Exhibit 10.3 

EMPLOYMENT AGREEMENT 

ThisEmployment Agreement (“Agreement”) is entered into this 18th day of November, 2008, but effective December 1, 2008 (the“Effective Date”), between XTO Energy Inc., a Delaware corporation (“XTO Energy”) (XTO Energy and, to the extent applicable, one or more of its subsidiaries, being collectively referred to herein as “Employer”), and BobR. Simpson, who resides in Fort Worth, Texas (“Employee”). 

RECITALS 

WHEREAS, Employee and XTO Energy entered into that certain Employment Agreement dated and effective May 16, 2006, which was amendedon December 31, 2007 (as amended, the “May 2006 Agreement”); and 

WHEREAS, Employee and XTO Energy desire toamend the May 2006 Agreement to amend certain terms and for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by executing this Agreement to completely replace the May 2006 Agreement; and

WHEREAS, Employer desires to employ Employee as Chairman of the Board and Founder of XTO Energy and as an officer and/ordirector of one or more of XTO Energy’s subsidiaries upon the terms and conditions provided herein; and 

WHEREAS,Employee desires to be so employed. 

STATEMENT OF AGREEMENT 

NOW, THEREFORE, in consideration of the above recitals, and for and in consideration of the mutual promises set forth below, the parties agree as follows: 

1. Employment. Employer hereby employs Employee as Chairman of the Board and Founder of XTO Energy, and Employee hereby acceptsemployment with Employer upon the terms and conditions herein stated. 

2. Term. 

2.1 Initial Term. Subject to the terms and conditions hereof, Employee’s term of employment under thisAgreement shall commence as of the Effective Date and continue through November 30, 2009 (the “Initial Term”), subject to the extension provisions of Section 2.2, unless terminated earlier in accordance with the provisionsof Section 10. 

2.2 Extensions. Beginning with December 1, 2009, the term of thisAgreement shall automatically be extended each year on December 1 for one additional year (for example, on December 1, 2009, the term of this Agreement will be extended to November 30, 2010), except that the term of this Agreementshall not be extended automatically if (i) in any year, prior to thirty (30) calendar days before the term is scheduled to be extended automatically, Employer delivers to Employee, or Employee delivers to Employer, written notice that theautomatic extension provision of this Section 2.2 shall be inoperative, (ii) a Notice of Termination (as defined in Section 10.5) has been delivered and not withdrawn, or (iii) Employee dies. 

 

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2.3 Expiration Date. The term of this Agreement shall expire atthe end of the Initial Term or, if extended pursuant to Section 2.2, at the end of the extension period (referred to herein as the “Expiration Date), subject to earlier termination pursuant to Section 10. 

3. Position and Duties. Employee shall serve Employer in an executive capacity as Chairman of the Board and Founder of XTO Energyand as an officer and/or director of one or more of XTO Energy’s subsidiaries. Employee’s duties shall include, in addition to those enumerated in the Bylaws of Employer, the following: serving as a director for XTO Energy, setting overallstrategic vision for XTO Energy, managing the acquisition and divesture strategy and hedging program, and performing those executive duties as may be directed by the Board of Directors of XTO Energy (the “Board”), including service as anofficer and/or director of one or more of XTO Energy’s subsidiaries. 

4. Extent of Services. Employee shalldevote his best efforts and full business time (with allowances for vacations and sick leave) and attention to furthering the business of Employer, and shall not during the term of this Agreement be engaged in other activities which require suchsubstantial services on the part of Employee that Employee is unable to perform the duties assigned to him by Employer. The foregoing shall not be construed as preventing Employee from maintaining or making investments, or engaging in otherbusiness, enterprises or civic, charitable or public service functions, provided such investments, business or enterprises do not require services on the part of Employee that would materially impair, or conflict with, the performance of his dutiesunder this Agreement. 

5. Compensation. As his regular compensation for all services rendered by Employee under thisAgreement to XTO Energy and its subsidiaries and affiliates, Employer shall pay Employee a salary (the “Base Salary”) of $3,600,000 per annum, payable in substantially equal semimonthly installments during the term hereof. All salary andany other current compensation (if any) paid to Employee shall be subject to such payroll and withholding deductions as are required by the laws of any jurisdiction, federal, state or local, with taxing authority with respect to such salary andother compensation, if any. Base Salary payments hereunder shall not in any way limit or reduce any other obligation of Employer hereunder, and no other compensation, benefit or payment hereunder shall in any way limit or reduce the obligation ofEmployer to pay Employee’s Base Salary hereunder. It is acknowledged by the parties that Employee’s Base Salary, as well as any incentive compensation and other employee benefits payable pursuant hereto, may be paid or provided by one ormore of XTO Energy’s subsidiaries, but shall be the ultimate responsibility of XTO Energy. 

6. IncentiveCompensation and Other Benefits. 

6.1 After December 1, 2008, Employee shall not be entitled toparticipate in any cash incentive compensation plan. 

6.2 On January 2, 2009, Employee shall be granted(a) 110,000 shares of XTO Energy common stock that has no vesting criteria, and (b) 40,000 shares of performance-based XTO Energy common stock with the terms of vesting to be determined by the Compensation Committee of the Board(“Compensation Committee”). If this Agreement is extended pursuant to Section 2.2, a similar grant shall be made to Employee on each January 2 thereafter unless otherwise amended by the parties. The shares referred to inthis Section 6.2 that have no vesting criteria shall be granted pursuant to Section 11 of the XTO Energy 2004 Stock Incentive Plan, as amended and restated as of May 20, 2008 (“2004 Plan”), as amended from time totime, or any other similar subsequently adopted equity compensation plans. No other grants shall be made to Employee pursuant to the 2004 Plan or any other similar subsequently adopted equity compensation plans during the term of this Agreement orany extension thereof. 

