Document:

exv10w1

Exhibit 10.1

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT is effective August 25, 2008, between Concho Resources Inc., a Delaware
corporation (the “Corporation”), and the undersigned director or officer of the Corporation
(“Indemnitee”).

     WHEREAS, the Restated Certificate of Incorporation of the Corporation (as the same may be
amended from time to time, the “Certificate of Incorporation”) provides for indemnification of the
Corporation’s directors and officers; and

     WHEREAS, the Corporation has adopted Amended and Restated Bylaws (as the same may be amended
from time to time, the “Bylaws”) providing for indemnification of the Corporation’s directors and
officers; and

     WHEREAS, the Bylaws and the Delaware General Corporation Law (the “DGCL”) contemplate that
contracts and insurance policies may be entered into with respect to indemnification of directors
and officers; and

     WHEREAS, there are questions concerning the adequacy and reliability of the protection which
might be afforded to directors and officers from acquisition of policies of Directors and Officers
Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by
directors and officers in the performance of their services to the Corporation; and

     WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself
contractually to indemnify Indemnitee so that he will serve or continue to serve the Corporation
free from undue concern that he will not be adequately protected;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:

     1. Definitions. As used in this Agreement:

     (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
claim, inquiry or proceeding, whether brought by or in the right of the Corporation or otherwise
and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which
Indemnitee is or is reasonably expected to be involved as a party, as a witness or otherwise, by
reason of the fact that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by him or of any inaction on his part while acting as a director or officer of the
Corporation or by reason of the fact that he is or was serving at the request of the Corporation as
a director, officer, trustee, employee or agent of another corporation, partnership, joint venture,
trust, limited liability company or other enterprise; in each case whether or not he is acting or
serving in any such capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement; provided that any such
action, suit, claim, inquiry or proceeding which is brought by Indemnitee against the Corporation
or directors or officers of the Corporation, other than an action brought by Indemnitee to enforce
his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a
majority of the Board of Directors of the Corporation.

 

 

     (b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties
against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a
Proceeding pursuant to this Agreement; and all attorneys’ fees and disbursements, accountants’
fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees
of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or
expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding
or establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.

     (c) References to Indemnitee’s being or acting as “a director or officer of the Corporation”
or “serving at the request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, limited liability company or other
enterprise” shall include in each case service to or actions taken while a director, officer,
trustee, employee or agent of any subsidiary of the Corporation or while serving as a member of a
committee of the Board of Directors of the Corporation.

     (d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves services by, such
director, officer, trustee, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably
believed to be in the interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” as
referred to in this Agreement.

     (e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of “Expenses” herein.

     (f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.

     2. Indemnity of Director or Officer. The Corporation hereby agrees to hold harmless and indemnify Indemnitee against Expenses to
the fullest extent authorized or permitted by law (including the applicable provisions of the
DGCL). The phrase “to the fullest extent permitted by law” shall include, but not be limited to
(a) to the fullest extent permitted by any provision of the DGCL that authorizes or permits
additional indemnification by agreement, or the corresponding provision of any amendment to or
replacement of the DGCL and (b) to the fullest extent authorized or permitted by any amendments to
or replacements of the DGCL adopted after the date of this Agreement that increase the extent to
which a corporation may indemnify its officers and directors. Any amendment, alteration or repeal
of the DGCL that adversely affects any right of Indemnitee shall be prospective only and shall not
limit or

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eliminate any such right with respect to any Proceeding involving any occurrence or
alleged occurrence of any action or omission to act that took place prior to such amendment or
repeal.

     3. Additional Indemnity. The Corporation hereby further agrees to hold harmless and indemnify Indemnitee against
Expenses incurred by reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation as a director,
officer, trustee, employee or agent of another corporation, partnership, joint venture, trust,
limited liability company or other enterprise, but only if Indemnitee acted in good faith and, in
the case of conduct in his official capacity, in a manner he reasonably believed to be in the best
interests of the Corporation and, in all other cases, not opposed to the best interests of the
Corporation. Additionally, in the case of a criminal proceeding, Indemnitee must have had no
reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding by
judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best interest of the
Corporation, and with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.

     4. Contribution. If the indemnification provided under Section 2 or Section 3 is unavailable by reason of a
court decision finding that Indemnitee is not eligible to receive indemnification for Expenses
incurred by Indemnitee under this Agreement, based on grounds other than any of those set forth in
Section 15, then, in respect of any Proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Corporation shall contribute to the
amount of Expenses actually and reasonably incurred and paid or payable by Indemnitee in such
proportion as is appropriate to reflect (i) the relative benefits received by the Corporation on
one hand and Indemnitee on the other from the transaction from which such Proceeding arose and (ii)
the relative fault of the Corporation on the one hand and of Indemnitee on the other in connection
with the events that resulted in such Expenses as well as any other relevant equitable
considerations. The relative fault of the Corporation on the one hand and of Indemnitee on the
other shall be determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the circumstances resulting
in such Expenses. The Corporation agrees that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or any other method of allocation
that does not take into account of the foregoing equitable considerations.

     5. Choice of Counsel. Each Indemnitee that is an Outside Director, Chase Director or Other Indemnitee, together with
the other Indemnitees who are designated in the same group, shall be entitled to employ, and be
reimbursed for the fees and disbursements of, separate counsel to represent the Outside Directors,
the Chase Directors or the Other Indemnitees, as the case may be, in connection with any
Proceeding. For purposes of this Agreement, an Indemnitee shall be designated as (i) an “Outside
Director” if such Indemnitee is a director and not an officer of the Corporation and is not a Chase
Director, (ii) a “Chase Director” if such Indemnitee is G. Carl Everett, Larry V. Kalas, John A.
Knorr, Bradley D. Bartek or Robert C. Chase, and (iii) an “Other Indemnitee” if such Indemnitee is
not an Outside Director or a Chase Director. The principal counsel for Outside Directors (“Outside
Director Counsel”) shall be determined by

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majority vote of the Outside Directors, the principal
counsel for Chase Directors (“Chase Counsel”) shall be determined by majority vote of the Chase
Directors, and the Principal Counsel for the Other Indemnitees (“Other Indemnitee Counsel”) shall
be determined by majority vote of the Other Indemnitees, in each case subject to the consent of the
Corporation (not to be unreasonably withheld or delayed). The obligation of the Corporation to
reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the
fees and disbursements of any counsel employed by Indemnitee other than Outside Director Counsel,
Chase Counsel or Other Indemnitee Counsel, as the case may be, unless Indemnitee has interests that
are different from those of the other Indemnitees or defenses available to him that are in addition
to or different from those of the other Indemnitees such that Outside Director Counsel, Chase
Counsel or Other Indemnitee Counsel, as the case may be, would have an actual, apparent or
potential conflict of interest in representing Indemnitee.

