Edgar Filing: DEVON ENERGY CORP/DE

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )


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Devon Energy Corporation

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		Devon Energy Corporation 20 North Broadway Oklahoma City, OK 73102-8260


			April 27, 2011

Notice of 2011 Annual Meeting of Stockholders and Proxy Statement Wednesday, June 8, 2011 8:00 a.m. (local time) The Skirvin Hilton Hotel Continental Room 1 Park Avenue Oklahoma City, Oklahoma			Dear Devon Stockholder, You are invited to attend the 2011 Annual Meeting of Stockholders of Devon Energy Corporation on Wednesday, June 8, 2011. The meeting will be held at 8:00 a.m., local time, at The Skirvin Hilton Hotel, Continental Room, 1 Park Avenue, Oklahoma City, Oklahoma. The Annual Meeting will focus on the formal items of business announced in the Notice of the 2011 Annual Meeting and Proxy Statement that follows. Additionally, we will present a report on Devon’s operations during 2010. It is important that your shares be represented and voted at the meeting. I urge you to submit your proxy using the Internet, telephone or by completing and mailing your Proxy Card in the envelope provided. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.


			Sincerely,


			J. Larry Nichols
			Executive Chairman of the Board

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2011


Time		8:00 a.m. (local time) on Wednesday, June 8, 2011
Place		The Skirvin Hilton Hotel Continental Room 1 Park Avenue Oklahoma City, Oklahoma
Items of Business		• Elect Eight Directors for a Term of One Year;
		• Advisory Vote on Executive Compensation;
		• Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation;
		• Amend the Restated Certificate of Incorporation to Eliminate Supermajority Voting Provisions;
		• Amend and Restate the Restated Certificate of Incorporation to Remove Unnecessary and Outdated Provisions;
		• Ratify the Appointment of the Independent Auditors for 2011;
		• Consider and Vote upon the Stockholder Proposal set forth in this Proxy Statement, if presented; and
		• Transact such other business as may properly come before the meeting or any adjournments of the meeting.
Who Can Vote		Stockholders of record at the close of business on April 11, 2011 are entitled to notice of and to vote at the meeting. You may examine a complete list of stockholders entitled to vote at the meeting during normal business hours for the 10 days prior to the meeting at our offices and at the meeting.
Voting by Proxy		Please submit a proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You may submit your proxy by:
		• Internet;
		• telephone; or
		• mail
		For specific information, please refer to the section entitled “About the Annual Meeting” beginning on page 1.

Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to be Held on June 8, 2011:

Our 2011 Proxy Materials, including the 2011 Proxy Statement and
Annual Report are available at www.proxydocs.com/dvn.


		BY ORDER OF THE BOARD OF DIRECTORS


Oklahoma City, Oklahoma April 27, 2011		Carla D. Brockman Vice President Corporate Governance and Corporate Secretary

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TABLE OF CONTENTS


ABOUT THE ANNUAL MEETING			1
AGENDA ITEM 1. ELECTION OF DIRECTORS			6
CORPORATE GOVERNANCE			10
Board of Directors’ Information			10
Practices for Considering Diversity			10
Committees			10
Director Independence			12
Lead Director			12
Board Involvement in Risk Oversight			13
Leadership Structure			13
Director Communication			13
Compensation Committee Interlocks and Insider Participation			13
Compensation Committee Consultant			14
Related Party Transactions			14
Director Compensation for the Year Ended December 31, 2010			14
Annual Retainer and Meeting Fees			15
Annual Equity Awards			15
GOVERNANCE COMMITTEE REPORT			16
AUDIT COMMITTEE REPORT			18
Independent Auditors’ Fees			19
Audit Committee Pre-Approval Policies and Procedures			19
RESERVES COMMITTEE REPORT			20
AGENDA ITEM 2. ADVISORY VOTE ON EXECUTIVE COMPENSATION			21
AGENDA ITEM 3. ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION			22
COMPENSATION DISCUSSION AND ANALYSIS			23
Introduction			23
Executive Summary			23
Compensation Philosophy and Objectives			24
Compensation Process			26
Overview of Executive Compensation Elements Used in 2010			28
Other Benefits			31
Post-Termination or Change in Control Benefits			31
Compensation Decisions in 2010			32
Considerations of Tax Implications			36
COMPENSATION COMMITTEE REPORT			36
SUMMARY COMPENSATION TABLE			37
GRANTS OF PLAN-BASED AWARDS DURING 2010			39
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2010			40
OPTION EXERCISES AND STOCK VESTED DURING THE YEAR ENDED DECEMBER 31, 2010			42
PENSION BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2010			43
Pension Benefits Table			44
Defined Benefit Plan			45
Benefit Restoration Plan			46
Supplemental Retirement Income Plan			46

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NONQUALIFIED DEFERRED COMPENSATION IN 2010			47
401(k) Plan			48
Deferred Compensation Plan			48
Supplemental Contribution Restoration Plans			48
Defined Contribution Supplemental Executive Retirement Plan			48
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			49
Employment and Severance Agreements			53
Long-Term Incentive Plan			55
Retirement Agreement with Mr. Heatly			55
EQUITY COMPENSATION PLAN INFORMATION			55
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			56
Security Ownership of Certain Beneficial Owners			56
Security Ownership of Management			56
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			58
INFORMATION ABOUT EXECUTIVE OFFICERS			58
AGENDA ITEM 4. AMEND THE RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING PROVISIONS			60
AGENDA ITEM 5. AMEND AND RESTATE THE RESTATED CERTIFICATE OF INCORPORATION TO REMOVE UNNECESSARY AND OUTDATED PROVISIONS			61
AGENDA ITEM 6. RATIFICATION OF INDEPENDENT AUDITORS FOR 2011			62
AGENDA ITEM 7. STOCKHOLDER PROPOSAL FOR SHAREHOLDER ACTION BY WRITTEN CONSENT			63
SUBMISSION OF STOCKHOLDER PROPOSALS			65
OTHER MATTERS			65
APPENDIX A			A-1

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Devon Energy Corporation
20 North Broadway
Oklahoma City, Oklahoma 73102-8260

Proxy Statement

Annual Meeting Of Stockholders

June 8, 2011

We are furnishing you this Proxy Statement in connection with the solicitation of proxies by our Board of Directors to be used at the Annual Meeting and any adjournment thereof. The Annual Meeting will be held on Wednesday, June 8, 2011 at 8:00 a.m. We are sending this Proxy Statement to our stockholders on or about April 27, 2011.

All references in this Proxy Statement to we, our, us, or the Company refer to Devon Energy Corporation, including our subsidiaries and affiliates.

ABOUT THE ANNUAL MEETING

What is the purpose of the Annual Meeting?

At our Annual Meeting, stockholders will be asked to:


	•	elect eight Directors for a term expiring at the next Annual Meeting of Stockholders;

	•	cast an advisory vote on executive compensation;

	•	cast an advisory vote on the frequency of future advisory votes on executive compensation;

	•	approve the amendment to the Restated Certificate of Incorporation to eliminate supermajority voting provisions;

	•	approve the amendment to and restatement of the Restated Certificate of Incorporation to remove unnecessary and outdated provisions;

	•	ratify the appointment of our independent auditors for 2011;

	•	consider and vote upon the stockholder proposal set forth in this Proxy Statement, if presented; and

	•	transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

Who is entitled to vote?

Stockholders as of the close of business on April 11, 2011 (the Record Date) are eligible to vote their shares at the Annual Meeting. As of the Record Date, there were 446,854,081 shares of our common stock outstanding. Each share of common stock is entitled to one vote at the Annual Meeting.

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How do I vote?

You may:


	•	attend the Annual Meeting and vote in person; or

	•	dial the toll-free number listed on the Proxy Card or Voting Instruction Form. Easy-to-follow voice prompts allow you to vote your shares and confirm that your voting instructions have been properly recorded. Telephone voting will be available 24 hours a day, and will close at 11:59 p.m. Eastern Time on June 7, 2011; or

	•	go to the website www.proxyvote.com and follow the instructions, then confirm that your voting instructions have been properly recorded. If you vote using the website, you can request electronic delivery of future proxy materials. Internet voting will be available 24 hours a day, and will close at 11:59 p.m. Eastern Time on June 7, 2011; or

	•	if you elected to receive a paper copy of your proxy materials, mark your selections on the Proxy Card, date and sign it, and return the card in the pre-addressed, postage-paid envelope provided.

Why did I receive a Notice Regarding the Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?

United States Securities and Exchange Commission (the SEC) rules allow companies to furnish proxy materials over the Internet. We have sent a Notice of Internet Availability of Proxy Materials to most of our stockholders instead of a paper copy of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, stockholders may request to receive future proxy materials in printed form by mail or electronically by email. A stockholder’s election to receive proxy materials by mail or email will remain in effect until the stockholder terminates it.

Why did I receive paper copies of proxy materials?

We are providing certain stockholders, including those who have previously requested to receive them, with paper copies of the proxy materials instead of a Notice. If you would like to reduce the costs incurred by us in mailing proxy materials, you may consent to receive all future proxy materials electronically via email or the Internet. To sign up for electronic delivery, please follow the instructions provided in your proxy materials. When prompted, indicate that you agree to receive or access stockholder communications electronically in the future.

How do I vote the shares held in my Devon 401(k) Plan account?

If you are a current employee participating in the Devon Energy Incentive Savings Plan (the 401(k) Plan), please follow the instructions you received via email from Broadridge Financial Solutions, Inc. (Broadridge).

If you are a former employee and have shares of our common stock credited to your 401(k) Plan account as of the Record Date, such shares are shown on the Voting Instruction Form you received from Broadridge. You have the right to direct Fidelity Management Trust Company (the 401(k) Plan Trustee) regarding how to vote those shares, which you can do by voting your shares in the same manner as provided above.

The 401(k) Plan Trustee will vote your shares in the 401(k) Plan account in accordance with your instructions. If instructions are not received by June 5, 2011, the shares credited to your account will be voted by the 401(k) Plan Trustee in the same proportion as it votes shares for which it did receive timely instructions.

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Will each stockholder in our household receive proxy materials?