 

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6.3 Employer shall also provide the following employee benefits toEmployee during the term of this Agreement: 

(a) Life Insurance. Employer will provide Employee withlife insurance having a death benefit equal to $3,000,000, which shall be in addition to the life insurance benefit provided to each employee of Employer. Employee shall have the right to designate on each policy the primary and contingentbeneficiaries thereunder. To the extent provision of such insurance coverage during the term of this Agreement is taxable to Employee, the provision of such in-kind benefits during a calendar year shall not affect the in-kind benefits to be providedin any other calendar year. 

(b) Medical Insurance. Employer shall maintain in full force and effect,and Employee shall be entitled to participate in, any medical or health benefit plan provided by XTO Energy or any of its subsidiaries, subject to the terms and conditions of each such plan. To the extent provision of such insurance coverage or costreimbursement benefits during the term of this Agreement are taxable to Employee, the provision of such in-kind benefits during a calendar year shall not affect the in-kind benefits to be provided in any other calendar year, unless the insurancecoverage or cost reimbursement benefits provide for a limit on the amount of expenses that may be reimbursed under such arrangement over some or all of the period in which such arrangement remains in effect. To the extent Employer directly providesto Employee any cost reimbursement benefits, payment of such benefits shall be made on or before the last day of the calendar year following the calendar year in which such costs are incurred. 

(c) Disability. Employer shall maintain in full force and effect, and Employee shall be entitled to receive, suchdisability insurance protection as is provided to other full-time executives of XTO Energy or any of its subsidiaries, subject to the terms and conditions of any plan or program sponsored by Employer providing such disability insurance protection.To the extent Employer provides such disability insurance coverage during the term of this Agreement, the provision of such in-kind benefits during a calendar year shall not affect the in-kind benefits to be provided, in any other calendar year. Tothe extent Employer reimburses Employee or pays on Employee’s behalf for such disability insurance coverage, payment or reimbursement of such insurance premiums shall be made on or before the last day of the calendar year following the calendaryear in which the premiums are due, and such payment or reimbursement during a calendar year shall not affect the premiums eligible for payment or reimbursement in any other calendar year. 

(d) Vacations. Employee shall be entitled to five weeks paid vacation in each calendar year and to compensation inrespect of earned but unused vacation days, determined in accordance with Employer’s vacation plan, if such plan so provides. Employee shall also be entitled to all paid holidays given by Employer to the executives of XTO Energy or any of itssubsidiaries. 

(e) Automobile and Related Expenses. Employee shall be paid a minimum monthlyautomobile allowance of $4,620 and shall be reimbursed for all fees, tags, insurance premiums and fuel and maintenance expenses regarding such automobile. Reimbursement of such insurance premiums during the term of this Agreement shall be made on orbefore the last day of the calendar year following the calendar year in which the premiums are due, and such reimbursement during a calendar year shall not affect the premiums eligible for reimbursement in any other calendar year. 

 

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(f) Tax Preparation Services. Employer shall prepare, or shallhave prepared, federal tax returns for Employee, Employee’s direct family, and entities owned by Employee or Employee’s direct family, at Employer’s cost. 

(g) Other Benefits. Employee shall be entitled to all other benefits and to participate in and be covered by allother employee benefit plans, including deferred compensation programs, if any, as are provided to other full-time executive employees of XTO Energy or any of its subsidiaries from time to time. 

6.4 Nothing paid to Employee under any plan or arrangement presently in effect or made available in the future shall bedeemed to be in lieu of the Base Salary payable to Employee pursuant to Section 5. Employer shall not make any changes in any plans or arrangements provided pursuant to this Section 6 that would adversely affectEmployee’s rights or benefits thereunder unless such change occurs pursuant to a program applicable to all executives of XTO Energy or any of its subsidiaries and does not result in a proportionately greater reduction in the rights or benefitsto Employee as compared with any other executive of XTO Energy or any of its subsidiaries. 

7. Covenant of Employee.As a material inducement to Employer to enter into this Agreement, Employee agrees to promptly inform Employer if Employee is the subject of any regulatory agency’s investigation for violation of state or federal securities law or has ajudgment against him for violation of these laws in any civil action in any court. 

8. Working Facilities and Staff.Employer shall furnish Employee with such facilities, staff and services as are suitable to his position and adequate for the performance of his duties. 

9. Expenses. Employer shall pay or reimburse Employee for all reasonable expenses for entertainment, travel, meals, hotel accommodations and fees and the like incurred by him in the interest of the business ofEmployer, such payment or reimbursement to be made upon submission of an itemized accounting statement by Employee documenting such expenses as may be required by the Code; *provided, however*, that Employee shall be reimbursed for suchexpenses, whether or not such expenses are deductible by Employer under the Code. The amount of expenses eligible for reimbursement during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year.Reimbursement of eligible expenses shall be made on or before the last day of the calendar year following the calendar year in which the expenses were incurred. 

10. Termination of Employment. 

10.1Termination of Employment. Notwithstanding any other provision hereof, Employee’s employment hereunder shall terminate, and, except as otherwise specifically provided herein, this Agreement shall terminate: 

(a) upon the death of Employee; 

(b) upon the disability of Employee, which for the purposes of this Agreement shall be the physical or mental inability of Employee to carry out the normal and usual duties of his employment on afull-time basis for the entire period of six (6) continuous months with the reasonable likelihood, as determined by a majority of the non-employee members of the Board, in their sole discretion, that Employee will be unable to carry out thenormal and usual duties of his employment on a full-time basis for the following continuous period of six (6) months; however, Employee may not be terminated for disability if, within thirty (30) days after Notice of Termination (asdefined in Section 10.5 below) is given, 

 

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Employee shall return to the performance of his duties on a full-time basis and a majority of the non-employee members of the Board shall determine, in theirsole discretion, that Employee is capable of carrying out such duties on a full-time basis (subject to the terms of Sections 6.3(c) and 11); 

(c) for “Cause” (as defined in Section 10.2 below), upon written notice of termination for Cause given by Employer to Employee after compliance with Section 10.2below; 

(d) for “Good Reason” (as defined in Section 10.3 below), upon written noticeof termination given by Employee to Employer; 

(e) without “Cause” (as defined inSection 10.2 below), upon written notice of termination given by Employer to Employee; 

(f) uponEmployee’s “Retirement” (as defined in Section 10.4 below); 

(g) uponEmployee’s voluntary resignation of employment for any reason other than Good Reason or Retirement; or 

(h) on the Expiration Date (subject to the terms of Section 2). 