     6. Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall
be paid by the Corporation, in advance of the final disposition of the Proceeding, within 20
calendar days after receipt of Indemnitee’s written request accompanied by substantiating
documentation and Indemnitee’s written affirmation that he has met the standard of conduct for
indemnification and a written undertaking to repay such amount to the extent it is ultimately
determined that indemnitee is not entitled to indemnification. No objections based on or involving
the question whether such charges meet the definition of “Expenses,” including any question
regarding the reasonableness of such Expenses, shall be grounds for failure to advance such amount
to Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 20-day period,
and the undertaking of Indemnitee set forth in Section 8 hereof to repay any such amount to the
extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be
deemed to include an undertaking to repay any such amounts determined not to have met such
definition.

     7. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any indemnification under this Agreement, other than advances pursuant to Section 6 hereof,
shall be made no later than 60 days after receipt by the Corporation of the written request of
Indemnitee, accompanied by substantiating documentation, unless a determination is made within said
60-day period by (a) the Board of Directors by a majority vote of a quorum consisting of directors
who are not or were not parties to such Proceeding, (b) a committee of the
Board of Directors designated by majority vote of the Board of Directors, even though less than a
quorum, (c) if there are no such directors, or if such directors so direct, independent legal
counsel in a written opinion or (d) the stockholders, that Indemnitee has not met the relevant
standards for indemnification set forth in Section 3 hereof.

     The right to indemnification or advances as provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is
not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, any committee thereof, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standards of conduct, nor an actual
determination by the Corporation (including its Board of Directors, any committee thereof,
independent legal counsel or its stockholders) that Indemnitee

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has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.

     8. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Corporation (a) any advances of Expenses pursuant
to Section 6 hereof and (b) any judgments, penalties, fines and settlements paid to or on behalf of
Indemnitee hereunder, in each case to the extent that it is ultimately determined that Indemnitee
is not entitled to indemnification. As a condition to the advancement of such Expenses or the
payment of such judgments, penalties, fines and settlements, Indemnitee shall, at the request of
the Corporation, execute an acknowledgment that such Expenses or such judgments, penalties, fines
and settlements, as the case may be, are delivered pursuant and are subject to the provisions of
this Agreement.

     9. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the Certificate of
Incorporation, the Bylaws, the DGCL, any D&O Insurance, any agreement, or otherwise, both as to
action in his official capacity and as to action in another capacity while holding such office of
the Corporation; provided, however, that this Agreement supersedes all prior written
indemnification agreements between the Corporation (or any predecessor thereof) and Indemnitee with
respect to the subject matter hereof. However, Indemnitee shall reimburse the Corporation for
amounts paid to him pursuant to such other rights to the extent such payments duplicate any
payments received pursuant to this Agreement.

     10. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the
period Indemnitee is a director or officer of the Corporation (or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise) and shall continue thereafter
so long as Indemnitee shall be subject to any possible Proceeding (notwithstanding the fact that
Indemnitee has ceased to serve the Corporation).

     11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for a portion of Expenses, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.

     12. Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without the Corporation’s prior written
consent. The Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee’s prior written consent. Neither the
Corporation nor Indemnitee will unreasonably withhold or delay their consent to any proposed
settlement. The Corporation shall not be liable to indemnify Indemnitee under this Agreement with
regard to any judicial award if the Corporation was not given a reasonable and timely opportunity,
at its expense, to participate in the defense of such action.

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     13. Acknowledgements.

     (a) Corporation Acknowledgement. The Corporation expressly confirms and agrees that
it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in
order to induce Indemnitee to serve or to continue to serve as a director or officer of the
Corporation, and acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve
or in continuing to serve as a director or officer of the Corporation.

     (b) Mutual Acknowledgment. Both the Corporation and Indemnitee acknowledge that in
certain instances, Federal law or public policy may override applicable state law and prohibit the
Corporation from indemnifying its directors and officers under this Agreement or otherwise. For
example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission
(the “SEC”) has taken the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations. Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the Corporation’s right
under public policy to indemnify Indemnitee.

     14. Enforcement. In the event Indemnitee is required to bring any action or other proceeding to enforce rights
or to collect moneys due under this Agreement and is successful in such action, the Corporation
shall reimburse Indemnitee for all of Indemnitee’s Expenses in bringing and pursuing such action.

     15. Exceptions. Any other provision herein to the contrary notwithstanding, the Corporation shall not be
obligated pursuant to the terms of this Agreement:

     (a) No Entitlement to Indemnification. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that Indemnitee was not
entitled to indemnification hereunder;

     (b) Insured Claims. To indemnify Indemnitee for Expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) to the extent such Expenses or liabilities have been paid directly to
Indemnitee by an insurance carrier under a D&O Insurance policy maintained by the Corporation;

     (c) Remuneration in Violation of Law. To indemnify Indemnitee in respect of
remuneration paid to Indemnitee if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;

     (d) Indemnification Unlawful. To indemnify Indemnitee if a final decision by a court
having jurisdiction in the matter shall determine that such indemnification is not lawful;

     (e) Misconduct, Etc. To indemnify Indemnitee on account of Indemnitee’s conduct which
is finally adjudged to have been knowingly fraudulent or deliberately dishonest or to

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constitute
intentional misconduct, a knowing violation of law, a violation of Section 174 of the DGCL or a
transaction from which Indemnitee derived an improper personal benefit;

     (f) Breach of Duty. To indemnify Indemnitee on account of Indemnitee’s conduct which
is the subject of any Proceeding brought by the Corporation and approved by a majority of the Board
of Directors which alleges willful misappropriation of corporate assets by Indemnitee, disclosure
of confidential information in violation of Indemnitee’s fiduciary or contractual obligations to
the Corporation, or any other willful and deliberate breach in bad faith of Indemnitee’s duty to
the Corporation or its stockholders; or

     (g) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment
of profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

     16. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a)
the validity, legality and enforceability of the remaining provisions of this Agreement shall not
be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions
of this Agreement shall be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable. Each section of this Agreement is a separate and
independent portion of this Agreement. If the indemnification to which Indemnitee is entitled with
respect to any aspect of any claim varies between two or more sections of this Agreement, that
section providing the most comprehensive indemnification shall apply.

     17. Miscellaneous.

     (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Delaware, without giving effect to principles of conflict
of law.

     (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

     (c) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

     (d) Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given (i) when delivered personally to the recipient, (ii) when sent to the recipient by
telecopy (receipt electronically confirmed by sender’s telecopy machine) if during normal

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business
hours of the recipient, otherwise on the next business day, (iii) one business day after the date
when sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) five
business days after the date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other communications shall be
sent to the parties at the addresses indicated on the signature page hereto, or to such other
address as any party hereto may, from time to time, designate in writing delivered pursuant to the
terms of this Section 17(d).

