exv10w2





EXHIBIT 10.2


RESTRICTED STOCK AGREEMENT


     THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the                     day of
                    ,
2009 (the “Date of Grant”), between CONCHO RESOURCES INC., a Delaware
corporation (the “Company”), and                     (the “Employee”).


     1. Award. Pursuant to the CONCHO RESOURCES INC. 2006 STOCK INCENTIVE PLAN (the
“Plan”), as of the Date of Grant,                     shares (the “Restricted Shares”) of the Company’s
common stock, par value $0.001 per share, shall be issued as hereinafter provided in the Employee’s
name subject to certain restrictions thereon. The Restricted Shares shall be issued upon
acceptance hereof by the Employee and upon satisfaction of the conditions of this Agreement. The
Employee acknowledges receipt of a copy of the Plan, and agrees that this award of Restricted
Shares shall be subject to all of the terms and provisions of the Plan, including future amendments
thereto, if any, pursuant to the terms thereof.


     2. Definitions. Capitalized terms used in this Agreement that are not defined below
or in the body of this Agreement shall have the meanings given to them in the Plan. In addition to
the terms defined in the body of this Agreement, the following capitalized words and terms shall
have the meanings indicated below:


     (a) “Change of Control” shall mean:


     (i) a merger of the Company with another entity, a consolidation involving the Company,
or the sale of all or substantially all of the assets of the Company to another entity if, in
any such case, (1) the holders of equity securities of the Company immediately prior to such
transaction or event do not beneficially own immediately after such transaction or event
equity securities of the resulting entity entitled to 50% or more of the votes then eligible
to be cast in the election of directors generally (or comparable governing body) of the
resulting entity in substantially the same proportions that they owned the equity securities
of the Company immediately prior to such transaction or event or (2) the persons who were
members of the Board immediately prior to such transaction or event shall not constitute at
least a majority of the board of directors of the resulting entity immediately after such
transaction or event;


     (ii) the dissolution or liquidation of the Company;


     (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3)
of the Exchange Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the combined voting power of the outstanding securities of
the Company; or


     (iv) as a result of or in connection with a contested election of directors, the persons
who were members of the Board immediately before such election shall cease to constitute a
majority of the Board.


     For
purposes of the preceding sentence, (1) “resulting entity”
in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the
surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or
acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of
common stock of the Company receive capital stock of such other entity in such transaction or
event, in which event the resulting entity shall be such other entity, and (2) subsequent to the
consummation of a merger or consolidation that does not constitute a Change of Control, the term
“Company” shall refer to the resulting entity and the term “Board” shall refer to the board of
directors (or comparable governing body) of the resulting entity.


     (b) “Disability” shall have the meaning assigned to such term under the Employment Agreement.


     (c) “Earned Shares” means the Restricted Shares after the lapse of the Forfeiture Restrictions
without forfeiture.


     (d) “Employment Agreement” means that certain Employment Agreement between the Company and the
Employee effective as of ___, 20___, as in effect on the Date of Grant.


     (e) “Forfeiture Restrictions” shall have the meaning specified in Section 3(a) hereof.


 








 





     (f) “Involuntary Termination” shall have the meaning assigned to such term under the
Employment Agreement.



     3. Restricted Shares. The Employee hereby accepts the Restricted Shares when issued
and agrees with respect thereto as follows:



     (a) Forfeiture Restrictions. The Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in the
event of termination of the Employee’s employment with the Company for any reason other than death,
Disability, or Involuntary Termination within the two-year period beginning on the date upon which
a Change of Control occurs, the Employee shall, for no consideration, forfeit to the Company all
Restricted Shares. The prohibition against transfer and the obligation to forfeit and surrender
Restricted Shares to the Company upon termination of employment as provided in the preceding
sentence are herein referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions
shall be binding upon and enforceable against any transferee of Restricted Shares.



