Document:

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                                                                   EXHIBIT 10.24

                                RELEASE AGREEMENT

              Made and entered into this 7th day of December, 2000

       PLEASE READ CAREFULLY. THIS RELEASE AGREEMENT INCLUDES THE RELEASE OF ALL
       KNOWN AND UNKNOWN CLAIMS AS OF THE DATE OF THIS AGREEMENT, AS WELL AS ALL
       CLAIMS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AGAINST
       DEVX ENERGY, INC., AND ANY OF ITS PARENT OR AFFILIATE COMPANIES OR
       DIVISIONS.

BETWEEN

       DevX Energy, Inc. a Delaware company ("DEVX"), DevX Energy, Inc., a
       Nevada company ("DEVXn"), DevX Energy (Canada), Inc. ("DEVXc"), DevX
       Operating Company., a Nevada Company ("OPCO") and Corrida Resources Inc.
       a Nevada Company ("Corrida"), each of which have an office at 13760 Noel
       Rd, Suite 1030, Dallas TX., 75240-7336.

       (DEVX, DEVXc, DEVXn, OPCO and Corrida shall be collectively referred to
       herein as the "Company Group")

AND

       Bruce I. Benn, of 20 Inverness Ave. Ottawa, Ontario Canada, K2E 6N7

       ("Benn" or "Employee").

WHEREAS: the Employee has been employed by DEVXc under a contract of employment
dated December 15, 1997 (the "Contract") and, pursuant to the Contract, has
served as Executive Vice-President and Secretary of DEVX as well as
Vice-President of DEVXc, DEVXn, OPCO and Corrida.

AND WHEREAS, the obligations of DEVc under the Contract were guaranteed by DEVX.

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AND WHEREAS the Employee also served as director of DEVX until his resignation
therefrom on October 26, 2000;

AND WHEREAS DEVX recently completed a reorganization and public offering of
stock as more particularly described in the Registration Statement on form S2
filed with the Securities and Exchange Commission on October 6, 2000 as number
333-41992 (the "Registration Statement");

AND WHEREAS pursuant to such reorganization and public offering, the Employee,
by letter agreement dated September 12, 2000, surrendered all options previously
granted to him under the DEVX's 1997 Incentive Stock Option Plan and, by further
letter agreement dated October 31 2000, acknowledged and agreed that none of the
transactions contemplated by the Registration Statement would constitute a
change of control for the purposes of the Contract;

AND WHEREAS Employee and DEVXc have agreed that Employee will cease his
employment with DEVXc and resign all positions with all other members of the
Company Group; and

AND WHEREAS, the parties have agreed to resolve any and all potential disputes,
claims, or causes of action which have or may have arisen between them and
growing out of Employee's employment with DEVXc and his positions with members
of the Company Group;

NOW, THEREFORE, in consideration of the following mutual promises, payments and
conditions contained in this Agreement, and effective on the eighth day
following Employee's execution of this Agreement ("Effective Date"), the parties
voluntarily agree as follows:

1      Severance Date. Employee's employment with DEVXc has ended as of November
       10, 2000 ("Last Day Worked").

2      Resignation. Employee hereby resigns his employment with DEVXc effective
       as of 5:00 p.m. EST on the Last Day Worked. Employee also hereby resigns
       all his remaining officer and director positions with all members of the
       Company Group effective as of 5:00 p.m. EST on November 24, 2000. Each
       member of the Company Group hereby accepts the Employee's resignations.

3      Severance Payment. DEVX, for and on behalf of itself, DEVXc and every
       other member of the Company Group, agrees to pay the Employee a severance
       package of US$295,000 consisting of a lump sum payment of US$45,000
       payable on the

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       Effective Date plus 20 equal monthly payments of US$12,500 payable on the
       last business day of every month from November 2000 through and including
       June 2002 provided that if there is a Change of Control (as hereinafter
       defined), all remaining monthly payments shall accelerate and become due
       and payable immediately upon such Change of Control. The Employee
       acknowledges and agrees that DEVX may deduct from any and all such
       payments, all applicable federal, provincial or state taxes as it may be
       required by law to withhold therefrom.

4      Medical and Other Benefits. DEVXc shall maintain until June 30 2002 for
       the continued benefit of the Employee coverage under those of its
       medical, dental and life insurance plans as are specified on Schedule A.
       Any benefits not specifically stated on Schedule A shall cease on
       Employee's Last Day Worked. Employee acknowledges and agrees that,
       because he is a Canadian resident and citizen, no member of the Company
       Group is required to maintain or pay for any health care or other benefit
       programs for or on account of the Employee pursuant to the Consolidated
       Omnibus Budget Reconciliation Act of 1985, as amended, ("COBRA").

5      Covenant of Confidentiality. For the purposes of this Agreement,
       Confidential Information shall mean all written, computer readable or
       other tangible forms of information, documents, memoranda, or other
       materials prepared by or on behalf of any of the Company Group, or the
       business, properties and assets thereof, including, without limitation,
       production reports, reserve reports, exploration programs or targets,
       work-over programs, capital expenditures, proposed or ongoing property
       acquisitions or divestments, employee lists and evaluation reports and
       financial and performance reports, plans or projections. All Confidential
       Information which has or will come into Employee's possession regarding
       shall be deemed to be confidential and proprietary to DEVX and its sole
       and exclusive property. Employee agrees that he will not divulge to any
       other party any Confidential Information, except as required by law.
       Additionally, Employee agrees that upon Employee's termination of
       employment, Employee shall promptly return to the Company Group any and
       all Confidential Information that is in Employee's possession. Each
       member of the Company Group agrees to keep the terms of this Agreement
       confidential and not divulge such terms to any other party except as
       required by law.

6      Covenant of Cooperation. Employee agrees to cooperate with the Company
       Group in resolving or pursuing any litigation or administrative
       proceedings involving any matters with which Employee was involved during
       Employee's employment with DEVXc or his relationship or position with any
       and all members of Company Group.

7      Covenants of Non-Solicitation and Non-Disparagement. Employee agrees that
       for the period of 26 months following the Last Day Worked, he will not
       solicit or induce or attempt to solicit or induce on behalf of himself or
       any other person or

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       entity, any employee of any member of the Company Group, to terminate
       such employee's employment with the particular member of the Company
       Group as the case may be. Employee also agrees not to make any negative
       or adverse remarks whatsoever concerning the business, operations,
       technologies, products, services, marketing strategies, pricing policies,
       management, business practices, employees, officers, directors, agents,
       representatives, affiliates, affairs and/or financial condition of the
       Company Group.

8      Covenant of Non-Competition Employee agrees that in consideration of the
       payment of US$5,000 payable by and on behalf of the Company Group on the
       Effective Date hereof and of the fact that in connection with his
       employment Employee has received Confidential Information, he will not
       for a period of 26 months following the Last Day Worked, directly or
       indirectly engage in the business of the acquisition of oil and natural
       gas reserves or of the production, exploration and exploitation of oil
       and natural gas reserves; or any other business in which any member of
       the Company Group is directly or indirectly engaged as of the Last Day
       Worked; provided, however, that the restriction in this Section 8 shall
       apply only to the geographic area consisting of a 5 mile strip around and
       contiguous to the perimeter of any oil and natural gas property in which
       any member of the Company Group directly or indirectly has an interest as
       of the Last Day Worked as more particularly set out in Schedule B. The
       Employee agrees that if a court of competent jurisdiction determines that
       the length of time or any other restriction, or portion thereof, set
       forth in this Section 8 is overly restrictive or otherwise unenforceable,
       the court may reduce or modify such restrictions to those which it deems
       reasonable and enforceable under the circumstances, and, as so reduced or
       modified, the parties hereto agree that the restrictions of this Section
       8 shall remain in full force and effect. The Employee acknowledges and
       agrees that the restrictions imposed by this Agreement are legitimate,
       reasonable and necessary to protect the businesses, investments and
       goodwill of DEVX and each member of the Company Group. The Employee
       acknowledges that the scope and duration of the restrictions contained
       herein are reasonable in light of the time that the Employee has been
       engaged in the business of DEVX and the other members of the Company
       Group, the Employees' reputation in the markets in which the members of
       the Company Group do business and the Employee's relationship with the
       suppliers, customers and clients of the members of the Company Group. The
       Employee further acknowledges that the restrictions contained herein are
       not burdensome to the Employee in light of the consideration paid
       therefore, and the other opportunities that remain open to the Employee.
       Moreover, the Employee acknowledges that he has means available to him
       for the pursuit of his livelihood that do not conflict with the
       provisions of this Section.

9      Employee Release. In consideration of the severance package and the
       mutual covenants contained herein, the Employee forever and
       unconditionally releases and discharges the Company Group, and each
       member thereof and their respective owners, directors, officers,
       employees, assigns, representatives or agents, and the Company Group, and
       member thereof and each of their respective

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       owners, directors, officers, employees, assigns, representatives or
       agents, forever and unconditionally releases and discharges the Employee
       from any and all claims, demands, complaints, or causes of action of any
       nature relating to or arising out of Employee's employment with DEVXc and
       any and all of his director and executive officer positions with any and
       all members of the Company Group. Such release encompasses, but is not
       limited to, any and all claims by Employee for severance amounts, wages,
       salary, bonuses, stock options or other benefits of employment payable
       under the Contract or otherwise, whether or not in the context of a
       change of control. For greater certainty, it is hereby acknowledged and
       agreed that except as expressly provided in this Agreement, no member of
       the Company Group shall have any further obligation to make any payment
       or provide any benefit to the Employee under the Contract or otherwise.
       Such release also encompasses, but is not limited to, all claims under
       U.S. and Canadian federal, provincial, or state statutes, or under equity
       or common law, or in tort or contract, whether express or implied, but
       does not encompass the obligations of the parties under this Agreement.

