XTO » Topics » 2. Definitions

This excerpt taken from the XTO DEF 14A filed Apr 17, 2009.

2.    Definitions

Whenever used in this Plan, the following terms shall have the respective meanings set forth below:

(a) “Applicable Period” means, with respect to any Performance Period, a period commencing on or before the first day of such Performance Period and ending no later than the earlier of (i) the 90th day of such Performance Period, or (ii) the date on which 25% of such Performance Period has been completed. Any action required under the Plan to be taken by the Committee within the period specified in the preceding sentence may be taken at a later date if, but only if, Section 162(m) of the Code permits such later date, in which case the term “Applicable Period” shall be deemed amended accordingly.

(b) “Board” means the Company’s Board of Directors.

(c) “Bonus Award Agreement” means the written instrument, which may consist of resolutions of the Committee, a subplan or program covering a number of Participants, or an employment or other agreement with a single Participant, that sets forth in writing, within the Applicable Period, the terms and conditions of a Bonus Award Opportunity for a Participant or Participants, and all amendments thereto.

(d) “Bonus Award Amount” means the amount earned, which may be stated in dollars, as a percentage share of a Bonus Pool Payment, or on a formula basis, upon attainment of stated Performance Goal(s), by a given Participant as a result of a given Bonus Award Opportunity, before the Committee’s exercise, if any, of Negative Discretion to reduce such amount.

(e) “Bonus Award Opportunity” means the award opportunity specified by the Committee in a Bonus Award Agreement, within the Applicable Period, for a given Participant to earn a Bonus Award Amount for a given Performance Period upon attainment of stated Performance Goal(s), which Bonus Award Amount may be expressed in dollars, as a percentage share of a Bonus Pool Payment, or on a formula basis, that is consistent with the terms and provisions of the Plan and Section 162(m) of the Code.

(f) “Bonus Award Payment” means the dollar amount of cash to be paid, or the equivalent fair market value of an award of bonus shares to be granted under and subject to all of the terms and provisions (including, but not limited to, the individual limits) of the Stock Incentive Plan, to a Participant in settlement of the Participant’s Bonus Award Opportunity, after the Committee’s exercise, if any, of Negative Discretion to reduce the Participant’s Bonus Award Amount. In no event may any Bonus Award Payment exceed the Per-Person Limit.

 

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(g) “Bonus Pool Amount” means the dollar amount actually earned to fund a pool, upon attainment in full or in part of stated Performance Goal(s), not to exceed the Bonus Pool Maximum.

(h) “Bonus Pool Maximum” means, for any given Performance Period, the maximum dollar amount that may be earned to fund a pool, upon attainment in full of stated Performance Goal(s), not to exceed the lesser of (i) 1.5% of Operating Cash Flow for that Performance Period, or (ii) $40 million multiplied by the number of whole and fractional fiscal years in the Performance Period.

(i) “Bonus Pool Payment” means the dollar amount available for allocation of Bonus Award Amounts to Participants in a pool for which a Bonus Pool Amount has been earned, after the Committee’s exercise, if any, of Negative Discretion to reduce the Bonus Pool Amount.

(j) “Change in Control” shall have the meaning set forth in the Stock Incentive Plan.

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

(l) “Committee” means the Compensation Committee of the Board, a subcommittee thereof, or another committee appointed by the Board to administer the Plan, consisting solely of two or more non-employee directors, each of whom is intended to qualify as an Outside Director, designated by the Board as the committee responsible for administering the Plan.

(m) “Company” means XTO Energy Inc. and its subsidiaries and affiliates.

(n) “Effective Date” means February 17, 2009, the date on which the Plan was approved by the Board subject to stockholder approval.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(p) “Executive” means an employee of the Company who is or may become an Executive Officer.

(q) “Executive Officer” shall have the meaning set forth in Rule 3b-7 under the Exchange Act, as the same may from time to time be amended.

(r) “GAAP” means United States generally accepted accounting principles.

(s) “Named Executive Officer” means, in respect of a given Performance Period, an Executive Officer whose name appears or will appear in the summary compensation table for the fiscal year preceding the fiscal year in which the Performance Period has or will commence, as set forth in the Company’s definitive proxy statement filed or to be filed pursuant to Section 14(a) of the Exchange Act.

(t) “Negative Discretion” means the discretion authorized by the Plan to be exercised by the Committee, taking into account any factors or considerations that the Committee may in its subjective judgment deem relevant (including, but not limited to, the past performance or future prospects of the Company, any subsidiary, division, region, district, or office, or any individual Participant, by reference to the business criteria set forth in Section 5(c) (whether or not such criteria were part of the Performance Goal(s) for the Performance Period), other business criteria, or other criteria, over the Performance Period at issue, a shorter or longer period which may or may not overlap with or include the Performance Period, or a future period, and any prohibitions or limitations set forth in any law, regulation, or agreement), to reduce or eliminate a Bonus Pool Amount and/or a Bonus Award Amount for a given Performance Period; provided, however, that the exercise of such Negative Discretion shall not result in an increase in any Bonus Pool Payment or Bonus Award Payment or otherwise

 

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cause any Bonus Award Payment to fail to qualify as “performance-based compensation” under Section 162(m) of the Code. By way of illustration and not by limitation, in the case of Bonus Award Amounts measured by reference to percentage shares of a Bonus Pool Payment, in no event shall any exercise of Negative Discretion by the Committee to reduce one Participant’s Bonus Award Payment below the Bonus Award Amount that that Participant would otherwise have earned as a percentage of the Bonus Pool Payment, in any way increase any other Participant’s Bonus Award Payment beyond the Bonus Award Amount that that other Participant earned as a percentage of that same Bonus Pool Payment.

(u) “Operating Cash Flow” means, a non-GAAP financial measure, defined as cash provided by operating activities before changes in operating assets and liabilities, exploration costs excluding dry hole expense, and significant cash flow effects of unusual, extraordinary and non-recurring items, as publicly disclosed in the Company’s earnings releases for the Performance Period (but without regard to any accrual, payment, or other effect of any Bonus Award Payment made or to be made under the Plan).

(v) “Outside Director” means a voting member of the Board who qualifies as an “outside director” under Section 162(m) of the Code.