10.2 Cause.Employer shall have Cause to terminate Employee’s employment if Employee (a) willfully and continually fails to substantially perform his duties with Employer (other than a failure resulting from Employee’s disability (as defined inSection 10.1(b) above), which failure continues for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to Employee specifying the manner in which Employee has failedto substantially perform, or (b) willfully engages in illegal conduct, gross misconduct, or a clearly established violation of Employer’s written policies and procedures, which is demonstrably and materially injurious to Employer,monetarily or otherwise; *provided, however*, that no termination of Employee’s employment shall be for Cause until (x) there shall have been delivered to Employee a written notice authorized by two-thirds (2/3) of thenon-employee members of the Board, specifying in detail the particulars of Employee’s conduct which violates either (a) or (b) above, (y) Employee shall have been provided an opportunity to be heard by the non-employee members ofthe Board (with the assistance of Employee’s counsel if Employee so desires), and (z) a resolution is adopted in good faith by two-thirds (2/3) of such members of the Board confirming such violation (excluding the vote of Employee).No act, nor failure to act, on Employee’s part, shall be considered “willful” unless he has acted or failed to act with an absence of good faith and without a reasonable belief that his action or failure to act was in the bestinterest of Employer. Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by Employee after Notice of Termination is given by or to Employee shall constitute Cause. 

10.3 Good Reason. Employee may terminate his employment hereunder for Good Reason upon the occurrence of any of thefollowing events or conditions: 

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

(b) a material diminution in Employee’s Base Salary; 

 

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(c) Employer’s requiring Employee (without the consent of Employee)to be based at any place outside a twenty-five (25) mile radius of his place of employment immediately prior to such proposed relocation, except for reasonably required travel on Employer’s business which is not materially greater thansuch travel requirements prior thereto; 

(d) any material breach by Employer of any provision of thisAgreement; or 

(e) any purported termination of Employee’s employment for Cause by Employer which doesnot otherwise comply with the terms of this Agreement. 

Employee must provide notice to Employer of theexistence of the condition constituting “Good Reason” within a period not to exceed ninety (90) days of the initial existence of the condition, upon the notice of which Employer must be provided a period of at least thirty(30) days during which it may remedy the condition and not be required to pay the amount. The separation from service must occur within the first two years following the initial existence of one or more of the Good Reason conditions arisingwithout the consent of Employee. 

10.4 Retirement. Employee shall be deemed to have terminated hisemployment with Employer due to his “Retirement” if Employee gives Employer a Notice of Termination that it is Employee’s intent to retire from and terminate his employment with Employer as an employee and to resign all of his officerpositions (which may or may not include his retirement as a director of Employer) and if, within the thirty (30) day period immediately following the date of such Notice of Termination, Employer does not provide Employee with written notice inaccordance with the procedures set forth in Section 10.2 above that, prior to receipt of Employee’s Notice of Termination, it had grounds to terminate Employee’s employment for Cause. In the event Employer provides Employeewith written notice that it had grounds to terminate Employee’s employment for Cause, the procedures set forth in Section 10.2 above shall apply and, if Employer cannot terminate Employee for Cause, Employee shall be deemed to haveterminated his employment due to Retirement. 

10.5 Notice of Termination. Any termination ofEmployee’s employment by Employer or by Employee (other than termination as a result of Employee’s death) shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice ofTermination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination ofEmployee’s employment under the provision so indicated. 

10.6 Date of Termination. “Date ofTermination” shall mean the date Employee incurs a “separation from service” as defined by Section 409A of the Code, which shall be (i) if Employee’s employment is terminated by his death, the date of his death,(ii) if Employee’s employment is terminated upon the disability of Employee, thirty (30) days after Notice of Termination is given (provided that, during such thirty (30) day period, Employee shall not have been approved forreturn to the performance of his duties on a full-time basis by a majority of the non-employee members of the Board as provided in Section 10.1(b) above), (iii) if Employee’s employment is terminated for Cause, the datespecified in the Notice of Termination, and (iv) if Employee’s employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Terminationis given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of 

 

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Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties or by a final determination inaccordance with Section 23 of this Agreement. 

10.7 Severance Benefits. In the event of aChange in Control or a termination of Employee’s employment under this Agreement for any reason, Employee shall have no right to receive any compensation, remuneration, bonus or benefit for any period subsequent to the Date of Termination orthe Change in Control, as the case may be, except as may be provided in Sections 11, 12 and 13. In the event that Employee is entitled to receive Severance Benefits pursuant to Section 11 upon a Change in Control, Employee shallnot be entitled to receive any other benefits under this Agreement, including, without limitation any Severance Benefits or Retirement Benefits upon the occurrence of any other event that would otherwise have entitled Employee to receive SeveranceBenefits or Retirement Benefits, including without limitation a subsequent Change in Control or a Termination of Employee’s employment as contemplated by Section 10.1. 

11. Compensation Upon Certain Employment Terminations or Change in Control. 

11.1 Termination without Cause, for Good Reason, by Death or Disability or Change in Control. If (i) Employeeincurs a “separation from service” as defined by Section 409A of the Code (A) by Employer without Cause, (B) by Employee for Good Reason, (C) by Employee’s death or disability, or (ii) there shall occur aChange in Control (as defined in Section 11.5), Employee shall be entitled to the following severance benefits (collectively, “Severance Benefits”): 

(a) Employer shall pay to Employee an amount in cash equal to three (3) times the sum of (x) Employee’sBase Salary and (y) two (2) times an amount equal to the greater of Employee’s two most recent regular bonuses paid in the prior twelve (12) months, if any. The amount determined in this paragraph (a) shall be paid on orbefore ten (10) days after the Date of Termination or forty-five (45) days after the Change in Control, whichever event is applicable. 