10     Indemnity. DEVX, and each member of the Company Group shall jointly and
       severally indemnify, to the full extent authorized by the laws of their
       respective incorporating jurisdictions, the Employee and his heirs,
       executives, administrators and legal representatives, from any and all
       suits, claims, actions, demands or proceedings of any kind to which the
       Employee is named or in respect of which he may be or become liable by
       reason of the fact that he is or was a director, officer or employee of
       any member of the Company Group or by reason of the fact that he is or
       was the representative of the Company or any member of the Company Group
       on any other corporation, trust, joint venture or enterprise not part of
       the Company Group or serving such other entity in any capacity at the
       Company's request, save and except in all cases for acts of fraud
       committed by the Employee

11     Waiver of Rights. Employee further agrees that it will not file any
       complaint, petition, or lawsuit against any member of the Company Group
       with any state or federal court, except for any such lawsuit specifically
       required for the enforcement of this Agreement. If the Employee, or
       anyone acting on his behalf, files any such lawsuit, petition, complaint,
       or if any court assumes jurisdiction of any lawsuit, petition, complaint
       or charge against any member of the Company Group regarding or involving
       Employee's employment with DEVXc or his position with any other member of
       the Company Group, Employee will, forthwith upon demand by DEVX, request
       such agency or court to withdraw from the matter and dismiss said action
       and reimburse the affected member of the Company Group for all costs,
       including attorneys' fees, incurred as a result of such complaint,
       petition, lawsuit, or charge.

12     Mutual Non-Admission. This Agreement shall not in any way be construed as
       an admission or as a waiver by either Party of any illegal act or
       violation of or by the

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       other of any federal, state, or local statute, law, ordinance, or of any
       breach of any express or implied contract or any right whatsoever by or
       against the other party.

13     Entire Agreement. Each party represents and acknowledges that in
       executing this Agreement it does not rely and has not relied upon any
       prior representations or prior agreements, written, verbal, express or
       implied, made by the other party or its employees, officers, agents,
       representatives, or attorneys concerning the subject matter of this
       Agreement and this Agreement represents the entire agreement between the
       parties concerning the subject matter hereof.

14     Vacation Pay The parties agree that the amount of accrued vacation pay
       for which the Employee is eligible up to and including the Last Day
       Worked is 4 weeks of the Employee's Base Salary in effect at such time
       and that US$12,307.69 is the equivalent of 4 weeks of such Base Salary.
       Accordingly, in addition to all other amounts otherwise payable in this
       Agreement, the Company shall pay the sum of US$12,307.69 (less all
       applicable taxes) to the Employee on the Effective Date for and on
       account of accrued vacation pay.

15     Accrued Salary & Benefits. Employee acknowledges and agrees that he has
       received all accrued salary and benefits (except for vacation pay as
       described in Section 14) payable under the Contract up to and including
       the Last Day Worked plus the additional sum of US$20,000 paid on account
       of all of the first and part of the second monthly severance payments
       described in Section 3.

16     Binding on Parties. This Agreement shall be binding upon the parties and
       their respective heirs, third party beneficiaries, administrators,
       representatives, executors, successors, assigns and affiliated entities.

17     Specific Remedy. As a further material inducement to enter into this
       Agreement, a party breaching this Agreement must reimburse the
       non-breaching party for any and all loss, cost, damage or expense,
       including without limitation, attorneys' fees arising out of any such
       breach of this Agreement. In addition, any breach of this Agreement will
       entitle the non-breaching party to seek injunctive relief and to recover
       any actual damages incurred as a result of such breach.

18     Severability. Should any provision of this Agreement be declared to be or
       determined to be illegal or invalid, the validity of the remaining parts
       of this Agreement will not be affected.

19     Legal Advice By Employee's signature below, he represents and confirms
       that: (a) he has read this Agreement carefully and completely, (b) he has
       been given a period of at least twenty-one (21) days to consider and
       review the terms of this Agreement, (c) he has been informed of his right
       to consult with legal and financial counsel and has had ample opportunity
       to do so (d) he understands and agrees to all the provisions contained in
       this Agreement, and (e) he is signing freely and voluntarily, without
       duress, coercion or undue influence.

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20     Governing Law This Agreement shall be governed and construed according to
       the laws of the Province of Ontario, Canada without regard to the
       conflict of laws provisions thereof. Each party submits to the
       jurisdiction of the courts of Ontario with respect to any dispute
       hereunder or in connection herewith.

21     Change of Control. For purposes of this Agreement, a "Change of Control"
       shall mean:

       21.1   the acquisition by any individual, entity, or group (within the
              meaning of Section 13(d)(3) or 14(d)(2) of the United States
              Securities and Exchange Act) (a "PERSON") of beneficial ownership
              (within the meaning of Rule 13d-3 promulgated under the United
              States Securities and Exchange Act) of 15% or more of either (A)
              the then outstanding shares of common stock of DEVX (the
              "OUTSTANDING COMPANY COMMON STOCK") or (B) the combined voting
              power of the then outstanding voting securities of DEVX entitled
              to vote generally in the election of directors (the "OUTSTANDING
              COMPANY VOTING SECURITIES"); (w) any acquisition directly from
              DEVX (excluding an acquisition by virtue of the exercise of a
              conversion privilege), (x) any acquisition by DEVX, (y) any
              acquisition by any employee benefit plan (or related trust)
              sponsored or maintained by DEVX or any corporation controlled by
              DEVX, or (z) any acquisition by any corporation pursuant to a
              reorganization, merger, or consolidation, if, following such
              reorganization, merger, or consolidation, the conditions described
              in clauses (A), (B), and (C) of Paragraph 19.3 are satisfied; or

       21.2   individuals who, as of the date of this Agreement, constitute the
              Board of Directors of DEVX (the "INCUMBENT BOARD") cease for any
              reason to constitute a majority of such Board; provided, however,
              that any individual becoming a director subsequent to the date
              hereof whose election, or nomination for election by the DEVX
              stockholders, was approved by a vote of a majority of the
              directors then comprising the Incumbent Board shall be considered
              as though such individual were a member of the Incumbent Board,
              but excluding, for this purpose, any such individual whose initial
              assumption of office occurs as a result of either an actual or
              threatened election contest or other actual or threatened
              solicitation of proxies or consents by or on behalf of a Person
              other than the Board of Directors of DEVX; or

       21.3   consummation of a reorganization, merger, or consolidation of
              DEVX, with or without approval by the stockholders of DEVX, in
              each case, unless, following such reorganization, merger, or
              consolidation, (A) more than 50% of, respectively, the then
              outstanding shares of common stock of the corporation resulting
              from such reorganization, merger, or consolidation and the
              combined voting power of the then outstanding voting securities of
              such corporation entitled to vote generally in the

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              election of directors is then beneficially owned, directly or
              indirectly, by all or substantially all of the individuals and
              entities who were the beneficial owners, respectively, of the
              Outstanding Company Common Stock and Outstanding Company Voting
              Securities immediately prior to such reorganization, merger, or
              consolidation in substantially the same proportions as their
              ownership, immediately prior to such reorganization, merger, or
              consolidation, of the Outstanding Company Common Stock or
              Outstanding Company Voting Securities, as the case may be)
              beneficially owns, directly or indirectly, 15% or more of,
              respectively, the then outstanding shares of common stock of the
              corporation resulting from such reorganization, merger, or
              consolidation or a the combined voting power of the then
              outstanding voting securities of such corporation entitled to vote
              generally in the election of directors, and (C) a majority of the
              members of the board of directors of the corporation resulting
              from such reorganization, merger, or consolidation where members
              of the Incumbent Board at the time of the execution of the initial
              agreement providing for such reorganization, merger, or
              consolidation; or

       21.4   consummation of a sale or other disposition of all or
              substantially all the assets of DEVX, with or without approval by
              the stockholders of DEVX, other than to a corporation, with
              respect to which following such sale or other disposition, (A)
              more than 50% of, respectively, the then outstanding shares of
              common stock of such corporation and the combined voting power of
              the then outstanding voting securities of such corporation
              entitled to vote generally in the election of directors is then
              beneficially owned, directly or indirectly, by all or
              substantially all the individuals and entities who were the
              beneficial owners, respectively, of the Outstanding Company Common
              Stock and Outstanding Company Voting Securities immediately prior
              to such sale or other disposition in substantially the same
              proportion as their ownership, immediately prior to such sale or
              other disposition, of the Outstanding Company Common Stock and
              Outstanding Company Voting Securities, as the case may be, (B) no
              Person (excluding the Company, any employee benefit plan (or
              related trust) of DEVX or such corporation, and any Person
              beneficially owning, immediately prior to such sale or other
              disposition, directly or indirectly, 15% or more of the
              Outstanding Company Common Stock or Outstanding Company Voting
              Securities, as the case may be) beneficially owns, directly or
              indirectly, 15% or more of, respectively, the then outstanding
              shares of common stock of such corporation or the combined voting
              power of the then outstanding voting securities of such
              corporation entitled to vote generally in the election of
              directors, and (C) a majority of the members of the board of
              directors of such corporation were members of the Incumbent Board
              at the time of the execution of the initial agreement or action of
              the Board providing for such sale or other disposition of assets
              of DEVX; and

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       21.5   approval by their respective stockholders of a complete
              liquidation or dissolution of DEVX or DEVXc

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SIGNED IN DALLAS, TEXAS ON THE 7TH DAY OF DECEMBER, 2000.

EMPLOYEE

/s/ Bruce I. Benn
---------------------------
By: Bruce I. Benn

DEVX ENERGY, INC. (DELAWARE)                DEVX ENERGY, INC. (NEVADA)

By: /s/ Edward J. Munden                    BY: /s/ Edward J. Munden
   -------------------------                   ------------------------
Name:   Edward J. Munden                    Name:   Edward J. Munden
Title:  President                           Title:  President

DEVX OPERATING COMPANY                      CORRIDA RESOURCES, INC.

By: /s/ Edward J. Munden                    BY: /s/ Edward J. Munden
   -------------------------                   ------------------------
Name:   Edward J. Munden                    Name:   Edward J. Munden
Title:  President                           Title:  President

DEVX ENERGY (CANADA), INC.

