Document:

exv10w3

 

 Exhibit 10.3

Form of 2008 General Award

NEWFIELD EXPLORATION COMPANY

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (this “Agreement”) is made as of February 7, 2008 (the “Date of
Grant”) and is by and between Newfield Exploration Company, a Delaware corporation (the “Company”),
and                      (“Employee”).

     1. Grant.

     (a) The Option. Pursuant to the Newfield Exploration Company 2000 Omnibus Stock Plan
(as amended from time to time, the “Plan”), this Agreement evidences the grant by the
Company of an award of an option (the “Option”) to purchase all or any part of an aggregate
of                     shares of Common Stock (the “Underlying Shares”) for a purchase price of $48.45
per share (the “Purchase Price”). The Option shall not be treated as an incentive stock
option within the meaning of section 422(b) of the Code.

     (b) Plan Incorporated. Employee acknowledges receipt of a copy of the Plan and agrees
that the Option shall be subject to all of the terms and conditions of the Plan, which terms
and conditions are incorporated herein for all purposes. Capitalized terms used but not
defined in this Agreement shall have the meanings ascribed to such terms in the Plan.

     2. Exercise of Option.

     (a) Continuous Employment. Subject to its earlier expiration or termination, the
Option may be exercised, by written notice to the Company at its principal executive office
addressed to the attention of its chief financial officer (or such other officer or employee
of the Company or third party administrator as the Company may designate from time to time),
at any time and from time to time after the date of grant hereof, but, except as otherwise
provided below, the Option shall not be exercisable for more than a percentage of the
aggregate number of Underlying Shares determined by the number of full years from the Date
of Grant to the date of such exercise, in accordance with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Underlying
	Number of Full Years	 	Shares that may be Purchased
	Less than 1 year
	 	 	0	%
	1 year but less than 2 years
	 	 	20	%
	2 years but less than 3 years
	 	 	40	%
	3 years but less than 4 years
	 	 	60	%
	4 years but less than 5 years
	 	 	80	%
	5 years or more
	 	 	100	%

     (b) Death or Disability. Subject to the earlier expiration or termination of the
Option, upon Employee’s separation from service with the Company by reason of Employee’s
death or Disability, the Option may be exercised in full by Employee (or Employee’s estate
or the person who acquires this Agreement by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) at any time during the

 

 

period of one year following such separation from service. After the expiration of
such one-year period, the Option shall terminate and shall not be exercisable.

     (c) Voluntary Termination or Involuntary Termination for Cause. If Employee
voluntarily terminates his employment with the Company or if Employee’s employment with the
Company is terminated involuntarily for Cause, then the Option shall terminate immediately
and shall not be exercisable. The Committee may, in its sole discretion, advise Employee in
writing, prior to a voluntary termination of Employee’s employment with the Company, that
such termination will be treated as an involuntary termination other than for Cause that is
governed by Section 3(d).

     (d) Other Involuntary Termination. Subject, in all cases, to the earlier expiration or
termination of the Option, if Employee’s employment with the Company terminates
involuntarily other than for Cause, then the Option may be exercised by Employee at any time
during the 90 day period following such termination, or by Employee’s estate (or the person
who acquires this Agreement by will or the laws of descent and distribution or otherwise by
reason of the death of Employee) during a period of one year following Employee’s death if
Employee dies during such 90 day period, but in each case only as to the number of shares
Employee was entitled to purchase hereunder as of the date Employee’s employment so
terminates. After the expiration of such 90 day period (or after the expiration of the one
year period following Employee’s death if Employee dies during such 90 day period), the
Option shall terminate and shall not be exercisable.

     3. Term. Notwithstanding anything in this Agreement to the contrary, the Option shall
terminate on, and shall not be exercisable on or after, the ten year anniversary of the Date of
Grant.

     4. Payment of Purchase Price. The Purchase Price shall be paid in full at the time of
exercise (a) in cash, (b) by delivering or constructively tendering to the Company shares of Common
Stock having a Fair Market Value equal to the purchase price (provided such shares used for this
purpose must have been held by Employee for such minimum period of time as may be established from
time to time by the Committee), (c) if the Common Stock is listed or traded on a national
securities market, through a “cashless exercise” in accordance with a policy or program established
by the Company or (d) any combination of the foregoing. No fraction of a share of Common Stock
will be issued by the Company upon exercise of the Option or accepted by the Company in payment of
the purchase price. In lieu thereof, Employee shall provide a cash payment for such amount as is
necessary to effect the issuance and acceptance of only whole shares of Common Stock. Until the
purchase price for Underlying Shares has been paid in full, the holder of such shares shall not be,
or have any of the rights or privileges of, a stockholder of the Company with respect to such
shares.