(w) “Participant” means, for any given Performance Period, each eligible Executive who is designated as a Participant for such Performance Period by the Committee pursuant to Section 4(b).

(x) “Performance Goal” means, with respect to a given Performance Period, the combination of one or more of the business criteria specified in Section 5(c), and one or more objective targeted level or levels of performance determined pursuant to Section 5(d), set by the Committee in writing, during the Applicable Period, to be attained during the Performance Period for purposes of determining whether a Bonus Pool Amount and/or a Bonus Award Amount, and the amount thereof, if applicable, have been earned in respect of the Performance Period.

(y) “Performance Period” means any period commencing on or after January 1, 2009 for which Performance Goal(s) are established under Section 5(b), and during which performance shall be measured to determine whether such Performance Goal(s) have been attained for purposes of determining whether the Bonus Pool Amount and/or the Bonus Award Amount, and the amount thereof, if applicable, have been earned in respect of such period. A Performance Period shall include at least one full fiscal year of the Company.

(z) “Per-Person Limit” means, in respect of any given Performance Period, a dollar amount equal to 50% of the Bonus Pool Maximum calculated for such Performance Period (whether or not a Bonus Pool Amount is used as part of the Bonus Award Opportunities for that Performance Period).

(aa) “Plan” means this XTO Energy Inc. 2009 Executive Incentive Compensation Plan, as amended from time to time.

(bb) “Section 162(m) of the Code” means such section of the Code and all applicable regulations thereunder, as the same may from time to time be amended.

(cc) “Section 409A of the Code” means such section of the Code and all applicable regulations thereunder, as the same may from time to time be amended.

(dd) “Stock Incentive Plan” means the XTO Energy Inc. 2004 Stock Incentive Plan, as Amended and Restated as of May 20, 2008, as the same may from time to time be further amended, and any successor thereto.

These excerpts taken from the XTO 10-K filed Feb 25, 2009.

DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

2.1 Board. The Board of Directors of the Company.

2.2 Cash Retainer. The annual cash retainer in effect immediately prior to a Change in Control that is paid to the Outside Director for the Outside Director’s performance of services to the Company in the capacity of an Outside Director, not including fees paid to committee chairs or meeting fees.

 

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2.3 Change in Control. A “Change in Control” shall mean the occurrence of one or more of the following events as objectively determined based upon all of the facts and circumstances without the exercise of discretion by the Board: (i) a Change in Ownership of the Company; (ii) a Change in Effective Control of the Company; or (iii) a Change in the Ownership of a Substantial Portion of the Assets of the Company. For purposes hereof:

(a) “Acting as a Group” shall mean “acting as a group” as such phrase is defined under Section 409A of the Code and the regulations or other guidance issued thereunder.

(b) “Change in Ownership” shall mean that any one person or more than one person Acting as a Group acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, however, that if any one person or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of any additional stock by the same person or persons shall not be considered a Change in Ownership or a Change in Effective Control.

(c) “Change in Effective Control” shall mean that either:

(1) any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or

(2) 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 members of the Board prior to the date of the appointment or election, provided that for purposes of this paragraph (2) the Company refers solely to the “relevant corporation” (as such term is defined in Section 409A of the Code and the regulations or other guidance issued thereunder) for which no other corporation is a majority shareholder.

Notwithstanding the foregoing, if any one person or more than one person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control by the same person or persons shall not be considered to cause a Change in Effective Control.

(d) “Change in the Ownership of a Substantial Portion of the Assets” shall mean any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total Gross Fair Market Value equal to more than 40% of the total Gross Fair Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

A Change in the Ownership of a Substantial Portion of the Assets shall not be deemed to have occurred if Company assets are transferred to:

 

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(1) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(2) an entity, 50% or more of the total value of voting power of which is owned, directly or indirectly, by the Company;

(3) a person, or more than one person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

(4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in sub-paragraph (d)(3).

For purposes of this paragraph and except as otherwise provided, a person’s status is determined immediately after the transfer of assets.

(e) For purposes of this Section 2.3, “Gross Fair Market Value” shall mean the value of the Company’s assets, or the value of the Company’s assets being disposed of, determined without regard to any liabilities associated with such assets.

(f) Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any subsidiary, a change in the beneficial ownership of any subsidiary, the merger or consolidation of a subsidiary with any other entity, the sale of all or substantially all of the assets of any subsidiary or the liquidation or dissolution of any subsidiary constitute a “Change in Control” under this Agreement.

(g) Notwithstanding the foregoing provisions of this Section 2.3, if an Outside Director’s services as an Outside Director are involuntary terminated prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control, or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

2.4 Company. XTO Energy Inc., a Delaware corporation.

2.5 Outside Director. A member of the Board or an advisory member of the Board who is not an employee of the Company.

2.6 Plan. This XTO Energy Inc. Amended and Restated Outside Directors Severance Plan, as amended from time to time.

2.7 Stock Grant Value. The number of shares most recently granted to each Outside Director in the form of a stock grant that vested immediately as part of his or her annual compensation pursuant to the XTO Energy Inc. Amended and Restated 2004 Stock Incentive Plan, or any successor or replacement plan, multiplied by the closing price of the Company’s common stock on the day on which a Change in Control occurs (or, if such common stock is not traded on the day the Change in Control occurs, on the day on which such common stock last traded prior to the Change in Control).

 

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DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

1.1 Board. The Board of Directors of the Company.

1.2 Change in Control. A “Change in Control” shall mean the occurrence of one or more of the following events as objectively determined based upon all of the facts and circumstances without the exercise of discretion by the Board: (i) a Change in Ownership of the Company; (ii) a Change in Effective Control of the Company; or (iii) a Change in the Ownership of a Substantial Portion of the Assets of the Company. For purposes hereof:

(a) “Acting as a Group” shall mean “acting as a group” as such phrase is defined under Section 409A of the Code and the regulations or other guidance issued thereunder.

(b) “Change in Ownership” shall mean that any one person or more than one person Acting as a Group acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, however, that if any one person or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of any additional stock by the same person or persons shall not be considered a Change in Ownership or a Change in Effective Control.