By: /s/ Edward J. Munden
   -------------------------
Name:   Edward J. Munden
Title:  President

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                                   Schedule A
                            To the Release Agreement
                         Dated December 7, 2000 between
   DevX Energy, Inc. (the "Company") et al and Bruce I. Benn (the "Employee")

List of Benefits to be provided to June 30, 2002

       1.     Group Health, Life & Disability Policy #230126 issued by The Great
              West Life Assurance Company (the "Plan") as the said Plan
              pertained to the Employee and his spouse and children on the day
              immediately preceding the Effective Date of the Release. [Annual
              premium cost = C$5,393.16]

Provided that, if the Employee is or becomes ineligible for continued benefits
under any or all of the policies described above (the "Policies") by virtue of
his no longer being an employee of the Company, then the Company shall in its
discretion, in respect of the period from the Effective Date to June 30, 2002,
either (A) establish at its expense for the benefit of the Employee and his
spouse and children such other plans or policies (the "Alternate Policies") as
will provide benefits that are reasonably equivalent to the benefits to which
the Employee and his spouse and children were entitled to receive under the
terms of Policies on the day immediately preceding the Effective Date, or (B)
pay the Employee the cash equivalent of the out-of-pocket costs the Company
would have incurred in respect of such plans had the employee remained employed
with the Company for that period.

Provided further the obligation of the Company to provide benefits hereunder
shall cease in the event that the Employee becomes eligible for reasonably
equivalent benefits by virtue of his employment with any other employer
following the Effective Date.

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                                   Schedule B
                            To the Release Agreement
                         Dated December 7, 2000 between
   DevX Energy, Inc. (the "Company") et al and Bruce I. Benn (the "Employee")

1.     All those properties described in that certain Purchase and Sale
       Agreement dated March 19, 1998 by and among DEVX (then known as Queen
       Sand Resources, Inc.) and other members of the Company Group and Morgan
       Guarantee Trust Company of New York as Trustee under a Declaration of
       Trust dated November 10, 1982, as amended, for certain Commingled Pension
       Trust Funds SAVE AND EXCEPT those certain properties described therein as
       East Hackberry, Giddings, Flores, Cadre, Conley and Samson.

2.     Those certain properties described in that certain Purchase and Sale
       Agreement dated August 1, 1997 between DEVX (then known as Queen Sand
       Resources, Inc.) and Collins & Ware, Inc. and being more particularly
       described as follows:

       2.1.   Oil, Gas and Mineral Lease dated January 3, 1990 by and between
              John B. Harvard, Jr., and wife, Mary Harvard, as Lessor, and Holly
              Petroleum, Inc., as Lessee, recorded in Volume 317 at Page 673 of
              the Official Public Records of Martin County, Texas.

       2.2.   Oil, Gas and Mineral Lease dated January 1, 1990 by and between
              Margaret Mae Good Cottrell, a married woman, dealing in her sole
              and separate property, as Lessor, and K. Bryan Reeves, as Lessee,
              recorded in Volume 317 at Page 385 of the Official Public Records
              of Martin County, Texas.

       2.3.   Oil, Gas and Mineral Lease dated January 1, 1990 by and between
              Clarence H. Good, a married man, dealing in his sole and separate
              property, as Lessor, and K. Bryan Reeves, as Lessee, recorded in
              Volume 317 at Page 673 of the Official Public Records of Martin
              County, Texas.

       2.4.   Oil, Gas and Mineral Lease dated January 1, 1990 by and between
              Lola Fay Good Craddock, dealing in her sole and separate property,
              as Lessor, and K. Bryan Reeves, as Lessee, recorded in Volume 317
              at Page 391 of the Official Public Records of Martin County,
              Texas.

       2.5.   Oil, Gas and Mineral Lease dated January 1, 1990 by and between
              Susan Edith Chenault, a widow, as Lessor, and K. Bryan Reeves, as
              Lessee, recorded in Volume 317 at Page 391 of the Official Public
              Records of Martin County, Texas.

       2.6.   Oil, Gas and Mineral Lease dated February 18, 1974 by and between
              Mary L. Holcombe, a widow, as Lessor, and R. William Cone, as
              Lessee, recorded in Volume 154 at Page 363 of the Official Public
              Records of Martin County, Texas.

       2.7.   Oil, Gas and Mineral Lease dated September 28, 1993 by and between
              Kenneth H. Gray, as Lessor, and Collins & Ware, Inc., as Lessee,
              recorded in Volume 34 at Page 258 of the Official Public Records
              of Martin County, Texas.

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       2.8.   Oil, Gas and Mineral Lease dated September 28, 1993 by and between
              Mary M. Reeves, DBA Hopewell Investments, as Lessor, and Collins &
              Ware, Inc., as Lessee, recorded in Volume 34 at Page 260 of the
              Official Public Records of Martin County, Texas.

       2.9.   Oil, Gas and Mineral Lease dated July 9, 1958 by and between E. H.
              Chandler and William A. Childress, as Lessors, and R. V. Butler,
              as Lessee, recorded in Volume 29 at Page 474 of the Official
              Public Records of Martin County, Texas.

       2.10.  Oil, Gas and Mineral Lease dated November 29, 1961 by and between
              Elma Letcher Slaughter, a widow, and Anella Slaughter Bauer, a
              widow, as Lessors, and Pan American Petroleum Corporation, as
              Lessee, recorded in Volume 36 at Page 367 of the Official Public
              Records of Martin County, Texas.

       2.11.  Oil, Gas and Mineral Lease dated July 9, 1958 by and between E. H.
              Chandler and William A. Childress, as Lessors, and R. V. Butler,
              as Lessee, recorded in Volume 29 at Page 455 of the Official
              Public Records of Martin County, Texas.

       2.12.  Oil, Gas and Mineral Lease dated November 29, 1961 by and between
              Elma Letcher Slaughter, a widow, and Anella Slaughter Bauer, a
              widow, as Lessors, and Pan American Petroleum Corporation, as
              Lessee, recorded in Volume 36 at Page 361 of the Official Public
              Records of Martin County, Texas.

       2.13.  Oil, Gas and Mineral Lease dated July 9, 1958 by and between E. H.
              Chandler and William A. Childress, as Lessors, and R. V. Butler,
              as Lessee, recorded in Volume 29 at Page 474 of the Official
              Public Records of Martin County, Texas.

       2.14.  Oil, Gas and Mineral Lease dated November 29, 1961 by and between
              Elma Letcher Slaughter, a widow, and Anella Slaughter Bauer, a
              widow, as Lessors, and Pan American Petroleum Corporation, as
              Lessee, recorded in Volume 36 at Page 367 of the Official Public
              Records of Martin County, Texas.

       2.15.  Oil and Gas Lease dated August 1, 1995 by and between the Texas
              Scottish Rite Hospital for Crippled Children, as Lessor, and
              Collins & Ware, Inc., as Lessee, recorded in Volume 304 at Page
              141 of the Oil & Gas Records of Reagan County, Texas and Volume
              112 at Page 196 of the Official Public Records of Irion County,
              Texas, as amended by that certain Amendment to Oil and Gas Lease
              dated effective February 1, 1997, recorded in Volume 315 at Page
              121 of the Oil and Gas Records of Reagan County, Texas, and as
              further amended by that certain Second Amendment to Oil and Gas
              Lease dated effective October 15, 1998, recorded in Volume 327 at
              Page 51 of the Oil and Gas Records of Reagan County, Texas and
              Volume 130 at Page 393 of the Official Public Records of Irion
              County, Texas, and as further amended by that certain Third
              Amendment to Oil and Gas Lease dated effective July 24, 2000,
              recorded in Volume 18 at Page 17 of the Official Public Records of
              Reagan County, Texas and Volume 138 at Page 583 of the Official
              Public Records of Irion County, Texas.

       2.16.  Oil and Gas Lease dated March 15, 1996 by and between the Texas
              Scottish Rite Hospital for Crippled Children, as Lessor, and
              Collins & Ware, Inc., as Lessee, recorded in Volume 310 at Page
              473 of the Official Public Records of Reagan County, Texas and
              Volume 116 at Page 675 of the Official Public Records of Irion

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<PAGE>   14

              County, Texas, as amended by that certain Amendment to Oil and Gas
              Lease dated effective September 1, 1997, recorded in Volume 319 at
              Page 473 and Volume 319 at Page 469 of the Official Public Records
              of Reagan County, Texas, and in Volume 124 at Page 512 and Volume
              124 at Page 504 of the Official Public Records of Irion County,
              Texas, and as further amended by that certain Second Amendment to
              Oil and Gas Lease dated effective October 15, 1998, recorded in
              Volume 327 at Page 63 of the Official Public Records of Reagan
              County, Texas and Volume 130 at Page 405 of the Official Public
              Records of Irion County, Texas.

3.     Those certain lands or land being situated in Meade, Hardin and
       Breckinridge Counties, Kentucky and being more particularly described as
       being located in and within a five (5) mile radius of those certain lands
       or land covered by those oil and gas leases more particularly described
       in that certain Development Agreement dated February 7, 1996 by and
       between Nasgas, LLC and Indeck Energy Services, Inc. and that certain
       Development Agreement dated May 29, 1997 by and between Nasgas, LLC and
       The Estate of Betty Jo Pare'.

4.     All properties located in Lea and Chavez Counties, New Mexico in which
       any member of the Company Group has an interest.

5.     All properties described as existing exploratory projects and prospects
       in Section II. of that certain Relationship and Participation Agreement
       dated September 14, 2000 by and between DEVX (then known as Queen Sand
       Resources, Inc.) and Aspen Integrated Oil & Gas, L.L.C. as further set
       forth in that certain Domestic Onshore U.S. Exploration Proposal to Queen
       Sand Resources, Inc. dated June 13, 2000 and prepared by Aspen Integrated
       Oil & Gas, L.L.C.

    ALL OF THE AGREEMENTS AND PROPOSALS REFERENCED IN THIS SCHEDULE B MAY BE
                  REVIEWED AT THE OFFICES OF DEVX ENERGY, INC.

                                       14<PAGE>   1

                                                                   EXHIBIT 10.27

                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                                DEVX ENERGY, INC.