     5. Definitions.

     (a) “Cause” means Employee has (i) failed to fulfill the duties of his employment
position as prescribed by the Board, the Company’s officers or Company policy, (ii) engaged
in conduct constituting willful misconduct or fraud or (iii) been convicted of any felony,
any crime involving moral turpitude or any crime committed in the course of Employee’s
employment.

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     (b) “Disability” has the meaning set forth in Section 409A(a)(2)(A)(ii) of the Code.

     6. Tax Withholding. To the extent that the exercise of the Option or the disposition
of Underlying Shares is compensation income to Employee for federal or state income tax purposes,
Employee shall deliver to the Company at the time of such exercise or disposition such amount of
money or shares of Common Stock as the Company may require to meet its obligation under applicable
tax laws or regulations. Upon an exercise of the Option, Employee hereby authorizes the Company,
in the Company’s sole discretion, to satisfy any such withholding requirement out of any cash or
shares of Common Stock distributable to Employee upon such exercise.

     7. Compliance with Securities Laws.

     (a) Registration of Underlying Shares. The Company has registered under the Securities
Act of 1933, as amended (the “Act”), the issuance and sale of Underlying Shares upon
exercise of the Option, and intends to keep such registration effective throughout the
period this Option is exercisable. In the absence of such effective registration or an
available exemption from registration under the Act, the issuance and sale of Underlying
Shares will be delayed until registration of such issuance and sale is effective or an
exemption from registration under the Act is available. The Company intends to use its
reasonable efforts to ensure that no such delay occurs. If an exemption from registration
under the Act is available upon an exercise of the Option, Employee (or the person permitted
to exercise the Option in the event of Employee’s death or incapacity), if requested by the
Company to do so, will execute and deliver to the Company in writing an agreement containing
such provisions as the Company may require to assure compliance with applicable securities
laws.

     (b) Resale of Underlying Shares. Employee shall not sell or otherwise dispose of any
of the Underlying Shares in any manner that would constitute a violation of applicable state
or federal securities laws. The certificates representing the Underlying Shares may bear
such legend or legends as the Committee deems appropriate.

     8. Community Interest of Spouse. The community interest, if any, of any spouse of
Employee in the Option or any of the Underlying Shares shall be subject to all of the terms,
conditions and restrictions of this Agreement and the Plan.

     9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Employee.

     10. Entire Agreement. This Agreement and the Plan constitute the entire agreement of
the parties hereto with regard to the subject matter hereof, and contain all the covenants and
agreements between the parties with respect to the Option and the Underlying Shares. Without
limiting the scope of the preceding sentence, all prior understandings and agreements, if any,
among the parties hereto relating to the subject matter hereof are hereby null and void and of no
further force and effect.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer
thereunto duly authorized, and Employee has executed this Agreement, all as of the Date of Grant.

	 	 	 	 	 	 	 
	 

	 	NEWFIELD EXPLORATION COMPANY	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

David A. Trice

President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[Employee]	 	 

4exv10w1

 

Exhibit 10.1

SEPARATION AGREEMENT

          This Separation Agreement (the “Agreement”) is entered into by and between, and shall inure to
the benefit of and be binding upon, the following parties:

          Francis S. Kalman, hereinafter referred to as “Mr. Kalman”; and

          McDERMOTT INCORPORATED, hereinafter referred to as the “Company.”

WITNESSETH:

          WHEREAS, Mr. Kalman resigned from employment with the Company on February 29, 2008 (the
“Resignation Date”); and

          WHEREAS, the Company and Mr. Kalman mutually desire to establish and agree upon the terms and
conditions of Mr. Kalman’s separation from service.

          NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, Mr.
Kalman and the Company hereby agree as follows:

	1.	 	Payments by the Company. If a bonus is paid to Company employees for fiscal year
2008 under the McDermott International, Inc. Executive Incentive Compensation Plan (the
“EICP”), the Company will pay a bonus to Mr. Kalman. The gross amount of such bonus shall be
calculated by multiplying Mr. Kalman’s annualized base salary on January 1, 2008 by 65%,
multiplying the resulting product by the applicable performance factor (not to exceed 2X), and
multiplying the resulting figure by two twelfths (2/12). Any such bonus shall be paid in
accordance with the Company’s customary practice, but in no event later than March 15, 2009,
and shall be subject to appropriate tax withholdings.
	 