     (b) Lapse of Forfeiture Restrictions. Provided that the Employee has been
continuously employed by the Company from the Date of Grant through the lapse date set forth in the
following schedule, the Forfeiture Restrictions shall lapse with respect to a percentage of the
Restricted Shares determined in accordance with the following schedule:



	 	 	 	 	 
	 	 	Percentage of Total Number
	 	 	of Restricted Shares as to Which
	Lapse Date	 	Forfeiture Restrictions Lapse
	 


	 	 	25	%
	 


	 	 	25	%
	 


	 	 	25	%
	 


	 	 	25	%
	 


	 	 	 	 





Notwithstanding the foregoing, (i) if the Employee’s employment with the Company is terminated by
reason of death or Disability, then the Forfeiture Restrictions shall lapse with respect to 100% of
the Restricted Shares effective as of the date of such termination, and (ii) subject to the
provisions of Section 5.5 (relating to parachute payments) and Section 5.6 (relating to a release
agreement) of the Employment Agreement, if the Employee’s employment with the Company shall be
subject to an Involuntary Termination within the two-year period beginning on the date upon which a
Change of Control occurs, then the Forfeiture Restrictions shall lapse with respect to 100% of the
Restricted Shares effective as of the date of such Involuntary Termination. Any shares with
respect to which the Forfeiture Restrictions do not lapse in accordance with the preceding
provisions of this Section 3(b) shall be forfeited to the Company for no consideration as of the
date of the termination of the Employee’s employment with the Company.




     (c) Certificates. A certificate evidencing the Restricted Shares shall be issued by
the Company in the Employee’s name, pursuant to which the Employee shall have all of the rights of
a stockholder of the Company with respect to the Restricted Shares, including, without limitation,
voting rights and the right to receive dividends (provided, however, that dividends paid in shares
of the Company’s stock shall be subject to the Forfeiture Restrictions and further provided that
dividends that are paid other than in shares of the Company’s stock shall be paid no later than the
end of the calendar year in which the dividend for such class of stock is paid to stockholders of
such class or, if later, the 15th day of the third month following the date the dividend is paid to
stockholders of such class of stock). Notwithstanding the foregoing, the Company may, in its
discretion, elect to complete the delivery of the Restricted Shares by means of electronic,
book-entry statement, rather than issuing physical share certificates. The Employee may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the stock until the Forfeiture
Restrictions have expired, and a breach of the terms of this Agreement shall cause a forfeiture of
the Restricted Shares. The certificate, if any, shall be delivered upon issuance to the Secretary
of the Company or to such other depository as may be designated by the Committee as a depository
for safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture
Restrictions lapse pursuant to the terms of the Plan and this Agreement. At the Company’s request,
the Employee shall deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeiture, the Company
shall cause a new certificate or certificates to be issued without legend (except for any legend
required pursuant to applicable securities laws or any other agreement to which the Employee is a
party) in the name of the Employee in exchange for the certificate evidencing the Restricted Shares
or, as may be the case, the Company shall issue appropriate instructions to the transfer agent if
the electronic, book-entry method is utilized.



     (d) Corporate Acts. The existence of the Restricted Shares shall not affect in any
way the right or power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s capital structure or
its business, any merger or consolidation of the Company, any issue of debt or equity securities,
the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate act or proceeding. The
prohibitions of Section 3(a) hereof shall not apply to the transfer of Restricted Shares pursuant
to a plan of reorganization of the Company, but the stock, securities or other property received in
exchange therefor shall also



 









 







become subject to the Forfeiture Restrictions and provisions governing the lapsing of such
Forfeiture Restrictions applicable to the original Restricted Shares for all purposes of this
Agreement, and the certificates, if any, representing such stock, securities or other property
shall be legended to show such restrictions.



     4. Withholding of Tax. To the extent that the receipt of the Restricted Shares or the
lapse of any Forfeiture Restrictions results in compensation income or wages to the Employee for
federal, state or local tax purposes, the Employee shall deliver to the Company at the time of such
receipt or lapse, as the case may be, such amount of money as the Company may require to meet its
minimum obligation under applicable tax laws or regulations, and if the Employee fails to do so,
the Company is authorized to withhold from any cash or stock remuneration (including withholding
any Restricted Shares or Earned Shares distributable to the Employee under this Agreement) then or
thereafter payable to the Employee any tax required to be withheld by reason of such resulting
compensation income or wages. The Employee acknowledges and agrees that the Company is making no
representation or warranty as to the tax consequences to the Employee as a result of the receipt of
the Restricted Shares, the lapse of any Forfeiture Restrictions or the forfeiture of any Restricted
Shares pursuant to the Forfeiture Restrictions.



