(f) “Involuntary Termination” shall have the meaning assigned to such term under theEmployment Agreement.     3. **Restricted Shares**. The Employee hereby accepts the Restricted Shares when issuedand agrees with respect thereto as follows:     (a) **Forfeiture Restrictions**. The Restricted Shares may not be sold, assigned,pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in theevent of termination of the Employee’s employment with the Company for any reason other than death,Disability, or Involuntary Termination within the two-year period beginning on the date upon whicha Change of Control occurs, the Employee shall, for no consideration, forfeit to the Company allRestricted Shares. The prohibition against transfer and the obligation to forfeit and surrenderRestricted Shares to the Company upon termination of employment as provided in the precedingsentence are herein referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictionsshall be binding upon and enforceable against any transferee of Restricted Shares.     (b) **Lapse of Forfeiture Restrictions**. Provided that the Employee has beencontinuously employed by the Company from the Date of Grant through the lapse date set forth in thefollowing schedule, the Forfeiture Restrictions shall lapse with respect to a percentage of theRestricted Shares determined in accordance with the following schedule:       **Percentage of Total Number**  **of Restricted Shares as to Which****Lapse Date** **Forfeiture Restrictions Lapse**   25%   25%   25%   25%     Notwithstanding the foregoing, (i) if the Employee’s employment with the Company is terminated byreason of death or Disability, then the Forfeiture Restrictions shall lapse with respect to 100% ofthe Restricted Shares effective as of the date of such termination, and (ii) subject to theprovisions of Section 5.5 (relating to parachute payments) and Section 5.6 (relating to a releaseagreement) of the Employment Agreement, if the Employee’s employment with the Company shall besubject to an Involuntary Termination within the two-year period beginning on the date upon which aChange of Control occurs, then the Forfeiture Restrictions shall lapse with respect to 100% of theRestricted Shares effective as of the date of such Involuntary Termination. Any shares withrespect to which the Forfeiture Restrictions do not lapse in accordance with the precedingprovisions of this Section 3(b) shall be forfeited to the Company for no consideration as of thedate of the termination of the Employee’s employment with the Company.     (c) **Certificates**. A certificate evidencing the Restricted Shares shall be issued bythe Company in the Employee’s name, pursuant to which the Employee shall have all of the rights ofa stockholder of the Company with respect to the Restricted Shares, including, without limitation,voting rights and the right to receive dividends (provided, however, that dividends paid in sharesof the Company’s stock shall be subject to the Forfeiture Restrictions and further provided thatdividends that are paid other than in shares of the Company’s stock shall be paid no later than theend of the calendar year in which the dividend for such class of stock is paid to stockholders ofsuch class or, if later, the 15th day of the third month following the date the dividend is paid tostockholders of such class of stock). Notwithstanding the foregoing, the Company may, in itsdiscretion, elect to complete the delivery of the Restricted Shares by means of electronic,book-entry statement, rather than issuing physical share certificates. The Employee may not sell,transfer, pledge, exchange, hypothecate or otherwise dispose of the stock until the ForfeitureRestrictions have expired, and a breach of the terms of this Agreement shall cause a forfeiture ofthe Restricted Shares. The certificate, if any, shall be delivered upon issuance to the Secretaryof the Company or to such other depository as may be designated by the Committee as a depositoryfor safekeeping until the forfeiture of such Restricted Shares occurs or the ForfeitureRestrictions lapse pursuant to the terms of the Plan and this Agreement. At the Company’s request,the Employee shall deliver to the Company a stock power, endorsed in blank, relating to theRestricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeiture, the Companyshall cause a new certificate or certificates to be issued without legend (except for any legendrequired pursuant to applicable securities laws or any other agreement to which the Employee is aparty) in the name of the Employee in exchange for the certificate evidencing the Restricted Sharesor, as may be the case, the Company shall issue appropriate instructions to the transfer agent ifthe electronic, book-entry method is utilized.     (d) **Corporate Acts**. The existence of the Restricted Shares shall not affect in anyway the right or power of the Board or the stockholders of the Company to make or authorize anyadjustment, recapitalization, reorganization or other change in the Company’s capital structure orits business, any merger or consolidation of the Company, any issue of debt or equity securities,the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition ofall or any part of its assets or business or any other corporate act or proceeding. Theprohibitions of Section 3(a) hereof shall not apply to the transfer of Restricted Shares pursuantto a plan of reorganization of the Company, but the stock, securities or other property received inexchange therefor shall also
 

 
