Continuity Agreement - Kenneth Crouch


    
      

    


    Exhibit
      10.2

    


    AMENDED
      CONTINUITY AGREEMENT

     

         This
      Amended Agreement (the
      "Agreement") is dated as of May 22, 2006
      by and between Kerr-McGee Corporation, a Delaware corporation (the "Company"),
      and Kenneth W. Crouch (the "Executive"), and amends and supersedes that certain
      Continuity Agreement dated January 11, 2000.

    


    WHEREAS,
      the Company's Board of Directors considers the continued services of key
      executives of the Company to be in the best interests of the Company and its
      stockholders; and

    


    WHEREAS,
      the Company's Board of Directors desires to assure, and has determined that
      it
      is appropriate and in the best interests of the Company and its stockholders
      to
      reinforce and encourage the continued attention and dedication of key executives
      of the Company to their duties of employment without personal distraction or
      conflict of interest in circumstances which could arise from the occurrence
      of a
      change in control of the Company; and

    


    WHEREAS,
      the Company's Board of Directors has authorized the Company to enter into
      amended continuity agreements with those key executives of the Company and
      any
      of its respective subsidiaries (all of such entities, together with the Company,
      are hereinafter referred to as an "Employer"), such agreements to set forth
      the
      severance compensation which the Company agrees under certain circumstances
      to
      pay such executives; and

    


    WHEREAS,
      the Executive is a key executive of an Employer and has been designated as
      an
      executive to be offered such a continuity compensation agreement with the
      Company.

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements contained herein and other good and valuable consideration, the
      receipt and sufficiency of which is hereby acknowledged, the Company and the
      Executive agree as follows:

    


    1. Term.
      This Agreement shall become effective on the date hereof (the "Effective
      Date") and remain in effect until the third anniversary thereof; provided,
      however,
      that this Agreement shall automatically renew for an additional year on each
      successive anniversary of the Effective Date, unless an Employer informs the
      Executive, in writing, at least 180 days prior to the renewal date, that this
      Agreement shall not be renewed. The foregoing shall constitute the "Term" of
      this Agreement for purposes hereof.

     

    2. Change
      in Control.
      No compensation or other benefit pursuant to Section 4 hereof shall be payable
      under this Agreement unless and until either (i) a Change in Control of the
      Company (as hereinafter defined) shall have occurred while the Executive is
      employed by an Employer and the Executive's employment by an Employer thereafter
      shall have terminated in accordance with Section 3 hereof or (ii) the
      Executive's employment by an Employer shall have terminated in accordance with
      Section 3(a)(ii) hereof prior to the occurrence of the Change in Control. For
      purposes of this Agreement, a "Change in Control" shall be deemed to have
      occurred when, during the Term of this Agreement: 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

           (a) any
      person ("Person") as defined in Section 3(a)(9) of the Securities Exchange
      Act
      of 1934, as amended (the "Exchange Act"), and as used in Section 13(d) and
      14(d)
      thereof, including a "group" as defined in Section 13(d) of the Exchange Act
      but
      excluding the Company and any subsidiary and any employee benefit plan sponsored
      or maintained by the Company or any subsidiary (including any trustee of such
      plan acting as trustee), directly or indirectly, becomes the "beneficial owner"
      (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company
      representing 25% or more of the combined voting power of the Company's then
      outstanding securities (other than indirectly as a result of the Company's
      redemption of its securities); or

    


    (b) the
      consummation of any merger or other business combination of the Company, sale
      of
      50% or more of the Company's assets, liquidation or dissolution of the Company
      or combination of the foregoing transactions (the "Transactions") other than
      a
      Transaction immediately following which the shareholders of the Company and
      any
      trustee or fiduciary of any Company employee benefit plan immediately prior
      to
      the Transaction own at least 60% of the voting power, directly or indirectly,
      of
      (A) the surviving corporation in any such merger or other business combination;
      (B) the purchaser of or successor to the Company's assets; (C) both the
      surviving corporation and the purchaser in the event of any combination of
      Transactions; or (D) the parent company owning 100% of such surviving
      corporation, purchaser or both the surviving corporation and the purchaser,
      as
      the case may be; or

     

    (c) within
      any twenty-four month period, the persons who were directors immediately before
      the beginning of such period (the "Incumbent Directors") shall cease (for any
      reason other than death) to constitute at least a majority of the Board or
      the
      board of directors of a successor to the Company. For this purpose, any director
      who was not a director at the beginning of such period shall be deemed to be
      an
      Incumbent Director if such director was elected to the Board by, or on the
      recommendation of or with the approval of, at least two-thirds of the directors
      who then qualified as Incumbent Directors (so long as such director was not
      nominated by a person who commenced or threatened to commence an election
      contest or proxy solicitation by or on behalf of a Person (other than the Board)
      or who has entered into an agreement to effect a Change in Control or expressed
      an intention to cause such a Change in Control); or

    


    (d) a
      majority of the members of the Board of Directors in office immediately prior
      to
      a proposed transaction determine by a written resolution that such proposed
      transaction, if taken, will be deemed a Change in Control and such proposed
      transaction is consummated.

    


    3. Termination
      of Employment; Definitions.
      

    


    (a)  Termination
      without Cause by the Company or for Good Reason by the Executive.
      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)
      The Executive shall be entitled to the compensation provided for in Section
      4
      hereof, if within two years after a Change in Control, the Executive's
      employment by an Employer shall be terminated (A) by an Employer for any reason
      other than (I) the Executive's Disability or Retirement, (II) the Executive's
      death or (III) for Cause, or (B) by the Executive with Good Reason (all terms
      are as hereinafter defined), unless such termination occurs with the Executive's
      prior written consent expressly waiving the rights provided
      hereunder.