     (e) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

     (f) Successors and Assigns. This Agreement shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs,
legal representatives and assigns.

     (g) Subrogation. In the event of payment under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Corporation to effectively bring suit to enforce such rights.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	/s/ David W. Copeland 	 
	 	 	David W. Copeland, Vice President and 	 
	 	 	General Counsel 	 
	 

	 	 	 	 	 
	 

	 	Address:
	 	550 West Texas Avenue
	 

	 	 	 	Suite 1300
	 

	 	 	 	Midland, Texas 79701
	 

	 	 	 	Facsimile: (432) 683-7441

	 	 	 	 	 
	 
	 	INDEMNITEE

 	 
	 	/s/ Darin G. Holderness
 	 
	 	Darin G. Holderness 	 
	 	 	 

	 	 	 	 	 
	 

	 	Address:
	 	550 West Texas Avenue
	 

	 	 	 	Suite 1300
	 

	 	 	 	Midland, Texas 79701
	 

	 	 	 	Facsimile: (432) 683-7441exv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and between Concho Resources Inc., a
Delaware corporation (“Company”), and DARIN G. HOLDERNESS (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company desires to employ Executive on the terms and conditions, and for the
consideration, hereinafter set forth and Executive desires to be employed by Company on such terms
and conditions and for such consideration;

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

ARTICLE 1: DEFINITIONS AND INTERPRETATIONS

     1.1 Definitions.

     (a) “Annual Base Salary” shall mean an amount equal to the greater of:

     (i) Executive’s base salary at the annual rate in effect pursuant to Section
4.1 at the date of Executive’s Involuntary Termination;

     (ii) Executive’s base salary at the annual rate in effect pursuant to Section
4.1 on the date that is 60 days prior to the date of Executive’s Involuntary
Termination; or

     (iii) Executive’s base salary at the annual rate in effect pursuant to Section
4.1 immediately prior to a Change of Control if Executive’s employment shall be
subject to an Involuntary Termination during the Change of Control Period.

     (b) “Board” shall mean the Board of Directors of Company.

     (c) “Cause” shall mean Executive (i) has engaged in gross negligence, gross
incompetence or willful misconduct in the performance of Executive’s duties, (ii) has
refused, without proper reason, to perform Executive’s duties, (iii) has materially breached
any material provision of this Agreement or corporate policy or code of conduct established
by Company, (iv) has willfully engaged in conduct which is materially injurious to Company
or its subsidiaries (monetarily or otherwise), (v) has committed an act of fraud,
embezzlement or willful breach of a fiduciary duty to Company or an affiliate (including the
unauthorized disclosure of confidential or proprietary material information of Company or an
affiliate), or (vi) has been convicted of (or pleaded no contest to) a crime involving
fraud, dishonesty or moral turpitude or any felony.

     (d) “Change in Duties” shall mean:

 

 

     (i) The occurrence, prior to the date that a Change of Control Period begins or
after the expiration of a Change of Control Period, of any one or more of the
following without the consent of Executive:

     (1) a reduction in the rank of Executive’s title as an officer of
Company from that previously applicable to Executive (it is specifically
agreed that any change in Executive’s position(s) or title(s) with Company
shall not constitute a Change in Duties under this clause unless the rank of
Executive’s title as an officer is reduced in connection with such change
(for example, a reduction in rank from vice president to assistant vice
president));

     (2) a reduction in Executive’s base salary; or

     (3) a material diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term disability plans)
and perquisites applicable to Executive from those substantially similar to
the employee benefits and perquisites provided by Company (including its
subsidiaries) to similarly situated executives; or

     (ii) The occurrence, within a Change of Control Period, of any one or more of
the following without the consent of Executive:

     (1) a material reduction in the nature or scope of Executive’s
authorities or duties from those applicable to Executive immediately prior
to the date on which a Change of Control Period begins;

     (2) a reduction in Executive’s base salary from that provided to
Executive immediately prior to the date on which a Change of Control Period
begins;

     (3) a diminution in Executive’s eligibility to participate in bonus,
stock option, incentive award and other compensation plans which provide
opportunities to receive compensation which are the greater of (A) the
opportunities provided by Company (including its subsidiaries) for similarly
situated executives or (B) the opportunities under any such plans under
which Executive was participating immediately prior to the date on which a
Change of Control Period begins;

     (4) a material diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term disability plans)
and perquisites applicable to Executive from the greater of (A) the employee
benefits and perquisites provided by Company (including its subsidiaries) to
similarly situated executives or (B) the employee benefits and perquisites
to which Executive was entitled immediately prior to the date on which a
Change of Control Period begins; or

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     (5) a change in the location of Executive’s principal place of
employment by Company (including its subsidiaries) by more than 10 miles
from the location where Executive was principally employed immediately prior
to the date on which a Change of Control Period begins.

     (e) “Change of Control” shall mean:

     (i) a merger of Company with another entity, a consolidation involving Company,
or the sale of all or substantially all of the assets of Company to another entity
if, in any such case, (1) the holders of equity securities of Company immediately
prior to such transaction or event do not beneficially own immediately after such
transaction or event equity securities of the resulting entity entitled to 50% or
more of the votes then eligible to be cast in the election of directors generally
(or comparable governing body) of the resulting entity in substantially the same
proportions that they owned the equity securities of Company immediately prior to
such transaction or event or (2) the persons who were members of the Board
immediately prior to such transaction or event shall not constitute at least a
majority of the board of directors of the resulting entity immediately after such
transaction or event;

     (ii) the dissolution or liquidation of Company;

     (iii) when any person or entity, including a “group” as contemplated by Section
13(d)(3) of the Securities Exchange Act of 1934, other than an Excluded Person
acquires or gains ownership or control (including, without limitation, power to
vote) of more than 50% of the combined voting power of the outstanding securities of
Company; or

     (iv) as a result of or in connection with a contested election of directors,
the persons who were members of the Board immediately before such election shall
cease to constitute a majority of the Board.

For purposes of the preceding sentence, (1) “resulting entity” in the context of a
transaction or event that is a merger, consolidation or sale of all or substantially
all assets shall mean the surviving entity (or acquiring entity in the case of an
asset sale) unless the surviving entity (or acquiring entity in the case of an asset
sale) is a subsidiary of another entity and the holders of common stock of Company
receive capital stock of such other entity in such transaction or event, in which
event the resulting entity shall be such other entity, and (2) subsequent to the
consummation of a merger or consolidation that does not constitute a Change of
Control, the term “Company” shall refer to the resulting entity and the term “Board”
shall refer to the board of directors (or comparable governing body) of the
resulting entity.

     (f) “Change of Control Period” shall mean, with respect to a Change of Control, the
two-year period beginning on the date upon which such Change of Control occurs.