Generally, no. We try to provide only one set of proxy materials to be delivered to multiple stockholders sharing an address unless you have given us other instructions. Any stockholder at a shared address may request delivery of single or multiple copies of proxy materials for future meetings by contacting us at Devon Energy Corporation, Attention: Corporate Secretary, 20 North Broadway, Oklahoma City, Oklahoma 73102-8260, email: CorporateSecretary@dvn.com or by calling (405) 235-3611.

If I vote via telephone or the Internet or by mailing my Proxy Card, may I still attend the Annual Meeting?

Yes.

What if I want to change my vote?

You may revoke your proxy before it is voted by submitting a new proxy with a later date (by mail, telephone or Internet), by voting at the Annual Meeting, or by filing a written revocation with our Corporate Secretary. Your attendance at the Annual Meeting will not automatically revoke your proxy.

Is my vote confidential?

Yes. We have procedures to ensure that regardless of whether stockholders vote by mail, telephone, Internet or in person, all proxies, ballots and voting tabulations that identify stockholders are kept permanently confidential, except as disclosure may be required by federal or state law or as expressly permitted by a stockholder.

In addition, special procedures have been established to maintain the confidentiality of shares voted in our 401(k) Plan. None of our employees will have access to voting instructions for shares in the 401(k) Plan.

Who will count the votes?

Broadridge will tabulate the votes.

What constitutes a quorum?

A majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. If you vote by telephone or Internet or by returning your Proxy Card, you will be considered part of the quorum. Broadridge, the Inspector of Election, will treat shares represented by a properly executed proxy as present at the meeting. Abstentions and broker non-votes will be counted for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner submits a proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power for that item and has not received instructions from the beneficial owner.

How many votes will be required to approve a proposal?

Election of Directors at the Annual Meeting will be by a plurality of votes cast at the Annual Meeting. Votes may be cast in favor of the election of the Director nominee or withheld.

Our Corporate Governance Guidelines and Bylaws contain a director resignation policy which provides that any nominee for Director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election must submit his or her offer of resignation to the Governance Committee of the Board of Directors within 90 days from the date of the election. The Governance Committee will consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offer of resignation.

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The proposed amendment to our Restated Certificate of Incorporation to eliminate supermajority voting provisions, as well as the proposed amendment and restatement of the Restated Certificate of Incorporation to remove unnecessary and outdated provisions, require the affirmative vote of the holders of at least two-thirds of the shares of the Company’s outstanding common stock.

With respect to the advisory vote concerning how often we should hold an advisory vote on executive compensation, we will consider the frequency option (every one year, two years or three years) that receives the highest number of votes by our stockholders (a plurality), to be the frequency recommended by our stockholders.

With respect to other matters, the affirmative vote of the holders of a majority of the shares, present in person or by proxy, and entitled to vote at the Annual Meeting, is required to take any other action.

Shares cannot be voted at the Annual Meeting unless the holder of record is present in person or by proxy.

Can brokers who hold shares in street name vote those shares if they have received no instructions?

Under the rules of the New York Stock Exchange (the NYSE) brokers may not vote the shares held by them in street name for their customers and for which they have not received instructions, except with respect to a routine matter. The only matter to be voted on at the Annual Meeting that is considered routine for these purposes is the ratification of the appointment of the Independent Auditors. This means that brokers may not vote your shares on any other matter if you have not given specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote will be counted.

How will you treat abstentions and broker non-votes?

We will:


	•	count abstentions and broker non-votes for purposes of determining the presence of a quorum at the Annual Meeting;

	•	treat abstentions as votes not cast but as shares represented at the Annual Meeting for determining results on actions requiring a majority of shares present and entitled to vote at the Annual Meeting;

	•	not consider broker non-votes for determining actions requiring a majority of shares present and entitled to vote at the Annual Meeting; and

	•	consider neither abstentions nor broker non-votes in determining results of plurality votes.

Because the proposed amendments and restatement of our Restated Certificate of Incorporation each require the affirmative vote of the holders of two-thirds of our shares of outstanding stock, abstentions and broker non-votes will have the effect of a vote “AGAINST” those matters.

Who pays the solicitation expenses?

We will bear the cost of solicitation of proxies. Proxies may be solicited by mail or personally by our Directors, officers or employees, none of whom will receive additional compensation for such solicitation. We have retained Phoenix Advisory Partners to assist in the solicitation of proxies at an estimated cost of $10,500, plus reasonable expenses. Those holding shares of common stock of record for the benefit of others, or nominee holders, are being asked to distribute proxy soliciting materials to, and request voting instructions from, the beneficial owners of such shares. We will reimburse nominee holders for their reasonable out-of-pocket expenses.

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Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting, and we will publish final results in a Form 8-K that will be filed with the SEC within four business days of the Annual Meeting. You may obtain a copy of this and other reports free of charge at www.devonenergy.com, or by contacting our Investor Relations Department at (405) 552-4570, or investor.relations@dvn.com, or by accessing the SEC’s website at www.sec.gov.

Will the Company’s independent auditors be available at the Annual Meeting to respond to questions?

Yes. The Audit Committee of the Board of Directors has approved KPMG LLP to serve as our independent auditors for the year ending December 31, 2011. Representatives of KPMG LLP will be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to stockholder questions.

Where can I contact the Company?

Our mailing address is:

Devon Energy Corporation

20 North Broadway

Oklahoma City, Oklahoma 73102-8260

Our telephone number is:

(405) 235-3611

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AGENDA ITEM 1. ELECTION OF DIRECTOR

Pursuant to provisions of our Restated Certificate of Incorporation, as amended, and Bylaws, the Board of Directors shall consist of not less than three nor more than 20 Directors. Currently, the Board is comprised of nine Directors. Our Restated Certificate of Incorporation and Bylaws provide for all Directors to be of one class and to be elected annually for a term expiring at the next Annual Meeting of Stockholders.

The Board of Directors has nominated for re-election incumbent Directors John A. Hill, Michael M. Kanovsky, Robert A. Mosbacher, Jr., J. Larry Nichols, Mary P. Ricciardello and John Richels, whose terms expire at the 2011 Annual Meeting. Also nominated for election are incumbent Directors Robert H. Henry and Duane C. Radtke, who were appointed to the Board of Directors in August 2010, and whose terms expire at the 2011 Annual Meeting. Mr. Henry and Mr. Radtke were recommended to the Governance Committee by an executive officer of the Company. If elected, all nominees will serve until their successors are elected and qualified. Mr. J. Todd Mitchell, whose term as a Director will expire at the 2011 Annual Meeting, has chosen not to stand for re-election.

The Board of Directors recommends a vote “FOR” each of the nominees for election to the Board of Directors.

It is the intention of the persons named in the proxy to vote proxies “FOR” the election of the nominees unless they are instructed otherwise. In the event any of the nominees should fail to stand for election, the persons named in the proxy intend to vote for substitute nominees designated by the Board of Directors, unless the Board of Directors reduces the number of Directors to be elected. Proxies cannot be voted for a greater number of persons than the number of nominees named.


*Director Nominees*

		*Robert H. Henry Director Since 2010* Mr. Henry, age 58, was appointed to the Board of Directors in 2010. He currently serves as President of Oklahoma City University. Mr. Henry was appointed to the United States Court of Appeals for the Tenth Circuit in 1994, where he served until June 2010, most recently as Chief Judge. Prior to his appointment, he was Dean and Professor of Law at Oklahoma City University School of Law from 1991 to 1994. Mr. Henry previously served as Attorney General of Oklahoma from 1987 to 1991 and served as an Oklahoma State Representative from 1976 to 1986. Mr. Henry holds a Bachelor’s degree with high honors from the University of Oklahoma and a law degree from the University of Oklahoma College of Law. Mr. Henry is a lifelong advocate for education and for legal and judicial issues. He has served on numerous national and international judicial advisory committees and has authored numerous law review articles, scholarly journal articles and other published works. Mr. Henry has a lifetime of public service and contribution to society and a wealth of knowledge and experience on issues which brings additional insight and perspective to the Board. For these reasons, the Board concluded that Mr. Henry is qualified and should serve as a director of the Company.

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		*John A. Hill Director Since 2000* Mr. Hill, age 69, was appointed to the Board of Directors in 2000. He founded First Reserve Corporation, an oil and gas investment management company, in 1983 and is currently its Vice Chairman and Managing Director. Mr. Hill also serves as Chairman of the Board of Trustees of the Putnam Funds in Boston and as Chairman of the Board of Trustees of Sarah Lawrence College. Mr. Hill was formerly President and Chief Executive Officer of several investment banking and asset management companies and served as the Deputy Associate Director of the Office of Management and Budget and as Deputy Administrator of the Federal Energy Administration during the Ford administration. Mr. Hill holds a Bachelor of Arts degree in Economics from Southern Methodist University and pursued graduate studies there as a Woodrow Wilson Fellow. Mr. Hill has 28 years of experience managing investments in the oil and gas business. This business experience demonstrates his leadership skill and success in the industry. Mr. Hill brings his extensive investment experience to the Board, which enhances the knowledge of the Board and provides useful insights to management. For these reasons, the Board concluded that Mr. Hill is qualified and should serve as a director of the Company.

		*Michael M. Kanovsky Director since 1999* Mr. Kanovsky, age 62, was appointed to the Board of Directors in 1999. He is currently President of Sky Energy Corporation and serves as a director of Argosy Energy Inc., ARC Resources Ltd., Bonavista Petroleum Ltd., Pure Technologies Ltd. and TransAlta Corporation. From 1982 to 1998 he served on the Board of Directors of the Canadian-based Northstar Energy Corporation, which was acquired by Devon in 1998. Mr. Kanovsky, a professional engineer, holds a Bachelor of Science degree in mechanical engineering from Queen’s University as well as a Masters degree in Business Administration from the Richard Ivey School of Business at the University of Western Ontario. Mr. Kanovsky was a founder of both Northstar Energy Corporation and Bonavista Energy Corporation. Mr. Kanovsky has more than 35 years of experience and his knowledge of the energy industry is extensive. For these reasons, the Board concluded that Mr. Kanovsky is qualified and should serve as a director of the Company.