(c) “Change in Effective Control” shall mean that either:

(1) any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or

(2) 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 members of the Board prior to the date of the appointment or election, provided that for purposes of this paragraph (2) the Company refers solely to the “relevant corporation” (as such term is defined in Section 409A of the Code and the regulations or other guidance issued thereunder) for which no other corporation is a majority shareholder.

 

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Notwithstanding the foregoing, if any one person or more than one person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control by the same person or persons shall not be considered to cause a Change in Effective Control.

(d) “Change in the Ownership of a Substantial Portion of the Assets” shall mean any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total Gross Fair Market Value equal to more than 40% of the total Gross Fair Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

A Change in the Ownership of a Substantial Portion of the Assets shall not be deemed to have occurred if Company assets are transferred to:

(1) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(2) an entity, 50% or more of the total value of voting power of which is owned, directly or indirectly, by the Company;

(3) a person, or more than one person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

(4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in sub-paragraph (d)(3).

For purposes of this paragraph and except as otherwise provided, a person’s status is determined immediately after the transfer of assets.

(e) For purposes of this Section 1.2, “Gross Fair Market Value” shall mean the value of the Company’s assets, or the value of the Company’s assets being disposed of, determined without regard to any liabilities associated with such assets.

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary constitute a “Change in Control” under this Plan.

For purposes of this Agreement, if the Executive’s employment with the Company is terminated by the Company other than for “Cause” (as defined in the Second Amended and Restated XTO Energy Inc. Management Group Employee Severance Protection Plan (the “Severance Plan”)) prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps

 

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reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

1.3 Common Stock. The common stock, par value $0.01 per share, which the Company is currently authorized to issue or may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be.

1.4 Compensation Committee. The Compensation Committee of the Board of Directors of the Company.

1.5 Fair Market Value. The closing market price on the date of the Change in Control or on the next business day, if such date is not a business day, or if no trading occurred on such date, then on the first day preceding such date on which trading occurred, of a share of Common Stock traded on the New York Stock Exchange, or any other public securities market selected by the Compensation Committee; provided, however, that, if shares of Common Stock shall not have been traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Compensation Committee for any other reason, the Fair Market Value of shares of Common Stock shall be as determined by the Compensation Committee in such other manner as it may deem appropriate.

DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

1.1 Board. The Board of Directors of the Company.

1.2 Change in Control. A “Change in Control” shall mean the occurrence of one or more of the following events as objectively determined based upon all of the facts and circumstances without the exercise of discretion by the Board: (i) a Change in Ownership of the Company; (ii) a Change in Effective Control of the Company; or (iii) a Change in the Ownership of a Substantial Portion of the Assets of the Company. For purposes hereof:

(a) “Acting as a Group” shall mean “acting as a group” as such phrase is defined under Section 409A of the Code and the regulations or other guidance issued thereunder.

(b) “Change in Ownership” shall mean that any one person or more than one person Acting as a Group acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, however, that if any one person or more than one person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of any additional stock by the same person or persons shall not be considered a Change in Ownership or a Change in Effective Control.

(c) “Change in Effective Control” shall mean that either:

(1) any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or

(2) 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 members of the Board prior to the date of the appointment or election, provided that for purposes of this paragraph (2) the Company refers

 

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solely to the “relevant corporation” (as such term is defined in Section 409A of the Code and the regulations or other guidance issued thereunder) for which no other corporation is a majority shareholder.

Notwithstanding the foregoing, if any one person or more than one person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control by the same person or persons shall not be considered to cause a Change in Effective Control.

(d) “Change in the Ownership of a Substantial Portion of the Assets” shall mean any one person or more than one person Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total Gross Fair Market Value equal to more than 40% of the total Gross Fair Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

A Change in the Ownership of a Substantial Portion of the Assets shall not be deemed to have occurred if Company assets are transferred to:

(1) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(2) an entity, 50% or more of the total value of voting power of which is owned, directly or indirectly, by the Company;

(3) a person, or more than one person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

(4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in sub-paragraph (d)(3).

For purposes of this paragraph and except as otherwise provided, a person’s status is determined immediately after the transfer of assets.

(e) For purposes of this Section 1.2, “Gross Fair Market Value” shall mean the value of the Company’s assets, or the value of the Company’s assets being disposed of, determined without regard to any liabilities associated with such assets.

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary constitute a “Change in Control” under this Plan.

 

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For purposes of this Agreement, if the Executive’s employment with the Company is terminated by the Company other than for “Cause” (as defined in the Second Amended and Restated XTO Energy Inc. Management Group Employee Severance Protection Plan (the “Severance Plan”)) prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

1.3 Common Stock. The common stock, par value $0.01 per share, which the Company is currently authorized to issue or may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be.

1.4 Compensation Committee. The Compensation Committee of the Board of Directors of the Company.

1.5 Fair Market Value. The closing market price on the date of the Change in Control or on the next business day, if such date is not a business day, or if no trading occurred on such date, then on the first day preceding such date on which trading occurred, of a share of Common Stock traded on the New York Stock Exchange, or any other public securities market selected by the Compensation Committee; provided, however, that, if shares of Common Stock shall not have been traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Compensation Committee for any other reason, the Fair Market Value of shares of Common Stock shall be as determined by the Compensation Committee in such other manner as it may deem appropriate.

This excerpt taken from the XTO 8-K filed Aug 5, 2008.

SECTION 2.1. Definitions.

Section 1.1 of the Original Indenture is amended and supplemented by inserting or restating, as the case may be, in their appropriate alphabetical position, the following definitions:

“2010 Notes” means the 5.00% Senior Notes due 2010 of the Company to be issued pursuant to this Indenture.

“2010 Note Issue Date” means the first day on which the Company issues the 2010 Notes under the Indenture.

“2013 Notes” means the 5.75% Senior Notes due 2013 of the Company to be issued pursuant to this Indenture.

“2013 Note Issue Date” means the first day on which the Company issues the 2013 Notes under this Indenture.

“2018 Notes” means the 6.50% Senior Notes due 2018 of the Company to be issued pursuant to this Indenture.

“2018 Note Issue Date” means the first day on which the Company issues the 2018 Notes under this Indenture.

