Exhibit 10.1

 

EXECUTION VERSION

 

STOCKHOLDERS’ AGREEMENT

 

This STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of March 6, 2020, is
entered into by and among WPX Energy, Inc., a Delaware corporation (the
“Company”), Felix Investments Holdings II, LLC, a Delaware limited liability
company (the “Investor”) and, solely for purposes of Section 2.1, Section 3.5,
Section 3.7 and Section 5.10, EnCap Energy Capital Fund X, L.P. (“EnCap”), and,
solely for purposes of Section 3.5, the Management Group (as defined below).

 

WHEREAS, the Investor and the Company have and will effect the transactions
contemplated by that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated as of December 15, 2019 (the “Signing Date”), pursuant to
which, among other things, the Investor has received 152,963,671 shares (the
“Issued Shares”) of the Company’s common stock, par value $0.01 per share
(“Common Stock”); and

 

WHEREAS, in connection with, and effective upon, the date of the closing of the
transactions contemplated by the Purchase Agreement (the “Closing Date”), the
Company and the Investor desire to enter into this Agreement to set forth
certain understandings among themselves.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and in
the Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1      Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate” means, with respect to any specified Person, a Person that directly
or indirectly Controls or is Controlled by, or is under common Control with,
such specified Person. For purposes of this Agreement, no party to this
Agreement shall be deemed to be an Affiliate of another party to this Agreement
solely by reason of the execution and delivery of this Agreement.

 

“Beneficial Owner” of a security is a Person who directly or indirectly, through
any contract, arrangement, understanding, relationship or otherwise, has or
shares (a) voting power, which includes the power to vote, or to direct the
voting of, such security and/or (b) investment power, which includes the power
to dispose of, or to direct the disposition of, such security. The term
“Beneficially Own” shall have a correlative meaning. For the avoidance of doubt,
for purposes of this Agreement, the Investor is deemed to Beneficially Own the
shares of Common Stock owned by it notwithstanding the fact that such shares are
subject to this Agreement.

 

“Board” means the Board of Directors of the Company.

 

“Control” (including the terms “Controls,” “Controlled by” and “under common
Control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

 

 

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Governance Committee” means the Nominating, and Governance, Environmental and
Public Policy Committee of the Board.

 

“Governmental Entity” means any court, governmental, regulatory or
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign.

 

“Group” shall have the meaning in set forth in Section 13(d) of the Exchange
Act.

 

“Investor Director” means the persons listed on Exhibit A hereto, or any other
person designated to replace such persons in accordance with the terms hereof.

 

“Investor Group” means the Investor and each of its Affiliates; provided,
however, that for purposes of this definition of Investor Group, neither the
Investor nor its Affiliates shall be considered to be an Affiliate of the
Company or any person Controlled by the Company.

 

“Law” means any law, rule, regulation, ordinance, code, judgment, order, treaty,
convention, governmental directive or other legally enforceable requirement,
U.S. or non-U.S., of any Governmental Entity, including common law.

 

“Management Group” means Skye Callantine and Michael Horton.

 

“Necessary Action” means, with respect to a specified result, any and all
actions necessary to cause such result, including but not limited to executing
any and all agreements and instruments that are required to achieve such result
and making, or causing to be made, with any and all Governmental Entities, all
filings, registrations or similar actions that are required to achieve such
result (but solely to the extent such actions are permitted by Law).

 

“Non-Affiliated Directors” means a director who qualifies as “independent” under
the rules of the NYSE or the rules of such other national securities exchange on
which the Company Common Stock is then listed or trading and who is not an
Investor Director.

 

“Organizational Documents” means the Company’s certificate of incorporation,
bylaws and certificates of designations, each as amended from time to time in
accordance with its terms.

 

“Permitted Transferee” means (i) any direct or indirect member of the Investor
who receives shares of Common Stock as a result of a distribution of Common
Stock by the Investor (or any subsequent distribution of such shares of Common
Stock by any such direct or indirect member of Investor) and (ii) any Affiliate
of the Investor.

 

“Person” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
any court, administrative agency, regulatory body, commission or other
governmental authority, board, bureau or instrumentality, domestic or foreign
and any subdivision thereof or other entity, and also includes any managed
investment account.

