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                                                                     EXHIBIT 4.3



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                             KERR-MCGEE CORPORATION



                                       TO



                                 CITIBANK, N.A.,
                                   AS TRUSTEE



                            -----------------------



                          SECOND SUPPLEMENTAL INDENTURE

                              DATED AUGUST 2, 1999

                    SUPPLEMENTING AND AMENDING THE INDENTURE
                           DATED AS OF AUGUST 1, 1982










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                  THIS SECOND SUPPLEMENTAL INDENTURE, dated August 2, 1999
(hereinafter called the "Supplemental Indenture"), is between KERR-McGEE
CORPORATION, a Delaware corporation (hereinafter called the "Corporation"), and
CITIBANK, N.A., a national banking association duly organized and existing under
the laws of the United States of America, as Trustee under the Indenture
referred to below (hereinafter called the "Trustee").

                                    RECITALS

                  The Company and the Trustee are parties to an Indenture, dated
as of August 1, 1982, as amended (the "Indenture"), relating to the issuance
from time to time by the Company of its Securities on terms to be specified at
the time of issuance. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Indenture.

                  The Company has duly authorized the creation of a series of
its Securities denominated its "5 1/2% Exchangeable Notes Due August 2, 2004"
representing up to 9,954,000 of its "Debt Exchangeable for Common Stock(SM)"
(such Securities being referred to herein as the "DECSSM"), the principal amount
of which is mandatorily exchangeable at Maturity into shares of Common Stock,
par value $0.10 per share (the "Devon Common Stock") of Devon Energy Corporation
("Devon"), or, at the option of the Company (under the circumstances described
herein), cash, in either case at the Exchange Rate (as defined herein) and/or
such other consideration as permitted or required by the terms of the DECS.

                  The Company has duly authorized the execution and delivery of
this Supplemental Indenture in order to provide for the issuance of the DECS.

                  The Company has requested the Trustee and the Trustee has
agreed to join with it in the execution and delivery of this Supplemental
Indenture.

                  Section 901(f) of the Indenture provides that the Company,
acting pursuant to a Board Resolution, and the Trustee, at any time and from
time to time, may enter into an indenture supplemental to the Indenture to make
such provisions in regard to matters or questions arising under the Indenture
which shall not adversely affect the interests of any Holders of Securities.

                  The Company has determined that this Supplemental Indenture
complies with Section 901(f) and does not require the consent of any Holders of
Securities. On the basis of the foregoing, the Trustee has determined that this
Supplemental Indenture is in form satisfactory to it.


<PAGE>   3
                                                                               2


                  The Company has furnished the Trustee with an Officer's
Certificate and an Opinion of Counsel complying with the requirements of Section
905 of the Indenture, stating that the execution of this Supplemental Indenture
is authorized or permitted by the Indenture, and has delivered to the Trustee a
Board Resolution authorizing the execution and delivery of this Supplemental
Indenture, together with such other documents as may have been required by
Section 102 of the Indenture.

                  All things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee and a valid amendment of and
supplement to the Indenture have been done.

                  The entry into this Supplemental Indenture by the parties
hereto is in all respects authorized by the provisions of the Indenture.

                  The Company has duly authorized the execution and delivery of
this Supplemental Indenture, and all things necessary have been done to make the
DECS, when executed by the Company and authenticated and delivered hereunder and
duly issued by the Company, the valid obligations of the Company, and to make
this Supplemental Indenture a valid agreement of the Company, in accordance with
their and its terms.

                  NOW THEREFORE:

                  It is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the DECS, as follows:

                                   ARTICLE I

                  SECTION 1.01. Definitions.

                  For all purposes of the Indenture and this Supplemental
Indenture as they relate to the DECS, except as otherwise expressly provided or
unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
assigned to them in this Article;

                  (2) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to the Indenture and this Supplemental Indenture
as a whole and not to any particular Article, Section or other subdivision; and

                  (3) capitalized terms used but not defined herein are used as
they are defined in the Indenture.

                  "Adjustment Event" has the meaning set forth in Section
2.04(b).


<PAGE>   4
                                                                               3


                  "Business Day" means any day that is not a Saturday, a Sunday
or a day on which the NYSE or banking institutions or trust companies in The
City of New York are authorized or obligated by law or executive order to close.

                  "Closing Price" of any security on any date of determination
means (i) the closing sale price (or, if no closing price is reported, the last
reported sale price) of such security (regular way) on the NYSE on such date,
(ii) if such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market, (iv) if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or (v) if
such security is not so quoted, the average of the mid-point of the last bid and
ask prices for such security from each of at least three nationally recognized
independent investment banking firms selected by the Company for such purpose.

                  "DECS" has the meaning set forth in the recitals to this
Supplemental Indenture.

                  "Devon Common Stock" has the meaning set forth in the recitals
to this Supplemental Indenture.

                  "Dilution Event" has the meaning set forth in Section
2.05(a)(ii).

                  "Exchange Rate" means a rate equal to (a) if the Maturity
Price is greater than or equal to $39.16125 (the "Threshold Appreciation
Price"), 0.84746 shares of Devon Common Stock per DECS, (b) if the Maturity
Price is less than the Threshold Appreciation Price but is greater than the
Initial Price, a fraction equal to (i) the Initial Price divided by (ii) the
Maturity Price of one share of Devon Common Stock per DECS (such fractional
share being calculated to the nearest 1/100,000th of a share or, if there is not
a nearest 1/100,000th of a share, to the next higher 1/100,000th of a share) and
(c) if the Maturity Price is less than or equal to the Initial Price, one share
of Devon Common Stock per DECS; provided, however, that the Exchange Rate is
subject to adjustment from time to time pursuant to Section 2.04(a).

                  "Initial Price" means $33.1875 per share of Devon Common
Stock.

                  "Market Price" means, as of any date of determination, the
average Closing Price per share of Devon Common Stock for the 20 Trading Days
immediately prior to (but not including) the date of determination; provided,
however, that if there are not 20 Trading Days for the Devon Common Stock
occurring later than the 60th calendar day immediately prior to, but not
including, such date, the Market Price shall mean the market value per share of
Devon Common Stock as of such date as determined by a nationally recognized
investment banking firm retained for such purpose by the Company.


<PAGE>   5
                                                                               4


                  "Maturity" means the date on which the principal of a DECS
becomes due and payable as provided herein, whether at Stated Maturity or by
declaration of acceleration or otherwise.

                  "Maturity Price" means the average Closing Price per share of
Devon Common Stock on the 20 Trading Days immediately prior to (but not
including) the date of Maturity; provided, however, that if there are not 20
Trading Days for the Devon Common Stock occurring later than the 60th calendar
day immediately prior to, but not including, the date of Maturity, Maturity
Price means the market value per share of Devon Common Stock as of Maturity as
determined by a nationally recognized independent investment banking firm
retained for such purpose by the Company.

                  "NYSE" means the New York Stock Exchange, Inc.

                  "Ordinary Cash Dividend" has the meaning set forth in
subparagraph (b)(5) of Section 2.04.

