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txn-ex10a_108.htm

Exhibit 10(a)

TEXAS INSTRUMENTS 2018 DIRECTOR COMPENSATION PLAN

SECTION 1.  PURPOSE.

The Texas Instruments 2018 Director Compensation Plan (“the Plan”) is intended as a successor plan to the Company’s 2009 Director Compensation Plan.  This Plan is designed to attract and retain qualified individuals to serve as directors of the Company and to increase the proprietary and vested interest of such directors in the growth and performance of the Company.  This Plan is effective for Awards granted on or after the Effective Date.  

SECTION 2.  DEFINITIONS.

As used in the Plan, the following terms shall have the meanings set forth below:

 

	
(a) 
	
“Account” means a Cash Account or Stock Unit Account established under Section 11 of the Plan.

 

	
(b) 
	
“Administrator” means the Board or a committee of directors designated by the Board to administer the Plan.

 

	
(c) 
	
“Award” means any Option, Restricted Stock Unit, Stock Appreciation Right or other stock-based award under the Plan.

 

	
(d) 
	
“Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Director.  An Award Agreement may be in electronic form.

 

	
(e) 
	
“Board” means the Board of Directors of the Company, as constituted from time to time.

 

	
(f) 
	
“Cash Account” means the bookkeeping accounts established or maintained pursuant to Section 11(b)(i) on behalf of each Director who elects pursuant to Section 11(b) to have any of his or her Deferred Compensation credited to a cash account.

 

	
(g)
	
“Change in Control” shall mean an event that will be deemed to have occurred:

 

	
 
	
(i)
	
On the date any Person, other than (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding stock under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding stock pursuant to an offering of such stock, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, acquires ownership of stock of the Company that, together with stock held by such Person, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company.  However, if any Person is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person is not considered to be a Change in Control;

 

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(ii)
	
On the date a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of the appointment or election; or

 

	
 
	
(iii)
	
On the date any Person acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.  For this purpose, gross fair market value means the value of the assets of the Company or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.  However, there is no Change in Control when there is such a sale or transfer to (i) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s then outstanding stock; (ii) an entity, at least 50 percent of the total value or voting power of the stock of which is owned, directly or indirectly, by the Company; (iii) a Person that owns, directly or indirectly, at least 50 percent of the total value or voting power of the outstanding stock of the Company; or (iv) an entity, at least 50 percent of the total value or voting power of the stock of which is owned, directly or indirectly, by a Person that owns, directly or indirectly, at least 50 percent of the total value or voting power of the outstanding stock of the Company.

 

	
 
	
(iv)
	
For purposes of (i), (ii) and (iii) of this Section 2(g): 

 

	
 
	
(A)
	
“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended;

 

	
 
	
(B)
	
“Person” shall have the meaning given in Section 7701(a)(1) of the Code.  Person shall include more than one Person acting as a group as defined by the Final Treasury Regulations issued under Section 409A of the Code; and

 

	
 
	
(C)
	
“Subsidiary” means any entity whose assets and net income are included in the consolidated financial statements of the Company audited by the Company’s independent auditors and reported to stockholders in the annual report to stockholders.

 

	
 
	
(v)
	
Notwithstanding the foregoing, in no case will an event in (i), (ii) or (iii) of this Section 2(g) be treated as a Change in Control  unless such event also constitutes a “change in control event” with respect to the Company within the meaning of Treas. Reg. § 1.409A-3(i)(5) or any successor provision.

 

	
(h)
	
“Code” means the Internal Revenue Code of 1986, as amended.

 

	
(i)
	
“Company” means Texas Instruments Incorporated, together with any successor thereto.

 

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(j)
	
“Deferred Cash Compensation” means that portion of any Director’s Eligible Compensation that is payable in cash and that he or she elects pursuant to Section 11(a) to be deferred in accordance with this Plan.

 

	
(k)
	
“Deferred Compensation” means that portion of any Director’s Eligible Compensation that he or she elects pursuant to Section 11(a) to be deferred in accordance with this Plan.

 

	
(l)
	
“Deferred Compensation Account” means a Cash Account or Stock Unit Account containing amounts earned and deferred under this Plan and Restricted Stock Units, the receipt of which a Director has elected to defer.

 

	
(m)
	
“Director” means a member of the Board who is not an employee of the Company or any subsidiary thereof.

 

	
(n)
	
“Effective Date” means the date this Plan is approved by stockholders of the Company.

 

	
(o)
	
“Eligible Compensation” means (i) the cash portion of any compensation payable by the Company to a Director for his or her services as a Director but shall not include any reimbursement by the Company of expenses incurred by a Director incidental to attendance at a meeting of the Company’s stockholders, the Board, or any committee of the Board, or of any other expense incurred on behalf of the Company, (ii) any Restricted Stock Units granted by the Company to a Director for his or her services as a Director, and (iii) any dividend equivalents paid on Restricted Stock Units pursuant to Section 9(d).

 

	
(p)
	
“Fair Market Value” means the closing price of the Shares on the date specified (or, if there is no trading on The NASDAQ Stock Market on such date, then on the first previous date on which there is such trading) as reported by WSJ.com or Bloomberg L.P., or if unavailable, then by reference to any other source as may be deemed appropriate by the GSR Committee.

 

	
(q) 
	
“GSR Committee” means the Governance and Stockholder Relations Committee of the Board or any successor committee.

 

	
(r)
	
“Option” means an option granted under this Plan to purchase Shares on the terms and conditions set forth in the Plan and the applicable Award Agreement.

 

	
(s)
	
“Participant” means an individual who has received an Award or established an Account under the Plan.

 

	
(t)
	
“Plan” means this Texas Instruments 2018 Director Compensation Plan.

 

	
(u)
	
“Restricted Stock Unit” means a contractual right granted under this Plan that is denominated in Shares, each of which represents a right to receive a Share on the terms and conditions set forth in the Plan and the applicable Award Agreement.

  

	
(v)
	
“Secretary” means the Secretary of the Company.

 

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(w)
	
“Separation from Service” means a termination of services provided by a Participant as a member of the Board or of the board of directors of any other member of the controlled group of corporations (as defined in Section 414(b) of the Code) which includes the Company (for purposes of this Section 2(x), the controlled group members other than the Company are referred to collectively as “ERISA Affiliates”), whether such termination is voluntary or involuntary, as determined by the Administrator in accordance with Treas. Reg. §1.409A-1(h).  In determining whether a Participant has experienced a Separation from Service as a member of the Board or of a board of directors of an ERISA Affiliate, the following provisions shall apply:

 

	
 
	
(i)
	
If a Director also provides services to the Company or any ERISA Affiliate as an employee at the time of his Separation from Service as a member of the Board, the services such Participant provides as an employee shall not be taken into account in determining whether the Participant has a Separation from Service as a Director for purposes of this Plan (provided that this Plan is not, at the time of such determination, aggregated under Treas. Reg. §1.409A-1(c)(2)(ii) with any plan in which the Participant participates as an employee).

 

	
 
	
(ii)
	
A Participant shall be considered to have experienced a termination of services when the facts and circumstances indicate that the Participant, the Company and each ERISA Affiliate reasonably anticipate that the Participant will perform no further services for the Company or any ERISA Affiliate as a member of the Board (or the board of directors of any ERISA Affiliate), and the Participant’s term as a member of the Board has expired.

 

	
 
	
(iii)
	
If a Director is also providing additional services to the Company as an independent contractor, he or she cannot have a Separation from Service for purposes of Section 409A of the Code until he or she has separated from service both as a Director and as an independent contractor.

 

	
(x)
	
“Shares” shall mean shares of the common stock of the Company, $1.00 par value.

 

	
(y)
	
“Specified Employee” means any Participant who is determined to be a “key employee” (as defined under Section 416(i) of the Code without regard to paragraph (5) thereof) for the applicable period, as determined annually by the Administrator in accordance with Treas. Reg. §1.409A-1(i).  In determining whether a Participant is a Specified Employee, the following provisions shall apply:

 

	
 
	
(i)
	
Identification of the individuals who fall within the above-referenced definition of “key employee” shall be based upon the 12-month period ending on each December 31st (referred to below as the “identification date”).  In applying the applicable provisions of Code Section 416(i) to identify such individuals, “compensation” shall be determined in accordance with Treas. Reg. §1.415(c)2(a) without regard to (i) any safe harbor provided in Treas. Reg. §1.415(c)-2(d), (ii) any of the special timing rules provided in Treas. Reg. §1.415(c)-2(e), and (iii) any of the special rules provided in Treas. Reg. §1.415(c)-2(g); and

 

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(ii)
	
Each Participant who is among the individuals identified as a “key employee” in accordance with part (i) of this Section 2(z) shall be treated as a Specified Employee for purposes of this Plan if such Participant experiences a Separation from Service during the 12-month period that begins on the April 1st following the applicable identification date.

 

	
(z)
	
“Stock Appreciation Right” or “SAR” means a right granted pursuant to Section 10 to receive, upon exercise by the Participant, the excess of (i) the Fair Market Value of one Share on the date of exercise or any date or dates during a specified period before the date of exercise over (ii) the grant price of the right, which grant price shall not be less than the Fair Market Value of one Share on the date of grant of the right.

 

	
(aa)
	
“Stock Unit Account” means the bookkeeping accounts established, pursuant to Section 11(b)(ii), on behalf of each Director who elects, pursuant to Section 11(b), to have any of his or her Deferred Cash Compensation credited to a stock unit account.

 

	
(bb)
	
"Unforeseeable Emergency" means a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant or the Participant’s spouse, beneficiary, or dependent (as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B) of the Code), (ii) loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control, all as determined by the Administrator based on the relevant facts and circumstances and as provided for in Treas. Reg. §1.409A-3(i)(3) or any successor provision.

 

	
(cc)
	
“Year” means a calendar year.

 

SECTION 3.  ELIGIBILITY.

 

Each Director shall be eligible to defer Eligible Compensation and to receive Awards under the Plan.

 

SECTION 4.  ADMINISTRATION.

 

This Plan shall be administered by the Administrator. Subject to the terms of the Plan and applicable law, the Administrator shall have full power and authority to:  (i) interpret, construe and administer the Plan and any instrument or agreement relating to, or Award granted or Accounts established under, the Plan; (ii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it deems appropriate for the proper administration of the Plan; and (iii) make any other determination and take any other action that it deems necessary or desirable for the administration of this Plan.  All decisions of the Administrator shall be final, conclusive and binding upon all parties, including the Company, the stockholders and the Directors.

 

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SECTION 5.  SHARES AVAILABLE FOR AWARDS.

 

	
(a) 
	
Subject to adjustment as provided in this Section 5, the number of Shares available for issuance under the Plan shall be 2,000,000 Shares. Notwithstanding anything to the contrary set forth herein, in any given Year, the total value of Awards granted to any Director shall not exceed $500,000 in grant-date value. 

 

	
(b) 
	
If, after the effective date of the Plan, (i) any Shares covered by an Award or Stock Unit Account, or to which such an Award relates, are forfeited, or (ii) if an Award or Account expires or is cancelled or is otherwise terminated without the delivery of Shares, then such Shares, to the extent of any such forfeiture, expiration, cancellation, or termination, shall again be, or shall become, available for issuance under the Plan.  For purposes of this Section, awards and options granted under any previous director compensation plan of the Company shall be treated as Awards, and accounts established under any such plan shall be treated as Accounts.  For the avoidance of doubt, the number of Shares available for issuance under the Plan shall not be increased by: (1) the withholding of Shares as a result of the net settlement of an outstanding Option; (2) the delivery of Shares to pay the exercise price or withholding taxes relating to an Award; or (3) the repurchase of Shares on the open market using the proceeds of an Option’s exercise.

 

	
(c) 
	
Any Shares delivered pursuant to an Award or Stock Unit Account may consist, in whole or in part, of authorized and unissued Shares, of treasury Shares or of both.

 

	
(d) 
	
In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Administrator shall equitably adjust any or all of (i) the number of outstanding Restricted Stock Units, (ii) the number and type of Shares credited to Stock Unit Accounts, (iii) the number and type of Shares subject to Options and SARs, (iv) the exercise price with respect to any Option or SAR or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Option or SAR, and (v) the limits specified in Section 5(a); provided, however, that no fractional Restricted Stock Units or Shares shall be issued or outstanding hereunder.  Any such adjustment with respect to a “Stock Right” outstanding under the Plan as defined in Section 409A of the Code, shall be made in a manner that is intended to avoid imposition of any additional tax or penalty under Section 409A.

 

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SECTION 6.  EQUITY GRANT UPON INITIAL ELECTION. 

 

	
(a) 
	
Initial Grant.  Following the effective date of this Plan, each Director shall, effective as of the date of such individual’s initial election or appointment to the Board, be granted 2,000 Restricted Stock Units. 

  

	
(b) 
	
Terms and Conditions.  The terms and conditions of each Restricted Stock Unit granted under this Section 6 shall be as described in Section 9.

 

SECTION 7.  ANNUAL EQUITY GRANTS.

 

	
(a) 
	
Annual Grant.  Each Director will be granted annually an Option with a grant-date value of approximately $100,000 determined using a Black-Scholes option-pricing model and a Restricted Stock Unit Award with a grant-date value of approximately $100,000, in each case rounded down to the nearest whole share.  The Restricted Stock Units granted under this Section 7(a) shall be in addition to any RSUs granted to any Director pursuant to Section 6.   