“Additional 2010 Notes” means 5.00% Senior Notes due 2010 issued from time to time after the 2010 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Additional 2013 Notes” means 5.75% Senior Notes due 2013 issued from time to time after the 2013 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Additional 2018 Notes” means 6.50% Senior Notes due 2018 issued from time to time after the 2018 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Notes” means the 2010 Notes, the 2013 Notes and the 2018 Notes.

 

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“Regular Record Date” for the interest payable on the Notes on any Interest Payment Date means, with respect to the 2013 Notes and the 2018 Notes, the June 1 or December 1 (whether or not a Business Day) and, with respect to the 2010 Notes, the January 15 or July 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

“Make-Whole Amount” with respect to a Note means an amount equal to the excess, if any, of (1) the present value of the remaining interest, premium and principal payments due on such Note (excluding any portion of such payments of interest accrued as of the Redemption Date), computed using a discount rate equal to the Treasury Rate plus 37.5 basis points (in the case of the 2010 Notes), 37.5 basis points (in the case of the 2013 Notes) or 37.5 basis points (in the case of the 2018 Notes), over (2) the outstanding principal amount of such Note. As used herein, “Treasury Rate” is defined as the yield to maturity (calculated on semi-annual bond-equivalent basis) at the time of the computation of United States Treasury securities with a constant maturity (as compiled by and published in the most recent Federal Reserve Statistical Release H.15 (510), which has become publicly available at least two business days prior to the date of the redemption notice or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the then remaining maturity of such Note; provided that if the Make-Whole Average Life of such Note is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the Make-Whole Average Life of such Note is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. As used herein, “Make-Whole Average Life” means the number of years (calculated to the nearest one-twelfth) between the Redemption Date and the Stated Maturity of such Note.

“MLP Subsidiary” means (i) any Subsidiary of the Company that is organized as a master limited partnership (or limited liability company or similar business entity with pass-through treatment for U.S. Federal income tax purposes) that, within two years of its organization, has a class of equity securities listed or eligible for trading on The New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market and (ii) any Subsidiary of the Subsidiary of the Company referred to in the preceding clause (i). Any Subsidiary referred to in clause (i) of this paragraph shall be and continue as an MLP Subsidiary until the second anniversary of its organization notwithstanding that it does not have a class of equity securities listed or eligible for trading on The New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market; provided, that such Subsidiary shall cease to be an MLP Subsidiary on such second anniversary if, on such date, it does not have a class of equity securities so listed or eligible.

“Restricted Subsidiary” means any Subsidiary of the Company (excluding any oil and gas royalty trust Subsidiary and any MLP Subsidiary) owning or leasing, directly or indirectly through ownership in another Subsidiary, any Principal Property.

 

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This excerpt taken from the XTO DEF 14A filed Apr 21, 2008.

2.    Definitions

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

(a) “Award” means an Option, Stock Appreciation Right, Stock Unit, Stock Award, Bonus Shares, Dividend Equivalent or Other Stock-Based Award granted under the Plan.

(b) “Award Agreement” means the written instrument that sets forth the terms and conditions of an Award, including all amendments thereto.

(c) “Board” means the Company’s Board of Directors.

(d) “Bonus Shares” means a grant of shares of Stock described in Section 11.

(e) “Change in Control” shall be deemed to have occurred if:

(i) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the Effective Date or was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;

(ii) any person or group of persons (as defined in Rule 13d-5 under the Exchange Act) together with such person’s or its affiliates, becomes the beneficial owner, directly or indirectly, of 25% or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(iii) in the case of a merger or consolidation to which the Company is a party, the stockholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

 

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(iv) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company occurs.

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

(g) “Committee” means (i) with respect to Awards to Employees, the Compensation Committee of the Board, a subcommittee thereof, or another committee appointed by the Board to administer the Plan, or its delegate, and (ii) with respect to Awards made to Non-Employee Directors, the Corporate Governance and Nominating Committee of the Board, a subcommittee thereof, or another committee appointed by the Board to administer the Plan with respect to Non-Employee Directors.

(h) “Company” means XTO Energy Inc. and its subsidiaries and affiliates.

(i) “Dividend Equivalent” means an Award described in Section 12.

(j) “Effective Date” of the Plan means the date the Plan was most recently amended and restated by the Board.

(k) “Employee” means an employee of the Company (including an officer or director who is also an employee).

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Exercise Price” means the per share price at which shares of Stock may be purchased under an Option, as designated by the Committee.

(n) “Fair Market Value” of Stock means, unless the Committee determines otherwise with respect to a particular Award, the closing market price on the Grant Date of the Award or the date of another specified event, or on the next business day, if such date is not a business day, or if no trading occurred on such date, then on the first day preceding such date on which trading occurred, of a share of Stock traded on the New York Stock Exchange, or any other public securities market selected by the Committee; provided, however, that, if shares of Stock shall not have been traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the Fair Market Value of shares of Stock shall be as determined by the Committee in such other manner as it may deem appropriate.

(o) “Grant Date” means the date on which the Committee takes action or is deemed to take action to grant an Award.

(p) “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under Section 422 of the Code.

(q) “Non-Employee Director” means a member of the Board who is not an employee of the Company and includes advisory directors who are not employees of the Company.

(r) “Nonqualified Stock Option” means an Option that is not intended to meet the requirements of an incentive stock option under Section 422 of the Code.

(s) “Option” means an Award to purchase shares of Stock described in Section 7.

(t) “Other Stock-Based Award” means any Award based on, measured by or payable in Stock (other than an Award described in Section 7, 8, 9, 10, 11, or 12 of the Plan) described in Section 13.

 

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(u) “Participant” means an Employee or Non-Employee Director designated by the Committee to participate in the Plan.

(v) “Plan” means this XTO Energy Inc. 2004 Stock Incentive Plan, as Amended and Restated as of May 20, 2008, as in effect from time to time.

(w) “Senior Executive” means the Chairman, the Chief Executive Officer, the President, the Senior Executive Vice President and Chief of Staff and any Executive Vice President of the Company.

(x) “Stock” means the common stock of the Company or any successor security.

(y) “Stock Appreciation Right” means an Award described in Section 8.

(z) “Stock Award” means an Award of Stock described in Section 10 and may be in the form of performance shares that vest based on performance or restricted shares that vest over time.

