Document:

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                          REGISTRATION RIGHTS AGREEMENT

                  REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 23, 2001, by and between Newfield Exploration Company, a Delaware
corporation (the "Company"), and certain of the former stockholders (the
"Stockholders") of Lariat Petroleum, Inc., a Delaware corporation ("Lariat").

                                    RECITALS

                  A. Pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of January 19, 2001, by and among the Company, Newfield
Exploration Mid-Continent Inc., a Delaware corporation and a direct, wholly
owned subsidiary of the Company ("Merger Sub"), Lariat and some or all of the
stockholders of Lariat (the "Merger Agreement"), Lariat was merged with and into
Merger Sub (the "Merger") and the Company issued shares of its common stock, par
value $0.01 per share (the "Common Stock"), and shares of its Junior Convertible
Preferred Stock, par value $.01 per share (the "Preferred Stock"), to the
Stockholders.

                  B. In order to induce the Stockholders to agree to the
proposed terms of the Merger Agreement, the Company agreed to grant certain
securities registration rights to the Stockholders as set forth herein.

                                   AGREEMENTS

                  In consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                  1. Definitions and General Interpretive Principles. In
addition to the capitalized terms defined elsewhere in this Agreement, the
following capitalized terms shall have the following meanings when used in this
Agreement:

                  "Agreement" has the meaning set forth in the Introduction.

                  "Commission" means the United States Securities and Exchange
Commission and any agency succeeding to its functions.

                  "Common Stock" has the meaning set forth in the Recitals.

                  "Company" has the meaning set forth in the Introduction.

                  "Effectiveness Period" has the meaning set forth in Section
2(b).

                  "Effectiveness Target Date" has the meaning set forth in
Section 2(b).

                  "Filing Target Date" has the meaning set forth in Section
2(b).

                  "Holder Representative" has the meaning set forth in Section
4(a)(iv).

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                  "Holders" means the Initial Holders or a successor, assignee
or transferee of the Initial Holders or subsequent Holders as contemplated by
Section 10 hereof, in each case for so long as such Holder owns Registrable
Securities.

                  "Indemnified Party" has the meaning set forth in Section 6(c).

                  "Indemnifying Party" has the meaning set forth in Section
6(c).

                  "Initial Holder" means the Stockholders and shall be deemed to
include any Person who held shares of common stock, par value $0.01 per share
(the "Lariat Stock"), of Lariat prior to the Merger and who duly delivers a
transmittal letter and certificates for such shares of Lariat Stock in exchange
for shares of Common Stock or Preferred Stock in accordance with the terms of
the Merger Agreement.

                  "Initial Shelf Registration" has the meaning set forth in
Section 2(a).

                  "Lariat" has the meaning set forth in the Introduction.

                  "Loss" and "Losses" have the meanings set forth in Section
6(a).

                  "Merger" has the meaning set forth in the Recitals.

                  "Merger Agreement" has the meaning set forth in the Recitals.

                  "Merger Closing Date" has the meaning set forth in Section
2(b).

                  "Merger Sub" has the meaning set forth in the Recitals.

                  "NASD" means the National Association of Securities Dealers,
Inc.

                  "NYSE" means The New York Stock Exchange.

                  "Participant" has the meaning set forth in Section 6(a).

                  "Person" means a natural person, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department agency or political subdivision thereof

                  "Preferred Stock" has the meaning set forth in the Recitals.

                  "Registrable Securities" means (a) the Common Stock issued in
the Merger, (b) the Preferred Stock issued in the Merger (but only for the
period commencing 60 days after the date hereof and terminating when the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, for the conversion of such Preferred Stock into Common by Warburg shall
have expired or been terminated), (c) the Common Stock issuable upon conversion
of the Preferred Stock, and (d) any other securities issued or issuable with
respect to such securities by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or

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otherwise; provided, however, that any of the foregoing securities shall cease
to be "Registrable Securities" to the extent that (i) a registration statement
with respect to their sale has been declared effective under the Securities Act
and they have been disposed of pursuant to such registration statement, (ii)
they have been sold pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act or (iii) they are eligible to be sold pursuant
to Rule 144(k). For purposes of this Agreement, (x) a "class" of Registrable
Securities shall mean all Registrable Securities with the same terms, and (y) a
"percentage" or a "majority" of the Registrable Securities (or, where
applicable, of any other securities) shall be determined on a fully diluted
basis, based on the number of shares of such securities (including the number of
shares of Common Stock issuable upon conversion of the Preferred Stock
(determined notwithstanding any restriction on conversion by a particular
Holder)).

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

                  "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Shelf Registration Statement" means a registration statement
of the Company filed with the Commission on Form S-3 (or any successors thereto)
for an offering to be made on a continuous or delayed basis pursuant to Rule 415
under the Securities Act (or any similar rule that may be adopted by the
Commission) covering all of the Registrable Securities.

                  "Stockholders" has the meaning set forth in the Introduction.

                  "Subsequent Shelf Registration" has the meaning set forth in
Section 2(c).

                  "Warburg" has the meaning set forth in Section 2(d).

                  "Warburg Partner Distribution" has the meaning set forth in
Section 2(d).

                  Whenever used in this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, any noun or pronoun shall be
deemed to include the plural as well as the singular and to cover all genders.
The name assigned this Agreement and the section captions used herein are for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect hereof. Unless otherwise specified, the terms "hereof,"
"herein," "hereunder" and similar terms refer to this Agreement as a whole, and
reference herein to Sections refer to Sections of this Agreement.

                  2. Shelf Registration

                  (a) Shelf Registration. The Company shall file with the
Commission a Shelf Registration Statement in accordance with the terms of this
Agreement (the "Initial Shelf Registration"). The Initial Shelf Registration
shall be on Form S-3. The Company shall not permit any securities other than the
Registrable Securities to be included in the Initial Shelf Registration or any
Subsequent Shelf Registration.

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                  (b) Time Periods. The Company will cause, by the 30th day
after the closing date of the Merger (the "Merger Closing Date"), the Initial
Shelf Registration to be prepared and filed with the Commission (the "Filing
Target Date") and have such Initial Shelf Registration Statement declared
effective by the Commission no later than 120 days after the Merger Closing Date
(the "Effectiveness Target Date"). The Company will cause the Initial Shelf
Registration to be continuously effective under the Securities Act until all
Registrable Securities covered by the Shelf Registration have been distributed
in the manner set forth and as contemplated in the Initial Shelf Registration
or, if applicable, a Subsequent Shelf Registration or there are no longer any
Registrable Securities outstanding (the "Effectiveness Period").

                  (c) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company shall, in
addition to fulfilling its obligations under Section 2(e) below, within five
business days of such cessation of effectiveness, amend the Initial Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
pursuant to Rule 415 under the Securities Act covering all of the Registrable
Securities covered by and not sold under the Initial Shelf Registration or an
earlier Subsequent Shelf Registration (each, a "Subsequent Shelf Registration").
If a Subsequent Shelf Registration is filed, the Company will cause the
Subsequent Shelf Registration to be declared effective under the Securities Act
as soon as practicable after such filing and to keep such Subsequent Shelf
Registration continuously effective during the remainder of the Effectiveness
Period.