become subject to the Forfeiture Restrictions and provisions governing the lapsing of suchForfeiture Restrictions applicable to the original Restricted Shares for all purposes of thisAgreement, and the certificates, if any, representing such stock, securities or other propertyshall be legended to show such restrictions.     4. **Withholding of Tax**. To the extent that the receipt of the Restricted Shares or thelapse of any Forfeiture Restrictions results in compensation income or wages to the Employee forfederal, state or local tax purposes, the Employee shall deliver to the Company at the time of suchreceipt or lapse, as the case may be, such amount of money as the Company may require to meet itsminimum obligation under applicable tax laws or regulations, and if the Employee fails to do so,the Company is authorized to withhold from any cash or stock remuneration (including withholdingany Restricted Shares or Earned Shares distributable to the Employee under this Agreement) then orthereafter payable to the Employee any tax required to be withheld by reason of such resultingcompensation income or wages. The Employee acknowledges and agrees that the Company is making norepresentation or warranty as to the tax consequences to the Employee as a result of the receipt ofthe Restricted Shares, the lapse of any Forfeiture Restrictions or the forfeiture of any RestrictedShares pursuant to the Forfeiture Restrictions.     5. **Status of Stock**. The Employee agrees that the Restricted Shares and Earned Sharesissued under this Agreement will not be sold or otherwise disposed of in any manner which wouldconstitute a violation of any applicable federal or state securities laws. The Employee alsoagrees that (a) the certificates, if any, representing the Restricted Shares and Earned Shares maybear such legend or legends as the Committee deems appropriate in order to reflect the ForfeitureRestrictions and to assure compliance with the terms and provisions of this Agreement andapplicable securities laws, (b) the Company may refuse to register the transfer of the RestrictedShares or Earned Shares on the stock transfer records of the Company if such proposed transferwould constitute a violation of the Forfeiture Restrictions or, in the opinion of counselsatisfactory to the Company, of any applicable securities law, and (c) the Company may give relatedinstructions to its transfer agent, if any, to stop registration of the transfer of the RestrictedShares.     6. **Employment Relationship**. For purposes of this Agreement, the Employee shall beconsidered to be in the employment of the Company as long as the Employee remains an employee ofeither the Company or an Affiliate. Without limiting the scope of the preceding sentence, it isspecifically provided that the Employee shall be considered to have terminated employment with theCompany at the time of the termination of the “Affiliate” status of the entity or otherorganization that employs the Employee. Nothing in the adoption of the Plan, nor the award of theRestricted Shares thereunder pursuant to this Agreement, shall confer upon the Employee the rightto continued employment by the Company or affect in any way the right of the Company to terminatesuch employment at any time. Unless otherwise provided in a written employment agreement or byapplicable law, the Employee’s employment by the Company shall be on an at-will basis, and theemployment relationship may be terminated at any time by either the Employee or the Company for anyreason whatsoever, with or without cause or notice. Any question as to whether and when there hasbeen a termination of such employment, and the cause of such termination, shall be determined bythe Committee or its delegate, and its determination shall be final.     7. **Notices**. Any notices or other communications provided for in this Agreement shallbe sufficient if in writing. In the case of the Employee, such notices or communications shall beeffectively delivered if hand delivered to the Employee at the Employee’s principal place ofemployment or if sent by registered or certified mail to the Employee at the last address theEmployee has filed with the Company. In the case of the Company, such notices or communicationsshall be effectively delivered if sent by registered or certified mail to the Company at itsprincipal executive offices.     8. **Entire Agreement; Amendment**. This Agreement replaces and merges all previousagreements and discussions relating to the same or similar subject matters between the Employee andthe Company and constitutes the entire agreement between the Employee and the Company with respectto the subject matter of this Agreement. This Agreement may not be modified in any respect by anyverbal statement, representation or agreement made by any employee, officer, or representative ofthe Company or by any written agreement unless signed by an officer of the Company who is expresslyauthorized by the Company to execute such document.     9. **Binding Effect; Survival**. This Agreement shall be binding upon and inure to thebenefit of any successors to the Company and all persons lawfully claiming under the Employee. Theprovisions of Section 5 shall survive the lapse of the Forfeiture Restrictions without forfeiture.     10. **Controlling Law**. **This Agreement shall be governed by, and construed in accordancewith, the laws of the State of Texas, without regard to conflicts of law principles thereof, or, ifapplicable, the laws of the United States.**[Signatures begin on next page.]
 

 
     **IN WITNESS WHEREOF**, the Company has caused this Agreement to be duly executed by an officerthereunto duly authorized, and the Employee has executed this Agreement, all as of the date firstabove written.           **CONCHO RESOURCES INC.**             **By:**          ** **      **Name:**                 **Title:**               ** **                               **EMPLOYEE**  **SPOUSAL CONSENT**     Employee’s spouse, if any, is fully aware of, understands and fully consents and agrees to theprovisions of this Agreement and its binding effect upon any marital or community propertyinterests he/she may now or hereafter own, and agrees that the termination of his/her andEmployee’s marital relationship for any reason shall not have the effect of removing any RestrictedShares and Earned Shares otherwise subject to this Agreement from coverage hereunder and thathis/her awareness, understanding, consent and agreement are evidenced by his/her signature below.            ** **    **Signature of Spouse**                   **Printed Name of Spouse**