		*Robert A. Mosbacher, Jr. Director since 2009* Mr. Mosbacher, age 59, was appointed to the Board of Directors in 2009 after having previously served as a member of the Board from 1999 until 2005. In 2005 he resigned to accept an appointment by the Bush administration to serve as President and Chief Executive Officer of the Overseas Private Investment Corporation (OPIC), an independent agency of the U.S. government that supports private capital investment in emerging markets around the world, where he served until January 2009. Mr. Mosbacher currently serves as Chairman of Mosbacher Energy Company, an independent oil and gas exploration and production company, where he served as President and Chief Executive Officer from 1986 to 2005. Mr. Mosbacher also currently serves as a director of Calpine Corporation. Mr. Mosbacher received a Bachelor of Arts degree from Georgetown University and a law degree from Southern Methodist University. Mr. Mosbacher’s leadership at OPIC contributed to the successful development of the global marketplace. Mr. Mosbacher’s experience in the industry and his well-rounded business acumen are widely acknowledged. For these reasons, the Board concluded that Mr. Mosbacher is qualified and should serve as a director of the Company.

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		J. Larry Nichols Director since 1971 Mr. Nichols, age 68, is a co-founder of Devon and has served on the Board of Directors since the Company’s inception. In 2010 he was elected to the position of Executive Chairman. Prior to that he served as Chief Executive Officer and Chairman of the Company. Mr. Nichols is a director of Baker Hughes Incorporated and Sonic Corp. and serves on the Board of Directors of the American Petroleum Institute Inc. Mr. Nichols holds a Bachelor of Arts degree in Geology from Princeton University and a law degree from the University of Michigan. Mr. Nichols’ role in the founding and leadership of Devon over a period of 40 years have been the foundation for the Company’s growth and continued success. Mr. Nichols’ decades of knowledge and experience and his proven contribution to the energy industry continue to be an immeasurable asset to the Company. Mr. Nichols has demonstrated strong business, management and leadership skills, and for these reasons, the Board concluded that Mr. Nichols is qualified and should serve as a Director of the Company.

		*Duane C. Radtke Director since 2010* Mr. Radtke, age 62, was appointed to the Board of Directors in 2010. He currently serves as owner, president and chief executive officer of Valiant Exploration LLC and as non-executive chairman of NFR Energy, LLC. Mr. Radtke served as a director of Smith International, Inc. from 2009 until 2010, at which time Smith International, Inc. merged with Schlumberger Limited. He served as president and chief executive officer of Dominion Exploration and Production from 2001 to 2007. Following Devon’s 2000 merger with Santa Fe Snyder, Mr. Radtke served as president of Devon’s international division until joining Dominion. Mr. Radtke began his energy industry career in 1971 with Texas Pacific Oil Company. Mr. Radtke holds a Bachelor’s degree in mining engineering from the University of Wisconsin. He has 40 years of experience in and extensive knowledge of the energy industry, including experience with Devon’s assets and operations. For these reasons, the Board concluded that Mr. Radtke is qualified and should serve as a director of the Company.

		*Mary P. Ricciardello Director Since 2007* Ms. Ricciardello, age 55, was appointed to the Board of Directors in 2007. She currently serves as a director of Noble Corporation and the National Association of Corporate Directors Houston Chapter. Ms. Ricciardello is a licensed Certified Public Accountant. In 2002 she retired after a 20-year career with Reliant Energy Incorporated, a leading independent power producer and marketer. Ms. Ricciardello began her career with Reliant in 1982 and served in various financial management positions with the company including Comptroller, Vice President and most recently as Senior Vice President and Chief Accounting Officer. Ms. Ricciardello holds a Bachelor of Science degree in Business Administration from the University of South Dakota and a Masters degree in Business Administration with emphasis in Finance from the University of Houston. Ms. Ricciardello is qualified as a financial expert, with over 20 years of knowledge and experience in corporate finance and tax matters. Ms. Ricciardello has held audit committee chairmanships in NYSE and NASDAQ companies, and has served as editorial advisor for the Journal of Accountancy. As a result of her business career and her experience as a director of other publicly held companies, Ms. Ricciardello provides knowledgeable advice to the Company’s other directors and to senior management. For these reasons, the Board concluded that Ms. Ricciardello is qualified and should serve as a director of the Company.

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		*John Richels Director since 2007* Mr. Richels, age 60, was appointed to the Board of Directors in 2007. He was appointed to the position of President of Devon in 2004 and appointed as President and Chief Executive Officer in 2010. Previously, Mr. Richels served as President and Chief Executive Officer of Devon Canada Corporation, a subsidiary of Devon. He joined the Company in 1998 when Devon acquired Canadian-based Northstar Energy Corporation. Mr. Richels served as a director of Northstar Energy Corporation from 1993 to 1996. Prior to that Mr. Richels served as Managing and Chief Operating Partner of the Canadian-based national law firm, Bennett Jones. He also served as vice-chairman of the board of governors of the Canadian Association of Petroleum Producers. Mr. Richels holds a Bachelor of Arts degree in economics from York University and a law degree from the University of Windsor. Mr. Richels has more than 30 years of experience in the energy industry and his knowledge of the industry is extensive. Mr. Richels has demonstrated his leadership abilities and his commitment to our Company, and has made significant contributions to the success of the Company during his tenure. For these reasons, the Board concluded that Mr. Richels is qualified and should serve as a director of the Company.

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CORPORATE GOVERNANCE

Board of Directors’ Information

Our Board of Directors met six times in 2010. All Directors attended 75% or more of the total meetings of the Board of Directors and Committees on which they served. We require a majority of our Directors to be in attendance at our Annual Meetings of Stockholders. All Directors attended the 2010 Annual Meeting.

Copies of the following governance documents are available at www.devonenergy.com and in print to any stockholder upon request:


	•	Restated Certificate of Incorporation;

	•	Certificate of Amendment of Restated Certificate of Incorporation;

	•	Bylaws;

	•	Corporate Governance Guidelines;

	•	Code of Business Conduct and Ethics;

	•	Code of Ethics for Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Accounting Officer (CAO); and

	•	Committee Charters.

Amendments to and waivers from any provision of the Code of Ethics for the CEO, CFO, and CAO will be posted on our website.

Our website also includes a copy of our Corporate Responsibility Report and information on our Environmental, Health and Safety Initiatives.

Practices for Considering Diversity

The charter of the Governance Committee provides that the Committee shall periodically review the appropriate skills and characteristics of members of the Board of Directors in the context of the then current make-up of the Board. This assessment includes the following factors: diversity (including diversity of skills, background and experience); business and professional background; financial literacy and expertise; availability and commitment; independence; and other criteria that the Governance Committee or the full Board finds relevant. It is the practice of the Governance Committee to consider these factors when screening and evaluating candidates for nomination to the Board of Directors.

Committees

The Board of Directors has standing Audit, Compensation, Governance and Reserves Committees. The following table shows each committee’s current membership, function and the number of meetings each committee held in 2010:


			Number of Meetings
Committee and Members	Functions of Committee		in 2010

Audit Mary P. Ricciardello⁽¹⁾⁽²⁾	•	Monitors the integrity of the Company’s financial statements and reporting system;	9
Robert H. Henry Michael M. Kanovsky	•	Ensures that the Company complies with legal and regulatory requirements;
J. Todd Mitchell	•	Monitors the independent auditors’ qualifications and independence;
	•	Monitors the performance of the Company’s internal auditors and independent auditors;

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			Number of Meetings
Committee and Members	Functions of Committee		in 2010
	•	Reviews the Company’s financial risk exposure and the steps management has taken to monitor and control such exposure;
	•	Monitors the business practices and ethical standards of the Company; and
	•	Performs such other duties and responsibilities as the Board shall approve and assign to the Committee.

Compensation John A. Hill⁽¹⁾	•	Reviews and approves the Company’s compensation philosophy and strategy;	6
Robert A. Mosbacher, Jr. Duane C. Radtke	•	Directs management to administer the annual compensation process in accordance with the stated compensation strategy of the Company and any requirements of the appropriate regulatory bodies;
	•	Reviews and approves the Company’s employee benefit and incentive programs;
	•	Annually reviews and determines total compensation for each management director, currently the Executive Chairman and the President and CEO;
	•	Reviews and approves total compensation for the Company’s executive officers in consultation with the Executive Chairman and the President and CEO;
	•	Reviews with the Executive Chairman and the President and CEO and advises the Board with regard to executive officer succession planning; and
	•	Performs such other duties and responsibilities as the Board shall approve and assign to the Committee.

Governance Robert A. Mosbacher, Jr.⁽¹⁾	•	Identifies and recommends qualified individuals to become Board members;	4
Robert H. Henry Mary P. Ricciardello	•	Evaluates and recommends nominees for election as directors at the annual stockholders’ meetings or for appointment between annual stockholders’ meetings;
	•	Evaluates and recommends compensation or revisions to compensation for members of the Board;
	•	Develops, recommends and reviews corporate governance guidelines for the Company; and
	•	Performs such other duties and responsibilities as the Board shall approve and assign to the Committee.

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			Number of Meetings
Committee and Members	Functions of Committee		in 2010
Reserves J. Todd Mitchell⁽¹⁾Michael M. Kanovsky	•	Performs an annual review and evaluation of the Company’s consolidated oil, natural gas and natural gas liquids reserves;	3
Duane C. Radtke	•	Oversees the integrity of the Company’s reserves evaluation and reporting system;
	•	Assesses the disclosure for the Company’s compliance with legal and regulatory requirements related to its oil, natural gas and natural gas liquids reserves;
	•	Reviews the qualifications and independence of the Company’s independent engineering consultants;
	•	Monitors the performance of the Company’s independent engineering consultants;
	•	Monitors and evaluates the Company’s business practices and standards of the Company in relation to the preparation and disclosure of its oil, natural gas and natural gas liquids reserves; and
	•	Performs such other duties and responsibilities as the Board shall approve and assign to the Committee.


⁽¹⁾		Chairman

⁽²⁾		Audit Committee financial expert

Director Independence

In accordance with our Corporate Governance Guidelines, the Board considers transactions and relationships between each Director or any member of the Director’s immediate family and the Company, our subsidiaries and affiliates. The Board has affirmatively determined that each of the current Directors and each person who served as a director during 2010, with the exception of our Executive Chairman, J. Larry Nichols, and our President and CEO, John Richels, was or is an independent Director as defined by the standards for director independence established by applicable laws, rules, and listing standards, including, without limitation, the standards for independent directors established by the NYSE and the SEC, has or had no material relationship with us that would interfere with the exercise of independent judgment and, therefore, is or was independent under our Corporate Governance Guidelines and standards established by the NYSE.