                  (d) Transfer Restrictions. Notwithstanding anything to the
contrary contained in this Section 2, prior to the first anniversary of the
Merger Closing Date, each Initial Holder agrees not to transfer or sell on any
one trading day on the NYSE a number of Registrable Securities that is in excess
of the greater of (x) 1,000 or (y) 2.5% of the number of shares of Common Stock
issued to such Initial Holder in the Merger; provided, however, that the
restrictions of this Section 2(d) shall not apply to (i) a distribution by
Warburg, Pincus Ventures, L.P. ("Warburg") to its general and limited partners
(a "Warburg Partner Distribution"), or (ii) the recipients of a Warburg Partner
Distribution or their transferees.

                  (e) Supplements and Amendments. The Company shall promptly
supplement and amend any Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the Holders of a majority in aggregate principal amount
of the Registrable Securities covered by such Shelf Registration Statement.

                  3. Blackout Periods. Notwithstanding anything to the contrary
contained herein, the Company may, upon written notice to the Holders whose
Registrable Securities are included in a Shelf Registration Statement, suspend
such Holders' use of any prospectus which is a part of the Shelf Registration
Statement (in which event the Holders shall discontinue sales of Registrable
Securities pursuant to the Shelf Registration Statement) if, in the reasonable
judgment of counsel to the Company, the Company possesses material nonpublic
information; provided that the Company may not suspend any such sales for more
than an aggregate of 45 consecutive days or for an aggregate of 120 days in any
period of 12 consecutive months.

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Upon the termination of the condition described above, the Company shall give
prompt notice to the Holders whose Registrable Securities are included in the
Shelf Registration Statement, and shall promptly terminate any suspension of
sales it has put into effect and shall take such other actions to permit
registered sales of Registrable Securities as contemplated by this Agreement.

                  4. Registration Procedures.

                  (a) In connection with the Company's registration obligations
pursuant to this Agreement, the Company shall, subject to the limitations set
forth herein, effect such registration so as to permit the sale of the
applicable Registrable Securities in accordance with the intended method or
methods of distribution thereof (which in the case of Warburg shall include both
a Warburg Partner Distribution, the listing of the partners of Warburg in the
registration statement and the subsequent sale by the partners in Warburg of
such Registrable Securities) and in conformity with any required time periods
set forth herein, and in connection therewith the Company shall:

                           (i) before filing a registration statement or
         prospectus with the Commission, or any amendments or supplements
         thereto and in connection therewith, furnish to the Holders holding the
         Registrable Securities covered by such registration statement, copies
         of all documents prepared to be filed, which documents will be subject
         to the review and comment of such Holders and their respective counsel,
         and the Company shall make such changes as are reasonably requested by
         such Holders or counsel;

                           (ii) prepare and file with the Commission a
         registration statement relating to the registration on any appropriate
         form under the Securities Act, which form shall be available for the
         sale of the Registrable Securities; provided, however, the Company
         shall not file any registration statement or amendment thereto or any
         prospectus or any supplement specific thereto (it being understood that
         filings pursuant to the Exchange Act by the Company that are
         incorporated by reference are not amendments or supplements to such
         registration statement for purposes of this Section 4(a)(ii)) to which
         the Holders of a majority of the Registrable Securities covered by such
         registration statement shall, in a timely manner, reasonably object;

                           (iii) prepare and file with the Commission such
         amendments or supplements to the applicable registration statement or
         prospectus used in connection therewith as may be (A) reasonably
         requested by any participating Holder (to the extent such request
         relates to information relating to such Holder); (B) necessary to keep
         such registration effective for the period of time required by this
         Agreement; or (C) necessary to comply fully with the applicable
         provisions of Rules 424 and 430A under the Securities Act;

                           (iv) notify Warburg or another representative of the
         Holders selected by the Holders of a majority of the Registrable
         Securities (the "Holder Representative") with respect to clauses (A)
         and (B) and each selling Holder with respect to clauses (C) and (D) as
         soon as reasonably practicable after notice thereof is received by the
         Company (A) when the applicable registration statement or any amendment
         thereto has been filed

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         or becomes effective and when the applicable prospectus or any
         amendment or supplement thereto has been filed, (B) of any written
         comments by the Commission or any request by the Commission for
         amendments or supplements to such registration statement or prospectus
         or for additional information, (C) of the issuance by the Commission of
         any stop order suspending the effectiveness of such registration
         statement or any order preventing or suspending the use of any
         preliminary or final prospectus or the initiation or threat of any
         proceedings for such purposes and (D) of the receipt by the Company of
         any notification with respect to the suspension of the qualification of
         the Registrable Securities for offering or sale in any jurisdiction or
         the initiation or threat of any proceeding for such purpose;

                           (v) promptly notify each selling Holder when the
         Company becomes aware of the happening of any event as a result of
         which the applicable registration statement or prospectus (as then in
         effect) contains any untrue statement of a material fact or omits to
         state a material fact necessary to make the statements therein (in the
         case of the prospectus and any preliminary prospectus, in light of the
         circumstances under which they were made) not misleading or, if for any
         other reason it shall be necessary to amend or supplement such
         registration statement or prospectus in order to comply with the
         Securities Act and, in either case as promptly as reasonably
         practicable thereafter, prepare and file with the Commission an
         amendment or supplement to such registration statement or prospectus
         which shall correct such statement or omission or effect such
         compliance;

                           (vi) make every reasonable effort to prevent or
         obtain at the earliest possible moment the withdrawal of any stop order
         with respect to the applicable registration statement or other order
         suspending the use of any preliminary or final prospectus;

                           (vii) promptly incorporate in a prospectus supplement
         or post-effective amendment to the applicable registration statement
         such information as any Holders appropriately and reasonably request
         should be included therein relating to the plan of distribution with
         respect to such Registrable Securities, information with respect to the
         amount of Registrable Securities being distributed, the purchase price
         being paid therefor and any other terms of the distribution of the
         Registrable Securities to be sold in such offering; and make all
         required filings of such prospectus supplement or post-effective
         amendment as soon as reasonably practicable after being notified of the
         matters to be incorporated in such prospectus supplement or
         post-effective amendment;

                           (viii) furnish to each selling Holder, without
         charge, as many conformed copies as such Holder may reasonably request
         of the applicable registration statement, including all documents
         incorporated by reference therein or exhibits thereto;

                           (ix) deliver to each selling Holder, without charge,
         as many copies of the applicable prospectus (including each preliminary
         prospectus) as such Holder may reasonably request (it being understood
         that the Company consents to the lawful use of the prospectus by each
         of the selling Holders in connection with the offering and sale of the
         Registrable Securities covered by the prospectus);

