Exhibit 10.2

LOGO [g266519g00c26.jpg]

 

 

NOTICE OF GRANT OF PERFORMANCE SHARE UNIT AWARD AND AWARD AGREEMENT

 

 

 

%%FIRST_NAME%-% %%MIDDLE_NAME%-% %%LAST_NAME%-%

%%OPTION_NUMBER%-%

%%ADDRESS_LINE_1%-%

%%ADDRESS_LINE_2%-%

%%CITY%-%, %%STATE%-%, %%ZIPCODE%-%

   Award Number:

 

Plan: %%EQUITY_PLAN%-%

ID:%%EMPLOYEE_IDENTIFIER%-%

 

 

Effective %%OPTION_DATE%-%, you have been granted a target award of
%%TOTAL_SHARES_GRANTED%-% Performance Share Units (“Award”) under the Devon
Energy Corporation 2009 Long-Term Incentive Plan. Each Performance Share Unit
that vests entitles you to one share of Devon Energy Corporation (the “Company”)
Common Stock. The vesting of these Performance Share Units is dependent upon the
Company’s Total Shareholder Return (“TSR”) over the specified Performance
Periods. Fifty percent (50%) of the target Award is subject to a two-year
Performance Period that begins [date] and ends [date] (the “20    -20    
Performance Period”) and 50% of the target Award is subject to a three-year
Performance Period that begins [date] and ends [date] (the “20    -20    
Performance Period”). The 20    -20     and 20    -20     Performance Periods
may each be individually referred to as a “Performance Period.” The maximum
number of Performance Share Units that you can earn during each Performance
Period will be calculated as follows: %%TOTAL_SHARES_GRANTED%-% x 50% x 200%,
with actual payout based on the performance level achieved by the Company with
respect to the Performance Goal set forth on Schedule A.

This Award also entitles you to be paid Dividend Equivalents as set forth in the
Award Agreement.

 

 

By accepting this agreement online, you and the Company agree that this award is
granted under and governed by the terms and conditions of the Company’s 2009
Long-Term Incentive Plan and the Award Agreement, both of which are attached and
made a part of this document.

 

 

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DEVON ENERGY CORPORATION

2009 LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE UNIT AGREEMENT

THIS PERFORMANCE SHARE UNIT AWARD AGREEMENT (the “Award Agreement”) is entered
into as of %%OPTION_DATE%-% (the “Date of Grant”), by and between Devon Energy
Corporation, a Delaware corporation (the “Company”) and %%FIRST_NAME%-%
%%MIDDLE_NAME%-% %%LAST_NAME%-% (the “Participant”);

W I T N E S S E T H:

WHEREAS, the Devon Energy Corporation 2009 Long-Term Incentive Plan (the “Plan”)
permits the grant of Performance Units (hereinafter referred to as “Performance
Share Units”) to employees, officers and non-employee directors of the Company
and its Subsidiaries and Affiliated Entities, in accordance with the terms and
provisions of the Plan; and

WHEREAS, in connection with the Participant’s employment with the Company, the
Company desires to award to the Participant %%TOTAL_SHARES_GRANTED%-%
Performance Share Units subject to the terms and conditions of this Award
Agreement and the Plan; and

WHEREAS, the Performance Share Units granted pursuant to this Award Agreement
shall vest based on the attainment and certification of the Performance Goal set
forth on Schedule A; and

NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants herein contained, the Participant and the Company agree as follows:

1. The Plan. The Plan, a copy of which is attached hereto, is hereby
incorporated by reference herein and made a part hereof for all purposes, and
when taken with this Award Agreement shall govern the rights of the Participant
and the Company with respect to the Award.

2. Grant of Award. The Company hereby grants to the Participant a target award
(the “Award”) of %%TOTAL_SHARES_GRANTED%-% Performance Share Units, on the terms
and conditions set forth herein and in the Plan. Each Performance Share Unit
that vests entitles the Participant to one share of Common Stock.

3. Terms of Award.

(a) Performance Share Unit Account. The Company shall establish a bookkeeping
account on its records for the Participant and shall credit the Participant’s
Performance Share Units to the bookkeeping account.