(b) For a period of eighteen (18) months after Employee’s termination of employment by Employer without Cause, by Employee for Good Reason, or after a Change in Control, Employer shall,at its sole expense, continue on behalf of Employee and his covered dependents and beneficiaries, all medical, dental, vision, and health benefits and insurance coverage that were being provided to Employee at the time of termination of employment.The benefits provided in this Section 11.1(b) shall be no less favorable to Employee, in terms of amounts and deductibles and costs to him, than the coverage provided Employee under the plans providing such benefits at the time oftermination. Employer’s obligation hereunder to provide a benefit shall terminate if Employee obtains comparable coverage under a subsequent employer’s benefit plan. For purposes of the preceding sentence, benefits will not be comparableduring any waiting period for eligibility for such benefits or during any period during which there is a preexisting condition limitation on such benefits. Employer also shall pay a lump sum equal to the amount of any additional income tax payableby Employee and attributable to the benefits provided under this Section 11.1(b) at the time such tax is imposed upon Employee. In the event that Employee’s participation in any such coverage is barred under the general terms andprovisions of the plans and programs under which such coverage is provided, or any such coverage is discontinued or the benefits thereunder are materially reduced, Employer shall provide or arrange to provide Employee with benefits substantiallysimilar to those which Employee was entitled to receive under such coverage immediately prior to the Termination Notice. At the end of the period of coverage set forth above, Employee shall have the 

 

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option to have assigned to him at no cost to Employee and with no apportionment of prepaid premiums, any assignable insurance owned by Employer and relatingspecifically to Employee, and Employee shall be entitled to all health and similar benefits that are or would have been made available to Employee under law. 

(c) Employer shall transfer to Employee, within ten (10) days after the Date of Termination or forty-five (45) days after the Change in Control, whichever event is applicable, allright, title or other ownership interest it may have in any automobile then being provided by Employer for use by Employee. 

(d) Employer shall transfer to Employee, within ten (10) days after the Date of Termination or forty-five (45) days after the Change in Control, whichever event is applicable, any right, title or ownershipin any club memberships provided by Employer for use by Employee. 

(e) Employer shall transfer to Employee,within ten (10) days after the Date of Termination or forty-five (45) days after the Change in Control, whichever event is applicable, any right, title or ownership in any life insurance owned by Employer on Employee’s life.

(f) (i) Unless otherwise specifically provided to the contrary in any option agreement, restricted stock agreement,or other agreement relating to equity-type compensation between Employee and Employer, all units, stock options, incentive stock options, performance shares, stock appreciation rights and royalty trust options under the 2004 Plan or any other planor arrangement (hereafter sometimes referred to as the “Rights”) held by Employee immediately prior to the Date of Termination (without Cause or for Good Reason) or the Change in Control, whichever is applicable, and any such Rightsreceived by Employee after such Date of Termination or the Change in Control, whichever is applicable (whether or not received in exchange for or in substitution for existing Rights), shall immediately become 100% vested and exercisable, andEmployee shall become 100% vested in all shares of restricted stock held by or for the benefit of Employee; *provided, however*, that to the extent Employer is unable to provide for such acceleration of vesting with respect to any such Rightsor shares of restricted stock, Employer shall provide in lieu thereof a lump-sum cash payment, within ten (10) days after the Date of Termination or forty-five (45) days after the Change in Control, whichever event is applicable, equal tothe difference between the total value of such unaccelerated Rights or shares of restricted stock (the “Stock Rights”) as of the Date of Termination or the Change in Control and the total value if such Stock Rights had accelerated vesting.The value of such accelerated vesting in Employee’s Stock Rights shall be determined by the Compensation Committee in good faith based on a valuation performed by an independent consultant selected by the Compensation Committee; any such StockRights which are not in existence at the time of Employee’s Date of Termination or the Change in Control shall be valued as of the date of the Date of Termination (as described herein) or the Change in Control, whichever is applicable.

(ii) Unless otherwise specifically provided to the contrary in any option agreement between Employee andEmployer, any previously unexercised options under any such option agreement shall not terminate or be forfeited and shall remain outstanding until the latest date on which the option would otherwise expire 

 

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under the terms of such agreement had Employee’s employment not terminated. However, with respect to any option (or portion of an option) for whicheither (i) Employer is unable to provide for the extension of the post-termination exercise period as provided in the preceding sentence, or (ii) providing for the extension would cause an option (or a portion of an option) to be subjectto Section 409A of the Code, then the option (or portion of an option) shall not be so extended and Employer shall make a lump sum cash payment to Employee, within thirty (30) days after the Date of Termination or the Change in Control,whichever event is applicable, equal to the value, as of the Date of Termination or the Change in Control, whichever event is applicable, of the extension of the post-termination exercise periods for all options (or portions of options) which cannotbe so extended. The value of such extension shall be determined by the Compensation Committee in good faith based on a valuation performed by an independent consultant selected by the Compensation Committee. Notwithstanding the foregoing, if, inaccordance with the foregoing, the post-termination exercise periods of an incentive stock option held by Employee may be extended without causing application of Section 409A of the Code, the extension of such options under thisSection 11.1(f)(ii) shall only be applicable if Employee has not exercised such option within three (3) months after Employee’s termination of employment, and, in that event, such options shall immediately convert tononqualified stock options. 

11.2 Retirement. If Employee’s employment is terminated due toEmployee’s Retirement, Employee shall be entitled to the following severance benefits (collectively, “Retirement Benefits”) upon his “separation from service” as defined by Section 409A of the Code: 

(a) Employer will retain Employee effective as of the Date of Termination for a period of eighteen (18) months (the“Consulting Period”) to render such consulting and advisory services (the “Consulting Services”) as Employer may reasonably request from time to time during the Consulting Period. Employee shall perform the Consulting Services atsuch times and places as an officer designated by Employer or the Board shall from time to time reasonably request. 

(b) As compensation for the Consulting Services, Employee shall receive each month at least the same monthly salary that he was receiving immediately prior to Employee’s retirement (the “Consulting Fee”), which shall be paidin accordance with the customary payroll practices of Employer. Any Consulting Fee payment payable to Employee hereunder in respect of any calendar month during which the Consulting Period ends prior to the end of such calendar month shall beprorated based on the ratio of the number of days in such calendar month during which Employee is retained as a consultant hereunder to the number of days in such calendar month. 

