions of the Plan
as adopted by such Subsidiary as may be desired by such Subsidiary and
acceptable to the Company. The adoptive instrument shall specify the effective
date of such adoption of the Plan and shall become as to such adopting
Subsidiary a part of this Plan.

ARTICLE IX.

MISCELLANEOUS

Section 9.01 Participant’s Legal Expenses. The Company agrees to pay, upon
written demand therefor by the Participant, all legal fees and expenses which
the Participant may reasonably incur as a result of any dispute or contest
(regardless of the outcome thereof) by or with the Company or the Employer, as
applicable, regarding the validity or enforceability of, or liability under, any
provision hereof (including as a result of any contest about the amount of any
payment pursuant to Article IV), plus in each case interest at the “applicable
Federal rate” (as defined in Section 1274(d) of the Code). In any such action
brought by a Participant for damages or to enforce any provisions hereof, he or
she shall be entitled to seek both legal and equitable relief and remedies,
including, without limitation, specific performance of the Company’s or the
Employer’s obligations hereunder, as applicable, in his or her sole discretion.

Section 9.02 Employment Status. This Plan does not constitute a contract of
employment or impose on the Employer any obligation to retain a Participant as
an employee, to change the status of a Participant’s employment as a Management
Group Employee, or to change any employment policies of the Employer.

Section 9.03 Validity and Severability. The invalidity or unenforceability of
any provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

Section 9.04 The Participant’s Heirs, etc. This Agreement shall inure to the
benefit of and be enforceable by the Participant’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Participant should die while any amounts would
still be payable to him or her hereunder as if he or she had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms hereof to his or her designee or, if there be no such designee,
to his or her estate.

Section 9.05 Governing Law. The validity, interpretation, construction, and
performance of the Plan shall in all respects be governed by the laws of the
State of Texas.

 

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Section 9.06 Choice of Forum. A Participant shall be entitled to enforce the
provisions of this Plan in any state or Federal court located in the State of
Texas, in addition to any other appropriate forum.

Section 9.07 Notice. For the purposes hereof, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given (i) when hand delivered or (ii) five (5) days after being
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company at its principal place of business and
to the Participant at his or her address as shown on the records of the Company,
provided that all notices to the Company shall be directed to the attention of
the Chief Executive Officer of the Company with a copy to the General Counsel of
the Company, or to such other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

Section 9.08 Withholding. All amounts paid under this Plan shall be paid less
all applicable state and Federal tax withholdings and any other withholdings
required by any applicable jurisdiction.

IN WITNESS WHEREOF, XTO Energy Inc. has caused these presents to be executed by
its duly authorized officer on the 18th day of November, 2008.

 

XTO ENERGY INC.

By:

 

/s/Vaughn O. Vennerberg II

Name:

 

Vaughn O. Vennerberg II

Title:

 

Senior Executive Vice President &
Chief of Staff

 

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