DEVON ENERGY CORPORATION
SEVERANCE AGREEMENT
(Effective: May 19, 1999)
J. Xxxxx Xxxxxxx
(3 x AP)
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT (the "Agreement") entered into among
DEVON ENERGY CORPORATION (NEVADA) a Nevada corporation ("Devon
Nevada"), DEVON ENERGY CORPORATION, an Oklahoma corporation
("Devon Energy"), DEVON DELAWARE CORPORATION, a Delaware
corporation ("Devon Delaware"), and J. Xxxxx Xxxxxxx, an
individual (the "Executive"), dated the 19th day of May, 1999 (the
"Effective Date").
WHEREAS, Devon Energy and Devon Delaware have entered into
that certain Amended and Restated Agreement and Plan of Merger by
and among Devon Energy Corporation, Devon Delaware Corporation,
Devon Oklahoma Corporation and PennzEnergy Company, dated as of
May 19, 1999 (the "Merger Agreement"); and
WHEREAS, for purposes of this Agreement, the term "Company"
shall mean Devon Energy, Devon Nevada, or Devon Delaware or any of
their Affiliates; provided, for purposes of the definition of
"Change of Control Date," from and after the closing of the
transactions contemplated under the Merger Agreement, the term
"Company" shall mean Devon Delaware; and
WHEREAS, the Company deems the services of the Executive to
be of great and unique value to the business of the Company and
the Company desires to assure both itself of continuity of
management and the Executive of continued employment; and
WHEREAS, the Executive is a key management employee of the
Company and is presently making and is expected to continue making
substantial contributions to the Company; and
WHEREAS, it is in the best interests of the Company and its
shareholders to induce the Executive to remain in the employ of
the Company; and
WHEREAS, the Executive presently is serving in his capacity
as President and Chief Executive Officer of the Company; and
WHEREAS, the Executive and the Company previously entered
into that certain Severance Agreement ("Prior Agreement") which
provided additional amounts of compensation in the event of his
termination of employment following "change of control date" or an
"acquisition date" (each as defined in the Prior Agreement); and
WHEREAS, this Agreement shall be considered as an amendment
and restatement of the Prior Agreement; and
WHEREAS, the Company desires to induce the Executive to
remain in the employ of the Company by providing to him additional
amounts of compensation in the event of his termination of
employment following a Change of Control Date or an Acquisition
Date (each as defined herein) for the reasons specified herein.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Executive and the Company hereby agree as provided below.
1. Operation of Agreement. The purpose of this Agreement
is to provide to the Executive additional amounts of compensation
in the event of the termination of his employment following a
Change of Control Date or an Acquisition Date for the reasons
specified herein. Accordingly, the Company and the Executive have
entered into this Agreement in accordance with the terms and
provisions herein to provide such protection to the Executive.
For the purposes of this Agreement, where the following
capitalized words and phrases appear in this Agreement, they shall
have the meanings set forth below unless a different context is
clearly expressed herein.
(a) Acquisition Date. "Acquisition Date" shall mean
the date on which the Company or any of its affiliates (as defined
in Rule 12b-2 as promulgated under the Securities Exchange Act of
1934) ("Affiliates") completes the acquisition of oil and gas
properties, or assets, or a business entity owning such properties
or assets under a contract ("Acquisition Contract") which results
in a 20% or more increase in the total oil and gas reserves or
total assets of the Company. For purposes of determining whether
a 20% or more increase in total oil and gas reserves or total
assets of the Company has occurred, the Company's ownership
interest, both direct and indirect, in the oil and gas reserves or
the total assets of any other business enterprise which is or
becomes an Affiliate will be included; provided, such
determination shall be made in accordance with generally accepted
accounting principles. In the case of a Business Combination
where the Company is not the surviving ultimate parent in the
Business Combination, then, the term "Company" shall refer to the
ultimate parent entity surviving in the Business Combination.