(b) General Vesting Terms. Except as provided in this Section 3, the Participant
shall vest in a number of Performance Share Units based on the attainment and
certification of the Performance Goal described on Schedule A as of the end of a
Performance Period. Any Performance Share Units that do not vest as of the end
of a Performance Period shall be forfeited as of the end of the Performance
Period. Except as specifically provided below in this Section 3, in the event of
a termination of the Participant’s employment prior to the end of a Performance
Period, all unvested Performance Share Units will be immediately forfeited.

 

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(c) If a Participant’s Date of Termination occurs by reason of disability,
Normal Retirement Date, Early Retirement Date, or other special circumstances
(as determined by the Committee), and the Committee determines, in its sole and
absolute discretion, that the Performance Share Units shall continue to vest
following the Participant’s Date of Termination, the Participant shall vest in
the maximum number of Performance Share Units in which the Participant could
vest, based on the actual level at which the Performance Goal is attained and
certified for the Performance Period, as if the Participant remained in the
employ of the Company through the end of the Performance Period, provided that,
if the Participant is Retirement Eligible, such continued vesting shall be
subject to the satisfaction of the conditions in Section 15 (except in the case
of the Participant’s disability).

(d) Performance Share Units shall continue to vest and the Participant shall
vest in the maximum number of Performance Share Units in which the Participant
could vest, based on the actual level at which the Performance Goal is attained
and certified for the Performance Period, as if the Participant remained in the
employ of the Company through the end of the Performance Period following the
Participant’s Date of Termination that occurs under circumstances in which the
Participant is entitled to a severance payment from the Company, a Subsidiary,
or an Affiliated Entity under (A) the Participant’s employment agreement or
severance agreement with the Company due to a termination of the Participant’s
employment by the Company without “cause” or by the Participant for “good
reason” in accordance with the Participant’s employment agreement or severance
agreement or (B) the Devon Energy Corporation Severance Plan, provided that for
a severance related termination, the Participant signs and returns to the
Company a release of claims against the Company in a form prepared by the
Company (the “Release”) and such Release becomes effective. If the Participant
fails to sign and return the Release to the Company or revokes the Release prior
to the date the Release becomes effective, the Performance Share Units (and
Dividend Equivalents) subject to this Award Agreement shall be forfeited.

(e) A Participant shall become fully and immediately vested in the Award at the
target level of performance for the Performance Period in the event of (1) the
Participant’s death or (2) the occurrence of a Change in Control Event.

(f) Voting Rights and Dividend Equivalents. The Participant shall not have any
voting rights with respect to the Performance Share Units. The Participant shall
be credited with dividend equivalents (“Dividend Equivalents”) with respect to
each outstanding Performance Share Unit to the extent that any dividends or
other distributions (in cash or other property) are declared and/or paid with
respect to the shares of Common Stock after the commencement of the Performance
Period (other than distributions pursuant to a share split, for which an
adjustment shall be made as described in Section 4 below). Dividend Equivalents
shall be credited to the bookkeeping account established on the records of the
Company for the Participant and will vest and be paid in cash to the Participant
at the same time, and subject to the same conditions, as are applicable to the
underlying Performance Share Units. Accordingly, Dividend Equivalents shall be
forfeited to the extent that the Performance Share Units do not vest and are
forfeited or cancelled. No interest shall be credited on Dividend Equivalents.

(g) Conversion of Performance Share Units; Delivery of Performance Share Units.

(i) Except in the event of the Participant’s death or the occurrence of a Change
in Control Event, the Committee shall, within a reasonably practicable time
following the last day of the Performance Period, certify the extent, if any, to
which the Performance Goal has been achieved with respect to the Performance
Period and the number of Performance Share Units, if any, earned upon attainment
of the

 

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Performance Goal. Such certification shall be final, conclusive and binding on
the Participant, and on all other persons, to the maximum extent permitted by
law. Payment in respect of vested Performance Share Units and Dividend
Equivalents shall be made promptly following the Committee’s certification of
the attainment of the Performance Goal, but in any event, no later than March 15
of the year following the year in which the Performance Period ends.