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     (g) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (h) “Compensation Committee” shall mean the Compensation Committee of the Board.

     (i) “Disability” shall mean that, as a result of Executive’s incapacity due to physical
or mental illness, Executive shall have been absent from the full-time performance of
Executive’s duties for six consecutive months and Executive shall not have returned to
full-time performance of Executive’s duties within 30 days after written notice of
termination is given to Executive by Company (provided, however, that such notice may not be
given prior to 30 days before the expiration of such six-month period).

     (j) “Effective Date” shall mean August 25, 2008.

     (k) “Excluded Person” means Chase Oil Corporation, Yorktown Partners LLC, and their
respective affiliates. For purposes of this Section 1.1(k), (i) an “affiliate” of an entity
means any other person or entity that, directly or indirectly, controls, is controlled by or
is under common control with, such specified entity through one or more intermediaries or
otherwise, and (ii) “control” means, where used with respect to any person or entity, the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled” have
correlative meanings.

     (l) “Involuntary Termination” shall mean any termination of Executive’s employment with
Company which:

     (i) does not result from a resignation by Executive (other than a resignation
pursuant to clause (ii) of this Section 1.1(l)); or

     (ii) results from a resignation by Executive on or before the date which is 60
days after the date upon which Executive receives notice of a Change in Duties;

provided, however, the term “Involuntary Termination” shall not include a termination for
Cause or any termination as a result of death or Disability.

     (m) “Monthly Severance Amount” shall mean an amount equal to one-twelfth of Executive’s
Annual Base Salary.

     1.2 Interpretations. In this Agreement, unless a clear contrary intention appears, (a)
the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other subdivision, (b) reference
to any Article or Section, means such Article or Section hereof, (c) the words “including” (and
with correlative meaning “include”) means including, without limiting the generality of any
description preceding such term, and (d) where any provision of this Agreement refers to action to
be taken by either party, or which such party is prohibited from

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taking, such provision shall be applicable whether such action is taken directly or indirectly
by such party.

ARTICLE 2: EMPLOYMENT AND DUTIES

     2.1 Employment. Effective as of the Effective Date and continuing for the period of time
set forth in Section 3.1, Executive’s employment by Company shall be subject to the terms and
conditions of this Agreement.

     2.2 Positions. From and after the Effective Date, (a) Executive shall serve as an officer
of Company in the position or positions determined by the Board and (b) Executive shall be employed
by Company or a subsidiary or affiliate of Company. The Board may at any time and from time to
time assign Executive to a different position or positions with Company and cause Executive to be
employed by Company or any subsidiary or affiliate of Company. Employment with a subsidiary or
affiliate of Company pursuant to the preceding sentence shall be considered as employment with
Company for purposes of this Agreement.

     2.3 Duties and Services. Executive agrees to serve in the positions referred to in
Section 2.2 and to perform diligently and to the best of Executive’s abilities the duties and
services appertaining to such offices, as well as such additional duties and services appropriate
to such offices which the parties mutually may agree upon from time to time. Executive’s
employment shall also be subject to the policies maintained and established by Company that are of
general applicability to Company’s executive employees, as such policies may be amended from time
to time.

     2.4 Other Interests. Executive agrees, during the period of Executive’s employment by
Company, to devote substantially all of Executive’s business time, energy and best efforts to the
business and affairs of Company and its affiliates and not to engage, directly or indirectly, in
any other business or businesses, whether or not similar to that of Company, except with the
consent of the Board. The foregoing notwithstanding, the parties recognize and agree that
Executive may engage in passive personal investment and charitable activities that do not conflict
with the business and affairs of Company or interfere with Executive’s performance of Executive’s
duties hereunder, which shall be at the sole determination of the Board. As of the date of this
Agreement, the Board has approved the activities set forth on Attachment A to this Agreement.

     2.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary
duty of loyalty to act at all times in the best interests of Company. In keeping with such duty,
Executive shall make full disclosure to Company of all business opportunities pertaining to
Company’s business and shall not appropriate for Executive’s own benefit business opportunities
concerning Company’s business.

ARTICLE 3: TERM AND TERMINATION OF EMPLOYMENT

     3.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to
employ Executive for the period beginning on the Effective Date and ending on the third anniversary
of the Effective Date (the “Initial Expiration Date”); provided, however, that beginning on the
Initial Expiration Date, and on each anniversary of the Initial Expiration Date

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thereafter, if Executive’s employment under this Agreement has not been terminated pursuant to
Section 3.2 or 3.3, then said term of employment shall automatically be extended for an additional
one-year period unless on or before the date that is 90 days prior to the first day of any such
extension period either party shall give written notice to the other that no such automatic
extension shall occur.

     3.2 Company’s Right to Terminate. Notwithstanding the provisions of Section 3.1, Company
shall have the right to terminate Executive’s employment under this Agreement at any time for any
of the following reasons:

     (a) upon Executive’s death;

     (b) upon Executive’s Disability;

     (c) for Cause; or

     (d) at any time, for any other reason whatsoever, in the sole discretion of the Board;
provided, however, that Company may not terminate Executive’s employment pursuant to this
Section 3.2(d) prior to the date that is four months after the Effective Date.

     3.3 Executive’s Right to Terminate. Notwithstanding the provisions of Section 3.1
Executive shall have the right to terminate Executive’s employment under this Agreement for any of
the following reasons:

     (a) as a result of a Change in Duties; provided, however, that prior to Executive’s
termination as a result of a Change in Duties, Executive must give written notice to Company
of the specific occurrence that resulted in the Change in Duties and such occurrence must
remain uncorrected for 10 days following such written notice; or

     (b) at any time for any other reason whatsoever, in the sole discretion of Executive.

     3.4 Notice of Termination. If Company desires to terminate Executive’s employment
hereunder at any time prior to expiration of the term of employment as provided in Section 3.1, it
shall do so by giving written notice to Executive that it has elected to terminate Executive’s
employment hereunder and stating the effective date and reason for such termination, provided that
no such action shall alter or amend any other provisions hereof or rights arising hereunder. If
Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of
the term of employment as provided in Section 3.1, Executive shall do so by giving a 30-day written
notice to Company that Executive has elected to terminate Executive’s employment hereunder and
stating the effective date and reason for such termination, provided that no such action shall
alter or amend any other provisions hereof or rights arising hereunder.

     3.5 Deemed Resignations. Any termination of Executive’s employment shall constitute an
automatic resignation of Executive as an officer of Company and each affiliate of Company, and an
automatic resignation of Executive from the Board (if applicable) and from the

6

 

board of directors or similar governing body of any affiliate of Company and from the board of
directors or similar governing body of any corporation, limited liability company or other entity
in which Company or any affiliate holds an equity interest and with respect to which board or
similar governing body Executive serves as Company’s or such affiliate’s designee or other
representative.