    


    (ii)
      In addition, the Executive shall be entitled to the compensation provided for
      in
      Section 4 hereof if, (A) in the event that an agreement is signed which, if
      consummated, would result in a Change of Control and, within 12 months
      thereafter, the Executive is terminated without Cause by the Company or an
      Employer (other than on account of Executive's Death or Disability) or
      terminates employment with Good Reason prior to the Change in Control, (B)
      such
      termination is at the request or instigation of the acquiror or merger partner
      or otherwise in connection with the anticipated Change in Control, and (C)
      within said 12 month period, such Change in Control actually
      occurs.

    


    (b) Disability.
      For purposes of this Agreement, "Disability" shall mean the Executive's absence
      from the full-time performance of the Executive's duties (as such duties existed
      immediately prior to such absence) for 180 consecutive business days, when
      the
      Executive is disabled as a result of incapacity due to physical or mental
      illness.

    


    (c) Retirement.
      For purposes of this Agreement, "Retirement" shall mean the Executive's
      voluntary termination of employment pursuant to late, normal or early retirement
      under a pension plan sponsored by an Employer, as defined in such plan, but
      only
      if such retirement occurs prior to a termination by an Employer without Cause
      or
      by the Executive for Good Reason.

    


    (d) Cause.
      For purposes of this Agreement, "Cause" shall mean:

    


    (i)
       the
      willful and continued failure of the Executive to perform substantially all
      of
      his or her duties with an Employer (other than any such failure resulting from
      incapacity due to physical or mental illness), after a written demand for
      substantial performance is delivered to such Executive by the Board of Directors
      (the "Board") of the Company which specifically identifies the manner in which
      the Board believes that the Executive has not substantially performed his or
      her
      duties;

    


    (ii)
       the
      willful engaging by the Executive in gross misconduct which is materially and
      demonstrably injurious to the Company or any Employer; or 

    


    (iii)
       the
      conviction of, or plea of guilty or nolo contendere
      to, a felony.

    


    Termination
      of the Executive for Cause shall be made by delivery to the Executive of a
      copy
      of a resolution duly adopted by the affirmative vote of not less than a
      three-fourths majority of the non-employee Directors of the Company or of the
      ultimate parent of the entity which caused the Change in Control (if the Company
      has become a subsidiary) at a meeting of such Directors called and held for
      such
      purpose, after 30 days prior written notice to the Executive specifying the
      basis for such termination and the particulars thereof and a reasonable
      opportunity for the Executive to cure or otherwise resolve the behavior in
      question prior to such meeting, finding that in the reasonable judgment of
      such
      Directors, the conduct or event set forth in any of clauses (i) through (iii)
      above has occurred and that such occurrence warrants the Executive's
      termination.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) Good
      Reason.
      For purposes of this Agreement, "Good Reason" shall mean the occurrence, within
      the Term of this Agreement, of any of the following without the Executive's
      written consent expressly waiving the rights provided hereunder:

    


    (i)
       any
      material and adverse diminution in the Executive's duties or responsibilities
      with the Company (or any affiliate thereof) from those in effect immediately
      prior to the Change in Control; provided,
      however,
      that no such diminution shall be deemed to exist solely because of changes
      in
      Executive’s duties, responsibilities or titles as a consequence of the Company
      ceasing to be a company with publicly-traded securities or becoming a
      wholly-owned subsidiary of another company;

    


    (ii)
       any
      reduction in the Executive's annual base salary or any adverse change in bonus
      opportunity or participation in cash bonus programs in effect immediately prior
      to the Change in Control;

    


    (iii)
       any
      requirement that Executive be based at a location more than 35 miles from the
      location at which the Executive was based immediately prior to the Change in
      Control (or a substantial increase in the amount of travel Executive is required
      to do because of a relocation of the executive offices); 

    


    (iv)
       any
      failure by the Company to obtain from any successor to the Company an agreement
      reasonably satisfactory to the Executive to assume and perform this Agreement,
      as contemplated by Section 10(a) hereof; 

    


    (v) during
      the thirty-day period immediately following the first anniversary of the Change
      in Control, the voluntary termination of employment by the Executive for any
      reason or no reason at all; or

     

    (vi) any
      amendment, reduction or termination of any benefit plan, program or arrangement,
      which has the effect of causing the Executive to have benefits which are not
      substantially similar, in the aggregate, to those benefits provided to the
      Executive immediately prior to the Change in Control.  

    


    Notwithstanding
      the foregoing, in the event Executive provides the Company with a Notice of
      Termination (as defined below) referencing this Section 3(e) (with the exception
      of Section 3(e)(v)), the Company shall have 30 days thereafter in which to
      cure
      or resolve the behavior otherwise constituting Good Reason. Any good faith
      determination by Executive that Good Reason exists shall be presumed correct
      and
      shall be binding upon the Company.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f) Notice
      of Termination.
      Any purported termination of the Executive's employment (other than on account
      of Executive's death) with an Employer, if such termination occurs after the
      occurrence of a Change in Control or under circumstances specified under Section
      3(a)(ii) above, shall be communicated by a Notice of Termination to the
      Executive, if such termination is by an Employer, or to an Employer, if such
      termination is by the Executive. For purposes of this Agreement, "Notice of
      Termination" 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 of the Executive's employment under the provisions so indicated;
      provided,
      however,
      that in connection with a termination for Good Reason under Section 3(e)(v),
      no
      details shall be necessary other than reference to such Section. For
      purposes of this Agreement, no purported termination of Executive's employment
      with an Employer shall be effective without such a Notice of Termination having
      been given.

