EXHIBIT 99.1
THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, Ocean Energy, Inc. ("OEI") and Xxxxx X. Xxxxxxx ("Executive")
have heretofore entered into an Employment Agreement (the "Agreement"),
initially effective as of September 16, 1998; and
WHEREAS, the Agreement has been subsequently amended on two occasions
and OEI, Devon Energy Corporation ("Devon") and Executive desire to further
amend the Agreement in certain respects, contingent on, and effective upon, the
consummation of the transactions (the "Merger") contemplated by the Agreement
and Plan of Merger by and among Devon, Devon Newco Corporation, and OEI dated as
of February 23, 2003, as the same may be amended from time to time (the "Merger
Agreement");
NOW, THEREFORE, the Agreement is amended as follows, effective as of
the "Effective Time" (which, for purposes of this Amendment, shall have the
meaning ascribed to it in the Merger Agreement):
1. References to the "Company" in the Agreement shall mean Devon
Energy Corporation.
2. Paragraph 1.2 of the Agreement shall be amended to read as
follows:
"1.2 POSITIONS. Effective as of the Effective Time, the
Company shall cause Executive to be appointed the President and Chief
Operating Officer of the Company. The Company shall maintain Executive
in such positions, or such other positions as the parties mutually may
agree, for the full term of Executive's employment hereunder. The term
"Effective Time" shall have the meaning ascribed to it in the Agreement
and Plan of Merger by and among Devon Energy Corporation, Devon Newco
Corporation, and Ocean Energy, Inc. dated as of February 23, 2003, as
the same may be amended from time to time (the "Merger Agreement")."
3. Article I is amended by adding thereto a new Paragraph 1.6,
Office Location, to read as follows:
"1.6 OFFICE LOCATION. The Company's principal executive
offices shall be maintained in the greater Oklahoma City,
Oklahoma area. It is anticipated that Executive will regard
Oklahoma City as the primary location of his office. Prior to
the relocation of his residence to Oklahoma City, the Company
shall provide Executive with appropriate airplane
transportation between Oklahoma City and Houston, Texas, or
promptly reimburse
Executive for the cost thereof. In addition, prior to
Executive's relocation to the greater Oklahoma City area (as
provided below), the Company shall provide Executive with, or
promptly reimburse Executive for the cost of, a temporary
rented, furnished apartment or condominium in the greater
Oklahoma City area and the use of an automobile while there
(the "Temporary Benefits"). All utility expenses, gasoline,
parking and other expenses incurred by Executive and
reasonably related to the Temporary Benefits shall be paid by
the Company. The Temporary Benefits provided Executive shall
be of a nature and have a status appropriate for Executive's
position with the Company. To the extent that the Company's
provision or payment of any of these items is taxable
compensation to Executive, the Company shall pay Executive, at
such applicable times, an additional amount in cash such that
the benefits are provided to Executive without any "tax cost,"
whether federal, state or otherwise, to him.
By May 1, 2004, Executive shall notify the Company
whether he is relocating to the greater Oklahoma City area or
exercising his right to terminate pursuant to paragraph
2.3(i). If Executive notifies the Company that he is
relocating, he shall use his reasonable best efforts to so
relocate by May 31, 2004, and if Executive has not relocated
to the greater Oklahoma City area by June 30, 2004, the
Company may terminate Executive's employment and such
termination shall be deemed to have been for cause pursuant to
paragraph 2.2(iii)."
4. Paragraph 2.1 is amended by adding a new sentence thereto to
read as follows:
"Notwithstanding the foregoing, the term of this Agreement
shall not expire prior to the fifth anniversary of the
Effective Time, unless sooner terminated pursuant to the other
provisions hereof."
5. Item (D) of Paragraph 2.3(i) is amended to read as follows:
"(D) the Company's principal executive offices cease to be in
the greater Oklahoma City area or Executive is required to
work at an office other than the principal executive offices
of the Company, excluding business travel reasonably
consistent with Executive's past practice;"
6. Paragraph 2.3 is further amended by adding thereto a new
sentence to read as follows:
"The Company and Executive agree that Executive may not
terminate his employment pursuant to paragraph 2.3(i) due to a
change in his duties, responsibilities, positions or principal
place of employment based on the same as they existed
immediately prior to the Effective Time; provided, however,
the foregoing shall not prevent Executive from terminating
pursuant to paragraph 2.3(i)
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based on any change from those duties, responsibilities,
positions or principle place of employment as in effect
immediately following the Effective Time; and provided,
further, that upon not less than four weeks notice, Executive
may in all events terminate his employment on May 1, 2004 and
such termination shall be deemed to be for a reason
encompassed by paragraph 2.3(i) for which there is no
correction by the Company and upon such termination the
Company shall provide Executive with the Termination
Benefits."
7. Paragraph 3.9(v) is amended by adding thereto the following:
"Notwithstanding the foregoing or anything in the
ESRP or Executive's Membership Agreement thereunder to the
contrary, Executive may elect, at any time prior to the
commencement of his benefit under the ESRP in an annuity form,
to receive an amount equal to 95% of the Actuarial Equivalent
(as such term is defined in the ESRP) of his then vested
Accrued Benefit under the ESRP in a single lump sum. Upon such
election, the non-vested portion, if any, of Executive's
Accrued Benefit shall be forfeited. The Company shall cause
the ESRP and Executive's Membership Agreement thereunder to be
amended as necessary to reflect this Paragraph 3.9(v)."
8. Notwithstanding anything herein to the contrary, the Company
continues to have the right to terminate Executive's employment at any
time pursuant to paragraph 2.2 and any such termination by the Company,
other than pursuant to paragraph 2.2(iii) or (iv), shall entitle
Executive to the Termination Benefits.
9. As amended hereby, the Agreement is specifically ratified and
reaffirmed. If the Merger Agreement is terminated without the
consummation of the transactions contemplated thereby, this Amendment
shall be null and void and of no effect.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
this February 23, 2003, to be effective as of the Effective Time.
Ocean Energy, Inc.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Executive Vice President,
General Counsel and Secretary
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Devon Energy Corporation
By: /s/ J. Xxxxx Xxxxxxx
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Name: J. Xxxxx Xxxxxxx
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Title: Chairman of the Board,
President and Chief
Executive Officer
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Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