In evaluating the independence of Mr. Robert H. Henry prior to his appointment, the Board has considered the charitable contributions made by us to Oklahoma City University (OCU) in recent years, all of which were made pursuant to funding commitments we entered into prior to Mr. Henry’s appointment to his current position at OCU and prior to his appointment to our Board. In 2008, 2009 and 2010, we made charitable contributions to OCU of $5.1 million, $3.1 million and $970,000, respectively. The commitments to provide these charitable contributions was entered into in 2008. In June 2010, Mr. Henry was named President of Oklahoma City University. In August 2010, Mr. Henry was appointed to our Board.

Lead Director

The Board has a Lead Director whose primary responsibility is to preside over the executive session of the Board meeting in which Mr. Nichols, Mr. Richels and other members of management do not participate. The Lead Director also performs other duties that the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities. In 2010, the Lead Director presided over four executive sessions of the Board.

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John A. Hill has served as our Lead Director since June 2010 and will serve in that position until a successor is named by the Board of Directors.

Board Involvement in Risk Oversight

The full Board has primary responsibility for risk oversight, with the Board’s standing committees supporting the Board by addressing the risks inherent in their respective areas of oversight. The Audit Committee, Governance Committee, Compensation Committee and Reserves Committee have been delegated certain risk oversight responsibilities. These responsibilities can be found in their respective charters located on the Devon Energy website.

Leadership Structure

As stated in the Company’s Corporate Governance Guidelines, the Board reserves the right to determine, from time to time, how to configure the leadership of the Board and the Company in the way that best serves the Company. The Board specifically reserves the right to vest the responsibilities of Chairman of the Board and Chief Executive Officer in the same or in different individuals. The Board currently has no fixed policy with respect to combining or separating the offices of Chairman of the Board and Chief Executive Officer.

J. Larry Nichols currently serves as Executive Chairman of the Board and John Richels serves as President and Chief Executive Officer. Although the Board believes this structure is in the Company’s best interest at the present time, the Board may combine these positions in the future should circumstances change.

The Company’s Corporate Governance Guidelines provide that at any time the Chief Executive Officer holds the position of Chairman of the Board, the Board shall appoint an independent Director to serve as the Lead Director. Although these positions are currently held by different individuals, the Board has appointed Mr. John Hill to serve as Lead Director.

Director Communication

Any stockholder or other interested party may contact any of the Devon Directors, including the Lead Director or Non-Management Directors as a group, by:


	•	U.S. mail to Lead Director or to Non-Management Directors, c/o Office of the Corporate Secretary, Devon Energy Corporation, 20 North Broadway, Oklahoma City, Oklahoma 73102-8260;

	•	calling our Non-Management Director access line at (866) 888-6179; or

	•	sending an email to nonmanagement.directors@dvn.com.

A Management Director may be contacted by:


	•	U.S. mail to Management Directors, c/o Office of the Corporate Secretary, Devon Energy Corporation, 20 North Broadway, Oklahoma City, Oklahoma 73102-8260;

	•	Contacting the Office of the Corporate Secretary at (405) 235-3611; or

	•	sending an email to CorporateSecretary@dvn.com.

All calls or correspondence are anonymous and kept confidential to the extent possible. All such communications, other than advertisements or commercial solicitations, will be forwarded to the appropriate Director(s) for review.

Compensation Committee Interlocks and Insider Participation

During 2010, the Compensation Committee was comprised of three independent Non-Management Directors with no interlocking relationships as defined by the SEC.

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Compensation Committee Consultant

In 2010, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) or (the “Compensation Consultant”) to provide the services described in the Compensation Discussion and Analysis on page .

After a review of all services provided by Meridian to the Company and its subsidiaries during 2010, the Compensation Committee determined that the executive compensation advice received from the Compensation Consultant during the year was sound and independent of other services provided by Meridian.

Related Party Transactions

We have adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of our Directors, officers and employees. The Code is posted at www.devonenergy.com. The Code describes the policies and standards for protecting the Company’s integrity and provides guidance for recognizing and properly resolving any ethical and legal issues that may be encountered while conducting business. The Board of Directors reviews the Code annually and individually sign acknowledgements agreeing to abide by the Code. Any waiver of any provisions of the Code on behalf of an executive officer or Director may only be approved by the Board of Directors or a committee designated by the Board of Directors. It is the policy of the Audit Committee to review the terms and substance of any potential related party transaction for purposes of determining whether a waiver to the Code should be granted.

Since the beginning of 2010 there have been no “related person transactions” as defined by applicable SEC regulations.

Director Compensation for the Year Ended December 31, 2010

Under our Corporate Governance Guidelines, Non-Management Director compensation is determined annually by the Board of Directors acting upon the recommendation of the Governance Committee. Directors who are also employees receive no Director compensation. The following table shows compensation for Non-Management Directors for 2010:


	Fees Earned or Paid		Stock Awards		Option Awards		Total
Name	in Cash ($)		($)⁽¹⁾		($)⁽¹⁾		($)
Thomas F. Ferguson		44,500		—		—		44,500
Robert H. Henry		39,000		120,560		72,107		231,667
John A. Hill		83,000		129,100		78,779		290,879
Robert L. Howard		41,000		—		—		41,000
Michael M. Kanovsky		80,000		129,100		78,779		287,879
J. Todd Mitchell		88,000		129,100		78,779		295,879
Robert A. Mosbacher, Jr.		83,500		129,100		78,779		291,379
Duane C. Radtke		38,000		120,560		72,107		230,667
Mary P. Ricciardello		88,500		129,100		78,779		296,379


(1)		Stock and option awards were made on June 9, 2010 to all Directors with the exception of Thomas F. Ferguson, Robert H. Henry, Robert L. Howard, and Duane C. Radtke. Messrs. Ferguson and Howard retired from the Board of Directors on June 9, 2010. Messrs. Henry and Radtke were both appointed to the Board of Directors on August 16, 2010. Their stock and option awards were made on August 31, 2010. The stock awarded on June 9, 2010 was valued at $64.55 per share and the options awarded on June 9, 2010 were at an exercise price of $64.55 with a value of $26.26 per share. The stock awarded on August 31, 2010 was valued at $60.28 per share and the options awarded on August 31, 2010 were at an exercise price of $60.28 with a value of $24.04. The dollar amounts reported in these columns

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		represent the grant date fair values of the stock and option awards granted in 2010. The assumptions used to value stock and option awards are discussed in Note 12 — Share-Based Compensation of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.

The following table represents the number of unvested stock awards and the number of outstanding and unexercised option awards held by each of our Non-Management Directors as of December 31, 2010:


	Outstanding Stock		Outstanding Option
Name	Awards		Awards
Thomas F. Ferguson		—		14,000
Robert H. Henry		2,000		3,000
John A. Hill		5,000		37,000
Robert L. Howard		—		16,000
Michael M. Kanovsky		5,000		37,000
J. Todd Mitchell		5,000		31,000
Robert A. Mosbacher, Jr.		3,500		6,000
Duane C. Radtke		2,000		3,000
Mary P. Ricciardello		5,000		12,000

Annual Retainer and Meeting Fees

The following is a schedule of annual retainers and meeting fees for Non-Management Directors in effect during 2010:


*Type of Fee*	*Amount*

Annual Board Retainer	$	50,000
Additional Annual Retainer to Chairman of Audit Committee	$	15,000
Additional Annual Retainer to Chairman of Compensation, Governance and Reserves Committees	$	10,000
Additional Annual Retainer to Audit Committee Members	$	2,000
Fee for each Board Meeting attended in person	$	2,000
Fee for each Board Meeting attended via telephone	$	1,000
Fee for each Committee Meeting attended in person	$	2,000
Fee for each Committee Meeting attended via telephone	$	1,000

Each Non-Management Director is reimbursed for out-of-pocket expenses incurred while serving as a Director.

Annual Equity Awards

In June 2010, our Non-Management Directors were granted an annual award of 3,000 stock options and 2,000 shares of restricted stock under our 2009 Long-Term Incentive Plan. Stock and option awards to Non-Management Directors are granted immediately following each Annual Meeting. In August 2010 Mr. Robert H. Henry and Mr. Duane C. Radtke were appointed as new non-management members of the Board of Directors and were granted an award of 3,000 stock options and 2,000 shares of restricted stock under our 2009 Long-Term Incentive Plan. Options vest on the date of grant and are granted at an exercise price equal to the closing price of our common stock on that date. Unexercised options will expire eight years from the date of grant. With respect to restricted stock awards, 25% of each award vests on each anniversary of the date of grant. Cash dividends on shares of restricted stock are paid at the same times and in the same amounts as on other shares of our common stock.

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GOVERNANCE COMMITTEE REPORT

The Governance Committee operates under a written charter approved by the Board of Directors. The Charter may be viewed at www.devonenergy.com. The Governance Committee is currently comprised of three independent Directors.

The Governance Committee is responsible for proposing qualified candidates to serve on the Board of Directors and reviewing with the Board special director qualifications, taking into account the composition and skills of the entire Board and specifically ensuring a sufficient number of the members of the Board are financially literate. The Governance Committee considers nominees recommended by stockholders and gives appropriate consideration in the same manner as given to other nominees. Stockholders who wish to submit director nominees for election at our 2012 Annual Meeting of Stockholders may do so by submitting in writing such nominee’s name, in compliance with the procedures required by our Bylaws, to the Governance Committee of the Board of Directors, Attention: Chairman, c/o Office of the Corporate Secretary, Devon Energy Corporation, 20 North Broadway, Oklahoma City, Oklahoma 73102-8260. Pursuant to our Bylaws, stockholders may recommend a director nominee by delivering a timely notice to our Corporate Secretary at the address above. Such a recommendation must be received between February 9, 2012 and March 10, 2012 in order to be considered timely. The stockholder’s notice must contain:


	•	all information relating to each person being nominated that is required to be disclosed with respect to such person pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, including such person’s written consent to being named in the Proxy Statement as a nominee and to serving as a Director, if elected;

	•	the name and address of the stockholder giving the notice and the beneficial owner, if any;

	•	the class and number of shares of our stock that are owned beneficially and of record by the stockholder giving the notice and the beneficial owner, if any;

	•	a description of all arrangements or understandings between the stockholder giving the notice and any other person or persons (including their names) in connection with the nomination; and

	•	a representation that the stockholder intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting.