                                       AND

                                EDWARD J. MUNDEN

                                NOVEMBER 10, 2000

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              Page
<S>  <C>                                                                      <C>

1.   Employment...............................................................  1

2.   Employment Term..........................................................  1

3.   Positions and Duties.....................................................  1

4.   Compensation and Related Matters.........................................  2
     (a)      Base Salary.....................................................  2
     (b)      Annual Bonus....................................................  3
     (c)      Stock Options...................................................  3
     (d)      Employee Benefits...............................................  4
              (i)      Incentive, Savings, and Retirement Plans...............  4
              (ii)     Welfare Benefit Plans..................................  4
     (e)      Expenses........................................................  4
     (f)      Fringe Benefits.................................................  5
     (g)      Vacation........................................................  5

5.   Termination of Employment................................................  5
     (a)      Death...........................................................  5
     (b)      Disability......................................................  5
     (c)      Termination by Company..........................................  5
     (d)      Termination by Executive........................................  6
     (e)      Notice of Termination...........................................  7
     (f)      Date of Termination.............................................  7

6.   Obligations of the Company Upon Termination..............................  7
     (a)      Good Reason; Other Than for Cause, Death, or Disability.........  8
     (b)      Death........................................................... 10
     (c)      Disability...................................................... 10
     (d)      Cause; Other Than for Good Reason or During the Window Period... 11
     (e)      Failure to relocate............................................. 11
     (f)      Complete Payment................................................ 11

7.   Certain Additional Payments by the Company............................... 11

8.   Representations and Warranties........................................... 13

9.   Confidential Information................................................. 14

10.  Certain Definitions...................................................... 14
     (a)      Effective Date.................................................. 14
     (b)      Change of Control Period........................................ 14
</TABLE>

                                        i
<PAGE>   3

<TABLE>
<S>  <C>                                                                      <C>
     (c)      Change of Control................................................ 14

11.  Full Settlement........................................................... 16

12.  No Effect on Other Contractual Rights..................................... 16

13.  Indemnification; Directors and Officers Insurance......................... 17

14.  Injunctive Relief......................................................... 17

15.  Governing Law............................................................. 17

16.  Notices................................................................... 17

17.  Binding Effect; No Third Party Benefit.................................... 18

18.  Miscellaneous............................................................. 18
     (a)      Amendment........................................................ 18
     (b)      Waiver........................................................... 18
     (c)      Withholding Taxes................................................ 19
     (d)      Nonalienation of Benefits........................................ 19
     (e)      Severability..................................................... 19
     (f)      Entire Agreement................................................. 19
     (g)      Captions......................................................... 19
     (h)      References....................................................... 19
</TABLE>

                                       ii
<PAGE>   4

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of November 10,
2000, by and between DEVX ENERGY, INC., a Delaware corporation (the "COMPANY"),
and EDWARD J. MUNDEN (the "EXECUTIVE");

                                   WITNESSETH:

         WHEREAS, the Board of Directors of the Company (the "BOARD") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat, or occurrence of a Change of Control
(as defined in Paragraph 10(c)) of the Company; and

         WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any pending or threatened Change of Control, and to provide the
Executive with assurance that the compensation and benefits expectations of the
Executive will be satisfied and will be competitive with those of other
corporations; and

         WHEREAS, in order to accomplish these objectives, the Board has caused
the Company to enter into this Agreement;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and the Executive hereby agree as follows:

         1. Employment. The Company agrees to employ the Executive, and the
Executive agrees to enter the employ of the Company, for the period set forth in
Paragraph 2, in the positions and with the duties and responsibilities set forth
in Paragraph 3, and upon the other terms and conditions herein provided.

         2. Employment Term. The employment of the Executive by the Company as
provided in Paragraph 1 shall be for the period commencing on November 10, 2000
through and ending on the second anniversary of such date unless earlier
terminated pursuant to the provisions of Paragraph 5 hereof (the "EMPLOYMENT
TERM"); provided, however, that beginning on the first anniversary date of this
Agreement and on each annual anniversary of such date (such date and each annual
anniversary thereof herein referred to as the "RESET DATE"), the Employment Term
shall be automatically extended so as to terminate two years after such Reset
Date, unless at least 60 days prior to the Reset Date the Company shall give
notice to the Executive that the Employment Term shall not be so extended; and
provided further, however, that following the occurrence of a Change of Control
(as defined in Paragraph 10(c) hereof), the term "EMPLOYMENT TERM" as used
herein shall thereafter mean and refer to the Change of Control Period (as
defined in Paragraph 10(b) hereof).

         3. Positions and Duties.

         (a) During the Employment Term, the Executive's position shall be Chief
Executive Officer and President. The Executive's responsibilities shall be
carried out jointly with the Chairman of the Board and with the advice and
counsel of the Board of Directors and shall include, but shall not be limited to
assisting the

<PAGE>   5

Chairman of the Board with the following: (i) establishing corporate strategies
having particular responsibility for finance and the formulation and execution
of the Company's merger and acquisition strategy; (ii) providing senior level
counsel to the business and operations of the Company; (iii) being involved with
the day-to-day management of the Company's affairs; (iv) representing the
Company in relationships and business dealings with the oil and gas industry and
the investment banking community where appropriate; and (v) participating in and
supporting the activities of the Board of Directors in keeping with the
Company's status as a publicly held corporation. The Executive shall report
directly to the Board of Directors jointly with the Chairman of the Board of
Directors but the Board of Directors may, in its sole and absolute discretion at
any time prior to the Effective Date (as defined in Paragraph 10(a) hereof),
direct the Executive to thenceforth report directly to the Chairman of the Board
and not to the Board of Directors. Notwithstanding anything herein to the
contrary the Board of Directors may, at any time, require the Executive to
relinquish the title of President in favor of the person then holding the
position of Chief Operating Officer of the Company, or being hired for such
position, provided that such person did not hold such position as of the date of
this Agreement.

         (b) During the Employment Term, the Executive shall devote reasonable
time and attention during normal business hours to the business and affairs of
the Company, and in furtherance of the business and affairs of its affiliated
companies (as defined below), and shall utilize Executive's reasonable best
efforts to discharge faithfully and efficiently the duties and responsibilities
delegated and assigned to the Executive herein or pursuant hereto, except for
usual, ordinary, and customary periods of vacation and absence due to illness or
other disability; provided, however, that the Executive may (i) serve on
industry-related, civic or charitable boards or committees, (ii) with the
approval of the Board, serve on corporate boards or committees, (iii) deliver
lectures, fulfill speaking engagements, or teach at educational institutions,
and (iv) manage the Executive's personal investments, so long as such activities
do not significantly interfere with the performance and fulfillment of the
Executive's duties and responsibilities as an employee of the Company in
accordance with this Agreement and, in the case of the activities described in
clause (ii) of this proviso, will not, in the good faith judgment of the Board,
constitute an actual or potential conflict of interest with the business of the
Company or an affiliated company. As used in this Agreement, the term
"AFFILIATED COMPANY" shall include any company controlled by, controlling, or
under common control with the Company.

         (c) The Executive will maintain an office and his full time residence
in Ottawa, Canada from which his regular duties and responsibilities may be
conducted from time to time on behalf of the Company. The Executive shall spend
a reasonable amount of time in the Dallas headquarters of the Company as
appropriate. Notwithstanding the foregoing, the Board may, upon 90 days notice,
require the Executive to move his residence to the Dallas area and thenceforth
to carry out his regular, full-time duties from the Company's Dallas
headquarters. For greater certainty, it is acknowledged and agreed that the
Company will not pay or be responsible for the Ottawa office expenses following
the time at which the Executive moves to Dallas or is terminated.

         (d) All services that the Executive may render to the Company or any of
its affiliated companies in any capacity during the Employment Term shall be
deemed to be services required by this Agreement and consideration for the
compensation provided for herein.

         4. Compensation and Related Matters.

         (a) Base Salary. During the Employment Term, the Executive shall
receive an annual base salary ("BASE SALARY") of Two Hundred Forty Thousand
Dollars ($240,000.00). The Base Salary shall be payable in installments in
accordance with the general payroll practices of the Company in effect at the
time such

                                        2
<PAGE>   6

payment is made, but in no event less frequently than monthly, or as otherwise
mutually agreed upon. During the Employment Term, the Executive's Base Salary
shall be subject to such increases (but not decreases) as may be determined from
time to time by the Board in its sole discretion; provided, however, that the
Executive's Base Salary (i) shall be reviewed by the Board at least annually,
with a view to making such upward adjustment, if any, as the Board deems
appropriate, and (ii) shall be increased at any time and from time to time as
shall be substantially consistent with increases in base salary generally
awarded in the ordinary course of business to the Executive's peer executives of
the Company or any of its affiliated companies. Base Salary shall not be reduced
after any such increase. The term Base Salary as used in this Agreement shall
refer to the Base Salary as so increased. Payments of Base Salary to the
Executive shall not be deemed exclusive and shall not prevent the Executive from
participating in any employee benefit plans, programs, or arrangements of the
Company and its affiliated companies in which the Executive is entitled to
participate. Payments of Base Salary to the Executive shall not in any way limit
or reduce any other obligation of the Company hereunder, and no other
compensation, benefit, or payment to the Executive hereunder shall in any way
limit or reduce the obligation of the Company regarding the Executive's Base
Salary hereunder.

         (b) Annual Bonus. Subject to proration as set forth below for calendar
year 2000, for each calendar year during the term of this Agreement, the
Executive shall be entitled to earn an annual cash bonus (the "ANNUAL BONUS") of
between 20% and 120% of the Executive's Base Salary for such year upon attaining
goals established yearly by the Board of Directors of the Company. The goals
shall be established by the Board of Directors, after consultation with the
Executive, consistent with the Company's standards, and shall be established to
produce a reasonable expectation that the Executive will receive a target bonus
(the "TARGET BONUS") for each year at least equal to 60% of the Executive's
Base Salary for such year. In recognition of the effort by the Executive in
successfully completing the reorganization and public offering as approved by
the Stockholders at their annual meeting held on September 18, 2000 and in
further recognition of the fact that the Executive has foregone bonuses since
the year ended June 30, 1999, the Executive's bonus for calendar year 2000 shall
be $150,000.

         (c) Stock Options.

                  (i) The Executive shall be eligible to receive grants of stock
         options as shall be determined by the Board of Directors from time to
         time during the Employment Term. The Company shall cause its currently
         effective registration statement on form S-8 (or comparable successor
         form) covering all shares subject to options granted to the Executive
         to remain effective until sixty (60) days after the later of exercise
         or termination of all options granted to the Executive. It is
         acknowledged that on October 27, 2000 the Company granted the Executive
         options to acquire 240,000 shares of post split common stock at an
         exercise price of $7.00 per share pursuant to its 1997 Incentive Equity
         Plan. The options are to vest in equal amounts on the first and second
         anniversary of the grant, and shall be pursuant to, and conditioned
         upon stockholder approval and the execution by the Executive of a Stock
         Option Agreement substantially in the form attached hereto as Exhibit
         A.