(ii) In the event of the Participant’s death or the occurrence of a Change in
Control Event, payment in respect of earned and vested Performance Share Units
shall be made as soon as reasonably practicable thereafter.

(iii) Notwithstanding any provision of this Award Agreement to the contrary, in
no event shall the timing of the Participant’s execution of the Compliance
Certificate, directly or indirectly, result in the Participant designating the
calendar year of payment, and if a payment that is subject to execution of the
Compliance Certificate could be made in more than one taxable year, payment
shall be made in the later taxable year.

(iv) All payments in respect of earned and vested Performance Share Units shall
be made in freely transferable shares of Common Stock. No fractional shares of
Common Stock shall be issued pursuant to this Award, and any fractional share
resulting from any calculation made in accordance with the terms of this Award
Agreement shall be rounded down to the next whole share.

4. Certain Corporate Changes. If any change is made to the Common Stock (whether
by reason of merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination of shares, or exchange of shares or any other
change in capital structure made without receipt of consideration), then unless
such event or change results in the termination of all the Performance Share
Units granted under this Award Agreement, the Committee shall adjust, in an
equitable manner and as provided in the Plan, the number and class of shares
underlying the Performance Share Units, the maximum number of shares for which
the Performance Share Units may vest, and the share price or class of Common
Stock for purposes of the Performance Goal, as appropriate, to reflect the
effect of such event or change in the Company’s capital structure in such a way
as to preserve the value of the Performance Share Units. Any adjustment that
occurs under the terms of this Section 4 or the Plan will not change the timing
or form of payment with respect to any Performance Share Units except as
permitted in accordance with section 409A of the Code.

5. Employment. Nothing in the Plan or in this Award Agreement shall confer upon
the Participant any right to continue in the employ of the Company or any of its
Subsidiaries or Affiliated Entities, or interfere in any way with the right to
terminate the Participant’s employment at any time.

6. Nontransferability of Award. The Participant shall not have the right to
sell, assign, transfer, convey, dispose, pledge, hypothecate, burden, encumber
or charge any Performance Share Unit or any interest therein in any manner
whatsoever.

7. Notices. All notices or other communications relating to the Plan and this
Agreement as it relates to the Participant shall be in writing and shall be
delivered personally or mailed (U.S. mail) by the Company to the Participant at
the then current address as maintained by the Company or such other address as
the Participant may advise the Company in writing.

8. Binding Effect and Governing Law. This Award Agreement shall be (i) binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns except as may be limited by the Plan, and (ii) governed
and construed under the laws of the State of Delaware.

 

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9. Company Policies. The Participant agrees that the Award will be subject to
any applicable clawback or recoupment policies, share trading policies and other
policies that may be implemented by the Company’s Board of Directors or a duly
authorized committee thereof, from time to time.

10. Withholding. The Company and the Participant shall comply with all federal
and state laws and regulations respecting the required withholding, deposit and
payment of any income, employment or other taxes relating to the Award
(including Dividend Equivalents). The Company shall withhold the employer’s
minimum statutory withholding based upon minimum statutory withholding rates for
federal and state purposes, including payroll taxes, that are applicable to such
supplemental taxable income. Any payment of required withholding taxes by the
Participant in the form of Common Stock shall not be permitted if it would
result in an accounting charge with respect to such shares used to pay such
taxes unless otherwise approved by the Committee.

11. Award Subject to Claims of Creditors. The Participant shall not have any
interest in any particular assets of the Company, its parent, if applicable, or
any Subsidiary or Affiliated Entity by reason of the right to earn an Award
(including Dividend Equivalents) under the Plan and this Award Agreement, and
the Participant or any other person shall have only the rights of a general
unsecured creditor of the Company, its parent, if applicable, or a Subsidiary or
Affiliated Entity with respect to any rights under the Plan or this Award
Agreement.