                  "Reported Securities" has the meaning set forth in
subparagraph (b)(3) of Section 2.04.

                  "Share Components" means the ratios of shares of Devon Common
Stock per DECS specified in clauses (a), (b) and (c) of the definition of
"Exchange Rate" set forth in this Article.

                  "Threshold Appreciation Price" has the meaning specified in
the definition of "Exchange Rate" set forth in this Article.

                  "Trading Day" means a Business Day on which the security, the
Closing Price of which is being determined, (a) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (b) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of such security.

                  "Transaction Value" means (a) for any cash received in any
Adjustment Event, the amount of cash received per share of Devon Common Stock,
(b) for any Reported Securities received in any Adjustment Event, an amount
equal to (x) the average Closing Price per security of such Reported Securities
for the 20 Trading Days immediately prior to (but not including) Maturity
multiplied by (y) the number of such Reported Securities (as adjusted pursuant
to subparagraph (b)(4) of Section 2.04) received per share of Devon Common Stock
and (c) for any property received in any Adjustment Event other than cash or
such Reported Securities, an amount equal to the fair market value of the
property received per share of Devon Common Stock on the date such property is
received, as determined by a nationally recognized investment banking firm
retained for this purpose by the Company; provided, however, that in the case of


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                                                                               5


clause (b), (x) with respect to securities that are Reported Securities by
virtue of only clause (iv) of the definition of Reported Security, Transaction
Value with respect to any such Reported Security means the average of the
mid-point of the last bid and ask prices for such Reported Security as of
Maturity from each of at least three nationally recognized independent
investment banking firms retained for such purpose by the Company multiplied by
the number of such Reported Securities (as adjusted pursuant to subparagraph
(b)(4) of Section 2.04) received per share of Devon Common Stock and (y) with
respect to all other Reported Securities, if there are not 20 Trading Days for
any particular Reported Security occurring later than the 60th calendar day
immediately prior to, but not including, the date of Maturity, Transaction Value
with respect to such Reported Security means the market value per security of
such Reported Security as of Maturity as determined by a nationally recognized
investment banking firm retained for such purpose by the Company multiplied by
the number of such Reported Securities (as adjusted pursuant to subparagraph
(b)(4) of Section 2.04) received per share of Devon Common Stock. For purposes
of calculating the Transaction Value, any cash, Reported Securities or other
property receivable in any Adjustment Event shall be deemed to have been
received immediately prior to the close of business on the record date for such
Adjustment Event or, if there is no record date for such Adjustment Event,
immediately prior to the close of business on the effective date of such
Adjustment Event.

                  Section 1.02. Effect of Headings.

                  The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.

                  Section 1.03. Successors and Assigns.

                  All covenants and agreements in this Supplemental Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.

                  Section 1.04. Separability.

                  In case any provision in this Supplemental Indenture or the
DECS shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  Section 1.05. Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Supplemental
Indenture by any of the provisions of the Trust Indenture Act of 1939, as
amended, such required provisions shall control.


<PAGE>   7
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                  Section 1.06. Benefits of Supplemental Indenture.

                  Nothing in this Supplemental Indenture, expressed or implied,
shall give to any person, other than the parties hereto and their successors
hereunder, and the Holders of the DECS any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture.

                  Section 1.07. Application of Supplemental Indenture.

                  This Supplemental Indenture shall take effect on the date
hereof, and shall, except with respect to Section 1.09, apply only to the DECS.
This Supplemental Indenture shall have no effect on any other Securities,
whether originally issued prior to the date hereof or thereafter. If any
provision of this Supplemental Indenture is inconsistent with any provision of
the Indenture, then, to the extent permitted by the Indenture, the provision in
this Supplemental Indenture shall control.

                  SECTION 1.08. Governing Law.

                  THIS SUPPLEMENTAL INDENTURE AND THE DECS SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS SUPPLEMENTAL
INDENTURE AND EACH SUCH DECS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

                  Section 1.09. Section 301 of the Indenture is hereby amended
as follows:

                  (a) By amending Section 301 of the Indenture by deleting the
word "and" at the end of clause (12), by renumbering clause (13) of Section 301
as clause (14), and by inserting a new Section (13) as follows:

                           (13) the terms and conditions, if any, upon which the
Securities of the series may or shall be convertible into or exchangeable or
exercisable for or payable in, among other things, other securities,
instruments, contracts, currencies, commodities or other forms of property,
rights or interests or any combination of the foregoing; and

                  (b) By amending clause (c) of Section 601 by deleting the word
"and" at the end of clause (3), by replacing the period at the end of clause (4)
with "and", and by inserting as a new clause (5) as follows:

                           (5) the Trustee shall not at any time be under any
duty or responsibility to any Holder of a Security that may or shall be
convertible into or exchangeable or exercisable for or payable in, among other
things, other securities, instruments, contracts, currencies, commodities or
other forms of property, rights or interests or any combination of the


<PAGE>   8
                                                                               7



foregoing, (A) to make or cause to be made any adjustment of the amount of the,
among other things securities, instruments, contracts, currencies, commodities
or other forms of property, rights or interests or any combination of the
foregoing that may be issued, transferred or delivered to such Holder, or to
determine whether any facts exist which may require any such adjustment, or with
respect to the nature or extent of any such adjustment when made, or with
respect to any method employed in making the same, (B) to account for the
validity or value (or the kind or amount) of the, among other things,
securities, instruments, contracts, currencies, commodities or others forms of
property, rights or interests or any combination of the foregoing that may at
any time be issued, transferred or delivered to such Holder or (C) with respect
to the failure of the Company to issue, transfer or deliver any of the, among
other things, securities, instruments, contracts, currencies, commodities or
other forms of property, rights or interests or any combination of the foregoing
pursuant to the terms of such Security.

                  (c) By amending clause (i) of Section 902 by inserting after
the last comma at the end of such clause the following:     "or change the terms
or conditions of any Securities so as to adversely affect the terms or
conditions upon which such Securities are convertible into or exchangeable or
exercisable for or payable in, among other things, other securities,
instruments, contracts, currencies, commodities or other forms of property,
rights or interests or any combination of the foregoing."

                                   ARTICLE II
                                    The DECS

                  Section 2.01 Title and Terms.

                  There is hereby created under the Indenture a series of
Securities known and designated as the "5 1/2% Exchangeable Notes Due August 2,
2004" of the Company. The aggregate principal amount of DECS that may be
authenticated and delivered under this Indenture is limited to $330,348,375
million, except for DECS authenticated and delivered upon reregistration of,
transfer of, or in exchange for, or in lieu of, other DECS pursuant to Section
305, 306, 307, 904 and 1103 of the Indenture.