                  (ii) In the event all required approvals (including
         stockholder approval) have not been timely obtained (as determined by
         the Executive), then the Company will pay to the Executive an amount in
         cash equal to the amount the Executive would have received if the
         options had been granted with all requisite approvals, and the
         Executive sells all of the Common Stock subject to option at the
         closing price thereof on the NASDAQ on the date or dates selected by
         the Executive. The Executive shall notify the Company of the date or
         dates of sale, with payment to be made by the Company within three (3)
         business days after receipt of such notification from Executive.

                                        3
<PAGE>   7

         (d) Employee Benefits.

                  (i) Incentive, Savings, and Retirement Plans. During the
         Employment Term, the Executive shall be entitled to participate in all
         incentive, savings, and retirement plans, programs, and arrangements
         applicable generally to the Executive's peer executives of the Company
         and its affiliated companies, but in no event shall such plans,
         programs, and arrangements provide the Executive with incentive
         opportunities (measured with respect to both regular and special
         incentive opportunities, to the extent, if any, that such distinction
         is applicable), savings opportunities, and retirement benefit
         opportunities, in each case, less favorable, in the aggregate, than the
         most favorable of those provided by the Company and its affiliated
         companies under such plans, programs, and arrangements to the
         Executive's peer executives of the Company and its affiliated companies
         at any time during the 120-day period immediately preceding the date
         hereof or, if more favorable to the Executive, as in effect generally
         at any time after the date hereof with respect to the Executive's peer
         executives of the Company and its affiliated companies.

                  (ii) Welfare Benefit Plans. During the Employment Term, the
         Executive and/or the Executive's family, as the case may be, shall be
         eligible to participate in and shall receive all benefits under all
         welfare benefits plans, programs, and arrangements provided by the
         Company and its affiliated companies (including, without limitation,
         medical, prescription, dental, disability, salary continuance, employee
         life, group life, accidental death, and travel accident insurance
         plans, programs, and arrangements) to the extent applicable generally
         to the Executive's peer executives of the Company and its affiliated
         companies, but in no event shall such plans, programs, and arrangements
         provide the Executive with welfare benefits that are less favorable, in
         the aggregate, than the most favorable of such plans, programs, and
         arrangements as in effect for the Executive's peer executives of the
         Company at any time during the 120-day period immediately preceding the
         date hereof or, if more favorable to the Executive, as in effect
         generally at any time after the date hereof with respect to the
         Executive's peer executives of the Company and its affiliated
         companies.

         (e) Expenses. During the Employment Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in performing the Executive's duties and responsibilities
hereunder including, without limitation, all reasonable costs and expenses
associated with the Executive's office in Ottawa (including air travel to and
from such office) until the 90th day following the Executive's receipt of notice
referred to in paragraph 3(c) hereof, all of the foregoing in accordance with
the most favorable policies, practices, and procedures of the Company and its
affiliated companies as in effect for the Executive's peer executives of the
Company and its affiliated companies at any time during the 120-day period
immediately preceding the date hereof or, if more favorable to the Executive, as
in effect generally at any time after the date hereof with respect to the
Executive's peer executives of the Company and its affiliated companies. For
greater certainty, it is acknowledged and agreed that the Company will pay for
the Executive's reasonable relocation expenses in the event that the Executive
is required to relocate pursuant to a notice delivered under the provisions of
paragraph 3(c) but will not pay or be responsible for the expenses associated
with the Ottawa office following the time at which the Executive moves to Dallas
or is terminated.

                                        4
<PAGE>   8

         (f) Fringe Benefits. During the Employment Term, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club fees and assessment and the use of an
appropriate automobile and payment of related expenses, in accordance with the
most favorable policies, practices, and procedures of the Company and its
affiliated companies as in effect for the Executive's peer executives of the
Company at any time during the 120-day period immediately preceding the date
hereof or, if more favorable to the Executive, as in effect generally at any
time after the date hereof with respect to the Executive's peer executives of
the Company and its affiliated companies.

         (g) Vacation. During the Employment Term, the Executive shall be
entitled to paid vacation and such other paid absences, whether for holidays,
illness, personal time, or any similar purposes, in accordance with the most
favorable policies, practices, and procedures of the Company and its affiliated
companies as in effect for the Executive's peer executives of the Company at any
time during the 120-day period immediately preceding the date hereof or, if more
favorable to the Executive, as in effect generally at any time after the date
hereof with respect to the Executive's peer executives of the Company and its
affiliated companies.

         5. Termination of Employment.

         (a) Death. The Executive's employment shall terminate automatically
upon the Executive's death during the Employment Term.

         (b) Disability. If the Company determines in good faith that the
Disability (as defined below) of the Executive has occurred during the
Employment Term, the Company may give the Executive notice of its intention to
terminate the Executive's employment. In such event, the Executive's employment
hereunder shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "DISABILITY EFFECTIVE DATE"), provided that, within the
30-day period after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
hereunder on a full-time basis for an aggregate of 180 days within any given
period of 270 consecutive days (in addition to any statutorily required leave of
absence and any leave of absence approved by the Company), as a result of
incapacity of the Executive, despite any reasonable accommodation required by
law, due to bodily injury or disease or any other mental or physical illness,
which will, in the opinion of a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive's legal
representative, be permanent and continuous during the remainder of the
Executive's life.

         (c) Termination by Company. The Company may terminate the Executive's
employment hereunder for Cause or Failure to Relocate (as defined below).

For purposes of this Agreement, "Cause" shall mean:

                  (i) the willful and continued failure of the Executive to
         perform substantially the Executive's duties hereunder (other than any
         such failure resulting from bodily injury or disease or any other
         incapacity due to mental or physical illness), after a written demand
         for substantial performance is delivered to the Executive by the Board
         of the Company which specifically identifies the manner in which the
         Board believes the Executive has not substantially performed the
         Executive's duties; or

                  (ii) the willful engaging by the Executive in illegal conduct
         or gross misconduct that is materially and demonstrably detrimental to
         the Company, monetarily or otherwise.

                                        5
<PAGE>   9

For purposes of this provision, no act, or failure to act, on the part of the
Executive shall be considered "willful" unless done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the Executive's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board then in office at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is given
an opportunity, together with counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

For purposes of this Agreement, "Failure to Relocate" shall mean a refusal by or
the inability or failure of the Executive to move his residence to the Dallas
area and thenceforth to carry out his regular, full-time duties from the
Company's Dallas headquarters within 90 days of being requested to do so by the
Board of Directors as contemplated by paragraph 3(c) hereof (other than any such
inability or failure during a period of incapacity due to mental or physical
illness). Provided that the Failure to Relocate shall not be considered Cause or
Good Reason for the purposes of this Agreement.

         (d) Termination by Executive. The Executive may terminate the
Executive's employment hereunder (i) at any time during the Employment Term for
Good Reason (as defined below) or (ii) during the Window Period (as defined
below) without any reason.

For purposes of this Agreement, the "Window Period" shall mean the 30-day period
immediately following the first anniversary of the Effective Date as defined in
Paragraph 10(a) hereof, and "Good Reason" shall mean any of the following
(without the Executive's express written consent):

                  (i) the assignment to the Executive of any duties materially
         inconsistent with the Executive's position (including status, title and
         reporting requirements), duties, functions, responsibilities, or
         authority as contemplated by Paragraph 3(a) of this Agreement (other
         than as provided in Paragraph 3(a)), or any action by the Company that
         results in a material diminution in such position, duties, functions,
         responsibilities, or authority as contemplated by Paragraph 3(a) of
         this Agreement (other than as provided in Paragraph 3(a)), excluding
         for this purpose an isolated, insubstantial, and inadvertent action not
         taken in bad faith and which is remedied by the Company promptly after
         receipt of notice thereof given by the Executive;

                  (ii) any failure by the Company to comply with any of the
         provisions of Paragraph 4 of this Agreement, other than an isolated,
         insubstantial, and inadvertent action not taken in bad faith and which
         is remedied by the Company promptly after receipt of notice thereof
         given by the Executive;

                  (iii) the Company's requiring the Executive to travel on
         Company business to a substantially greater extent than during any
         period prior to the Effective Date;

                  (iv) the Company's requiring the Executive to reside in or be
         based at any office or location other than as provided in Paragraph
         3(c) of this Agreement or;

                                        6
<PAGE>   10

                  (v) any failure by the Company to comply with and satisfy
         Paragraph 17(c) of this Agreement; or

                  (vi) any purported termination by the Company of the
         Executive's employment hereunder otherwise than as expressly permitted
         by this Agreement, and for purposes of this Agreement, no such
         purported termination shall be effective.

For purposes of this Paragraph 5(d), any good faith determination of "Good
Reason" made by the Executive shall be conclusive, absent manifest error. A
determination by the Company not to extend the Employment Term as provided in
Paragraph 2 hereof, shall not constitute "Good Reason".

         (e) Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or by the Executive (other than a
termination pursuant to Paragraph 5(a)) shall be communicated by a Notice of
Termination (as defined below) to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) in the case
of a termination for Disability, Cause, or Good Reason, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, and (iii) specifies
the Date of Termination (as defined in Paragraph 5(f) below); provided, however,
that, notwithstanding any provision of this Agreement to the contrary, a Notice
of Termination given in connection with a termination for Good Reason shall be
given by the Executive within a reasonable period of time, not to exceed 120
days, following the occurrence of the event giving rise to such right of
termination. The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Disability, Cause, or Good Reason shall not waive any right of the Company or
the Executive hereunder or preclude the Company or the Executive from asserting
such fact or circumstance in enforcing the Company's or the Executive's rights
hereunder.

         (f) Date of Termination. For purposes of this Agreement, the "Date of
Termination" shall mean the effective date of termination of the Executive's
employment hereunder, which date shall be (i) if the Executive's employment is
terminated by the Executive's death, the date of the Executive's death, (ii) if
the Executive's employment is terminated because of the Executive's Disability,
the Disability Effective Date, (iii) if the Executive's employment is terminated
by the Company for Cause or by the Executive for Good Reason, the date on which
the Notice of Termination is given, (iv) if the Executive's employment is
terminated pursuant to Paragraph 2 after the occurrence of the Effective Date,
the date on which the Employment Term ends pursuant to Paragraph 2 due to a
party's delivery of a Notice of Termination thereunder, and (v) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination, which date shall in no event be earlier than the date
such notice is given; provided, however, that if within 30 days after any Notice
of Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or by a final judgment, order, or
decree of court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).