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                           (x) on or prior to the date on which the applicable
         registration statement is declared effective, register or qualify such
         Registrable Securities for offer and sale under the securities or "Blue
         Sky" laws of each state and other jurisdiction of the United States, as
         any such selling Holder or its counsel reasonably requests in writing,
         and do any and all other acts or things reasonably necessary or
         advisable to keep such registration or qualification in effect so as to
         permit the commencement and continuance of sales and dealings in such
         jurisdictions for as long as may be necessary to complete the
         distribution of the Registrable Securities covered by the registration
         statement; provided that the Company shall not be required (A) to
         qualify generally to do business in any jurisdiction where it is not
         then so qualified, or (B) to take any action which would subject it to
         taxation or general service of process in any such jurisdiction where
         it is not then so subject;

                           (xi) (A) cooperate with the selling Holders to
         facilitate the timely preparation and delivery of certificates
         representing Registrable Securities to be sold and, if appropriate, not
         bearing any restrictive legends, and (B) upon consummation of a Warburg
         Partner Distribution, issue or cause the transfer agent to issue to the
         recipients of the Warburg Partner Distribution certificates for the
         securities received free of any restrictive legend or stop transfer
         order;

                           (xii) except with respect to the Preferred Stock, not
         later than the effective date of the applicable registration statement,
         provide a CUSIP number for all Registrable Securities and provide the
         applicable transfer agent with printed certificates for the Registrable
         Securities which certificates shall be in a form eligible for deposit
         with The Depository Trust Company;

                           (xiii) use its reasonable best efforts to comply with
         all applicable rules and regulations of the Commission and make
         generally available to its securityholders consolidated earnings
         statements satisfying the provisions of Section 11(a) of the Securities
         Act and Rule 158 thereunder (or any similar rule promulgated under the
         Securities Act) no later than 45 days after the end of any 12-month
         period (or 90 days after the end of any 12-month period if such period
         is a fiscal year), commencing on the first day of the first fiscal
         quarter of the Company after the effective date of a registration
         statement, which statements shall cover said 12-month periods;

                           (xiv) provide and cause to be maintained a transfer
         agent and registrar for all Registrable Securities covered by the
         applicable registration statement from and after a date not later than
         the effective date of such registration statement;

                           (xv) cause all Registrable Securities of a class
         covered by the applicable registration statement to be listed on each
         securities exchange on which any of the Company's securities of such
         class are then listed or quoted and on each inter-dealer quotation
         system on which any of the Company's securities of such class are then
         quoted;

                           (xvi) make available upon reasonable notice at
         reasonable times and for reasonable periods for inspection by the
         Holder Representative, on behalf of the selling Holders, and by any
         attorney, accountant or other agent retained by such selling Holders,

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         all pertinent financial and other records, pertinent corporate
         documents and properties of the Company as shall be reasonably
         necessary to enable them to exercise their due diligence
         responsibility, and cause all of the Company's officers and the
         independent public accountants who have audited its financial
         statements to make themselves available, upon reasonable notice and for
         reasonable periods during normal business hours to discuss the business
         of the Company and to supply all information reasonably requested by
         any such Holder Representative, attorney, accountant or agent in
         connection with such registration statement as shall be reasonably
         necessary to enable them to exercise their due diligence responsibility
         (subject to the entry by each party referred to in this clause (xvi)
         into customary confidentiality agreements in a form reasonably
         acceptable to the Company); and

                           (xvii) if any fact or event contemplated by clause
         (a)(v) above shall exist or have occurred, prepare a supplement or
         post-effective amendment to the registration statement or related
         prospectus or any document incorporated therein by reference or file
         any other required document so that, as thereafter delivered to the
         purchasers of Registrable Securities, the prospectus shall not contain
         an untrue statement of a material fact or omit to state any material
         fact necessary to make the statements therein not misleading.

                  (b) The Company may require each selling Holder as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such Holders' Registrable Securities and such
other information relating to such Holder and its ownership of the applicable
Registrable Securities as the Company may from time to time reasonably request;
provided Warburg and the partners in Warburg shall not be obligated to furnish
any information as to the beneficial owners of the partners in Warburg, except
to the extent the Company is required by the Securities Act or the Securities
Exchange Act to disclose such information in connection with this Agreement.
Each Holder agrees to furnish such information to the Company and to cooperate
with the Company as necessary to enable the Company to comply with the
provisions of this Agreement. The Company shall have the right to exclude any
Holder that does not comply with the preceding sentence from the applicable
registration.

                  (c) Each Holder agrees by acquisition of its Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 5(a)(v), such Holder will discontinue
disposition of its Registrable Securities pursuant to such registration
statement until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5(a)(xvii) and of any additional or
supplemental filings that are incorporated by reference in the prospectus, or
until such Holder is advised in writing by the Company that the use of the
prospectus may be resumed, and has received copies and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus covering such Registrable Securities which are current at the
time of the receipt of such notice.

                  5. Registration Expenses. The Company shall pay all of the
following expenses in connection with a registration under this Agreement of
Registrable Securities: (i) all

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registration and filing fees, and any other fees and expenses associated with
filings required to be made with the Commission, (ii) all fees and expenses of
compliance with federal securities or state securities or "Blue Sky" laws, (iii)
all of its printing, duplicating, word processing, messenger, telephone,
facsimile and delivery expenses (including expenses of printing certificates for
the Registrable Securities in a form eligible for deposit with The Depository
Trust Company and of printing prospectuses), (iv) all fees and disbursements of
counsel for the Company and of all independent certified public accountants of
the Company, (v) Securities Act liability insurance or similar insurance if the
Company so desires, (vi) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange or the
quotation of the Registrable Securities on any inter-dealer quotation system,
and (vii) the fees and expenses of one counsel to the Holders (selected by the
Holders of a majority of the Registrable Securities included in the Registration
Statement) in an amount not to exceed $10,000. In addition, the Company shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any audit and the fees and expenses of any Person, including
special experts, retained by the Company. The Company shall not be required to
pay any other costs or expenses in the course of the transactions contemplated
hereby, including, without limitation, all expenses incurred by the Holders
(except as provided in clauses (i), (ii) and (vii) of the preceding sentence)
and including, without limitation, underwriting discounts and commissions and
transfer taxes attributable to the sale of Registrable Securities and the fees
and expenses of counsel to the underwriters.

                  6. Indemnification.

                  (a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each Holder
selling Registrable Securities and its respective officers, directors and
employees and each Person who controls (within the meaning of the Securities Act
or the Securities Exchange Act) such selling Holder ("Participant") from and
against any and all losses, claims, damages, judgments, liabilities and expenses
(including reasonable costs of investigation and legal expenses) caused by,
arising out of, or based upon (i) any untrue or alleged untrue statement of a
material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act (including any
final, preliminary, or summary prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein) or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus or preliminary prospectus, in light of the
circumstances under which they were made) not misleading (each, a "Loss" and
collectively "Losses"); provided, however, that the Company shall not be liable
to any Participant in any such case to the extent that any such Loss is caused
by written information furnished to the Company by such Holder expressly for use
in the preparation thereof, or if such untrue statement or alleged untrue
statement or omission or alleged omission is corrected in an amendment or
supplement to such prospectus which has been made available to the Holders and
the relevant Holder fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sales of the Registrable
Securities to the Person asserting such Loss. This indemnity shall be in
addition to any liability the Company may otherwise have.