(c) Employee shall receive $10,000 per calendar month as part of the Consulting Fee during the Consulting Period for thepurposes of (i) the use of office space and office equipment, and (ii) expenses incurred by Employee in rendering the Consulting Services during the Consulting Period, which shall include without limitation travel, lodging, meals, and carrentals or taxi fares when out of town, long distance telephone calls to or for Employer, facsimile transmissions charges, and mailing expenses incurred by Employee in rendering the Consulting Services. 

 

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(d) Employer and Employee shall enter into a consulting agreement.Employee shall be an independent contractor in performing the Consulting Services, with authority to select the means and method of performing the Consulting Services. Employee shall not be an employee or agent of Employer. Unless otherwisespecifically authorized by the consulting agreement, Employee shall have no authority to transact any business or make any representations or promises in the name of Employer. 

(e) The consulting arrangement created by this Section 11.2 (i) shall terminate automatically upon thedeath of Employee; and (ii) shall terminate automatically at the expiration of the Consulting Period. Upon a termination of the consulting arrangement, neither of the parties hereto shall have any further duty or obligation under thisSection 11.2; provided, however, that termination of the consulting arrangement shall not affect the duties and obligations set forth in the other sections of this Agreement. 

(f) As of the Date of Termination (for Retirement), Employee shall be eligible for retiree medical coverage comparable tothe coverage provided to retirees under Employer’s retiree medical program as in effect on such Date of Termination, and as such program may be changed from time to time, on the same terms and conditions as similarly situated former employees.

(g) (i) Unless otherwise specifically provided to the contrary in any option agreement between Employee and Employer,any option that was granted to Employee at least eighteen (18) months prior to the Date of Termination (for Retirement) shall immediately become one-hundred percent (100%) vested and exercisable on the Date of Termination (for Retirement)and shall be exercisable by Employee for the remaining term of the option; provided, however, that to the extent Employer is unable to provide for such acceleration of vesting with respect to any such option, Employer shall provide in lieu thereof alump-sum cash payment, within thirty (30) days after the Date of Termination, equal to the difference between the total value of such unaccelerated option as of the Date of Termination and the total value of the option if such option had beenvested as of the Date of Termination. The value of such accelerated vesting of Employee’s unvested options shall be determined by the Compensation Committee in good faith based on a valuation performed by an independent consultant selected bythe Compensation Committee. 

(ii) Unless otherwise specifically provided to the contrary in any optionagreement or restricted or performance share award agreement between Employee and Employer, any previously unexercised options, whether vested or not (other than options governed by Section 11.2(g)(i) above), and any unvested restricted orperformance shares that are outstanding on the Date of Termination (for Retirement) shall not terminate or be forfeited and shall remain outstanding until the latest date on which the option or restricted or performance shares would otherwise expireunder the terms of such agreement had Employee’s employment not terminated. In addition, after the Date of Termination (for Retirement), unvested options and restricted or performance shares shall continue to vest, and once vested options shallcontinue to be exercisable, for the remaining term of the grant as if Employee’s employment had not terminated. However, with respect to any option or restricted or performance share grant (or portion thereof) for which either (i) Employeris unable to provide for the extension of the post-termination vesting and exercise periods as provided in the preceding sentences, or (ii) providing for such 

 

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extensions would cause an option or restricted or performance share grant (or a portion thereof) to be subject to Section 409A of the Code, then suchoption or restricted or performance share grant (or portion thereof) shall not be so extended, and Employer shall make a lump-sum cash payment to Employee, within thirty (30) days after the Date of Termination, equal to the value as of the Dateof Termination of the extension of the post-termination vesting and exercise periods for all options or restricted or performance share grants (or portions thereof) which cannot be so extended. The value of such extension shall be determined by theCompensation Committee in good faith based on a valuation performed by an independent consultant selected by the Compensation Committee. Notwithstanding the foregoing, if, in accordance with the foregoing, the post-termination vesting and exerciseperiods of an incentive stock option held by Employee may be extended without causing application of Section 409A of the Code, the extension of such options under this Section 11.2(g)(ii) shall only be applicable if Employee has notexercised such option within three (3) months after Employee’s termination of employment, and, in that event, such options shall immediately convert to nonqualified stock options. 

11.3 Other Terminations. If Employee’s employment shall be terminated (i) by Employer for Cause, or(ii) by Employee without Good Reason and not due to Retirement, Employer shall pay Employee (x) his Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and (y) the vestedportion of any incentive compensation plan to which Employee is entitled in accordance with the terms of such plan. 

11.4 Disability. During any period that Employee fails to perform his duties hereunder as a result of incapacity due to physical or mental illness (“Disability Period”), Employee shall continue to receive his Base Salary atthe rate then in effect for such period until his employment is terminated pursuant to Section 10.1(b) hereof, provided that payments so made to Employee during the Disability Period shall be reduced by the sum of the amounts, if any,payable to Employee prior to the time of any such payment under disability benefit plans of Employer and which were not previously applied to reduce any Base Salary payment. 

11.5 Change in Control. 

(a) For purposes of this Agreement, a “Change in Control” shall mean the occurrence of one or more of the following events as objectively determined based upon all of the facts andcircumstances without the exercise of discretion by the Board: (i) a Change in Ownership of Employer; (ii) a Change in Effective Control of Employer; or (iii) a Change in the Ownership of a Substantial Portion of the Assets ofEmployer. For purposes hereof: 

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

(ii) “Change in Ownership” shall mean that any one person or more than one person Acting as a Group acquires ownership of stock of Employer that, together with stock held by such person or group, constitutesmore than 50% of the total fair market value or total voting power of the stock of Employer; provided, however, that if any one person or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value ortotal voting 

 

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power of the stock of Employer, the acquisition of any additional stock by the same person or persons shall not be considered a Change in Ownership or aChange in Effective Control. 