         6. Obligations of the Company Upon Termination.

                                        7
<PAGE>   11

         (a) Good Reason; Other Than for Cause, Death, or Disability. If, during
the Employment Term and prior to the Effective Date, the Company shall terminate
the Executive's employment hereunder other than for Cause, Death or Disability
or the Executive shall terminate the Executive's employment for Good Reason:

                  (i) the Company shall pay to the Executive in a lump sum in
         cash within 30 days after the Date of Termination the aggregate of the
         following amounts:

                           (A) the sum of (1) the Executive's Base Salary
                  through the Date of Termination to the extent not theretofore
                  paid, (2) the product of (x) the greater of (I) the Target
                  Bonus for the current fiscal year of the Company and (II) the
                  Annual Bonus paid or payable, including by reason of any
                  deferral, to the Executive (and annualized for any fiscal year
                  consisting of less than 12 full months or for which the
                  Executive has been employed by the Company for less than 12
                  full months) in respect of the most recently completed fiscal
                  year of the Company during the Employment Term, if any (such
                  greater amount hereinafter referred to as the "HIGHEST ANNUAL
                  BONUS"), and (y) a fraction, the numerator of which is the
                  number of days in the current fiscal year through the Date of
                  Termination, and the denominator of which is 365, and (3) any
                  compensation previously deferred by the Executive (together
                  with any accrued interest or earnings thereon) and any accrued
                  vacation pay, in each case to the extent not theretofore paid
                  (the sum of the amounts described in clauses (1), (2) and (3)
                  are hereinafter referred to as the "ACCRUED OBLIGATIONS"); and

                           (B) an amount (such amount is hereinafter referred to
                  as the "SEVERANCE AMOUNT") equal to the sum of (1) the
                  Executive's Base Salary and (2) the Highest Annual Bonus;
                  provided, however, that if the Executive's employment
                  hereunder is terminated during the Employment Term, following
                  the occurrence of the Effective Date (as defined in Paragraph
                  10(a) hereof) by the Company other than for Cause or
                  Disability or the Executive shall terminate the Executive's
                  employment either for Good Reason or without any reason during
                  the Window Period, the Company shall pay to the Executive in a
                  lump sum in cash within 30 days after the Date of Termination
                  an amount equal to the product of (1) three and (2) the sum of
                  (x) the Executive's Base Salary and (y) the Highest Annual
                  Bonus; and

                           (C) a separate lump-sum supplemental retirement
                  benefit (the amount of such benefit hereinafter referred to as
                  the "SUPPLEMENTAL RETIREMENT AMOUNT") equal to the difference
                  between (1) the actuarial equivalent (utilizing for this
                  purpose the actuarial assumptions utilized with respect to the
                  qualified benefit retirement plan of the Company and its
                  affiliated companies in which the Executive is eligible to
                  participate (or any successor plan thereto) (the "RETIREMENT
                  PLAN") during the 120-day period immediately preceding the
                  Effective Date) of the benefit payable under the Retirement
                  Plan and any supplemental and/or excess retirement plan of the
                  Company and its affiliated companies providing benefits for
                  the Executive (the "SERP") which the Executive would receive
                  if the Executive's employment continued at the compensation
                  level provided for in Paragraphs 4(a) and 4(b)(i) for the
                  remainder of the Employment Term, assuming for this purpose
                  that all accrued benefits are fully vested and that benefit
                  accrual formulas are no less advantageous to the Executive
                  than those in effect during the 120-day period immediately
                  preceding the Effective Date, and (2) the actuarial equivalent
                  (utilizing for this purpose the actuarial assumptions utilized
                  with respect to the Retirement Plan during the 120-day period
                  immediately preceding the Effective

                                        8
<PAGE>   12

                  Date) of the Executive's actual benefit (paid or payable), if
                  any, under the Retirement Plan or the SERP; and

                  (ii) for three years after the Executive's Date of
         Termination, or such longer period as any plan, program, or arrangement
         may provide, the Company shall continue benefits to the Executive
         and/or the Executive's family at least equal to those that would have
         been provided to them in accordance with the plans, programs, and
         arrangements described in Paragraph 4(d)(ii) if the Executive's
         employment had not been terminated, in accordance with the most
         favorable plans, programs, and arrangements of the Company as in effect
         and applicable generally to the Executive's peer executives of the
         Company and its affiliated companies and their families during the
         120-day period immediately preceding the Effective Date or, if more
         favorable to the Executive, as in effect generally at any time
         thereafter with respect to the Executive's peer executives of the
         Company and its affiliated companies and their families; provided,
         however, that if the Executive becomes reemployed with another employer
         and is eligible to receive medical or other welfare benefits under
         another employer provided plan, the medical and other welfare benefits
         described herein shall be secondary to those provided under such other
         plan during such applicable period of eligibility (such continuation of
         such benefits for the applicable period herein set forth is hereinafter
         referred to as "WELFARE BENEFIT CONTINUATION") (for purposes of
         determining eligibility of the Executive for retiree benefits pursuant
         to such plans, programs, and arrangements, the Executive shall be
         considered to have remained employed until three years after the Date
         of Termination and to have retired on the last day of such period); and

                  (iii) the Company shall, at its sole expense as incurred,
         provide the Executive with outplacement services the scope and provider
         of which shall be selected by the Executive in the Executive's sole
         discretion; and

                  (iv) with respect to all options to purchase Common Stock held
         by the Executive pursuant to a Company stock option plan on or prior to
         the Date of Termination, irrespective of whether such options are then
         exercisable, the Executive shall have the right, during the 60-day
         period after the Date of Termination, to elect to surrender all or part
         of such options in exchange for a cash payment by the Company to the
         Executive in an amount equal to the number of shares of Common Stock
         subject to the Executive's option multiplied by the excess of (x) over
         (y), where (x) equals the highest reported sale price of a share of
         Common Stock in any transaction reported on the NASDAQ during the
         60-day period prior to and including the Executive's Date of
         Termination and (y) equals the purchase price per share covered by the
         option. Such cash payments shall be made within 30 days after the date
         of the Executive's election; provided, however, that if the Executive's
         Date of Termination is within six months after the date of a grant of a
         particular option held by the Executive and the Executive is subject to
         a Section 16(b) of the Securities Exchange Act of 1934, as amended (the
         "EXCHANGE ACT"), any cash payments related thereto shall be made on the
         date which is six months and one day after imposition of the
         disgorgement provisions under Section 16(b). Notwithstanding the
         foregoing, if any right granted pursuant to the foregoing would make
         any change of control transaction ineligible for pooling of interests
         accounting treatment under APB No. 16 that but for this Section
         6(a)(iv) would otherwise be eligible for such accounting treatment, the
         Executive shall receive shares of Common Stock with a fair market value
         equal to the cash that would otherwise be payable hereunder in
         substitution for the cash, provided that any such shares of Common
         Stock so delivered to the Executive shall be registered under the
         Securities Act of 1933, as amended; any options outstanding as of the
         Date of Termination and not then exercisable shall become fully
         exercisable as of the Executive's Date

                                        9
<PAGE>   13

         of Termination, and to the extent the Executive does not elect to
         surrender same for a cash payment (or the equivalent number of shares
         of Common Stock) as provided above, such options shall remain
         exercisable after the Executive's Date of Termination in accordance
         with the terms thereof; and restrictions applicable to any shares of
         Common Stock awarded to the Executive by the Company shall lapse, as of
         the date of the Executive's Date of Termination; and

                  (v) all club memberships and other memberships that the
         Company was providing for the Executive's use at the time Notice of
         Termination is given shall, to the extent possible, be transferred and
         assigned to the Executive at no cost to the Executive (other than
         income taxes owed), the cost of transfer, if any, to be borne by the
         Company; and

                  (vi) all benefits under the Company's 1997 Incentive Equity
         Plan as same may be amended from time to time and any other similar
         plans, including any stock options or restricted stock held by the
         Executive, not already vested shall be 100% vested, to the extent such
         vesting is permitted under the Code; and

                  (vii) to the extent not theretofore paid or provided, the
         Company shall timely pay or provide to the Executive any other amounts
         or benefits required to be paid or provided or which the Executive is
         eligible to receive any plan, program, policy, practice, or arrangement
         or contract or agreement of the Company and its affiliated companies
         (such other amounts and benefits hereinafter referred to as the "OTHER
         BENEFITS").

         (b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Term, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for (i) payment of Accrued Obligations (which shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and the Other Benefits and (ii)
payment to the Executive's estate or beneficiaries, as applicable, in a lump sum
in cash within 30 days of Date of Termination of an amount equal to the sum of
the Severance Amount and the Supplemental Retirement Amount. With respect to the
provision of Other Benefits, the term Other Benefits as used in this Section
6(b) shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and affiliated companies to the
estates and beneficiaries of peer executives of the Company and such affiliated
companies under such plans, programs, practices, and policies relating to death
benefits, if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
date hereof or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

         (c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Term, this Agreement shall
terminate without further obligations to the Executive, other than for (i)
payment of Accrued Obligations (which shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and the Other Benefits and (ii)
payment to the Executive in a lump sum in cash within 30 days of the Date of
Termination of an amount equal to the sum of the Severance Amount and the
Supplemental Retirement Amount. With respect to the provision of Other Benefits,
the term Other Benefits as used in this Section 6(c) shall include, without
limitation, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the

                                       10
<PAGE>   14

Company and affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices, and policies relating to
disability, if any, as in effect generally with respect to other peer executives
and their families at any time during the 120-day period immediately preceding
the date hereof or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other peer
executives of the Company and its affiliated companies and their families.