 

	
(b) 
	
Effective Date of Annual Grant.  In each year the effective date for the annual grant of equity to the Company’s executive officers by the Compensation Committee of the Board (or any successor committee) shall be the date the Options and Restricted Stock Units are granted; provided that in any year in which the Compensation Committee does not grant equity to any of the Company’s executive officers in connection with the annual compensation review process, then the third trading day after the release of the Company’s financial results for the first quarter of such year shall be the date the Options and Restricted Stock Units are granted.

 

	
(c) 
	
Terms and Conditions.  The terms and conditions of each Option and Restricted Stock Unit granted under this Section 6 shall be as described in Sections 8 and 9, respectively.

 

	
(d) 
	
Reductions in Awards.  Prior to the effective date of any annual grant as described in this Section 7, the Board shall have the right to make reductions in the Awards to be granted under this Section 7.  In determining whether to reduce any Award and the amount of any reduction, the Board shall take into consideration such factors as the Board shall determine.

 

SECTION 8.  OPTIONS.

 

The Options granted under this Plan will be nonstatutory stock options not intended to qualify under Section 422 of the Code and shall have the terms and conditions described in this Section 8:

 

	
(a)
	
Price and Term of Options.  The purchase price per share of Shares deliverable upon the exercise of each Option shall be 100% of the Fair Market Value per share of the Shares on the effective date of the grant as determined in Section 7(b).  

 

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(b)
	
Payment.  The Secretary shall determine the method or methods by which, and the form or forms, including, without limitation, cash, Shares, or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect to an Option may be made or deemed to have been made.

 

	
(c)
	
Exercisability.  Subject to Section 8(d), Options shall become exercisable in four equal annual installments commencing on the first anniversary date of the grant.

 

	
(d)
	
Termination of Service as a Director.  The effect of a Participant’s termination of service as a member of the Board shall be as follows:

 

	
 
	
(i)
	
Termination for cause: All outstanding Options held by the Participant shall be canceled immediately upon termination.

 

	
 
	
(ii)
	
Death: All outstanding Options held by the Participant shall continue to full term, becoming exercisable in accordance with Section 8(c), and shall be exercisable by such Participant’s heirs or legal representatives.

 

	
 
	
(iii)
	
Permanent disability, termination after 8 years of service, or termination for reason of ineligibility to stand for reelection under the Company’s By-Laws: All outstanding Options held by the Participant shall continue to full term, becoming exercisable in accordance with Section 8(c).

 

	
 
	
(iv)
	
Change in Control:  If a Participant experiences a Separation From Service (other than for cause) within 24 months after a Change in Control, the provisions of Section 8(c) shall not apply and Options held by the Participant shall be immediately exercisable and shall continue to full term.

 

	
 
	
(v)
	
Other: For any termination other than those specified above, all outstanding Options held by the Participant shall be exercisable for 30 days after the date of termination, only to the extent that such Options were exercisable on the date of termination, except that if the Participant dies within 30 days after his or her termination, then such Participant’s heirs may exercise the Options for a period of up to one year after the Participant’s death, but only to the extent any unexercised portion was exercisable on the date of termination.

 

	
(e)
	
Option Agreement.  Each Option granted under this Plan shall be evidenced by an Award Agreement with the Company, which shall contain the terms and provisions set forth herein and shall otherwise be consistent with the provisions of the Plan.

 

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SECTION 9.  RESTRICTED STOCK UNITS.

 

Each Restricted Stock Unit granted under this Plan shall be paid or settled by the issuance of one Share and shall have the terms and conditions described in this Section 9:

 

	
(a)
	
Vesting and Settlement.  Subject to Section 9(b) and subject to a Director’s election to defer the settlement of Restricted Stock Units pursuant to Section 11, the shares covered by the Restricted Stock Units shall be paid or settled as soon as practicable after the fourth anniversary of the date of grant.

 

	
(b)
	
Termination of Service as a Director.  The effect of a Participant's termination of service as a member of the Board shall be as follows:

 

	
 
	
(i)
	
Death:  All outstanding Restricted Stock Units held by the Participant shall continue to full term subject to the other terms and conditions of this Plan, and shares shall be issued to such Participant's heirs at such times and in such manner as if the Participant were still a member of the Board.

 

	
 
	
(ii)
	
Permanent disability, termination after 8 years of service, or termination for reason of ineligibility to stand for reelection under the Company's By-Laws:  All outstanding Restricted Stock Units held by the Participant shall continue to full term subject to the other terms and conditions of this Plan, and shares shall be issued to such Participant at such times and in such manner as if the Participant were still a member of the Board.

 

	
 
	
(iii)
	
Separation From Service after a Change in Control:   If a Participant experiences a Separation From Service (other than for cause) within 24 months after a Change in Control, the provisions of Section 9(a) shall not apply and:  

 

	
 
	
(A)
	
To the extent permitted without additional tax or penalty by Section 409A of the Code, all shares underlying such Restricted Stock Units held by the Participant (including any such Restricted Stock Units subject to an election to defer settlement under Section 11) will be issued on, or as soon as practicable (but no later than 60 days) after, the Participant’s Separation From Service; provided, however, that if the participant is a Specified Employee upon such Separation From Service, the shares will be issued on, or as soon as practicable (but no more than 10 days) after, the first day of the seventh month following the Separation From Service and any such Restricted Stock Units outstanding under this Plan shall vest and be paid immediately. 

 

	
 
	
(B)
	
To the extent that the issuance of shares is not permitted without additional tax or penalty by Section 409A, the Award will continue to full term and the shares will be issued at the issuance date specified in the Award Agreement as if the Participant were still a Director on such date or (for any such Restricted Stock Units subject to an election to defer settlement pursuant to Section 11) in accordance with Section 11(h)(i).

 

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(iv)
	
Other:  For any termination other than those specified above, all outstanding Restricted Stock Units held by the Participant shall terminate and become void without any shares being issued.

 

	
(c)
	
Restricted Stock Unit Agreement.  Each Restricted Stock Unit Award granted under this Plan shall be evidenced by an Award Agreement with the Company, which shall contain the terms and conditions set forth herein and shall otherwise be consistent with the provisions of this Plan.

 

	
(d)
	
Right to Dividend Equivalents.  Each recipient of Restricted Stock Units under this Plan shall have the right, during the period when such Restricted Stock Units are outstanding and prior to the termination, forfeiture or payment or settlement thereof, to receive dividend equivalents equal to the amount or value of any cash or other distributions or dividends payable on the same number of Shares.  The Company shall accumulate dividend equivalents on each dividend payment date and, unless a Director has elected to defer receipt of such dividend equivalents pursuant to Section 11, pay such accumulated amounts without interest in December of each fiscal year, but no later than March 15 of the calendar year following the calendar year in which the related dividend is declared.

 

	
(e)
	
Issuance of Shares.  A stock certificate or certificates shall be registered and issued or other indicia of ownership of shares shall be issued, in the name or for the benefit of the holder of Restricted Stock Units and delivered to such holder as soon as practicable after such Restricted Stock Units have become payable or settleable in accordance with the terms of the Plan.

 

SECTION 10.  STOCK APPRECIATION RIGHTS (SARs).

 

	
(a)
	
SARs may be granted to Directors with such terms and conditions as the Administrator shall determine not inconsistent with the provisions of the Plan.

 

	
(b)
	
The term of each SAR shall be fixed by the Administrator but shall not exceed 10 years.

 

SECTION 11.  DEFERRED COMPENSATION.

 

	
(a)
	
Deferral Election.  Each Director may elect, with respect to any Year, that all or any percentage of his or her Eligible Compensation be deferred in accordance with the terms of this Plan.

 

	
(b)
	
Cash Compensation Investment Alternatives.  Each Director may elect that his or her Deferred Cash Compensation for any Year be credited to a Cash Account or a Stock Unit Account or to any combination thereof.

 

	
 
	
(i)
	
Cash Accounts.

 

	
 
	
(A)
	
The Company shall establish and maintain, as appropriate, separate unfunded Cash Accounts for each Director who has elected that any portion of his or her Deferred Cash Compensation be credited to a Cash Account.

 

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(B)
	
As of the date on which any amount of a Director’s Deferred Cash Compensation becomes payable, his or her Cash Account shall be credited with an amount equal to that portion of such Deferred Cash Compensation as such Director has elected be credited to his or her Cash Account.

 

	
 
	
(C)
	
As of the last day of each month, interest on each Cash Account shall be credited on the average of the balances on the first and last day of such month.  Interest shall be credited at a rate equivalent to the average yield on corporate bonds rated Aaa by Moody’s Investors Service on September 30 of the preceding Year (or if there is no such yield reported for such date, then on the next preceding date for which such a yield is reported) as published in Federal Reserve Statistical Release H.15, or at such other rate that would qualify as a "reasonable rate of interest" as defined by Section 409A of the Code, as may be determined by the GSR Committee for each Year.

 

	
 
	
(ii)
	
Stock Unit Accounts.

 

	
 
	
(A)
	
The Company shall establish and maintain, as appropriate, separate unfunded Stock Unit Accounts for each Director who has elected that any portion of his or her Deferred Cash Compensation be credited to a Stock Unit Account.

 

	
 
	
(B)
	
As of each date on which any amount of a Director’s Deferred Cash Compensation becomes payable, his or her Stock Unit Account shall be credited with that number of units as are equal to the number of full or fractional Shares as could be purchased at the Fair Market Value on the first trading day preceding such date with the portion of such Deferred Cash Compensation as such Director has elected be credited to his or her Stock Unit Account.

 

	
 
	
(C)
	
As of the payment date for each dividend on Shares declared by the Board, there shall be credited to each Stock Unit Account that number of units as are equal to the number of full or fractional Shares as could be purchased at the Fair Market Value on the first trading day preceding the payment date for such dividend with an amount equal to the product of: (i) the dividend per share, and (ii) the number of units in such Stock Unit Account immediately prior to the record date for such dividend.

 

	
(c)
	
Restricted Stock Units.  Each Director may elect to defer all or a portion of any Restricted Stock Unit Award.

 

	
(d)
	
Dividend Equivalents.  Each Director may elect to defer all or a portion of any dividend equivalents paid on Restricted Stock Units.

 

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(e)
	
Time of Election.  An election to defer all or any portion of Eligible Compensation for any Year shall be made in writing in the form (“Election Form”) prescribed by the Secretary.  

 

	
 
	
(i)
	
Except as hereinafter provided, to be effective, an Election Form relating to payments for a Year, or to Restricted Stock Units that may be granted in such Year, must be received by the Secretary on or before December 31 of the preceding Year.  In the case of a Director’s initial election to the Board, the initial Election Form must be received not more than 30 days following his or her election to the Board and, if received within such 30-day period, the Election Form shall be effective only for Eligible Compensation earned after the election becomes irrevocable pursuant to Section 11(f).  The time of election and the time of distribution shall comply in all respects with the applicable requirements of Section 409A of the Code.

 

	
(f)
	
Irrevocability of Election.  A Director’s election to defer all or any portion of his or her Eligible Compensation for any Year shall be irrevocable upon receipt by the Secretary of a completed Election Form from the Director.

 

	
(g)
	
Form of Distributions.  

 

	
 
	
(i)
	
Distributions of amounts credited to each Participant’s Cash Account shall be made in cash. 

 

	
 
	
(ii)
	
Distributions of units credited to each Participant’s Stock Unit Account shall be made by issuing to such Participant an equivalent number of Shares. 

 

	
 
	
(iii)
	
Distribution of Shares relating to vested Restricted Stock Units the Participant has elected to defer shall be made by issuing to such Participant the whole number of Shares attributable to such vested Restricted Stock Units.  Notwithstanding the foregoing, no fractional shares will be issued and any fractional unit will be distributed by payment of cash in the amount represented by such fractional unit based on the Fair Market Value on the date preceding the date of payment.

 

	
(h)
	
Time of Distributions.

 

	
 
	
(i)
	
Normal Distributions.  Except as otherwise hereinafter provided, distributions from a Participant's Deferred Compensation Account shall be made on the first day of the month following such Participant’s Separation from Service on the Board for any reason other than death.

 

	
 
	

	
Notwithstanding the foregoing, no distribution may be made to a Specified Employee before the date that is six months after the date of Separation from Service or, if earlier, the date of death.

 

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(ii)
	
Change in Control.  In the event a Participant experiences a Separation From Service (other than for cause) within 24 months after a Change in Control, then, to the extent permitted without additional tax or penalty by Section 409A of the Code, such Participant shall receive a distribution of the balances credited to the Participant’s Account which are attributable to amounts credited to the account.  See Section 9(b)(iii) for the effect of such Separation From Service on deferred Restricted Stock Units.

 

	
 
	

	
The amounts to be distributed pursuant to this Section 11(h)(ii) shall be paid on, or as soon as practicable (but no later than 60 days) after, the Participant’s Separation from Service, provided, however, that if the Participant is a Specified Employee upon such Separation From Service, the balances credited to the Participant’s Account will be distributed on, or as soon as practicable (but no more than 10 days) after, the first day of the seventh month following such Separation From Service.

 

	
 
	

	
To the extent that distributions of amounts pursuant to this Section 11(h)(ii) are not permitted without additional tax or penalty by Section 409A of the Code, the affected Participant shall receive distribution of the amounts referred to in this Section 11(h)(ii) in accordance with Section 11(h)(i). 