    


    4. Compensation
      Upon Termination After a Change in Control.

    


    Subject
      to Section 9 hereof, if within two years of a Change in Control, the Executive's
      employment by an Employer shall be terminated in accordance with Section 3(a)
      (the "Termination"), the Executive shall be entitled to the following payments
      and benefits: 

    


    (a) Severance.
      The Company shall pay or cause to be paid to the Executive a cash severance
      amount equal to (i) three
      (3) times the sum of (A) the Executive's annual base salary on the date of
      the
      Change in Control (or, if higher, the annual base salary in effect immediately
      prior to the giving of the Notice of Termination) and (B) the higher of: (x)
      the
      average of the actual bonuses earned by the Executive in respect of the three
      years prior to the year in which the Change in Control occurs under an
      Employer's incentive award program, or (y) the Executive's target bonus for
      the
      year of Termination, plus (ii) in lieu of continuation of any of the Executive's
      perquisites as provided to the Executive prior to the Change in Control (or,
      if
      greater, at the time of Termination), a cash payment equal to 7 percent of
      the
      Executive's annual base salary as in effect on the date of the Change in Control
      for each of the three (3) years following the date of Termination. This cash
      severance amount shall be payable in a lump sum.

    


    (b) Additional
      Payments and Benefits.
      The Executive shall also be entitled to: 

    


    (i)
       a
      lump sum cash payment equal to the sum of (A) the Executive's accrued but unpaid
      annual base salary through the date of Termination, (B) the unpaid portion,
      if
      any, of bonuses previously earned by the Executive pursuant to the Company's
      Executive incentive award program, plus the pro rata portion of the
      target
      bonus to be paid for the year in which the date of Termination occurs
      (calculated through the date of Termination), and (C) an amount, if any, equal
      to any
      accrued vacation pay, in full
      satisfaction of Executive's rights thereto. 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)
       a
      lump sum cash payment equal to the aggregate sum of (A) additional pension
      contributions in an amount equal to the Company's contributions under the
      Company's 401(k) plan, profit sharing or other savings pension plans (or such
      other qualified and nonqualified defined contribution pension plans as then
      in
      effect) for the three (3) year
      period following the date of Termination (the "Separation Period") (based on
      assumed rates of Executive's contributions at the level of participation in
      effect as of the last date Executive was permitted to participate); and (B)
      the
      difference between the discounted present value (i.e., lump sum value) of the
      annuity benefit the Executive is entitled to receive under the Company's
      qualified and nonqualified defined benefit retirement programs in which the
      Executive is a participant calculated through the date of Termination and the
      discounted present value (i.e., lump sum value) of the annuity benefit the
      Executive would be entitled to receive under such retirement programs calculated
      after adding an additional five years of credit to age and service up to a
      maximum of age 65 as if the executive had been paid at the rate used to
      calculate the payments under Section 4(a), provided that the additional credits
      added with respect to each retirement program shall not exceed five years when
      added to any additional credits already provided by the terms of such programs
      in respect of the Termination covered hereby.

    


    (iii)
       continued
      medical, dental, vision, and life insurance coverage (excluding accident, death,
      and disability insurance) for the Executive and the Executive's eligible
      dependents or, to the extent such coverage is not commercially available, such
      other arrangements reasonably acceptable to the Executive, on the same basis
      as
      in effect prior to the Change in Control or the Executive's Termination,
      whichever is deemed to provide for more substantial benefits, for a period
      ending on the earlier of (A) the end of the Separation Period or (B) the
      commencement of comparable coverage by the Executive with a subsequent
      employer;

    


    (iv)
       unless
      it would adversely affect the Company's ability to use pooling of interest
      accounting in a Change in Control transaction in which such accounting is
      intended to be used, immediate 100% vesting of all outstanding stock options,
      stock appreciation rights and restricted stock granted or issued by any Employer
      to the extent not previously vested on or following the Change of Control;
      and

    


    (v) all
      other accrued or vested benefits in accordance with the terms of the applicable
      plan (with an offset for any amounts paid under Section 4(b)(i)(C),
      above).

    


    All
      lump sum payments under this Section 4 shall be paid within 15 business days
      after Executive's date of Termination. At the Company’s option, it may within
      the 15-day period either (x) make the payment to the Executive subject to the
      Executive’s obligation to promptly return the funds if the release required
      under Section 13 is revoked by the Executive as provided in the release or
      (y)
      deposit the funds with a third party escrow agent pursuant to customary
      arrangements where the only condition to release of the escrowed funds to the
      Executive is that the release has not been revoked by the Executive as provided
      in the release. Discounted present value (i.e., lump sum value) for purposes
      of
      subsection (ii) above shall be calculated using a discount factor equal to
      one
      percentage point below the rate of interest, per annum, publicly announced
      by
      The Chase Manhattan Bank, N.A. as its prime rate in effect at its principal
      office in New York City, and using the actuarial factors set forth in the
      defined benefit retirement program.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Outplacement.
      If so requested by the Executive, outplacement services shall be provided by
      a
      professional outplacement provider selected by Executive; provided,
      however,
      that such outplacement services shall be provided the Executive at an aggregate
      total cost to the Company of not more than ten (10) percent of such Executive's
      annual base salary.

    


    (d) Withholding.
      Payments and benefits provided pursuant to this Section 4 shall be subject
      to
      any applicable payroll and other taxes required to be withheld.  