         (d) Cause; Other Than for Good Reason or During the Window Period. If
the Executive's employment is terminated for Cause during the Employment Term,
this Agreement shall terminate without further obligations to the Executive
other than the obligation to pay to the Executive Base Salary through the Date
of Termination plus the amount of any compensation previously deferred by the
Executive, in each case to the extent theretofore unpaid. If the Executive
voluntarily terminates the Executive's employment during the Employment Term,
excluding a termination either for Good Reason or without any reason during the
Window Period, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or
provision of the Other Benefits. In such case, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination subject to applicable laws and regulations.

         (e) Failure to Relocate. If the Executive's employment is terminated by
the Company for Failure to Relocate during the Employment Term, the Company
shall pay to the Executive, in a lump sum in cash within 30 days after the Date
of Termination, the aggregate of the amounts that would be payable under
paragraph 6(a) if the termination had been effected at such time by the Company
Other Than For Cause.

         (f) Complete Payment. The payments and other benefits to be made or to
be extended to the Executive under the provisions of this Paragraph 6 upon
termination of the Executive's employment shall be in complete satisfaction of
any and all payments that would otherwise be due the Executive had he remained
employed by the Company during the remainder of the Employment Term and the
Company shall have no further obligation to make any payment or extend any
benefit to the Executive pursuant to Paragraph 4, 5 and 6 of this Agreement or
otherwise upon or after such termination other than as provided in this
Paragraph 6.

         7. Certain Additional Payments by the Company.

         (a) Notwithstanding any provision in this Agreement to the contrary and
except as set forth below, if it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required pursuant to this Paragraph 7) (a "PAYMENT") would be subject to the
excise tax imposed by Section 4999 of the Code (or other taxing provision to
which the Executive may be subject having a similar effect) or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise or other similar tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "EXCISE TAX"), then the Executive
shall be entitled to receive an additional payment (a "GROSS-UP PAYMENT") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the

                                       11
<PAGE>   15

Payments. Notwithstanding the foregoing provisions of this Paragraph 7(a), if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the Payments and the Gross-Up
Payment, would not receive a net after-tax benefit of at least $25,000 (taking
into account both income taxes and any Excise Tax) as compared to the net
after-tax proceeds to the Executive resulting from an elimination of the
Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount
(the "REDUCED AMOUNT") such that the receipt of payments would not give rise to
any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced Amount.

         (b) Subject to the provisions of Paragraph 7(c), all determinations
required to be made pursuant to this Paragraph 7, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
Arthur Andersen & Co. (the "ACCOUNTING FIRM") or, as provided below, such other
certified public accounting form as may be designated by the Executive, which
shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days after the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company. If the Accounting Firm is serving as accountant or auditor for the
individual, entity, or group effecting the Change of Control, the Executive
shall have the option, in the Executive's sole discretion, to appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Paragraph 7, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made ("UNDERPAYMENT"), consistent with the calculations required to be made
hereunder. If the Company exhausts its remedies pursuant to Paragraph 7(c) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.

         (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment (or an additional amount of Gross-Up
Payment) in the event the Internal Revenue Service seeks higher payment. Such
notification shall be given as soon as practicable but no later than 10 business
days after the Executive is informed in writing of such claim and shall apprize
the Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives such notice
to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:

                  (i) give the Company any information reasonably requested by
         the Company relating to such claim;

                                       12
<PAGE>   16

                  (ii) take such action in connection with contesting such claim
         as the Company shall reasonably request in writing from time to time,
         including the acceptance of legal representation with respect to such
         claim by an attorney reasonably selected by the Company;

                  (iii) cooperate with the Company in good faith in order
         effectively to contest such claim; and

                  (iv) permit the Company to participate in any proceedings
         relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this Paragraph 7(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings, and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction, and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and h
old the Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income tax with respect to such
advance; and provided further that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

         (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Paragraph 7(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Paragraph 7(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Paragraph 7(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

         8. Representations and Warranties.

         (a) The Company represents and warrants to the Executive that the
execution, delivery, and performance by the Company of this Agreement have been
duly authorized by all necessary corporate action of the Company and do not and
will not conflict with or result in a violation of any provision of, or
constitute

                                       13
<PAGE>   17

a default under, any contract, agreement, instrument, or obligation to which the
Company is a party or by which it is bound.

         (b) The Executive represents and warrants to the Company that the
execution, delivery, and performance by the Executive of this Agreement do not
and will not conflict with or result in a violation of any provision of, or
constitute a default under, any contract, agreement, instrument, or obligation
to which the Executive is a party or by which the Executive is bound.

         9. Confidential Information. The Executive recognizes and acknowledges
that the Company's trade secrets and other confidential or proprietary
information, as they may exist from time to time, are valuable, special, and
unique assets of the Company's business, access to and knowledge of which are
essential to the performance of the Executive's duties hereunder. The Executive
confirms that all such trade secrets and other information constitute the
exclusive property of the Company. During the Employment Term and thereafter
without limitation of time, the Executive shall hold in strict confidence and
shall not, directly or indirectly, disclose or reveal to any person, or sue for
the Executive's own personal benefit or for the benefit of anyone else, any
trade secrets, confidential dealings, or other confidential or proprietary
information of any kind, nature, or description (whether or not acquired,
learned, obtained, or developed by the Executive alone or in conjunction with
others) belonging to or concerning the Company or any of its affiliated
companies, except (i) with the prior written consent of the Company duly
authorized by the Board, (ii) in the course of the proper performance of the
Executive's duties hereunder, (iii) for information (x) that becomes generally
available to the public other than as a result of unauthorized disclosure by the
Executive or the Executive's affiliates or (y) other than the Company or its
affiliated companies who is not bound by a duty of confidentiality, or other
contractual, legal, or fiduciary obligation, to the Company, or (iv) as required
by applicable law or legal process. The provisions of this Paragraph 9 shall
continue in effect notwithstanding termination of the Executive's employment
hereunder for any reason.

         10. Certain Definitions.

         (a) Effective Date. The "EFFECTIVE DATE" shall mean the first date
during the Change of Control Period (as defined in Paragraph 10(b)) on which a
Change of Control occurs. Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs and if the Executive's employment with
the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arise in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement, the "EFFECTIVE DATE" shall mean the date immediately
prior to the date of such termination of employment.

         (b) Change of Control Period. The "CHANGE OF CONTROL PERIOD" shall mean
the period commencing on the date on which a Change of Control occurs and ending
on the second anniversary of such date; provided, however, that commencing on
the date one year after the Effective Date, and on each annual anniversary of
such date (such date and each annual anniversary thereof herein referred to as
the "RENEWAL DATE"), the Change of Control Period shall be automatically
extended so as to terminate two years after such Renewal Date, unless at least
60 days prior to the Renewal Date the Company shall give notice to the Executive
that the Change of Control Period shall not be so extended.

         (c) Change of Control. For purposes of this Agreement, a "CHANGE OF
CONTROL" shall mean:

                                       14
<PAGE>   18

                  (i) the acquisition by any individual, entity, or group
         (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
         Act) (a "PERSON") of beneficial ownership (within the meaning of Rule
         13d-3 promulgated under the Exchange Act) of 15% or more of either (A)
         the then outstanding shares of common stock of the Company (the
         "OUTSTANDING COMPANY COMMON STOCK") or (B) the combined voting power of
         the then outstanding voting securities of the Company entitled to vote
         generally in the election of directors (the "OUTSTANDING COMPANY VOTING
         SECURITIES"); provided, however, that for purposes of this subparagraph
         (c)(i), consummation of the transactions contemplated by the Company's
         Registration Statement on Form S-2 filed with the Securities and
         Exchange Commission on July 21, 2000, and the following acquisitions
         shall not constitute a Change of Control: (w) any acquisition directly
         from the Company (excluding an acquisition by virtue of the exercise of
         a conversion privilege), (x) any acquisition by the Company, (y) any
         acquisition by any employee benefit plan (or related trust) sponsored
         or maintained by the Company or any corporation controlled by the
         Company, or (z) any acquisition by any corporation pursuant to a
         reorganization, merger, or consolidation, if, following such
         reorganization, merger, or consolidation, the conditions described in
         clauses (A), (B), and (C) of subparagraph (iii) of this Paragraph 10(c)
         are satisfied; or

                  (ii) individuals who, as of the date of this Agreement,
         constitute the Board (the "INCUMBENT BOARD") cease for any reason to
         constitute a majority of the Board; provided, however, that any
         individual becoming a director subsequent to the date hereof whose
         election, or nomination for election by the Company's stockholders, was
         approved by a vote of a majority of the directors then comprising the
         Incumbent Board shall be considered as though such individual were a
         member of the Incumbent Board, but excluding, for this purpose, any
         such individual whose initial assumption of office occurs as a result
         of either an actual or threatened election contest or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         Person other than the Board; or

                  (iii) consummation of a reorganization, merger, or
         consolidation of the Company, with or without approval by the
         stockholders of the Company, in each case, unless, following such
         reorganization, merger, or consolidation, (A) more than 50% of,
         respectively, the then outstanding shares of common stock of the
         corporation resulting from such reorganization, merger, or
         consolidation and the combined voting power of the then outstanding
         voting securities of such corporation entitled to vote generally in the
         election of directors is then beneficially owned, directly or
         indirectly, by all or substantially all of the individuals and entities
         who were the beneficial owners, respectively, of the Outstanding
         Company Common Stock and Outstanding Company Voting Securities
         immediately prior to such reorganization, merger, or consolidation in
         substantially the same proportions as their ownership, immediately
         prior to such reorganization, merger, or consolidation, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (B) no Person (excluding the Company,
         any employee benefit plan (or related trust) of the Company or such
         corporation resulting from such reorganization, merger, or
         consolidation, and any Person beneficially owning, immediately prior to
         such reorganization, merger, or consolidation, directly or indirectly,
         15% or more of the Outstanding Company Common Stock or Outstanding
         Company Voting Securities, as the case may be) beneficially owns,
         directly or indirectly, 15% or more of, respectively, the then
         outstanding shares of common stock of the corporation resulting from
         such reorganization, merger, or consolidation ora the combined voting
         power of the then outstanding voting securities of such corporation
         entitled to vote generally in the election of directors, and (C) a
         majority of the members of the board of directors of the corporation
         resulting from such reorganization, merger, or consolidation where
         members of the Incumbent Board at the time of the execution of the
         initial agreement providing for such reorganization, merger, or
         consolidation; or

                                       15
<PAGE>   19

                  (iv) consummation of a sale or other disposition of all or
         substantially all the assets of the Company, with or without approval
         by the stockholders of the Company, other than to a corporation, with
         respect to which following such sale or other disposition, (A) more
         than 50% of, respectively, the then outstanding shares of common stock
         of such corporation and the combined voting power of the then
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors is then beneficially owned,
         directly or indirectly, by all or substantially all the individuals and
         entities who were the beneficial owners, respectively, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such sale or other disposition in
         substantially the same proportion as their ownership, immediately prior
         to such sale or other disposition, of the Outstanding Company Common
         Stock and Outstanding Company Voting Securities, as the case may be,
         (B) no Person (excluding the Company, any employee benefit plan (or
         related trust) of the Company or such corporation, and any Person
         beneficially owning, immediately prior to such sale or other
         disposition, directly or indirectly, 15% or more of the Outstanding
         Company Common Stock or Outstanding Company Voting Securities, as the
         case may be) beneficially owns, directly or indirectly, 15% or more of,
         respectively, the then outstanding shares of common stock of such
         corporation or the combined voting power of the then outstanding voting
         securities of such corporation entitled to vote generally in the
         election of directors, and (C) a majority of the members of the board
         of directors of such corporation were members of the Incumbent Board at
         the time of the execution of the initial agreement or action of the
         Board providing for such sale or other disposition of assets of the
         Company; and

                  (v) approval by the stockholders of the Company of a complete
         liquidation or dissolution of the Company.

