exv10w1



 




Exhibit 10.1




Form of Amendment to Stock Option Award Agreement

related to the Pre-Combination Options




     In accordance with Instruction 2 to Item 601 of Regulation S-K, the Amendments to Stock Option
Award Agreements signed by the Executive Officers are substantially identical in all material
respects except as to the parties thereto, the date of the original Pre-Combination Option award
agreement and the number of shares of common stock subject to the original Pre-Combination Option
award agreement. The following sets forth the material details of each Amendment to Stock Option
Award Agreement that differs from the form of Amendment to Stock Option Award Agreement filed
herewith:



	 	 	 	 	 	 	 
	 	 	 	 	Number of Shares of
	 	 	 	 	Common Stock Subject to
	 	 	Date of Original Pre-	 	the Original Pre-
	 	 	Combination Option Award	 	Combination Option Award
	Name of Executive Officer	 	Agreement	 	Agreement
	Timothy A. Leach

	 	 December 6, 2004 
	 	 	138,665	 
	 

	 	July 15, 2005
	 	 	59,513	 
	 

	 	December 30, 2005
	 	 	89,269	 
	 

	 	February 23, 2006
	 	 	130,924	 
	Steven L. Beal

	 	December 6, 2004
	 	 	138,665	 
	 

	 	July 15, 2005
	 	 	59,513	 
	 

	 	December 30, 2005
	 	 	89,269	 
	 

	 	February 23, 2006
	 	 	130,924	 
	Curt F. Kamradt

	 	December 6, 2004
	 	 	61,628	 
	 

	 	July 15, 2005
	 	 	26,450	 
	 

	 	December 30, 2005
	 	 	39,675	 
	 

	 	February 23, 2006
	 	 	58,188	 
	David W. Copeland

	 	December 6, 2004
	 	 	61,628	 
	 

	 	July 15, 2005
	 	 	26,450	 
	 

	 	December 30, 2005
	 	 	39,675	 
	 

	 	February 23, 2006
	 	 	58,188	 
	E. Joseph Wright

	 	December 6, 2004
	 	 	61,628	 
	 

	 	July 15, 2005
	 	 	26,450	 
	 

	 	December 30, 2005
	 	 	39,675	 
	 

	 	February 23, 2006
	 	 	58,188	 
	David M. Thomas III

	 	April 15, 2005
	 	 	47,877	 
	 

	 	July 15, 2005
	 	 	12,500	 
	 

	 	December 30, 2005
	 	 	18,750	 
	 

	 	February 23, 2006
	 	 	27,500	 






 









 





(Options Granted Prior to 6/12/06)




AMENDMENT TO

STOCK OPTION AWARD AGREEMENT




     This Amendment to Stock Option Award Agreement (this “Amendment”) is entered into effective as
of November 16, 2007 (the “Effective Date”), by and between Concho Resources Inc., a Delaware
corporation (the “Company”), and                      (“Employee”).



W I T N E S S E T H:




     WHEREAS, the Company (as successor to Concho Equity Holdings Corp.) has previously granted to
Employee an option (the “Option”) effective as of ___, 200___ pursuant to a Stock Option Award
Agreement and Summary of Stock Option Grant (collectively, as amended, the “Stock Option
Agreement”) covering, as of the Effective Date, ___ shares (after taking into account certain
adjustments previously made to the Option) of the common stock of the Company, par value $.001 per
share (“Common Stock”), at a purchase price per share of $8.00 (after taking into account certain
adjustments previously made to the Option);



     WHEREAS, as of the Effective Date, the Option is subject to the terms and conditions set forth
in the Stock Option Agreement and the Concho Resources Inc. 2006 Stock Incentive Plan (the “Plan”)
(which is an amendment and restatement of the Concho Equity Holdings Corp. 2004 Stock Option Plan
pursuant to which the Option was originally granted); and



     WHEREAS, the Company and Employee are concerned that the Option could be subject to the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), because
the original exercise price per share under the Option as of the date of grant of the Option was
less than the fair market value of a share on such date; and



