CIMAREX ENERGY CO.
1700 Lincoln Street, Suite 3700
Denver, Colorado 80203-4537

    

NOTICE OF GRANT OF RESTRICTED STOCK
AND AWARD AGREEMENT (PERFORMANCE AWARD)

    

Name: <first_name> <last_name>
 
Participant ID: <emp_id>
 
Plan: 2014 Equity Incentive Plan
 
Date of Award: December 6, 2018
 
Number of shares: <shares_awarded>
 
Restriction Period Ends: December 1, 2021

By accepting this agreement online, you and Cimarex Energy Co. (the “Company”)
agree that this restricted stock award is granted under and governed by the
terms and conditions of the Company’s 2014 Equity Incentive Plan (the “Plan”)
and the Award Agreement (the “Agreement”), both of which are attached and made a
part of this document. In the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of the Agreement, the terms
and conditions of the Plan will prevail.

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AWARD AGREEMENT

1.    Grant of Restricted Stock. Pursuant to the Plan and subject to the terms
and conditions of this Agreement, you are granted the shares of restricted stock
(“Restricted Stock”) as set forth in the foregoing Notice of Grant as an Other
Stock Award pursuant to Article VIII of the Plan. Upon the Company’s achievement
of pre-determined objectives for a specified performance period, some or all of
the shares of Restricted Stock will vest (the “Vested Shares”). Prior to the end
of the Performance Period (as defined in Paragraph 3), the Restricted Stock may
be evidenced in the manner the Company deems appropriate, including, without
limitation, a book-entry registration or issuance of a stock certificate or
certificates. At the end of the Performance Period the shares will be disposed
of as provided in Paragraph 7.

2.    Voting Rights and Ordinary Cash Dividends. Prior to the end of the
Performance Period you are entitled to the voting rights of a holder of the
Company’s common stock.

During the Performance Period, the Company will accrue dividends on the maximum
number of shares that may vest pursuant to this grant for each dividend record
date occurring during the Performance Period. At the end of the Performance
Period, the number of Vested Shares to be paid to you will be calculated in
accordance with paragraph 4 of this Agreement. At that time you will receive the
dividends accrued by the Company that are attributable to the Vested Shares paid
to you in accordance with such calculation. Any dividends that are accrued on
shares that are forfeited as a result of the calculation described in paragraph
4 will also be forfeited and returned to the Company’s general funds.

3.    Performance Period. Except as provided in Paragraphs 5 and 6, the
“Performance Period” shall be the three-year period ending on December 1, 2021
as provided in the foregoing Notice of Award. You may not sell, assign, transfer
by gift or otherwise, pledge, hypothecate or otherwise dispose of, by operation
of law or otherwise, any of the shares of Restricted Stock prior to expiration
of the Performance Period.

4.    Performance Goals. The number of Vested Shares will be determined at the
end of the Performance Period and will be based upon the Company’s stock price
performance relative to that of a defined peer group. The peer group will be
comprised of the exploration and production companies set forth on Appendix B,
on both the first day of the Performance Period and on the last day of the
Performance Period (the “Performance Peer Group”). The calculation of the exact
number of Vested Shares to be issued shall be determined as follows:

a.
The calculated percentage difference between (i) and (ii), below:

(i)
the average (rounded to the second decimal place) of the per share closing price
of the Company’s common stock (the “XEC Beginning Price”) and the common stock
of each company in the Performance Peer Group over 30 trading days preceding the
beginning of the Performance Period, and

(ii)
the average (rounded to the second decimal place) of the per share closing price
of the Company’s common stock (the “XEC Ending Price”) and the common stock of
each company in the Performance Peer Group over 30 trading days preceding the
end of the Performance Period.

b.
After determination of the percentage difference as provided in 4.a., the
Company and the companies in the Performance Peer Group will be ranked from the
highest percentage to the lowest percentage, with the highest percentage company
ranked as first and the lowest

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percentage company as the last number of the total number of companies in the
Performance Peer Group. If during the Performance Period any member of the
Performance Peer Group (i) declares bankruptcy, or (ii) is delisted and ceases
to be traded on a national securities exchange, then it will remain in the
Performance Peer Group and shall be ranked with any similarly-situated company
in last place for purposes of this Section 4.b.