 

	
 
	
(iii)
	
Unforeseeable Emergency.  An earlier distribution may be made upon a finding that the Participant is suffering from an Unforeseeable Emergency.  A withdrawal on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved (A) through reimbursement or compensation from insurance or otherwise, (B) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or (C) by cessation of deferrals under the Plan.

 

	
 
	

	
Withdrawal because of an Unforeseeable Emergency must be limited to the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any federal, state, local, or foreign income taxes or penalties reasonably anticipated to result from the distribution), as determined by the Administrator, in its sole discretion.  The Participant must apply in writing for a payment upon an “Unforeseeable Emergency,” using the form prescribed by the Administrator.  The Administrator retains the sole and absolute discretion to grant or deny a payment upon an Unforeseeable Emergency.  In the event of approval of a payment upon an Unforeseeable Emergency, the Participant’s outstanding deferral elections under the Plan shall be cancelled.

 

13

 

	
(i)
	
Death of Participant.  Notwithstanding the foregoing, in the event of the death of a Participant prior to receipt by such Participant of the full amount of cash and number of shares to be distributed from his or her Deferred Compensation Account, all such cash and/or shares will be distributed to the beneficiary or beneficiaries designated by the Participant, or if no beneficiary has been designated, to the Participant’s estate as soon as practicable following the month in which the death occurred.  Shares to be distributed to the Participant in connection with deferred Restricted Stock Units shall also be distributed as described in the preceding sentence but in no event earlier than the fourth anniversary of the date of grant.

 

	
(j)
	
Certain Rights Reserved by the Company.  In the event that, pursuant to Section 13, the Company suspends, modifies or terminates this Plan, the Company shall have the right to distribute to each Participant all amounts in such Participant’s Cash Account or Shares equivalent to units in such Participant’s Stock Unit Account, including, in the case of Stock Unit Accounts, the right to distribute cash equivalent to the units in such Accounts and all Shares attributable to vested Restricted Stock Units that a Participant has elected to defer, provided that any such suspension, modification or termination may be effected without penalty under Section 409A of the Code.

 

	
(k)
	
Certain Affiliations.  In the event that a Participant terminates his or her membership on the Board and becomes affiliated with a government agency, all amounts in such Participant’s Cash Account, shares equivalent to units in such Participant’s Stock Unit Account and Shares attributable to Restricted Stock Units that such Participant has elected to defer will be distributed to the Participant if such payment is necessary to avoid violation of any applicable federal, state, local or foreign ethics or conflict of interest law or if necessary to comply with an ethics agreement with the federal government.

 

SECTION 12.  OTHER STOCK-BASED AWARDS.

 

The Administrator is hereby authorized to grant to Directors such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares) as are deemed by the Administrator to be consistent with the purposes of the Plan.  Subject to the terms of the Plan, the Administrator shall determine the terms and conditions of such Awards.  Shares or other securities delivered pursuant to a purchase right granted under this Section 12 shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, as the Administrator shall determine, the value of which consideration, as established by the Administrator, shall not be less than the Fair Market Value of such Shares or other securities as of the date such purchase right is granted.  The Company intends that such other Awards granted pursuant to this Section shall comply with Section 409A of the Code if applicable.

 

14

 

SECTION 13.  AMENDMENT AND TERMINATION.

 

Except to the extent prohibited by or inconsistent with applicable law:

 

	
(a)
	
Amendments.  The Board may amend, alter, suspend, discontinue or terminate the Plan, including, without limitation, the number of shares subject to Awards granted pursuant to Sections 6, 7 and 10, without the consent of any stockholder, Participant, other holder or beneficiary of any Award, or other person; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) stockholder approval if such approval is necessary to comply with the listing requirements of The NASDAQ Stock Market or (ii) the consent of the affected Participants, if such action would adversely affect the rights of such Participants under any outstanding Award; and provided further, that no such amendment or alteration shall increase the aggregate number of shares that may be issued under the Plan or increase the total value of Awards that may be granted in any given Year, in each case except as provided in Section 5(d).  In addition, any such amendment shall be in compliance with Section 409A of the Code.  The Administrator may modify any outstanding Awards to comply with Section 409A without consent from Participants.  Notwithstanding any other provision of the Plan or any Award Agreement, no amendment, alteration, suspension, discontinuation or termination of the Plan or any Award Agreement shall be made that would (1) permit Options or SARs to be granted with a per Share exercise price of less than the Fair Market Value of a Share on the date of grant thereof or (2) except as provided in Section 5(d), (w) reduce the exercise price of any Option or SAR established at the time of grant thereof, (x) be treated as a repricing under U.S. generally accepted accounting principles (“GAAP”), (y) cancel an Option or SAR  in exchange for another Option, SAR, restricted stock unit or any other Award, or (z) terminate an Option or SAR in exchange for a cash amount equal to or greater than the excess, if any, of the Fair Market Value of the underlying Shares on the date of cancellation over the exercise price times the number of Shares outstanding under the Award.  A cancellation and exchange described in clause (y) of the immediately preceding sentence is prohibited regardless of whether the option, SAR, restricted stock unit or other equity is delivered simultaneously with the cancellation and regardless of whether the cancellation and exchange are treated as a repricing under GAAP or are voluntary on the part of the Participant.

 

	
(b)
	
Correction of Defects, Omissions and Inconsistencies.  The Administrator may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.

 

SECTION 14.  GENERAL PROVISIONS.

 

	
(a)
	
No Rights of Stockholders.  Neither a Participant nor a Participant’s legal representative shall be, or have any of the rights and privileges of, a stockholder of the Company in respect of any Shares issuable under the Plan in connection with any Award or Account, in whole or in part, unless and until certificates or other indicia of ownership of such shares shall have been issued.

 

15

 

	
(b)
	
Limits of Transfer of Awards.  No Award and no right under any such Award, shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or by the laws of descent and distribution.  During the Participant’s lifetime, rights under an Award shall be exercisable only by the Participant, or if permissible under applicable law, by the Participant’s guardian or legal representative.

 

	
(c)
	
No Limit on Other Compensation Arrangements.  Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

 

	
(d)
	
Governing Law.  The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without giving effect to the principles of conflict of laws thereof.

 

	
(e)
	
Severability.  If any provision of the Plan or any Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person, Award or Account, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

	
(f)
	
No Trust or Fund Created.  Neither the Plan nor any Award or Account shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person.  To the extent that any person acquires a right to receive an Award or Account, or Shares pursuant to an Award or Account, from the Company pursuant to this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

 

	
(g)
	
Accounts Unsecured.  Until distributed, all amounts credited to any Cash Accounts or represented by units credited to any Stock Unit Account shall be property of the Company, available for the Company’s use, and subject to the claims of general creditors of the Company.  The rights of any Participant or beneficiary to distributions under this Plan are not subject to anticipation, alienation, sale, transfer, assignment, or encumbrance, and shall not be subject to the debts or liabilities of any Participant or beneficiary.

 

	
(h)
	
Withholding.  The Company shall be authorized to withhold from any Awards granted or any transfer made under any Award or under the Plan or from any dividend equivalents to be paid on Restricted Stock Units the amount (in cash, Shares, other securities, or other property) of any taxes required to be withheld in respect of a grant, exercise, payment or settlement of an Award or any payment of dividend equivalents under Restricted Stock Units or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations of the Company for the payment of any such taxes.

 

16

 

	
(i)
	
No Right to Continued Board Membership.  The grant of an Award or establishment of an Account shall not be construed as giving a Participant the right to be retained as a director of the Company.  The Board may at any time fail or refuse to nominate a Participant for election to the Board, and the stockholders of the Company may at any election fail or refuse to elect any Participant to the Board free from any liability or claim under this Plan or any Award or Account.

 

	
(j)
	
409A Compliance.  The Company makes no representations or covenants that any Award granted or Deferred Compensation arrangement maintained under the Plan will comply with Section 409A of the Code.

 

SECTION 15.  EFFECTIVE DATE OF THE PLAN.

 

The Plan shall be effective as of the date of its approval by the stockholders of the Company.

 

SECTION 16.  TERM OF THE PLAN.

 

No Award shall be granted or compensation deferred under the Plan after the tenth anniversary of the Effective Date of the Plan.  However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted or Account established prior to the termination of the Plan may extend beyond such date, and the authority of the Committee and the Board under Section 12 to amend, alter, adjust, suspend, discontinue, or terminate any such Award or Account, or to waive any conditions or rights thereunder, shall extend beyond such date.

17Exhibit

Exhibit 10.32
WPX ENERGY, INC.

AMENDED AND RESTATED 
CHANGE IN CONTROL SEVERANCE AGREEMENT

(TIER I EXECUTIVE)

WPX ENERGY, INC.

AMENDED AND RESTATED 
CHANGE IN CONTROL SEVERANCE AGREEMENT 
(TIER I EXECUTIVE)
TABLE OF CONTENTS
	
				
	 
	 
	Page
	

	ARTICLE I.
	Definitions
	1
	

	1.2
	Accrued Base Salary
	1
	

	1.3
	Accrued Obligations
	1
	

	1.4
	Affiliate
	2
	

	1.5
	Agreement
	2
	

	1.6
	Agreement Date
	2
	

	1.7
	Agreement Term
	2
	

	1.8
	Annual Bonus
	2
	

	1.9
	Base Salary
	3
	

	1.10
	Beneficiary
	3
	

	1.11
	Board
	3
	

	1.12
	Cause
	3
	

	1.13
	Cause Determination
	4
	

	1.14
	Change Date
	5
	

	1.15
	Change in Control
	5
	

	1.16
	Code
	6
	

	1.17
	Competitive Business
	6
	

	1.18
	Confidential Information
	6
	

	1.19
	Controlled Affiliate
	6
	

	1.20
	Disability
	6
	

	1.21
	Disqualifying Disaggregation
	7
	

	1.22
	ERISA
	7
	

	1.23
	Exchange Act
	7
	

	1.24
	Good Reason
	7
	

	1.25
	IRS
	8
	

	1.26
	Legal and Other Expenses
	8
	

	1.27
	Notice of Consideration
	8
	

	1.28
	Notice of Termination
	8
	

	1.29
	Person
	9
	

	1.30
	Post-Change Period
	9
	

	1.31
	Potential Parachute Payment
	9
	

	1.32
	Pro-rata Annual Bonus
	9
	

TABLE OF CONTENTS (continued)
Page

	
				
	1.33
	Reorganization Transaction
	9
	

	1.34
	Restricted Shares
	9
	

	1.35
	SEC
	9
	

	1.36
	Separation from Service
	9
	

	1.37
	Stock Options
	9
	

	1.38
	Surviving Company
	9
	

	1.39
	Target Annual Bonus
	9
	

	1.40
	Taxes
	10
	

	1.41
	Termination Date
	10
	

	1.42
	Voting Securities
	10
	

	1.43
	Work Product
	10
	

	1.44
	WPX
	10
	

	1.45
	WPX Energy
	10
	

	1.46
	WPX Incumbent Directors
	10
	

	1.47
	WPX NQDC Plan
	11
	

	ARTICLE II.
	WPX’s Obligations Upon Separation from Service During the Post-Change Period
	11
	

	2.1
	If By Executive for Good Reason or By WPX Other Than for Cause, Disability, Death or Disqualifying Disaggregation
	11
	

	2.2
	If by WPX for Cause
	12
	

	2.3
	If by Executive Other Than for Good Reason
	13
	

	2.4
	If by Death or Disability
	13
	

	2.5
	Waiver and Release
	13
	

	2.6
	Breach of Covenants
	14
	

	ARTICLE III.
	Certain Potential Benefit Adjustments by WPX
	14
	

	3.1
	Potential Benefit Adjustment on Account of “Golden Parachute” Excise Taxes
	14
	

	3.2
	Implementation of Calculations and Any Benefit Reduction Under Section 3.1
	14
	

	3.3
	Potential Subsequent Adjustments
	15
	

	ARTICLE IV.
	Expenses and Interest
	15
	

	4.1
	Legal and Other Expenses
	15
	

	4.2
	Interest
	16
	

	ARTICLE V.
	No Set-off or Mitigation
	16
	

	5.1
	No Set-off by WPX
	16
	

	5.2
	No Mitigation
	16
	

	ARTICLE VI.
	Restrictive Covenants
	16
	

	6.1
	Confidential Information
	16
	

	6.2
	Non-Competition
	17
	

	6.3
	Non-Solicitation
	18
	

	6.4
	Intellectual Property
	18
	

	6.5
	Non-Disparagement
	20
	

	6.6
	Reasonableness of Restrictive Covenants
	20
	

ii

TABLE OF CONTENTS (continued)
Page

	
				
	6.7
	Right to Injunction: Survival of Undertakings
	21
	

	ARTICLE VII.
	Non-Exclusivity of Rights
	21
	

	7.1
	Waiver of Certain Other Rights
	21
	

	7.2
	Other Rights
	22
	

	7.3
	No Right to Continued Employment
	22
	

	ARTICLE VIII.
	Claims Procedure
	22
	

	8.1
	Filing a Claim
	22
	

	8.2
	Review of Claim Denial
	22
	

	ARTICLE IX.
	Miscellaneous
	23
	

	9.1
	No Assignability
	23
	

	9.2
	Successors
	23
	

	9.3
	Payments to Beneficiary
	23
	

	9.4
	Non-Alienation of Benefits
	23
	

	9.5
	Severability
	23
	

	9.6
	Amendments
	24
	

	9.7
	Notices
	24
	

	9.8
	Counterparts
	24
	

	9.9
	Governing Law
	24
	

	9.10
	Captions
	24
	

	9.11
	Rules of Construction
	25
	

	9.12
	Number and Gender
	25
	

	9.13
	Tax Withholding
	25
	

	9.14
	No Rights Prior to Change Date
	25
	

	9.15
	Entire Agreement
	25
	

iii

WPX ENERGY, INC.

