nfx8k-04202009.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________________
FORM
8-K
_____________________________
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 20,
2009
_____________________________
NEWFIELD
EXPLORATION COMPANY
(Exact
name of registrant as specified in its charter)
_____________________________
|
Delaware
|
1-12534
|
72-1133047
|
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(I.R.S.
Employer
|
|
of
incorporation)
|
|
Identification
No.)
|
363
N. Sam Houston Parkway E., Suite 100
Houston,
Texas 77060
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (281) 847-6000
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
As previously disclosed, David A. Trice
will be retiring as Chief Executive Officer of Newfield Exploration Company
(“Newfield”) on May 7, 2009, the date of Newfield’s 2009 annual meeting of
stockholders. Mr. Trice’s employment will terminate on May 31, 2009
(the “Employment Termination Date”). After the Employment Termination
Date, Newfield’s Board desires for Mr. Trice to serve as non-executive Chairman
of the Board until Newfield’s 2010 annual meeting of stockholders.
On April 20, 2009,
Newfield’s Compensation & Management Development Committee and Newfield’s
Board of Directors approved a Retirement Agreement with Mr.
Trice. The Retirement Agreement contains a release of claims and a
two-year non-compete agreement by Mr. Trice and describes (1) the regular
separation benefits to which Mr. Trice is already entitled as a result of his
employment at Newfield, regardless of the Retirement Agreement and (2) the
additional separation benefits to which Mr. Trice is entitled as a result of the
Retirement Agreement. In addition, in recognition of Mr. Trice’s
agreement to serve as non-executive Chairman of the Board until Newfield’s 2010
annual meeting of stockholders and his agreement to enter into the Non-Compete
Agreement attached as Annex D to the Retirement Agreement, on April 20, 2009,
Newfield’s Compensation & Management Development Committee granted Mr. Trice
a new award of restricted stock units. The material terms of the
Retirement Agreement, including the release of claims, the non-compete
agreement, the additional separation benefits and the new grant of restricted
stock units, are described below. The Retirement Agreement is filed
herewith as Exhibit 10.23, and the forms of Restricted Stock Unit Agreement
and Non-Compete Agreement are attached thereto as Annex C and Annex D,
respectively. The Retirement Agreement (including the Restricted
Stock Unit Agreement attached thereto as Annex C and the Non-Compete Agreement
attached thereto as Annex D) is incorporated herein by reference.
Release of
Claims. In consideration of the separation benefits and the
award of restricted stock units described below, as part of the Retirement
Agreement, Mr. Trice provided Newfield with an irrevocable and unconditional
release and discharge of claims, as further described in the Retirement
Agreement.
Non-Compete
Agreement. As a condition to Mr. Trice being entitled to the
separation benefits described in the Retirement Agreement, including the award
of restricted stock units described below, Mr. Trice entered into the
Non-Compete Agreement attached as Annex D to the Retirement Agreement filed
herewith as Exhibit 10.23. As more specifically described in the
Non-Compete Agreement, Mr. Trice agreed that, for the 24 month period beginning
on the Employment Termination Date, he will not compete with Newfield and he
will not solicit or otherwise interfere with Newfield’s relationships with its
employees, agents or material customers or suppliers.
Stock
Options. A schedule of Mr. Trice’s outstanding nonqualified
stock options is set forth below:
|
Grant
Date
|
|
Shares
Subject to
Stock
Option (#)
|
|
Exercise
Price ($)
|
|
Expiration
Date
|
|
Plan
|
|
02/10/00
|
|
60,000
|
|
14.91
|
|
02/10/10
|
|
2000
Omnibus Stock Plan
|
|
02/09/01
|
|
40,000
|
|
19.02
|
|
02/09/11
|
|
2000
Omnibus Stock Plan
|
|
02/07/02
|
|
40,000
|
|
16.87
|
|
02/07/12
|
|
2000
Omnibus Stock Plan
|
|
11/26/02
|
|
40,000
|
|
17.84
|
|
11/26/12
|
|
2000
Omnibus Stock Plan
|
|
02/07/08
|
|
72,000
|
|
48.45
|
|
02/07/18
|
|
2000
Omnibus Stock Plan
|
|
02/07/08
|
|
63,000
|
|
48.45
|
|
02/07/18
|
|
2007
Omnibus Stock Plan
|
Mr.
Trice’s stock option awards granted on February 10, 2000, February 9, 2001,
February 7, 2002 and November 26, 2002 (the “Vested Awards”) are 100% vested,
and the awards granted on February 7, 2008 are 33 1/3% vested. Under
the Retirement Agreement, Newfield agreed that the Vested Awards will remain
exercisable until their respective expiration dates set forth in the table
above. With respect to the awards granted on February 7, 2008, Newfield agreed
to deem Mr. Trice’s retirement on the Employment Termination Date to be a
“Qualified Retirement” under the award agreements. As a result, the
February 7, 2008 awards may be exercised in full by Mr. Trice anytime during the
five-year period following the Employment Termination Date, as provided in the
award agreements.
Restricted
Stock. On February 12, 2003, Mr. Trice was granted an award of
100,000 shares of restricted stock under the 2000 Omnibus Stock Plan, 33,333
shares of which are already vested. Under the Retirement Agreement,
Newfield agreed to vest the remaining 66,667 shares subject to the award on the
Employment Termination Date.