The Board takes reasonable steps to ensure that a diverse group of qualified candidates are in the pool from which the nominees for the Board are chosen. The Governance Committee may, at its discretion, seek third-party resources to assist in the process and makes final director candidate recommendations to the Board. Our Board of Directors considered the experience, qualifications, attributes and skills of each of the nominees for Director at the 2011 Annual Meeting. As identified in our Corporate Governance Guidelines, the basic qualifications that the Governance Committee looks for in a Director include such factors as:


	•	integrity and accountability;

	•	informed judgment;

	•	peer respect; and

	•	high performance standards.

Following election to the Board, the Corporate Governance Guidelines provide for:


	•	mandatory retirement at the Annual Meeting following the 73rd birthday of a director;

	•	required ownership of Devon common stock equal to five times the Director’s annual retainer;

	•	a recommendation that a Director not serve on more than five public company boards in addition to serving on the Company’s Board;

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	•	“majority voting,” which requires a nominee for Director in an uncontested election to submit an offer of resignation to the Governance Committee within 90 days of the date of the election if the director receives a greater number of “withheld” votes than “for” votes. The Governance Committee will then consider all of the relevant facts and circumstances and recommend to the full Board the action to be taken with respect to the offer to resign;

	•	approval of the Governance Committee to serve as a Director, officer or employee of a competitor of the Company; and

	•	prompt notification to the Executive Chairman of the Board and Chairman of the Governance Committee upon the acceptance of a directorship of any other public company or any assignment to the Audit or Compensation Committees of the board of any public company.

The Governance Committee also plays a leadership role in shaping the Company’s corporate governance. It periodically undertakes a corporate governance self-assessment, consisting of a thorough review of the Company’s corporate governance practices. The Governance Committee reviews the Company’s practices and best practices followed by other companies. The goal is to maintain a corporate governance framework for the Company that is effective and functional and that fully addresses the interests of the Company’s stakeholders. The Governance Committee determined that the Company operates under many corporate governance best practices. The Governance Committee may from time to time recommend enhanced corporate governance standards to the Board. The Board voted to approve these standards which are reflected in:


	•	the Corporate Governance Guidelines;

	•	the Charters for each of the Board’s Committees; and

	•	an expanded Code of Business Conduct and Ethics for all Directors, officers and employees.

The standards reflected in these documents implement and strengthen the Company’s corporate governance practices. These documents, and others related to corporate governance, are available at www.devonenergy.com.

With the Company’s fundamental corporate governance practices firmly in place and regularly evaluated, the Governance Committee is prepared to respond quickly to new regulatory requirements and emerging best practices. The Governance Committee intends to continue to require an annual evaluation of the effectiveness of the Board and its Committees to enable the Company to maintain its position at the forefront of corporate governance best practices.

Robert A. Mosbacher, Jr., Chairman

Robert H. Henry

Mary P. Ricciardello

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AUDIT COMMITTEE REPORT

The Board of Directors maintains an Audit Committee which is currently comprised of four independent Directors. The Board and the Audit Committee believe that the Audit Committee’s current membership satisfies the rules of the NYSE that govern audit committee composition, including the requirement that audit committee members all be independent directors as that term is defined under the listing standards of the NYSE. Also, for purposes of complying with the listing standards of the NYSE, the Board has determined that none of the directors is currently serving on the audit committees of more than three public companies. The Audit Committee operates under a written charter approved by the Board of Directors. The Charter is available at www.devonenergy.com.

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the preparation of the financial statements and the establishment and maintenance of the system of internal controls. This system is designed to provide reasonable assurance regarding the achievement of objectives in the areas of reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations. In fulfilling its oversight responsibilities, the Audit Committee reviewed with management internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board and the audited financial statements in the Annual Report. This review included a discussion of the quality, and the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

In fulfilling its duties during 2010, the Audit Committee:


	•	reviewed with the independent auditors their opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles and the effective operation of the Company’s internal controls over financial reporting;

	•	reviewed with independent auditors their judgments as to the quality and the acceptability, of the Company’s accounting principles and other matters;

	•	discussed with the independent auditors other matters under generally accepted auditing standards, including Statement on Auditing Standards No. 61, Communication with Audit Committees;

	•	discussed with the independent auditors the auditors’ independence, including the matters in the written disclosures and the letter received from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence;

	•	discussed with the independent auditors the overall scope and plans for their audit; and

	•	met with the independent auditors, with and without management present, to discuss the results of their audit and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 that has been filed with the SEC. The Audit Committee has approved KPMG LLP as the Company’s independent auditors for the year ending December 31, 2011.

Mary P. Ricciardello, Chairman
Robert H. Henry
Michael M. Kanovsky
J. Todd Mitchell

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Independent Auditors’ Fees

Under the terms of its Charter, the Audit Committee approves the fees paid to the independent auditors. For the years ended December 31, 2010 and December 31, 2009, the following fees were paid to KPMG LLP:


	2010		2009

Audit fees		3,300,000	$	3,258,000
Audit related fees		132,000		115,000
Tax fees		267,000		271,000
All other fees				—

		3,699,000	$	3,644,000

Audit fees include services for the audits of the financial statements and the effective operation of our internal controls over financial reporting. Audit related fees consisted principally of audits of financial statements of certain affiliates and subsidiaries and certain accounting consultation. Tax fees consisted of tax compliance and tax consulting fees.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, the Audit Committee pre-approves both the type of services to be provided by KPMG LLP and the estimated fees related to these services. During the approval process, the Audit Committee considers the impact of the types of services and the related fees on the independence of the auditors. The services and fees must be deemed compatible with the maintenance of the auditors’ independence, including compliance with SEC rules and regulations.

All of the 2010 and 2009 audit and non-audit services provided by KPMG LLP were approved by the Audit Committee. The non-audit services that were approved by the Audit Committee were also reviewed to ensure compatibility with maintaining the auditors’ independence and the Audit Committee determined the auditors’ independence was not impaired.

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RESERVES COMMITTEE REPORT

In 2004, the Board of Directors established a Reserves Committee that is currently comprised of three independent Directors. The Reserves Committee operates under a charter approved by the Board of Directors that is available at www.devonenergy.com. The Reserves Committee oversees, on behalf of the Board, the integrity of the Company’s oil, natural gas and natural gas liquids reserves data. Management and our independent engineering consultants have the primary responsibility for the preparation of the reserves reports. In fulfilling its oversight responsibilities, the Reserves Committee reviewed with management the internal procedures relating to the disclosure of reserves in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, having regard to industry practices and all applicable laws and regulations. In fulfilling its duties during 2010, the Reserves Committee has:


	•	approved AJM Petroleum Consultants and LaRoche Petroleum Consultants, Ltd. as the Company’s independent engineering consultants for the year ended December 31, 2010;

	•	reviewed with the independent engineering consultants the scope of the annual review of the Company’s reserves;

	•	met with the independent engineering consultants, with and without management, to review and consider the evaluation of the reserves and any other matters of concern in respect to the evaluation of the reserves;

	•	reviewed and approved any statement of reserves data or similar reserves information, and any report of the independent engineering consultants regarding such reserves to be filed with any securities regulatory authorities or to be disseminated to the public;

	•	reviewed the internal procedures relating to the disclosure of reserves; and

	•	reviewed the qualifications and independence of the independent engineering consultants prior to their appointment and throughout their engagement.

In reliance on the reviews and discussions referred to above, the Reserves Committee recommended to the Board of Directors, and the Board has approved, that the reserves information be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 that has been filed with the SEC.

J. Todd Mitchell, Chairman
Michael M. Kanovsky
Duane C. Radtke

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AGENDA ITEM 2.
ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, we are asking our stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our named executive officers as disclosed in this proxy statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the 2011 Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2011 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2010 Summary Compensation Table and the other related tables and narrative disclosure.”

This vote, commonly called a “say-on-pay” vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board of Directors. Our Board of Directors, including our Compensation Committee, value the opinions of our stockholders. In the event our stockholders do not vote in favor of this resolution, we will consider our stockholders’ concerns and will evaluate whether any actions are necessary to address those concerns.

The Board of Directors recommends a vote “FOR” the approval of the compensation of our named executive officers.

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AGENDA ITEM 3.
ADVISORY VOTE ON THE
FREQUENCY OF AN ADVISORY VOTE ON
EXECUTIVE COMPENSATION

The Dodd-Frank Act also requires that our stockholders be asked to indicate how frequently we should seek an advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Agenda Item 2 included on page ## of this Proxy Statement. By voting on this Agenda Item 3, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years.

After careful consideration of this Proposal, our Board of Directors has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for Devon and our stockholders, and therefore our Board of Directors recommends that you vote for a one year interval for the advisory vote on executive compensation.

Stockholders will not be voting to approve or disapprove the Board’s recommendation on this agenda item. Instead, you may cast your vote on the voting frequency by choosing among three frequency options, the option of one, two or three years or you may abstain from voting,

Although this advisory vote on the frequency of the “say on pay” vote is nonbinding, the Board of Directors and the Compensation Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation. The Board of Directors may decide that it is in the best interests of our stockholders and Devon to hold an advisory vote on executive compensation more or less frequently than the option receiving the highest number of votes from our stockholders.

The Board of Directors recommends a vote for the option of “ONE YEAR” year as the frequency with which stockholders are asked to provide an advisory vote on executive compensation.

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COMPENSATION DISCUSSION AND ANALYSIS

Introduction

We depend on the performance of highly trained, experienced and committed executive officers who have the skills, education, background and personal qualities necessary to lead an oil and gas business. This requires a competitive executive compensation program that retains effective and knowledgeable leaders who have contributed to the success of the Company and attracts new personnel with proven track records in the oil and gas industry.