ARTICLE 4: COMPENSATION AND BENEFITS

     4.1 Base Salary. During the period of this Agreement, Executive shall receive a minimum
base salary of $250,000 per annum. Executive’s base salary may, in the sole discretion of the
Compensation Committee, be increased, but not decreased, effective as of any date determined by the
Compensation Committee. Executive’s base salary shall be paid in equal installments in accordance
with Company’s standard policy regarding payment of compensation to executives but no less
frequently than monthly.

     4.2 Bonuses. Executive shall be eligible to participate in Company’s annual cash
incentive plan as approved from time to time by the Board or the Compensation Committee in amounts
to be determined by the Compensation Committee based upon criteria established by the Compensation
Committee.

     4.3 Other Perquisites. During Executive’s employment hereunder, Executive shall be
afforded the following benefits as incidences of Executive’s employment:

     (a) Business and Entertainment Expenses - Subject to Company’s standard policies and
procedures with respect to expense reimbursement as applied to its executive employees
generally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonable
and appropriate expenses incurred by Executive for business related purposes, including dues
and fees to industry and professional organizations and costs of entertainment and business
development.

     (b) Other Company Benefits - Executive and, to the extent applicable, Executive’s
spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans
and programs, including improvements or modifications of the same, which are now, or may
hereafter be, available to other executive employees of Company. Such benefits, plans and
programs shall include, without limitation, any profit sharing plan, thrift plan, health
insurance or health care plan, life insurance, disability insurance, pension plan,
supplemental retirement plan, vacation and sick leave plan, and the like which may be
maintained by Company. Company shall not, however, by reason of this paragraph be obligated
to institute, maintain, or refrain from changing, amending, or discontinuing, any such
benefit plan or program, so long as such changes are similarly applicable to executive
employees generally.

ARTICLE 5: EFFECT OF TERMINATION ON COMPENSATION; ADDITIONAL PAYMENTS

     5.1 Termination Other Than an Involuntary Termination. If Executive’s employment
hereunder shall terminate upon expiration of the term provided in Section 3.1 because either party
has provided the notice contemplated in such Section, or if Executive’s

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employment hereunder shall terminate for any other reason except those described in Sections
5.2 and 5.3, then all compensation and all benefits to Executive hereunder shall continue to be
provided until the date of such termination of employment and such compensation and benefits shall
terminate contemporaneously with such termination of employment.

     5.2 Involuntary Termination Other Than During a Change of Control Period. Subject to the
provisions of Sections 5.5, 5.6 and 5.7, if Executive’s employment by Company or any subsidiary
thereof or successor thereto shall be subject to an Involuntary Termination which occurs prior to
the date that a Change of Control Period begins or after the expiration of a Change of Control
Period, then Company shall, as additional compensation for services rendered to Company (including
its subsidiaries), pay to Executive the following amounts and take the following actions:

     (a) pay Executive the Monthly Severance Amount on the last day of each month throughout
the 12-month period commencing on the date of such Involuntary Termination; and

     (b) during the portion, if any, of the 12-month period commencing on the date of such
Involuntary Termination that Executive is eligible to elect and elects to continue coverage
for himself and his eligible dependents under Company’s or a subsidiary’s group health
plans, as applicable, under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and/or Sections 601 through 608 of the Employee Retirement Income Security Act of
1974, as amended, Company shall promptly reimburse Executive on a monthly basis for the
difference between the amount Executive pays to effect and continue such coverage and the
employee contribution amount that active senior executive employees of Company pay for the
same or similar coverage under such group health plans.

     5.3 Involuntary Termination During a Change of Control Period. Subject to the provisions
of Section 5.5, 5.6 and 5.7, if Executive’s employment by Company or any subsidiary thereof or
successor thereto shall be subject to an Involuntary Termination during a Change of Control Period,
then Company shall, as additional compensation for services rendered to Company (including its
subsidiaries), pay to Executive the following amounts and take the following actions:

     (a) (i) if the Change of Control relating to such Change of Control Period constitutes
a change in control event (as defined in Treasury regulation section 1.409A-3(i)(5)), pay
Executive a lump sum cash payment in an amount equal to two times Executive’s Annual Base
Salary on or before the fifth day after the last day of Executive’s employment with Company,
or (ii) if the Change of Control relating to such Change of Control Period does not
constitute a change in control event (as defined in Treasury regulation section
1.409A-3(i)(5)), pay Executive an amount equal to two times the Monthly Severance Amount on
the last day of each month throughout the 12-month period commencing on the date of such
Involuntary Termination;

     (b) cause any and all outstanding options to purchase common stock of Company held by
Executive to be fully vested and to become immediately exercisable in

8

 

full and cause any and all shares of restricted shares of Company’s common stock held
by Executive to become immediately nonforfeitable; and

     (c) during the portion, if any, of the 18-month period commencing on the date of such
Involuntary Termination that Executive is eligible to elect and elects to continue coverage
for himself and his eligible dependents under Company’s or a subsidiary’s group health
plans, as applicable, under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and/or Sections 601 through 608 of the Employee Retirement Income Security Act of
1974, as amended, Company shall promptly reimburse Executive on a monthly basis for the
difference between the amount Executive pays to effect and continue such coverage and the
employee contribution amount that active senior executive employees of Company pay for the
same or similar coverage under such group health plans.

     5.4 Interest on Late Payments. If any payment provided for in Section 5.2 or Section 5.3
hereof is not made when due (applying the deferred payment date provided for in Section 5.7 as the
due date, if applicable), then Company shall pay to Executive interest on the amount payable from
the date that such payment should have been made under such Section until such payment is made,
which interest shall be calculated at the prime or base rate of interest announced by JPMorgan
Chase Bank (or any successor thereto) at its principal office in New York, and shall change when
and as any such change in such prime or base rate shall be announced by such bank.

     5.5 Parachute Payments. Notwithstanding anything to the contrary in this Agreement, if
Executive is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the
benefits provided for in this Article, together with any other payments and benefits which
Executive has the right to receive from Company and its affiliates, would constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), then the benefits provided hereunder
(beginning with any benefit to be paid in cash hereunder) shall be either (1) reduced (but not
below zero) so that the present value of such total amounts and benefits received by Executive from
Company will be one dollar ($1.00) less than three times Executive’s “base amount” (as defined in
Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by
Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (2) paid in
full, whichever produces the better net after-tax position to Executive (taking into account any
applicable excise tax under Section 4999 of the Code and any other applicable taxes). The
determination as to whether any such reduction in the amount of the benefits provided hereunder is
necessary shall be made by the Compensation Committee in good faith. If a reduced cash payment is
made and through error or otherwise that payment, when aggregated with other payments and benefits
from Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one
dollar ($1.00) less than three times Executive’s base amount, then Executive shall immediately
repay such excess to Company upon notification that an overpayment has been made. Nothing in this
Section 5.5 shall require Company to be responsible for, or have any liability or obligation with
respect to, Executive’s excise tax liabilities under Section 4999 of the Code.