AMENDED AND RESTATED 
CHANGE-IN-CONTROL SEVERANCE 
AGREEMENT (TIER I EXECUTIVE)
THIS AGREEMENT (“Agreement”) dated as of _________________, 20__ (the “Agreement Date”) is made by and between WPX Energy, Inc., a corporation incorporated under the laws of the State of Delaware (hereinafter, together with its subsidiaries and successors, referred to as “WPX”), and [INSERT EXECUTIVE NAME] (“Executive”).
RECITALS

The Compensation Committee of the Board of Directors of WPX has determined that it is in the best interests of WPX and its shareholders to encourage and motivate Executive to devote his full attention to the performance of his assigned duties without the distraction of concerns regarding his involuntary or constructive termination of employment due to a Change in Control of WPX.  WPX believes that it is in the best interest of Executive, its customers, the communities they serve, and the stockholders of WPX to provide financial assistance through severance payments and other benefits to Executive if Executive is involuntarily or constructively terminated upon or within a certain period after a Change in Control.  This Agreement is intended to accomplish these objectives and does not apply to any termination of employment not occurring during the Post-Change Period (as defined below).
This Agreement supersedes and replaces all other written or oral exchanges, agreements, understandings, or arrangements between or among Executive and WPX entered into prior to the date hereof and relating to severance or benefits in relation to a Change in Control, including but not limited to that certain Amended and Restated Change-In-Control Severance Agreement (Tier I Executive) entered into between WPX and Executive dated as of ______________ ____20___, but excluding any non-qualified deferred compensation plan(s) sponsored by WPX (“WPX NQDC Plan”) and any agreements and plans awarding Stock Options and Restricted Shares.  Each superseded agreement or understanding is void and of no further force and effect.

ARTICLE I. 
DEFINITIONS
As used in this Agreement, the terms specified below shall have the following meanings:
1.1     “Accrued Base Salary”     means the amount of Executive’s Base Salary that is accrued but not yet paid as of the Termination Date, other than amounts Executive has elected to defer.

1

1.2    “Accrued Obligations”     means, as of the Termination Date, the sum of Executive’s Accrued Base Salary, any accrued but unpaid paid time off under WPX’s paid time off program, and any other amounts and benefits which are then due to be paid or provided to Executive by WPX, but have not yet been paid or provided (as applicable), provided no payments will be accelerated if such acceleration would violate Code Section 409A.  Accrued Obligations shall not include Restricted Stock or Stock Options. 
1.3    “Affiliate”     means any Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with WPX.  For purposes of this definition the term “control” with respect to any Person means the power to direct or cause the direction of management or policies of such Person, directly or indirectly, whether through the ownership of Voting Securities, by contract or otherwise.
1.4    “Agreement”     means this Change In Control Severance Agreement (Tier I Executive). 
1.5    “Agreement Date”     -- see the introductory paragraph of this Agreement.
1.6    “Agreement Term”     means the period commencing on the Agreement Date and ending on the second anniversary of the Agreement Date or, if later, such later date to which the Agreement Term is extended, unless earlier terminated as provided herein.  On the first anniversary of the Agreement Date, the term shall automatically be extended by one year and then each day thereafter by one day to create a perpetual two-year term, unless earlier terminated as provided herein.  
The Agreement Term may be terminated at any time by WPX upon delivering written notice (an “Expiration Notice”) to Executive that the Agreement shall terminate on a date specified in the Expiration Notice (the “Expiration Date”) that is not less than 12 months after the date the Expiration Notice is delivered to Executive.  Notwithstanding the foregoing, if a Change Date occurs before the Expiration Date, then such Expiration Notice shall be void and of no further effect.  
If, before a Change Date, Executive is demoted to an employment classification lower than Senior Vice President, the Agreement Term shall automatically terminate on the first anniversary of the date of such demotion (the “Demotion Anniversary Date”), without the requirement of notice or any action by Company or Executive.  Notwithstanding the foregoing, if a Change Date occurs before the Demotion Anniversary Date, the Agreement Term shall not terminate as a result of the demotion.
In the event a Change Date occurs before the Agreement Term terminates, the Agreement Term shall end at the later of the following: (a) the second anniversary of the Change Date, or (b) until all obligations, if any, of WPX to Executive hereunder have been fulfilled, and until all benefits required hereunder have been paid to Executive.  The obligations of Executive under this Agreement shall continue beyond the Agreement Term until all such obligations are fully satisfied.  Notwithstanding anything herein to the contrary, the Agreement shall automatically terminate upon the occurrence of a Disqualifying Disaggregation pursuant to Section 1.21(a).  

2

1.7    “Annual Bonus”     means the opportunity to receive payment of a cash annual incentive.  As of the Agreement Date, the term “Annual Bonus” refers to the bonus determined pursuant to the WPX Annual Incentive Plan.  In the event the Annual Incentive Plan is replaced or superseded, the term “Annual Bonus” shall refer to such replacement or successor bonus plan or program.
1.8    “Average Annual Bonus” means, subject to the requirements described in this Section 1.8, the average of the Annual Bonus payments received by Executive with respect to the three (3) most recent fiscal years preceding the Termination Date.
(a)    Except as provided in Section 1.8(d), to be taken into account for purposes of calculating the Average Annual Bonus, an Annual Bonus payment must reflect employment in any of the Senior Vice President, Executive Vice President, and/or President employment classifications (or any combination thereof) for the entire fiscal year.  Except as provided in Section 1.8(d), any Annual Bonus amount that: (i) reflects employment in an employment classification lower than Senior Vice President; or (ii) reflects less than the entire fiscal year in any of the Senior Vice President, Executive Vice President, and/or President classifications (or any combination thereof), shall not be taken into account for purposes of calculating the Average Annual Bonus.
(b)    If, as of the Termination Date, Executive has received only two (2) Annual Bonus payments that reflect employment in any of the Senior Vice President, Executive Vice President, and/or President employment classifications (or any combination thereof) for the entire fiscal year, Average Annual Bonus shall mean the average of those two (2) Annual Bonus payments.
(c)    If, as of the Termination Date, Executive has received only one (1) Annual Bonus payment that reflects employment in any of the Senior Vice President, Executive Vice President, and/or President employment classifications (or any combination thereof) for the entire fiscal year, Average Annual Bonus shall mean the amount of such Annual Bonus payment.
(d)    If, as of the Termination Date, Executive has not received an Annual Bonus payment that reflects employment in any of the Senior Vice President, Executive Vice President, and/or President employment classifications (or any combination thereof) for the entire fiscal year, Average Annual Bonus shall mean the greater of: (i) the amount of any Annual Bonus payment received that reflects any employment in any of the Senior Vice President, Executive Vice President, and/or President employment classifications (or any combination thereof); or (ii) 75% of Executive’s Base Salary.
1.9    “Base Salary”     means annual base salary in effect on the Termination Date, disregarding any reduction that would qualify as Good Reason.
1.10    “Beneficiary”     means the persons or entities designated or deemed designated by Executive pursuant to Section 9.3. 

3

1.11    “Board”     means the Board of Directors of WPX Energy or, from and after the Change Date that gives rise to a Surviving Company other than WPX Energy, the board of directors or comparable governing body of such Surviving Company.
1.12    “Cause”     means any one or more of the following:
(a)    Executive’s conviction of or plea of nolo contendere to a felony or other crime involving fraud, dishonesty or moral turpitude;
(b)    Executive’s willful or reckless material misconduct in the performance of his duties which results in an adverse effect on WPX or an Affiliate;
(c)    Executive’s willful or reckless violation or disregard of the code of business conduct;
(d)    Executive’s material willful or reckless violation or disregard of a WPX policy; or
(e)    Executive’s habitual or gross neglect of duties;

provided, however, that for purposes of clauses (b) and (e), Cause shall not include any one or more of the following:
(i)    bad judgment or negligence, other than Executive’s habitual neglect of duties or gross negligence;
(ii)    any act or omission believed by Executive in good faith, after reasonable investigation, to have been in or not opposed to the interest of WPX or an Affiliate (without intent of Executive to gain, directly or indirectly, a profit to which Executive was not legally entitled);
(iii)    any act or omission with respect to which a determination could properly have been made by the Board that Executive had satisfied the applicable standard of conduct for indemnification or reimbursement under WPX’s by-laws, any applicable indemnification agreement, or applicable law, in each case as in effect at the time of such act or omission; or
(iv)    during a Post-Change Period, failure to meet performance goals, objectives or measures following good faith efforts to meet such goals, objectives or measures; and
further provided that, for purposes of clauses (b) through (e) if an act, or a failure to act, which was done, or omitted to be done, by Executive in good faith and with a reasonable belief, after reasonable investigation, that Executive’s act, or failure to act, was in the best interests of WPX, or an Affiliate or was required by applicable law or administrative regulation, such breach shall not constitute Cause if, within 10 business days after Executive is given written notice of such breach that specifically refers to this Section, Executive cures such breach to the fullest extent that it is curable.  

4

With respect to the above definition of “cause”, no act or conduct by Executive will constitute “cause” if Executive acted:  (i) in accordance with the instructions or advice of counsel representing WPX or, if there was a conflict such that Executive could not consult with counsel representing WPX, other qualified counsel, or (ii) as required by legal process. 
1.13    “Cause Determination”     -- see Section 2.2(b)(iv)
1.14    “Change Date”     means the date on which a Change in Control first occurs during the Agreement Term.
1.15    “Change in Control”     means, except as otherwise provided below, the occurrence of any one or more of the following during the Agreement Term:
(a)    any person (as such term is used in Rule 13d‐5 of the SEC under the Exchange Act) or group (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than a Controlled Affiliate of WPX Energy or any employee benefit plan (or any related trust) sponsored or maintained by WPX Energy or any of its Controlled Affiliates (a “Related Party”), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of twenty-five percent (25%) or more of the common stock of WPX Energy or of Voting Securities representing twenty-five percent (25%) or more of the combined voting power of all Voting Securities of WPX Energy; or
(b)    WPX Incumbent Directors (determined using the Agreement Date as the baseline date) cease for any reason to constitute at least a majority of the directors of WPX Energy then serving; or
(c)    consummation of a merger, reorganization, recapitalization, consolidation, or similar transaction (any of the foregoing, a “Reorganization Transaction”), other than a Reorganization Transaction that results in the Persons who were the direct or indirect owners of the outstanding common stock and Voting Securities of WPX Energy immediately before such Reorganization Transaction becoming, immediately after the consummation of such Reorganization Transaction, the direct or indirect owners, of both at least sixty-five percent (65%) of the then-outstanding common stock of the Surviving Company and Voting Securities representing at least sixty-five percent (65%) of the combined voting power of the then-outstanding Voting Securities of the Surviving Company, in substantially the same respective proportions as such Persons’ ownership of the common stock and Voting Securities of WPX Energy immediately before such Reorganization Transaction; or 
(d)    consummation of a plan or agreement for the sale or other disposition of all or substantially all of the consolidated assets of WPX Energy or a plan of complete liquidation of WPX Energy, other than any such transaction that would result in (i) a Related Party owning or acquiring more than fifty percent (50%) of the assets owned by WPX Energy immediately prior to the transaction or (ii) the Persons who were the direct or indirect owners of the outstanding common stock and Voting Securities of WPX Energy immediately before such transaction becoming, immediately after the consummation of such transaction, the 

5

direct or indirect owners, of more than fifty percent (50%) of the assets owned by WPX Energy immediately prior to the transaction.