    


    5. Compensation
      Upon Termination for Death, Disability or Retirement.

    


    If
      an Executive's employment is terminated by reason of Death, Disability or
      Retirement prior to any other termination, Executive will receive:

    


    (a) the
      sum of (i) Executive's accrued but unpaid salary through the date of
      Termination, (ii) the pro rata portion of the Executive's target bonus for
      the
      year of Executive's Death or Disability (calculated through the date of
      Termination), and (iii) an amount equal to any accrued
      vacation pay; and

    


    (b) other
      accrued or vested benefits in accordance with the terms of the applicable plan
      (with an offset for any amounts paid under item (a)(iii), above).

     

            5A. Application
      of Section 409A of the Code.
      To the extent Section 409A of the Internal Revenue Code of 1986, as amended
      (the
      "Code"), applies to any compensation or other benefit payable under this
      Agreement (including, but not limited to, Sections 4 and 5), this Section 5A
      applies, and to the extent that it conflicts with any other provision of the
      Agreement, it supersedes such conflicting provisions. If Section 409A of the
      Code does not apply to any compensation or other benefits payable under this
      Agreement, this Section 5A shall have no effect.

     

                (a) In
      General.
      This Section 5A is intended to comply with the provisions of Section 409A of
      the
      Code. In furtherance of this intent, to the extent this Agreement is subject
      to
      Section 409A of the Code, it shall be interpreted, operated, and administered
      in
      a manner consistent with these intentions, and the parties agree to amend this
      Agreement further (if necessary) in order to avoid the adverse tax consequences
      of Section 409A of the Code.

    
      	(b)  	
              Definitions.
                For purposes of, and as used in, this Section 5A only,
                

            


    

     

                Key
      Employee
      shall mean an employee who is treated as a "specified employee" under Section
      409A(a)(2)(B)(i) of the Code, i.e., a key employee (as defined in Section 416(i)
      of the Code, without regard to paragraph (5) thereof, and determined as of
      each
      December 31 in accordance with Section 409A of the Code) of the
      Company.

     

                Separation
      from
      Service
      shall mean a "separation from service" within the meaning of Section 409A of
      the
      Code.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
            (c) Timing
        of Benefit Payments.
        If the Executive is a Key Employee, all amounts payable under the Agreement
        that
        are subject to Section 409A of the Code shall be paid in a lump-sum on the
        date
        that is six months following the Executive's Separation from Service (or
        on the
        date of the Executive's death, if earlier). Otherwise, such amounts shall
        be
        payable in a lump sum on the date of the Executive's Separation from Service
        (or
        on the date of the Executive's death, if earlier),
        provided
        that the Company may within the 15-day period specified in Section 4(b) either
        (i) make the payment to the Executive subject to the Executive’s obligation to
        promptly return the funds if the release required under Section 13 is revoked
        by
        the Executive as provided in the release or
        (ii) deposit the funds with a third party escrow agent pursuant to customary
        arrangements where the only condition to release of the escrowed funds to
        the
        Executive is that the release has not been revoked by the Executive as provided
        in the release.
        For purposes of this Section 5A, a payment that is required to be made on
        a
        certain date may be made as soon as practicable following such date, provided
        that the payment must be made during the same calendar year as the required
        payment date or, if later, by the 15th
        day of the third calendar month following the required payment date, or
        otherwise in accordance with Section 409A of the Code.

    

    


    6. Excess
      Parachute Payments.
      

    


    (a)
      (i) If it is determined (as hereafter provided) that any payment or distribution
      by the Company or any Employer to or for the benefit of the Executive, whether
      paid or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise pursuant to or by reason of any other agreement, policy,
      plan, program or arrangement, including without limitation any stock option,
      stock appreciation right or similar right, or the lapse or termination of any
      restriction on or the vesting or exercisability of any of the foregoing (a
      "Severance Payment"), would be subject to the excise tax imposed by Section
      4999
      of the Code
      (or any successor provision thereto) by reason of being "contingent on a change
      in ownership or control" of the Company, within the meaning of Section 280G
      of
      the Code (or any successor provision thereto) or to any similar tax imposed
      by
      state or local law, or any interest or penalties with respect to such excise
      tax
      (such tax or taxes, together with any such interest and penalties, are hereafter
      collectively referred to as the "Excise Tax"), then the Executive shall be
      entitled to receive an additional payment or payments (a "Gross-Up Payment")
      in
      an amount such that, after payment by the Executive of all taxes (including
      any
      interest or penalties imposed with respect to such taxes), including any Excise
      Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of
      the
      Gross-Up Payment equal to the Excise Tax imposed upon the Severance
      Payments.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)
       Subject
      to the provisions of Section 6(a)(i) hereof, all determinations required to
      be
      made under this Section 6, including whether an Excise Tax is payable by the
      Executive and the amount of such Excise Tax and whether a Gross-Up Payment
      is
      required and the amount of such Gross-Up Payment, shall be made by the
      nationally recognized firm of certified public accountants (the "Accounting
      Firm") used by the Company prior to the Change in Control (or, if such
      Accounting Firm declines to serve, the Accounting Firm shall be a nationally
      recognized firm of certified public accountants selected by the Executive).
      The
      Accounting Firm shall be directed by the Company or the Executive to submit
      its
      preliminary determination and detailed supporting calculations to both the
      Company and the Executive within 15 calendar days after the Termination Date,
      if
      applicable, and any other such time or times as may be requested by the Company
      or the Executive. If the Accounting Firm determines that any Excise Tax is
      payable by the Executive, the Company shall pay the required Gross-Up Payment
      to, or for the benefit of, the Executive within five business days after receipt
      of such determination and calculations. If the Accounting Firm determines that
      no Excise Tax is payable by the Executive, it shall, at the same time as it
      makes such determination, furnish the Executive with an opinion that he has
      substantial authority not to report any Excise Tax on his/her federal, state,
      local income or other tax return. Any determination by the Accounting Firm
      as to
      the amount of the Gross-Up Payment shall be binding upon the Company and the
      Executive absent a contrary determination by the Internal Revenue Services
      or a
      court of competent jurisdiction; provided,
      however,
      that no such determination shall eliminate or reduce the Company's obligation
      to
      provide any Gross-Up Payment that shall be due as a result of such contrary
      determination. As a result of the uncertainty in the application of Section
      4999
      of the Code (or any successor provision thereto) and the possibility of similar
      uncertainty regarding state or local tax law at the time of any determination
      by
      the Accounting Firm hereunder, it is possible that Gross-Up Payments that will
      not have been made by the Company should have been made (an "Underpayment"),
      consistent with the calculations required to be made hereunder. In the event
      that the Company exhausts or fails to pursue its remedies pursuant to Section
      6
      hereof and the Executive thereafter is required to make a payment of any Excise
      Tax, the Executive shall direct the Accounting Firm to determine the amount
      of
      the Underpayment that has occurred and to submit its determination and detailed
      supporting calculations to both the Company and the Executive as promptly as
      possible. Any such Underpayment shall be promptly paid by the Company to, or
      for
      the benefit of, the Executive within five business days after receipt of such
      determination and calculations.