12. Compliance with Section 409A. This Award is intended to comply with the
applicable requirements of section 409A of the Code and shall be administered in
accordance with section 409A of the Code. Notwithstanding anything in this Award
Agreement to the contrary, if the Performance Share Units constitute “deferred
compensation” under section 409A of the Code and any Performance Share Units
become payable pursuant to the Participant’s termination of employment,
settlement of the Performance Share Units shall be delayed for a period of six
months after the Participant’s termination of employment if the Participant is a
“specified employee” as defined under section 409A of the Code and if required
pursuant to section 409A of the Code. If settlement of the Performance Share
Units is delayed, the Performance Share Units shall be settled within 30 days of
the date that is the six-month anniversary of the Participant’s termination of
employment. If the Participant dies during the six-month delay, the Performance
Share Units shall be settled in accordance with the Participant’s will or under
the applicable laws of descent and distribution. Notwithstanding any provision
to the contrary herein, distributions made with respect to this Award may only
be made in a manner and upon an event permitted by section 409A of the Code, and
all payments to be made upon a termination of employment hereunder may only be
made upon a “separation from service” as defined under section 409A of the Code.
To the extent that any provision of the Award Agreement would cause a conflict
with the requirements of section 409A of the Code, or would cause the
administration of the Performance Share Units to fail to satisfy the
requirements of section 409A of the Code, such provision shall be deemed null
and void to the extent permitted by applicable law. In no event shall a
Participant, directly or indirectly, designate the calendar year of payment.
This Award Agreement may be amended without the consent of the Participant in
any respect deemed by the Board of Directors or its delegate to be necessary in
order to preserve compliance with section 409A of the Code.

13. Captions. The captions of specific provisions of this Award Agreement are
for convenience and reference only, and in no way define, describe, extend or
limit the scope of this Award Agreement or the intent of any provision hereof.

 

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14. Counterparts. This Award Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original for all
purposes, but all of which taken together shall form one agreement.

15. Conditions to Post-Retirement Vesting.

(a) Notice of and Conditions to Post-Retirement Vesting. If the Participant is
Retirement Eligible, the Company shall, within a reasonable period of time prior
to the Participant’s Date of Termination, notify the Participant that the
Participant has the right, pursuant to this Section 15(a), to continue to vest
following the Date of Termination in any unvested Performance Share Units
provided that the Participant executes and delivers to the Company the following
documentation: (i) a non-disclosure letter agreement, in the form attached as
Exhibit A,(a “Non-Disclosure Agreement”), on or before the Date of Termination,
and (ii) a compliance certificate, in the form attached as Exhibit B, (a
“Compliance Certificate”), indicating the Participant’s full compliance with the
Non-Disclosure Agreement, no later than the time(s) required by the Committee.

(b) Consequences of Failure to Satisfy Vesting Conditions. In the event that,
the Participant fails to deliver either the respective Non-Disclosure Agreement
or Compliance Certificate on or before the date required for the delivery of
such document (such failure, a “Non-Compliance Event”), the Participant shall
not be entitled to vest in any unvested Performance Share Units and the unvested
Performance Share Units subject to this Award Agreement shall be forfeited. The
only remedy of the Company for failure to deliver a Non-Disclosure Agreement or
a Compliance Certificate shall be the Participant’s failure to vest in, and
forfeiture of, any unvested Performance Share Units.

16. Definitions. Words, terms or phrases used in this Award Agreement shall have
the meaning set forth in this Section 16. Capitalized terms used in this Award
Agreement but not defined herein shall have the meaning designated in the Plan.

(a) “Award” has the meaning set forth in Section 2.

(b) “Award Agreement” has the meaning set forth in the preamble.

(c) “Company” has the meaning set forth on the Cover Page.

(d) “Compliance Certificate” has the meaning set forth in Section 15(a).

(e) “Date of Grant” has the meaning set forth in the preamble.