This Compensation Discussion and Analysis (CD&A) describes the overall executive compensation approach at the Company and specifically discusses total compensation for the following named executive officers:


Executive			Position
J. Larry Nichols			Executive Chairman (CEO until June 2010)
John Richels			President and Chief Executive Officer
Jeffrey A. Agosta			Executive Vice President and Chief Financial Officer
David A. Hager			Executive Vice President, Exploration and Production
Darryl G. Smette			Executive Vice President, Marketing and Midstream
Lyndon C. Taylor			Executive Vice President and General Counsel
Danny J. Heatly			Former Senior Vice President, Accounting and Chief Accounting Officer (principal financial officer until March 2010)

In addition to the term “named executive officers,” we use one other term in this CD&A to identify a group of our executives due to the similarity of the compensation processes and decisions applicable to them. The term “executive officers” refers to Messrs. Nichols and Richels as well as our executive vice presidents. Seven employees, including Messrs. Agosta, Hager, Smette and Taylor, were executive vice presidents at the end of 2010. Mr. Heatly was not an executive officer at any point in 2010, therefore processes and decisions related to Mr. Heatly’s compensation were similar to those of the Company’s other non-executive officers.

Executive Summary

Near the end of 2009, the Company announced a plan to strategically reposition itself as a focused North American onshore company. As a part of this repositioning, the Company devoted significant efforts during 2010 to successfully divest its offshore assets in the Gulf of Mexico and countries outside North America. The results of the Company’s efforts to bring forward the value of the divested assets far surpassed initial expectations, with total proceeds expected to exceed $10 billion on a pre-tax basis and $8 billion on an after-tax basis.

In the midst of the successful execution of this repositioning, the Company was able to deliver excellent operating results from its North American assets, with 2010 earnings and year-end reserve balances both reaching record levels. The Company utilized its cash flow to enhance its long-term growth prospects by investing in additional onshore exploration and development opportunities, repaying $1.8 billion of debt and returning $1.4 billion to the Company’s stockholders in form of share repurchases and dividends. As

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the Company nears the completion of its strategic repositioning, it possesses a premier portfolio of North American onshore assets and enviable financial strength and flexibility.

Our compensation philosophy of pay for performance recognizes near-term operational and financial success as well as decision-making that supports long-term value creation. We believe our compensation programs have served the Company and its stockholders well during a significant and transformative year for the Company.

Within this context, the Committee made the following compensation decisions in 2010 for the named executive officers (see “Compensation Decisions in 2010” section of this CD&A for additional detail):


	•	increased base salaries, including mid-year increases for Messrs. Richels and Agosta due to their promotions to CEO and CFO, respectively;

	•	paid higher cash bonuses than in the prior year, based on the Company’s overall improved performance in 2010 in the midst of the successful execution of the Company’s strategic repositioning; and

	•	awarded stock options and restricted stock with values generally higher than the prior year primarily due to promotions and increases in responsibilities.

Further, in March 2011, the Compensation Committee approved amendments to our employment agreements with our executive officers that would eliminate tax gross-up payment obligations of the Company to the executive officers in the event of a change in control of the Company.

Compensation Philosophy and Objectives

Overview

The Company strives to optimize value for its stockholders by growing cash flow, earnings, production and reserves, all on a debt-adjusted per share basis. This demands that the Company, among other things, exercise capital discipline, invest in oil and gas properties with high operating margins, balance its reserves and production mix between natural gas and liquids (such as oil) and maintain a low overall cost structure.

We believe that this operating strategy requires a compensation philosophy that recognizes near-term operational and financial success as well as decision-making that supports long-term value creation. For these reasons, our executive compensation program is designed to strike the appropriate balance between the near-term and the long-term.

The goals of our compensation program are to:


	•	motivate, reward and retain management talent to support our goal of increasing stockholder value;

	•	effectively compete against other oil and gas companies for executive talent;

	•	consider and respond to developments within the oil and gas industry;

	•	provide balanced incentives for the achievement of near-term and long-term objectives, without motivating executives to take excessive risk; and

	•	emphasize direct compensation over indirect compensation, such as benefits and perquisites.

The following table gives a broad overview of the elements of our executive compensation program, including the description and purpose of each element and the market guidelines we target. In each case, the market guidelines refer to an element’s relative value within a group of industry peer

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companies for comparable executive roles (see further discussion, including detail on the compensation peer group, under “Benchmarking” below).


Compensation Element	Description and Purpose	Market Guidelines
Base Salary	Provides fixed compensation to pay for experience, expertise and knowledge	At or slightly above the 50^th percentile
Annual Cash Bonus	Emphasizes near-term performance results and current decision-making that affects long-term value creation	From the 50^th to 75^th percentiles based on performance
Long-Term Incentive Awards	Aligns executives’ and stockholders’ interests in the long-term performance of the Company Promotes retention of executives through vesting of awards over time Provides for meaningful share ownership opportunities	From the 50^th to 75^th percentiles based on performance
Retirement and Other Benefits	Retirement benefits provide long-term financial security Other benefits include basic health and welfare programs that are made available to all employees Severance benefits allow for short-term financial security in certain cases of termination	Provide program features competitive with the compensation peer group

For executive officers, we generally target total direct compensation, which we define as the aggregate of base salary, annual cash bonus and long-term incentive awards, between the 50^th and 75^th percentiles of the compensation peer group.

Balancing Compensation for Near-Term and Long-Term Performance

To reinforce the goals of both achieving near-term results and creating long-term stockholder value, the Company provides executive officers both annual cash bonuses and long-term incentive awards. We believe that properly allocating these compensation elements is critical in motivating executive officers to carry out our operating strategy. Overall, the value of an executive officer’s total compensation is weighted in favor of long-term incentives in order to focus the officer’s efforts on the long-term performance of the Company and to encourage the executive to remain at the Company.

Compensation Weighted Toward Performance-Based Compensation

We believe that the proportion of any employee’s total direct compensation that varies based on performance should increase as the scope of an employee’s ability to influence our results increases. Since executive officers have the greatest influence over our results, a significant portion of their overall

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compensation consists of cash bonuses and long-term incentive awards that vary based on performance. In 2010, for example, approximately 90% of the estimated value of the total direct compensation of both our Executive Chairman and our President and CEO was variable based on performance. For all other executive officers, the estimated value of their 2010 total direct compensation subject to performance-related variability ranged from approximately 81% to 85%.

Compensation Process

Our process for reviewing and determining the compensation for named executive officers involves the Compensation Committee of the Board of Directors (the “Committee”), executive officers of the Company and an external compensation consultant. Their roles are further described in the following sections.

As noted above, Mr. Heatly was not an executive officer at any point in 2010, therefore the processes related to Mr. Heatly’s compensation were similar to those of the Company’s other non-executive officers.

Role of the Committee and Executive Officers

The Committee establishes our executive compensation philosophy and administers the overall executive compensation program. The Committee operates under a written charter approved by the Board of Directors, a copy of which is available at www.devonenergy.com.

Each year, the Committee conducts an individual, in-depth interview with each executive officer to discuss the officer’s analysis of the Company’s overall performance for the year, performance within his area of responsibility and any issues or concerns regarding the Company’s operations. We believe this is a unique practice among compensation committees and a highly effective tool in the Committee’s oversight of the executive compensation process. In addition, the Executive Chairman and the President and CEO discuss with the Committee their evaluation of each executive officer’s performance, role, development and potential to take on greater or different responsibilities. The Executive Chairman and the President and CEO then recommend to the Committee compensation changes for executive officers. Neither the Executive Chairman nor the President and CEO makes any recommendation to the Committee regarding his own compensation.

The Committee considers the compensation philosophy, the Company’s recent performance, each executive officer’s individual performance during the year, the Committee’s interviews with executive officers, the Executive Chairman’s and the President and CEO’s recommendations, the external compensation consultant’s input and the Committee’s own review of competitive market data. In a closed session without any executive officer present, the Committee first sets the Executive Chairman’s and the President and CEO’s compensation. The Committee then determines whether to approve the Executive Chairman’s and the President and CEO’s recommendations of compensation for the other executive officers during a session that includes the Executive Chairman and the President and CEO.

Compensation decisions are further discussed in the “Compensation Decisions in 2010” section of this CD&A.

Role of the Compensation Consultant

For the 2010 compensation process, the Committee retained as its external compensation consultant representatives from Meridian Compensation Partners, LLC (the “Compensation Consultant”). The Compensation Consultant evaluated the competitiveness of our programs and assisted with executive compensation program design. The Committee did not direct the particular manner or method in which the Compensation Consultant performed these services. The Committee has the final authority to hire and terminate the Compensation Consultant, and the Committee evaluates the performance of the Compensation Consultant annually.

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Benchmarking

To successfully compete for executive talent, the Committee, working with the Compensation Consultant, annually compares the compensation of our executives to the compensation of similarly situated executives at peer companies. In establishing a peer group, the Committee chiefly seeks companies with asset and market values similar to the Company; the Committee also considers revenue levels and enterprise values — calculated as market value plus net long-term debt and preferred stock — of the companies. The Committee believes these metrics are appropriate for determining peers, because they provide a reasonable point of reference for comparing executives with similar positions and responsibilities. At the time the Committee approved the peer group for 2010, the Company was positioned between the 35^th and 65^th percentiles of the peer group on each of these metrics.

In the past, the peer group consisted of companies primarily in the business of exploration and production as well as a few companies focused on energy services. In 2010, the Committee decided to remove the companies that focus on energy services and to expand the number of companies primarily in the business of exploration and production in order to better represent the competitive market for executive talent in our industry.

The approved peer group for 2010 consisted of the 14 companies listed below (the “compensation peer group”).

Anadarko Petroleum Corporation

Apache Corporation

Chesapeake Energy Corporation

Chevron Corporation

ConocoPhillips

EnCana Corporation

EOG Resources, Inc.

Hess Corporation

Marathon Oil Corporation

Murphy Oil Corporation

Noble Energy Inc.

Occidental Petroleum Corporation

Pioneer Natural Resources Company

Talisman Energy Inc.

The Committee’s benchmarking analysis consists of all components of total direct compensation, including base salary, annual bonus and long-term incentives. The Compensation Consultant collected and summarized compensation data from the proxy statements of the compensation peer group and the Compensation Consultant’s proprietary databases. The compensation data is typically from the prior year. Thus, when setting current compensation, the Committee works with the Compensation Consultant to adjust the data to account for known or expected changes in the market between the effective date of the data and the current date. Additionally, the Committee typically excludes from its benchmarking analysis those few companies and individuals whose compensation far exceeds the compensation found at a majority of the compensation peer group.