    


    (iii)
       The
      federal, state and local income or other tax returns filed by the Executive
      (or
      any filing made by a consolidated tax group which includes the Company) shall
      be
      prepared and filed on a consistent basis with the determination of the
      Accounting Firm with respect to the Excise Tax payable by the Executive. The
      Executive shall make proper payment of the amount of any Excise Tax, and at
      the
      request of the Company, provide to the Company true and correct copies (with
      any
      amendments) of his/her federal income tax return as filed with the Internal
      Revenue Service and corresponding state and local tax returns, if relevant,
      as
      filed with the applicable taxing authority, and such other documents reasonably
      requested by the Company, evidencing such payment. If prior to the filing of
      the
      Executive's federal income tax return, or corresponding state or local tax
      return, if relevant, the Accounting Firm determines that the amount of the
      Gross-Up Payment should be reduced, the Executive shall within five business
      days pay to the Company the amount of such reduction.

    


    (iv)
       The
      Company and the Executive shall each provide the Accounting Firm access to
      and
      copies of any books, records and documents in the possession of the Company
      or
      the Executive, as the case may be, reasonably requested by the Accounting Firm,
      and otherwise cooperate with the Accounting Firm in connection with the
      preparation and issuance of the determination contemplated by Section 6(a)
      hereof.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (v) The
      fees and expenses of the Accounting Firm for its services in connection with
      the
      determinations and calculations contemplated by Sections 6(a)(ii) and (iv)
      hereof shall be borne by the Company. If such fees and expenses are initially
      advanced by the Executive, the Company shall reimburse the Executive the full
      amount of such fees and expenses within five business days after receipt from
      the Executive of a statement therefor and reasonable evidence of his/her payment
      thereof.

     

    (b) In
      the event that the Internal Revenue Service claims that any payment or benefit
      received under this Agreement constitutes an "excess parachute payment," within
      the meaning of Section 280G(b)(1) of the Code, the Executive shall notify the
      Company in writing of such claim. Such notification shall be given as soon
      as
      practicable but no later than 10 business days after the Executive is informed
      in writing of such claim and shall apprise the Company of the nature of such
      claim and the date on which such claim is requested to be paid. The Executive
      shall not pay such claim prior to the expiration of the 30 day period following
      the date on which the Executive gives such notice to the Company (or such
      shorter period ending on the date that any payment of taxes with respect to
      such
      claim is due). If the Company notifies the Executive in writing prior to the
      expiration of such period that it desires to contest such claim, the Executive
      shall (i) give the Company any information reasonably requested by the Company
      relating to such claim; (ii) take such action in connection with contesting
      such
      claim as the Company shall reasonably request in writing from time to time,
      including without limitation, accepting legal representation with respect to
      such claim by an attorney reasonably selected by the Company and reasonably
      satisfactory to the Executive; (iii) cooperate with the Company in good faith
      in
      order to effectively contest such claim; and (iv) permit the Company to
      participate in any proceedings relating to such claim; provided,
      however,
      that the Company shall bear and pay directly all costs and expenses (including,
      but not limited to, additional interest and penalties and related legal,
      consulting or other similar fees) incurred in connection with such contest
      and
      shall indemnify and hold the Executive harmless, on an after-tax basis, for
      and
      against any Excise Tax or other tax (including interest and penalties with
      respect thereto) imposed as a result of such representation and payment of
      costs
      and expenses.

     

                (c) The
      Company 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 authority in respect
      of
      such claim and may, at its sole option, pay the tax claimed and direct the
      Executive to sue for a refund or direct
      the Executive to
      contest the claim in any permissible manner, and the Executive agrees to
      prosecute such contest to a determination before any administrative tribunal,
      in
      a court of initial jurisdiction and in one or more appellate courts, as the
      Company shall determine; provided,
      however,
      that if the Company pays such claim and directs the Executive to sue for a
      refund, the Company shall indemnify and hold the Executive harmless, on an
      after-tax basis, from any Excise Tax or other tax (including interest and
      penalties with respect thereto) imposed with respect to such payment or with
      respect to any imputed income with respect to such payment; and provided,
      further,
      that if the Executive is required to extend the statute of limitations to enable
      the Company to contest such claim, the Executive may limit this extension solely
      to such contested amount. The Company's control of the contest shall be limited
      to issues with respect to which a corporate deduction would be disallowed
      pursuant to Section 280G of the Code and the Executive shall be entitled to
      settle or contest, as the case may be, any other issue raised by the Internal
      Revenue Service or any other taxing authority. In addition, no position may
      be
      taken nor any final resolution be agreed to by the Company without the
      Executive's consent if such position or resolution could reasonably be expected
      to adversely affect the Executive (including any other tax position of the
      Executive unrelated to matters covered hereby).