                  The Stated Maturity for payment of principal of the DECS shall
be August 2, 2004 and the DECS shall bear interest (computed on the basis of a
360-day year of twelve 30-day months) at the rate of 5 1/2% of the principal
amount per annum, from the date of original issuance or the most recent Interest
Payment Date to which interest has been paid or duly provided for, until the
principal amount thereof is exchanged at maturity pursuant to the terms of the
DECS. Interest on the DECS shall be payable quarterly in arrears on February 1,
May 1, August 1 and November 1 of each year, commencing November 1, 1999 (each,
an "Interest Payment Date"), to the persons in whose names the DECS (or any
predecessor securities) are registered at the close of business on the January
15, April 15, July 15 and October 15 immediately preceding such Interest Payment
Date, until the principal thereof is paid or made


<PAGE>   9
                                                                               8



available for payment provided that interest payable at Maturity shall be
payable to the person to whom the Devon Common Stock is deliverable.

                  The DECS shall be initially issued in the form of a Global
Security and the Depositary for the DECS shall be the Depository Trust Company,
New York, New York.

                  The DECS shall not be redeemable prior to their Stated
Maturity and shall not be subject to any sinking fund. The DECS are not subject
to payment prior to the date of Maturity at the option of the Holder.

                  The DECS shall be mandatorily exchangeable as provided in
Section 2.02.

                  The Company shall not be obligated to pay any additional
amounts on the DECS in respect of taxes, except as otherwise provided in Section
2.06 and 3.01.

                  The DECS shall be issuable in denominations of $1000 and any
amounts in excess thereof.

                  The DECS shall not be issued as Original Issue Discount
Securities.

                  The form of DECS attached hereto as Exhibit A is hereby
adopted, as a form of Securities of a series that consists of DECS. Certain
terms of the DECS are set forth in the form of the DECS.

                  With respect to the DECS only and for the benefit of only the
Holders thereof, the failure on the part of the Company to observe or perform
any of the covenants or agreements on the part of the Company in this Second
Supplemental Indenture not otherwise specified in Section 501 of the Indenture
shall be an additional Event of Default with respect to the DECS as if and, for
all purposes under the Indenture, to the same extent as if the same were
specified in paragraph (d) of such Section 501 of the Indenture.

                  Section 2.02. Exchange at Maturity.

                  Subject to Section 2.04(b), at Maturity the principal amount
of each DECS shall be mandatorily exchanged by the Company into a number of
shares of Devon Common Stock at the Exchange Rate; provided, however, that,
pursuant to Section 2.03, no fraction of a share of Devon Common Stock shall be
issued. The Holders of the DECS shall be responsible for the payment of any and
all brokerage costs upon the subsequent sale of such shares. The Company may, at
its option, in lieu of delivering Devon Common Stock, deliver cash in an amount
(calculated to the nearest 1/100th of a dollar per DECS or, if there is not a
nearest 1/100th of a dollar, then to the next higher 1/100th of a dollar) equal
to the product of the number of shares of Devon Common Stock otherwise
deliverable in respect of such DECS on the date of Maturity, multiplied by the
Maturity Price; provided, however, that if such option is exercised,


<PAGE>   10
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the Company shall deliver cash with respect to all, but not less than all, of
the Devon Common Stock that would otherwise be deliverable. In determining the
amount of cash deliverable in exchange for the DECS in lieu of Devon Common
Stock pursuant to the prior sentence hereof, if more than one DECS shall be
surrendered for exchange at one time by the same Holder, the amount of cash
which shall be delivered upon exchange shall be computed on the basis of the
aggregate number of DECS so surrendered at Maturity.

                  Section 2.03. No Fractional Shares.

                  If more than one DECS shall be surrendered for exchange
pursuant to Section 2.02 at one time by the same Holder, the number of full
shares of Devon Common Stock or Reported Securities which shall be delivered
upon such exchange, in whole or in part, as the case may be, shall be computed
on the basis of the aggregate number of DECS surrendered at Maturity. No
fractional shares or scrip representing fractional shares of Devon Common Stock
or Reported Securities shall be issued or delivered upon any exchange pursuant
to Section 2.02 of any DECS. In lieu of any fractional share of Devon Common
Stock or of Reported Securities which, but for the immediately preceding
sentence, would otherwise be deliverable upon such exchange, the Company,
through any applicable Paying Agent, shall make a cash payment in respect of
such fractional interest in an amount equal to the value of such fractional
share of Devon Common Stock or Reported Security at the Maturity Price. The
Company shall, upon such exchange of any DECS, provide cash to any applicable
Paying Agent in an amount equal to the cash payable with respect to any
fractional shares of Devon Common Stock deliverable upon such exchange, and the
Company shall retain such fractional shares of Devon Common Stock.

                  Section 2.04. Adjustment of Exchange Rate.

                  (a) Adjustment for Distributions, Reclassifications, etc. The
Exchange Rate shall be subject to adjustment from time to time as follows:

                      (i) If Devon shall:

                           (A) pay a stock dividend or make a distribution, in
                  either case, with respect to the Devon Common Stock in shares
                  of such stock;

                           (B) subdivide or split the outstanding shares of
                  Devon Common Stock into a greater number of shares;

                           (C) combine the outstanding shares of Devon Common
                  Stock into a smaller number of shares; or

                           (D) issue by reclassification (other than a
                  reclassification pursuant to clause (ii), (iii), (iv) or (v)
                  of the definition of Adjustment Event in paragraph (b)


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                  of this Section) of shares of Devon Common Stock any shares of
                  common stock of Devon;

                  then, in any such event, the Exchange Rate shall be adjusted
                  by adjusting each of the Share Components of the Exchange Rate
                  in effect immediately prior to such event so that a holder of
                  any DECS shall be entitled to receive, upon exchange pursuant
                  to Section 2.02 of the principal amount of such DECS at
                  Maturity, the number of shares of Devon Common Stock (or, in
                  the case of a reclassification referred to in clause (D) of
                  this sentence, the number of shares of other common stock of
                  Devon issued pursuant thereto) which such holder of such DECS
                  would have owned or been entitled to receive immediately
                  following such event had such DECS been exchanged immediately
                  prior to such event or any record date with respect thereto.
                  Each such adjustment shall become effective at the opening of
                  business on the Business Day next following the record date
                  for determination of holders of Devon Common Stock entitled to
                  receive such dividend or distribution in the case of a
                  dividend or distribution and shall become effective
                  immediately after the effective date in the case of a
                  subdivision, split, combination or reclassification. Each such
                  adjustment shall be made successively.