c.
The result obtained in 4.b. will serve as the basis for the percentage of Vested
Shares to be held by you. The applicable vesting percentages are set forth on
Appendix A to this Agreement. For the Company’s rank under the column entitled
“Relative Performance Rank” you will vest the percentage shown under the
appropriate “Percent of Award Vesting” column depending on whether (i) the XEC
Ending Price is less than the XEC Beginning Price or (ii) the XEC Ending Price
is equal to or greater than the XEC Beginning Price. If at the end of the
Performance Period there are fewer companies in the Performance Peer Group than
at the beginning of the Performance Period, the relative performance rank will
be adjusted so that the Company must be ranked first or second of the companies
in the Performance Peer Group in order for you to achieve 200% of the award, and
no shares will vest if the Company is ranked less than 35% of the companies in
the Performance Peer Group, with the remaining vesting percentages adjusted by
interpolation.

 
5.    Termination of Employment.

a.    Death or Disability. If your employment with the Company terminates on
account of death or disability (as defined below) prior to the end of the
Performance Period, you will receive the number of Vested Shares calculated in
accordance with paragraph 4, except that the end of the Performance Period will
be the date of death or disability.

You will be considered disabled if you are (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
Cimarex.

b.    Other Terminations. If your employment is terminated, voluntarily or
involuntarily, for any reason other than death or disability prior to the end of
the Performance Period, your Restricted Stock will be forfeited.

6.    Change in Control. Upon the occurrence of a Change in Control, as defined
in the Plan, you will receive the number of Vested Shares calculated in
accordance with paragraph 4, except that the end of the Performance Period shall
be the date of the Change in Control.

7.    Removal of Restrictions. Upon expiration of the Performance Period, the
Company will deliver to you the number of Vested Shares computed in accordance
with this Agreement. In conformity with its insider trading policy, Cimarex may
elect to electronically deliver the shares to your account at a brokerage firm
selected by the Company. You shall forfeit and assign to the Company, without
any consideration, any shares of Restricted Stock to which you are not entitled
at the end of the Performance Period.

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8.    Withholding Taxes. Unless you make other arrangements with the Company,
the Company will withhold a number of Vested Shares having a Fair Market Value
(as defined in the Plan) on the date of payment equal to the minimum statutory
total tax that could be withheld on the transaction. You may also make
arrangements with the Company to pay the amount of taxes required by law or to
deliver to the Company previously owned shares of common stock having a Fair
Market Value on the date of payment equal to the minimum statutory total tax. In
no event shall any form of payment made by you be permitted if it would result
in an accounting charge with respect to shares delivered to pay such taxes,
unless otherwise approved by the Company’s Compensation and Governance
Committee.

9.    Effect of Prohibited Transfer. If any transfer of Restricted Stock is made
or attempted to be made contrary to the terms of this Agreement, the Company
will have the right to acquire, without the payment of any consideration, such
shares from you or your transferee, at any time before or after a prohibited
transfer. In addition to any other legal or equitable remedies it may have, the
Company may enforce its rights to specific performance to the extent permitted
by law and may exercise such other equitable remedies then available to it. The
Company may refuse for any purpose to recognize any transferee who receives
shares contrary to the provisions of this Agreement as a stockholder and may
retain and/or recover all dividends on such shares that were paid or payable
subsequent to the date on which the prohibited transfer was made or attempted.

10.    Clawback. By accepting this Performance Award, you expressly agree that,
in the event of an accounting restatement due to material noncompliance with
financial reporting requirements under the U.S. federal securities laws, the
Committee has the right to use reasonable efforts to recover from you this
Performance Award, during the three-year period preceding the date on which the
Company is required to prepare an accounting restatement. This clawback policy
will be interpreted in the best judgment of the Committee in a manner consistent
with any applicable rules or regulations adopted by the Securities and Exchange
Commission or the New York Stock Exchange Stock Market as contemplated by the
Dodd-Frank Act.
11.    Miscellaneous.