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
            (d) If,
        after payment by the Company in connection with the contest of the Excise
        Tax
        claim, the Executive becomes entitled to receive any refund with respect
        to such
        claim, the Executive shall promptly pay to the Company the amount of such
        refund
        (together with any interest paid or credited thereon after taxes applicable
        thereto); provided,
        however,
        if the amount of that refund exceeds the amount paid by the Company or it
        is
        otherwise determined for any reason that additional amounts could be paid
        to the
Executive
        without incurring any Excise Tax, any such amount will be promptly paid by
        the
        Company to the Executive
        (or shall be applied to reduce any amount that Executive would otherwise
        be
        required to pay the Company). If, after payment by the Company in connection
        with an Excise Tax claim, a determination is made that the Executive shall
        not
        be entitled to any refund with respect to such claim and the Company does
        not
        notify the Executive in writing of its intent to contest the denial of such
        refund prior to the expiration of 30 days after such determination, the Company
        shall have no claim against the Executive for the amount paid and such amount
        shall be deemed to be in consideration for services rendered after the date
        of
        the Termination.

    

     

                (e)
 Notwithstanding
      the foregoing, if the payment described in Section 6(c) is determined by the
      Company to be impermissible under applicable law, then no such payment shall
      be
      made, nor shall the Company direct the Executive to pay the tax claimed and
      sue
      for a refund.

    


    7. Expenses.
      In addition to all other amounts payable to the Executive under this Agreement,
      the Company shall pay or reimburse the Executive for reasonable legal fees
      (including without limitation, any and all court costs and reasonable attorneys'
      fees and expenses) incurred by the Executive in connection with or as a result
      of any claim, action or proceeding brought by the Company, any other Employer
      or
      the Executive with respect to or arising out of this Agreement or any provision
      hereof; provided,
      however,
      that the Company shall have no obligation to pay any such legal fees, if (i)
      in
      the case of an action brought by the Executive, the Company or any other
      Employer is successful in establishing with the court that the Executive's
      action was frivolous or otherwise without any reasonable legal or factual basis;
      or (ii) in connection with any such claim, action or proceeding arising out
      of
      Section 12 of this Agreement.

     

         8. Obligations
      Absolute; Non-Exclusivity of Rights; Joint and
      Several Liability.

    


    (a) The
      obligations of the Company to make the payments to the Executive, and to make
      the arrangements, provided for herein shall be absolute and unconditional and
      shall not be reduced by any circumstances, including without limitation any
      set-off, counterclaim, recoupment, defense or other right which the Company
      or
      any other Employer may have against the Executive or any third party at any
      time.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

               (b) Nothing
        in this Agreement shall prevent or limit the Executive's continuing or future
        participation in any benefit, bonus, incentive or other plan or program provided
        by the Company or any other Employer and for which the Executive may qualify,
        nor shall anything herein limit or reduce such rights as the Executive may
        have
        under any agreements with the Company or any other Employer;
        provided, however, the terms and conditions of compensation or benefits
        specifically addressed in this Agreement (e.g., the right to severance pay
        for a
        termination of employment within two years following a Change in Control)
        shall
        be determined solely in accordance with the terms of this Agreement. The
        terms
        and conditions of compensation or benefits not specifically addressed in
        this
        Agreement shall be determined in accordance with the applicable documents
        governing such compensation and benefits (e.g., the amount and timing of
        payments with respect to performance units upon a Change in Control is governed
        by the appropriate long term incentive plan, and the amount and timing of
        benefits under the Kerr-McGee Corporation Executive Deferred Compensation
        Plan
        (EDCP) is governed by the EDCP), and the amount and timing of benefits under
        the
        Company’s qualified and non-qualified defined benefit retirement programs are
        governed by the applicable retirement plan.

       

    

    (c) Each
      entity included in the definition of "Employer" and any successors or assigns
      shall be joint and severally liable with the Company under this
      Agreement.

    


    9. Not
      an Employment Agreement; Effect On Other Rights.
      

    


    (a) This
      Agreement is not, and nothing herein shall be deemed to create, a contract
      of
      employment between the Executive and the Company or any other Employer. The
      Company or any other Employer may terminate the employment of the Executive
      by
      the Company at any time, subject to the terms of this Agreement and/or any
      employment agreement or arrangement between the Company or any other Employer
      and the Executive that may then be in effect.

    


    (b) This
      Agreement supersedes all prior agreements covering change in control or any
      other subject matter covered by this Agreement and Executive hereby represents
      that the Executive has no other oral or written representations, understandings
      or agreements with the Company, any other Employer, or any of their officers,
      directors or representatives covering any such subject matter and agrees that
      any and all prior written agreements relating to such subject matter shall
      be
      terminated effective as of the date of execution of this Agreement and shall
      be
      of no further force or effect. It is understood that nothing in this Agreement
      supersedes or otherwise affects that certain Retirement Benefits Preservation
      Agreement dated July 18, 2005 between Executive and the Company. Amounts which
      are vested benefits or which the Executive is otherwise entitled to receive
      under any Company plan or program of the Company or any other Employer shall
      be
      payable in accordance with such plan or program, except as explicitly modified
      by this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10. Successors;
      Binding Agreement, Assignment.