                      (ii) If Devon shall, after the date hereof, issue rights
           or warrants to all holders of Devon Common Stock entitling them to
           subscribe for or purchase shares of Devon Common Stock (other than
           rights to purchase Devon Common Stock pursuant to a plan for the
           reinvestment of dividends) at a price per share less than the Market
           Price of the Devon Common Stock on the Business Day next following
           the record date for the determination of holders of shares of Devon
           Common Stock entitled to receive such rights or warrants, then in
           each case, the Exchange Rate shall be adjusted by multiplying each of
           the Share Components of the Exchange Rate in effect on the record
           date for the determination of holders of Devon Common Stock entitled
           to receive such rights or warrants, by a fraction, of which the
           numerator shall be (A) the number of shares of Devon Common Stock
           outstanding on such record date plus (B) the number of additional
           shares of Devon Common Stock offered for subscription or purchase
           pursuant to such rights or warrants, and of which the denominator
           shall be (x) the number of shares of Devon Common Stock outstanding
           on such record date plus (y) the number of additional shares of Devon
           Common Stock which the aggregate offering price of the total number
           of shares of Devon Common Stock so offered for subscription or
           purchase pursuant to such rights or warrants would purchase at the
           Market Price of the Devon Common Stock on the Business Day next
           following such record date, which number of additional shares shall
           be determined by multiplying such total number of shares by the
           exercise price of such rights or warrants and dividing the product so
           obtained by such Market Price of Devon Common Stock. Such adjustment
           shall become effective at the opening of business on the Business Day
           next following the record date for the determination of holders of
           Devon Common Stock entitled to receive such rights or warrants. To
           the


<PAGE>   12
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           extent that such rights or warrants expire prior to the Maturity of
           the DECS and shares of Devon Common Stock are not delivered pursuant
           to such rights or warrants prior to such expiration, the Exchange
           Rate shall be readjusted to the Exchange Rate which would then be in
           effect had such adjustments for the issuance of such rights or
           warrants been made upon the basis of delivery of only the number of
           shares of Devon Common Stock actually delivered pursuant to such
           rights or warrants. Each such adjustment shall be made successively.

                      (iii) Any shares of Devon Common Stock issuable in payment
           of a dividend shall be deemed to have been issued immediately prior
           to the close of business on the record date for such dividend for
           purposes of calculating the number of outstanding shares of Devon
           Common Stock under paragraph (a)(ii) of this Section.

                      (iv) All adjustments to the Exchange Rate will be
           calculated to the nearest 1/100,000th of a share of Devon Common
           Stock (or, if there is not a nearest 1/100,000th of a share of Devon
           Common Stock, to the next lower 1/100,000th of a share of Devon
           Common Stock). No adjustment in the Exchange Rate shall be required
           unless such adjustment would require an increase or decrease of at
           least one percent therein; provided, however, that any adjustments
           which by reason of this paragraph (a)(iv) are not required to be made
           shall be carried forward and taken into account in any subsequent
           adjustment. If an adjustment is made to the Exchange Rate pursuant to
           paragraphs (a)(i) or (a)(ii) of this Section, an adjustment shall
           also be made to the Maturity Price as such term is used throughout
           the definition of Exchange Rate set forth in Section 1.01. The
           required adjustment to the Maturity Price shall be made at Maturity
           by multiplying the original Maturity Price by the number or fraction
           determined under paragraphs (a)(i) and/or (a)(ii) of this Section by
           which the original Exchange Rate was multiplied to adjust such rate.
           In the case of a reclassification of any shares of Devon Common Stock
           into any common stock of Devon other than Devon Common Stock, such
           common stock shall be deemed to be shares of Devon Common Stock
           solely to determine the Maturity Price and to apply the Exchange Rate
           at Maturity. Each such adjustment to the Exchange Rate and the
           Maturity Price shall be made successively.

                  (b) Other Adjustment Events. In the event of (i) any dividend
or distribution by Devon to all holders of Devon Common Stock of evidences of
its indebtedness or other assets (excluding any dividends or distributions
referred to in clause (A) of paragraph (a)(i) of this Section, any common shares
issued pursuant to a reclassification referred to in clause (D) of paragraph
(a)(i) of this Section and any Ordinary Cash Dividends (as defined below)) or
any issuance by Devon to all holders of Devon Common Stock of rights or warrants
to subscribe for or purchase any of its Securities (other than rights or
warrants referred to in paragraph (a)(ii) of this Section), (ii) any
consolidation or merger of Devon or any surviving entity or subsequent surviving
entity of Devon (a "Devon Successor") with or into another entity (other than a
merger or consolidation in which Devon is the continuing corporation and in
which the Devon Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash,


<PAGE>   13
                                                                              12



securities or other property of Devon or another corporation), (iii) any sale,
transfer, lease or conveyance to another corporation of the property of Devon or
any Devon Successor as an entirety or substantially as an entirety, (iv) any
statutory exchange of securities of Devon or any Devon Successor with another
corporation (other than in connection with a merger or acquisition) or (v) any
liquidation, dissolution or winding up of Devon or any Devon Successor (any such
event, an "Adjustment Event"), the property receivable by Holders of DECS at
Maturity shall be subject to adjustment from time to time as follows:

                  (1) Each Holder of a DECS will receive at Maturity, in lieu of
         or (in the case of an Adjustment Event described in clause (i) of this
         paragraph (b)) in addition to, the shares of Devon Common Stock that it
         would otherwise receive as required by Section 2.02, cash in an amount
         equal to (A) if the Maturity Price is greater than or equal to the
         Threshold Appreciation Price, 0.84746 multiplied by the Transaction
         Value, (B) if the Maturity Price is less than the Threshold
         Appreciation Price but is greater than the Initial Price, the product
         of (x) the Initial Price divided by the Maturity Price multiplied by
         (y) the Transaction Value and (C) if the Maturity Price is less than or
         equal to the Initial Price, the Transaction Value.

                  (2) Following an Adjustment Event, the Maturity Price, as such
         term is used in subparagraph (b)(1) above and throughout the definition
         of Exchange Rate, shall be deemed to equal (A) if shares of Devon
         Common Stock are outstanding at Maturity, subject to clause (B) below,
         the Maturity Price of Devon Common Stock, as adjusted pursuant to the
         provisions of paragraph (a)(iv) of this Section, plus the Transaction
         Value or (B) if shares of Devon Common Stock are not outstanding at
         maturity (or if the Devon Common Stock, as a result of an Adjustment
         Event, is not (i) listed on a United States national securities
         exchange, (ii) reported on a United States national securities system
         subject to last sale reporting or (iii) traded in the over-the-counter
         market and reported on the National Quotation Bureau or similar
         organization, and for which bid and ask prices are not available from
         at least three nationally recognized investment banking firms), the
         Transaction Value.

                  (3) Notwithstanding the foregoing, with respect to any
         securities received in an Adjustment Event that (A) are (i) listed on a
         United States national securities exchange, (ii) reported on a United
         States national securities system subject to last sale reporting, (iii)
         traded in the over-the-counter market and reported on the National
         Quotation Bureau or similar organization or (iv) for which bid and ask
         prices are available from at least three nationally recognized
         investment banking firms and (B) are either (x) perpetual equity
         securities or (y) non-perpetual equity or debt securities with a stated
         maturity after the Stated Maturity ("Reported Securities"), the Company
         may, at its option, in lieu of delivering the amount of cash
         deliverable in respect of Reported Securities received in an Adjustment
         Event, as determined in accordance with subparagraph (b)(1), deliver a
         number of such Reported Securities with a value equal to such cash
         amount, as determined in accordance with clause (b) of the definition
         of Transaction Value set forth