(i) For purposes of determining if the 20%
increase in total oil and gas reserves has occurred, the
acquisition must result in a 20% or more increase in the total oil
and gas reserves of the Company when compared to the Company's pre-
acquisition reserves. The Company's pre-acquisition reserves will
be the estimated reserve volumes expressed in barrels of oil
equivalent ("BOE's") contained in the most recent annual report
filed with the United States Securities and Exchange Commission on
Form 10-K, adjusted to the Acquisition Date for subsequent
production, drilling, purchases and sales of reserves (other than
the subject acquisition). In each instance, 6 thousand cubic feet
of natural gas will be equal to one barrel of oil.
(ii) For purposes of determining if the 20% or more
increase in the total assets of the Company has occurred, the
gross purchase or acquisition price paid (including any debt or
other liabilities assumed) for the assets or the business entity
owning the assets (as determined pursuant to the final Acquisition
Contract) must equal 20% or more of the sum of (1) Total
Liabilities and Stockholder's Equity minus (2) the Total
Shareholder's Equity and any other securities convertible to
common stock not included in Total Shareholder's Equity plus (3)
the market value of the Company's outstanding common and preferred
stock and any other securities convertible to common stock not
included in Total Shareholder's Equity (the "Market
Capitalization"). For the purpose of this determination, the
foregoing items included in (1) and (2) above shall be based upon
the Company's consolidated financial statement as of the last day
of the month immediately preceding the month in which such
purchase or acquisition occurs; and, for the purpose of
determining the Market Capitalization, the Company's outstanding
common and preferred stock and any other securities convertible to
common stock not included in Total Shareholder's Equity shall be
valued at the weighted average closing price of such stock for the
ten trading days preceding the public announcement of the terms of
the transaction.
(b) Change of Control Date. "Change of Control Date"
shall mean the date on which one of the following events occurs:
(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 30%
or more of either (1) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (2) 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 the following acquisitions shall not constitute an
event causing a Change of Control Date: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(1), (2), and (3) of subsection (iii) below; or
(ii) Individuals who, as of the date hereof,
constitute the board of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided however, that any individual becoming a director
subsequent to the date hereof whose election, appointment or
nomination for election by the Company's shareholders was approved
by a vote of at least 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 purposes
of this definition, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the shareholders of
the Company of a reorganization, share exchange, merger or
consolidation (a "Business Combination"), in each case, unless
following such Business Combination, (1) 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
Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of common stock
of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination, and (3) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Incumbent Board providing for such Business
Combination, or were elected, appointed, or nominated by the
Incumbent Board; or
(iv) Approval by the shareholders of the Company of
(1) a complete liquidation or dissolution of the Company or, (2)
the sale or other disposition of all or substantially all of the
assets 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 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
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)
less than 30% 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 any Person
(excluding any employee benefit plan (or related trust) of the
Company or such corporation), except to the extent that such
Person owned 30% or more of the Outstanding Company Common Stock
or Outstanding Company Voting Securities prior to the sale or
disposition, and (C) at least 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 of the action of the Incumbent Board providing for
such sale or other disposition of assets of the Company, or were
elected, appointed, or nominated by the Incumbent Board.
Provided, in the event the Acquisition Date or the Change of
Control Date occurs, and there is a subsequent occurrence of an
Acquisition Date or Change of Control Date, then, for purposes of
calculating the applicable 24 month period as provided under
Section 5 hereof, such calculation shall be made from the most
recent Change of Control Date or Acquisition Date and the fact
that there has been a prior occurrence of a Change of Control Date
or Acquisition Date (including those which may have occurred under
the Prior Agreement) shall not in any manner reduce the total
period as provided under Section 5 hereof when the Company may
have obligations to the Executive upon his termination of
employment.
(c) Good Reason. "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, office, titles and reporting requirements),
authority, duties, or responsibilities as contemplated by this
Agreement, or any other action by the Company which results in a
diminution in such position, compensation, authority, duties or
responsibilities, 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 this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring 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
be based at any office or location other than that which he
occupied at the Effective Date, or within 25 miles of such
location, except for periodic travel reasonably required in the
performance of the Executive's responsibilities;
(iv) any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted
by this Agreement;
(v) any failure by the Company to comply with and
satisfy Section 11(a) of this Agreement.