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

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

(2) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or electionis not endorsed by a majority of the members of the Board prior to the date of the appointment or election, provided that for purposes of this paragraph (2) Employer refers solely to the “relevant corporation” (as such term is definedin Section 409A of the Code and the regulations or other guidance issued thereunder) for which no other corporation is a majority shareholder. 

Notwithstanding the foregoing, if any one person or more than one person Acting as a Group, is considered to effectively control Employer, the acquisition of additional control by the same person or persons shall notbe considered to cause a Change in Effective Control. 

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

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

(1) a shareholder of Employer (immediately before the asset transfer) in exchange foror with respect to its stock; 

(2) an entity, 50% or more of the total value of voting power of which isowned, directly or indirectly, by Employer; 

(3) a person, or more than one person Acting as a Group, thatowns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of Employer; or 

(4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iv)(3). 

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

 

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For purposes of this Section 11.5(a), “Gross Fair Market Value”shall mean the value of Employer’s assets, or the value of Employer’s assets being disposed of, determined without regard to any liabilities associated with such assets. 

(b) Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the boardof directors of any subsidiary, a change in the beneficial ownership of any subsidiary, the merger or consolidation of a subsidiary with any other entity, the sale of all or substantially all of the assets of any subsidiary or the liquidation ordissolution of any subsidiary constitute a “Change in Control” under this Agreement. 

11.6 NoMitigation. Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement bereduced by any compensation earned by Employee as the result of employment by another employer after the Date of Termination, or otherwise. 

11.7 No Other Compensation. Employee agrees that the compensation and benefits set forth in this Section 11 constitute the entire amount of consideration provided to him under this Agreement, andthat he will not seek any further compensation for any other claimed damage, costs, severance, income, or attorney’s or arbitrator’s fees. If Employee receives any compensation or benefits in accordance with this Section 11, heexpressly waives any right to participate in or receive any benefits or payments under any severance plan or program offered by or on behalf of Employer. 

11.8 Release. Employer may condition payment of amounts due under this Section 11 upon the receipt of a release and covenant not to sue or pursue arbitration in a formreasonably satisfactory to Employer, the terms of which shall not conflict with this Agreement. 

11.9Code Section 409A; Delay of Payments. 

(a) The terms of this Agreement have been designed tocomply with the requirements of Section 409A of the Code, as amended, where applicable, and shall be interpreted and administered in a manner consistent with such intent. Notwithstanding anything to the contrary in this Agreement, (i) ifupon the date of Employee’s termination of employment with Employer, Employee is a “specified employee” within the meaning of Section 409A of the Code, and the deferral of any amounts otherwise payable under this Agreement as aresult of Employee’s termination of employment is necessary in order to prevent any accelerated or additional tax to Employee under Section 409A of the Code, then Employer will defer the payment of any such amounts hereunder until the datethat is six (6) months following the date of Employee’s termination of employment with Employer at which time any such delayed amounts will be paid to Employee in a single lump sum, with interest from the date otherwise payable at theprime rate as published in The Wall Street Journal on the date of Employee’s termination of employment with Employer, and (ii) if any other payments of money or other benefits due to Employee hereunder could cause the application of anaccelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code. 

(b) In the event that a payment is made under the terms of this Agreement such that Section 409A of the Code appliesand Employee is assessed a penalty and interest on 

 

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such payment, Employer, upon receipt of written notice from Employee of the assessment, shall reimburse Employee for the amount of the assessed penalty andinterest on such payment. Employee shall notify Employer and such claim shall be handled in the same manner as provided in Sections 13.3 and 13.4 for the Excise Tax. Any payment made pursuant to this Section 11.9(b) shall be madenot later than December 31 of Employee’s taxable year following the taxable year in which such additional taxes or interest are remitted by Employee 

12. XTO Energy’s Guarantee of Severance Benefits. 

12.1 In the event Employee becomes entitled to receive Severance Benefits under Section 11.1 above and Employee’s employer fails to pay or provide such Severance Benefits, XTO Energy shall assume the obligation of suchemployer to pay or provide such Severance Benefits. In consideration of XTO Energy’s assumption of the obligation to pay or provide such Severance Benefits provided under this Agreement, XTO Energy shall be subrogated to any recovery(irrespective of whether there is recovery from the third party of the full amount of all claims against the third party) or right to recovery of either Employee or his legal representative against Employer or any person or entity. Employee or hislegal representative shall cooperate in doing what is reasonably necessary to assist XTO Energy in exercising such rights, including but not limited to notifying XTO Energy of the institution of any claim against a third party and notifying thethird party and the third party’s insurer, if any, of XTO Energy’s subrogation rights. Neither Employee nor his legal representative shall do anything after a loss to prejudice such rights. 

12.2 In its sole discretion, XTO Energy reserves the right to prosecute an action in the name of Employee or his legalrepresentative against any third parties potentially liable to Employee. XTO Energy shall have the absolute discretion to settle subrogation claims on any basis it deems appropriate under the circumstances. If Employee or his legal representativeinitiates a lawsuit against any third parties potentially liable to Employee, XTO Energy shall not be responsible for any attorneys’ fees or court costs that may be incurred in such liability claim. 

12.3 XTO Energy shall be entitled, to the extent of any payments made to or on behalf of Employee or a dependent ofEmployee, to be paid first from the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery asserted by or on behalf of Employee or his legal representative against any person or entity legally responsiblefor the injury for which such payment was made. XTO Energy shall be reimbursed by Employee or his legal representative an amount of money equal to all sums paid by XTO Energy under this Agreement to or on behalf of Employee and all expenses, costsand attorneys’ fees incurred by XTO Energy in connection with the prosecution and collection of XTO Energy’s subrogation interest. The right is also hereby given XTO Energy to receive directly from Employer or any third party(ies),attorney(s) or insurance company(ies) an amount equal to the amount paid to or on behalf of Employee. 