<PAGE>   14
                                                                              13



         in Section 1.01; provided, however, that (i) if such option is
         exercised, the Company shall deliver Reported Securities in respect of
         all, but not less than all, cash amounts that would otherwise be
         deliverable in respect of Reported Securities received in an Adjustment
         Event, (ii) the Company may not exercise such option if the Company has
         elected to deliver cash in lieu of Devon Common Stock, if any,
         deliverable upon Maturity or if such Reported Securities have not yet
         been delivered to the holders entitled thereto following such
         Adjustment Event or any record date with respect thereto, and (iii)
         subject to clause (ii) of this proviso, the Company must exercise such
         option if the Company does not elect to deliver cash in lieu of Devon
         Common Stock, if any, deliverable upon Maturity. If the Company elects
         to deliver Reported Securities, each Holder of a DECS will be
         responsible for the payment of any and all brokerage and other
         transaction costs upon the sale of such Reported Securities. If,
         following any Adjustment Event, any Reported Security ceases to qualify
         as a Reported Security, then (x) the Company may no longer elect to
         deliver such Reported Security in lieu of an equivalent amount of cash
         and (y) notwithstanding clause (b) of the definition of Transaction
         Value, the Transaction Value of such Reported Security shall mean the
         fair market value of such Reported Security on the date such security
         ceases to qualify as a Reported Security, as determined by a nationally
         recognized investment banking firm retained for this purpose by the
         Company.

                  (4) The amount of cash and/or the kind and number of
         securities into which the DECS shall be exchangeable after an
         Adjustment Event shall be subject to adjustment following such
         Adjustment Event in the same manner and upon the occurrence of the same
         type of events as described in paragraphs (a) and (b) of this Section
         with respect to Devon Common Stock and Devon.

                  (5) For purposes of the foregoing, the term "Ordinary Cash
         Dividend" means, with respect to any consecutive 365-day period, any
         dividend with respect to Devon Common Stock paid in cash to the extent
         that the amount of such dividend, together with the aggregate amount of
         all other dividends on Devon Common Stock paid in cash during such
         365-day period, does not exceed on a per-share basis 10% of the average
         of the Closing Prices of Devon Common Stock over such 365-day period.
         For purposes of this subparagraph (b)(5), any cash dividend shall be
         deemed to be paid as of the record date for such cash dividend.

                  Section 2.05. Notice of Adjustment and Certain Other Events.

                  (a) Whenever the Exchange Rate is adjusted as herein provided
or an Adjustment Event occurs, the Company shall:

                      (i) forthwith compute the adjusted Exchange Rate (or
           Transaction Value) in accordance with Section 2.04 and prepare a
           certificate signed by an officer of the Company setting forth the
           adjusted Exchange Rate (or Transaction Value), the method of


<PAGE>   15
                                                                              14



           calculation thereof in reasonable detail and the facts requiring such
           adjustment and upon which such adjustment is based, which certificate
           shall be conclusive, final and binding evidence of the correctness of
           the adjustment, and file such certificate forthwith with the Trustee;
           and

                      (ii) within ten Business Days following the occurrence of
           an event that permits or requires an adjustment to the Exchange Rate
           pursuant to Section 2.04(a) (each, a "Dilution Event") or an
           Adjustment Event that permits or requires a change in the
           consideration to be received by Holders pursuant to Section 2.04(b)
           (or, in either case, if the Company is not aware of such occurrence,
           as soon as practicable after becoming so aware), provide written
           notice to the Trustee and to the Holders of the outstanding DECS of
           the occurrence of such Dilution Event or Adjustment Event including a
           statement in reasonable detail setting forth the method by which any
           adjustment to the Exchange Rate or change in the consideration to be
           received by Holders of DECS following the Adjustment Event was
           determined and setting forth the revised Exchange Rate or
           consideration, as the case may be; provided, however, that in respect
           of any adjustment of the Maturity Price, such notice need only
           disclose the factor by which the Maturity Price is to be multiplied
           pursuant to Section 2.04(a)(iv) in order to determine which clause of
           the definition of the Exchange Rate will apply at Maturity, it being
           understood that, until Maturity, the Exchange Rate itself cannot be
           determined.

                  (b) In case at any time while any of the DECS are outstanding
the Company becomes aware that:

                      (i) Devon will declare a dividend (or any other
           distribution) on or in respect of the Devon Common Stock to which
           Section 2.04(a)(i) or (ii) shall apply (other than any cash dividends
           and distributions, if any, paid from time to time by Devon that
           constitute Ordinary Cash Dividends);

                      (ii) Devon will authorize the issuance to all holders of
           Devon Common Stock of rights or warrants to subscribe for or purchase
           shares of Devon Common Stock or of any other subscription rights or
           warrants;

                      (iii) there will occur any conversion or reclassification
           of Devon Common Stock (other than a subdivision or combination of
           outstanding shares of such Devon Common Stock) or any consolidation,
           merger or reorganization to which Devon is a party and for which
           approval of any stockholders of Devon is required, or the sale or
           transfer of all or substantially all of the assets of Devon; or

                      (iv) there will occur the voluntary or involuntary
           dissolution, liquidation or winding up of Devon;


<PAGE>   16
                                                                              15



         then, if the Company becomes aware of the information described in
         clause (x) and (y) below (other than the proposed merger between Devon
         Delaware and PennzEnergy Corp. for the terms disclosed on the date
         hereof) a reasonable amount of time in advance of the delivery and
         filing requirements set forth in this subparagraph (b), the Company
         shall cause to be delivered to the Trustee and any applicable Paying
         Agent and filed at the office or agency maintained for the purpose of
         exchange of DECS at Maturity in the Borough of Manhattan, in The City
         of New York by the Trustee (or any applicable Paying Agent), and shall
         promptly cause to be mailed to the Holders of DECS at their last
         addresses as they shall appear upon the registration books of the
         Security Registrar, at least ten days before the date hereinafter
         specified (or the earlier of the dates hereinafter specified, in the
         event that more than one is specified), a notice stating (x) the date
         on which a record is to be taken for the purpose of such dividend,
         distribution or grant of rights or warrants or, if a record is not to
         be taken, the date as of which holders of Devon Common Stock of record
         to be entitled to such dividend, distribution or grant of rights or
         warrants are to be determined, or (y) the date, if known by the
         Company, on which such reclassification, consolidation, merger, sale,
         transfer, dissolution, liquidation or winding up is expected to become
         effective. Following any Adjustment Event, the provisions of this
         paragraph (b) shall apply with respect to any Reported Securities in
         the same manner as with respect to Devon and the Devon Common Stock.

                  (c) On or prior to the twenty-first Business Day preceding the
Stated Maturity of the DECS, the Company shall notify the Trustee and will
publish a notice in a daily newspaper of national circulation stating whether
the Company will deliver, in accordance with Section 2.02, shares of Devon
Common Stock or cash (and/or, in accordance with Section 2.04(b), cash or
Reported Securities) upon the mandatory exchange of the principal amount of the
DECS. The Trustee shall notify DTC of the form of consideration to be delivered
by the Company. After the close of business on the Business Day immediately
preceding the Stated Maturity of the DECS, the Company shall notify the Trustee
in writing of the number of shares of Devon Common Stock and/or Reported
Securities, or the amount of cash to be paid per DECS.