(aa) “Stock Unit” means an Award of a unit representing a share of Stock described in Section 9 and may be in the form of phantom or restricted units that vest based on performance or that vest over time.

This excerpt taken from the XTO 8-K filed Apr 16, 2008.

SECTION 2.1. Definitions.

Section 1.1 of the Original Indenture is amended and supplemented by inserting or restating, as the case may be, in their appropriate alphabetical position, the following definitions:

“2013 Notes” means the 4.625% Senior Notes due 2013 of the Company to be issued pursuant to this Indenture.

“2013 Note Issue Date” means the first day on which the Company issues the 2013 Notes under this Indenture.

“2018 Notes” means the 5.500% Senior Notes due 2018 of the Company to be issued pursuant to this Indenture.

“2018 Note Issue Date” means the first day on which the Company issues the 2018 Notes under this Indenture.

“2038 Notes” means the 6.375% Senior Notes due 2038 of the Company to be issued pursuant to this Indenture.

“2038 Notes Issue Date” means the first day on which the Company issues the 2038 Notes under the Indenture.

“Additional 2013 Notes” means 4.625% Senior Notes due 2013 issued from time to time after the 2013 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Additional 2018 Notes” means 5.500% Senior Notes due 2018 issued from time to time after the 2018 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Additional 2038 Notes” means 6.375% Senior Notes due 2038 issued from time to time after the 2038 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

“Notes” means the 2013 Notes, the 2018 Notes and the 2038 Notes.

 

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“Regular Record Date” for the interest payable on the Notes on any Interest Payment Date means the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

“Make-Whole Amount” with respect to a Note means an amount equal to the excess, if any, of (1) the present value of the remaining interest, premium and principal payments due on such Note (excluding any portion of such payments of interest accrued as of the Redemption Date), computed using a discount rate equal to the Treasury Rate plus 30 basis points (in the case of the 2013 Notes), 30 basis points (in the case of the 2018 Notes) or 30 basis points (in the case of the 2038 Notes), over (2) the outstanding principal amount of such Note. As used herein, “Treasury Rate” is defined as the yield to maturity (calculated on semi-annual bond-equivalent basis) at the time of the computation of United States Treasury securities with a constant maturity (as compiled by and published in the most recent Federal Reserve Statistical Release H.15 (510), which has become publicly available at least two business days prior to the date of the redemption notice or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the then remaining maturity of such Note; provided that if the Make-Whole Average Life of such Note is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the Make-Whole Average Life of such Note is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. As used herein, “Make-Whole Average Life” means the number of years (calculated to the nearest one-twelfth) between the Redemption Date and the Stated Maturity of such Note.

“MLP Subsidiary” means (i) any Subsidiary of the Company that is organized as a master limited partnership (or limited liability company or similar business entity with pass-through treatment for U.S. Federal income tax purposes) that, within two years of its organization, has a class of equity securities listed or eligible for trading on The New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market and (ii) any Subsidiary of the Subsidiary of the Company referred to in the preceding clause (i). Any Subsidiary referred to in clause (i) of this paragraph shall be and continue as an MLP Subsidiary until the second anniversary of its organization notwithstanding that it does not have a class of equity securities listed or eligible for trading on The New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market; provided, that such Subsidiary shall cease to be an MLP Subsidiary on such second anniversary if, on such date, it does not have a class of equity securities so listed or eligible.

“Restricted Subsidiary” means any Subsidiary of the Company (excluding any oil and gas royalty trust Subsidiary and any MLP Subsidiary) owning or leasing, directly or indirectly through ownership in another Subsidiary, any Principal Property.

 

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These excerpts taken from the XTO 10-K filed Mar 1, 2007.

2. Definitions

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

(a) “Award” means an Option, Stock Appreciation Right, Stock Unit, Stock Award, Bonus Shares, Dividend Equivalent or Other Stock-Based Award granted under the Plan.

(b) “Award Agreement” means the written instrument that sets forth the terms and conditions of an Award, including all amendments thereto.

(c) “Board” means the Company’s Board of Directors.

(d) “Bonus Shares” means a grant of shares of Stock described in Section 11.

(e) “Change in Control” shall be deemed to have occurred if:

(i) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the Effective Date or was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;


(ii) any person or group of persons (as defined in Rule 13d-5 under the Exchange Act) together with such person’s or its affiliates, becomes the beneficial owner, directly or indirectly, of 25% or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(iii) in the case of a merger or consolidation to which the Company is a party, the stockholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

(iv) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company occurs.

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

(g) “Committee” means (i) with respect to Awards to Employees, the Compensation Committee of the Board, a subcommittee thereof, or another committee appointed by the Board to administer the Plan, or its delegate, and (ii) with respect to Awards made to Non-Employee Directors, the Corporate Governance and Nominating Committee of the Board, a subcommittee thereof, or another committee appointed by the Board to administer the Plan with respect to Non-Employee Directors.

(h) “Company” means XTO Energy Inc. and its subsidiaries and affiliates.

(i) “Dividend Equivalent” means an Award described in Section 12.

(j) “Effective Date” of the Plan means the date the Plan was most recently amended and restated by the Board.

(k) “Employee” means an employee of the Company (including an officer or director who is also an employee).

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Exercise Price” means the per share price at which shares of Stock may be purchased under an Option, as designated by the Committee.

(n) “Fair Market Value” of Stock means, unless the Committee determines otherwise with respect to a particular Award, the closing market price on the Grant Date of the Award or the date of another specified event, or on the next business day, if such date is not a business day, or if no trading occurred on such date, then on the first day preceding such date on which trading occurred, of a share of Stock traded on the New

 

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York Stock Exchange, or any other public securities market selected by the Committee; provided, however, that, if shares of Stock shall not have been traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the Fair Market Value of shares of Stock shall be as determined by the Committee in such other manner as it may deem appropriate.

(o) “Grant Date” means the date on which the Committee takes action or is deemed to take action to grant an Award.

(p) “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under Section 422 of the Code.

(q) “Non-Employee Director” means a member of the Board who is not an employee of the Company and includes advisory directors who are not employees of the Company.

(r) “Nonqualified Stock Option” means an Option that is not intended to meet the requirements of an incentive stock option under Section 422 of the Code.