 

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“Public Portfolio Companies” means any Person in which EnCap or one of its
Affiliates has made an investment that has securities that trade on a national
securities exchange or on an “over-the-counter” market together with any
Controlled Affiliates thereof.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Subject Policy” means each policy of the Board in place as of the Signing Date
that was in effect and applicable to the other Directors (a copy of which was
provided to the Investor on or prior to the Signing Date or was available on the
Signing Date on EDGAR or the Company’s website at www.wpxenergy.com), each
subsequent policy of the Board required by Law that is in effect and applicable
to all Non-Affiliated Directors, and each other subsequent policy of the Board
unless such policy would have the effect of excluding the Investor Directors
named on Exhibit A from serving on the Board.

 

Section 1.2           Rules of Construction.

 

(a)          Unless the context requires otherwise: (i) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms;
(ii) references to Articles and Sections refer to articles and sections of this
Agreement; (iii) the terms “include,” “includes,” “including” and words of like
import shall be deemed to be followed by the words “without limitation”;
(iv) the terms “hereof,” “hereto,” “herein” or “hereunder” refer to this
Agreement as a whole and not to any particular provision of this Agreement;
(v) unless the context otherwise requires, the term “or” is not exclusive and
shall have the inclusive meaning of “and/or”; (vi) defined terms herein will
apply equally to both the singular and plural forms and derivative forms of
defined terms will have correlative meanings; (vii) references to any Law or
statute shall include all rules and regulations promulgated thereunder, and
references to any Law or statute shall be construed as including any legal and
statutory provisions consolidating, amending, succeeding or replacing the
applicable Law or statute; (viii) references to any Person include such Person’s
successors and permitted assigns; and (ix) references to “days” are to calendar
days unless otherwise indicated.

 

(b)          The headings in this Agreement are for convenience and
identification only and are not intended to describe, interpret, define or limit
the scope, extent or intent of this Agreement or any provision thereof.

 

(c)          This Agreement shall be construed without regard to any presumption
or other rule requiring construction against the party that drafted or caused
this Agreement to be drafted.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Section 2.1           Representations and Warranties. Each party hereto
represents and warrants to the other party as follows: (i) such party has full
legal right and capacity to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated by this
Agreement; (ii) this Agreement has been duly executed and delivered by such
party and the execution, delivery and performance of this Agreement by it and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by all Necessary Action on the part of such party and no other
actions or proceedings on the part of such party are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement;
(iii) this Agreement constitutes the valid and binding agreement of such party,
enforceable against such party in accordance with its terms; and (iv) the
execution and delivery of this Agreement by such party does not, and the
consummation of the transactions contemplated by this Agreement and the
compliance with the provisions of this Agreement will not, conflict with or
violate any Laws or agreements binding upon such party, nor require any
authorization, consent or approval of, or filing with, any Governmental Entity,
except, with respect to the Company, for filings with the SEC by the Company.

 

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ARTICLE III

COVENANTS

 

Section 3.1           Designees.

 

(a)          On the Closing Date, the Company will take all Necessary Action to
cause the Investor Directors listed in Exhibit A hereto to be appointed to the
Board.

 

(b)          From and after the Closing Date until the Board Designation
Expiration Date, the manner for selecting nominees for election to the Board
will be as follows, subject to Section 3.4:

 

(i)            In connection with each annual or special meeting of stockholders
of the Company at which directors are to be elected (each such annual or special
meeting, an “Election Meeting”), the Investor shall have the right to designate
for nomination a number of Investor Directors as follows: (A) during any time
that the Investor Group and the Management Group collectively Beneficially Own,
and have collectively Beneficially Owned at all times from the Closing Date
through such Election Meeting, at least twenty percent (20%) of the outstanding
shares of Common Stock, two (2) Investor Directors or (B) during any time that
the Investor Group and the Management Group do not collectively satisfy the
tests set forth in the preceding clause (A) but do collectively Beneficially
Own, and have collectively Beneficially Owned at all times from the Closing Date
through such Election Meeting, at least ten percent (10%) of the outstanding
shares of Common Stock, one (1) Investor Director.

 

(ii)           The Investor shall give written notice to the Governance
Committee of each such Investor Director no later than the date that is sixty
(60) days before the first anniversary of the date that the Company’s annual
proxy for the prior year was first mailed to the Company’s stockholders and the
Investor shall provide, or cause such individual(s) to provide, to the Company,
such information about such individuals and the nomination to the Company at
such times as the Company may reasonably request in order to ensure compliance
with the applicable stock exchange rules and the applicable securities Laws, and
to enable the Board of any committee thereof to make determinations with respect
to the qualifications of the individual(s) to be Investor Director(s) (the
“Required Information”); provided, however, that if the Investor fails to give
such notice or the Required Information in a timely manner, then the Investor
shall be deemed to have nominated the incumbent Investor Director or Investor
Directors, as applicable, in a timely manner. The Investor shall also provide to
the Company, upon reasonable request from the Company and in connection with
providing the Required Information, evidence reasonably satisfactory to the
Company that the Investor Group and the Management Group collectively
Beneficially Own the number of shares of Common Stock that would be required to
designate the number of Investor Directors pursuant to this Section 3.1(b) then
serving on the Board or then being designated to the Board in connection with an
Election Meeting, as applicable.