                  Section 2.06. Taxes.

                  (a) The Company will pay any and all documentary, stamp,
transfer or similar taxes that may be payable in respect of the transfer and
delivery of Devon Common Stock (or Reported Securities) pursuant hereto;
provided, however, that the Company shall not be required to pay any such tax
which may be payable in respect of any transfer involved in the delivery of
Devon Common Stock (or Reported Securities) in a name other than that in which
the DECS so exchanged were registered, and no such transfer or delivery shall be
made unless and until the person requesting such transfer has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.

                  (b) The parties hereto hereby agree, and each Holder of a DECS
by its purchase of a DECS hereby agrees:


<PAGE>   17
                                                                              16



                      (i) to treat, for U.S. federal income tax purposes, each
           DECS as a forward purchase contract to purchase Devon Common Stock at
           Maturity (including as a result of acceleration or otherwise) (the
           "forward purchase contract characterization"), under the terms of
           which contract (a) at the time of issuance of the DECS the Holder
           deposits irrevocably with the Company a fixed amount of cash equal to
           the purchase price of the DECS to assure the fulfillment of the
           Holder's purchase obligation described in clause (c) below, which
           deposit will unconditionally and irrevocably be applied at Maturity
           to satisfy such obligation, (b) until Maturity the Company will be
           obligated to pay interest on such deposit at a rate equal to the
           stated rate of interest on the DECS as compensation to the Holder for
           the Company's use of such cash deposit during the term of the DECS,
           and (c) at Maturity such cash deposit unconditionally and irrevocably
           will be applied by the Company in full satisfaction of the Holder's
           obligation under the forward purchase contract, and the Company will
           deliver to the Holder the number of shares of Devon Common Stock that
           the Holder is entitled to receive at the time pursuant to the terms
           of the DECS (subject to the Company's right to deliver cash in lieu
           of the shares of Devon Common Stock);

                      (ii) to treat, consistent with the above characterization,
           (x) amounts paid to the Company in respect of the original issue of a
           DECS as allocable in their entirety to the amount of the cash deposit
           attributable to such DECS, and (y) amounts denominated as interest
           that are payable with respect to the DECS as interest payable on the
           amount of such deposit, includible annually in the income of the
           Holder as interest income in accordance with its method of
           accounting; and

                      (iii) to file all U.S. federal, state and local income and
           franchise tax returns consistent with the forward purchase contract
           characterization (unless required otherwise by an applicable taxing
           authority).

                  Section 2.07. Delivery of Securities upon Maturity.

                  All Devon Common Stock and Reported Securities deliverable to
Holders upon the Maturity of the DECS shall be delivered to such Holders,
whenever practicable, in such manner (such as by book-entry transfer) so as to
assure same-day transfer of such securities to Holders and otherwise in the
manner customary at such time for delivery of such securities and securities of
the same type.


                                   ARTICLE III
                                    Covenants

                  Section 3.01 Shares Free and Clear; No Rights in the Stock.


<PAGE>   18
                                                                              17



                  With respect to the DECS only and for the benefit of only the
Holders thereof, the Company covenants and warrants that upon exchange of a DECS
at Maturity pursuant to the Indenture and this Supplemental Indenture, the
Holder of a DECS shall receive valid title to the Devon Common Stock (and, in
the event an Adjustment Event has occurred, the Reported Securities, if Reported
Securities are delivered) for which such DECS is at such time exchangeable
pursuant to this Indenture, free and clear of any and all liens, claims, charges
and encumbrances whatsoever, except to the extent such liens, claims, charges
and encumbrances as may have been placed on any Devon Energy Common Stock by the
prior owner thereof, prior to the time such Devon Energy Common Stock was
acquired by the Company, or are caused by the Holders. In addition, the Company
further warrants that any Devon Common Stock (and Reported Securities) so
delivered in exchange for DECS hereunder shall be free of any transfer
restrictions (other than such as are solely attributable to any Holder's status
as an affiliate of Devon or the issuer of such Reported Securities). Except as
provided in Section 2.06(a), the Company shall pay all taxes and charges with
respect to the delivery of Devon Common Stock (and Reported Securities)
delivered in exchange for DECS hereunder. Until such time, if any, as the
Company shall deliver shares of Devon Common Stock to Holders of the DECS at
Maturity, the Holders shall not be entitled to any rights with respect to the
Devon Common Stock (including, without limitation, voting rights and the rights
to receive any dividends or other distributions in respect thereof.

                  Section 3.02 Discharge of Indenture.

                  With respect to the DECS only and for the benefit of only the
Holders thereof, Article Four of the Indenture is amended to read in its
entirety as follows:

          (a) If at any time (i) the Company shall have delivered to the Trustee
         for cancellation all of the DECS theretofore authenticated and
         delivered (other than (1) any DECS which shall have been destroyed,
         lost or stolen and which shall have been replaced or paid as provided
         in Section 306 and (2) DECS for whose payment money has theretofore
         been deposited in trust and thereafter repaid to the Company as
         provided in Section 1003) or (ii) all DECS not theretofore delivered to
         the Trustee for cancellation shall have become due and payable, and the
         Company shall deposit with the Trustee in trust the number of shares of
         Devon Energy Common Stock (and/or Reported Securities) or the entire
         amount of money in Dollars sufficient to pay all DECS not theretofore
         delivered to the Trustee for cancellation, including principal and
         interest due, in accordance with the terms of such DECS, and if in
         either case the Company shall also pay or cause to be paid all other
         the sums payable hereunder by the Company, then this Second
         Supplemental Indenture shall cease to be of further effect (except as
         to any surviving rights of registration of transfer or exchange of such
         DECS herein expressly provided for and rights to receive payments of
         principal of, and interest on, the DECS with respect to the DECS), and
         the Trustee, on demand of the Company accompanied by an Officers'
         Certificate and an Opinion of Counsel and


<PAGE>   19
                                                                              18



         at the cost and expense of the Company, shall execute proper
         instruments acknowledging satisfaction of and discharging this
         Indenture.



                                   ARTICLE IV
                                  Miscellaneous

                  Section 4.01. Confirmation of Indenture.

                  The Indenture, as supplemented and amended by this
Supplemental Indenture and all other indentures supplemental thereto, is in all
respects ratified and confirmed, and the Indenture, this Supplemental Indenture
and all indentures supplemental thereto shall be read, taken and construed as
one and the same instrument.

                  Section 4.02. Concerning the Trustee.

                  The Trustee assumes no duties, responsibilities or liabilities
by reason of this Supplemental Indenture other than as set forth in the
Indenture.

                  The recitals contained herein shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the correctness of
same, except for the recital indicating the Trustee's approval of the form of
this Second Supplemental Indenture. The Trustee makes no representation as to
the validity of this Second Supplemental Indenture.

                  The Trustee accepts the trust created by the Indenture, as
supplemented by this Second Supplemental Indenture, and agrees to perform the
same upon the terms and conditions in the Indenture, as supplemented by this
Second Supplemental Indenture.

                  Section 4.03. Payment of Principal.