Notwithstanding the occurrence of any of the foregoing events and subject to Section 9.6, a Change in Control shall not occur with respect to Executive if, in advance of such event, Executive agrees in writing that such event shall not constitute a Change in Control.  Executive also agrees that the occurrence of a Change in Control involves the sale of the goodwill of WPX Energy within the meaning of Title 15, Section 218 of the Oklahoma Statutes and that the benefits provided under this Agreement are being provided by the Company to Executive in connection with such a transaction.
1.16    “Code”     means the Internal Revenue Code of 1986, as amended.
1.17    “Competitive Business”     means, as of any date, any energy business and any individual or entity (and any branch, office, or operation thereof) which engages in, or proposes to engage in (with Executive’s assistance) any of the following in which Executive has been engaged in the twelve (12) months preceding the Termination Date: the exploration and/or production, marketing or sale of oil, gas or other energy product, which is located (i) anywhere in the United States, or (ii) anywhere outside of the United States where WPX is then engaged in, or proposes as of the Termination Date to engage in to the knowledge of Executive, any of such activities.  
1.18    “Confidential Information”     means any non-public information of any kind or nature in the possession of WPX or any of its Affiliates, including without limitation, processes, methods, designs, innovations, devices, inventions, discoveries, data, techniques, models, customer lists, marketing, business or strategic plans, financial information, research and development information, trade secrets or other subject matter relating to WPX’s or its Affiliates’ products, services, businesses, operations, employees, customers or suppliers, whether in tangible or intangible form, including (i) any information that gives WPX or any of its Affiliates a competitive advantage in the exploration and/or production, marketing or sale of oil, gas or other energy or any other businesses in which WPX or an Affiliate is engaged, or (ii) any information obtained by WPX or any of its Affiliates from third parties to which WPX or an Affiliate owes a duty of confidentiality, or (iii) any information that was learned, discovered, developed, conceived, originated or prepared during or as a result of Executive’s performance of any services on behalf of WPX or any Affiliate. Notwithstanding the foregoing, “Confidential Information” shall not include: (i) information that is or becomes generally known to the public through no fault of Executive; (ii) information obtained on a non-confidential basis from a third party other than WPX or any Affiliate, which third party disclosed such information without breaching any legal, contractual or fiduciary obligation; or (iii) information approved for release by written authorization of WPX. 
1.19    “Controlled Affiliate”     means any Person that directly or indirectly, through one or more intermediaries, is controlled by WPX Energy.
1.20    “Disability”     means any medically determinable physical or mental impairment of Executive where he or she (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in 

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death or can be expected to last for a continuous period of not less than twelve (12) months, or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Executive’s employer.  Notwithstanding the forgoing, all determinations of whether an Executive is Disabled shall be made in accordance with Code Section 409A.
1.21    “Disqualifying Disaggregation”     means: 

(a)    The cessation of Executive’s employment with WPX and/or its Affiliates prior to the Change Date for any reason, including but not limited to a cessation of employment with WPX and/or its Affiliates which is effected by a sale, spin-off, or other disaggregation (“Disaggregation”) by WPX or an Affiliate of the business unit which employed Executive immediately prior to such Disaggregation; or
(b)    The cessation of Executive’s employment with WPX and/or its Affiliates during the Post-Change Period due to a Disaggregation solely where Executive is employed by the successor in substantially the same position as the position held prior to the Disaggregation, provided the successor assumes all of WPX’s obligations under this Agreement.
1.22    “ERISA”     means the Employee Retirement Income Security Act of 1974, as amended.
1.23    “Exchange Act”     means the Securities Exchange Act of 1934, as amended.
1.24    “Good Reason”     means a Separation from Service by Executive in accordance with the substantive and procedural provisions of this Section.
(a)    Separation from Service by Executive for “Good Reason” means a Separation from Service initiated by Executive on account of any one or more of the following actions or omissions that, unless otherwise specified, occurs during a Post-Change Period:  

(i)    a material adverse reduction in the nature or scope of Executive’s office, position, duties, functions, responsibilities or authority (including reporting responsibilities and authority) during a Post-Change Period from the most significant of those held, exercised and assigned at any time during the 90-day period immediately before the Change Date;

(ii)    any reduction in or failure to pay Executive’s Base Salary at an annual rate not less than twelve (12) times the highest monthly base salary paid or payable to Executive by WPX in respect of the twelve (12) month period immediately before the Change Date;

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(iii)    any material reduction in the Target Annual Bonus which Executive may earn determined as of the Change Date or failure to pay Executive’s Annual Bonus on terms substantially equivalent to those provided to peer executives of WPX;
(iv)    a material reduction of Executive’s aggregate compensation and benefits from the amounts and/or levels in effect on the Change Date, unless such reduction is part of a policy applicable to peer executives of WPX and of any successor entity.  For this purpose, the term “aggregate compensation and benefits” includes Base Salary, Target Annual Bonus, stock-based compensation, benefits and perquisites under WPX-sponsored benefit plans and programs (including but not limited to retirement plans (qualified and nonqualified) and medical insurance);
(v)    required relocation during a Post-Change Period of more than 50 miles of Executive’s workplace without the consent of Executive; provided, such new location is farther from Executive’s residence than the prior location;
(vi)    the failure at any time of a successor to WPX to explicitly to assume and agree to be bound by this Agreement; or
(vii)    the giving of a Notice of Consideration pursuant to Section 2.2(b)(ii) and the subsequent failure to terminate Executive for Cause within a period of ninety (90) days thereafter in compliance with all of the substantive and procedural requirements of Section 2.2.
(b)    Notwithstanding anything in this Agreement to the contrary, no act or omission shall constitute grounds for “Good Reason”:
(i)    Unless Executive gives a Notice of Termination to WPX at least 30 days prior to his intent to terminate his employment for Good Reason which describes the alleged act or omission giving rise to Good Reason; and
(ii)    Unless such Notice of Termination is given within ninety (90) days of Executive’s first actual knowledge of such act or omission; and
(iii)    Unless WPX fails to cure such act or omission within the thirty (30) day period after receiving the Notice of Termination.
(c)    Notwithstanding the foregoing provisions of this Section, no act or omission shall constitute grounds for “Good Reason”, if Executive has consented in writing to such act or omission in a document that makes specific reference to this Section, or if any of the reductions contemplated in (a)(ii)–(iv) are applicable to all similarly situated employees of the Company. 
1.25    “IRS”     means the Internal Revenue Service of the United States of America.
1.26    “Legal and Other Expenses”     -- see Section 4.1.

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1.27    “Notice of Consideration”     -- see Section 2.2(b)(ii).
1.28    “Notice of Termination”     means a written notice of a Separation from Service, if applicable, given in accordance with Section 9.7 that sets forth (a) the specific termination provision in this Agreement relied on by the party giving such notice, (b) in reasonable detail the specific facts and circumstances claimed to provide a basis for such Separation from Service, and (c) if the Termination Date is other than the date of receipt of such Notice of Termination, the Termination Date.
1.29    “Person”     means any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government instrumentality, division, agency, body or department.
1.30    “Post-Change Period”     means the period commencing on the Change Date and ending on the earlier of the Termination Date or the second anniversary of the Change Date.
1.31    “Potential Parachute Payment”     -- see Section 3.1.
1.32    “Pro-rata Annual Bonus”     means, in respect of WPX’s fiscal year during which the Termination Date occurs, an amount equal to the product of Executive’s Target Annual Bonus (determined as of the Termination Date) multiplied by a fraction, the numerator of which equals the number of days from and including the first day of such fiscal year through and including the Termination Date, and the denominator of which equals three hundred sixty-five (365).
1.33    “Reorganization Transaction”     -- see clause (c) of the definition of “Change in Control”.
1.34    “Restricted Shares”     means shares of restricted stock, restricted stock units, deferred stock or similar awards.
1.35    “SEC”     means the United States Securities and Exchange Commission. 
1.36    “Separation from Service”     means Executive’s termination from employment with WPX and its Affiliates on account of Executive’s death, retirement or other termination of employment, as determined in accordance with Code Section 409A and the regulations thereunder.
1.37    “Stock Options”     means stock options, stock appreciation rights or similar awards.
1.38    “Surviving Company”     means the parent company resulting from a Reorganization Transaction or, if securities representing at least fifty percent (50%) of the aggregate voting power of all Voting Securities of a company effected by a Change in Control which is not a Reorganization Transaction are directly or indirectly owned by another company, such other company.
1.39    “Target Annual Bonus”     means, as of any date, the amount equal to the product of Executive’s Base Salary determined as of such date multiplied by the percentage of such Base 

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Salary to which Executive would have been entitled immediately prior to such date under any Annual Bonus arrangement for the fiscal year for which the Annual Bonus is awarded if the performance goals established pursuant to such Annual Bonus were achieved at the one hundred percent (100%) level as of the end of the fiscal year; provided, however, that if Executive’s Annual Bonus is discretionary and no one hundred percent (100%) target level is formally established either under the Annual Bonus arrangement or otherwise, Executive’s “Target Annual Bonus” shall mean the amount equal to the one hundred percent (100%) of Executive’s Base Salary. 
1.40    “Taxes”     means federal, state, local and other income, employment and other taxes.
1.41    “Termination Date”     means the date of the receipt of the Notice of Termination by Executive (if such notice is given by WPX) or by WPX (if such notice is given by Executive), or any later date specified in the notice that is not more than thirty (30) days after delivery of such notice; provided, however, that:
(a)    if Executive’s employment is terminated by reason of death or Disability, the Termination Date shall be the date of Executive’s death or the date of deemed termination of employment due to Disability, as applicable, regardless of whether a Notice of Termination has been given; and
(b)    if no Notice of Termination is given, the Termination Date shall be the last date on which Executive is employed by WPX; and
(c)    for purposes of Article VI (Restrictive Covenants), if Executive does not have a Separation from Service, the Termination Date shall be the later of the date the entity that employs Executive ceases to be an Affiliate of WPX Energy, or, after a Disaggregation (as defined in Section 1.21), the date Executive’s employment with the successor business unit terminates, whether such termination is initiated by such successor or by Executive. 
1.42    “Voting Securities”     of a corporation or other entity means securities of such corporation or other entity that are entitled to vote generally in the election of directors of such corporation or board of directors or comparable governing body of such other entity.  
1.43    “Work Product”     means any and all work product, including, but not limited to, documentation, tools, templates, processes, procedures, discoveries, inventions, innovations, technical data, concepts, know-how, methodologies, methods, drawings, prototypes, trade secrets, notebooks, reports, findings, business plans, recommendations and memoranda of every description, that Executive makes, conceives, discovers or develops alone or with others during the course of Executive’s employment with WPX or during the one year period following Executive’s Termination Date (whether or not protectable upon application by copyright, patent, trademark, trade secret or other proprietary rights).
1.44    “WPX”     means WPX Energy, together with its subsidiaries, or any successor thereto as provided in Section 9.2.

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1.45    “WPX Energy”     means WPX Energy, Inc., a Delaware Corporation.
1.46    “WPX Incumbent Directors”     means, determined as of any date by reference to any baseline date:
(a)    the members of the Board on the date of such determination who have been members of the Board since such baseline date, and
(b)    the members of the Board on the date of such determination who were appointed or elected after such baseline date and whose election, or nomination for election by stockholders of WPX Energy or the Surviving Company, as applicable, was approved by a vote or written consent of two-thirds of the directors comprising the WPX Incumbent Directors on the date of such vote or written consent, but excluding each such member whose initial assumption of office was in connection with (i) an actual or threatened election contest, including a consent solicitation, relating to the election or removal of one or more members of the Board, (ii) a “tender offer” (as such term is used in Section 14(d) of the Exchange Act), or (iii) a proposed Reorganization Transaction.
1.47    “WPX NQDC Plan”     -- see the second paragraph of the Recitals of this Agreement.
ARTICLE II.     
WPX’S OBLIGATIONS UPON SEPARATION FROM SERVICE DURING THE POST-CHANGE PERIOD
2.1    If By Executive for Good Reason or By WPX Other Than for Cause, Disability, Death or Disqualifying Disaggregation.  If, during the Post-Change Period, Executive has a Separation from Service for Good Reason or there is a WPX-initiated Separation from Service for any reason other than Cause, Disability, death or a Disqualifying Disaggregation, then in addition to payment of all Accrued Obligations, which shall be payable no later than ten (10) business days after the Termination Date, WPX’s sole obligation to Executive under this Agreement shall be as follows:
(a)    Severance Payments.  Executive shall be paid a lump-sum cash amount equal to the sum of the following, on the first business day following six (6) months after  Executive’s Separation from Service:  
(i)    Prorated Annual Bonus for Year of Termination.  Executive’s Pro-rata Annual Bonus reduced (but not below zero (0)) by the amount of any Annual Bonus paid to Executive with respect to WPX’s fiscal year during which the Termination Date occurs;
(ii)    Multiple of Salary and Bonus.  An amount equal to two (2) times the sum of (A) Base Salary plus (B) the Average Annual Bonus; provided, however, that any reduction in Executive’s Base Salary that would qualify as Good Reason shall be disregarded for this purpose.

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(iii)    COBRA Equivalent Payment.  If Executive was enrolled in WPX -sponsored medical and prescription coverage on the Termination Date, an amount equal to the monthly premium for COBRA continuation coverage for the medical and prescription coverage elected by Executive and in effect on such date multiplied by eighteen (18). Dental, vision and health care flexible spending account coverage premiums will not be included in determining such payment.  
(b)    Stock Incentive Awards.  The effect on any outstanding Stock Options and Restricted Shares held by Executive shall be determined in accordance with the applicable award agreements and the applicable plan, subject to Section 2.6. 
(c)    Outplacement.  Executive shall be reimbursed for reasonable fees and costs for outplacement services incurred by Executive within six (6) months after the Separation from Service, promptly upon presentation of reasonable documentation of such fees and costs, subject to a maximum of $25,000. All requests of Executive for reimbursement must be submitted to WPX within one (1) year of Separation from Service and WPX shall make the reimbursement of reasonable requests no later than thirty (30) days after such request, but in all events within fifteen (15) months of Separation from Service.
(d)    Indemnification.  Executive (i) shall be indemnified and held harmless by WPX on the same terms as other peer executives and to the greatest extent permitted under applicable law as the same now exists or may hereafter be amended and WPX Energy’s by-laws as such exist on the Agreement Date, or such greater rights that may be provided by amendment to such by-laws from time to time, if Executive was, is, or is threatened to be, made a party to any pending, completed or threatened action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative, and whether formal or informal, by reason of the fact that Executive is or was, or had agreed to become, a director, officer, employee, agent or fiduciary of WPX or any other entity which Executive is or was serving at the request of WPX (“Proceeding”), against all expenses (including reasonable attorneys’ fees) and all claims, damages, liabilities and losses incurred or suffered by Executive or to which Executive may become subject for any reason, and (ii) shall be entitled to advancement of any such indemnifiable expenses in accordance with WPX Energy’s by-laws as such exist on the Agreement Date, or such greater rights that may be provided by amendment to such by-laws from time to time.  A Proceeding shall not include any proceeding to the extent it concerns or relates to a matter described in Section 4.1 (concerning reimbursement of certain costs and expenses).
(e)    Directors’ and Officers’ Liability Insurance.  For a period of six (6) years after the Termination Date (or for any known longer applicable statute of limitations period), Executive shall be entitled to coverage under a directors’ and officers’ liability insurance policy in an amount no less than, and on the same terms as those provided to peer executive officers and directors of WPX.
2.2    If by WPX for Cause.