On February 8, 2005, Mr. Trice was
granted an award of 80,000 shares of restricted stock under the 2004 Omnibus
Stock Plan, subject to performance-based vesting criteria, which shares of
restricted stock would vest or be forfeited on February 1, 2010 depending on
Newfield’s TSR rank as provided in the award agreement. Under the
Retirement Agreement, Mr. Trice will forfeit 10,826 of the 80,000 shares on the
Employment Termination Date (representing the pro rata portion of the
performance period during which Mr. Trice will no longer be employed by
Newfield) and Newfield agreed that Mr. Trice will not forfeit the remaining
69,174 shares. Instead, those 69,174 shares will continue in effect
and will be subject to forfeiture in full upon Mr. Trice’s ceasing to serve as
Chairman of the Board before February 1, 2010 (the date of potential vesting
under the award agreement). The 69,174 shares of the award also
remain subject to the achievement of the performance goals specified in the
February 8, 2005 award agreement.
Restricted Stock
Units. On February 7, 2008, Mr. Trice was awarded 20,000
time-vesting restricted stock units under the 2007 Omnibus Stock Plan, all of
which are unvested. Under the Retirement Agreement, Newfield agreed
to fully vest the award on the Employment Termination Date. Mr. Trice
will not be paid shares of Newfield’s common stock under the February 7, 2008
restricted stock unit award until the date that is six months following his
separation from service (as defined in the Retirement Agreement). Mr.
Trice also will not be paid shares of Newfield’s common stock under his February
14, 2007 restricted stock unit award (the unvested portion of which will vest on
the Employment Termination Date by the terms of the February 14, 2007 award
agreement) until the date that is six months following his separation from
service (as defined in the Retirement Agreement).
As described in the Retirement
Agreement, in recognition of Mr. Trice’s agreement to serve as non-executive
Chairman of the Board until Newfield’s 2010 annual meeting of stockholders and
his agreement to enter into the Non-Compete Agreement, on April 20, 2009
Newfield also granted Mr. Trice an award of 100,000 restricted stock units under
the 2007 Omnibus Stock Plan. The terms of the restricted stock unit
award are set forth in the Restricted Stock Unit Award Agreement attached as
Annex C to the Retirement Agreement filed herewith as Exhibit
10.23. The forfeiture restrictions on the restricted stock units will
lapse on April 30, 2010 as long as Mr. Trice serves as Chairman of the Board
until April 30, 2010. If Mr. Trice dies or becomes permanently
disabled before April 30, 2010 and while serving as Chairman of the Board of
Newfield, the forfeiture restrictions will lapse upon the date he ceases to
serve as Chairman of the Board due to death or disability (as defined in the
award agreement). If a change of control (as defined in the award
agreement) occurs on or before April 30, 2010 and Mr. Trice does not cease to
serve as Chairman of the Board before the change of control occurs, all
remaining forfeiture restrictions will lapse on either the date of the change of
control or April 30, 2010, as provided in the award agreement. If the
Board requests that Mr. Trice resign as Chairman of the Board before April 30,
2010, the forfeiture restrictions will lapse on April 30, 2010. If
Mr. Trice ceases to serve as Chairman of the Board before April 30, 2010 for any
other reason, he would forfeit the restricted stock units under the award
agreement. Mr. Trice also would forfeit the restricted stock units
under the award agreement if he did not sign the Retirement Agreement or if he
revokes the Retirement Agreement.
Bonus. Mr. Trice
will not be eligible to receive a current award (as defined in the plan) under
Newfield’s Incentive Compensation Plan with respect to the 2009 performance
period. Mr. Trice will be vested in the full amount (including
interest to the date of payment) remaining in all of his deferred award accounts
(as defined in the plan) at the Employment Termination Date and such amounts
will be paid to Mr. Trice at the same time that such amounts would have been
paid in the absence of his retirement.
Under the
Retirement Agreement, Newfield agreed that, during the fourth quarter of 2009,
Mr. Trice will be eligible for consideration for a discretionary pro-rated bonus
in recognition of his service to Newfield during 2009. The amount of
the bonus, if any, will be determined in the sole discretion of the Compensation
& Management Development Committee of Newfield’s Board of Directors, and any
such bonus will be paid on the date that is six months after the date of Mr.
Trice’s separation from service (as defined in the Retirement
Agreement).
Indemnity. In
view of the uncertainties concerning the application of Section 409A of the
Internal Revenue Code of 1986, as amended, if any compensatory payments received
or to be received by Mr. Trice under agreements and arrangements of Newfield
(the “Total Payments”) will be subject to an additional tax under Section 409A,
Newfield agreed in the Retirement Agreement to pay Mr. Trice an additional
indemnity amount so that the net amount retained after the deduction of any
additional tax under Section 409A on the Total Payments and any federal income
and employment taxes on the indemnity will be equal to the Total
Payments. The purpose of the indemnity is to put Mr. Trice is the
same economic position he would have been in had no additional tax under Section
409A been imposed with respect to the Total Payments.
Item
9.01 Financial Statements and Exhibits
|
(d)
|
Exhibits
|
|
|
|
|
|
|
10.23
|
Retirement
Agreement (the form of Restricted Stock Unit Award Agreement and the form
of
|
|
|
|
Non-Compete
Agreement are attached thereto)
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
NEWFIELD
EXPLORATION COMPANY
|
|
|
|
|
|
|
|
|
|
Date:
April 22, 2009
|
By:
|
/s/
Brian L. Rickmers
|
|
|
|
Brian
L. Rickmers
|
|
|
|
Controller
|
Exhibit
Index
|
Exhibit
No.
|
|
Description
|
|
10.23
|
|
Retirement
Agreement (the form of Restricted Stock Unit Award Agreement and the form
of
|
|
|
|
Non-Compete
Agreement are attached thereto)
|