         11. Full Settlement.

         (a) There shall be no right of set off or counterclaim against, or
delay in, any payments to the Executive, or to the Executive's heirs or legal
representatives, provided for in this Agreement, in respect of any claim against
or debt or other obligation of the Executive or others, whether arising
hereunder or otherwise.

         (b) In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment.

         (c) The Company agrees to pay as incurred, to the full extent permitted
by law, all costs and expenses (including attorneys' fees) that the Executive,
or the Executive's heirs or legal representatives, may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company, the
Executive, or others of the validity or enforceability of, or liability under,
any provision of this Agreement, or any guarantee of performance thereof,
(including as a result of any contest by the Executive, or the Executive's heirs
or legal representatives, about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
federal rate provided for in Section 7872(f)(2) of the Code.

         12. No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable to the Executive, or in any way diminish the Executive's
rights as an employee of the Company, whether existing at the date of this
Agreement or hereafter, under any employee benefit plan, program, or arrangement
or other contract or agreement of the Company providing benefits to the
Executive.

                                       16
<PAGE>   20

         13. Indemnification; Directors and Officers Insurance. The Company
shall (a) during the Employment Term and thereafter without limitation of time,
indemnify and advance expenses to the Executive to the fullest extent permitted
by the laws of the State of Delaware from time to time in effect and (b) during
the Employment Term, acquire and maintain directors and offices liability
insurance covering the Executive (and to the extent the Company desires, other
directors and officers of the Company and its affiliated companies) to the
extent it is available at commercially reasonable rates as determined by the
Board; provided, however, that in no event shall the Executive be entitled to
indemnification or advancement of expenses under this Paragraph 13 with respect
to any proceeding, or matter therein, brought or made by the Executive against
the Company other than one initiated by the Executive to enforce the Executive's
advancement of expenses as provided in this Paragraph 13 shall not be deemed
exclusive of any other rights to which the Executive may at any time be entitled
under applicable law, the certificate of incorporation or bylaws of the Company,
any agreement, a vote of stockholders, a resolution of the Board, or otherwise.
The provisions of this Paragraph 13 shall continue in effect notwithstanding
termination of the Executive's employment hereunder for any reason, including,
without limitation, Executive's voluntary termination. In furtherance thereof,
and not by way of limitation, the Company shall reimburse Executive for all
reasonable legal fees and expenses incurred by Executive (i) in the preparation
of this Agreement, and (ii) in connection with Executive's obtaining and
enforcing any right or benefit provided by this Agreement. The reimbursement of
such legal fees and expenses shall be made within 30 days after Executive's
request for payment accompanied by evidence of the fees and expenses incurred.
For a period of ten years after the termination, for any reason, of Executive's
employment with the Company, the Company shall indemnify, hold harmless and
defend Executive, to the fullest extent permitted by applicable law, from and
against any loss, cost or expense related to or arising out of any action or
claim with respect to (i) the Company or its affiliated companies or (ii) any
action taken or omitted by the Executive (INCLUDING, BUT NOT LIMITED TO, MATTERS
THAT CONSTITUTE NEGLIGENCE OF THE EXECUTIVE) for or on behalf of the Company or
its affiliated companies, whether, in either case, such action or claim, or the
facts and circumstances giving rise thereto, occurred or accrued before or after
such termination of employment.

         14. Injunctive Relief. In recognition of the fact that a breach by the
Executive of any of the provisions of Paragraph 9 will cause irreparable damage
to the Company for which monetary damages alone will not constitute an adequate
remedy, the Company shall be entitled as a matter of right (without being
required to prove damages or furnish any bond or other security) to obtain a
restraining order, an injunction, an order of specific performance, or other
equitable or extraordinary relief from any court of competent jurisdiction
restraining any further violation of such provisions by the Executive or
requiring the Executive to perform the Executive's obligations hereunder. Such
right to equitable or extraordinary relief shall not be exclusive but shall be
in addition to all other rights and remedies to which the Company may be
entitled at lw or in equity, including without limitation the right to recover
monetary damages for the breach by the Executive of any of the provisions of
this Agreement.

         15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas, without regard
to the principles of conflicts of law thereof.

         16. Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by either party hereto shall
be in writing and shall be deemed to have been duly given or made (i) when
delivered, or (ii) seven (7) days after being deposited in the United States
mail, first class registered or certified mail, postage prepaid, return receipt
requested, to the party for which intended at the following addresses (or at
such other addresses as shall be specified by the parties by like notice, except
that notice of change of address shall be effective only upon receipt):

                                       17
<PAGE>   21

                  If to the Company, at:        DevX Energy, Inc.
                                                13760 Noel Road, Suite 1030
                                                Dallas, Texas 75240-7336
                                                Attention: Chairman of the Board

                  If to the Executive, at:      Edward J. Munden
                                                4 Sellers' Court
                                                Ottawa, Canada
                                                K2H 7Y7

         17. Binding Effect; No Third Party Benefit.

         (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and shall be enforceable by the Executive's legal
representatives.

         (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

         (c) The Company shall require any successor or assign (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all the business and/or assets of the Company, by agreement in
writing in form and substance reasonably satisfactory to the Executive,
expressly, absolutely, and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. As
used in this Agreement, the "COMPANY" shall mean the Company as hereinabove
defined and any successor or assign to its business and/or assets as aforesaid
which executes and delivers this Agreement provided for in this Paragraph 17(c)
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.

         (d) Nothing in this Agreement, express or implied, is intended to or
shall confer upon any person other than the parties hereto, and their respective
heirs, legal representatives, successors, and permitted assigns, any rights,
benefits, or remedies of any nature whatsoever under or by reason of this
Agreement.

         18. Miscellaneous.

         (a) Amendment. This Agreement may not be modified or amended in any
respect except by an instrument in writing signed by the party against whom such
modification or amendment is sought to be enforced. No person, other than
pursuant to a resolution of the Board of a committee thereof, shall have
authority on behalf of the Company to agree to modify, amend, or waive any
provision of this Agreement or anything in reference thereto.

         (b) Waiver. Any term or condition of this Agreement may be waived at
any time by the party hereto which is entitled to have the benefit thereof, but
such waiver shall only be effective if evidenced by a writing signed by such
party, and a waiver on one occasion shall not be deemed to be a waiver of the
same or any other type of breach on a future occasion. No failure or delay by a
party hereto in exercising any right or

                                       18
<PAGE>   22

power hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right or power.

         (c) Withholding Taxes. The Company may withhold from any amounts
payable under this Agreement such federal, state, local, or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

         (d) Nonalienation of Benefits. The Executive shall not have any right
to pledge, hypothecate, anticipate, or in any way create a lien upon any
payments or other benefits provided under this Agreement; and no benefits
payable hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law, except by will or
pursuant to the laws of decent and distribution.

         (e) Severability. If any provision of this Agreement is held to be
invalid or unenforceable, (a) this Agreement shall be considered divisible, (b)
such provision shall be deemed inoperative to the extent it is deemed invalid or
unenforceable, and (c) in all other respects this Agreement shall remain full
force and effect; provided, however, that if any such provision may be made
valid or enforceable by limitation thereof, then such provision shall be deemed
to be so limited and shall be valid and/or enforceable to the maximum extent
permitted by applicable law.

         (f) Entire Agreement. This Agreement replaces the Employment Agreement
dated December 15, 1997 between the Executive and Queen Sand Resources (Canada),
Inc. and constitutes the entire agreement between the parties hereto concerning
the subject matter hereof, and from and after the date of this Agreement, this
Agreement shall supersede any other prior agreement or understanding, both
written and oral, between the parties with respect to such subject matter.
Executive represents to the Company that there are no other agreements, promises
or undertakings of any kind, whether written or oral, concerning the Executive's
employment or compensation terms with the Company or its subsidiaries not
expressed in this Agreement.

         (g) Captions. The captions herein are inserted for convenience of
reference only, do not constitute a part of this Agreement, and shall not affect
in any manner the meaning or interpretation of this Agreement.

         (h) References. All references in this Agreement to Paragraphs,
subparagraphs, and other subdivisions refer to the Paragraphs, subparagraphs,
and other subdivisions of this Agreement unless expressly provided otherwise.
The words "this Agreement", " herein", "hereof", "hereunder", and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes", and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Words in the singular
form shall be construed to include the plural and vice versa, unless the context
otherwise requires.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Executive has
executed this Agreement, as of the date first above set forth.

                                       19
<PAGE>   23

                                             DEVX ENERGY, INC.

                                             By: /s/ Authorized Signatory
                                                 -------------------------------
                                                 Name:
                                                      --------------------------
                                                 Title:
                                                       -------------------------

                                                                       "COMPANY"

                                                 /s/ Edward J. Munden
                                                 -------------------------------
                                                 EDWARD J. MUNDEN

                                                                     "EXECUTIVE"

                                       20

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