(s) “Option” means an Award to purchase shares of Stock described in Section 7.

(t) “Other Stock-Based Award” means any Award based on, measured by or payable in Stock (other than an Award described in Section 7, 8, 9, 10, 11, or 12 of the Plan) described in Section 13.

(u) “Participant” means an Employee or Non-Employee Director designated by the Committee to participate in the Plan.

(v) “Plan” means this XTO Energy Inc. Amended and Restated 2004 Stock Incentive Plan, as in effect from time to time.

(w) “Senior Executive” means the Chairman, the Chief Executive Officer, the President, the Senior Executive Vice President and Chief of Staff and any Executive Vice President of the Company.

(x) “Stock” means the common stock of the Company or any successor security.

(y) “Stock Appreciation Right” means an Award described in Section 8.

(z) “Stock Award” means an Award of Stock described in Section 10 and may be in the form of performance shares that vest based on performance or restricted shares that vest over time.

 

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(aa) “Stock Unit” means an Award of a unit representing a share of Stock described in Section 9 and may be in the form of phantom or restricted units that vest based on performance or that vest over time.

DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

1.1 Board. The Board of Directors of the Company.

 

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1.2 Change in Control. A “Change in Control” shall mean any one of the following:

(a) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the date hereof or was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;

(b) any person or group of persons (as defined in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) together with his or its affiliates, becomes the beneficial owner, directly or indirectly, of 25% or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(c) the merger or consolidation to which the Company is a party if the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

(d) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company.

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary constitute a “Change in Control” under this Plan.

For purposes of this Agreement, if the Executive’s employment with the Company is terminated by the Company other than for “Cause” (as defined in the Amended and Restated XTO Energy Inc. Management Group Employee Severance Protection Plan (“Severance Plan”)) prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

1.3 Common Stock. The common stock, par value $0.01 per share, which the Company is currently authorized to issue or may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be.

 

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1.4 Compensation Committee. The Compensation Committee of the Board of Directors of the Company.

1.5 Fair Market Value. The closing market price on the date of the Change in Control or on the next business day, if such date is not a business day, or if no trading occurred on such date, then on the first day preceding such date on which trading occurred, of a share of Common Stock traded on the New York Stock Exchange, or any other public securities market selected by the Compensation Committee; provided, however, that, if shares of Common Stock shall not have been traded on the New York Stock Exchange or other public securities market for more than 10 days immediately preceding such date or if deemed appropriate by the Compensation Committee for any other reason, the Fair Market Value of shares of Common Stock shall be as determined by the Compensation Committee in such other manner as it may deem appropriate.

These excerpts taken from the XTO 10-Q filed Nov 7, 2006.

DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

2.1 Board. The Board of Directors of the Company.

 

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2.2 Cash Retainer. The annual cash retainer in effect immediately prior to a Change in Control that is paid to the Outside Director for the Outside Director’s performance of services to the Company in the capacity of an Outside Director.

2.3 Change in Control. A “Change in Control” shall mean any one of the following:

(a) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the Effective Date or was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;

(b) any person or group of persons (as defined in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) together with his, her or its affiliates, becomes the beneficial owner, directly or indirectly, of twenty-five percent (25%) or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(c) the merger or consolidation to which the Company is a party if the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

(d) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company.

Notwithstanding the foregoing provisions of this Section 2.3, if an Outside Director’s services as an Outside Director are involuntary terminated prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

2.4 Company. XTO Energy Inc., a Delaware corporation.

2.5 Outside Director. A member of the Board or an advisory member of the Board who is not an employee of the Company.

2.6 Plan. This XTO Energy Inc. Amended and Restated Outside Directors Severance Plan, as amended from time to time.

2.7 Stock Grant Value. The value (expressed in U.S. Dollars) of the number of shares most recently granted to each Outside Director in the form of a stock grant that vested immediately as part of his or her annual compensation pursuant to the XTO Energy Inc. Amended and Restated 2004 Stock Incentive Plan, or any successor or replacement plan, multiplied by the closing price of the Company’s common stock on the day on which a Change in Control occurs (or, if such common stock is not traded on the day the Change in Control occurs, on the day on which such common stock last traded prior to the Change in Control).

 

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DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

Section 2.01 Base Salary. The amount a Participant receives as wages or salary on an annualized basis, calculated immediately prior to a Change in Control.

Section 2.02 Board. The Board of Directors of the Company.

Section 2.03 Bonus Amount. An amount equal to (i) the most recent bonus awarded prior to a Change in Control under the Non-Exempt Employee Bonus Plan or the Exempt Employee Bonus Plan adopted by the Company (or any other bonus plan or program then in effect), plus (ii) the total amount, if any, of any special bonuses, and any amounts required to be designated as a bonus under the rules and regulations of the Securities and Exchange Commission, awarded to a Participant during the three (3) years preceding the Change in Control. A special bonus will include any bonus paid as a result of an individual becoming an employee of the Company but will not include any bonus paid related to moving expenses.

Section 2.04 Cause. The Employer shall have “Cause” to terminate a Participant if the Participant (i) willfully and continually fails to substantially perform his or her duties with the Employer (other than a failure resulting from the Participant’s incapacity due to physical or mental illness) which failure continues for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to the Participant specifying the manner in which the Participant has failed to substantially perform, or (ii) willfully engages in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise. Notwithstanding any provision in this Plan to the contrary, any dispute as to whether a Participant’s termination was for cause will be determined in the sole discretion of the Board.

Section 2.05 Change in Control. A “Change in Control” shall mean any one of the following:

(a) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the date hereof or was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;

(b) any person or group of persons (as defined in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) together with his, her or its affiliates, becomes the beneficial owner, directly or indirectly, of twenty-five percent (25%) or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(c) the merger or consolidation to which the Company is a party if the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

(d) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company.

 

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Notwithstanding the foregoing provisions of this Section 2.05, if a Participant’s employment with the Employer is terminated by the Employer other than for “Cause” prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary constitute a “Change in Control” under this Plan.

Section 2.06 Company. XTO Energy Inc., a Delaware corporation.