13. ExciseTaxes. 

13.1 In the event it shall be determined that any payment or distribution of any type byEmployer to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be subject to the excise tax imposed bySection 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the amount of the TotalPayments, shall be reduced, so that the aggregate present value of all payments in the nature of compensation to (or for the benefit of) Employee which are contingent on a change of control (as defined in Section 280G(b)(2)(A) of the Code) is

 

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the maximum amount of payments that could be made, without the imposition of the excise tax under Section 4999 of the Code. To the extent the TotalPayments must be reduced in accordance with this Article VI, the Company shall retain cash amounts that are otherwise payable to Employee, and, if necessary, the Company shall retain such other amounts, in its discretion, which wouldotherwise be payable to Employee. 

13.2 All determinations required to be made under this Section 13shall be made by an independent accounting firm retained by Employer on the date of the Change in Control (the “Accounting Firm”), which shall provide detailed supporting calculations both to Employer and Employee within fifteen(15) business days of the Payment Date, if applicable, or such earlier time as is requested by Employer. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with an opinion that he hassubstantial authority not to report any Excise Tax on his federal income tax return. Any determination by the Accounting Firm shall be binding upon Employer and Employee. As a result of the uncertainty in the application of Section 4999 of theCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that such Accounting Firm may miscalculate the maximum amount of Total Payments Employee may receive under Section 13.1 with imposition of anexcise tax under Code Section 4999; if such miscalculation results in the imposition of an excise tax on Employee, any Excise Tax amounts that Employee is required to pay shall be referred to as an “Underpayment.” In the event thatEmployer exhausts its remedies pursuant to Section 13.3 and Employee thereafter is required to make a payment of any Underpayment, the Accounting Firm shall determine the amount of the Underpayment and Employer shall pay to Employee anamount (the “Indemnification Amount”) such that, after payment by Employee of all taxes (including additional excise taxes under said Section 4999 and any interest and penalties imposed with respect to any taxes) imposed upon theIndemnification Amount, Employee retains an amount equal to the Underpayment. Employer shall pay the Indemnification Amount to Employee as soon as practicable after determination of Employee’s liability for the Underpayment. 

13.3 Employee shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, wouldrequire the payment by Employee of any Underpayment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Employee is notified in writing of such claim and shall apprise Employer of the natureof such claim and the date on which such claim is requested to be paid. Employee shall not pay such claim prior to the expiration of the thirty (30)-day period following the date on which he gives such notice to Employer (or such shorter periodending on the date that any payment of taxes with respect to such claim is due). If Employer notifies Employee in writing prior to the expiration of such period that it desires to contest such claim, Employee shall (w) give Employer anyinformation reasonably requested by Employer relating to such claim, (x) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legalrepresentation with respect to such claim by an attorney reasonably selected by Employer, (y) cooperate with Employer in good faith in order to effectively contest such claim, and (z) permit Employer to participate in any proceedingsrelating to such claim, *provided, however*, that Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Employee harmless,on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of thisSection 13.3, Employer shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authorityin respect of such claim and may, at its sole option, either direct Employee to pay the tax claimed and sue for a refund, or contest the claim in any permissible manner, and Employee agrees 

 

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to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, asEmployer shall determine; *provided, however*, that if Employer directs Employee to pay such claim and sue for a refund, Employer shall advance the amount of such payment to Employee, on an interest-free basis and shall indemnify and holdEmployee harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and furtherprovided that any extension of the statute of limitations relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore,Employer’s control of the contest shall be limited to issues with respect to which any Underpayment would be payable hereunder and Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the InternalRevenue Service or any other taxing authority. 

13.4 If, after the receipt by Employee of an amount advancedby Employer pursuant to Section 13.3, Employee becomes entitled to receive any refund with respect to such claim, Employee shall (subject to Employer’s complying with the requirements of Section 13.3) promptly pay toEmployer the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Employee of an amount advanced by Employer pursuant to Section 13.3, a determination ismade that Employee shall not be entitled to any refund with respect to such claim and Employer does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after suchdetermination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Underpayment required to be paid. 

14. Counsel Fees and Indemnification. 

14.1 In the event Employer or Employee is required to employ legal counsel to enforce the performance of this Agreement or recover damages because of any breach of this Agreement, the prevailingparty shall be entitled to recover from the other party reasonable attorneys’ fees and the reimbursement of all necessary expenses, court costs and arbitration fees. 

14.2 Employer shall indemnify and hold Employee harmless to the maximum extent permitted by law against judgments, fines,amounts paid in settlement and reasonable expenses, including attorneys’ fees and costs incurred by Employee, in connection with the defense of, or as a result of any action or proceeding or any appeal from any action or proceeding, in whichEmployee is made or is threatened to be made a party by reason that Employee is or was an officer or director of XTO Energy or any of its subsidiaries or affiliates (for purposes of this Section 14.1, “Claims”), regardless ofwhether such action or proceeding is one brought by or in the right of XTO Energy or any of its subsidiaries or affiliates, to procure a judgment in their favor (or other than by or in the right of XTO Energy or any of its subsidiaries oraffiliates). This indemnification shall apply to Claims made against Employee after he is no longer employed by Employer or to Claims made against Employee’s estate after his death. 

14.3 The undertakings of Section 14.1 above are independent of, and shall not be limited or prejudiced by, theundertakings of Section 14.2 above. This indemnification shall be in addition to and not in lieu of the indemnifications contained in that certain Indemnification Agreement between Employer and Employee dated November 15, 2005, asamended. 

15. Notices. All notices, requests, demands and other communications required or permitted to be givenunder this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given and acknowledged by written 

 

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receipt, or on the seventh day after mailing if mailed (return receipt requested), postage prepaid and properly addressed as follows: 

 

XTO Energy/Employer:
  
XTO Energy Inc.
  
810 Houston Street
  
Fort Worth, Texas 76102
  
Attention: Board of Directors

Employee:
  
Bob R. Simpson
  
6501 Haig Point Court
  
Fort Worth, Texas 76132

Any party may change its address for purposes of this Section 15 by giving the otherparty written notice of the new address in the manner set forth above. 