Tally Sheet Review

The Committee annually reviews tally sheets for named executive officers, including potential payments under various termination scenarios. Further detail can be found in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. The tally sheets reviewed by the Committee contain both IRS and SEC calculations that assign values for any personal use of the corporate aircraft.

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The Committee has determined that the amounts reflected in these reviews are reasonable and consistent with the Company’s compensation philosophy. The Committee has noted that in the case of personal use of the corporate aircraft, the values for named executive officers were significantly less than those reported by the compensation peer group companies.

Succession Planning

The Company has a robust succession planning process to ensure the development of executive talent for the near and long term. The process and progress are reviewed with the Committee and the Board of Directors on an annual basis.

Overview of Executive Compensation Elements Used in 2010

Overview

We use several different compensation elements in our executive compensation program for the purpose of addressing both near-term and long-term value creation for the Company. As outlined earlier, the primary components of our executive compensation program consist of:


	•	base salary;

	•	annual cash bonus;

	•	long-term incentives; and

	•	retirement and other benefits.

The sections that follow further describe the design of each compensation element.

Base Salary

The Committee reviews and approves, on an annual basis, the base salaries of our named executive officers. We consider a competitive base salary vital to ensuring the continuity of our management. The following factors are considered when establishing base salaries for the named executive officers:


	•	external market forces and data, including the competitive market information provided by the Compensation Consultant;

	•	the scope of responsibility, experience and tenure of each executive;

	•	the development plans for the executive and his potential to take on greater or different responsibilities; and

	•	internal equity considerations.

We believe that our ability to achieve our objectives depends in large part on employing an executive leadership team that has a combination of significant industry experience and longevity with the Company. In order to attract and retain such executives, their base salaries must be competitive with the base salaries of executive officers of peer companies with whom we compete for executive personnel. We believe that targeting base salaries at or slightly above the market median enables us to compete successfully and allows us to heavily weight our overall compensation package toward pay that varies based on performance.

Annual Cash Bonus

The Committee annually approves cash bonus awards for our named executive officers. The Committee believes that the executives’ cash bonuses should reflect the near-term operating, strategic, and financial performance and current decision-making that affects long-term stockholder value. In that

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regard, bonuses awarded by the Committee are intended to be competitive with the market while rewarding named executive officers for:


	•	delivering near-term financial and operating results;

	•	developing long-term growth prospects;

	•	cultivating internal talent;

	•	building on our positive relationships with regulators, landowners and other stakeholders;

	•	improving the efficiency and effectiveness of business processes on a continuous basis; and

	•	building a culture of mutual respect and teamwork focused on creating long-term stockholder value.

To that end, in determining the appropriate cash bonus amounts, the Committee considers our compensation philosophy, recent Company performance, each named executive officer’s individual performance during the year, competitive market conditions, historical practices and incentive awards for others in the Company. Although the Committee does not assign specific target or maximum cash bonus award levels to the named executive officers, the benchmarking analysis of the compensation peer group provides a competitive market frame of reference for setting current compensation.

When evaluating recent Company performance, the Committee considers, among other things, our performance in relation to structured and measurable goals approved by the Board of Directors at the beginning of the year. These goals cover a number of both quantitative and qualitative areas, such as delivering stockholder returns, growing our oil and gas production and reserves, adhering to capital and operating budgets, improving environmental, health and safety performance, improving corporate efficiency and enhancing our workforce planning. The Committee does not assign a specific weight to any particular performance goal, whether quantitative or qualitative, nor is a specific weight assigned to the performance goals in the aggregate.

As part of its evaluation of certain quantitative financial and operating metrics, the Committee compares the performance of the Company to certain recognized peers in the industry (the “performance peer group”). For 2010, the performance peer group consisted of Anadarko Petroleum Corporation, Apache Corporation, Chesapeake Energy Corporation, EnCana Corporation and EOG Resources, Inc. The members of the performance peer group are similar in size with comparable businesses to the Company. Each of these companies is included within our compensation peer group.

In addition to considering the Company’s quantitative and qualitative performance goals set at the beginning of the year, the Committee also takes into account market and economic trends and forces, extraordinary internal and market-driven events, unanticipated developments and other extenuating circumstances. In short, the Committee exercises a comprehensive approach in determining the amount of annual cash bonuses for named executive officers.

Our approach to annual bonuses is both methodical and purposeful. Our approach leads to the creation of a highly effective management team that is evaluated on its ability to be flexible in addressing changing market and industry conditions while executing the Company’s overall business strategy. We believe the Company’s recent and long-term performance demonstrate that this flexible approach works well.

Long-Term Incentives

A key element of our compensation program is to reward named executive officers for long-term strategic accomplishments and enhancement of long-term stockholder value through equity-based incentives that vest over an extended period of time. We believe that long-term incentive compensation plays an essential role in attracting and retaining executive officers and aligns their interests with the long-term interests of our stockholders.

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The Committee approves long-term incentive awards to named executive officers at the year-end Committee meeting in December. The Committee does not time the grant of awards in coordination with the release of material nonpublic information.

In analyzing the value of long-term incentives awarded to our executives, the Committee takes into account:


	•	our compensation philosophy;

	•	recent Company performance with a focus on how such performance creates value for our stockholders over the long term;

	•	each executive officer’s individual performance during the year;

	•	competitive market conditions;

	•	historical practices, including the value of prior years’ long term incentives;

	•	incentive awards for others in the organization; and

	•	the overall impact of awards on the Company’s share dilution levels.

Our long-term incentive awards consist of stock options and restricted stock. Stock option awards give executive officers the right to purchase common stock of the Company at a specified price within a specified period of time. Restricted stock awards consist of grants of our common stock that will only be earned by an executive officer when the restrictions lapse. For the stock options awarded in 2010, 20% of the stock options immediately vested and became exercisable on the grant date. An additional 20% of each grant vests and becomes exercisable on each of the first four anniversaries of the original grant. With respect to restricted stock awards made in 2010, 25% of each award vests on each of the first four anniversary dates of the original grant. Executive officers generally forfeit the remaining portion of any award if they are not employed by the Company at the time the remaining portion of the award is otherwise scheduled to vest. Upon retirement from the Company, executive officers who meet certain years of service and age criteria may continue to vest in outstanding equity-based grants in accordance with the vesting dates established in the original grants so long as they agree to certain covenants to protect the Company’s business.

The vesting schedule of our awards provides a strong incentive for our executive officers to continue service with the Company for an extended period. Moreover, the long-term interests of our executive officers and our stockholders align in that both groups are rewarded when our common stock appreciates in value over time. This is particularly true with respect to stock options because executive officers only stand to gain from their receipt of stock options if our common stock appreciates in value.

Stock Ownership Guidelines

We believe that the ownership of our stock by our executives aligns the interests of our executives with the interests of our stockholders. Accordingly, the Board of Directors maintains stock ownership guidelines that require each executive officer who has served in such capacity for at least five years to own shares of common stock at least equal in value to a multiple of his base salary. The guidelines establish the following minimum ownership levels:


Officer Title		Share Ownership Expectation as Multiple of Base Salary

Executive Chairman		Five times base salary
President and CEO		Five times base salary
Executive Vice Presidents		Three times base salary

As of March 31, 2011, each executive officer held stock in excess of the levels required in the guidelines. Moreover, our executives have historically maintained share ownership levels well above our guidelines. For purposes of calculating share ownership levels, the Board includes (i) shares owned directly by the

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officer and his immediate family members who share the same household, (ii) shares owned beneficially by the officer and his immediate family members residing in the same household, and (iii) unvested restricted stock for which the restrictions have not lapsed.

The Company also has a policy that prohibits our personnel from engaging in short-term or speculative transactions involving our common stock. This policy prohibits trading in our stock on a short-term basis, engaging in short sales, buying and selling puts and calls, and discourages the practice of purchasing the Company’s stock on margin.

For additional detail on the stock owned by our named executive officers, please refer to the Security Ownership of Management table on page .

Retirement Benefits

Our named executive officers are entitled to participate in the following retirement benefits:


	•	a qualified 401(k) Plan with a Company match of up to 6%;

	•	a nonqualified Deferred Compensation Plan that allows eligible employees to defer cash compensation beyond the limits placed on the 401(k) Plan by the Internal Revenue Code and permits the Company to contribute a match to the extent that the match available under the qualified 401(k) Plan is limited;

	•	a qualified Defined Benefit Plan that provides annual retirement income of 65% of final average compensation (i.e., the average of the highest three consecutive years’ compensation from salary and cash bonuses out of the last 10 years), less any benefits due to the participant under Social Security, times a fraction, the numerator of which is credited years of service up to a maximum of 25 and the denominator of which is 25; and

	•	a nonqualified defined benefit plan (the Supplemental Retirement Income Plan or “SRIP”) that, among other things, provides retirement benefits calculated without certain limitations applicable to the Defined Benefit Plan, accrues over 20 years of service (rather than the 25 years applicable to the Defined Benefit Plan), includes a five-year vesting schedule, and allows for payments in a lump sum upon a change in control of the Company.

Mr. Hager joined the Company after our Defined Benefit Plan was closed to new participants. In lieu of participating in the Defined Benefit Plan and the SRIP, Mr. Hager is eligible to participate in the enhanced defined contribution structure of the 401(k) plan and receive a Company Retirement contribution to his 401(k) account of 8% of his compensation. He is also eligible to participate in additional nonqualified defined contribution plans in lieu of participating in the SRIP.

For additional information on the Defined Benefit Plan, the SRIP and the defined contribution plans and the present values of the accumulated benefits of our named executive officers under each plan, please refer to the Pension Benefits for the Year Ended December 31, 2010 section on page and the Nonqualified Deferred Compensation Plan in 2010 section on page .

Other Benefits

We limit the perquisites made available to our executives. Personal use of aircraft by executives on a limited basis is allowed as approved by the Executive Chairman or the President and CEO. The Committee reviews the personal use of aircraft on an annual basis and has noted that the use has been significantly lower than that of our compensation peer group.