                  Each reference in the Indenture to the payment by the Company
of the principal of any Security (or words of like import) shall be deemed, for
purposes of the DECS only, to mean the delivery of the Devon Common Stock (or,
at the Company's option, the cash equivalent thereof) at the time, rate and
manner set forth herein.

                                  ------------

                  This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.



<PAGE>   20
                                                                              19


                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

                                                 KERR-McGEE CORPORATION

                                                 By: /s/ JOHN C. LINEHAN
                                                    ----------------------------
                                                 Name:  John C. Linehan
                                                 Title: Executive Vice President

[CORPORATE SEAL]


Attest: /s/ DON HAGER
        --------------------
       Name:  Don Hager
       Title: Assistant Secretary

                                                 CITIBANK, N.A.,
                                                 as Trustee

                                                 By: /s/ P. DEFELICE
                                                    ----------------------------
                                                 Name:  P. DeFelice
                                                 Title: Vice President


Attest: /s/ NANCY FORTE
        --------------------
       Name: Nancy Forte
       Title: Trust Officer


<PAGE>   21



STATE OF OKLAHOMA          )
                           )  ss.:
COUNTY OF OKLAHOMA         )


                  On the 2nd day of August, 1999, before me personally appeared
John C. Linehan, to me known, who, being by me duly sworn, did depose and say
that he is the Executive Vice President of KERR-McGEE CORPORATION, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.


                                                     /s/ KAREN D. HANSON
                                                     ---------------------------
                                                     Notary Public


[SEAL]


My Commission Expires:

  October 30, 2000





<PAGE>   22



STATE OF NEW YORK          )
                           )   ss.:
COUNTY OF NEW YORK         )


                  On the 2nd day of August, 1999, before me personally came
P. DeFelice, to me known, who, being by me duly sworn, did depose and say that
he is the Vice President of CITIBANK, N.A., one of the corporations described in
and which executed the foregoing instrument; that she/he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she/he signed her/his name thereto by like authority.


                                                 /s/ PETER M. PAVLYSHIN
                                                 -----------------------
                                                 Notary Public


[SEAL]                                                   [STAMP]

<PAGE>   23



                                                                       EXHIBIT A

                  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL DEBT SECURITIES REPRESENTED HEREBY, THIS
GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

                  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.





<PAGE>   24







                  This Note is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This DECS may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary, unless and until this Note is exchanged in whole or in part for DECS
in definitive form.

                  Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or the Trustee (each as hereafter defined) for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

NO. D-3                                                      CUSIP NO. 492386305

                                                                     $43,088,925


                             KERR-McGEE CORPORATION

                                1,298,348 DECS (SM)
                     (Debt Exchangeable for Common Stock (SM))

                   5 1/2% Exchangeable Note Due August 2, 2004

          (Subject to Exchange at Maturity into Shares of Common Stock,
             Par Value $.10 Per Share, of Devon Energy Corporation)

                  KERR-McGEE CORPORATION, a Delaware corporation (hereinafter
called the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to CEDE & CO. or registered assigns, on August 2, 2004 a number of shares of
Common Stock, par value $.10 per share (the "Devon Common Stock"), of Devon
Energy Corporation ("Devon") (or, at the Company's option, the cash equivalent
thereof and/or such other consideration as permitted or required by the terms of
the DECS) at the Exchange Rate (as defined herein), and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on such
principal amount from the date of original issuance or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, quarterly on February 1, May 1, August 1 and November 1 of each
year (each, an "Interest Payment Date" and, collectively, the "Interest Payment
Dates"),


<PAGE>   25
                                                                               2



commencing November 1, 1999, at the rate per annum specified in the title of
this note, until Maturity. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in said Indenture,
be paid to the person in whose name this DECS (or the DECS in exchange or
substitution for which this DECS was issued) is registered at the close of
business on the Regular Record Date (as defined below) for interest payable on
such Interest Payment Date. The "Regular Record Date" for any interest payment
is the close of business on the January 15, April 15, July 15 and October 15
immediately preceding the relevant Interest Payment Date, whether or not a
Business Day (as defined below), provided that interest payable at Maturity
shall be payable to the person to whom the Devon Common Stock is deliverable. In
any case where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this DECS) payment of
such interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and, if such payment is so made, no interest shall accrue
for the period from and after such Interest Payment Date. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holder on such Regular Record Date, and may be paid to the person
in whose name this DECS (or the DECS in exchange or substitution for which this
DECS was issued) is registered at the close of business on a record date for the
payment of such interest to be fixed by the Trustee for the DECS, notice whereof
shall be given to Holders of the DECS not less than ten days prior to such
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the DECS
may be listed and not deemed impracticable by the Trustee, and upon such notice
as may be required by such exchange.

                  At Maturity, the principal amount of this DECS will be
mandatorily exchanged into a number of shares of Devon Common Stock, at the
Exchange Rate. The "Exchange Rate" is equal to (a) if the Maturity Price (as
defined below) is greater than or equal to $39.16125 (the "Threshold
Appreciation Price"), 0.84746 shares of Devon Common Stock per DECS, (b) if the
Maturity Price is less than the Threshold Appreciation Price but is greater than
$33.1875 (the "Initial Price"), a fraction equal to the Initial Price divided by
the Maturity Price of one share of Devon Common Stock per DECS (such fractional
share being calculated to the nearest 1/100,000th of a share or, if there is not
a nearest 1/100,000th of a share, to the next higher 1/100,000th of a share) and
(c) if the Maturity Price is less than or equal to the Initial Price, one share
of Devon Common Stock per DECS. Any shares of Devon Common Stock delivered by
the Company to the Holders of the DECS that are not affiliated with Devon shall
be free of any transfer restrictions except to the extent any transfer
restrictions are caused by the Holders of DECS, and the holders of DECS will be
responsible for the payment of any and all brokerage costs upon the subsequent
sale of such shares. No fractional shares of Devon Common Stock will be issued
at Maturity as provided in the Indenture.

                  The Company may at its option, in lieu of delivering shares of
Devon Common Stock, deliver cash in an amount equal to the value of such number
of shares of Devon Common Stock at the Maturity Price as provided in the
Indenture; provided, however, that if such option


<PAGE>   26
                                                                               3



is exercised, the Company shall deliver cash with respect to all, but not less
than all, of the shares of Devon Common Stock that would otherwise be
deliverable.

                  Notwithstanding the foregoing, (i) in the case of certain
dilution events, the Exchange Rate will be subject to adjustment and (ii) in the
case of certain adjustment events, the consideration received by Holders of DECS
at Maturity will be shares of Devon Common Stock, other securities and/or cash,
each as provided in the Indenture.