    


    (a) The
      Company shall require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      of the Company, by agreement to expressly, absolutely and unconditionally assume
      and agree to perform this Agreement in the same manner and to the same extent
      that the Company would be required to perform it if no such succession had
      taken
      place. Failure of the Company to obtain such agreement prior to the
      effectiveness of any such succession shall be a material breach of this
      Agreement and shall entitle the Executive to terminate the Executive's
      employment with the Company or such successor for Good Reason immediately prior
      to or at any time after such succession. As used in this Agreement, "Company"
      shall mean (i) the Company as hereinbefore defined, and (ii) any successor
      to
      all the stock of the Company or to all or substantially all of the Company's
      business or assets which executes and delivers an agreement provided for in
      this
      Section 10(a) or which otherwise becomes bound by all the terms and provisions
      of this Agreement by operation of law, including any parent or subsidiary of
      such a successor.

    


    (b) This
      Agreement shall inure to the benefit of and be enforceable by the Executive's
      personal or legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees. If the Executive should die while any
      amount would be payable to the Executive hereunder if the Executive had
      continued to live, all such amounts, unless otherwise provided herein, shall
      be
      paid in accordance with the terms of this Agreement to the Executive's estate
      or
      designated beneficiary. Neither this Agreement nor any right arising hereunder
      may be assigned or pledged by the Executive.

    


    11. Notice.
      For purpose of this Agreement, notices and all other communications provided
      for
      in this Agreement or contemplated hereby shall be in writing and shall be deemed
      to have been duly given when personally delivered, delivered by a nationally
      recognized overnight delivery service or when mailed United States certified
      or
      registered mail, return receipt requested, postage prepaid, and addressed,
      in
      the case of the Company, to the Company at:

    


    Kerr-McGee
      Corporation

    123
      Robert S. Kerr Avenue 

    P.O.
      Box 25861 

    Oklahoma
      City, Oklahoma 73125

    Attention:
      Chief Executive Officer

    (with
      a copy to General Counsel)

    


    and
      in the case of the Executive, to the Executive at the address set forth on
      the
      execution page at the end hereof.

    


    Either
      party may designate a different address by giving notice of change of address
      in
      the manner provided above, except that notices of change of address shall be
      effective only upon receipt.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12. Confidentiality.

    


              (a)
       The
      Executive shall retain in confidence any and all confidential information
      concerning the Company, each other Employer and their respective business which
      is now known or hereafter becomes known to the Executive, except as otherwise
      required by law and except information (i) ascertainable or obtained from public
      information, (ii) received by the Executive at any time after the Executive's
      employment by the Company and all other Employers shall have terminated, from
      a
      third party not employed by or otherwise affiliated with the Company or any
      other Employer or (iii) which is or becomes known to the public by any means
      other than a breach of this Section 12. Upon the Termination of employment,
      the
      Executive will not take or keep any proprietary or confidential information
      or
      documentation belonging to the Company. 

    


    (b) The
      Executive acknowledges and agrees that the Company's and Employer’s remedies at
      law for a breach or threatened breach of any of the provisions of this Section
      12 would be inadequate and, in recognition of this fact, Executive agrees that,
      in the event of such a breach or threatened breach, in addition to any remedies
      at law, the Company, or any other Employer, without posting any bond, shall
      be
      entitled to cease making any payments or providing any benefit otherwise
      required by this Agreement during the pendency of any dispute involving such
      Section and to obtain equitable relief in the form of specific performance,
      temporary restraining order, temporary or permanent injunction or any other
      equitable remedy which may then be available. Upon the resolution of such
      dispute, any payments or benefits required by this Agreement which were
      suspended during the pendency of the dispute shall be paid or provided to the
      Executive if it is determined that no breach of this Section 12
      occurred.

    


    This
      paragraph 12 shall survive this Agreement.

    


    13.
       Release.
      The Executive shall enter into a release, in the form attached hereto as Exhibit
      A, or such other form as the Company and the Executive shall agree, as a
      condition to providing any payments or benefits under this
      Agreement.

    


    14. Miscellaneous.
      No provision of this Agreement may be amended, altered, modified, waived or
      discharged unless such amendment, alteration, modification, waiver or discharge
      is agreed to in writing signed by the Executive and such officer of the Company
      as shall be specifically designated by the Committee or by the Board of
      Directors of the Company. No waiver by either party, at any time, of any breach
      by the other party of, or of compliance by the other party with, any condition
      or provision of this Agreement to be performed or complied with by such other
      party shall be deemed a waiver of any similar or dissimilar provision or
      condition of this Agreement or any other breach of or failure to comply with
      the
      same condition or provision at the same time or at any prior or subsequent
      time.
      No agreements or representations, oral or otherwise, express or implied, with
      respect to the subject matter hereof have been made by either party which are
      not expressly set forth in this Agreement.

    


    15. Severability.
      If any one or more of the provisions of this Agreement shall be held to be
      invalid, illegal or unenforceable, the validity, legality and enforceability
      of
      the remaining provisions of this Agreement shall not be affected thereby. To
      the
      extent permitted by applicable law, each party hereto waives any provision
      of
      law which renders any provision of this Agreement invalid, illegal or
      unenforceable in any respect.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    16. Governing
      Law; Venue.
      The validity, interpretation, construction and performance of this Agreement
      shall be governed exclusively by the laws of the State of Delaware
      without giving effect to its conflict of laws rules. For purposes of
      jurisdiction and venue, the Company and each Employer hereby consents to
      jurisdiction and venue in any suit, action
      or proceeding with respect to this Agreement in any court of competent
      jurisdiction in the state in which Executive resides at the commencement of
      such
      suit, action or proceeding and waives any objection, challenge or dispute as
      to
      such jurisdiction or venue being proper.