(f) “Date of Termination” means the first day occurring on or after the Date of
Grant on which the Participant is not employed by the Company, a Subsidiary, or
an Affiliated Entity, regardless of the reason for the termination of
employment; provided, however, that a termination of employment shall not be
deemed to occur by reason of a transfer of the Participant between the Company,
a Subsidiary, and an Affiliated Entity or between two Subsidiaries or two
Affiliated Entities. The Participant’s employment shall not be considered
terminated while the Participant is on a leave of absence from the Company, a
Subsidiary, or an Affiliated Entity approved by the Participant’s employer
pursuant to Company policies. If, as a result of a sale or other transaction,
the Participant’s employer ceases to be either a Subsidiary or an Affiliated
Entity, and the Participant is not, at the end of the 30-day period following
the transaction, employed by the Company or an entity that is then a Subsidiary
or Affiliated Entity, then the date of occurrence of such transaction shall be
treated as the Participant’s Date of Termination.

 

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(g) “Dividend Equivalent” has the meaning set forth in Section 3(f).

(h) “Early Retirement Date” means, with respect to the Participant, the first
day of a month that occurs on or after the date the Participant (i) attains age
55 and (ii) earns at least 10 Years of Service.

(i) “Non-Compliance Event” has the meaning set forth in Section 15(b).

(j) “Non-Disclosure Agreement” has the meaning set forth in Section 15(a).

(k) “Normal Retirement Date” means, with respect to the Participant, the first
day of a month that occurs on or after the date the Participant attains age 65.

(l) “Participant” has the meaning set forth in the preamble.

(m) “Performance Goal” shall mean the performance goal specified on attached
Schedule A which must be attained and certified in order to satisfy the
performance vesting requirements for the shares of Common Stock subject to this
Award.

(n) “Performance Period” has the meaning set forth on the Cover Page and
Schedule A over which the attainment of the Performance Goal is to be measured.

(o) “Performance Share Unit” the meaning set forth in the preamble.

(p) “Plan” has the meaning set forth in the preamble.

(q) “Retirement Eligible” means the Participant’s Date of Termination occurs on
or after the Participant’s Early Retirement Date or Normal Retirement Date.

(r) “Year of Service” means a calendar year in which the Participant is employed
with the Company, a Subsidiary or Affiliated Entity for at least nine months of
a calendar year. When calculating Years of Service hereunder, Participant’s
first hire date with the Company, a Subsidiary or Affiliated Entity shall be
used.

 

“COMPANY”    

DEVON ENERGY CORPORATION,

a Delaware corporation

“PARTICIPANT”    

%%FIRST_NAME%-% %%MIDDLE_NAME%-%

%LAST_NAME%-%        %%ADDRESS_LINE_1%-%

%%ADDRESS_LINE_2%-%

%%CITY%-%, %%STATE%-%, %%ZIPCODE%-%

ID %%EMPLOYEE_IDENTIFIER%-%

 

 

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SCHEDULE A

PERFORMANCE GOALS AND PERFORMANCE PERIOD

1. Performance Period. Fifty percent (50%) of the target Award is subject to a
two-year Performance Period that begins [date] and ends [date] (the
“20    -20     Performance Period”) and 50% of the target Award is subject to a
three-year Performance Period that begins [date] and ends [date] (the
“20    -20     Performance Period”). The 20    -20     and 20    -20    
Performance Periods may each be individually referred to as a “Performance
Period.”

2. Performance Goal. The Performance Goal is based on total shareholder return
(“TSR”). TSR shall mean the rate of return stockholders receive through stock
price changes and the assumed reinvestment of dividends over the Performance
Period. Vesting will be based on the Company’s TSR ranking relative to the TSR
ranking of the Peer Companies (identified in Section 3(d) below). At the end of
the Performance Period, the TSR for the Company, and for each Peer Company,
shall be determined pursuant to the following formula:

 

TSR =

   (Closing Average Share Value – Opening Average Share Value) + Reinvested
Dividends                                                 Opening Average Share
Value

The result shall be rounded to the nearest hundredth of one percent (.01%).

(a) The term “Closing Average Share Value” means the average value of the common
stock for the 30 trading days ending on the last day of the Performance Period,
which shall be calculated as follows: (i) determine the closing price of the
common stock on each trading date during 30-day period and (ii) average the
amounts so determined for the 30-day period.