     5.6 Release and Full Settlement. As a condition to the receipt of any severance
compensation and benefits under this Agreement, Executive must first execute a release and

9

 

agreement, in a form reasonably satisfactory to Company, which (1) shall release and discharge
Company and its affiliates, and their officers, directors, employees and agents from any and all
claims or causes of action of any kind or character, including but not limited to all claims or
causes of action arising out of Executive’s employment with Company or its affiliates or the
termination of such employment, and (2) must be effective and irrevocable within 55 days after the
termination of Executive’s employment. If Executive is entitled to and receives the benefits
provided hereunder, performance of the obligations of Company hereunder will constitute full
settlement of all claims that Executive might otherwise assert against Company on account of
Executive’s termination of employment.

     5.7 Payments Subject to Section 409A of the Code. Notwithstanding the foregoing provisions of
this Article 5, if the payment of any severance compensation or severance benefits under this
Agreement would be subject to additional taxes and interest under Section 409A of the Code because
the timing of such payment is not delayed as provided in Section 409A(a)(2)(B) of the Code, then
any such payments that Executive would otherwise be entitled to during the first six months
following the date of Executive’s termination of employment shall be accumulated and paid on the
date that is six months after the date of Executive’s termination of employment (or if such payment
date does not fall on a business day of Company, the next following business day of Company), or
such earlier date upon which such amount can be paid under Section 409A of the Code without being
subject to such additional taxes and interest. Executive hereby agrees to be bound by Company’s
determination of its “specified employees” (as such term is defined in Section 409A of the Code) in
accordance with any of the methods permitted under the regulations issued under Section 409A of the
Code. The provisions of this Section 5.7 shall also apply, to the extent required under Section
409A of the Code, to any payment of the Monthly Severance Amount to Executive pursuant to Section
7.1(b).

     5.8 Liquidated Damages. In light of the difficulties in estimating the damages for an
early termination of Executive’s employment under this Agreement, Company and Executive hereby
agree that the payments, if any, to be received by Executive pursuant to this Article 5 shall be
received by Executive as liquidated damages.

     5.9 Other Benefits. This Agreement governs the rights and obligations of Executive and
Company with respect to Executive’s base salary and certain perquisites of employment. Except as
expressly provided herein, Executive’s rights and obligations both during the term of his
employment and thereafter with respect to stock options, restricted stock, incentive and deferred
compensation, life insurance policies insuring the life of Executive, and other benefits under the
plans and programs maintained by Company shall be governed by the separate agreements, plans and
other documents and instruments governing such matters.

ARTICLE 6: PROTECTION OF CONFIDENTIAL INFORMATION

     6.1 Disclosure to and Property of Company. All information, designs, ideas, concepts,
improvements, product developments, discoveries and inventions, whether patentable or not, that are
conceived, made, developed or acquired by Executive, individually or in conjunction with others,
during the period of Executive’s employment by Company (whether during business hours or otherwise
and whether on Company’s premises or otherwise) that relate to Company’s (or any of its
affiliates’) business, trade secrets, products or services (including,

10

 

without limitation, all such information relating to corporate opportunities, product
specification, compositions, manufacturing and distribution methods and processes, research,
financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions
prospects, the identity of customers or their requirements, the identity of key contacts within the
customer’s organizations or within the organization of acquisition prospects, marketing and
merchandising techniques, business plans, computer software or programs, computer software and
database technologies, prospective names and marks) (collectively, “Confidential Information”)
shall be disclosed to Company and are and shall be the sole and exclusive property of Company (or
its affiliates). Moreover, all documents, videotapes, written presentations, brochures, drawings,
memoranda, notes, records, files, correspondence, manuals, models, specifications, computer
programs, E-mail, voice mail, electronic databases, maps, drawings, architectural renditions,
models and all other writings or materials of any type embodying any of such information, ideas,
concepts, improvements, discoveries, inventions and other similar forms of expression
(collectively, “Work Product”) are and shall be the sole and exclusive property of Company (or its
affiliates). Upon Executive’s termination of employment with Company, for any reason, Executive
promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to
Company.

     6.2 Disclosure to Executive. Company has and will disclose to Executive, or place
Executive in a position to have access to or develop, Confidential Information and Work Product of
Company (or its affiliates); and/or has and will entrust Executive with business opportunities of
Company (or its affiliates); and/or has and will place Executive in a position to develop business
good will on behalf of Company (or its affiliates). Executive agrees to preserve and protect the
confidentiality of all Confidential Information or Work Product of Company (or its affiliates).

     6.3 No Unauthorized Use or Disclosure. Executive agrees that he will not, at any time
during or after Executive’s employment by Company, make any unauthorized disclosure of, and will
prevent the removal from Company premises of, Confidential Information or Work Product of Company
(or its affiliates), or make any use thereof, except in the carrying out of Executive’s
responsibilities during the course of Executive’s employment with Company. Executive shall use
commercially reasonable efforts to cause all persons or entities to whom any Confidential
Information shall be disclosed by him hereunder to observe the terms and conditions set forth
herein as though each such person or entity was bound hereby. Executive shall have no obligation
hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof
is specifically required by law; provided, however, that in the event disclosure is required by
applicable law, Executive shall provide Company with prompt notice of such requirement prior to
making any such disclosure, so that Company may seek an appropriate protective order. At the
request of Company at any time, Executive agrees to deliver to Company all Confidential Information
that he may possess or control. Executive agrees that all Confidential Information of Company
(whether now or hereafter existing) conceived, discovered or made by him during the period of
Executive’s employment by Company exclusively belongs to Company (and not to Executive), and
Executive will promptly disclose such Confidential Information to Company and perform all actions
reasonably requested by Company to establish and confirm such exclusive ownership. Affiliates of
Company shall be third party beneficiaries of Executive’s obligations under this Article 6. As a
result of Executive’s employment by Company, Executive may also from time to time have access to,
or knowledge of, Confidential

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Information or Work Product of third parties, such as customers, suppliers, partners, joint
venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and
protect the confidentiality of such third party Confidential Information and Work Product to the
same extent, and on the same basis, as Company’s Confidential Information and Work Product.