	 	 	Mr. Kalman previously received certain awards (the “Awards”) under the McDermott
International, Inc. 2001 Directors and Officers Long Term Incentive Plan (the “LTIP”).
Subject to the provisions of Paragraph 5 below, Mr. Kalman’s outstanding unvested

 

 

	 	 	Awards shall remain in full force and effect during the period from the Resignation Date
through February 28, 2010 and any Awards scheduled to vest during that period shall become
vested and payable in accordance with the terms of the LTIP and the applicable Grant
Agreement. All other outstanding unvested Awards shall be forfeited on the Resignation
Date, unless a Change in Control event occurs and results in an early vesting on or before
February 28, 2010.
	 
	2.	 	Retiree Benefits. As of the first day of the month coincident with or next following
his attainment of age 65, Mr. Kalman shall begin receiving benefits under the Retirement Plan
for Employees of McDermott Incorporated and Participating Subsidiary and Affiliated Companies
and, subject to Paragraph 5 below, under the Restoration of Retirement Income Plan (the
“Excess Plan”). In addition, Mr. Kalman shall be entitled to receive the portion of his
account balance in the McDermott International, Inc. New Supplemental Executive Retirement
Plan (“SERP”) in which he is vested as of his Resignation Date, and the vesting of the
remaining portion of his SERP account shall be accelerated so that, subject to Paragraph 5
below, Mr. Kalman is 100% vested in such account as of his Resignation Date. SERP benefits
shall be distributed in accordance with Mr. Kalman’s existing election, in a single lump sum
payment on the first day of the calendar month next following the six month anniversary of his
Resignation Date.
	 
	3.	 	Cooperation and Advisory Services. During the period beginning on the Resignation
Date and continuing for twenty-four months thereafter, Mr. Kalman shall provide such
cooperation and advisory services as the Company may request with respect to matters in which
he was involved during his employment with the Company and similar matters arising in the
ordinary course of business. Additionally, the Company or its affiliates may request Mr.
Kalman’s assistance with respect to matters outside the ordinary course of business; provided
that any such request shall be subject to mutually acceptable terms and conditions.
	 
	4.	 	Release of Claims. In consideration of the foregoing, the adequacy of which is
hereby expressly acknowledged, Mr. Kalman hereby unconditionally and irrevocably releases
and forever discharges, to the fullest extent applicable law permits, the “Releasees,” as
defined below, from any and every action, cause of action, complaint, claim, demand,
administrative charge, legal right, compensation, obligation, damages (including

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	 	 	consequential, exemplary and punitive damages), liability, cost and/or expense (including
attorney’s fees) that he has, may have or may be entitled to from or against the Releasees,
whether legal, equitable or administrative, in any forum or jurisdiction, whether known or
unknown, foreseen or unforeseen, matured or unmatured, accrued or not accrued which arises
directly or indirectly out of, or is based on or related in any way to Mr. Kalman’s
employment with or termination of employment from the Company, its predecessors, successors
and assigns and past, present and future affiliates, subsidiaries, divisions and parent
corporations, including, without limitation, any such matter arising from the negligence,
gross negligence or willful misconduct of the Releasees, (together, the “Released Claims”);
provided, however, that this Release does not apply to any claims arising solely and
specifically 1.) under the Age Discrimination in Employment Act of 1967, as amended arising
after the date this Agreement is executed, 2.) to any claim for indemnification (including,
without limitation, under the Company’s organizational documents or insurance policies)
arising in connection with an action instituted by a third party against the Company, its
affiliates or Mr. Kalman in his capacity as a former officer or director of the Company or
its affiliates, or 3.) to any claim arising from any breach or failure to perform this
Agreement.
	 
	 	 	The parties intend this Release to cover any and all such Released Claims, whether arising
under any employment contract (express or implied), policies, procedures or practices of any
of the Releasees, and/or by any acts or omissions of any of the Releasees’ agents or
employees or former agents or employees and/or whether arising under any state or federal
statute, including but not limited to Texas’ employment discrimination laws, all federal
discrimination laws, the Age Discrimination in Employment Act of 1967, as amended, the
Employee Retirement Income Security Act of 1974, as amended, all local laws and ordinances
and/or common law, without exception. As such, it is expressly acknowledged and agreed that
this Release is a general release, representing a full and complete disposition and
satisfaction of all of the Company’s real or alleged legal obligations to Mr. Kalman with
the exceptions noted above. The term “Releasees” means the Company, its predecessors,
successors and assigns and past, present and future affiliates, subsidiaries, divisions and
parent corporations and all their respective past, present and future officers, directors,
shareholders, employee benefit plan administrators, employees and agents, individually and
in their respective capacities.