     WHEREAS, the Company and Employee wish to amend the Stock Option Agreement pursuant to the
transition relief made available under Section 3.02 of IRS Notice 2006-79 (as modified by IRS
Notice 2007-86) so that the Option will not be subject to the provisions of Section 409A of the
Code;



     NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein,
the parties, intending to be legally bound hereby, agree as follows, effective as of the Effective
Date:



     1. Notwithstanding any provision in the Stock Option Agreement or the Plan to the contrary,
the Stock Option Agreement is hereby amended as follows:



     (a) The Option shall be exercisable in accordance with the procedures set forth in the Stock
Option Agreement only upon the occurrence of an “Exercise Date” and only during the period
beginning on such Exercise Date and ending on the “Expiration Date” relating to such Exercise Date.
The potential Exercise Dates and related Expiration Dates are described in paragraph 1(b) below.
For purposes of this Amendment, (i) the term “Cause” shall have the meaning assigned to such term
in the Stock Option Agreement, (ii) the term “Change of Control” shall mean the occurrence of a
change in control event (as defined in Treasury regulation section 1.409A-3(i)(5)) with respect to
the Company, (iii) the term “Disabled” shall mean the Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable



 









 







physical or mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, (iv) the term “Separation from Service”
shall mean Employee’s separation of service with the Company within the meaning of Section
409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder, and (v) the
term “Specified Employee” has the meaning assigned to such term in Section 409A of the Code as
determined by the Company in accordance with any of the methods permitted under the regulations
issued under Section 409A of the Code.



     (b) Subject to the provisions of paragraph 1(c) below, the Exercise Dates and related
Expiration Dates are as follows:




	 	(i)	 	If Employee incurs a Separation from Service by reason of Employee’s death,
then the date of Employee’s death shall constitute an Exercise Date and the related
Expiration Date shall be the last day of the taxable year of Employee in which such
Exercise Date occurs or, if later, the 15th day of the third calendar month
following such Exercise Date;
	 
	 	(ii)	 	If Employee becomes Disabled prior to incurring a Separation from Service, then
the date Employee becomes Disabled (as determined by the Social Security
Administration) shall constitute an Exercise Date and the related Expiration Date shall
be the last day of the taxable year of Employee in which such Exercise Date occurs or,
if later, the 15th day of the third calendar month following such Exercise
Date;
	 
	 	(iii)	 	The occurrence of a Change of Control shall constitute an Exercise Date and
the related Expiration Date shall be the last day of the taxable year of Employee in
which such Exercise Date occurs or, if later, the 15th day of the third
calendar month following such Exercise Date (provided, however, that the Company may,
in its sole discretion, specify an earlier Expiration Date (but in no event earlier
than the date upon which the Change of Control occurs) upon written notice to
Employee);
	 
	 	(iv)	 	If Employee incurs a Separation from Service for any reason other than Cause,
death or becoming Disabled, and if the Employee is not a Specified Employee as of the
date of such Separation from Service, then (x) the Exercise Date shall be the date of
such Separation from Service and (y) the related Expiration Date shall be the earlier
of (A) the date that is three months after such Exercise Date or (B) the later of (1)
the last day of the taxable year of Employee in which such Exercise Date occurs or (2)
the 15th day of the third calendar month following such Exercise Date;
	 
	 	(v)	 	If Employee incurs a Separation from Service for any reason other than Cause,
death or becoming Disabled, and if the Employee is a Specified Employee as of the date
of such Separation from Service, then (x) the Exercise Date shall be the earlier of the
date of Employee’s death or the date that is six months after such Separation from
Service and (y) the related Expiration Date shall be the earlier of (A) the date that
is three months after such Exercise Date or (B) the later of (1)




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	 	 	 	the last day of the taxable year of Employee in which such Exercise Date occurs or
(2) the 15th day of the third calendar month following such Exercise
Date; and
	 
	 	(vi)	 	Each of January 1, 2008, January 1, 2009, February 27, 2009, January 1, 2010,
and January 1, 2011 shall constitute an Exercise Date with respect to a portion of the
Option covering a percentage of the shares of Common Stock subject to the Option as of
the Effective Date as set forth in the following schedule:





	 	 	 
	Exercise Date	 	Percentage of Shares
	January 1, 2008
	 	19.50%
	January 1, 2009
	 	19.50%
	February 27, 2009
	 	  7.33%
	January 1, 2010
	 	26.83%
	January 1, 2011
	 	26.84%







	 	 	 	The Expiration Date relating to each Exercise Date set forth in the schedule above
shall be the last day of the taxable year of Employee in which such Exercise Date
occurs.
	 