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                  (b) Indemnification by the Holders. Each selling Holder agrees
(severally and not jointly) to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors, officers and employees and
each Person who controls the Company (within the meaning of the Securities Act
and the Securities Exchange Act) from and against any Loss to the extent, but
only to the extent, that such Loss is caused by any information furnished in
writing by such selling Holder to the Company specifically for inclusion in such
registration statement and was not corrected in a subsequent writing prior to or
concurrently with the sale of the Registrable Securities to the Person asserting
such Loss. The liability of any Holder under this paragraph shall in no event
exceed the amount by which proceeds received by such Holder from sales of
Registrable Securities giving rise to such obligations exceed the amount of any
Loss that such Holder has otherwise been required to pay by reason of such
untrue statement or omission. This indemnity shall be in addition to any
liability such Holder may otherwise have.

                  (c) Indemnification Proceedings. Any Person entitled to
indemnification hereunder (an "Indemnified Party") shall (i) give prompt written
notice to the Person from whom such indemnification may be sought (the
"Indemnifying Party") of any claim with respect to which it seeks
indemnification; provided, however, that the failure to so notify the
Indemnifying Party shall not relieve it of any obligation or liability which it
may have hereunder or otherwise except to the extent it is materially prejudiced
by such failure, and (ii) permit such Indemnifying Party to assume the defense
of such claim with counsel reasonably satisfactory to the Indemnified Party;
provided, however, that the Indemnified Party shall have the right to select and
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Party unless (A) the Indemnifying Party has agreed in writing to pay such fees
or expenses, (B) the Indemnifying Party shall have failed to assume the defense
of such claim within a reasonable time after having received notice of such
claim from the Indemnified Party and to employ counsel reasonably satisfactory
to the Indemnified Party, or (C) in the reasonable judgment of the Indemnified
Party, based upon advice of its counsel, a conflict of interest may exist
between the Indemnified Party and the Indemnifying Party with respect to such
claims or the Indemnified Party has defenses separate and apart from the
defenses of the Indemnifying Party with respect to such claims (in which case,
if the Indemnified Party notifies the Indemnifying Party in writing that the
Indemnified Party intends to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such claim on behalf of such Person). If such defense is assumed
by the Indemnifying Party, the Indemnifying Party shall not be subject to any
liability for any settlement made without its consent, but such consent may not
be unreasonably withheld; provided, that an Indemnifying Party shall not be
required to consent to any settlement involving the imposition of equitable
remedies or involving the imposition of any material obligations on such
Indemnifying Party other than financial obligations for which such Indemnified
Party will be indemnified hereunder. If the Indemnifying Party assumes the
defense, the Indemnifying Party shall have the right to settle such action
without the consent of the Indemnified Party; provided, that the Indemnifying
Party shall be required to obtain such consent (which consent may be withheld in
the Indemnified Party's sole discretion) if the settlement includes any
admission of wrongdoing on the part of the Indemnified Party or any equitable
remedies or restriction on the Indemnified Party or its officers, directors or
employees or if the Indemnified Party reasonably believes that the Indemnifying
Party may not be able to satisfy its obligations thereunder. No Indemnifying
Party shall consent to entry of any judgment or enter into any settlement which
does not include as an

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unconditional term thereof the giving by the claimant or plaintiff to each
Indemnified Party of an unconditional release from all liability in respect to
such claim or litigation. The Indemnifying Party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time from all
Indemnified Parties unless (x) the employment of more than one counsel has been
authorized in writing by the Indemnifying Party or (y) a conflict or potential
conflict exists or may exist (based on advice of counsel to an Indemnified
Party) between such Indemnified Parties, in each of which cases the Indemnifying
Party shall be obligated to pay the reasonable fees and expenses of such
additional counsel or counsels. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or an behalf of the Indemnified Party or any officer, director or
controlling Person of such Indemnified Party and shall survive the transfer of
securities.

                  (d) Contribution. If for any reason the indemnification
provided for in the paragraphs (a) and (b) of this Section 6 is unavailable to
an Indemnified Party or insufficient to hold it harmless as contemplated by
paragraphs (a) and (b) of this Section 6, then the Indemnifying Party shall
contribute to the amount paid or payable by the Indemnified Party as a result of
such Loss in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and the Indemnified Party on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding anything in this
Section 6(d) to the contrary, no Indemnifying Party (other than the Company)
shall be required pursuant to this Section 6(d) to contribute any amount in
excess of the amount by which the net proceeds received by such Indemnifying
Party from the sale of Registrable Securities in the offering to which the
Losses of the Indemnified Parties relate exceed the amount of any damages that
such Indemnifying Party has otherwise been required to pay by reason of such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the second preceding
sentence. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 6, the Indemnifying Parties
shall indemnify each Indemnified Party to the full extent provided in Sections
6(a) and 6(b) hereof without regard to the relative fault of said Indemnifying
Parties or Indemnified Party.

                  7. Compliance with Rule 144. The Company shall file the
reports required to be filed by it under the Securities Act and the Securities
Exchange Act, so long as the Company is obligated to file such reports, and it
shall take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time or (b) any similar rules or regulations
hereafter adopted by the Commission.

                                       11
<PAGE>   12

Upon the written request of any Holder, the Company shall deliver to such Holder
a written statement as to whether it has complied with such requirements.

                  8. Term. This Agreement shall terminate at the end of the
Effectiveness Period. The provisions of Sections 6, 8-14 and 18 shall survive
any termination.

                  9. Amendments and Waivers. The Provisions of this Agreement
may be amended or waived at any time only by the written agreement of the
Company and the Holders holding a majority of the Registrable Securities;
provided, however, (i) any amendment or waiver of Section 6, 9 or 18 shall only
be binding on those Holders that have expressly agreed to such amendment or
waiver and (ii) for a period of two years after the Merger Closing Date, any
amendment or waiver of Section 8 shall only be binding on those Holders that
have expressly agreed to such amendment or waiver. Any waiver, permit, consent
or approval of any kind or character on the part of any such Holders of any
provision or condition of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in writing. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
Holder and the Company, except as provided in the proviso to the first sentence
of this Section. Each Holder acknowledges that by operation of this Section the
Holders holding a majority of the Registrable Securities, acting in conjunction
with the Company, will have the right and power to diminish or eliminate all
rights pursuant to this Agreement, except as provided in the proviso to the
first sentence of this Section.