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(a)    Termination for Cause.  If Executive has a Separation from Service for Cause during the Post-Change Period, WPX’s sole obligation to Executive under this Article II shall be to pay Executive a lump-sum cash amount equal to all Accrued Obligations.
(b)    Change in Control: Procedural Requirements for Termination for Cause.  For any Separation from Service for Cause during any part of a Post-Change Period, WPX shall strictly observe each of the following substantive and procedural provisions:
(i)    The Board shall call a meeting for the stated purpose of determining whether Executive’s acts or omissions satisfy the requirements of the definition of “Cause” and, if so, whether to terminate Executive’s employment for Cause.
(ii)    Not less than fifteen (15) days prior to the date of such meeting, the Board shall provide Executive and each member of the Board written notice (a “Notice of Consideration”) of (A) a detailed description of the acts or omissions alleged to constitute Cause, (B) the date of such meeting of the Board, and (C) Executive’s rights under clauses (iii) and (iv) below.
(iii)    Executive shall have the opportunity to appear before the Board in person and, at Executive’s option, with legal counsel, and/or present to the Board a written response.
(iv)    Executive’s employment may be terminated for Cause only if (A) the acts or omissions specified in the Notice of Consideration did in fact occur and such actions or omissions do constitute Cause as defined in this Agreement, (B) the Board, by affirmative vote of at least sixty-six and two/thirds percent (662⁄3 %) of its members (excluding Executive’s vote), makes a specific determination to such effect and to the effect that Executive’s employment should be terminated for Cause (“Cause Determination”), and (C) WPX thereafter provides Executive with a Notice of Termination that specifies in specific detail the basis of such Separation from Service for Cause and which Notice shall be consistent with the reasons set forth in the Notice of Consideration.
Nothing in this Section 2.2(b) shall preclude the Board, by majority vote, from suspending Executive from his duties, with pay, at any time.
(c)    Change in Control: Standard of Review.  In the event that the existence of Cause during a Post-Change Period shall become an issue in any action or proceeding between Executive and WPX, WPX shall, notwithstanding the Cause Determination, have the burden of establishing that the actions or omissions specified in the Notice of Consideration did in fact occur and do constitute Cause and that WPX has satisfied all applicable substantive and procedural requirements of this Section.
2.3    If by Executive Other Than for Good Reason.  If Executive has a Separation from Service initiated by Executive during the Post-Change Period other than for Good Reason, Disability 

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or death, the sole obligation of WPX to Executive under this Agreement shall be to pay Executive a lump-sum cash amount equal to all Accrued Obligations.
2.4    If by Death or Disability.  If Executive dies during the Post-Change Period or if Executive has a Separation from Service during the Post-Change Period by reason of Executive’s Disability, WPX’s sole obligation to Executive under this Agreement shall be to pay Executive a lump-sum cash amount equal to all Accrued Obligations.
2.5    Waiver and Release.  Notwithstanding anything herein to the contrary, in the event that Executive’s employment terminates pursuant to Section 2.1, WPX shall have no obligation to Executive under Section 2.1(a) and Sections 2.1(c)-(e) unless and until Executive executes and delivers to WPX within sixty (60) days after Separation from Service a release and waiver of WPX and Affiliates, and thereafter not revoking such release, in substantially the same form as attached hereto as Exhibit A (as may be amended by WPX from time to time solely to comply with changes in applicable law), or as otherwise mutually acceptable.
2.6    Breach of Covenants.  If a court determines (after exhaustion of all available judicial remedies) that Executive has breached any non-competition, non-solicitation, non-disparagement, confidential information or intellectual property covenant entered into at any time between Executive and WPX or any Affiliate, including the Restrictive Covenants in Article VI, (a) WPX will not have any obligation to pay or provide any severance or benefits under Article II, (b) all of Executive’s unexercised Stock Options shall terminate as of the date of the breach, (c) all of Executive’s Restricted Stock shall be forfeited as of the date of the breach, (d) Executive shall reimburse WPX for any amount already paid under Article II or any value received from any Stock Option or Restricted Stock on or after the date of the breach, and (e) Executive shall repay to WPX an amount equal to the aggregate “spread” (as defined below) on all Stock Options exercised in the one year period prior to the first date on which Executive breached any such covenant (“Breach Date”).  For purposes of this Section 2.6, “spread” in respect of any Stock Option shall mean the product of the number of shares as to which such Stock Option has been exercised during the one year period prior to the Breach Date multiplied by the difference between the closing price of the common stock on the exercise date (or if the common stock did not trade on the New York Stock Exchange or other exchange, if any, on which common stock had a higher trading volume at the time, on the exercise date, the most recent date on which the common stock did so trade) and the exercise price of the Stock Options.
ARTICLE III.     
CERTAIN POTENTIAL BENEFIT ADJUSTMENTS BY WPX
3.1    Potential Benefit Adjustment on Account of “Golden Parachute” Excise Taxes.  If at any time or from time to time, it shall be determined by independent tax professionals selected by WPX (“Tax Professional”) that any payment or other benefit to Executive pursuant to Article II of this Agreement or otherwise (“Potential Parachute Payment”) is or will, but for the provisions of this Article III, become subject to the excise tax imposed by Code Section 4999 or any similar tax payable under any state, local, foreign or other law, but expressly excluding any income taxes and penalties or interest imposed pursuant to Code Section 409A (“Excise Taxes”), then Executive’s Potential Parachute Payment shall be either (a) provided to Executive in full, or (b) provided to 

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Executive as to such lesser extent which would result in no portion of such benefits being subject to the Excise Taxes, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Taxes (“Payments”).
3.2    Implementation of Calculations and Any Benefit Reduction Under Section 3.1.  In the event of a reduction of benefits pursuant to Section 3.1, the Tax Professional shall determine which benefits shall be reduced so as to achieve the principle set forth in Section 3.1.  For purposes of making the calculations required by Section 3.1, the Tax Professional may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal authority.  WPX and Executive shall furnish to the Tax Professional such information and documents as the Tax Professional may reasonably request in order to make a determination under Section 3.1.  WPX shall bear all costs the Tax Professional may reasonably incur in connection with any calculations contemplated by Section 3.1.
3.3    Potential Subsequent Adjustments.
(a)    If, notwithstanding any calculations performed or reduction in benefits imposed as described in Section 3.1, the IRS determines that Executive is liable for Excise Taxes as a result of the receipt of any payments made pursuant to Article II of this Agreement or otherwise, then Executive shall be obligated to pay back to WPX, within thirty (30) days after a final IRS determination or in the event that Executive challenges the final IRS determination, a final judicial determination, a portion of the Payments equal to the “Repayment Amount.”  The Repayment Amount shall be the smallest such amount, if any, as shall be required to be paid to WPX so that Executive’s net after-tax proceeds with respect to the Payments (after taking into account the payment of the Excise Taxes and all other applicable taxes imposed on such benefits) shall be maximized.  The Repayment Amount shall be zero if a Repayment Amount of more than zero would not result in Executive’s net after-tax proceeds with respect to the Payments being maximized.  If the Excise Taxes are not eliminated pursuant to this Section 3.3, Executive shall pay the Excise Taxes.
(b)    Notwithstanding any other provision of this Article III, if (i) there is a reduction in the payments to an Executive as described above in this Article III, (ii) the IRS later determines that Executive is liable for Excise Taxes, the payment of which would result in the maximization of Executive’s net after-tax proceeds (calculated based on the full amount of the Potential Parachute Payment and as if Executive’s benefits had not previously been reduced), and (iii) Executive pays the Excise Tax, then WPX shall pay to Executive those payments which were reduced pursuant to Section 3.1 or 3.3(a) as soon as administratively possible after Executive pays the Excise Taxes to the extent that Executive’s net after-tax proceeds with respect to the payment of the Payments are maximized.
ARTICLE IV.     
EXPENSES AND INTEREST

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4.1    Legal and Other Expenses.
(a)    If Executive incurs legal fees or other expenses (including expert witness and accounting fees) in an effort to determine, secure, preserve, establish entitlement to, or obtain benefits under this Agreement (collectively, “Legal and Other Expenses”), Executive shall, regardless of the outcome of such effort, be entitled to payment of or reimbursement for such Legal and Other Expenses in accordance with Section 4.1(b).
(b)    All Legal and Other Expenses shall be paid or reimbursed on a monthly basis within 10 days after presentation of Executive’s written request for reimbursement accompanied by evidence that such Legal and Other Expenses were incurred.  In all events, the Company shall pay or reimburse such eligible expenses in accordance with the requirements of Treasury Regulation Section 1.409A-3(i)(1)(iv) for reimbursement and in-kind benefit plans, to the extent applicable.  For this purpose, (i) any reimbursement shall be for expenses incurred during Executive’s lifetime or within two additional years following Executive’s death, (ii) the amount of expenses eligible for reimbursement, or benefits provided, in one calendar year shall not affect the expenses eligible for reimbursement, or benefits to be provided, in any other calendar year, (iii) the reimbursement of any eligible expense will be made no later than the last day of the calendar year next following the calendar year in which the expense was incurred, and (iv) the right to any reimbursement or benefit shall not be subject to liquidation or exchange for any other benefit.
(c)    If Executive does not prevail (after exhaustion of all available judicial remedies) in respect of a claim by Executive or by WPX, hereunder, and such party establishes before a court of competent jurisdiction that Executive had no reasonable basis for his claim hereunder, or for his response to such party’s claim hereunder, or acted in bad faith, no further payment of or reimbursement for Legal and Other Expenses shall be due to Executive in respect of such claim and Executive shall refund any amounts previously paid or reimbursed hereunder with respect to such claim.
4.2    Interest.  If an amount due is not paid to Executive under this Agreement within five business days after such amount first became due and owing, interest shall accrue on such amount from the date it became due and owing until the date of payment at an annual rate equal to two hundred (200) basis points above the base commercial lending rate published in The Wall Street Journal in effect from time to time during the period of such nonpayment.
ARTICLE V.     
NO SET-OFF OR MITIGATION
5.1    No Set-off by WPX. Executive’s right to receive when due the payments and other benefits provided for under this Agreement is absolute, unconditional and subject to no setoff, counterclaim, recoupment, or other claim, right or action that WPX may have against Executive or others.  Time is of the essence in the performance by WPX of its obligations under this Agreement.
5.2    No Mitigation.  Executive shall not have any duty to mitigate the amounts payable under this Agreement by seeking new employment or self-employment following termination.  

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Except as specifically otherwise provided in this Agreement, all amounts payable pursuant to this Agreement shall be paid without reduction regardless of any amounts of salary, compensation or other amounts which may be paid or payable to Executive as the result of Executive’s employment by another employer or self-employment.
ARTICLE VI.     
RESTRICTIVE COVENANTS
6.1    Confidential Information.  Executive acknowledges that in the course of performing services for WPX and its Affiliates, Executive may create (alone or with others), learn of, have access to, or receive Confidential Information.  Executive recognizes that all such Confidential Information is the sole and exclusive property of WPX and its Affiliates or of third parties to which WPX or an Affiliate owes a duty of confidentiality, that it is WPX’s policy to safeguard and keep confidential all such Confidential Information, and that disclosure of Confidential Information to an unauthorized third party would cause irreparable damage to WPX and its Affiliates.  Executive agrees that, except as required by the duties of Executive’s employment with WPX or any of its Affiliates and except in connection with enforcing Executive’s rights under this Agreement or if compelled by a court or governmental agency, in each case provided that prior written notice is given to WPX, Executive will not, without the written consent of WPX, willfully disseminate or otherwise disclose, directly or indirectly, any Confidential Information disclosed to Executive or otherwise obtained by Executive during his employment with WPX or its Affiliates, and will take all necessary precautions to prevent disclosure, to any unauthorized individual or entity (whether or not such individual or entity is employed or engaged by, or is otherwise affiliated with, WPX or any Affiliate), and will use the Confidential Information solely for the benefit of WPX and its Affiliates and will not use the Confidential Information for the benefit of any other Person nor permit its use for the benefit of Executive.  These obligations shall continue during and after the termination of Executive’s employment for any reason and for so long as the Confidential Information remains Confidential Information.  For the avoidance of doubt, nothing in the foregoing shall preclude Executive from disclosing Confidential Information for purposes of reporting a possible violation of state or federal law to a relevant law enforcement agency, including, without limitation, to the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934 or any similar provision of applicable state or federal law and the rules and regulations promulgated thereunder.  Furthermore, Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of Confidential Information or a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law.  Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of Confidential Information or a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  If Executive files a lawsuit for retaliation by WPX for reporting a suspected violation of law he may disclose the Confidential Information or trade secret to his attorney and use the Confidential Information or trade secret information in the court proceeding, if Executive files any document containing the Confidential Information or trade secret under seal; and does not disclose the trade secret, except pursuant to court order.