(b) The term “Opening Average Share Value” means the average value of the common
stock for the 30 trading days preceding the start of the Performance Period,
which shall be calculated as follows: (i) determine the closing price of the
common stock on each trading date during the 30-day period and (ii) average the
amounts so determined for the 30-day period.

(c) “Reinvested Dividends” shall be calculated by multiplying (i) the aggregate
number of shares (including fractional shares) that could have been purchased
during the Performance Period had each cash dividend paid on a single share
during that period been immediately reinvested in additional shares (or
fractional shares) at the closing selling price per share on the applicable
dividend payment date by (ii) the average daily closing price per share
calculated for the entire duration of the Performance Period.

(d) Each of the foregoing amounts shall be equitably adjusted for stock splits,
stock dividends, recapitalizations and other similar events affecting the shares
in question without the issuer’s receipt of consideration.

 

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3. Vesting Schedule. The Performance Share Units will vest based on the
Company’s relative TSR ranking in respect of the Performance Period as compared
to the TSR ranking of the Peer Companies, in accordance with the following
schedule:

 

Devon Energy Corporation

Relative TSR Ranking

   Vesting
(Percentage
of Target
Award)

1-3

   200%

4

   180%

5

   160%

6

   140%

7

   120%

8

   100%

9

   85%

10

   70%

11

   60%

12

   50%

13-15

     0%

(a) The actual number of Performance Share Units that vest for each Performance
Period may range from 0% to 200% multiplied by 50% of the target Award, with the
actual percentage to be determined on the basis of the percentile level at which
the Committee certifies that the Performance Goal has been attained in relation
to the corresponding Performance Goal for Peer Companies for the Performance
Period; provided however, that the maximum number of Performance Share Units
that may become earned and vested during each Performance Period will be
calculated as follows: %%TOTAL_SHARES_GRANTED%-% x 50% x 200%. The Committee
retains sole discretion to reduce the vesting percentage (and thus the number of
Performance Share Units that vest), including reduction to zero, without regard
to the performance of the Company’s TSR relative to the TSR of the Peer
Companies.

(b) If the Company’s final TSR value is equal to the TSR value of a Peer
Company, the Committee shall assign the Company the higher ranking.

(c) In addition to the Company, the Peer Companies are Anadarko Petroleum
Corporation, Apache Corporation, Chesapeake Energy Corporation, Chevron
Corporation, ConocoPhillips, EnCana Corporation, EOG Resources, Inc., Hess
Corporation, Marathon Oil Corporation, Murphy Oil Corporation, Noble Energy,
Inc., Occidental Petroleum Corporation, Pioneer Natural Resources Company, and
Talisman Energy, Inc.

(d) The Peer Companies will be subject to change as follows:

(i) In the event of a merger, acquisition or business combination transaction of
a Peer Company, in which the Peer Company is the surviving entity and remains
publicly traded, the surviving entity shall remain a Peer Company. Any entity
involved in the transaction that is not the surviving company shall no longer be
a Peer Company.

(ii) In the event of a merger, acquisition or business combination transaction
of a Peer Company, a “going private” transaction or other event involving a Peer
Company or the liquidation of a Peer Company, in each case where the Peer
Company is not the surviving entity or is no longer publicly traded, the company
shall no longer be a Peer Company.

 

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(iii) Notwithstanding the foregoing, in the event of a bankruptcy of a Peer
Company where the Peer Company is not publicly traded at the end of the
Performance Period, such company shall remain a Peer Company but shall be deemed
to have a TSR of negative 100% (-100%).

(iv) If a Peer Company ceases to be a publicly traded company at any time during
the Performance Period, such company will be replaced as a Peer Company by a
company that has been pre-approved by the Committee as a replacement company,
provided that each such replacement company satisfies the requirement to be a
Peer Company throughout the Performance Period.

4. General Vesting Terms. Any fractional Performance Share Unit resulting from
the vesting of the Performance Share Units in accordance with the Award
Agreement shall be rounded down to the nearest whole number. Any portion of the
Performance Share Units that does not vest as of the end of the Performance
Period shall be forfeited as of the end of the Performance Period.