     6.4 Ownership by Company. If, during Executive’s employment by Company, Executive creates
any work of authorship fixed in any tangible medium of expression that is the subject matter of
copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail,
voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals,
brochures, or the like) relating to Company’s business, products, or services, whether such work is
created solely by Executive or jointly with others (whether during business hours or otherwise and
whether on Company’s premises or otherwise), including any Work Product, Company shall be deemed
the author of such work if the work is prepared by Executive in the scope of Executive’s
employment; or, if the work is not prepared by Executive within the scope of Executive’s employment
but is specially ordered by Company as a contribution to a collective work, as a part of a motion
picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or
as an instructional text, then the work shall be considered to be work made for hire and Company
shall be the author of the work. If such work is neither prepared by Executive within the scope of
Executive’s employment nor a work specially ordered that is deemed to be a work made for hire, then
Executive hereby agrees to assign, and by these presents does assign, to Company all of Executive’s
worldwide right, title, and interest in and to such work and all rights of copyright therein.

     6.5 Assistance by Executive. During the period of Executive’s employment by Company and
thereafter, Executive shall assist Company and its nominee, at any time, in the protection of
Company’s (or its affiliates’) worldwide right, title and interest in and to Work Product and the
execution of all formal assignment documents requested by Company or its nominee and the execution
of all lawful oaths and applications for patents and registration of copyright in the United States
and foreign countries.

     6.6 Remedies. Executive acknowledges that money damages would not be sufficient remedy
for any breach of this Article 6 by Executive, and Company or its affiliates shall be entitled to
enforce the provisions of this Article 6 by terminating payments then owing to Executive under this
Agreement or otherwise and to specific performance and injunctive relief as remedies for such
breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a
breach of this Article 6 but shall be in addition to all remedies available at law or in equity,
including the recovery of damages from Executive and his agents.

ARTICLE 7: NON-COMPETITION AND RELATED OBLIGATIONS

     7.1 General. (a) As part of the consideration for Company’s employment of Executive and
the compensation and benefits that may be paid to Executive hereunder; to protect the trade secrets
and Confidential Information of Company or its affiliates that have been and will in the future be
disclosed or entrusted to Executive, the business good will of Company or its affiliates that has
been and will in the future be developed in Executive, or the business opportunities that have been
and will in the future be disclosed or entrusted to Executive by Company or its affiliates; and as
an additional incentive for Company to enter into this

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Agreement, Company and Executive agree to the provisions of this Article 7. Except as
provided in Section 7.1(b), Executive agrees that during Executive’s employment with Company and
for a period of one year following the termination of Executive’s employment with Company for any
reason (the “Non-Compete Period”), Executive shall not:

     (i) directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder, partner or in any
other individual or representative capacity whatsoever, either for Executive’s own benefit
or for the benefit of any other person or entity either (1) hire, contract or solicit, or
attempt any of the foregoing with respect to hiring any employee of Company or its
affiliates, or (2) induce or otherwise counsel, advise, or encourage any employee of Company
or its affiliates to leave the employment of Company or its affiliates; and

     (ii) within any geographic area or market where Company or any of its affiliates are
conducting any business or have, during the twelve months preceding the termination of
Executive’s employment with Company, conducted such business, as applicable:

     (1) directly or indirectly participate in the ownership, management, operation
or control of, or be connected as an officer, employee, partner, director,
contractor or otherwise with, or have any financial interest in or aid or assist
anyone else in the conduct of, any business in any of the business territories in
which Company is presently or from time-to-time conducting business that either
conducts a business similar to that conducted by Company or its affiliates or
provides or sells a service or product that is the same, substantially similar to or
otherwise competitive with the products and services provided or sold by Company or
its affiliates (a “Competitive Operation”); provided, however, that this provision
shall not preclude Executive after the termination of Executive’s employment with
Company from owning less than 2% of the equity securities of any publicly held
Competitive Operation so long as Executive does not serve as an employee, officer,
director or consultant to such business;

     (2) directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder, partner or
in any other individual or representative capacity whatsoever, either for
Executive’s own benefit or for the benefit of any other person or entity call upon,
solicit, divert or take away, any customer or vendor of Company or its affiliates
with whom Executive dealt, directly or indirectly, during Executive’s engagement
with Company or its affiliates, in connection with a Competitive Operation; or

     (3) call upon any prospective acquisition candidate on Executive’s own behalf
or on behalf of any Competitive Operation, which candidate is a Competitive
Operation or which candidate was, to Executive’s knowledge after due inquiry, either
called upon by Company or for which Company or any of its affiliates made an
acquisition analysis, for the purpose of acquiring such entity.

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     (b) Notwithstanding the provisions of Section 7.1(a), if (i) Executive provides written notice
to Company pursuant to Section 3.4 that Executive will terminate employment with Company pursuant
to a resignation by Executive that does not constitute an Involuntary Termination or (ii) either
party provides written notice to the other that the term of this Agreement shall not be
automatically extended as provided in Section 3.1, then, in any such case:

     (1) for purposes of Sections 7.1(a)(ii)(1), the Non-Compete Period shall end on a date
selected by Company and set forth in a written notice provided by Company to Executive (the
“Non-Compete Notice”); provided, however, that (1) the date selected by Company shall be a
whole number of months (not in excess of 12) after the last day of Executive’s employment
with Company and (2) Company shall pay to Executive the Monthly Severance Amount on the last
day of each month during the portion of the Non-Compete Period that is after the last day of
Executive’s employment with Company; and

     (2) for purposes of Sections 7.1(a)(i), 7.1(a)(ii)(2) and 7.1(a)(ii)(3), the
Non-Compete period shall end on the date that is one year after the last day of Executive’s
employment with Company.

The Non-Compete Notice shall be delivered by Company to Executive within 10 days after receipt by
Company of Executive’s notice pursuant to Section 3.4 or on or before the date that is 45 days
prior to the expiration of the term of this Agreement under Section 3.1, as applicable. Executive
hereby delegates to Company the right to select and determine in good faith the duration of the
Non-Compete Period as provided in Section 7.1(b)(i).

     7.2 Non-Disparagement. During Executive’s employment with Company and following any
termination of employment with Company, Executive and Company agree not to disparage, either orally
or in writing, Executive, Company, any of Company’s affiliates, business, products, services or
practices, or any of Company’s or its affiliates’ directors, officers, agents, representatives,
stockholders, or employees.

     7.3 New Employer. Executive agrees that prior to accepting any new employment during the
Non-Compete Period, Executive shall advise Company of the identity of the potential new employer.
Company may serve such new employer with notice of the non-competition restrictions set forth in
this Article 7 and may furnish such employer with a copy of this Agreement or the relevant portions
thereof.

     7.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy
for any breach of this Article 7 by Executive, and Company or its affiliates shall be entitled to
enforce the provisions of this Article 7 by terminating payments then owing to Executive under this
Agreement or otherwise and to specific performance and injunctive relief as remedies for such
breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a
breach of this Article 7 but shall be in addition to all remedies available at law or in equity,
including the recovery of damages from Executive and his agents.