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6.2    Non-Competition.  For twelve (12) months following a Separation from Service pursuant to Section 2.1, Executive agrees that without the written consent of WPX, Executive shall not at any time, directly or indirectly, in any capacity:  
(a)    engage or participate in, become employed by, serve as a director of, or render advisory or consulting or other services in connection with, any Competitive Business; provided, however, that after Executive’s Separation from Service, this Section 6.2 shall not preclude Executive from (i) being an employee of, or consultant to, any business unit of a Competitive Business if (A) such business unit does not qualify as a Competitive Business in its own right and (B) Executive does not have any direct or indirect involvement in, or responsibility for, any operations of such Competitive Business that cause it to qualify as a Competitive Business, or (ii) with the approval of an Authorized WPX Executive, being a consultant to, an advisor to, a director of, or an employee of a Competitive Business (for purposes of this Section 6.2(a), an “Authorized WPX Executive” shall mean one of the individuals then serving as the Chief Executive Officer, President, or  Executive Vice President, Chief Financial Officer of WPX Energy); or
(b)    make or retain any financial investment, whether in the form of equity or debt, or own any interest, in any Competitive Business.  Nothing in this subsection (b) shall, however, restrict Executive from making an investment in any Competitive Business if such investment does not (i) represent more than 1% of the aggregate market value of the outstanding capital stock or debt (as applicable) of such Competitive Business, (ii) give Executive any right or ability, directly or indirectly, to control or influence the policy decisions or management of such Competitive Business, or (iii) create a conflict of interest between Executive’s duties to WPX and its Affiliates or under this Agreement and his interest in such investment.
6.3    Non-Solicitation.  During the period beginning on the Agreement Date and ending on the Termination Date (or the first anniversary of the Termination Date following a Separation from Service pursuant to Section 2.1 or Section 2.2), Executive shall not, directly or indirectly:
(a)    other than in connection with the good-faith performance of his duties as an officer of WPX or its Affiliates, cause or attempt to cause any employee, director or consultant of WPX or an Affiliate to terminate his or her relationship with WPX or an Affiliate;
(b)    employ, engage as a consultant or adviser, or solicit the employment or engagement as a consultant or adviser, of any employee of WPX or an Affiliate (other than by WPX or its Affiliates), or cause or attempt to cause any Person to do any of the foregoing;
(c)    establish (or take preliminary steps to establish) a business with, or cause or attempt to cause others to establish (or take preliminary steps to establish) a business with, any employee of WPX or an Affiliate, if such business is or will be a Competitive Business;
(d)    interfere with the relationship of WPX or an Affiliate with, or endeavor to entice away from WPX or an Affiliate, any Person who or which at any time during the 

18

period commencing one year prior to the Termination Date was or is, to Executive’s knowledge, a material customer or material supplier of, or maintained a material business relationship with, WPX or an Affiliate; or
(e)    directly solicit the sale of goods, services or a combination of goods and services from the established customers of WPX or an Affiliate.
6.4    Intellectual Property.
(a)    During the period of Executive’s employment with WPX or any Affiliate, and thereafter upon WPX’s request, regardless of the reason for Executive’s Separation from Service, Executive shall disclose immediately to WPX all Work Product that:  (i) relates to the business of WPX or any Affiliate or any customer or supplier to WPX or an Affiliate or any of the products or services being developed, manufactured, sold or otherwise provided by WPX or an Affiliate or that may be used in relation therewith; or (ii) results from tasks or projects assigned to Executive by WPX or an Affiliate; or (iii) results from the use of the premises or personal property (whether tangible or intangible) owned, leased or contracted for by WPX or an Affiliate.  Executive agrees that any Work Product shall be the property of WPX and, if subject to copyright, shall be considered a “work made for hire” within the meaning of the Copyright Act of 1976, as amended.  If and to the extent that any such Work Product is not a “work made for hire” within the meaning of the Copyright Act of 1976, as amended, Executive hereby assigns, and agrees to assign, to WPX all right, title and interest in and to the Work Product and all copies thereof, and all copyrights , patent rights, trademark rights, trade secret rights and all other proprietary and intellectual property rights in the Work Product, without further consideration, free from any claim, lien for balance due, or rights of retention thereto on the part of Executive.
(b)    Notwithstanding the foregoing, WPX agrees and acknowledges that the provisions of Section 6.4(a) relating to ownership and disclosure of Work Product do not apply to any inventions or other subject matter for which no equipment, supplies, facility, or trade secret information of WPX or an Affiliate was used and that are developed entirely on Executive’s own time, unless: (i) the invention or other subject matter relates (a) to the business of WPX or an Affiliate, or (b) to the actual or demonstrably anticipated research or development of WPX or any Affiliate, or (ii) the invention or other subject matter results from any work performed by Executive for WPX or any Affiliate.
(c)    Executive agrees that, upon disclosure of Work Product to WPX, Executive will, during his employment by WPX or an Affiliate and at any time thereafter, at the request and cost of WPX, execute all such documents and perform all such acts as WPX or an Affiliate (or their respective duly authorized agents) may reasonably require:  (i) to apply for, obtain and vest in the name of WPX alone (unless WPX otherwise directs) letters patent, copyrights or other intellectual property protection in any country throughout the world, and when so obtained or vested to renew and restore the same; and (ii) to prosecute or defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other intellectual property protection, or otherwise in respect of the Work Product.

19

(d)    In the event that WPX is unable, after reasonable effort, to secure Executive’s execution of such documents as provided in Section 6.4(c), whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints WPX and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and on his behalf to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution, issuance and protection of letters patent, copyright and other intellectual property protection with the same legal force and effect as if personally executed by Executive.

20

6.5    Non-Disparagement.
(a)    Executive agrees not to make, or cause to be made, any statement, observation or opinion, or communicate any information (whether oral or written, directly or indirectly) that (i) accuses or implies that WPX and/or any of its Affiliates, together with their respective present or former officers, directors, partners, stockholders, employees and agents, and each of their predecessors, successors and assigns, engaged in any wrongful, unlawful or improper conduct, whether relating to Executive’s employment (or the termination thereof), the business or operations of WPX, or otherwise; or (ii) disparages, impugns or in any way reflects adversely upon the business or reputation of WPX and/or any of its Affiliates, together with their respective present or former officers, directors, partners, stockholders, employees and agents, and each of their predecessors, successors and assigns.
(b)    WPX agrees not to authorize any statement, observation or opinion, or communicate any information (whether oral or written, direct or indirect) that (i) accuses or implies that Executive engaged in any wrongful, unlawful or improper conduct relating to Executive’s employment or termination thereof with WPX, or otherwise; or (ii) disparages, impugns or in any way reflects adversely upon the reputation of Executive.
(c)    Notwithstanding anything contained herein to the contrary, nothing herein shall be deemed to preclude Executive or WPX from providing truthful testimony or information pursuant to subpoena, court order or other similar legal or regulatory process, provided, that to the extent permitted by law, Executive will promptly inform WPX of any such obligation prior to participating in any such proceedings.
6.6    Reasonableness of Restrictive Covenants.
(a)    Executive acknowledges that the covenants contained in this Agreement are reasonable in the scope of the activities restricted, the geographic area covered by the restrictions, and the duration of the restrictions, and that such covenants are reasonably necessary to protect WPX’s legitimate interests in its Confidential Information, its proprietary work, and in its relationships with its employees, customers, suppliers and agents.
(b)    WPX has, and Executive has had an opportunity to, consult with their respective legal counsel and to be advised concerning the reasonableness and propriety of such covenants.  Executive acknowledges that his observance of the covenants contained herein will not deprive Executive of the ability to earn a livelihood or to support his or her dependents.
(c)    Executive understands he is bound by the terms of this Article VI, whether or not he receives severance payments under the Agreement or otherwise.

21

6.7    Right to Injunction: Survival of Undertakings.
(a)    In recognition of the confidential nature of the Confidential Information, and in recognition of the necessity of the limited restrictions imposed by this Agreement, Executive and WPX agree that it would be impossible to measure solely in money the damages which WPX would suffer if Executive were to breach any of his obligations hereunder.  Executive acknowledges that any breach of any provision of this Agreement would irreparably injure WPX.  Accordingly, Executive agrees that if he breaches any of the provisions of Article VI of this Agreement, WPX shall be entitled, in addition to any other remedies to which WPX may be entitled under this Agreement or otherwise, to an injunction to be issued by a court of competent jurisdiction, to restrain any breach, or threatened breach, of any provision of this Agreement without the necessity of posting a bond or other security therefor, and Executive hereby waives any right to assert any claim or defense that WPX has an adequate remedy at law for any such breach.
(b)    If a court determines that any covenant included in this Article VI is unenforceable in whole or in part because of such covenant’s duration or geographical or other scope, such court shall have the power to modify the duration or scope of such provision, as the case may be, so as to cause such covenant as so modified to be enforceable.  Furthermore, if a court determines that a certain form of remedy or relief sought by WPX for the breach of a covenant included in this Article VI is unavailable under applicable law, such a finding shall not prohibit WPX from obtaining a different form of remedy or relief with respect to such breach which such court has not found to be unavailable.
(c)    All of the provisions of this Agreement shall survive any Separation from Service of Executive, without regard to the reasons for such termination.  Notwithstanding Section 2.6, in addition to any other rights it may have, neither WPX nor any Affiliate shall have any obligation to pay or provide severance or other benefits (except as may be required under the Employee Retirement Income Security Act of 1974, as amended) after the Termination Date if Executive has materially breached any of Executive’s obligations under Article VI of this Agreement.
ARTICLE VII.     
NON-EXCLUSIVITY OF RIGHTS
7.1    Waiver of Certain Other Rights.  To the extent that Executive shall have received severance payments or other severance benefits under any other plan, program, policy, practice or procedure or agreement of WPX prior to receiving severance payments or other severance benefits pursuant to Article II, the severance payments or other severance benefits under such other plan, program, policy, practice or procedure or agreement shall reduce (but not below zero) the corresponding severance payments or other benefits to which Executive shall be entitled under Article II, but only to the extent such severance payments or other severance benefits are payable in the same form and in the same calendar year in which such severance payments or other benefits under this Agreement are to be made.  To the extent that Executive accepts payments made pursuant 

22

to Article II, he shall be deemed to have waived his right to receive a corresponding amount of future severance payments or other severance benefits under any other plan, program, policy, practice or procedure or agreement of WPX.
7.2    Other Rights.  Except as expressly provided in Section 7.1 and as provided in the Recitals to this Agreement, this Agreement shall not prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan, program, policy, practice or procedure provided by WPX and for which Executive may qualify, nor shall this Agreement limit or otherwise affect such rights as Executive may have under any other agreements with WPX.  Amounts that are vested benefits or that Executive is otherwise entitled to receive under any plan, program, policy, practice or procedure and any other payment or benefit required by law at or after the Termination Date shall be payable in accordance with such plan, program, policy, practice or procedure or applicable law except as expressly modified by this Agreement.
7.3    No Right to Continued Employment.  Nothing in this Agreement shall guarantee the right of Executive to continue in employment, and WPX retains the right to terminate Executive’s employment at any time for any reason or for no reason.
ARTICLE VIII.     
CLAIMS PROCEDURE
8.1    Filing a Claim.
(a)    Each individual eligible for benefits under this Agreement (“Claimant”) may submit his application for benefits (“Claim”) to WPX (or to such other person as may be designated by WPX) in writing in such form as is provided or approved by WPX.  A Claimant shall have no right to seek review of a denial or benefits, or to bring any action in any court to enforce a Claim, prior to his filing a Claim and exhausting his rights to review under Sections 8.1 and 8.2.
(b)    When a Claim has been filed properly, it shall be evaluated and the Claimant shall be notified of the approval or the denial of the Claim within thirty (30) days after the receipt of such Claim.  A Claimant shall be given a written notice in which the Claimant shall be advised as to whether the Claim is granted or denied, in whole or in part.  If a Claim is denied, in whole or in part, the notice shall contain (i) the specific reasons for the denial, (ii) references to pertinent provisions of this Agreement on which the denial is based, (iii) a description of any additional material or information necessary to perfect the Claim and an explanation of why such material or information is necessary,  (iv) the Claimant’s right to seek review of the denial and a description of the procedures for such review and (v) a statement regarding Claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse decision on appeal.
8.2    Review of Claim Denial.  If a Claim is denied, in whole or in part, or if a Claim is neither approved nor denied within the thirty (30) day period specified Section 8.1(b), the Claimant (or his or her authorized representative) shall have the right at any time to (a) request that WPX (or such other person as shall be designated in writing by WPX) review the denial or the failure to approve or deny the Claim, (b) review pertinent documents, and (c) submit issues and comments 