Section 2.07 Effective Date. The date the Plan is approved by the Board, or such other date as the Board shall designate in its resolution approving the Plan.

Section 2.08 Employee. Each employee of the Employer who has not been designated as a “Management Group Employee” under the XTO Energy Inc. Management Group Employee Severance Protection Plan.

Section 2.09 Employer. The Company and any Subsidiary of the Company which adopts this Plan as a Participating Employer. With respect to a Participant who is not an employee of the Company, any reference under this Plan to such Participant’s “Employer” shall refer only to the employer of the Participant, and in no event shall be construed to refer to the Company as well.

Section 2.10 Good Reason. “Good Reason” shall mean the occurrence of any of the following events or conditions:

(a) a change in the Participant’s status, title, position or responsibilities (including reporting responsibilities) which, in the Participant’s reasonable judgment, represents a substantial reduction of the status, title, position or responsibilities as in effect immediately prior to the Change in Control; the assignment to the Participant of any duties or responsibilities which, in the Participant’s reasonable judgment, are inconsistent with such status, title, position or responsibilities; or any removal of the Participant from, or failure to reappoint or reelect him or her to, any of such positions, except in connection with the termination of his or her employment for Cause or by the Participant other than for Good Reason;

(b) a reduction in the Participant’s Base Salary;

(c) the Employer’s requiring the Participant (without the consent of the Participant) to be based at any place outside a twenty-five (25) mile radius of his or her place of employment immediately prior to a Change in Control, except for reasonably required travel on the Employer’s business which is not materially greater than such travel requirements prior to the Change in Control, or, in the event the Participant consents to any relocation beyond such twenty-five (25) mile radius, the failure by the Employer to pay (or reimburse the Participant) for all reasonable moving expenses incurred by him or her relating to a change of his or her principal residence in connection with such relocation and to indemnify the Participant against any loss (defined as the difference between the actual sale price of such residence and the higher of (x) his or her aggregate investment in such residence or (y) the fair market value of such residence as determined by a real estate appraiser

 

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designated by the Participant and reasonably satisfactory to the Employer) realized on the sale of the Participant’s principal residence in connection with any such change of residence;

(d) the failure by the Employer to provide the Participant with compensation and benefits at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each employee benefit plan, program and practice as in effect immediately prior to the Change in Control (or as in effect following the Change in Control, if greater), including, but not limited to, the XTO Energy Inc. Amended and Restated 2004 Stock Incentive Plan, the XTO Energy Inc. Employees’ 401(k) Plan, the Non-Exempt Employee Bonus Plan, the Exempt Employee Bonus Plan, and any other stock option plan, pension plan, life insurance plan, health and accident plan or disability plan;

(e) any material breach by the Employer of any provision of this Plan;

(f) any purported termination of the Participant’s employment for Cause by the Employer which does not otherwise comply with the terms of this Plan; or

(g) any failure of the Company to obtain the assumption of, or the agreement to perform, this Agreement by any successor as contemplated in Article VI.

Section 2.11 Notice of Termination. A notice which indicates the specific provisions in this Plan relied upon as the basis for any termination of employment which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated; no purported termination of employment shall be effective without such Notice of Termination.

Section 2.12 Participant. A Participant who meets the eligibility requirements of Article III.

Section 2.13 Participating Employer. A Subsidiary of the Company which adopts this Plan in accordance with Section 7.04 below.

Section 2.14 Severance Benefit. The benefits payable in accordance with Article IV of the Plan.

Section 2.15 Severance Units. A Participant shall receive one (1) Severance Unit, to be used in calculating his or her Severance Benefit, for (i) each $7,000 of his or her Base Salary plus Bonus Amount, and (ii) each twelve (12) months of employment by the Company or an Employer; the sum of any partial Severance Unit under (i) and (ii) shall be rounded to one (1). However, the maximum number of Severance Units that may be granted to a Participant is eighteen (18), and each Participant shall be granted at least three (3) Severance Units. For example, if a Participant’s Base Salary is $52,000, his or her Bonus Amount is $5,000, and he or she has been employed by the Company or an Employer for fifty-seven (57) months, he or she would have 8.14 Severance Units for his or her compensation and 4.75 Severance Units for his or her service, for a total of thirteen (13).

Section 2.16 Subsidiary. Any subsidiary of the Company, and any wholly or partially owned partnership, joint venture, limited liability company, corporation and other form of investment by the Company.

Section 2.17 Termination Date. The date on which a Participant’s employment with the Employer terminates in accordance with Section 5.02.

A pronoun or adjective in the masculine gender includes the feminine gender, and the singular includes the plural, unless the context clearly indicates otherwise.

 

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DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

Section 2.01 Base Salary. The amount a Participant receives as wages or salary on an annualized basis, calculated immediately prior to a Change in Control.

Section 2.02 Board. The Board of Directors of the Company.

Section 2.03 Bonus Amount. An amount equal to (i) the greater of a Participant’s two most recent bonuses awarded on or prior to the date of the Change in Control under the Key Management Incentive Bonus Plan adopted by the Company (or any other bonus plan or program then in effect), multiplied by two, plus (ii) the amount, if any, of the Participant’s monthly car allowance on the date of the Change in Control, multiplied by twelve, plus (iii) the amount, if any, of any special bonuses, and any amounts required to be designated as a bonus under the rules and regulations of the Securities and Exchange Commission, awarded to a Participant during the three years preceding the change in control. A special bonus will include any bonus paid as a result of an individual becoming an employee of the Company but will not include any bonus paid related to moving expenses.

Section 2.04 Cause. The Employer shall have “Cause” to terminate a Participant if the Participant (i) willfully and continually fails to substantially perform his or her duties with the Employer (other than a failure resulting from the Participant’s incapacity due to physical or mental illness) which failure continues for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to the Participant specifying the manner in which the Participant has failed to substantially perform, or (ii) willfully engages in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise; provided, however, that no termination of the Participant’s employment shall be for Cause until (x) there shall have been delivered to the Participant a copy of a written notice specifying in detail the particulars of the Participant’s conduct which violates either (i) or (ii) above, (y) the Participant shall have been provided an opportunity to be heard by the Board (with the assistance of the Participant’s counsel if the Participant so desires), and (z) a resolution is adopted in good faith by two-thirds (2/3) of the Board confirming said violation. No act, nor failure to act, on the Participant’s part, shall be considered “willful” unless he or she has acted or failed to act with an absence of good faith and without a reasonable belief that his or her action or failure to act was in the best interest of the Employer. Notwithstanding anything contained in this Plan to the contrary, no failure to perform by the Participant after Notice of Termination is given by or to the Participant shall constitute Cause.