2. Agreement Not Employment Contract. This Agreement shall
be considered solely as a "severance agreement" obligating the
Company to pay to the Executive certain amounts of compensation in
the event and only in the event of his termination of employment
after the Change of Control Date or the Acquisition Date for the
reasons and at the times specified herein. Apart from the
obligation of the Company to provide the amounts of additional
compensation as provided in this Agreement, the Company shall at
all times retain the right to terminate the employment of the
Executive since the obligation of the Company to the Executive
shall only be considered as an employment relationship which
exists between the Company and the Executive which may be
terminated at will be either party subject to the obligation of
the Company to make payment as provided in this Agreement.
3. Termination of Agreement. Except as provided in Section
5 hereof, this Agreement shall terminate upon the first to occur
of the following events.
(a) Death. The date of death of the Executive.
(b) Cause. The termination of the Executive's
employment by the Company for "Cause." For purposes of this
Agreement, termination of the Executive's employment by the
Company for Cause shall mean termination for one of the following
reasons: (i) the conviction of the Executive of a felony by a
federal or state court of competent jurisdiction; (ii) an act or
acts of dishonesty taken by the Executive and intended to result
in substantial personal enrichment of the Executive at the expense
of the Company or its shareholders; or (iii) the Executive's
"willful" failure to follow a direct lawful written order from his
supervisor, within the reasonable scope of the Executive's duties,
which failure is not cured by the Executive within 30 days after
the receipt of written notice thereof given by the Company.
Further, for purposes of this Section (b):
(1) No act, or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable
belief that the Executive's action or omission was in the best
interest of the Company.
(2) The Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Executive a copy of the resolution duly adopted
by the affirmative vote of not less than three-fourths (3/4ths) of
the entire membership of the Board of Directors of the Company
(the "Board") at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set
forth in clauses (i), (ii), or (iii) above and specifying the
particulars thereof in detail.
(c) Voluntary Termination. The Executive voluntarily
terminates employment other than for Good Reason.
(d) Notice. Two years after the Company has provided the
Executive with written notice of the Company's desire to terminate
the Agreement; provided, if a Change of Control Date or
Acquisition Date occurs at any time during such two year period,
then, this Agreement may not be terminated under this Section 3(d)
until the expiration of the applicable 24 month period described
in Section 5 below.
4. Notice of Termination of Employment. Any termination of
employment by the Company for Cause or by the Executive for Good
Reason shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 13 of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
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) if the
termination date of the Executive's employment is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than 15 days after the giving of
such notice).
5. Obligations of the Company Upon Termination Following
Change of Control Date or the Acquisition Date. If within 24
months of the Change of Control Date or 24 months following the
Acquisition Date (i) the Company shall terminate the Executive's
employment for any reason other than for Cause or death, or (ii)
the employment of the Executive shall be terminated by the
Executive for Good Reason, then the Company shall pay to the
Executive in a lump sum, in cash, within 30 days after the date of
termination of employment, an amount equal to 3 times the
Executive's highest annual Actual Compensation, paid or accrued
during the three calendar years preceding the year in which the
Executive's employment was terminated. Provided, if the Executive
has attained his normal retirement date of age 65 ("Normal
Retirement Date") and is not otherwise entitled to receive payment
under this Agreement due to his termination of employment as of
his Normal Retirement Date, then, the Executive shall not be
entitled to payment under this Agreement. For purposes of this
Section 5, "Actual Compensation" shall mean the Executive's annual
wages, salaries, bonuses and fees for personal services actually
rendered in the course of employment with the Company, excluding
the following: (i) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property)
held by the Executive either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture; (ii) amounts
realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and (iii) other amounts
which received special tax benefits (whether or not the amounts
are actually excludable from the gross income of the Executive).
6. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
payment or distribution 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, including, by way of
example and not by way of limitation, acceleration of the date of
vesting, payment, rate of payment or right to future payment under
any plan, program or arrangement of the Company (a "Payment"),
would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or any
interest or penalties with respect to such excise tax (such excise
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 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
Payments.