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	 	 	Mr. Kalman expressly agrees that neither he nor any person acting on his behalf
will file or permit to be filed any action for legal or equitable relief against the
Releasees involving any matter related in any way to his employment with, or
resignation from employment with the Company, its predecessors, successors, assigns and
past, present and future affiliates, subsidiaries, divisions and parent corporations,
including the matters covered by the Released Claims. In the event that such an action
is filed, Mr. Kalman agrees that the Releasees are entitled to legal and equitable
remedies against him, including an award of attorney’s fees. However, it is expressly
understood and agreed that the foregoing sentence shall not apply to any charge filed
by Mr. Kalman with the Equal Employment Opportunity Commission or any action filed by
Mr. Kalman that is narrowly limited to seeking a determination as to the validity of
this Agreement and enforcement thereof. Should Mr. Kalman file a charge with the Equal
Employment Opportunity Commission or should any governmental entity, agency, or
commission file a charge, action, complaint or lawsuit against any of the Releasees
based on any Released Claim, Mr. Kalman agrees not to seek or accept any resulting
relief whatsoever.

	5.	 	Undertakings By Mr. Kalman. In consideration of the foregoing, the adequacy of which
is expressly acknowledged and agreed, unless otherwise mutually agreed between Mr. Kalman and
the Company, Mr. Kalman shall immediately return to the Company any and all documents,
records, files, reports, memoranda, books, papers, plans, letters and any other data in his
possession regardless of the medium held or stored that relate in any way to the business of
the Company, and any credit cards, keys, access cards, calling cards, computer equipment and
software, telephone, facsimile or other equipment or property of the Company, and agrees that
during the period beginning on March 1, 2008 and ending on February 28, 2010:

	 	(a)	 	He will not at any time disclose or use for his own benefit or purposes or for
the benefit or purposes of any party other than the Company, any trade secrets,
information, data or other confidential or proprietary information or data which may
have come to Mr. Kalman’s knowledge during his employment with the Company, provided,
however that the foregoing shall not apply to information which is generally known to
the industry or the public other than as a result of Mr. Kalman’s breach of this
undertaking. This undertaking shall apply without limit of time;

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	 	(b)	 	He will refrain from performing any act, engaging in any conduct or course of
action or making or publishing any adverse or untrue or misleading statement which has
or may reasonably have the effect of demeaning the name or business reputation of the
Releasees or which adversely affects or may reasonably adversely affect the best
interests (economic or otherwise) of the Releasees;
	 
	 	(c)	 	He will refrain from the solicitation, procurement, interference with or
attempt to entice away from the Company and/or its affiliates of (i) any person or
entity who is a material customer, supplier, agent or distributor of the Company and/or
its affiliates with whom Mr. Kalman or any employee subordinate to Mr. Kalman had
contact on behalf of the Company and/or its affiliates, or (ii) any senior employee or
consultant employed by the Company and/or its affiliates on or after the Resignation
Date; and
	 
	 	(d)	 	He will refrain from any direct or indirect involvement without prior notice to
and consent of the Company, in any other enterprise which is competitive with any trade
or business carried on by McDermott International, Inc., its subsidiaries and
affiliates.

     Mr. Kalman expressly acknowledges and agrees that in the event that he institutes legal
action in violation of Paragraph 4 above, or the Company determines that he has engaged in
conduct prohibited under any of subparagraphs (a) through (d) above, or he fails to provide
services reasonably requested by the Company pursuant to Paragraph 3 above, any payments
otherwise due and owing pursuant to Paragraphs 1 above and under the SERP referenced in
Paragraph 2 above shall be forfeited and all outstanding Awards shall be cancelled. Mr.
Kalman further expressly agrees that the Company shall have the right, in its sole
discretion, to suspend any such payment or benefit while an allegation that any of the
undertakings set forth in the foregoing subparagraphs (a) through (d) have been breached is
under investigation and agrees that this Agreement shall act as a complete bar to his
entitlement to any legal, equitable or administrative remedy based upon any forfeiture,
cancellation or suspension pursuant to this Paragraph 5. Mr. Kalman further agrees that
if he institutes legal action in violation of Paragraph 4 above or the Company determines
that he has engaged in conduct prohibited under any of

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subparagraphs (a) through (d) above, he shall repay to the Company, within thirty (30) days
of receipt of written demand for repayment, 40% of the SERP benefits distributed to him
pursuant to Paragraph 2 above and 100% of the value of any Award that became vested after
the Resignation Date pursuant to Paragraph 1 above. In the event that legal action is taken
by the Company to enforce this repayment obligation, the Company shall be entitled to the
amount of the repayment obligation, interest on the unpaid amount, costs and attorney’s
fees.