	 	(c)	 	Notwithstanding the provisions of paragraph 1(b) above:
	 
	 	(i)	 	If an Exercise Date occurs under clauses (i) through (v) of paragraph 1(b)
above, then no subsequent Exercise Date may occur under any of such clauses or under
clause (vi) of paragraph 1(b) above:
	 
	 	(ii)	 	If an Exercise Date occurs under clause (vi) of paragraph 1(b) above with
respect to a percentage of the shares of Common Stock subject to the Option, then no
subsequent Exercise Date may occur under any of clauses (i) through (vi) of paragraph
1(b) above with respect to such shares;
	 
	 	(iii)	 	If a Change of Control occurs after the occurrence of an Exercise Date
pursuant to clauses (i), (ii), (iv), (v) or (vi) of paragraph 1(b) above and prior to
the related Expiration Date, then the Company may, in its sole discretion, specify an
earlier Expiration Date upon written notice to Employee;
	 
	 	(iv)	 	If Employee does not exercise the Option (or, in the case of clause (vi) of
paragraph 1(b) above, the specified portion of the Option) on or before the applicable
Expiration Date, then the Option (or, in the case of clause (vi) of paragraph 1(b)
above, the specified portion of the Option) will terminate and no longer be exercisable
immediately following such Expiration Date;




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	 	(v)	 	In no event shall the Option be exercisable after the expiration of the
original term of the Option or from and after the date Employee incurs a Separation
from Service on account of the Company’s termination of Employee’s employment for
Cause;
	 
	 	(vi)	 	If an Exercise Date would occur prior to January 1, 2008 pursuant to clauses
(i) through (v) of paragraph 1(b) above, then such Exercise Date shall be deemed to
have occurred on January 1, 2008; and
	 
	 	(vii)	 	The Option shall in no event be exercisable with respect to shares for which
the Option has not become vested in accordance with the Stock Option Agreement.





     2. (a) Employee represents and warrants to the Company that: (i) this Amendment and the terms
of this Amendment have been freely made and without duress after having consulted with
professionals of Employee’s choice; (ii) as of the Effective Date, Employee is the lawful owner of,
and has good title to, the Option; (iii) the Option is free and clear of all liens, encumbrances,
and adverse claims; (iv) Employee has not heretofore assigned, transferred, sold, delivered,
mortgaged, pledged, granted options or rights to purchase, or encumbered the Option; (v) Employee
has the right, power, and authority to enter into this Amendment; and (vi) this Amendment has been
duly executed by, and constitutes a legal, valid, binding and enforceable obligation of, Employee.



     (b) Employee acknowledges and agrees that Employee is not relying upon any written or oral
statement or representation of the Company, its affiliates, or any of their respective officers,
directors, shareholders, agents, attorneys, or successors, or any failure of such individual or
entity to disclose information, or any written or oral statements or representations or failure to
disclose information by any representative or agent of such individual or entity. Employee
acknowledges and agrees that in deciding to enter into this Amendment, Employee is relying on his
or her own judgment and the judgment of the professionals of Employee’s choice with whom Employee
has consulted.



     3. As amended hereby, the Stock Option Agreement is specifically ratified and reaffirmed.



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     IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed by an officer
thereunto duly authorized, and Employee has executed this Amendment, as of the 16th day of
November, 2007, effective as of the Effective Date.



	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	A. Wellford Tabor 	 
	 	 	Title:  	Chairman, Compensation Committee 	 
	 
	 	EMPLOYEE

 	 
	 	 	 
	 	 	 
	 	 	 
	 






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