                  10. Successors, Assigns and Transferees.

                  (a) The registration rights of any Holder under this Agreement
with respect to any Registrable Securities may be transferred and assigned,
provided that no such transfer or assignment shall be binding upon or obligate
the Company to any such transferee or assignee unless and until the Company
shall have received notice of such transfer or assignment and a written
agreement of the transferee or assignee to be bound by the provisions of this
Agreement.

                  (b) In the event that, either immediately prior to or
subsequent to the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its partners, such Holder shall so advise
the Company and provide such information as shall be necessary to permit an
amendment to such registration statement to provide information with respect to
such partners, as selling Holders. Promptly following receipt of such
information, the Company shall file an appropriate amendment to such
registration statement reflecting the information so provided.

                  (c) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective successors and permitted
assigns as well as the parties referenced in Section 18.

                  11. Final Agreement. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.

                  12. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any

                                       12
<PAGE>   13

provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.

                  13. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) when sent to the recipient by telecopy (receipt
electronically confirmed by sender's telecopy machine) if during normal business
hours of the recipient, otherwise on the next business day, (c) one business day
after the date when sent to the recipient by reputable express courier service
(charges prepaid), or (d) five business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
parties at the addresses indicated below, or to such other address as any party
hereto may, from time to time, designate in writing delivered pursuant to the
terms of this Section.

                  If to Holders, to the addresses set forth on the stock record
books of the Company; provided, however, that any notices to recipients of a
Warburg Partner Distribution shall be delivered to Warburg, which shall forward
such notice to such recipients. Warburg shall indemnify the Company for any
actual damages (but not consequential or punitive damages) incurred as a result
of the failure of Warburg to fulfill its obligations to forward to the
recipients of a Warburg Partner Distribution a notice given by the Company
pursuant to Section 3. Warburg's obligations under this Section shall be limited
to the assets of Warburg, and no party shall have any recourse to any partner or
Affiliate of Warburg.

                  If to the Company, to:

                           Newfield Exploration Company
                           363 N. Sam Houston Parkway E., Suite 2020
                           Houston, TX 77060
                           Attention: Terry W. Rathert
                           Telephone: (281) 847-6036
                           Facsimile: (281) 405-4255

                  14. Governing Law, Service of Process; Consent to
Jurisdiction.

                  (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WITHIN THE STATE.

                  (b) To the fullest extent permitted by applicable law, each
party hereto (i) agrees that any claim, action or proceeding by such party
seeking any relief whatsoever arising out of, or in connection with, this
Agreement or the transactions contemplated hereby may be brought in the United
States District Court for the Southern District of New York and in any

                                       13
<PAGE>   14

New York State court located in the Borough of Manhattan, (ii) agrees to submit
to the jurisdiction of such courts located in the State of New York for purposes
of all legal proceedings brought in such courts and arising out of, or in
connection with, this Agreement or the transactions contemplated hereby, and
(iii) irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.

                  15. Counterparts and Facsimile Execution. This Agreement may
be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument. This agreement may be executed by the exchange of
signatures by facsimile transmission. Each party shall receive a duplicate
original of the counterpart copy or copies executed by it and the Company.

                  16. Specific Performance. Without limiting or waiving in any
respect any rights or remedies of the parties under this Agreement now or
hereinafter existing at law or in equity or by statute, each of the parties
hereto shall be entitled to seek specific performance of the obligations to be
performed by the other in accordance with the provisions of this Agreement.

                  17. No Inconsistent Agreements. The Company shall not, on or
after the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof. In the event of a conflict
between the terms of this Agreement and the Plan, the terms of this Agreement
shall govern.

                  18. Third Party Beneficiaries. Holders of Registrable
Securities, the Indemnified Parties and the officers, directors, employees and
affiliates of each Indemnified Party are intended third party beneficiaries of
this Agreement, and this Agreement shall inure to the benefit of, and may be
enforced by, such Persons.

      [Remainder of page intentionally left blank. Signature pages follow.]

                                       14
<PAGE>   15
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.

                                        NEWFIELD EXPLORATION COMPANY

                                        By: /s/ Terry W. Rathert
                                           -------------------------------------
                                            Name: Terry W. Rathert
                                            Title: Vice President and Chief
                                            Financial Officer

                                        INITIAL HOLDERS

                                        WARBURG, PINCUS VENTURES, L.P.

                                        By: Warburg, Pincus & Co.,
                                                 its general partner

                                        By:   /s/ Jeffrey A. Harris
                                            ------------------------------------
                                        Name: Jeffrey A. Harris
                                        Title: Managing Director

                                        By:   /s/ Randy A. Foutch
                                           -------------------------------------
                                              Randy A. Foutch

                                        By:   /s/ Richard Kent Samuel
                                           -------------------------------------
                                              Richard Kent Samuel

                                        By:   /s/ Christian Woessner
                                           -------------------------------------
                                              Christian Woessner

                                        By: /s/ Dan Dienstbier
                                          --------------------------------------
                                            Dan Dienstbier

                                        By: /s/ Cameron O. Smith
                                           -------------------------------------
                                            Cameron O. Smith

                                       15
<PAGE>   16
                                        By: /s/ L. Santiago
                                           -------------------------------------
                                            DLJSC for the Benefit of J.
                                            Lawrence Snead

                                        By: /s/ Charles G. VanBrunt
                                           -------------------------------------
                                            Charles G. VanBrunt

                                        By: /s/ Patrick J. Curth
                                           -------------------------------------
                                            Patrick J. Curth

                                       16<PAGE>   1
                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between LARIAT
PETROLEUM, INC. ("Company") and RAYMOND A. FOUTCH ("Executive").

                                   WITNESSETH:

         WHEREAS, Company is desirous of employing Executive in an executive
capacity on the terms and conditions, and for the consideration, hereinafter set
forth and Executive is desirous of being employed by Company on such terms and
conditions and for such consideration;

         NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, Company and Executive agree as
follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

         1.1 EMPLOYMENT; EFFECTIVE DATE. Company agrees to employ Executive and
Executive agrees to be employed by Company, beginning as of the Effective Date
(as hereinafter defined) and continuing for the period of time set forth in
Article 2 of this Agreement, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, the "Effective Date" shall be April
1, 1997.

         1.2 POSITION. From and after the Effective Date, Company shall employ
Executive in the position of President and Chairman of the Board of Company, or
in such other positions as the parties mutually may agree.

         1.3 DUTIES AND SERVICES. Executive agrees to serve in the position
referred to in paragraph 1.2 and to perform diligently and to the best of his
abilities the duties and services appertaining to such office, as well as such
additional duties and services appropriate to such office which the parties
mutually may agree upon from time to time. Executive's employment shall also be
subject to the policies maintained and established by Company, as the same may
be amended from time to time.