     5. Status of Stock. The Employee agrees that the Restricted Shares and Earned Shares
issued under this Agreement will not be sold or otherwise disposed of in any manner which would
constitute a violation of any applicable federal or state securities laws. The Employee also
agrees that (a) the certificates, if any, representing the Restricted Shares and Earned Shares may
bear such legend or legends as the Committee deems appropriate in order to reflect the Forfeiture
Restrictions and to assure compliance with the terms and provisions of this Agreement and
applicable securities laws, (b) the Company may refuse to register the transfer of the Restricted
Shares or Earned Shares on the stock transfer records of the Company if such proposed transfer
would constitute a violation of the Forfeiture Restrictions or, in the opinion of counsel
satisfactory to the Company, of any applicable securities law, and (c) the Company may give related
instructions to its transfer agent, if any, to stop registration of the transfer of the Restricted
Shares.



     6. Employment Relationship. For purposes of this Agreement, the Employee shall be
considered to be in the employment of the Company as long as the Employee remains an employee of
either the Company or an Affiliate. Without limiting the scope of the preceding sentence, it is
specifically provided that the Employee shall be considered to have terminated employment with the
Company at the time of the termination of the “Affiliate” status of the entity or other
organization that employs the Employee. Nothing in the adoption of the Plan, nor the award of the
Restricted Shares thereunder pursuant to this Agreement, shall confer upon the Employee the right
to continued employment by the Company or affect in any way the right of the Company to terminate
such employment at any time. Unless otherwise provided in a written employment agreement or by
applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the
employment relationship may be terminated at any time by either the Employee or the Company for any
reason whatsoever, with or without cause or notice. Any question as to whether and when there has
been a termination of such employment, and the cause of such termination, shall be determined by
the Committee or its delegate, and its determination shall be final.



     7. Notices. Any notices or other communications provided for in this Agreement shall
be sufficient if in writing. In the case of the Employee, such notices or communications shall be
effectively delivered if hand delivered to the Employee at the Employee’s principal place of
employment or if sent by registered or certified mail to the Employee at the last address the
Employee has filed with the Company. In the case of the Company, such notices or communications
shall be effectively delivered if sent by registered or certified mail to the Company at its
principal executive offices.



     8. Entire Agreement; Amendment. This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters between the Employee and
the Company and constitutes the entire agreement between the Employee and the Company with respect
to the subject matter of this Agreement. This Agreement may not be modified in any respect by any
verbal statement, representation or agreement made by any employee, officer, or representative of
the Company or by any written agreement unless signed by an officer of the Company who is expressly
authorized by the Company to execute such document.



     9. Binding Effect; Survival. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under the Employee. The
provisions of Section 5 shall survive the lapse of the Forfeiture Restrictions without forfeiture.



     10. Controlling Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas, without regard to conflicts of law principles thereof, or, if
applicable, the laws of the United States.



[Signatures begin on next page.]




 









 




     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and the Employee has executed this Agreement, all as of the date first
above written.



	 	 	 	 	 	 	 	 	 
	 	 	CONCHO RESOURCES INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 





SPOUSAL CONSENT


     Employee’s spouse, if any, is fully aware of, understands and fully consents and agrees to the
provisions of this Agreement and its binding effect upon any marital or community property
interests he/she may now or hereafter own, and agrees that the termination of his/her and
Employee’s marital relationship for any reason shall not have the effect of removing any Restricted
Shares and Earned Shares otherwise subject to this Agreement from coverage hereunder and that
his/her awareness, understanding, consent and agreement are evidenced by his/her signature below.



	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 
	 	 
	 

	 	Signature of Spouse	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	Printed Name of Spouse