                  The "Maturity Price" is defined as the average Closing Price
per share of Devon Common Stock on the 20 Trading Days immediately prior to (but
not including) the date of Maturity or, under certain circumstances as provided
in the Indenture, the market value per share of Devon Common Stock as of the
date of Maturity as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company. The "Closing Price" of
any security on any date of determination means (i) the closing sale price (or,
if no closing sale price is reported, the last reported sale price) of such
security (regular way) on the New York Stock Exchange (the "NYSE") on such date,
(ii) if such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market, (iv) if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or (v) if such
security is not so quoted, the average of the mid-point of the last bid and ask
prices for such security from each of at least three nationally recognized
investment banking firms selected for this purpose by the Company. A "Trading
Day" is defined as a Business Day on which the security the Closing Price of
which is being determined (i) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (ii) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of such security. "Business Day" means any day
that is not a Saturday, a Sunday or a day on which the NYSE, banking
institutions or trust companies in The City of New York, New York are authorized
or obligated by law or executive order to close.

                  Interest on this DECS will be payable, and delivery of Devon
Common Stock (or, at the Company's option, the cash equivalent of such Devon
Common Stock and/or such other consideration as permitted or required herein and
in the Indenture) in exchange for the principal amount of this DECS at Maturity
will be made upon surrender of this DECS, at the office or agency of the Company
maintained for that purpose in the City of New York, New York, and payment of
interest on (and, if the Company elects not to deliver Devon Common Stock and/or
other Reported Securities upon exchange at Maturity, the cash equivalent thereof
payable upon exchange for the principal amount of) this DECS will be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the persons in whose names the DECS are registered on the Regular


<PAGE>   27
                                                                               4



Record Date with respect to the relevant Interest Payment Date. Initially, such
office shall be the principal corporate trust office of the Trustee in New York
City, which is located at 111 Wall Street, 5th Floor, New York, New York 10005.

                  Reference is hereby made to the further provisions of this
DECS set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as of set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by manual signature by the Trustee referred to on the reverse hereof,
this DECS shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.

                  "DECS" and "Debt Exchangeable for Common Stock" are service
marks of Salomon Smith Barney Inc.


<PAGE>   28
                                                                               5



                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal by the manual or facsimile signatures
of its officers thereunto duly authorized.

                                             KERR-McGEE CORPORATION

                                             By:
                                                -------------------


                                             Attest:

                                             By:
                                                -------------------


Dated: August 9, 1999

                                                                [CORPORATE SEAL]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the series of Debt Securities
issued under the within mentioned Indenture.

Date of Authentication:

         CITIBANK, N.A.,
           as Trustee


         By:
            --------------------------------
            Authorized Signatory


<PAGE>   29
                                                                               6




                                [Reverse of DECS]

                             KERR-McGEE CORPORATION

                   5 1/2% Exchangeable Note Due August 2, 2004

          (Subject to Exchange at Maturity into Shares of Common Stock,
             Par Value $.10 Per Share, of Devon Energy Corporation)


                  This DECS is one of a duly authorized issue of notes of the
Company of the series designated 5 1/2% Exchangeable Notes due August 2, 2004,
(herein called the "DECS"), limited in aggregate principal amount to
$330,348,375 issued and to be issued under an Indenture dated as of August 1,
1982, between the Company and Citibank, N.A., as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), as
supplemented by the First Supplemental Indenture dated as of May 7, 1996 and the
Second Supplemental Indenture thereto dated August 2, 1999 (said Indenture, as
so supplemented, herein and as it may be further supplemented from time to time,
called the "Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the DECS, and of the terms upon which
the DECS are, and are to be, authenticated and delivered.

                  The DECS may not be redeemed prior to Stated Maturity and are
not entitled to the benefit of any sinking fund.

                  The provisions contained in the Indenture for defeasance of
the Company's obligations and discharge of the entire principal of all the
Securities of any series upon compliance by the Company with certain conditions
set forth therein will not be applicable to the DECS. Certain other provisions
contained in the Indenture pertaining to satisfaction and discharge of the
Indenture upon deposit of funds with the Trustee shall apply to the DECS in the
manner set forth in the Second Supplemental Indenture referred to above.

                  If an Event of Default with respect to the DECS, as defined in
the Indenture, shall occur and be continuing, the principal of all DECS may be
declared due and payable and therefore will result in the mandatory exchange of
the principal amount thereof for Devon Common Stock (or, at the Company's
option, cash and/or such other consideration as permitted or required herein),
all in the manner and with the effect provided in the Indenture.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company with


<PAGE>   30
                                                                               7



respect to the DECS and the rights of the Holders of each series of the DECS
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Outstanding DECS of the series to be affected thereby. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the DECS of any series at the time Outstanding, on behalf of
the Holders of all the DECS of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences with respect to such series. Any such consent
or waiver by the Holder of this DECS shall be conclusive and binding upon such
Holder and upon all future Holders of this DECS and of any DECS issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this DECS.

                  Holders of DECS may not enforce their rights pursuant to the
Indenture or the DECS except as provided in the Indenture. No reference herein
to the Indenture and no provision of this DECS or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this DECS at the times, place, and rate,
and in the manner herein prescribed.

                  As provided in the Indenture and subject to certain
limitations therein set forth, this DECS is transferable on the Security
Register of the Company, upon surrender of this DECS for registration of
transfer at the office of the Company maintained for such purpose in the Borough
of Manhattan, the City and State of New York, duly endorsed, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new DECS of like aggregate
principal amount of such denominations as are authorized for DECS and of a like
Stated Maturity and with like terms and conditions will be issued in the name of
the designated transferee or transferees.

                  The DECS are issuable in registered form without coupons, in
denominations of $1,000 and any amounts in excess thereof. As provided in the
Indenture and subject to certain limitations therein set forth, DECS are
exchangeable for other DECS of like aggregate principal amount and of a like
Stated Maturity and with like terms and conditions, as requested by the Holder
surrendering the same.

                  No service charge shall be made for any registration of
transfer or exchange of DECS, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.

                  The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this DECS is registered as the owner
hereof for all purposes, whether or not this DECS be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.


<PAGE>   31
                                                                               8



                  All terms used in this DECS which are defined in the Indenture
shall have the meanings assigned to them therein.

                  THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                               -------------------

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of the within DECS, shall be construed as though they were written out
in full according to applicable laws or regulations.


TEN COM - as tenants in common -
TEN ENT - as tenants by the entireties         UNIF GIFT MIN ACT
                                               ___________Custodian_____________
JT TEN  - as joint tenants with right of       (Cust)              (Minor)
               survivorship and not as         Under Uniform Gifts to Minors Act
               tenants in common               _________________________________
                                                           (State)

                Additional abbreviations may also be used though
                              not in the above list

                             ----------------------

          FOR VALUE RECEIVED the undersigned hereby sells, assigns and
                                 transfers unto

PLEASE INSERT SOCIAL SECURITY                     ------------------------------
OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
                                                  ------------------------------





               (Name and Address of Assignee, including zip code,
                         must be printed or typewritten)




<PAGE>   32
                                                                               9



the within DECS, and all rights thereunder, hereby irrevocably constituting and
appointing Attorney to transfer said DECS on the books of the Company, with full
power of substitution in the premises.

         Dated:
               ---------------------              ------------------------------
                                                  Signature

                  NOTICE: The signature to this assignment must correspond with
         the name as it appears upon the face of the within DECS in every
         particular, without alteration or enlargement or any change whatever.