         1.4 OTHER INTERESTS. Executive agrees, during the period of his
employment by Company, to devote his primary business time, energy and best
efforts to the business and affairs of Company and its affiliates and not to
engage, directly or indirectly, in any other business or businesses, whether or
not similar to that of Company, except with the consent of the Board of
Directors of Company (the "Board of Directors"). The foregoing notwithstanding,
the parties recognize and agree that Executive may engage or participate in
charitable activities, industry associations and passive personal investments
(in which he does not have a management or operational role) that do not
conflict with the business and affairs of Company or interfere with Executive's
performance of his duties hereunder. The Company shall be the only entity
through which Executive or any of his affiliates participates in the North
American oil and gas exploration

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        1

<PAGE>   2

and production industry with the exception of passive investments in which
Executive does not have a management or operational role.

         1.5 DUTY OF LOYALTY. Executive acknowledges and agrees that Executive
owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in
the best interests of Company and to do no act which would injure the business,
interests, or reputation of Company or any of its subsidiaries or affiliates. In
keeping with these duties, Executive shall make full disclosure to Company of
all business opportunities pertaining to Company's business and shall not
appropriate for Executive's own benefit business opportunities concerning the
subject matter of the fiduciary relationship.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

         2.1 TERM. Unless sooner terminated pursuant to other provisions hereof,
Company agrees to employ Executive for the period beginning on the Effective
Date and ending on the first anniversary of the Effective Date. Said term of
employment shall be extended automatically from day to day (commencing on the
second day of employment hereunder) until such time as either party shall give
written notice to the other that no such automatic extension shall occur, in
which event Executive's employment shall terminate on the first anniversary date
of the date such notice is given.

         2.2 COMPANY'S RIGHT TO TERMINATE. Notwithstanding the provisions of
paragraph 2.1, Company shall have the right to terminate Executive's employment
under this Agreement at any time for any of the following reasons:

                  (i) upon Executive's death;

                  (ii) upon Executive's becoming incapacitated by accident,
         sickness or other circumstance which renders him mentally or physically
         incapable of performing the duties and services required of him
         hereunder on a full-time basis for a period of at least 120 days during
         any 12-month period;

                  (iii) for cause, which for purposes of this Agreement shall
         mean Executive (A) has engaged in gross negligence or willful
         misconduct in the performance of the duties required of him hereunder,
         (B) has been convicted of a felony or a misdemeanor involving moral
         turpitude, (C) has willfully refused, after five days' written notice
         from the Board of Directors and without proper legal reason, to perform
         the duties and responsibilities required of him hereunder, (D) has
         willfully and materially breached any corporate policy or code of
         conduct established by Company, or (E) has willfully engaged in conduct
         that he knows or should know is materially injurious to Company or any
         of its affiliates;

                  (iv) for Executive's material breach of any material provision
         of this Agreement which, if correctable, remains uncorrected for 30
         days following written notice to Executive by Company of such breach;
         or

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        2
<PAGE>   3

                  (v) for any other reason whatsoever, in the sole discretion of
         the Board of Directors.

         2.3 EXECUTIVE'S RIGHT TO TERMINATE. Notwithstanding the provisions of
paragraph 2.1, Executive shall have the right to terminate his employment under
this Agreement at any time for any of the following reasons:

                  (i) (A) a material breach by Company of any material provision
         of this Agreement which, if correctable, remains uncorrected for 30
         days following written notice of such breach by Executive to Company;
         (B) Executive's office is relocated outside Tulsa County, Oklahoma
         without Executive's consent; (C) a Change in Control (as that term is
         defined in the Stockholders Agreement dated as of April 1, 1997 among
         the Company and the other parties thereto (the "Stockholders
         Agreement")) has occurred within the prior 60 days; or (D) the WPV
         Group Holders (as defined in the Stockholders Agreement) or the
         Company's Board of Directors undertake a pattern of actions which are
         unreasonable, arbitrary, deceitful, or oppressive with respect to the
         Executive or the business or management of the Company including
         unreasonably or arbitrarily withholding approval of exploration or
         exploitation projects or acquisitions of oil and natural gas interest
         proposed by Executive within the Anadarko Basin region which the
         Company has the financial resources to fund, provided such project
         recommendations represent Executive's good faith assumptions based upon
         reasonable and supportable criteria including, but not limited to,
         natural gas geological findings or reasonable projections and
         assumptions drawn therefrom; and provided further, that Executive has
         previously notified the Board of Directors in writing of Executive's
         concerns and the Board and Executive fail to resolve their differences
         after discussions held in good faith over at least 60 days.

                  (ii) for any other reason whatsoever, in the sole discretion
         of Executive.

         2.4 NOTICE OF TERMINATION. If Company or Executive desires to terminate
Executive's employment hereunder at any time prior to expiration of the term of
employment as provided in paragraph 2.1, it or he shall do so by giving written
notice to the other party that it or he has elected to terminate Executive's
employment hereunder and stating the effective date and reason for such
termination, provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder, including, without limitation,
the provisions of Articles 4 and 5 hereof.

ARTICLE 3: COMPENSATION AND BENEFITS

         3.1 BASE SALARY. During the period of this Agreement, Executive shall
receive a minimum annual base salary equal to the greater of (i) $175,000 or
(ii) such greater amount as the parties mutually may agree upon from time to
time. Executive's annual base salary shall be paid in equal installments in
accordance with the Company's standard policy regarding payment of compensation
to executives but no less frequently than monthly.

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        3
<PAGE>   4

         3.2 BONUSES. Executive shall receive such bonuses, if any, as Company
shall determine in its sole discretion.

         3.3 OTHER PERQUISITES. During his employment hereunder, Executive shall
be afforded the following benefits as incidences of his employment:

                  (i) INSURANCE - During Executive's employment, Company will
         pay the premiums on the life insurance and disability policy described
         on Schedule A hereto (which includes a description of the premiums
         required to be paid during next five years). During Executive's
         employment, Company also agrees to use reasonable efforts to obtain and
         pay for a $1,000,000 term life insurance policy and a $1,000,000
         permanent disability insurance policy on Executive, the proceeds of
         which would be used in accordance with Section 5.5 of the Stockholders
         Agreement. Executive agrees to cooperate and take such reasonable steps
         as are necessary for Warburg, Pincus Ventures, L.P. to acquire term
         life and permanent disability insurance policies on Executive in the
         amount of $2,000,000.

                  (ii) OTHER COMPANY BENEFITS - Executive and, to the extent
         applicable, Executive's spouse, dependents and beneficiaries, shall be
         allowed to participate on at least the same basis in all benefits,
         plans and programs, including improvements or modifications of the
         same, which are now, or may hereafter be, available to other executive
         employees of Company, and have been approved of by the Board of
         Directors of the Company. Executive will be entitled to vacation
         consistent with that provided to other employees of the Company.
         Executive shall be entitled to be reimbursed by the Company for all
         reasonable out-of-pocket expenses which Executive may incur in
         connection with his duties hereunder. Executive will be entitled to
         indemnification from the Company as currently provided by Article VI of
         the Company's Bylaws. Executive is expected to continue to have the use
         of a company car consistent with the Company's current policy. Company
         shall not, however, by reason of this paragraph be obligated to
         institute, maintain, or refrain from changing, amending, or
         discontinuing, any such benefit plan or program, so long as such
         changes are similarly applicable to similarly situated executive
         employees generally.