(b) Subject to the provisions of Section 6(c), all determinations
required to be made under this Section 6, including whether a
Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by KPMG LLP (the "Accounting Firm") which
shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment which would be
subject to the Excise Tax, or such earlier time as is requested by
the Company. The initial Gross-Up Payment, if any, as determined
pursuant to this Section 6(b), shall be paid 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 an opinion that he has substantial authority not to report
any Excise Tax on his federal income tax return. 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 Payment which will not have been made by the Company
should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 6(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.
Such notification shall be given as soon as practicable but no
later than ten business days after the Executive knows of such
claim, and shall apprise 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 the Executive 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,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting 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 on the
foregoing provisions of this Section 6(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 xxx for a
refund or contest the claim in any permissible manner. 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 xxx for a refund, the Company
shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold 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
with respect to such advance; and further provided 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 Section 6(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 Section 6(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
Section 6(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 thirty
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.
7. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or
program provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have
under any stock option or other agreements with the Company or any
of its affiliated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any
plan or program of the Company or any of its affiliated companies
at or subsequent to the date of termination of employment shall be
payable in accordance with such plan or program.
8. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company
may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment by way of
mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement.
9. Confidential Information.
(a) Requirement of Executive. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated
companies and which shall not be public knowledge (other than by
acts by the Executive or his representatives in violation of this
Agreement). After termination of the Executive's employment with
the Company, the Executive shall not, without the prior written
consent of the Company, communicate or divulge any such
information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted
violation of the provisions of this Section 9 constitute a basis
for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
(b) Additional Remedies. The Executive agrees that the
remedy at law for any breach or threatened breach of any covenant
contained in this Section 9 may be inadequate, and that the
Company, in addition to such other remedies as may be available to
it, in law or in equity, shall be entitled to injunctive relief
without bond or other security pending arbitration under Section
10.
10. Arbitration; Legal Fees and Expenses. The parties agree that
Executive's employment and this Agreement relate to interstate
commerce, and that any disputes, claims or controversies between
Executive and the Company which may arise out of or relate to the
Executive's employment relationship or this Agreement shall be
settled by arbitration. This agreement to arbitrate shall survive
the termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association
and shall be undertaken pursuant to the Federal Arbitration Act.
Arbitration will be held in Oklahoma City, Oklahoma unless the
parties mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent
jurisdiction. The parties agree that punitive, liquidated or
indirect damages shall not be awarded by the arbitrator(s).
Nothing in this agreement to arbitrate, however, shall preclude
the Company from obtaining injunctive relief from a court of
competent jurisdiction prohibiting any on-going breaches by
Executive of this Agreement including, without limitation,
violations of Section 9. If any contest or dispute shall arise
between the Company and Executive regarding any provision of this
Agreement, the Company shall reimburse Executive for all legal
fees and expenses reasonably incurred by Executive in connection
with such contest or dispute, but only if Executive is successful
in respect of one or more of Executive's material claims or
defenses brought, raised or pursued in connection with such
contest or dispute. Such reimbursement shall be made as soon as
practicable following the resolution of such contest or dispute to
the extent the Company receives reasonable written evidence of
such fees and expenses.
11. Successors and Binding Effect.
(a) Successor Must Assume Agreement. The Company will
require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly 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 had taken place. If the Company fails to obtain such
assumption and agreement prior to the effectiveness of any such
succession, this Agreement shall nevertheless determine the
Executive's entitlement to payment hereunder. As used in this
Agreement, "Company" shall mean the Company as herein before
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.
(b) Binding Effect. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die
while any amount would still be payable to the Executive at the
time of his death, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee or other designee
or, if there is no such designee, to the Executive's estate.
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma,
without reference to principles of conflict of laws.
13. Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party, by registered or certified mail, return receipt
requested, or by overnight express delivery service, postage
prepaid, addressed as follows:
If to the Executive:
J. Xxxxx Xxxxxxx
0000 X. Xxxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
If to the Company:
Devon Energy Corporation
00 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: J. Xxxxx Xxxxxxx
President and Chief Executive Officer
with a copy to:
McAfee & Xxxx
A Professional Corporation
Xxxxx Xxxxx
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx Xxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
14. Occurrence of Change of Control Date. Upon the
completion of the transactions contemplated by the Merger
Agreement, pursuant to the terms of the Prior Agreement and this
Agreement, there shall be an occurrence of an event which will be
a "change of control date" under the Prior Agreement and a Change
of Control Date under this Agreement. Accordingly, the applicable
provisions of the Prior Agreement with respect to the definition
of "change of control date" shall continue to be applicable with
respect to the Executive and the terms and provisions of this
Agreement shall in no way detract or adversely affect the rights
of the Executive under this Agreement. Accordingly, because a
Change of Control Date under this Agreement and a "change of
control date" under the Prior Agreement has occurred upon the
completion of a transaction contemplated under the Merger
Agreement, therefore, the applicable 24 month period as described
in Section 5 hereof during which the Company may have obligations
to the Executive shall commence as of the closing of the
transaction as contemplated under the Merger Agreement.
15. Alienation. The rights and benefits of, and payments
to, the Executive (or his beneficiary in the event of his death)
under this Agreement may not be anticipated, assigned (either at
law or in equity), alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process
except as required by law. Any attempt by the Executive to
anticipate, alienate, assign, sell, transfer, pledge, encumber or
charge the same shall be void. The benefits of the Executive
shall not in any manner be subject to the debts, contracts,
liabilities, engagements or torts of the Executive (or his
beneficiary in the event of his death) and payments hereunder
shall not be considered an asset of the Executive (or his
beneficiary in the event of his death) in the event of his
insolvency or bankruptcy.
16. Right as General Creditor. The Executive acknowledges
this Agreement represents the Company's unfunded and unsecured
obligation to pay benefits set forth above. No provision of this
Agreement shall be construed to give the Executive any right
except as a general creditor of the Company.
17. Taxes to be Withheld. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
18. Joint Obligations. For purposes of this Agreement,
Devon Nevada, Devon Energy and Devon Delaware shall have joint and
several liability for all obligations hereunder.
19. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter
hereof and supersedes any and all prior or contemporaneous oral
and prior written agreements and understandings, including any
Severance Agreements previously entered into between the Company
and the Executive. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any
kind as conditions or inducements to the execution hereof or in
effect among the parties.
20. Amendment. This Agreement may not be amended, and no
provision hereof shall be waived, except by a writing signed by
all the parties to this Agreement, or, in the case of a waiver, by
the party waiving compliance therewith, which states that it is
intended to amend or waive a provision of this Agreement. Any
waiver of any rights or failure to act in a specific instance
shall relate only to such instance and shall not be construed as
an agreement to waive any rights or failure to act in any other
instance, whether or not similar.
21. Enforceability. Should any provision of this Agreement
be unenforceable or prohibited by an applicable law, this
Agreement shall be considered divisible as to such provision which
shall be inoperative, and the remainder of this Agreement shall be
valid and binding as though such provision were not included
herein.
22. Counterparts. This Agreement may be executed in two or
more counterparts with the same effect as if the signatures to all
such counterparts were upon the same instrument, and all such
counterparts shall constitute but one instrument.
23. Headings. All headings in this Agreement are for
convenience only and are not intended to affect the meaning of any
provision hereof.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from their respective Boards of
Directors, Devon Nevada, Devon Energy and Devon Delaware have each
caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
"EXECUTIVE"
J. Xxxxx Xxxxxxx
"COMPANY"
DEVON ENERGY CORPORATION (NEVADA), a
Nevada corporation
By
J. Xxxxx Xxxxxxx, President and
Chief Executive Officer
DEVON ENERGY CORPORATION, an
Oklahoma corporation
By
J. Xxxxx Xxxxxxx, President and
Chief Executive Officer
DEVON DELAWARE CORPORATION, a
Delaware corporation
By
J. Xxxxx Xxxxxxx, President and
Chief Executive Officer