 

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(iii)          In the event that the Company amends its certificate of
incorporation to provide that the Board shall be classified into separate
classes of directors, then proper provision shall be made such that the
designees of the Investor shall be distributed as evenly as possible among such
classes of directors in order to preserve the designation rights of the Investor
in accordance with this Section 3.1.

 

(c)          From and after the Closing Date until the Board Designation
Expiration Date, the Company shall take all Necessary Actions to cause the Board
to include the Investor Director(s) entitled to be designated by the Investor
pursuant to Section 3.1(b) and otherwise to reflect the Board composition
contemplated by Section 3.1, including the following: (i) at each Election
Meeting, include (x) the Investor Director(s) entitled to be designated by the
Investor pursuant to Section 3.1(b) in the slate of nominees recommended by the
Board to the Company’s stockholders for election as directors, (ii) to solicit
proxies in order to obtain stockholder approval of the election of the Investor
Director(s), including causing officers of the Company who hold proxies (unless
otherwise directed by the Company stockholder submitting such proxy) to vote
such proxies in favor of the election of such Investor Director(s) and (iii) to
cause the Investor Director(s) to be elected to the Board, including
recommending that the Company’s stockholders vote in favor of the Investor
Director(s) in any proxy statement used by the Company to solicit the vote of
its stockholders in connection with each Election Meeting.

 

(d)          If at any time the number of Investor Directors serving on the
Board exceeds the total number of Investor Directors the Investor is entitled to
designate pursuant to Section 3.1(b), then unless otherwise requested by the
Board by action of the Non-Affiliated Directors, the Investor shall promptly
(and in any event prior to the time the Board next takes any action, whether at
a meeting or by written consent) cause one or more such Investor Director(s) to
resign from the Board such that, following such resignation(s), the number of
Investor Directors serving on the Board does not exceed the total number of
Investor Directors the Investor is entitled to designate pursuant to
Section 3.1(b).

 

(e)          On the earliest to occur of (the “Board Designation Expiration
Date”) (i) the Investor Group and the Management Group collectively Beneficially
Owning less than ten percent (10%) of the outstanding shares of Common Stock and
(ii) such date that the Investor delivers a written waiver of its rights under
this Section 3.1 and Section 3.2 to the Company (which shall be irrevocable) the
Investor will have no further rights under this Section 3.1 or Section 3.2.

 

(f)           For the avoidance of doubt and subject to Section 3.5 and
Section 3.7, the rights granted to Investor to designate members of the Board
are additive to, and not intended to limit in any way, the rights that the
Investor may have to nominate, elect or remove directors under the
Organizational Documents or Delaware General Corporation Law.

 

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Section 3.2           Vacancies. Subject to Section 3.1 and Section 3.4, if at
any time the number of Investor Directors serving on the Board is less than the
total number of Investor Directors the Investor is entitled to designate
pursuant to Section 3.1(b), whether due to the death, resignation, retirement,
disqualification or removal from office as a member of the Board of an Investor
Director or otherwise, the Board shall take all Necessary Action required to
fill the vacancy resulting therefrom with such replacement designated by the
Investor as promptly as practicable. In furtherance thereof, the Company and the
Board shall use its reasonable best efforts, if requested by the Investor on a
timely basis, to fill such vacancy prior to the time the Board next takes action
on any other matter.

 

Section 3.3           Compensation; Indemnification. Each Investor Director
shall be entitled to the same expense reimbursement and advancement, exculpation
and indemnification in connection with his or her role as a director as the
other members of the Board, as well as reimbursement for documented, reasonable
out-of-pocket expenses incurred in attending meetings of the Board or any
committee of the Board of which such Investor Director is a member, if any, in
each case to the same extent as the other members of the Board. Each Investor
Director shall be also entitled to any retainer, equity compensation or other
fees or compensation paid to the non-employee directors of the Company for their
services as a director, including any service on any committee of the Board.

 

Section 3.4           Selection of Investor Directors; Committees.

