Form of Award Agreement 7/8/04



 Exhibit 10.4 
  
 FORM OF AWARD AGREEMENT 
 PHANTOM PERFORMANCE SHARES 
  
 THIS AGREEMENT is entered into this 8th day of July, 2004, between XTO Energy Inc., a Delaware corporation (herein called “Company”), and Grantee [see attached schedule for list of grantees] (herein called
“Grantee”), pursuant to resolutions adopted by the Compensation Committee of the XTO Energy Inc. Board of Directors (the “Committee”) has determined that it is in the best interests of the Company that grantee be awarded phantom
performance shares and, to carry out its purposes, has this day authorized the grant of the phantom performance shares set forth below to Grantee. 
  
 NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties do hereby agree as follows: 
  

	 	1.	Grant of Phantom Performance Shares. Subject to all of the terms, conditions, and provisions of the Agreement and certain provisions of the 1998 Stock Incentive Plan of the
Company (the “Plan”) described in Section 6 below, the Company hereby grants to Grantee [see attached schedule for number of phantom shares granted] phantom performance shares which shall be payable in cash equal to the fair market
value of the common stock of the Company, of the par value of one cent ($0.01) per share (“Common Stock”), on the date of vesting. 

  

	 	2.	Vesting. All of the phantom performance shares granted herein shall vest when the Common Stock trades at or above $31.86 on the New York Stock Exchange.


  

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	 	3.	Dividends. The Grantee will be entitled to receive cash payments equal to any cash dividends and other distributions paid with respect to a corresponding number of shares of
Common Stock, provided that if any such dividends or distributions are paid in shares of Common Stock, the fair market value (as defined in the Plan) of such shares of Common Stock, on the effective date of the distribution shall be paid to Grantee
in cash. 

  

	 	4.	Grantee’s Agreement. Grantee expressly and specifically agrees that: 

  

	 	(a)	With respect to the calendar year in which such phantom performance shares are vested Grantee shall include in his gross income for federal income tax purposes the fair market value
of the phantom performance shares. 

  

	 	(b)	The grant of the phantom performance shares is special incentive compensation which will not be taken into account as “wages” or salary” in determining the amount of
payment or benefit to Grantee under any pension, thrift, stock, or deferred compensation plan of the Company. 

  

	 	(c)	In behalf of Grantee’s beneficiary, such grant shall not affect the amount of any life insurance coverage available to such beneficiary under any life insurance plan covering
employees of the Company or any subsidiary. 

  

	 	(d)	The Company may withhold any federal, state, or local tax liability owed as a result of the performance shares vesting. 

  

	 	5.	Rights as Stockholder. Grantee will not have any voting or any other rights as a stockholder of the Company with respect to the phantom performance shares.


  

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	 	6.	Other Terms, Conditions, and Provisions. The performance shares herein granted by the Company to Grantee are granted subject to all of the terms, conditions, and provisions
of this Agreement as well as to certain provisions of the 1998 Stock Incentive Plan of the Company. To the extent not inconsistent with the terms in this Agreement, the parties agree that Sections 1.7. 4.5, 6.1, 6.2, 6.3, 6.4, 6.7 (to the extent
applicable to the other sections incorporated herein), 6.8, 6.10, 6.11, and 6.12, of the 1998 Stock Incentive Plan of the Company (the “Plan”) be, and they hereby are incorporated herein by reference as fully as if copies herein in full.
Grantee acknowledges receiving a copy of the Plan, including the provisions referenced above. Reference to the sections of the Plan listed above is therefore made for a full descriptions of the rights of Grantee and of all of the other provisions,
terms, and conditions of the Plan applicable to the phantom performance shares granted herein. If any of the provisions of this Agreement shall vary from or be in conflict with the Plan, the provisions of this Agreement shall be controlling.


  

	 	7.	No Employment Commitment. Grantee acknowledges that neither the grant of phantom performance shares nor the execution of this Agreement by the Company will be interpreted or
construed as imposing upon the Company an obligation to retain Grantee’s services for any stated period of time, which employment shall continue to be at the pleasure of the Company at such compensation as it shall determine, unless otherwise
provided in a written employment agreement signed by the Company and Grantee. 

  

	 	8.	Amendment. This Agreement may be amended only a writing executed by the Company and Grantee which specifically states that it is amending this Agreement.


  

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	 	9.	Other Agreements. 

  

	 	(a)	Phantom performance shares granted under this Agreement will vest in accordance with the provisions of Section 4.4 of the XTO Energy Inc. Management Group Employee Severance
Protection Plan (“Severance Plan”) in the event of a Change in Control as defined in the Severance Plan. 

  

	 	(b)	The phantom performance shares granted under this Agreement will reduce the number of performance shares that will be awarded to Grantee under the agreement for Grant of Performance
Shares (relating to change in control) dated February 20, 2001, between the Company and the Grantee (“Change in Control Performance Share Agreement”) in accordance with Section 2.1 of Change in Control Performance Share Agreement if the
phantom performance shares granted hereunder have not been forfeited prior to the change in control as defined in the Change in Control Performance Share Agreement. 

  
 IN WITNESS WHEREOF, this Agreement is executed and entered into effective on the date and year first above expressed.

  

									
	 ATTEST:
	 	 	 	 XTO ENERGY INC.

				
	  

	 	 	 	 By:
	 	 
	 Virginia N. Anderson
 Vice President and Corporate Secretary
	 	 	 	 Name:
 Title:
	 	 
				
	 	 	 	 	 	 	 GRANTEE
  

 



  

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 Schedule of Grants 
 July 8, 2004 
  

							
	 Grantee

	 	 	 	 	  	Phantom Shares Granted


	 Bob R. Simpson
	 	 	 	 	  	112,500
	 Steffen E. Palko
	 	 	 	 	  	  62,500
	 Louis G. Baldwin
	 	 	 	 	  	  20,000
	 Keith A. Hutton
	 	 	 	 	  	  30,000
	 Vaughn O. Vennerberg, II
	 	 	 	 	  	  25,000

  

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