16. Successors of Employer. Employer willrequire any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance satisfactory to Employee, expressly toassume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of anysuch succession shall be a breach of this Agreement and shall entitle Employee to compensation from Employer in the same amount and on the same terms as Employee would be entitled hereunder if Employee terminated his employment for Good Reason,except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, “Employer” shall mean the Employer as hereinbefore definedand any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 16 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation oflaw. 

17. Assignment; Binding Effect. Employee may not assign his rights or delegate his duties or obligationshereunder without the written consent of Employer. This Agreement shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees andlegatees. If Employee should die while any amounts would still be payable to him hereunder as if he had continued to live, all such amounts, unless other provided herein, shall be paid in accordance with the terms of this Agreement to his designeeor, if there be no such designee, to his estate. 

18. Amendment; Waiver. No provisions of this Agreement may bemodified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee or his legal representative and such officer as may be specifically designated by the Board of Employer. No waiver by eitherparty hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions atthe same or at any prior or subsequent time. 

19. Invalid Provisions. Should any portion of this Agreement beadjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall, ifpossible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof. 

20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the sameinstrument. 

 

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21. Governing Law. This Agreement shall be governed by and construed under thelaws of the State of Texas. 

22. Captions and Gender. The use of captions and section headings herein is forpurposes of convenience only and shall not effect the interpretation or substance of any provisions contained herein. Similarly, the use of the masculine gender with respect to pronouns in this Agreement is for purposes of convenience and includeseither sex who may be a signatory. 

23. Dispute Resolution. Any dispute, controversy or claim arising out of or inrelation to or in connection with this Agreement, including without limitation any dispute as to the construction, validity, interpretation, enforceability or breach of this Agreement, shall be exclusively and finally settled by arbitration, and anyparty may submit such dispute, controversy or claim, including a claim for indemnification under this Section 23, to arbitration. 

(a) Arbitrators. The arbitration shall be heard and determined by one arbitrator, who shall be impartial and who shall be selected by mutual agreement of the parties; provided,however, that if the dispute involves more than $2,000,000, then the arbitration shall be heard and determined by three (3) arbitrators. If three (3) arbitrators are necessary as provided above, then (i) each side shall appointan arbitrator of its choice within thirty (30) days of the submission of a notice of arbitration and (ii) the party-appointed arbitrators shall in turn appoint a presiding arbitrator of the tribunal within thirty (30) days followingthe appointment of the last party-appointed arbitrator. If (x) the parties cannot agree on the sole arbitrator, (y) one party refuses to appoint its party-appointed arbitrator within said thirty (30) day period or (z) theparty-appointed arbitrators cannot reach agreement on a presiding arbitrator of the tribunal, then the appointing authority for the implementation of such procedure shall be the Senior United States District Judge for the Northern District of Texas,who shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. If the Senior United States District Judge for the Northern District of Texas refuses or fails to act as the appointingauthority within ninety (90) days after being requested to do so, then the appointing authority shall be the Chief Executive Officer of the American Arbitration Association, who shall appoint an independent arbitrator who does not have anyfinancial interest in the dispute, controversy or claim. All decisions and awards by the arbitration tribunal shall be made by majority vote. 

(b) Proceedings. Unless otherwise expressly agreed in writing by the parties to the arbitration proceedings: 

(i) The arbitration proceedings shall be held in Fort Worth, Texas, at a site chosen by mutual agreement of the parties,or if the parties cannot reach agreement on a location within thirty (30) days of the appointment of the last arbitrator, then at a site chosen by the arbitrator(s); 

(ii) The arbitrator(s) shall be and remain at all times wholly independent and impartial; 

(iii) The arbitration proceedings shall be conducted in accordance with the Commercial Arbitration Rules of the AmericanArbitration Association, as amended from time to time; 

 

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(iv) Any procedural issues not determined under the arbitral rulesselected pursuant to item (iii) above shall be determined by the law of the place of arbitration, other than those laws which would refer the matter to another jurisdiction; 

(v) The costs of the arbitration proceedings (including attorneys’ fees and costs) shall be borne in the mannerdetermined by the arbitrator(s); 

(vi) The decision of the arbitrator(s) shall be reduced to writing; finaland binding without the right of appeal; the sole and exclusive remedy regarding any claims, counterclaims, issues or accounting presented to the arbitrator(s); made and promptly paid in United States dollars free of any deduction or offset; and anycosts or fees incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement; 

(vii) The award shall include interest from the date of any breach or violation of this Agreement, as determined by the arbitral award, and from the date of the award until paid in full, at6% per annum; and 

(viii) Judgment upon the award may be entered in any court having jurisdiction overthe person or the assets of the party owing the judgment or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. 

(c) Injunction. Notwithstanding the preceding provisions of this Section 23, the parties acknowledgethat either of them may seek emergency or temporary or permanent injunctive relief or a restraining order, including costs and attorneys’ fees incurred in connection with such action, but absolutely no other relief, in any court of competentjurisdiction. All other disputes, claims and remedies shall be settled by arbitration in accordance with this Section 23. 

(d) Acknowledgment of Parties. Each party acknowledges that he or she or it has voluntarily and knowingly entered into an agreement to arbitration under this Section by executing this Agreement. 

24. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subjectmatter hereof and supersedes any and all prior and contemporaneous promises, agreements and representations not set forth in this Agreement including, but not limited to, as of the Effective Date, the Original Agreement. This Agreement may not beamended except by a mutual written agreement signed by all parties or their legal representatives; provided, however, that the terms of any cash incentive compensation plan or stock option plan established by Employer subsequent to the date hereofin accordance with terms previously outlined by Employer shall automatically become part of this Agreement when established. 

25. Survival of Certain Provisions. Notwithstanding any other provision of this Agreement to the contrary, the provisions of Sections 11 through 24 of this Agreement shall survive the termination of this Agreement. 

 

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IN WITNESS WHEREOF, Employer and Employee have executed and delivered this Agreement asof the date written above. 

 

XTO ENERGY INC.

By:
 
/s/ Karen S. Wilson
 
Karen S. Wilson
 
Vice President – Human Resources

 

EMPLOYEE:

/s/ Bob R. Simpson

Bob R. Simpson

 

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