(a)Adjustments. Article IX of the Plan provides for certain adjustments to the
number of shares of Common Stock covered by the Restricted Stock and other
changes in connection with a reorganization or other changes to the Common
Stock.
(b)Restrictions on Common Stock. Any shares of Common Stock acquired by you are
subject to the Company’s Insider Trading Policy and may be subject to other
restrictions on resale. Any sale or other disposition of shares by you must be
made in compliance with the Company’s Insider Trading Policy, in effect from
time to time, securities law and other applicable legal requirements.
(c)Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to Restricted Stock awarded under the Plan or
future Restricted Stock that may be awarded under the Plan by electronic means.
You hereby consent to receive such documents by electronic delivery and agree to
participate in the Plan through any on-line or electronic system established and
maintained by the Company or another third party designated by the Company.
(d)Amendment or Modifications to the Agreement. This Agreement constitutes the
entire understanding of the parties on the subjects covered. You expressly
warrant that you are not accepting this Agreement in reliance on any promises,
representations, or inducements other than those contained herein. Modifications
to this Agreement or the Plan may only be made in writing and signed by a duly
authorized officer of the Company.
(e)    Amendment or Termination of the Plan. By accepting this Performance
Award, you expressly warrant that you have received the Restricted Stock under
the Plan, and have received, read

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and are familiar with the terms of the Plan. You understand that the Plan is
discretionary in nature and that it may be amended, suspended or terminated by
the Company at any time.
(f)    Defined Terms. Capitalized terms have the meaning set forth in the Plan
or herein, as the case may be.
(g)    Compliance with Securities Laws. This Agreement shall be subject to the
requirement that if at any time counsel to the Company determines that the
listing, registration or qualification of the shares of Restricted Stock upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of such shares thereunder, the
Restricted Stock may not be awarded unless such listing, registration,
qualification, consent or approval shall have been effected or obtained on
conditions acceptable to the Company. Nothing herein shall be deemed to require
the Company to apply for, obtain, or keep current, any such listing,
registration or qualification.
(h)    Construction; Severability. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.
(i)    Waiver. Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Committee appointed under the
Plan, but only to the extent permitted under the Plan.
(j)    Binding Effect. Subject to the limits on the transferability of the
Restricted Stock, this Agreement shall be binding upon and inure to the benefit
of the Company and you and their respective heirs, executors, administrators,
legal representatives, successors and assigns.
(k)    No Right to Continued Employment. Nothing contained in this Agreement or
the Plan shall be construed as giving you any right to remain employed by (or
provide other service to) the Company, any Subsidiary or any Affiliated Entity.
The Company reserves the right to terminate your employment (or other service)
at any time.
(l)    Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be delivered electronically, personally
or mailed (U.S. Mail) by the Company to you at your then current address as
maintained by the Company or such other address as you may advise the Company in
writing. Any such notice shall be deemed to have been given as of the second day
after deposit in the United States mails, postage prepaid, properly addressed as
set forth in this paragraph, in the case of a mailed notice, or as of the date
delivered in the case of electronic or personal delivery.
(m)    Governing Law. This Agreement and the Plan shall be governed by and
construed in accordance with the laws of the State of Delaware except as
superseded by applicable Federal law.

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Attachments:
2014 Equity Incentive Plan
Plan Prospectus
Insider Trading Policy

[REST OF THE PAGE IS LEFT BLANK INTENTIONALLY]

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Appendix A
Cimarex Energy Co.
Performance Award Agreement

Relative Performance Rank
XEC Ending Price is Less Than XEC Beginning Price - Percent of Award Vesting
XEC Ending Price is Equal to or Greater Than XEC Beginning Price - Percent of
Award Vesting
1-2
200%
200%
3
175%
175%
4-5
135%
150%
6
100%
125%
7-8
50%
100%
9
0%
75%
10
0%
50%
 11-15
0%
0%

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Appendix B
Cimarex Energy Co.
Performance Award Agreement

Performance Peer Group

(Initially consisting of companies in the S&P 500 Exploration and Production
Index
as of December 6, 2018, subject to adjustment as provided in
Section 4 of this Performance Share Agreement)

Anadarko Petroleum Corporation (APC)
EQT Corporation (EQT)
Apache Corporation (APA)
Hess Corporation (HES)
Cabot Oil & Gas Corporation (COG)
Marathon Oil Corporation (MRO
Cimarex Energy Co. (XEC)
Newfield Exploration Company (NFX)
Concho Resources Inc. (CXO)
Noble Energy Inc. (NBL)
ConocoPhillips (COP)
Occidental Petroleum Corporation (OXY)
Devon Energy Corporation (DVN)
Pioneer Natural Resources Company (PXD)
EOG Resources Inc. (EOG)
 

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