 

(a)          Each Investor Director’s service as a member of the Board must be
reasonably acceptable to the Governance Committee. The parties hereto agree that
the persons listed on Exhibit A to this Agreement are qualified for service
pursuant to the foregoing sentence. Subject to applicable Law and stock exchange
rules, until the Board Designation Expiration Date, each committee of the Board
shall include at least one Investor Director, subject to any limitations imposed
by Law or stock exchange rules (including with respect to director independence
requirements).

 

(b)          Notwithstanding anything to the contrary herein, the Investor shall
not be entitled to designate any Investor Director pursuant to Section 3.1(a) to
the Board if the Board or a committee thereof reasonably determines that (i) the
election of such Investor Director to the Board would cause the Company to not
be in compliance with applicable Law or (ii) such Investor Director has been
involved in any of the events that would be required to be disclosed in a
registration statement on Form S-1 pursuant to Item 401(f)(2)-(8) of Regulation
S-K under the Securities Act of 1933 or is subject to any order, decree or
judgment of any Governmental Entity prohibiting service as a director of any
public company. In any such case described in clauses (i) or (ii) of the
immediately preceding sentence, the Investor shall withdraw the designation of
such proposed Investor Director, and, subject to the requirements of this
Section 3.4(b) be permitted to designate a replacement therefor (which
replacement Investor Director will also be subject to the requirements of this
Section 3.4(b)). The Company hereby agrees that the Investor Directors listed on
Exhibit A to this Agreement would not be prohibited from serving on the Board
pursuant to clause (i) of the first sentence of this Section 3.4(b).

 

(c)          Subject to Section 3.7, the Board may impose as a condition to an
Investor Director serving on the Board that such Investor Director agree to, and
be subject to, each Subject Policy. For the avoidance of doubt, no Subject
Policy shall modify any of the rights and obligations of the parties to this
Agreement, the Registration Rights Agreement between the parties dated as of the
date hereof, the Purchase Agreement or any other agreement entered into between
the parties in connection with the transactions contemplated by the Purchase
Agreement.

 

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Section 3.5           Voting With Respect to Election Meetings. From and after
the date of this Agreement, until the Board Designation Expiration
Date, Investor, EnCap and the Management Group agree to, EnCap agrees to cause
its Controlled Affiliates to, and Investor agrees to cause its Affiliates to
(i) cause all voting securities of the Company held by such Persons or over
which any such Person otherwise has voting discretion or control to be present
at any Election Meeting either in person or by proxy; (ii) to vote such voting
securities Beneficially Owned by such Person or over which such Person otherwise
has voting discretion or control (A) in favor of all director nominees nominated
by the Governance Committee, (B) against any other nominees and (C) against the
removal of any Director (other than an Investor Director) unless the Governance
Committee so recommends in favor of such removal (such recommendation not to be
made without the approval of a majority of the Non-Affiliated Directors).

 

Section 3.6           Lock-up. The Investor shall not, without the prior written
consent of the Company, during the period commencing on the Closing Date and
continuing for one hundred and eighty (180) days after the Closing Date (the
“Lock-up Period”), (a) offer, pledge, sell, contract to sell, grant any option,
right or warrant to purchase, give, assign, hypothecate, pledge, encumber, grant
a security interest in, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, lend
or otherwise transfer or dispose of (including through any hedging or other
similar transaction) any economic, voting or other rights in or to the Issued
Shares, or otherwise transfer or dispose of, directly or indirectly, or
(b) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Issued Shares (any such
transaction described in clause (a) or (b) above, a “Transfer”). Notwithstanding
the foregoing, the restrictions set forth in this Section 3.6 shall not apply to
(i) Transfers involving in the aggregate no more than 50,987,890 shares of
Common Stock (as appropriately adjusted for any stock split, stock dividend or
similar transaction), (ii) Transfers to Permitted Transferees; provided,
however, that any such Permitted Transferee must agree in an executed written
agreement (a copy of which will be delivered to the Company) for the benefit of
the Company to be bound by the terms of this Section 3.6 prior to such Transfer
or distribution, as applicable, and that any Permitted Transferee that is an
Affiliate of the Investor and does not otherwise qualify as a Permitted
Transferee shall also agree that such Person shall Transfer such shares of
Common Stock back to the Investor if, during the Lock-Up Period, such Person
ceases to be an Affiliate of the Investor, or (iii) any Transfers made in
connection with any tender offer, exchange offer, merger, consolidation or other
similar transaction approved or recommended by the Board or a committee thereof.
Notwithstanding the foregoing, EnCap shall not be entitled to distribute shares
of Common Stock to its limited partners during the Lock-Up Period. In connection
with any Transfer to a Permitted Transferee, the Company agrees to not take any
action that would cause such Transfer to be subject to requirements imposed by
any “fair price,” “moratorium,” “control share acquisition,” “business
combination” or any other anti-takeover statute or similar statute enacted under
applicable Law (“Takeover Laws”), and, at the request of the Investor, will take
all reasonable steps within its control to exempt (or ensure the continued
exemption of) the Transfer from the Takeover Laws of any state that purport to
apply to such transaction.