Section 2.05 Change in Control. A “Change in Control” shall mean any one of the following:

(a) “Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” means any individual who is a member of the Board on the date hereof or


was nominated for election as a director by, or whose nomination as a director was approved by, the Board with the affirmative vote of a majority of the Continuing Directors;

(b) any person or group of persons (as defined in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) together with his, her or its affiliates, becomes the beneficial owner, directly or indirectly, of twenty-five percent (25%) or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of the Company’s directors;

(c) the merger or consolidation to which the Company is a party if the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation or other entity following the effective date of such merger or consolidation; or

(d) the sale of all or substantially all of the assets of the Company or the liquidation or dissolution of the Company.

Notwithstanding the foregoing provisions of this Section 2.05, if a Participant’s employment with the Employer is terminated by the Employer other than for “Cause” prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with a Change in Control, then for all purposes hereof, such termination shall be deemed to have occurred immediately following a Change in Control.

Notwithstanding the foregoing provisions of this Section 2.05, in the event a benefit provided upon the occurrence of a Change in Control is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Change in Control” for purposes of such benefit shall be the definition provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary constitute a “Change in Control” under this Plan.

Section 2.06 Company. XTO Energy Inc., a Delaware corporation.

Section 2.07 Effective Date. The date the Plan is approved by the Board, or such other date as the Board shall designate in its resolution approving the Plan.

Section 2.08 Employer. The Company and any Subsidiary of the Company which adopts this Plan as a Participating Employer. With respect to a Participant who is not an employee of the Company, any reference under this Plan to such Participant’s “Employer” shall refer only to the employer of the Participant, and in no event shall be construed to refer to the Company as well.

Section 2.09 Good Reason. “Good Reason” shall mean the occurrence of any of the following events or conditions:


(a) a change in the Participant’s status, title, position or responsibilities (including reporting responsibilities) which, in the Participant’s reasonable judgment, represents a substantial reduction of the status, title, position or responsibilities as in effect immediately prior to the Change in Control; the assignment to the Participant of any duties or responsibilities which, in the Participant’s reasonable judgment, are inconsistent with such status, title, position or responsibilities; or any removal of the Participant from, or failure to reappoint or reelect him or her to, any of such positions, except in connection with the termination of his or her employment for Cause or by the Participant other than for Good Reason;

(b) a reduction in the Participant’s Base Salary;

(c) the Employer’s requiring the Participant (without the consent of the Participant) to be based at any place outside a twenty-five (25) mile radius of his or her place of employment immediately prior to a Change in Control, except for reasonably required travel on the Employer’s business which is not materially greater than such travel requirements prior to the Change in Control, or, in the event the Participant consents to any relocation beyond such twenty-five (25)-mile radius, the failure by the Employer to pay (or reimburse the Participant) for all reasonable moving expenses incurred by him or her relating to a change of his or her principal residence in connection with such relocation and to indemnify the Participant against any loss (defined as the difference between the actual sale price of such residence and the higher of (x) his or her aggregate investment in such residence or (y) the fair market value of such residence as determined by a real estate appraiser designated by the Participant and reasonably satisfactory to the Employer) realized on the sale of the Participant’s principal residence in connection with any such change of residence;

(d) the failure by the Employer to provide the Participant with compensation and benefits at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each employee benefit plan, program and practice as in effect immediately prior to the Change in Control (or as in effect following the Change in Control, if greater), including, but not limited to, the XTO Energy Inc. Amended and Restated 2004 Stock Incentive Plan, the XTO Energy Inc. Employees’ 401(k) Plan, the Key Management Incentive Bonus Plan, and any other stock option plan, pension plan, life insurance plan, health and accident plan or disability plan;

(e) any material breach by the Employer of any provision of this Plan;

(f) any purported termination of the Participant’s employment for Cause by the Employer which does not otherwise comply with the terms of this Plan;

(g) any failure of the Company to obtain the assumption of, or the agreement to perform, this Agreement by any successor as contemplated in Article VII; or

(h) any termination of employment by the Participant after his or her Payment Date (as defined in Section 2.14 below).

Section 2.10 Management Group Employee. Each employee of the Employer who has been designated by his or her Employer as member of the Management Group or the Management Group II.

Section 2.11 Notice of Termination. A notice which indicates the specific provisions in this Plan relied upon as the basis for any termination of employment which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under


the provision so indicated; no purported termination of employment shall be effective without such Notice of Termination.

Section 2.12 Participant. A Participant who meets the eligibility requirements of Article III.

Section 2.13 Participating Employer. A Subsidiary of the Company which adopts this Plan in accordance with Section 8.04 below.

Section 2.14 Payment Date. For a Participant, the date on which he or she is entitled to a Retention Benefit after a Change in Control pursuant to Section 4.02; the Payment Date for Participants are as follows: for the Chief Executive Officer, President, Senior Executive Vice President, Executive and Senior Vice Presidents of the Company, forty-five (45) days after the date of the Change in Control; for all other officers of the Company, ninety (90) days after the date of the Change in Control; and for all other Participants, one hundred eighty (180) days after the date of the Change in Control.

Section 2.15 Plan Benefit. The benefits payable in accordance with Article IV of the Plan.

Section 2.16 Retention Benefit. The benefits payable in accordance with Section 4.02 of the Plan.

Section 2.17 Severance Benefit. The benefits payable in accordance with Section 4.03 of the Plan.

Section 2.18 Subsidiary. Any subsidiary of the Company, and any wholly or partially owned partnership, joint venture, limited liability company, corporation and other form of investment by the Company.

Section 2.19 Termination Date. The date on which a Participant’s employment with the Employer terminates in accordance with Section 5.02.

A pronoun or adjective in the masculine gender includes the feminine gender, and the singular includes the plural, unless the context clearly indicates otherwise.

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