23

in writing.  Within thirty (30) days after such a request is received, WPX shall complete its review and give the Claimant written notice of its decision.  Upon request and without charge, the Claimant will be provided reasonable access to and copies of all documents, records and other information relevant to the claim. WPX shall include in its notice to Claimant (i) the specific reasons for its decision, (ii) references to provisions of this Agreement on which its decision is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim; and (iv) a statement regarding the Claimant’s right to bring a civil action under ERISA Section 502(a) within one hundred eighty (180) days of receipt of notice of denial on appeal.
ARTICLE IX.     
MISCELLANEOUS
9.1    No Assignability.  This Agreement is personal to Executive and without the prior written consent of WPX shall not be assignable by Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
9.2    Successors.  This Agreement shall inure to the benefit of and be binding upon WPX and its successors and assigns.  WPX will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of WPX to assume expressly and agree to perform this Agreement in the same manner and to the same extent that WPX would be required to perform it if no such succession had taken place.  Any successor to the business or assets of WPX which assumes or agrees to perform this Agreement by operation of law, contract, or otherwise shall be jointly and severally liable with WPX under this Agreement as if such successor were WPX.
9.3    Payments to Beneficiary.  If Executive dies before receiving amounts to which Executive is entitled under this Agreement, such amounts shall be paid in a lump sum to one or more beneficiaries designated in writing by Executive (each, a “Beneficiary”).  If none is so designated, Executive’s estate shall be his or her Beneficiary.
9.4    Non-Alienation of Benefits.  Benefits payable under this Agreement shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, before actually being received by Executive, and any such attempt to dispose of any right to benefits payable under this Agreement shall be void.
9.5    Severability.  If any one or more Articles, Sections or other portions of this Agreement are declared by any court or governmental authority to be unlawful, invalid, void or unenforceable, such unlawfulness, invalidity or unenforceability shall not serve to invalidate any Article, Section or other portion not so declared to be unlawful, invalid, void or unenforceable.  Any Article, Section or other portion so declared to be unlawful, invalid, void or unenforceable shall be construed so as to effectuate the terms of such Article, Section or other portion to the fullest extent possible while remaining lawful and valid.  To the extent that any provision of this Agreement is adjudicated to 

24

be unlawful, invalid, void or unenforceable because it is overbroad, that provision shall not be void but rather shall be limited only to the extent required by applicable law and enforced as so limited.  The parties expressly acknowledge and agree that this Section is reasonable in view of the parties’ respective interests.
9.6    Amendments.  This Agreement shall not be amended or modified except by written instrument executed by WPX and Executive; provided however that notwithstanding the terms of this Agreement to the contrary, the terms of this Agreement shall be administered in such a way to comply with Code Section 409A as reasonably deemed appropriate by WPX; provided further however that notwithstanding anything to the contrary herein, WPX shall have the unilateral right to modify or amend this Agreement as it reasonably deems appropriate related to compliance with Code Section 409A.  The parties to this Agreement intend that this Agreement meet the requirements of Internal Revenue Code Section 409A and recognize that it may be necessary to modify this Agreement to reflect guidance under Code Section 409A issued by the IRS.
9.7    Notices.  All notices and other communications under this Agreement shall be in writing and delivered by hand, by nationally-recognized delivery service that promises overnight delivery, or by first-class registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive, to Executive at his most recent home address on file with WPX.
If to WPX:
J. Kevin Vann 
Executive Vice President, Chief Financial Officer 
WPX Energy, Inc. 
3500 One Williams Center 
Tulsa, OK  74172
or to such other address as either party shall have furnished to the other in writing.  WPX may also deliver notice and other communications under this Agreement in writing by email transmission to the work email address of Executive.
Notice and communications shall be effective when received by the addressee.  An email notice under this Agreement will be deemed received when sent.  All other notices or communications will be deemed received when delivered if delivery is confirmed by a delivery service or return receipt.
9.8    Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.
9.9    Governing Law.  This Agreement shall be interpreted and construed in accordance with the laws of the State of Oklahoma, without regard to its choice of law principles, except to the extent preempted by federal law.

25

9.10    Captions.  The captions of this Agreement are not a part of the provisions hereof and shall have no force or effect.
9.11    Rules of Construction.  Reference to a specific law shall include such law, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.
9.12    Number and Gender.  Wherever appropriate, the singular shall include the plural, the plural shall include the singular, and the masculine shall include the feminine.
9.13    Tax Withholding.  WPX may withhold from any amounts payable under this Agreement or otherwise payable to Executive any Taxes WPX determines to be required under applicable law or regulation and may report all such amounts payable to such authority as is required by any applicable law or regulation.
9.14    No Rights Prior to Change Date.  Notwithstanding any provision of this Agreement to the contrary, this Agreement shall not entitle Executive to any compensation, severance or other payments or benefits of any kind prior to a Change Date.
9.15    Entire Agreement.  This Agreement and the documents expressly referred to herein contain the entire understanding of WPX and Executive with respect to severance or benefits in relation to a Change in Control.

[Signature Page Follows]

26

IN WITNESS WHEREOF, Executive and a duly authorized representative of WPX Energy, Inc. have executed this Agreement as of the date set forth at the beginning of this Agreement.
[INSERT EXECUTIVE NAME]

_____________________________________
Signature
Date:_________________________________

WPX ENERGY, INC., acting on behalf of itself and its Affiliates
By:__________________________________

Title:_________________________________

Date:_________________________________

27

EXHIBIT A
WPX ENERGY, INC.
WAIVER AND RELEASE
CHANGE IN CONTROL SEVERANCE 
AGREEMENT (TIER I EXECUTIVE)
 
This agreement, release and waiver (the “Agreement”), made as of the ___ day of ________________, 20__ (the “Effective Date”), is made by and among WPX Energy, Inc. (“WPX”)(and together with all successors thereto and subsidiaries and affiliates thereof, “Company”) and [INSERT EXECUTIVE NAME] (“Executive”).
WHEREAS, the Executive and WPX have entered into WPX Energy, Inc. Change in Control Severance Agreement (Tier I Executive) (“Severance Agreement”);
NOW THEREFORE, in consideration for receiving benefits and severance under the Severance Agreement and in consideration of the representations, covenants and mutual promises set forth in this Agreement, the parties agree as follows:
1.    Release.  Except with respect to all of the Company’s obligations under the Severance Agreement, the Executive, and Executive’s heirs, executors, assigns, agents, legal representatives, and personal representatives, hereby releases, acquits and forever discharges the Company, its agents, subsidiaries, affiliates, and their respective officers, directors, agents, servants, employees, attorneys, shareholders, partners, members, managers, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorney’s fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related to agreements, events, acts or conduct at any time prior to the day prior to execution of this Agreement that arose out of or were related to the Executive’s employment with the Company or the Executive’s termination of employment with the Company including, but not limited to, claims pursuant to under Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000e, et seq.; 42 U.S.C. § 1981; 42 U.S.C. § 1983; 42 U.S.C. § 1985; 42 U.S.C. § 1986; the Equal Pay Act of 1963, 29 U.S.C. § 206(d); the National Labor Relations Act, as amended, 29 U.S.C. § 160, et seq.; the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101, et seq.; the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”), 29 U.S.C. § 1001, et seq.; the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, 29 U.S.C.§ 621, et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C.§ 2601 et seq.; the Rehabilitation Act of 1973; the Oklahoma Anti-Discrimination Act, Okla. Stat., tit. 25, §§ 1101, et seq., and any claims for wrongful discharge, breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, discrimination, harassment, defamation, infliction of emotional distress, termination in violation of public policy, retaliation, including workers’ compensation retaliation under state statutes, tort law; contract law; wrongful discharge; discrimination; fraud; libel; slander; defamation; harassment; emotional distress; breach of the implied covenant of good faith and fair dealing; or other claims arising under any local, state or federal regulation, statute or common law.  This Release does not apply to the payment of any 

1

and all benefits and/or monies earned, accrued, vested or otherwise owing, if any, to the Executive under the terms of a Company sponsored tax qualified retirement or savings plan and/or any non-qualified deferred compensation plan(s) sponsored by the Company, except that the Executive hereby releases and waives any claims that his termination was to avoid payment of such benefits or payments, and that, as a result of his termination, he is entitled to additional benefits or payments.  Additionally, this Release does not apply to the indemnification provided or any other payments or benefits to which Executive is entitled pursuant to the Severance Agreement. This Release does not apply to any claim or rights which might arise out of the actions of the Company after the date the Executive signs this Agreement or any other claims or rights that Executive is prohibited from waiving under applicable law.  
2.    No Inducement.  Executive agrees that no promise or inducement to enter into this Agreement has been offered or made except as set forth in this Agreement, that the Executive is entering into this Agreement without any threat or coercion and without reliance or any statement or representation made on behalf of the Company or by any person employed by or representing the Company, except for the written provisions and promises contained in this Agreement.
3.    Damages.  The parties agree that damages incurred as a result of a breach of this Agreement will be difficult to measure.  It is, therefore, further agreed that, in addition to any other remedies, equitable relief will be available in the case of a breach of this Agreement.  It is also agreed that, in the event Executive files a claim against the Company with respect to a claim released by Executive herein (other than a proceeding before the EEOC), the Company may withhold, retain, or require reimbursement of all or any portion of the benefits and severance payments under the Severance Agreement until such claim is withdrawn by Executive.  For the avoidance of doubt, the foregoing does not extend to any monetary award from a law enforcement agency, including, without limitation, the Securities and Exchange Commission, relating to reporting by the Executive of a possible violation of state or federal law.
4.    Advice of Counsel; Time to Consider; Revocation.  Executive acknowledges the following:
(a)    Executive has read this Agreement, and understands its legal and binding effect.  Executive is acting voluntarily and of Executive’s own free will in executing this Agreement.
(b)    Executive has been advised to seek and has had the opportunity to seek legal counsel in connection with this Agreement.
(c)    Executive was given at least twenty-one (21) days to consider the terms of this Agreement before signing it.  
Executive understands that, if Executive signs this Agreement, Executive may revoke it within seven days after signing it by delivering written notification of intent to revoke within that seven day period.  Executive understands that this Agreement will not be effective until after the seven-day period has expired.

2

5.    Severability.  If all or any part of this Agreement is declared by any court, arbitrator or governmental authority to be unlawful, invalid, void or unenforceable, such unlawfulness, invalidity or unenforceability shall not affect the validity or enforceability of any other portion of this Agreement.  Any section or a part of a section declared to be unlawful, invalid, void or unenforceable shall, if possible, be construed in a manner which will give effect to the terms of the section to the fullest extent possible while remaining lawful and valid.  To the extent that any provision of this Agreement is adjudicated to be unlawful, invalid, void or unenforceable because it is overbroad, that provision shall not be void but rather shall be limited only to the extent required by applicable law and enforced as so limited.  The parties expressly acknowledge and agree that this Section is reasonable in view of the parties’ respective interests. 
6.    Amendment.  This Agreement shall not be altered, amended, or modified except by written instrument executed by the Company and the Executive.  A waiver of any portion of this Agreement shall not be deemed a waiver of any other portion of this Agreement.
7.    Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument. 
8.    Headings.  The headings of this Agreement are not part of the provisions hereof and shall not have any force or effect.
9.    Rules of Construction.  Reference to a specific law shall include such law, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.
10.    Applicable Law.  The provisions of this Agreement shall be interpreted and construed in accordance with the laws of the State of Oklahoma without regard to its choice of law principles.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates specified below.
[INSERT EXECUTIVE NAME]

_____________________________________
Signature

Date:_________________________________

WPX ENERGY, INC.

By:__________________________________

Title:_________________________________

Date:_________________________________

3

WPX Energy, Inc.
Change in Control Severance Agreement
Beneficiary Designation and Spousal Consent Form
 

	
		
	 
	 

 
Participant’s Name        Social Security Number
In the event of my death, I hereby designate the Beneficiary(ies) identified below to receive any benefits to which I am entitled under the WPX Energy, Inc. Change in Control Severance Agreement (the “Agreement”).  In the event I live in a community property state, I understand that if I do not designate my current spouse as sole primary beneficiary, I shall obtain the written consent of my spouse (see below) in order to have this beneficiary designation apply in full to my award.  If I do not obtain my spouse’s written consent, I understand that this beneficiary designation shall apply only to the extent otherwise permitted by law.  I reserve the right to revoke or modify this designation at any time by a subsequent written designation.
	
					
	PRIMARY BENEFICIARY*

	Name
	Relationship
	Percent**
	Date of Birth 
(if applicable)
	Social Security Number 
or EIN

	1)
	 
	 
	 
	 

	2)
	 
	 
	 
	 

	3)
	 
	 
	 
	 

If some but not all Primary Beneficiaries survive me by (or exist after my death for) at least thirty (30) days, then the portion allocated to the non-surviving or non-existing Primary Beneficiary(ies) will be re-allocated to the remaining Primary Beneficiaries pro rata based on their original allocations.  If all such Primary Beneficiaries shall not survive me by (or shall not exist after my death for) at least thirty (30) days, the following shall be the Beneficiary(ies):

	
					
	CONTINGENT BENEFICIARY*

	Name
	Relationship
	Percent**
	Date of Birth 
(if applicable)
	Social Security Number 
or EIN

	1)
	 
	 
	 
	 

	2)
	 
	 
	 
	 

	3)
	 
	 
	 
	 

If some but not all Contingent Beneficiaries survive me by (or exist after my death for) at least thirty (30) days, then the portion allocated to the non-surviving or non-existing Contingent Beneficiary(ies) will be re-allocated to the remaining Contingent Beneficiaries pro rata based on their original allocations.
By submitting this Beneficiary Designation and Spousal Consent Form, all previous Beneficiary Designation and Spousal Consent Forms relating to any rights that I may have under the Agreement hereby are revoked.
            
Signature of Participant    Date

	
	
	SPOUSAL CONSENT – Required for persons living in a community property state.

	I, _________________________, am the spouse of ___________________________.  I acknowledge that my spouse has designated someone other than me as a primary beneficiary of benefits under the Agreement, and I hereby approve of that designation. I agree that the designation shall be binding upon me with the same effect as if I personally had executed said designation.
      
   Signature of Spouse   Date

* If you wish to designate more than three beneficiaries, please contact Human Resources.
**Must total 100%.

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