 

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EXHIBIT A

Form of Non-Disclosure Agreement

[Insert Date]

Devon Energy Corporation

20 North Broadway

Oklahoma City, OK 73102

 

  Re: Non-Disclosure Agreement

Ladies and Gentlemen:

This letter agreement is entered between Devon Energy Corporation (together with
its subsidiaries and affiliates, the “Company”) and the undersigned (the
“Participant”) in connection with that certain Performance Share Unit Award
Agreement (the “Agreement”) dated         ,     between the Company and the
Participant. All capitalized terms used in this letter agreement shall have the
same meaning ascribed to them in the Agreement unless specifically denoted
otherwise.

The Participant acknowledges that, during the course of and in connection with
the employment relationship between the Participant and the Company, the Company
provided and the Participant accepted access to the Company’s trade secrets and
confidential and proprietary information, which included, without limitation,
information pertaining to the Company’s finances, oil and gas properties and
prospects, compensation structures, business and litigation strategies and
future business plans and other information or material that is of special and
unique value to the Company and that the Company maintains as confidential and
does not disclose to the general public, whether through its annual report
and/or filings with the Securities and Exchange Commission or otherwise (the
“Confidential Information”).

The Participant acknowledges that his position with the Company was one of trust
and confidence because of the access to the Confidential Information, requiring
the Participant’s best efforts and utmost diligence to protect and maintain the
confidentiality of the Confidential Information. Unless required by the Company
or with the Company’s express written consent, the Participant will not, during
the term of this letter agreement, directly or indirectly, disclose to others or
use for his own benefit or the benefit of another any of the Confidential
Information, whether or not the Confidential Information is acquired, learned,
attained or developed by the Participant alone or in conjunction with others.

The Participant agrees that, due to his access to the Confidential Information,
the Participant would inevitably use and/or disclose that Confidential
Information in breach of his confidentiality and non-disclosure obligations if
the Participant worked in certain capacities or engaged in certain activities
for a period of time following his employment with the Company, specifically in
a position that involves (i) responsibility and decision-making authority or
input at the executive level regarding any subject or responsibility,
(ii) decision-making responsibility or input at any management level in the
Participant’s individual area of assignment with the Company, or
(iii) responsibility and decision-making authority or input that otherwise
allows the use of the

 

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Confidential Information (collectively referred to as the “Restricted
Occupation”). Therefore, except with the prior written consent of the Company,
during the term of this letter agreement, the Participant agrees not to be
employed by, consult for or otherwise act on behalf of any person or entity in
any capacity in which he would be involved, directly or indirectly, in a
Restricted Occupation. The Participant acknowledges that this commitment is
intended to protect the Confidential Information and is not intended to be
applied or interpreted as a covenant against competition.

The Participant further agrees that during the term of this letter agreement,
the Participant will not, directly or indirectly on behalf of a person or entity
or otherwise, (i) solicit any of the established customers of the Company or
attempt to induce any of the established customers of the Company to cease doing
business with the Company, or (ii) solicit any of the employees of the Company
to cease employment with the Company.

This letter agreement shall become effective upon execution by the Participant
and the Company and shall terminate on December 31, 20    . [Note: Insert date
that is the end of the 20    -20     Performance Period.]

If you agree to the above terms and conditions, please execute a copy of this
letter agreement below and return a copy to me.

 

“PARTICIPANT”    [Name of Participant]

THE UNDERSIGNED HEREBY ACCEPTS AND AGREES TO THE TERMS SET FORTH ABOVE AS OF
THIS             DAY OF             ,             .

 

“COMPANY” DEVON ENERGY CORPORATION By:     Name:     Title:    

 

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EXHIBIT B

Form of Compliance Certificate

I hereby certify that I am in full compliance with the covenants contained in
that certain letter agreement (the “Agreement”) dated as of         ,
    between Devon Energy Corporation and me and have been in full compliance
with such covenants at all times during the period ending         ,     .

 

   [Name of Participant]

Dated:                                                              

 

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