ARTICLE 4: PROTECTION OF INFORMATION

         4.1 DISCLOSURE TO EXECUTIVE. Company expects that it is likely that it
will disclose to Executive, or place Executive in a position to have access to
or develop, trade secrets or confidential information of Company or its
affiliates; and/or shall entrust Executive with business opportunities of
Company or its affiliates; and/or shall place Executive in a position to develop
business good will on behalf of Company or its affiliates.

         4.2 DISCLOSURE TO AND PROPERTY OF COMPANY. All information, ideas,
concepts, improvements, discoveries, and inventions, whether patentable or not,
which are conceived, made, developed, or acquired by Executive, individually or
in conjunction with others, during Executive's employment by Company (whether
during business hours or otherwise and whether on Company's premises or
otherwise) which relate to Company's business, products, or services (including,
without

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        4
<PAGE>   5

limitation, all such information relating to corporate opportunities, research,
prospective names, and marks) shall be disclosed to Company and are and shall be
the sole and exclusive property of Company. Moreover, all documents, drawings,
memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, E-mail, voice mail, electronic databases,
maps, and all other writings or materials of any type embodying any of such
information, ideas, concepts, improvements, discoveries, and inventions are and
shall be the sole and exclusive property of Company. Upon termination of
Executive's employment by Company, for any reason, Executive promptly shall
deliver the same, and all copies thereof, to Company.

         4.3 NO UNAUTHORIZED USE OR DISCLOSURE. Executive will not, at any time
during or after Executive's employment by Company, make any unauthorized
disclosure of any confidential business information or trade secrets of Company
or its affiliates, or make any use thereof, except in the carrying out of
Executive's employment responsibilities hereunder. Affiliates of the Company
shall be third party beneficiaries of Executive's obligations under this
paragraph. As a result of Executive's employment by Company, Executive may also
from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint venturers, and the like, of Company and its affiliates.
Executive also agrees to preserve and protect the confidentiality of such third
party confidential information and trade secrets to the same extent, and on the
same basis, as Company's confidential business information and trade secrets.

         4.4 OWNERSHIP BY COMPANY. If, during Executive's employment by Company,
Executive creates any work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright relating to Company's
business, products, or services, whether such work is created solely by
Executive or jointly with others, Company shall be deemed the author of such
work if the work is prepared by Executive in the scope of Executive's
employment; or, if the work is not prepared by Executive within the scope of
Executive's employment but is specially ordered by Company as a contribution to
a collective work, as a translation, as a supplementary work, as a compilation,
or as an instructional text, then the work shall be considered to be work made
for hire and Company shall be the author of the work.

         4.5 ASSISTANCE BY EXECUTIVE. Both during the period of Executive's
employment by Company and thereafter, Executive shall assist Company and its
nominee, at any time, in the protection of Company's worldwide right, title, and
interest in and to information, ideas, concepts, improvements, discoveries, and
inventions, and its copyrighted works, including without limitation, the
execution of all formal assignment documents requested by Company or its nominee
and the execution of all lawful oaths and applications for patents and
registration of copyright in the United States and foreign countries.

         4.6 REMEDIES. Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article by Executive, and Company shall
be entitled to enforce the provisions of this Article by terminating payments
then owing to Executive under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this
Article, but

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        5
<PAGE>   6

shall be in addition to all remedies available at law or in equity to Company,
including the recovery of damages from Executive and his agents involved in such
breach and remedies available to Company pursuant to other agreements with
Executive.

ARTICLE 5: NONCOMPETITION OBLIGATIONS

         5.1 IN GENERAL. As part of the consideration for the compensation and
benefits to be paid to Executive hereunder; to protect the trade secrets and
confidential information of Company and its affiliates that have been and will
in the future be disclosed or entrusted to Executive, the business good will of
Company and its affiliates that has been and will in the future be developed in
Executive, or the business opportunities that have been and will in the future
be disclosed or entrusted to Executive by Company and its affiliates; and as an
additional incentive for Company to enter into this Agreement, Company and
Executive agree to the noncompetition obligations hereunder. Executive shall
not, directly or indirectly for Executive or for others:

                  (i) engage in the Anadarko Basin region in any business
         competitive with the business conducted by Company;

                  (ii) render advice or services to, or otherwise assist, any
         other person, association, or entity who is engaged, directly or
         indirectly, in the Anadarko Basin region in any business competitive
         with the business conducted by Company with respect to such competitive
         business other than rendering advice to professional associations; or

                  (iii) induce any employee of Company or any of its affiliates
         to terminate his or her employment with Company or such affiliates, or
         hire or assist in the hiring of any such employee by any person,
         association, or entity not affiliated with Company.

These noncompetition obligations shall apply during the period that Executive is
employed by Company and, (i) if Executive is entitled to receive payments from
Company pursuant to Article 7, then such obligations shall continue for such
period as Executive is entitled to receive payments thereunder, but in no event
more than one year after termination of the employment relationship and (ii) if
Executive's employment is terminated pursuant to Sections 2.2(iii), 2.2(iv) or
2.3(ii), then such obligations shall continue until the first anniversary of the
termination of Executive's employment; provided, however, that such
noncompetition obligations shall not apply at any time after termination of the
employment relationship if WPV (as defined in the Stockholders Agreement) has
acquired (whether before or after such termination of employment) or acquires
voting equity securities in a Competitive E&P Company (as defined in the
Stockholders Agreement) without the written approval of RAF.

         5.2 ENFORCEMENT AND REMEDIES. Executive understands that the
restrictions set forth in paragraph 5.1 may limit Executive's ability to engage
in certain businesses anywhere in the Anadarko Basin region during the period
provided for above, but acknowledges that Executive will receive sufficiently
high remuneration and other benefits under this Agreement to justify such
restriction. Executive acknowledges that money damages would not be sufficient
remedy for any breach of this Article by Executive, and Company shall be
entitled to enforce the provisions of this

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        6
<PAGE>   7

Article by terminating any payments then owing to Executive under this Agreement
and/or to specific performance and injunctive relief as remedies for such breach
or any threatened breach. Such remedies shall not be deemed the exclusive
remedies for a breach of this Article, but shall be in addition to all remedies
available at law or in equity to Company, including without limitation, the
recovery of damages from Executive and Executive's agents involved in such
breach and remedies available to Company pursuant to other agreements with
Executive.

         5.3 REFORMATION. It is expressly understood and agreed that Company and
Executive consider the restrictions contained in this Article to be reasonable
and necessary to protect the proprietary information of Company. Nevertheless,
if any of the aforesaid restrictions are found by a court having jurisdiction to
be unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by such court so as to be reasonable and enforceable and, as so
modified by the court, to be fully enforced.