     7.5 Reformation. Company and Executive agree that the foregoing restrictions are
reasonable under the circumstances and that any breach of the covenants contained in this

14

 

Article 7 would cause irreparable injury to Company. Executive understands that the foregoing
restrictions may limit Executive’s ability to engage in certain businesses anywhere in the United
States or such other geographic areas or markets in which Company or any of its affiliates are
conducting business or have, during the 12 months preceding the termination of Executive’s
employment, conducted such business, as applicable, during the Non-Compete Period, but acknowledges
that Executive will receive sufficiently high remuneration and other benefits from Company to
justify such restriction. Nevertheless, if any of the aforesaid restrictions are found by a court
of competent jurisdiction to be unreasonable, or overly broad as to geographic area or time, or
otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified
by the court making such determination so as to be reasonable and enforceable and, as so modified,
to be fully enforced. By agreeing to this contractual modification prospectively at this time,
Company and Executive intend to make this provision enforceable under the law or laws of all
applicable States so that the entire agreement not to compete and this Agreement as prospectively
modified shall remain in full force and effect and shall not be rendered void or illegal. Such
modification shall not affect the payments made to Executive under this Agreement.

ARTICLE 8: MISCELLANEOUS

     8.1 Indemnification. If Executive shall obtain any money judgment or otherwise
prevail with respect to any litigation brought by Executive or Company to enforce or interpret any
provision contained herein, Company, to the fullest extent permitted by applicable law, hereby
indemnifies Executive for his reasonable attorneys’ fees and disbursements incurred in such
litigation and hereby agrees (i) to pay in full all such fees and disbursements and (ii) to pay
prejudgment interest on any money judgment obtained by Executive from the earliest date that
payment to him should have been made under this Agreement until such judgment shall have been paid
in full, which interest shall be calculated at the prime or base rate of interest announced by
JPMorgan Chase Bank (or any successor thereto) at its principal office in New York, and shall
change when and as any such change in such prime or base rate shall be announced by such bank. Any
reimbursement of reasonable attorneys’ fees and disbursements required under this Section 8.1 shall
be made not later than the close of Executive’s taxable year following the taxable year in which
Executive incurs the expense; provided, however, that, upon Executive’s termination of employment
with Company, in no event shall any additional reimbursement be made prior to the date that is six
months after the date of Executive’s termination of employment to the extent such payment delay is
required under Section 409A(a)(2)(B)(i) of the Code. In no event shall any reimbursement be made
to Executive for such fees and disbursements incurred after the later of (1) Executive’s death or
(2) the date that is 10 years after the date of Executive’s termination of employment with Company.

     8.2 Payment Obligations Absolute. Except as specifically provided in Sections 6.6 and
7.4, Company’s obligation to pay (or cause one of its subsidiaries to pay) Executive the amounts
and to make the arrangements provided herein shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which Company (including its subsidiaries) may have against him
or anyone else. All amounts payable by Company (including its subsidiaries hereunder) shall be
paid without notice or demand. Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any

15

 

provision of this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of Company’s obligations to make (or cause to be made) the payments and
arrangements required to be made under this Agreement.

     8.3 Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

	 	 	 	 
	     
If to Company to:

	 	Concho Resources Inc.
	 

	 	550 W. Texas Avenue, Suite 1300
	 

	 	Midland, Texas 79701
	 

	 	Attention: Chairman of the Board of Directors
	 
	 	 
	     If to Executive to:

	 	Darin Holderness
	 
	 	 
	 

	 	 

	 

	 	 

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

     8.4 Applicable Law. This Agreement is entered into under, and shall be governed for
all purposes by, the laws of the State of Texas.

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

     8.6 Severability. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without invalidating or
affecting the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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

     8.8 Withholding of Taxes and Other Employee Deductions. Company may withhold from any
benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as
may be required pursuant to any law or governmental regulation or ruling and all other normal
employee deductions made with respect to Company’s employees generally.

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

16

 

     8.10 Gender and Plurals. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and conversely.

     8.11 Assignment. This Agreement shall be binding upon and inure to the benefit of
Company and any successor of Company, by merger or otherwise. This Agreement shall also be binding
upon and inure to the benefit of Executive and his estate. If Executive shall die prior to full
payment of amounts due pursuant to this Agreement, such amounts shall be payable pursuant to the
terms of this Agreement to his estate. Executive shall not have any right to pledge, hypothecate,
anticipate or assign this Agreement or the rights hereunder, except by will or the laws of descent
and distribution.

     8.12 Term. This Agreement has a term co-extensive with the term of employment
provided in Section 3.1. Termination shall not affect any right or obligation of any party which
is accrued or vested prior to such termination. The provisions of Section 3.5 and Articles 6 and 7
shall survive the termination of this Agreement.

     8.13 Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to such subject matter.
Without limiting the scope of the preceding sentence, all understandings and agreements preceding
the date of execution of this Agreement and relating to the subject matter hereof are hereby null
and void and of no further force and effect, including, without limitation, all prior employment
and severance agreements, if any, by and between Company and Executive. Any modification of this
Agreement will be effective only if it is in writing and signed by the party to be charged.

[Signatures begin on next page.]

17

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 25th day of August,
2008, to be effective as of the Effective Date.

	 	 	 	 	 
	 	Concho Resources Inc.

 	 
	 	By:  	/s/ David W. Copeland 	 
	 	 	David W. Copeland, Vice President and 	 
	 	 	General Counsel 	 
	 

COMPANY

	 	 	 	 	 
	 	 	 
	 	     /s/ Darin G. Holderness
 	 
	 	Darin G. Holderness 	 
	 	 	 
	 

EXECUTIVE

18

 

MEMO

	 	 	 
	 
	 	 
	DATE:

	 	August 25, 2008
	 
	 	 
	TO:

	 	Steve Beal & David Copeland
	 
	 	 
	FROM:

	 	Darin Holderness
	 
	 	 
	SUBJECT:

	 	Disclosure of Oil and Gas Holdings
	 
	 	 

          As we discussed prior to my employment, my wife and I have various oil and gas holdings. I
was assured that this was not an issue in relation to my employment. Our investments are primarily
through a company owned by my wife’s brother-in-law and his father. With our current holdings we
have been, and continue to be, active in the drilling, development and production of wells.

          My wife’s parents passed away in 2007. The estate settlement for both parents is currently
underway. My wife’s parents held interests in oil and gas holdings of which my wife will inherit
25%.

          Upon the passing of my wife’s mother, she is to receive 25% of the assets from a “by-pass”
trust established by her grandfather. These assets include a variety of securities and oil and gas
holdings. The oil and gas holdings include producing properties (primarily royalty interest, but
some ORRI and WI) and mineral and ORRI interest in nonproducing acreage.

          I am not involved in the management of any of these properties or interests.

A-1

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