 

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Section 3.7           Standstill.

 

(a)          During the period commencing on the date of this Agreement and
continuing until the thirty-six (36) month anniversary of the Closing Date (the
“Standstill Termination Date”), except for any time during such thirty-six (36)
month period during which the Investor Group collectively Beneficially Owns less
than ten percent (10%) of the outstanding shares of Common Stock, unless such
action shall have been specifically invited in writing by the Board, EnCap shall
not and shall cause its Controlled Affiliates (other than Public Portfolio
Companies) not to:

 

(i)            make any proposal or offer to the Board or any of the Company’s
stockholders regarding, or make any public announcement, proposal or offer
(including any “solicitation” of “proxies” as such terms are defined or used in
Regulation 14A of the Exchange Act) with respect to, or otherwise solicit, seek
or offer to effect (i) any business combination, merger, tender offer, exchange
offer or similar transaction involving the Company or any of its subsidiaries,
(ii) any restructuring, recapitalization, liquidation or similar transaction
involving the Company or any of its subsidiaries; provided, however, that
nothing in this Section 3.7(a) shall prohibit EnCap or a Controlled Affiliate of
EnCap from privately communicating any such proposal or offer to the Company so
long as such private communications do not trigger public disclosure obligations
of or for any Person (including the filing of a Schedule 13D or Schedule 13G or
any amendment thereof);

 

(ii)           form, join or in any way participate in any Group with any Person
with respect to any Common Stock other than forming, joining or in any way
participating in a Group solely between or among (i) EnCap and its Affiliates or
(ii) EnCap and its Affiliates and any other Permitted Transferee with respect
any shares of Common Stock Transferred to any such Permitted Transferee not in
violation of the terms of this Agreement;

 

(iii)          enter, agree to enter, propose or offer to enter into any merger,
business combination, recapitalization, restructuring, change in control
transaction or other similar extraordinary transaction involving the Company or
any of its subsidiaries (unless such transaction is affirmatively publicly
recommended by the Board);

 

(iv)          otherwise act with any Person, including by providing financing
for another party, to seek to control or influence the management, the Board or
the policies of the Company;

 

(v)           acquire, agree or propose or offer to acquire (including through
any hedging or other similar transaction) any Common Stock or securities that
are convertible or exchangeable into (or exercisable for) Common Stock, other
than as a result of any stock split or stock dividend of voting securities of
the Company; provided, however, that these restrictions shall not apply to any
acquisition of, or agreement or proposal to acquire, Common Stock of the Company
if immediately following any such acquisition or contemplated acquisition EnCap
and its Controlled Affiliates collectively Beneficially Own no more than the
greater of (i) 152,963,671 shares of Common Stock (as appropriately adjusted for
any stock split, stock dividend or similar transaction) and (ii) twenty-seven
percent (27%) of the outstanding shares of Common Stock;

 

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(vi)          call, or seek to call, a meeting of the stockholders of the
Company or initiate any stockholder proposal for action by stockholders of the
Company;

 

(vii)         publicly disclose any intention, plan or arrangement prohibited
by, or inconsistent with, the foregoing;

 

(viii)        except as expressly permitted by this Agreement or required under
the order of a court of competent jurisdiction, transfer any Common Stock into a
voting trust or similar contract or subject any Common Stock to any voting
agreement, pooling arrangement or similar arrangement, or grant any proxy with
respect to any Common Stock, in each case other than (A) to the Company or a
person specified by the Company in a proxy card provided to shareholders of the
Company by or on behalf of the Company or (B) solely among EnCap and its
Affiliates and any other Permitted Transferee with respect any shares of Common
Stock Transferred to any such Permitted Transferee not in violation of the terms
of this Agreement; or

 

(ix)          knowingly facilitate, encourage or assist any third party to do
any of the foregoing.

 

(b)          The Investor and EnCap further agree that they shall not, and shall
cause their Controlled Affiliates (other than Public Portfolio Companies) to
not, without the prior written consent of the Company, publicly request the
Company to amend or waive any provision of this Section 3.7 (including this
sentence) or do so in any other manner that would require the Company to
publicly disclose such request.

 

(c)          Notwithstanding the foregoing, the parties agree and acknowledge
that (i) EnCap and its Controlled Affiliates may vote their shares of Common
Stock at any meeting of holders of Common Stock in their sole discretion,
(ii) the limitations set forth in this Section 3.7 shall in no way limit the
activities of any Investor Director, so long as such activities are undertaken
in his or her capacity as a director of the Company, or limit any communication
between or among EnCap and its Affiliates or any Permitted Transferee with
respect to any shares of Common Stock Transferred to any such Permitted
Transferee, (iii) EnCap and its Affiliates may coordinate any such vote with,
act in concert with, and be part of a Group with, any other Affiliate of EnCap
or any Permitted Transferee with respect to any shares of Common Stock
Transferred to any such Permitted Transferee, and (iv) nothing in this
Section 3.7 shall apply to potential or actual purchases or sales of oil and/or
gas assets or interests between EnCap or any of its Affiliates, on the one hand,
and the Company or any of its subsidiaries, on the other hand.

 

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Section 3.8           Waiver of Corporate Opportunities. It is hereby
acknowledged that members of the Investor Group participate in, and own and will
own substantial equity interests in other entities (existing and future) that
participate in, the energy industry (“Portfolio Companies”) and may make
investments and enter into advisory service agreements and other agreements from
time to time with those Portfolio Companies. Any individual who serves as an
Investor Director may also serve as an employee, partner, officer, director, or
member of the Investor Group or Portfolio Companies and, at any given time,
members of the Investor Group or Portfolio Companies may be in direct or
indirect competition with the Company and/or its subsidiaries. The Company
waives, to the maximum extent permitted by Law, the application of the doctrine
of corporate opportunity (or any analogous doctrine) with respect to the
Investor Group or Portfolio Companies or any Investor Director. As a result of
such waiver, no member of the Investor Group or Portfolio Companies, nor any
Investor Director, shall have any obligation to refrain from: (A) engaging in or
managing the same or similar activities or lines of business as the Company or
any of its subsidiaries or developing or marketing any products or services that
compete (directly or indirectly) with those of the Company or any of its
subsidiaries; (B) acquiring assets in the same or similar areas of operation and
lines of business of the Company; (C) investing in, owning or disposing of any
(public or private) interest in any Person engaged in the same or similar
activities or lines of business as, or otherwise in competition with, the
Company or any of its subsidiaries (including any member of the Investor Group,
a “Competing Person”); (D) developing a business relationship with any Competing
Person; or (E) entering into any agreement to provide any service(s) to any
Competing Person or acting as an officer, director, member, manager or advisor
to, or other principal of, any Competing Person, regardless (in the case of each
of clauses (A) through (E)) of whether such activities are in direct or indirect
competition with the business or activities of the Company or any of its
subsidiaries (the activities described in clauses (A) through (D) are referred
to herein as “Specified Activities”). To the fullest extent permitted by Law,
the Company hereby renounces (for itself and on behalf of its subsidiaries) any
interest or expectancy in, or in being notified of or offered an opportunity to
participate in, any Specified Activity that may be presented to or become known
to any member of the Investor Group or Portfolio Companies or any Investor
Director. Nothing in this Section 3.8 shall be construed to limit or waive any
right of the Company or any of its Subsidiaries pursuant to any express written
agreement between the Company and/or one or more of its Subsidiaries, on the one
hand, and any member of the Investor Group, any Portfolio Company, or any of
their respective employees, partners, officers, directors or members, on the
other hand.

 

Section 3.9           Amendment to Organizational Documents. The Company shall
not amend, or propose to amend, the Organizational Documents in any manner that
is inconsistent with or would nullify or supersede any of the terms of this
Agreement or would prevent any party hereto from complying with its obligations
hereunder unless such proposed amendment is approved by the Investor.

 

ARTICLE IV

TERMINATION

 

Section 4.1           Termination. This Agreement (except with respect to the
rights and obligations under Section 3.8 hereof, which shall not be terminable)
shall terminate upon the earliest to occur of (a) the last to occur of (i) the
Board Designation Expiration Date, (ii) the expiration of the Lock-up Period and
(iii) the Standstill Termination Date, (b) the Investor and its Permitted
Transferees ceasing to own any shares of Common Stock or (c) the mutual written
consent of the parties. Notwithstanding the foregoing, the rights and
obligations provided under Section 5.10 shall terminate upon the one-year
anniversary of the Board Designation Expiration Date.

 

 10 

 

 

ARTICLE V

MISCELLANEOUS

 

Section 5.1             Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be personally
delivered, sent by nationally recognized overnight courier, mailed by registered
or certified mail or be sent by facsimile or electronic mail to such party at
the address set forth below (or such other address as shall be specified by like
notice). Notices will be deemed to have been duly given hereunder if
(a) personally delivered, when received, (b) sent by nationally recognized
overnight courier, one business day after deposit with the nationally recognized
overnight courier, (c) mailed by registered or certified mail, five business
days after the date on which it is so mailed, and (d) sent by facsimile or
electronic mail, on the date sent so long as such communication is transmitted
before 5:00 p.m. in the time zone of the receiving party on a business day and
the receiving party affirmatively acknowledges receipt, otherwise, on the next
business day.

 

(a)           If to the Company, to:

 

WPX Energy, Inc.

3500 One Williams Center

Tulsa, Oklahoma 74172

Attention: Dennis Cameron

E-mail: Dennis.Cameron@wpxenergy.com

 

(b)           If to the Investor, to:

 

Felix Investments Holdings II, LLC

1530 16th Street

Suite 500

Denver, Colorado 80202

Attention: Michael Horton

E-mail: MichaelH@felix-energy.com

 

(c)           If to EnCap, to:

 

EnCap Energy Capital Fund X, L.P.

1100 Louisiana Street

Suite 4900

Houston, Texas 77002

Attention: Douglas E. Swanson, Jr.

E-mail: dswanson@encapinvestments.com

 

Section 5.2             Severability. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

 

11

 

 

Section 5.3             Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
taken together, shall be considered one and the same agreement.

 

Section 5.4             Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersedes all other prior
agreements, both written and oral, among the parties hereto with respect to the
subject matter hereof and (b) is not intended to confer upon any Person, other
than the parties hereto, any rights or remedies hereunder.

 

Section 5.5             Further Assurances.

 

(a)           Each party hereto shall execute, deliver, acknowledge and file
such other documents and take such further actions as may be reasonably
requested from time to time by the other parties hereto to give effect to and
carry out the transactions contemplated herein.

 

(b)           In the event that the Company or any of its successors or
permitted assigns engage in a merger, consolidation, equity security exchange or
similar transaction in which the Common Stock is converted into or exchanged for
equity securities in another entity, the Company (or such successor or permitted
assign) shall cause such other entity to enter into an agreement with the
Investor that provides the Investor with rights substantially similar to those
provided hereunder.

 

Section 5.6             Governing Law; Equitable Remedies. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE (WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF). The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to an injunction or injunctions and other
equitable remedies to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any of the Selected Courts (as
defined below), this being in addition to any other remedy to which they are
entitled at Law or in equity. Any requirements for the securing or posting of
any bond with respect to such remedy are hereby waived by each of the parties
hereto. Each party hereto further agrees that, in the event of any action for an
injunction or other equitable remedy in respect of such breach or enforcement of
specific performance, it will not assert the defense that a remedy at Law would
be adequate.

 

12

 

 

Section 5.7             Consent To Jurisdiction. With respect to any suit,
action or proceeding (“Proceeding”) arising out of or relating to this
Agreement, each of the parties hereto hereby irrevocably (a) submits to the
exclusive jurisdiction of the Court of Chancery of the State of Delaware and the
United States District Court for the District of Delaware and the appellate
courts therefrom (the “Selected Courts”) and waives any objection to venue being
laid in the Selected Courts whether based on the grounds of forum non conveniens
or otherwise and hereby agrees not to commence any such Proceeding other than
before one of the Selected Courts; provided, however, that a party may commence
any Proceeding in a court other than a Selected Court solely for the purpose of
enforcing an order or judgment issued by one of the Selected Courts;
(b) consents to service of process in any Proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by recognized
international express carrier or delivery service, to their respective addresses
referred to in Section 5.1 hereof; provided, however, that nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by Law; and (c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH
ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN
ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT AND TO HAVE
ALL MATTERS RELATING TO THIS AGREEMENT BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

Section 5.8             Amendments; Waivers.

 

(a)           No provision of this Agreement may be amended or waived unless
such amendment or waiver is in writing and signed (i) in the case of an
amendment, by each of the parties hereto, and (ii) in the case of a waiver, by
each of the parties against whom the waiver is to be effective.

 

(b)           No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.

 

Section 5.9             Assignment. Neither this Agreement nor any of the rights
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties; provided, however, that the
Investor may assign any of its rights hereunder to any of its Affiliates to the
extent such Affiliate is Transferred Common Stock not in violation of the terms
of this Agreement and provided any such Affiliate execute a joinder to this
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.

 

13

 

 

Section 5.10           Confidentiality. Each of the Investor and EnCap shall
hold, and cause its Affiliates and its and their respective directors, managers,
officers, employees, agents, consultants, auditors, attorneys, financial
advisors, financing sources and other consultants and advisors
(“Representatives”) to hold, in strict confidence, unless disclosure to a
regulatory authority is necessary in connection with any necessary regulatory
approval, examination or inspection or unless disclosure is required by judicial
or administrative process or by other requirement of law or the applicable
requirements of any regulatory agency or relevant stock exchange (in which case,
other than in connection with a disclosure in connection with a routine audit or
examination by, or document request from, a regulatory or self-regulatory
authority, bank examiner or auditor, the party disclosing such information shall
provide the other party with prior written notice of such permitted disclosure),
all nonpublic records, books, contracts, instruments, computer data and other
data and information (collectively, “Information”) concerning the Company or any
of its subsidiaries furnished to it or the Investor Directors by or on behalf of
the Company or any of its subsidiaries (except to the extent that such
information can be shown by the party receiving such Information to have been
(a) previously known by such party from other sources, provided that such source
was not known by such party to be bound by a contractual, legal or fiduciary
obligation of confidentiality to the other party, (b) in the public domain
through no violation of this Section 5.10 by such party or (c) later lawfully
acquired from other sources by the party to which it was furnished), and no such
party shall release or disclose such Information to any other person, except its
Representatives (excluding, for the avoidance of doubt, any Portfolio Company,
unless such Portfolio Company enters into a joinder agreement with the Company),
or use such Information other than in connection with evaluating and taking
actions with respect to such Person’s ownership interest in the Company. The
Company acknowledges and agrees that the Investor and EnCap may, in the ordinary
course of their respective businesses, evaluate investments in the energy
industry and that they are actively seeking to invest in energy related projects
in a variety of areas, including the provision of fresh water and disposal of
produced water in connection with oil and gas exploration and development
operations. The Company understands that the Investor, EnCap and the Investor
Directors will retain certain mental impressions of Information, which are
indistinguishable from generalized industry knowledge. Accordingly, the Company
agrees that, subject to the terms of this Agreement, the Investor, EnCap and the
Investor Directors are not precluded from pursuing investments solely because of
such retained mental impressions. Notwithstanding any provision of this
Agreement to the contrary, no provision of this Agreement shall apply to any
action taken independently by any Portfolio Company so long as the Investor or
EnCap has not provided such Portfolio Company with any Information. For purposes
of clarification, no such Portfolio Company shall be deemed to have been
provided with Information solely as a result of the Investor, EnCap, any
Investor Director or any Representative (whether such Person has been provided
with or has knowledge of Information) serving on the board of such Portfolio
Company (provided that such board member does not use Information in connection
with the business of such Portfolio Company).

 

[Signature page follows.]

 

14

 

 

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

 

  WPX Energy, Inc.       By: /s/ Richard E. Muncrief   Name: Richard E. Muncrief
  Title: Chairman and Chief Executive Officer

 

Signature Page to Stockholders’ Agreement

 

 

 

  Felix Investments Holdings II, LLC       By: /s/ Skye Callantine   Name: Skye
Callantine   Title: President and Chief Executive Officer

 

Signature Page to Stockholders’ Agreement

 

 

 

Accepted and acknowledged, solely for purposes of Section 2.1, Section 3.5,
Section 3.7 and Section 5.10 in this Agreement:

 

EnCap Energy Capital Fund X, L.P.       By: EnCap Equity Fund X GP, L.P.,    
General Partner of EnCap Energy     Capital Fund X, L.P.       By: EnCap
Investments L.P.,     General Partner of EnCap Equity Fund     X GP, L.P.      
By:  EnCap Investments GP, L.L.C.,     General Partner of EnCap Investments  
L.P.       By: /s/ Douglas E. Swanson, Jr.   Name: Douglas E. Swanson, Jr.  
Title: Managing Partner  

 

Signature Page to Stockholders’ Agreement

 

 

 

Accepted and acknowledged, solely for purposes of Section 3.5 in this Agreement:

 

 

/s/ Skye Callantine   Name: Skye Callantine  

 

Signature Page to Stockholders’ Agreement

 

 

 

/s/ Michael Horton   Name: Michael Horton  

 

Signature Page to Stockholders’ Agreement

 

 

 

EXHIBIT A

 

INITIAL INVESTOR DIRECTORS

 

1.D. Martin Phillips; and

 

2.Douglas E. Swanson, Jr.

 

1