	6.	 	Confidentiality. Mr. Kalman agrees to keep the terms of this Agreement, and the
settlement it embodies, strictly confidential, and further agrees not to disclose or permit
disclosure of any information concerning this Agreement to any other person, commercial or
non-profit newspaper, publication or broadcast, of any kind whatsoever, except: (a) as
required to do so by court order; (b) or as necessary for tax planning and/or preparation or
to respond to inquiries or audits by a federal, state or local taxing authority; (c) or for
purposes of providing such information to his personal legal counsel; (d) or as necessary for
the enforcement hereof.
	 
	7.	 	Miscellaneous Provisions.

	 	(a)	 	Failure on the part of the Company or Mr. Kalman at any time to insist on
strict compliance by the other party with any provisions of this Agreement shall not
constitute a waiver of either party’s obligations in respect thereof, or of either
party’s right hereunder to require strict compliance therewith in the future.
	 
	 	(b)	 	The obligations set forth in this Agreement are severable and divisible, and
the unenforceability of any clause or portion thereof shall not affect the
enforceability of the remainder of such clause or of any other obligation contained
herein.

	8.	 	Entire Agreement. Mr. Kalman and the Company agree and acknowledge that this
Agreement contains and comprises the entire agreement and understanding between the parties,
that no other representation, promise, covenant or agreement of any kind whatsoever has been
made to cause any party to execute this Agreement, and that all agreements and understandings
between the parties are embodied and expressed in these agreements. The parties also agree
that the terms of this Agreement shall not be amendedr or changed except in writing and signed by Mr. Kalman and a duly authorized agent of

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 the
Company. The parties to this Agreement further agree that this Agreement shall be binding
on and inure to the benefit of Mr. Kalman, the Company and the Releasees as defined in this
Agreement. Any other agreements or understandings between the parties, whether written or
oral, are hereby null and void.

	9.	 	Timing and Consultation with Counsel. Mr. Kalman acknowledges that he has been given
a reasonable period of time within which to consider this Agreement and has been advised to
discuss the terms of this Agreement with legal counsel. Mr. Kalman acknowledges that this
Agreement was offered to him on February 7, 2008, that he was advised that (i) it could be
executed at any time prior to February 29, 2008, and (ii) if accepted, the Agreement could be
revoked, in writing, for up to seven (7) days following the date of such acceptance. Based
upon his review, Mr. Kalman acknowledges that he fully and completely understands and accepts
the terms of this Agreement, including the Release in Paragraph 4, and enters into it freely,
voluntarily and of his own free will.

	 	 	10. Applicable Law. This Agreement shall be interpreted and construed in accordance
with the laws of the State of Texas.

I HAVE READ THE FOREGOING SEPARATION AGREEMENT, FULLY UNDERSTAND IT AND HAVE VOLUNTARILY
EXECUTED IT ON THE DATE WRITTEN BELOW, SIGNIFYING THEREBY MY ASSENT TO, AND WILLINGNESS TO
BE BOUND BY, ITS TERMS:

	 	 	 	 	 	 
	Date:

	 	February 8, 2008
	 	          /s/ Francis S. Kalman
	 
	 

	 	 	 	 	 
	 

	 	 	 	          Francis S. Kalman	 

          Before me, a Notary Public in and for Harris County, Texas, personally appeared the
above-named Francis S. Kalman, who acknowledged that he did sign the foregoing instrument, and that
the same is his free act and deed.

          IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Harris County, Texas,
this 8th day of February, 2008.

	 	 	 	 
	 

	 	 	 
	 

	 	NOTARY PUBLIC	 

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	 	 	 	McDERMOTT INCORPORATED
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ John T. Nesser III	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     John T. Nesser III	 	 
	 

	 	 	 	Executive Vice President, Chief Administrative and Legal Officer
	 	 

          Before me, a Notary Public in and for Harris County, Texas, personally appeared the
above-named McDermott Incorporated through John T. Nesser, III, its Executive Vice President, Chief
Administrative and Legal Officer, who acknowledged that he did sign the foregoing instrument for
and on behalf of McDermott Incorporated, and that the same is the free act and deed of McDermott
Incorporated and the free act and deed of him as its agent.

          IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Harris County, Texas,
this 8th day of February, 2008.

	 	 	 
	 

	 	 
	 

	 	NOTARY PUBLIC

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