     

    17. Counterparts.
      This Agreement may be executed in two or more counterparts, each of which shall
      be an original and all of which shall be deemed to constitute one and the same
      instrument.

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


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

    


    
      	 	
              KERR-MCGEE
                CORPORATION

               

               

               

              By:
                /s/ Luke R. Corbett 

              Luke
                R. Corbett

               Chairman
                and Chief Executive Officer

            
	 	
               

               

               

              /s/
                Kenneth W. Crouch

              Kenneth
                W. Crouch

              [address]

               

            


    


    
      
        
          
            


          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    Exhibit
      A

    RELEASE

     

    [__________]
      (“Executive”), for and in consideration of the payments and benefits that
      Executive shall receive under this Agreement, hereby executes the following
      General Release (“Release”) and agrees as follows:

     

    1. Effective
      on the date all payments have been made by the Company to the Executive under
      the Continuity Agreement, dated [Insert
      Date],
      between the Company and the Executive (the “Continuity Agreement”), Executive,
      on behalf of Executive, Executive’s agents, assignees, attorneys, successors,
      assigns, heirs and executors, agrees to, and Executive does hereby fully and
      completely forever, release the Company and its affiliates, predecessors and
      successors and all of their respective past and/or present officers, directors,
      partners, members, managing members, managers, Executives, agents,
      representatives, administrators, attorneys, insurers and fiduciaries in their
      individual and/or representative capacities (hereinafter collectively referred
      to as the “Releasees”), from any and all causes of action, suits, agreements,
      promises, damages, disputes, controversies, contentions, differences, judgments,
      claims, debts, dues, sums of money, accounts, reckonings, bonds, bills,
      specialties, covenants, contracts, variances, trespasses, extents, executions
      and demands of any kind whatsoever (each a “claim”), which Executive or
      Executive’s heirs, executors, administrators, successors and assigns ever had,
      now have or may have against the Releasees or any of them, in law, admiralty
      or
      equity, whether known or unknown to Executive, for, upon, or by reason of,
      any
      matter, action, omission, course or thing whatsoever occurring up to the date
      this Release is signed by Executive, including, without limitation, in
      connection with or in relationship to Executive’s employment or other service
      relationship with the Company or its affiliates, the termination of any such
      employment or service relationship and any applicable employment, compensatory
      or equity arrangement with the Company or its respective affiliates (such
      released claims, subject to the provisos in the next clause, are collectively
      referred to herein as the “Released Claims”); provided
      that such released claims shall not include (i) any claims to enforce
      Executive’s rights under, or with respect to, the Continuity Agreement,
      including with respect to accrued or vested benefits referenced in clauses
      4(b)(v), 5(b), and/or 9(b) of the Continuity Agreement, (ii) any claims to
      enforce Executive’s rights to any indemnification or contribution under the
      Company’s charter or by-laws, by contract or by law, including without
      limitation any rights to advancement of funds, or to any insurance whether
      or
      not obtained by the Company or (iii) any claims used as defenses to, or rights
      of set off relating to, any actions against the Executive, Executive’s agents,
      assignees, attorneys, successors, assigns, heirs and executors. 

     

    2. Notwithstanding
      the generality of clause (1) above, the Released Claims include, without
      limitation, (a) any and all claims under Title VII of the Civil Rights Act
      of
      1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act
      of
      1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Executive
      Retirement Income Security Act of 1974, the Americans with Disabilities Act,
      the
      Family and Medical Leave Act of 1993, and any and all other federal, state
      or
      local laws, statutes, rules and regulations pertaining to employment or
      otherwise, and (b) any claims for wrongful discharge, breach of contract, fraud,
      misrepresentation or any compensation claims, or any other claims under any
      statute, rule, regulation or under the common law, including compensatory
      damages, punitive damages, attorney’s fees, costs, expenses and all claims for
      any other type of damage or relief.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. This
      means that, by signing this Release, the Executive shall have waived any right
      to which the Executive may have had to bring a lawsuit or make any claim against
      the releasees based on any acts or omissions of the releasees up to the date
      of
      the signing of this Release.

     

    4. Executive
      represents that he has read carefully and fully understands the terms of this
      Release, and that Executive has been advised to consult with an attorney and
      have had the opportunity to consult with an attorney prior to signing this
      Release. Executive acknowledges that he is executing this Release voluntarily
      and knowingly and that he has not relied on any representations, promises or
      agreements of any kind made to Executive in connection with Executive’s decision
      to accept the terms of this Release, other than those set forth in this Release.
      Executive acknowledges that Executive has been given at least twenty-one (21)
      days to consider whether Executive wants to sign this Release and that the
      Age
      Discrimination in Employment Act gives Executive the right to revoke this
      Release within seven (7) days after it is signed, and Executive understands
      that
      (1) if the Company makes any payments to Executive pursuant to the Continuity
      Agreement prior to the expiration of such seven (7) day revocation period (the
      “Revocation Period”), Executive shall promptly return the funds to the Company
      if Executive revokes this Release prior to such expiration or (2) if the Company
      deposits the funds necessary to make such payment to Executive into escrow
      as
      described in the Continuity Agreement, such funds will be released to Executive
      upon the expiration of the Revocation Period without Executive having revoked
      this Release. To the extent Executive has executed this Release within less
      than
      twenty-one (21) days after its delivery to Executive, Executive hereby
      acknowledges that his decision to execute this Release prior to the expiration
      of such twenty-one (21) day period was entirely voluntary.

     

    


     

    KERR-MCGEE
      CORPORATION

    


    


    


    ______________________                                          ___________________________

    Executive                              Title:

     
      Name: