Exhibit 10(3)

 

 

HESS CORPORATION 2017 LONG-TERM INCENTIVE PLAN Performance Award Agreement

 

 

 

Participant:

FIRST NAME – LAST NAME

 

 

Grant Date:

DATE

 

 

Number of Performance Shares:

# OF PERFORMANCE SHARE UNITS

 

* * * * *

 

This PERFORMANCE AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date
specified above, is entered into by and between HESS CORPORATION, a Delaware
corporation (the “Corporation”), and the Participant specified above, pursuant
to the Shareholder Value Program under the Hess Corporation 2017 Long-Term
Incentive Plan, as in effect and as amended from time to time (the “Plan”).

 

WHEREAS, it has been determined under the Plan that it would be in the best
interests of the Corporation to grant the Performance Award provided for herein
to the Participant as an inducement to remain in the employment of the
Corporation (and/or any Subsidiary), and as an incentive for improved
performance toward corporate goals during such employment;

 

WHEREAS, pursuant to the provisions of the Plan, the Committee has authorized
the grant to the Participant of a Performance Award in accordance with the terms
and conditions of this Agreement; and

 

WHEREAS, the Participant and the Corporation desire to enter into this Agreement
to evidence and confirm the grant of such Performance Award on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and premises
hereinafter set forth and for other good and valuable consideration, the parties
hereto hereby mutually covenant and agree as follows.

 

1.Incorporation By Reference; Document Receipt. This Agreement is subject in all
respects to the terms and provisions of the Plan (including, without limitation,
any amendments thereto adopted at any time and from time to time unless such
amendments are expressly not intended to apply to the grant of the Performance
Award hereunder), all of which terms and provisions are made a part of and
incorporated in this Agreement as if each were expressly set forth mutatis
mutandis herein. Any capitalized term not defined in this Agreement shall have
the same meaning as is ascribed thereto under the Plan.  The Participant hereby
acknowledges receipt of a prospectus describing the Plan and the Awards
thereunder and that he has read it carefully and fully understands its content.
In the event of any conflict between the terms of this Agreement and the terms
of the Plan, the terms of the Plan shall control.

 

 

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2.Grant of Performance Award.  Pursuant to the provisions of the Plan, the
Corporation as of the date set forth above (the “Grant Date”) has granted to the
Participant, and hereby evidences the grant to the Participant of, subject to
the terms and conditions set forth herein and in the Plan, a Performance Award
consisting of the number of Performance Shares specified above. A Performance
Share is an unfunded and unsecured obligation to deliver up to two Shares (or a
portion thereof) or the cash equivalent thereof (determined in accordance with
Section 3), subject to the terms and conditions of this Agreement and those of
the Plan.  References herein to Performance Shares are to the Performance Shares
comprising such Performance Award granted pursuant to this Agreement.

 

3.Payment of Earned Performance Shares.  Subject to the provisions of Section 5
and Section 6, after the end of the Performance Cycle described in Section 4(a),
the Committee shall certify in writing on the date (the “vesting date”) of its
first regular meeting following the end of the Performance Cycle whether, and to
what extent, the performance goal set forth in Section 4(b) has been achieved
and determine and certify in writing the number of Performance Shares earned
pursuant to Section 4.  The number of such Performance Shares so earned shall be
paid by the Corporation as soon as administratively practicable after the
vesting date; provided that in no event shall such payment be made later than
March 15 of the calendar year that immediately follows the last day of the
Performance Cycle.  To the extent that the Performance Shares are not earned
pursuant to Section 4, such Performance Shares shall be forfeited. Payments
hereunder shall be made in Shares, unless the Committee, in its sole discretion,
affirmatively determines that such payments shall be made in cash, or a
combination of Shares and cash. If a cash payment is made in lieu of delivering
Shares, the amount of such payment shall be equal to the Fair Market Value of
such Shares as of the trading date immediately prior to the date of such
payment, less applicable tax withholdings in accordance with Section 12.03 of
the Plan.

 

4.Vesting Criteria Applicable to Performance Shares.

 

(a)Performance Cycle.  The Performance Cycle for the Performance Award granted
pursuant to this Agreement shall commence on January 1, 2020, and shall end on
December 31, 2022.

 

(b)Performance Goal.  The performance goal for the Performance Cycle is the
total return per Share to the Corporation’s shareholders, inclusive of dividends
paid, during the Performance Cycle in comparison to the total return per share
of common stock, inclusive of dividends paid, during the Performance Cycle
achieved by the companies that are listed in Exhibit A attached hereto (the
“Comparison Companies”) as well as the S&P 500 Total Return Index (the “S&P
Total Return Index”), in each case as set forth in this Section 4(b).  For
purposes of this Agreement, such total shareholder return (“Total Shareholder
Return”) for the Corporation and each of the Comparison Companies shall be
measured by dividing (A) the sum of (1) the dividends paid (regardless of
whether paid in cash or property) on the common stock of such company during the
Performance Cycle, assuming reinvestment of such dividends in such stock (based
on the closing price of such stock on the date such dividend is paid), plus (2)
the average closing price of a share of such stock on the principal United
States exchange on which the stock trades for the 60 trading days immediately
prior to and including the last day of the Performance Cycle (appropriately
adjusted for any stock dividend, stock split, spin-off, merger or other similar
corporate events)(the “Ending Average Value”) minus the average closing price of
a share of such company's common stock on the principal United States exchange
on which the stock trades for the 60 trading days occurring immediately prior to
the first day of the Performance Cycle (the “Beginning Average Value”), by (B)
the Beginning Average Value.  For the avoidance of doubt, it is intended that
the foregoing calculation of Total Shareholder Return for the Corporation and
each of the Comparison Companies shall take into account not only the
reinvestment of dividends in a share of common stock of the Corporation and any
Comparison Company but also capital appreciation or depreciation in the shares
deemed acquired by such reinvestment.  For purposes of this Agreement, Total
Shareholder Return for the S&P 500 Total Return Index shall be measured by
dividing (A) the average closing price of a share of such index on the principal
United States exchange on which the index trades for the 60 trading days
immediately prior to and including the last day of the Performance Cycle, minus
the average closing price of a share of such index on the principal United
States exchange on which the index trades to the 60 trading days occurring
immediately prior to the first day of the Performance Cycle (the “S&P Beginning
Average

 

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Value”) by (B) the S&P Beginning Average Value.  The S&P 500 Total Return Index
includes both the capital gains of its underlying securities but also assumes
that all distributions, such as dividends are reinvested back into the
index.  All determinations under this Section 4 shall be made by the Committee.

 

(c)Percentage of Performance Shares Earned.  Except as provided in Section 6,
the Performance Shares shall be earned based on where the Corporation’s Total
Shareholder Return during the Performance Cycle ranks in comparison to the Total
Shareholder Returns of the Comparison Companies and the S&P Total Return Index
during the Performance Cycle.  As soon as practicable after the completion of
the Performance Cycle, the Total Shareholder Returns of the Corporation, each of
the Comparison Companies and the S&P Total Return Index shall be calculated and
ranked from first to last (the “TSR Ranking”). The extent to which Performance
Shares shall become earned on the vesting date described in Section 3 shall be
based on the TSR Ranking attained by the Corporation. The percentage of
Performance Shares earned (the “Percentage of Performance Shares Earned”) shall
be the percentage set forth in the Percentage of Performance Shares Earned
column of the schedule set forth in Exhibit B attached hereto that corresponds
to the TSR Ranking attained by the Corporation set forth in the TSR Ranking
column of such schedule.  The number of Performance Shares earned shall be the
product of the number of Performance Shares set forth in Section 2 multiplied by
the Percentage of Performance Shares Earned. If at any time during the
Performance Cycle, a Comparison Company is acquired, ceases to exist, ceases to
be a publicly-traded company, files for bankruptcy, spins off 50% or more of its
assets (except as otherwise provided in Exhibit A), or sells all, or
substantially all, of its assets, such Comparison Company shall be removed and
treated as if it had never been a Comparison Company.  The Total Shareholder
Returns of the Corporation and the remaining Comparison Companies and the S&P
Total Return Index shall be ranked from first to last, and the Percentage of
Performance Shares Earned shall be determined as described in this Section 4(c)
based on the Corporation's TSR Ranking among the remaining Comparison Companies
and S&P Total Return Index:  (i) to the extent the number of Comparison
Companies and the S&P Total Return Index plus the Corporation is reduced to 11,
10, 9 or 8, in accordance with the percentage corresponding to Corporation’s TSR
Ranking as set forth in Exhibit C-1, C-2, C-3, or C-4 attached hereto,
respectively, and (ii) to the extent that the number of Comparison Companies and
the Total Return Index plus the Corporation is reduced to fewer than 8, in
accordance with the percentage corresponding to the Corporation’s TSR Ranking as
set forth in Exhibit C-4, provided that (1) the Committee may use negative
discretion to reduce the Percentage of Performance Shares Earned corresponding
to such TSR Ranking of the Corporation such that the Percentage of Performance
Shares Earned shall be as reasonably commensurate as possible with the
Percentage of Performance Shares Earned that would have resulted if the number
of Comparison Companies and the S&P Total Return Index plus the Corporation had
been 8, using similar percentile hurdles as exist in C-4, with straight-line
interpolation between points, and (2) if the Corporation ranks last among the
remaining Comparison Companies and the S&P Total Return Index, the Percentage of
Performance Shares Earned shall be 0%.  Notwithstanding the foregoing provisions
of this Section 4(c) to the contrary, if the Corporation’s Total Shareholder
Return during the Performance Cycle is negative, the Percentage of Performance
Shares Earned shall not exceed 100%.

 

5.         Termination of Employment.  Except as provided in this Section 5, the
Participant shall not have any right to any payment hereunder unless the
Participant is employed by the Corporation or a Subsidiary on the vesting date
pursuant to Section 3.

 

(a)Death, Permanent Total Disability or Full Retirement. If (i) the
Participant’s employment with the Corporation or any Subsidiary terminates prior
to the vesting date pursuant to Section 3 by reason of the Participant’s death,
permanent total disability or “Full Retirement” (as defined below), the
Participant shall be entitled to receive the same payment, if any (without
pro-ration), in respect of the Performance Shares as would have been payable,
and at the same time and subject to the same conditions, had the Participant’s
employment continued until such vesting date.  The existence and date of
permanent total disability shall be determined by the Committee and its
determination shall be final and conclusive.  For purposes of this Agreement,
“Full Retirement” shall mean voluntary retirement after attaining at least age
65 with at least five years of continuous service with the Corporation or any
Subsidiary prior to the date of such retirement.

 

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(b)Other than Death, Permanent Total Disability or Full Retirement. If the
Participant’s employment with the Corporation or any Subsidiary terminates prior
to the vesting date pursuant to Section 3 for any reason other than the
Participant’s death, permanent total disability or Full Retirement, all of the
Performance Shares and the Participant’s rights with respect thereto shall be
immediately forfeited and cancelled without further action by the Corporation or
the Participant as of the date of such termination of employment.

 

(c)Early Retirement/Termination other than Cause.  Notwithstanding Section 5(b),
if (i) the Participant’s employment with the Corporation or any Subsidiary
terminates prior to the vesting date pursuant to Section 3 by reason of the
Participant’s “Early Retirement” (as defined below) or on account of a
termination by the Corporation or a Subsidiary other than for Cause, the
Participant shall be entitled to receive the same payment, if any, in respect of
the Performance Shares as would have been payable, and at the same time and
subject to the same conditions, had the Participant’s employment continued until
such vesting date, provided that such payment shall be pro-rated based on the
number of calendar days of the Performance Cycle elapsed through the date of
such Early Retirement or termination other than for Cause.  For purposes of this
Agreement, “Early Retirement” shall mean voluntary retirement after attaining at
least age 55 with at least ten years of continuous service with the Corporation
or any Subsidiary prior to the date of such retirement.

 

(d)Forfeiture Following Early Retirement or Termination other than
Cause.  Notwithstanding any other provision of this Agreement to the contrary,
if, following termination of the Participant’s employment with the Corporation
or any Subsidiary due to Early Retirement or a termination other than for Cause,
as described in Section 5(c), the Committee determines in its good faith
discretion that the Participant shall have engaged in any Prohibited Activity
(as hereinafter defined) at any time during the time through the otherwise
applicable vesting date with respect to the Performance Cycle, all of the
Performance Shares and the Participant’s rights with respect thereto shall be
immediately forfeited and cancelled without further action by the Corporation or
the Participant as of the date on which the Participant shall have first entered
into such Prohibited Activity.  This Section 5(d) shall not constitute the
Corporation’s exclusive remedy for the Participant’s engagement in any
Prohibited Activity, and the Corporation may seek any additional legal or
equitable remedy, including injunctive relief, in any such circumstances. If any
provision contained in this Section 5(d) shall be held by any court of competent
jurisdiction to be unenforceable, void or invalid, the parties intend that such
provision be modified to make it valid and enforceable to the fullest extent
permitted by law. If any such provision cannot be modified to be valid and
enforceable, such provision shall be severed from this Agreement and the
invalidity or unenforceability of such provision shall not affect the validity
or enforceability of the remaining provisions.  Notwithstanding any other
provision of this Section 5(d) to the contrary, upon the occurrence of a Change
of Control, the foregoing provisions of this Section 5(d) shall automatically
terminate and cease to apply with respect to any Performance Shares that are
outstanding and have not previously been forfeited under this Section 5(d). For
purposes of this Agreement:

 

(i)“Prohibited Activity” shall mean either Competitive Activity or Interference.

 

(ii)“Competitive Activity” shall mean that the Participant, directly or
indirectly, in any manner or capacity, shall be employed by, serve as a director
or manager of, act as a consultant to or maintain any material ownership
interest in, any E&P Company or M&R Company that competes with the business of
the Corporation or any Subsidiary or affiliate thereof in geographical areas in
which the Participant is aware that the Corporation or any Subsidiary or
affiliate is engaged, or is considering engaging, unless the Committee agrees to
such activity of the Participant in writing; provided, however, that the
Participant’s ownership solely as an investor of less than 1% of the outstanding
securities of any publicly-traded securities of any E&P Company or M&R Company
shall not, by itself, be considered to be Competitive Activity.

 

(iii)“Interference” shall mean that the Participant shall, directly or

 

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indirectly, interfere with the relationship between the Corporation or any
Subsidiary or affiliate of the Corporation and any person (including, without
limitation, any business or governmental entity) that to the Participant’s
knowledge is, or was, a client, customer, supplier, licensee or partner of the
Corporation or any Subsidiary, or had any other business relationship with the
Corporation or any Subsidiary.

(iv)“E&P Company” shall mean any business which is engaged in the business of
exploring for, or developing or producing, crude oil or natural gas.

(v)“M&R Company” shall mean any business which is engaged in the manufacture,
generation, purchase, marketing or trading of refined petroleum products,
natural gas or electricity.

 

6.Change of Control.  Notwithstanding anything in Section 3, 4, 5(a) or 5(c) to
the contrary, in the event a Change of Control occurs during the Performance
Cycle, the Corporation’s Total Shareholder Return, TSR Ranking and the
Percentage of Performance Shares Earned shall be determined in accordance with
Section 4 for the portion of the Performance Cycle that ends on the date
immediately prior to the date of the Change of Control.  Provided that the
Performance Shares have not been forfeited pursuant to Section 5 prior to the
date of the Change of Control, the number of the Performance Shares earned shall
be the sum of (a) the product of the number of Performance Shares set forth in
Section 2, multiplied by a fraction, the numerator of which is the number of
calendar days of the Performance Cycle that elapse through the date immediately
prior to the date of the Change of Control and the denominator of which is the
full number of calendar days during the Performance Cycle, multiplied by the
Percentage of Performance Shares Earned, plus (b) the product of the number of
Performance Shares set forth in Section 2, multiplied by a fraction, the
numerator of which is the number of calendar days remaining in the Performance
Cycle on and following the date of the Change of Control and the denominator of
which is the full number of calendar days during the Performance Cycle.  The
amount payable subject to the terms and conditions hereof in respect of such
earned Performance Shares shall be equal to the product of such number of earned
Performance Shares multiplied by the Change of Control Price, without interest
or other additional earnings (such amount, the “CoC Earned Performance Share
Amount”).  Except as otherwise provided in this Section 6, the CoC Earned
Performance Share Amount shall be paid in a cash lump-sum during, and no later
than March 15 of, the calendar year that immediately follows the last day of the
Performance Cycle.  If, following a Change of Control, the Participant’s
employment with the Corporation or any Subsidiary terminates prior to payment of
the CoC Earned Performance Share Amount by reason of (w) termination by the
Corporation or such Subsidiary without Cause, (x) resignation by the Participant
for Good Reason, (y) the Participant’s death or permanent total disability
(determined as described in Section 5(a)) or (z) the Participant’s Full
Retirement, the Participant shall be entitled to receive payment of the CoC
Earned Performance Share Amount in a cash lump-sum not later than 5 business
days after the effective date of such termination of employment, provided that
if such payment would result in accelerated or additional taxes under Section
409A of the Code then such payment shall be made at the time specified in the
immediately preceding sentence as if the Participant’s employment had not so
terminated.  If, following a Change of Control, the Participant’s employment
with the Corporation or any Subsidiary terminates under any circumstances other
than those described in the immediately preceding sentence, then the Participant
shall not have any right to any payment in respect of the Performance Shares,
whether or not earned.

 

7.Dividend Equivalents.  With respect to the number of Performance Shares set
forth in Section 2, the Participant shall be credited with Dividend Equivalents
with respect to each such Performance Share equal to the amount per Share of any
ordinary cash dividends declared by the Board with record dates during the
period beginning on the first day of the Performance Cycle and ending on the
earliest to occur of:  (a) the last day of the Performance Cycle; (b) the date
of a Change of Control and (c) the date such Performance Share terminates or is
forfeited under Section 3 or Section 5. The Corporation shall pay in cash to the
Participant an amount equal to the product of (i) sum of the aggregate amount of
such Dividend Equivalents credited to the Participant, multiplied by (ii) the
Percentage of Performance Shares Earned, such amount to be paid as and when the
related Performance Shares are paid in accordance with Section 3 or Section 6,
as applicable.  Any Dividend Equivalents shall be forfeited as and when the

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related Performance Shares are forfeited in accordance with Section 3, Section 5
or Section 6.

 

8.No Rights as a Shareholder.  Until shares of Common Stock are issued, if at
all, in satisfaction of the Corporation’s obligations under this Agreement, in
the time and manner specified in Section 3 or 6, the Participant shall have no
rights as a shareholder as to the Shares underlying the Performance Shares.

 

9.Beneficiary. The Participant may designate the beneficiary or beneficiaries to
receive any payments which may be made in respect of the Performance Shares
after the Participant’s death.  Any such designation shall be made by the
Participant in writing on a beneficiary designation form provided by or on
behalf of the Corporation and (unless the Participant has waived such right) may
be changed by the Participant from time to time by filing a new beneficiary
designation form as provided therein. If the Participant does not designate a
beneficiary or if no designated beneficiary survives the Participant, the
Participant’s beneficiary shall be the legal representative of his estate.

 

10.Tax Withholding.  No payment of Shares or cash in respect of the Performance
Shares shall be made unless and until the Participant (or his or her beneficiary
or legal representative) shall have made arrangements satisfactory to the
Committee for the payment of any amounts required to be withheld with respect
thereto under all present or future federal, state, local and non-United States
tax laws and regulations and other laws and regulations in accordance with
Section 12.03 of the Plan. The Corporation shall have the right to deduct from
all amounts paid to the Participant in cash in respect of Performance Shares any
such amounts. In the case of any payments of Performance Shares in the form of
Shares, unless the Participant elects otherwise in advance in writing or is
prohibited by law, upon payment of such Shares, such number of such Shares as
shall be necessary to pay such amounts shall be sold by the Corporation or its
designee on the Participant’s behalf, and the proceeds thereof shall be
delivered to the Corporation for remittance to the appropriate governmental
authorities. In the event the Committee determines that any amounts are required
to be withheld in respect of the Performance Shares prior to payment of such
Performance Shares, the Participant shall thereupon pay to the Corporation in
cash the full amount so required to be withheld.

 

11.Limitations; Governing Law.  Nothing herein or in the Plan shall be construed
as conferring on the Participant or anyone else the right to continue in the
employ of the Corporation or any Subsidiary.  The rights and obligations under
this Agreement are governed by and construed in accordance with the laws of the
State of Delaware, without reference to the principles of conflict of laws
thereof.

 

12.Non-transferability. Except as otherwise provided by Section 8, the
Performance Shares, and any rights and interests with respect thereto, may not
be sold, exchanged, transferred, assigned or otherwise disposed of in any way by
the Participant (or the Participant’s beneficiary), and may not be pledged or
encumbered in any way by the Participant (or the Participant’s beneficiary), and
shall not be subject to execution, attachment or similar legal process.

 

13.Entire Agreement; Amendment.  This Agreement (including the Plan which is
incorporated herein by reference) contains the entire agreement between the
parties hereto with respect to the subject matter contained herein, and
supersedes all prior agreements or prior understandings, whether written or
oral, between the parties hereto relating to such subject matter.  The Board has
the right, in its sole discretion, to amend, alter, suspend, discontinue or
terminate the Plan, and the Committee has the right, in its sole discretion, to
amend, alter, suspend, discontinue or terminate this Agreement from time to time
in accordance with and as provided in the Plan; provided, however, that no such
amendment, alteration, suspension, discontinuance or termination of the Plan may
materially impair the Participant’s previously accrued rights under this
Agreement or the Plan without the Participant’s consent, except as otherwise
provided in Section 11 of the Plan.  This Agreement may also be modified,
amended or terminated by a writing signed by the Participant and the
Corporation.

 

14.Notices.  Any notice which may be required or permitted under this Agreement
shall be in writing and shall be delivered in person, or via facsimile
transmission, overnight courier service

 

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or certified mail, return receipt requested, postage prepaid, properly addressed
as follows:

 

(a)If the notice is to the Corporation, to the attention of the Secretary of
Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036, or at
such other address as the Corporation by notice to the Participant may designate
in writing from time to time.

 

(b)If the notice is to the Participant, at the Participant’s address as shown on
the Corporation's records, or at such other address as the Participant, by
notice to the Corporation, may designate in writing from time to time.

 

15.Compliance with Laws. The issuance of any Shares pursuant to this Agreement
shall be subject to, and shall comply with, any applicable requirements of
federal and state securities laws, rules and regulations (including, without
limitation, the provisions of the Securities Act of 1933, as amended, the
Exchange Act and the respective rules and regulations promulgated thereunder),
any applicable rules of any exchange on which the Common Stock is listed
(including, without limitation, the rules and regulations of the New York Stock
Exchange), and any other law, rule or regulation applicable thereto.  The
Corporation shall not be obligated to issue any of the Common Stock subject to
this Agreement if such issuance would violate any such requirements and if
issued shall be deemed void ab initio.

 

16.Binding Agreement; Further Assurances.  This Agreement shall inure to the
benefit of, be binding upon, and be enforceable by the Corporation and its
successors and assigns.  Each party hereto shall do and perform (or shall cause
to be done and performed) all such further acts and shall execute and deliver
all such other agreements, certificates, instruments and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the Plan and the consummation of
the transactions contemplated thereunder.

 

17.Counterparts; Headings. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.  The titles and headings of the
various sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed to be a part of this Agreement.

 

18.Severability.  The invalidity or unenforceability of any provisions of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of any provision of this Agreement in any
other jurisdiction, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by law.

 

19.Terms of Employment. The Plan is a discretionary plan.  The Participant
hereby acknowledges that neither the Plan nor this Agreement forms part of the
Participant’s terms of employment and nothing in the Plan may be construed as
imposing on the Corporation or any Subsidiary a contractual obligation to offer
participation in the Plan to any employee of the Corporation or any
Subsidiary.  Neither the Corporation nor any Subsidiary is under any obligation
to grant any further Awards to the Participant under the Plan. If the
Participant ceases to be an employee of the Corporation or any Subsidiary for
any reason, the Participant shall not be entitled by way of compensation for
loss of office or otherwise howsoever to any sum or other benefit to compensate
the Participant for the loss of any rights under this Agreement or the Plan.

The Participant also acknowledges that the Corporation has adopted a policy
prohibiting recipients of equity awarded from the Corporation, including the
Performance Shares, from trading in equity derivative instruments to hedge the
economic risks of holding Corporation common stock or interests therein.  The
Participant hereby acknowledges that he will abide by such policy in all
respects.

 

20.Data Protection. By signing this Agreement, the Participant hereby consents
to the holding and processing of personal data provided by the Participant to
the Corporation for all purposes necessary for the operation of the Plan. These
include, but are not limited to:

 

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(a)administering and maintaining the Participant’s records;

(b)providing information to any registrars, brokers or third party
administrators of the Plan; and

(c)providing information to future purchasers of the Corporation or the business
in which the Participant works.

21.Code Section 409A. Payment of the Performance Shares and this Agreement are
intended to comply with Section 409A of the Code, and shall be administered and
construed in accordance with such intent. Accordingly, the Corporation shall
have the authority to take any action, or refrain from taking any action, with
respect to this Agreement that it determines is necessary or appropriate to
ensure compliance with Code Section 409A (provided that the Corporation shall
choose the action that best preserves the value of payments provided to the
Participant under this Agreement that is consistent with Code Section 409A). In
furtherance, but not in limitation, of the foregoing, notwithstanding any other
provisions of this Agreement to the contrary:

 

(a)in no event may the Participant designate, directly or indirectly, the
calendar year of any payment to be made hereunder;

 

(b)if at the time of the Participant’s separation from service, the Corporation
determines that the Participant is a “specified employee” within the meaning of
Code Section 409A, payments, if any, hereunder that constitute a “deferral of
compensation” under Code Section 409A and that would otherwise become due on
account of such separation from service shall be delayed and all such delayed
payments shall be paid in full upon the earlier to occur of (i) a date during
the thirty-day period commencing six months and one day following such
separation from service and (ii) the date of the Participant’s death, provided
that such delay shall not apply to any payment that is excepted from coverage by
Code Section 409A, such as a payment covered by the short-term deferral
exception described in Treasury Regulations Section 1.409A-1(b)(4); and

 

(c)notwithstanding any other provision of this Agreement to the contrary, a
termination or retirement of Participant's employment hereunder shall mean and
be interpreted consistent with a “separation from service” within the meaning of
Code Section 409A with respect to any payments hereunder that constitute a
“deferral of compensation” under Code Section 409A that become due on account of
such separation from service.

 

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by
its duly authorized officer, and the Participant has also executed this
Agreement and acknowledged receipt of other related materials including the Plan
prospectus, all as of the Grant Date.

 

 

 

 

 

Hess Corporation

 

 

 

By

 

/s/ John B. Hess 

 

 

JOHN B. HESS

 

 

CHIEF EXECUTIVE OFFICER

 

 

Acknowledged and Agreed to:

 

 

___________________________

 

 

9

 

 

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Exhibit A

 

Comparison Companies and S&P Total Return Index

 

•

Apache Corporation

•

ConocoPhillips Company

•

Continental Resources, Inc.

•

Devon Energy Corporation

•

EOG Resources, Inc.

•

Marathon Oil Corporation

•

Murphy Oil Corporation

•

Noble Energy, Inc.

•

Occidental Petroleum Corporation

•

Pioneer Natural Resources Co.

•

S&P 500 Total Return Index

 

 

 

 

 

 

10

 

 

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Exhibit B

 

 

Percentage of Performance Shares Earned Schedule

 

Use this schedule if number of Comparison Companies and the S&P Total Return
Index plus the Corporation is 12:

 

TSR Ranking

 

1st

Percentage of Performance Shares Earned

 

200%

2nd

200%

3rd

175%

4th

150%

5th

125%

6th

100%

7th

83%

8th

66%

9th

50%

10th

0%

11th

0%

12th

0%

 

11

 

 

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Exhibit C-1

Percentage of Performance Shares Earned Schedule

 

Use this schedule if number of Comparison Companies and the S&P Total Return
Index plus the Corporation is 11:

 

TSR Ranking

 

1st

Percentage of Performance Shares Earned

 

200%

2nd

200%

3rd

175%

4th

150%

5th

100%

6th

83%

7th

67%

8th

50%

9th

0%

10th

0%

11th

0%

 

12

 

 

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Exhibit C-2

 

 

 

Percentage of Performance Shares Earned Schedule

 

Use this schedule if number of Comparison Companies and the S&P Total Return
Index plus the Corporation is 10:

 

TSR Ranking

 

1st

Percentage of Performance Shares Earned

 

200%

2nd

175%

3rd

150%

4th

125%

5th

100%

6th

75%

7th

50%

8th

0%

9th

0%

10th

0%

 

13

 

 

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Exhibit C-3

 

 

 

Percentage of Performance Shares Earned Schedule

 

Use this schedule if number of Comparison Companies and the S&P Total Return
Index plus the Corporation is 9:

 

TSR Ranking

 

1st

Percentage of Performance Shares Earned

 

200%

2nd

167%

3rd

133%

4th

100%

5th

83%

6th

67%

7th

50%

8th

0%

9th

0%

 

14

 

 

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Exhibit C-4

 

 

 

Percentage of Performance Shares Earned Schedule

 

Use this schedule if number of Comparison Companies and the S&P Total Return
Index plus the Corporation is 8:

 

TSR Ranking

 

1st

Percentage of Performance Shares Earned

 

200%

2nd

167%

3rd

133%

4th

100%

5th

75%

6th

50%

7th

0%

8th

0%

 

15