ARTICLE 6: STATEMENTS CONCERNING COMPANY

         6.1 IN GENERAL. Executive shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing
any oral or written statements about Company, any of its affiliates,
shareholders or any of such entities' officers, employees, agents or
representatives that are slanderous, libelous, or defamatory; or that disclose
private or confidential information about Company, any of its affiliates, or any
of such entities' business affairs, officers, employees, agents, or
representatives; or that constitute an intrusion into the seclusion or private
lives of Company, any of its affiliates, or any of such entities' officers,
employees, agents, or representatives; or that give rise to unreasonable
publicity about the private lives of Company, any of its affiliates, or any of
such entities' officers, employees, agents, or representatives; or that place
Company, any of its affiliates, or any of such entities' officers, employees,
agents, or representatives in a false light before the public; or that
constitute a misappropriation of the name or likeness of Company, any of its
affiliates, or any of such entities' officers, employees, agents, or
representatives. A violation or threatened violation of this prohibition may be
enjoined by the courts. The rights afforded Company and its affiliates under
this provision are in addition to any and all rights and remedies otherwise
afforded by law.

ARTICLE 7: EFFECT OF TERMINATION ON COMPENSATION

         7.1 BY EXPIRATION. If Executive's employment hereunder shall terminate
upon expiration of the term provided in paragraph 2.1 hereof, then all
compensation and all benefits to Executive hereunder shall terminate
contemporaneously with termination of his employment; provided, however, that if
such employment terminates as a result of the Company giving notice pursuant to
paragraph 2.1 that the term of employment shall not be extended automatically,
then Company shall continue to pay to Executive his then current base salary
pursuant to paragraph 3.1 until the first anniversary of the date of such
termination.

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        7
<PAGE>   8

         7.2 BY COMPANY. If Executive's employment hereunder shall be terminated
by Company prior to expiration of the term provided in paragraph 2.1, then, upon
such termination, regardless of the reason therefor, all compensation and
benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment; provided, however, that if such termination
shall be for any reason other than those encompassed by paragraphs 2.2(i), (ii),
(iii), or (iv), then Company shall continue to pay to Executive his then current
base salary pursuant to paragraph 3.1 until the first anniversary of the date of
such termination; provided further, however, that if such termination shall be
for the reason encompassed by paragraph 2.2(i), then Company shall pay
Executive's surviving spouse Executive's base salary as of such termination date
until the 90th day following such termination.

         7.3 BY EXECUTIVE. If Executive's employment hereunder shall be
terminated by Executive prior to expiration of the term provided in paragraph
2.1, then, upon such termination, regardless of the reason therefor, all
compensation and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment; provided, however,
that if such termination shall be pursuant to paragraph 2.3(i), then Company
shall continue to pay to Executive his then current base salary pursuant to
paragraph 3.1 until the first anniversary of the date of such termination.

         7.4 NO DUTY TO MITIGATE LOSSES. Executive shall have no duty to find
new employment following the termination of his employment under circumstances
which require Company to pay any amount to Executive pursuant to this Article 7.
Any salary or remuneration received by Executive from a third party for the
providing of personal services (whether by employment or by functioning as an
independent contractor) following the termination of his employment under
circumstances pursuant to which this Article 7 apply shall not reduce Company's
obligation to make a payment to Executive (or the amount of such payment)
pursuant to the terms of this Article 7.

         7.5 LIQUIDATED DAMAGES. In light of the difficulties in estimating the
damages for an early termination of this Agreement, Company and Executive hereby
agree that the payments, if any, to be received by Executive pursuant to this
Article 7 shall be received by Executive as liquidated damages.

         7.6 INCENTIVE AND DEFERRED COMPENSATION. This Agreement governs the
rights and obligations of Executive and Company with respect to Executive's base
salary and certain perquisites of employment. Executive's rights and obligations
both during the term of his employment and thereafter with respect to stock
options, and other benefits under the plans and programs maintained by Company
shall be governed by the separate agreements, plans and other documents and
instruments governing such matters.

ARTICLE 8: MISCELLANEOUS

         8.1 NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        8
<PAGE>   9

delivered or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

         IF TO COMPANY TO:          Lariat Petroleum, Inc.
                                    15 West 6th Street, Suite 1302
                                    Tulsa, Oklahoma 74119
                                    Attention: Chairman of the Board

         IF TO EXECUTIVE TO:        Raymond A. Foutch
                                    10901 S. 33rd W. Avenue
                                    Sapulpa, Oklahoma 74066

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices or changes of address shall be
effective only upon receipt.

         8.2 APPLICABLE LAW. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Oklahoma.

         8.3 NO WAIVER. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

         8.4 SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the invalidity
or unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.

         8.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

         8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to Company's employees generally.

         8.7 HEADINGS. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.

         8.8 GENDER AND PLURALS. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                        9
<PAGE>   10

         8.9 AFFILIATE. As used in this Agreement, the term "affiliate" shall
mean any entity which owns or controls, is owned or controlled by, or is under
common ownership or control with, Company.

         8.10 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Company and any successor of Company, by merger or otherwise. Except
as provided in the preceding sentence, this Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement,
nor any right, benefit, or obligation of either party hereto, shall be subject
to voluntary or involuntary assignment, alienation or transfer, whether by
operation of law or otherwise, without the prior written consent of the other
party.

         8.11 TERM. This Agreement has a term co-extensive with the term of
employment provided in paragraph 2.1. Termination shall not affect any right or
obligation of any party which is accrued or vested prior to such termination.
Without limiting the scope of the preceding sentence, the provisions of Articles
4, 5, and 6 shall survive any termination of the employment relationship and/or
of this Agreement.

         8.12 ENTIRE AGREEMENT. Except as provided in the written benefit plans
and programs referenced in paragraph 3.3 and any signed written agreement
contemporaneously or hereafter executed by Company and Executive, this Agreement
constitutes the entire agreement of the parties with regard to the subject
matter hereof, and contains all the covenants, promises, representations,
warranties and agreements between the parties with respect to employment of
Executive by Company. Without limiting the scope of the preceding sentence, all
prior understandings and agreements among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and
effect. Any modification of this Agreement will be effective only if it is in
writing and signed by the party to be charged.

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                       10
<PAGE>   11

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 1st day of April, 1997, to be effective as of the Effective Date.

                                       LARIAT PETROLEUM, INC.

                                       BY: /s/ Raymond A. Foutch
                                          --------------------------------------
                                       NAME: Raymond A. Foutch
                                            ------------------------------------
                                       TITLE: President
                                             -----------------------------------

                                                                       "COMPANY"

                                       /s/ Raymond A. Foutch
                                       -----------------------------------------

                                       Raymond A. Foutch

                                                                     "EXECUTIVE"

                            RAF EMPLOYMENT AGREEMENT
                             LARIAT PETROLEUM, INC.
                                       11

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