Post-Termination or Change in Control Benefits

We maintain employment agreements with each of our named executive officers except for Mr. Heatly, with whom we maintained a severance agreement until his retirement in March 2011. These agreements give each named executive officer certain additional compensation if his employment is involuntarily

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terminated other than for cause or if the executive voluntarily terminates his employment for good reason, as those terms are defined in the relevant agreements. Also, in these situations, the applicable named executive officer fully vests in any unvested long-term incentive awards.

If a named executive officer is terminated within two years of a change in control, the executive is also entitled to an additional three years of service credit and age in determining entitlement to retiree medical benefits and SRIP benefits (or with respect to Mr. Hager’s nonqualified defined contribution plan, an additional three years of contributions by the Company).

As noted above, Mr. Heatly was not an executive officer in 2010. Accordingly, his post-termination arrangements were more in line with other non-executive officers.

In March 2011, the Company amended the employment agreements in order to eliminate tax gross-up payment obligations of the Company to the executives in the event of a change in control of the Company. Prior to the amendments, the employment agreements contained a tax gross-up provision that obligated the Company to pay an additional amount to the named executive officer if his benefits under the employment agreement or any other Company arrangement were subject to the tax imposed on excess parachute payments by Section 4999 of the Internal Revenue Code. The amendments to the employment agreements eliminate this tax gross-up provision.

Post-termination and change in control benefits are typical in the oil and gas industry and necessary in order to compete for executive talent. Please refer to the Potential Payments Upon Termination or Change in Control section on page for more information.

Compensation Decisions in 2010

As discussed in the “Compensation Process” section of this CD&A, the Committee considers the following factors in making annual compensation decisions for the named executive officers:


	•	our compensation philosophy;

	•	recent Company performance;

	•	each named executive officer’s individual performance during the year, including the performance of the business or organizational unit for which the officer is responsible;

	•	interviews with the executive officers;

	•	the Compensation Consultant’s input;

	•	the Committee’s own review of competitive market data; and

	•	the Executive Chairman’s and the President and CEO’s recommendations (as applicable).

In 2010, the Committee also considered the current economic environment and the unique dynamics of the oil and gas industry.

Base Salary

The Committee took the following factors into account when considering whether, and by what amount, to adjust the salary of an executive officer:


	•	the comparative position of our executive officers’ base salaries to targeted market objective on a group and individual basis;

	•	the tight and competitive labor market for executive leadership in the industry;

	•	the Committee’s decisions since the end of 2007 to freeze salaries for the executive officers except for adjustments related to promotions; and

	•	the leadership each executive officer has shown in the strategic repositioning of the Company.

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Based on the foregoing and the other factors the Committee typically considers when establishing base salaries (see the factors described in “Base Salary” under the “Overview of Executive Compensation Elements in 2010” section of this CD&A), the Committee decided to award salary increases effective January 1, 2011 to executive officers. Excluding Messrs. Agosta and Heatly, the salary adjustments resulted in increases ranging from 5% to 15% over salaries in effect at the end of 2010. Mr. Agosta received an increase of 25% over his prior salary primarily due to his appointment as the Company’s CFO and our market guidelines for his position. The salary levels are consistent with the market guidelines we target for our named executive officers as a group.

As previously noted, the Committee does not determine Mr. Heatly’s compensation.

Please refer to the Summary Compensation Table for further information on the base salaries of named executive officers.

Annual Cash Bonus

Overall in 2010, the Committee concluded that the Company achieved key operational and other successes as the Company met the challenge of reorganizing operations and staff in support of the strategy to focus on North American onshore assets. Additionally, the Committee believes the Company improved its growth prospects through the redeployment of some of the divestiture proceeds.

The Committee noted the following metrics related to Company performance:


	•	significantly exceeded expectations for execution of the sale of the Company’s offshore and international assets, with pre-tax proceeds expected to exceed $10 billion on a pre-tax basis and $8 billion on an after-tax basis;

	•	generated stockholder returns in the top half of our performance peer group;

	•	exceeded target for oil and gas production volume, with total production of 227.6 million barrels of oil equivalent (BOE) related to continuing operations;

	•	exceeded goal for oil and gas reserve additions, with 392 million BOE of reserve additions;

	•	achieved pre-tax cash costs in the lower half of our performance peer group;

	•	recorded earnings per share growth in the top half of our performance peer group;

	•	gained new resource potential with successful property acquisitions;

	•	reduced cycle time for conversion of potential resources to reserves; and

	•	exercised significant financial discipline in relation to capital expenditure and operating budgets.

The Committee also noted that the Company fell short of targeted goals with respect to environmental, health and safety as recordable incident and spill rate goals were missed, and the Committee took those missed goals into account in determining the bonuses and overall compensation awarded to the named executive officers.

In its evaluation of the Company’s performance related to certain non-quantitative goals, the Committee noted the Company’s success in the following areas:


	•	continued to build strong community, government and stockholder relations;

	•	enhanced strategies for cultivating leadership talent, including the identification of emerging leader talent groups and the creation of development plans for each group; and

	•	continued to build on the Company’s reputation as a desirable place to work.

The Committee conducted a thorough evaluation of each named executive officers’ performance, including the individual interviews described above. Among the named executive officers for whom it made bonus determinations, the Committee determined that each had made significant contributions to

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the Company’s overall results. As previously noted, the Committee did not determine the bonus for Mr. Heatly.

The 2010 benchmarking indicated that bonuses paid to the named executive officers for 2009 performance generally met the Company’s market objective on an overall basis.

Based on the Committee’s evaluation of the Company’s performance in 2010 and other factors that it considers when making annual cash bonus decisions (see the factors described in “Annual Cash Bonus” under the “Overview of Executive Compensation Elements in 2010” section of this CD&A), the Committee determined that cash bonuses should be higher than those for 2009. In making the award determination, the Committee also noted that the cash bonuses in 2009 were 30% less than those awarded in 2008 due to the Company’s relative performance in those years. In recognition of the Company’s overall improved performance in 2010 as compared to 2009 in the midst of the successful execution of the Company’s strategic repositioning, the following cash bonuses were awarded to the named executive officers:


	2010
Name	Cash Bonuses
J. Larry Nichols	$	3,000,000
John Richels	$	2,500,000
Jeffrey A. Agosta	$	550,000
David A. Hager	$	900,000
Darryl G. Smette	$	800,000
Lyndon C. Taylor	$	550,000
Danny J. Healy	$	350,000

Please refer to the Summary Compensation Table for further information on the annual cash bonuses of named executive officers.

Long-Term Incentives

For 2010, the Committee made grants of long-term incentive awards to named executive officers in the form of stock options and restricted stock that vest as described in the section of this CD&A titled “Overview of Executive Compensation Elements Used in 2010.” As was the case in 2009, approximately one-half of the total award value was granted in options, and one-half of the award value was granted in restricted stock. We continue to believe this combination promotes stockholder value creation as well as executive stock ownership and retention.

Benchmarking conducted in 2010 indicated that the value of long-term incentives awarded to the named executive officers in 2009 generally fell within the Company’s market objective of the 50th to 75^th percentile of the compensation peer companies.

During its year-end meeting, the Committee approved the grants set forth in the table below. In the process of considering these grants, the Committee reviewed the 2010 benchmarking results, which showed, in general, an increase in values for the 50th to 75^th percentiles with respect to awards for executives in the compensation peer group. The Committee also noted the change in responsibilities for Messrs. Nichols, Richels and Agosta, respectively, during the year (for additional information, see discussion of factors described in “Long-Term Incentives” under the “Overview of Executive Compensation Elements in 2010” section of this CD&A). In finalizing its long-term incentive decisions, the Committee cited its confidence in the strategic direction set forth by the Company’s executive officers and its belief that the implementation of that strategy would have a positive impact on the long-term growth and return prospects for the Company.

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	2010		2010
Name	Stock Awards		Option Awards
J. Larry Nichols		74,900		187,700
John Richels		68,100		187,100
Jeffrey A. Agosta⁽¹⁾		15,925		43,350
David A. Hager		20,425		56,150
Darryl G. Smette		15,675		43,050
Lyndon C. Taylor		12,250		33,700
Danny J. Heatly		0		0


(1)		The amounts shown include 2,300 shares of restricted stock and 5,900 stock options that were awarded upon Mr. Agosta’s appointment as the Company’s Executive Vice President and Chief Financial Officer in March 2010. It also includes 13,625 shares of restricted stock and 37,450 stock options that were awarded upon the annual grant in December 2010.

For additional detail on the Company’s long-term incentive awards granted in 2010, please refer to the Summary Compensation Table and Grants of Plan-Based Awards During 2010.

Material Differences in Compensation Decisions for Named Executive Officers

Mr. Nichols’ total compensation for 2010 was higher than that of other named executive officers primarily because of his position, his long tenure with the Company, his status as a founder of and source of strategic vision for the Company, the compensation levels of comparable executives of other companies against whom his compensation is benchmarked and his greater influence over and responsibility for the entire Company (as opposed to a distinct division or function). In addition, Mr. Nichols’ compensation recognized his leadership role with respect to matters affecting the oil and gas industry generally.

Mr. Richels’ total compensation for 2010 was higher than that of other named executive officers, except for Mr. Nichols, primarily because of his position, his experience and stature in the industry, his reporting relationship to the Executive Chairman, the compensation levels of comparable executives of other companies against whom his compensation is benchmarked and his greater influence over and responsibility for the entire Company (as opposed to a distinct division or function). In addition, Mr. Richels’ compensation recognized the leadership role he is exercising with respect to the day-to-day operations of the Company.

As noted above, Mr. Heatly was not an executive officer in 2010, so his compensation was similar to other non-executive officers with significant responsibilities at the Company.

Compensation Program and Risk-Taking

Our executive compensation program is designed to provide executive officers incentives for the achievement of near-term and long-term objectives, without motivating them to take unnecessary risk. As part of its review and discussion of the compensation program with the Compensation Consultant, the Committee noted the following factors that discourage the Company’s executives from taking unnecessary or excessive risk:


	•	the Company’s operating strategy and related compensation philosophy;

	•	the effective balance, in each case, between cash and equity mix, near-term and long-term focus, corporate and individual performance, and financial and non-financial performance;

	•	a multi-faceted approach to performance evaluation and compensation that does not reward an executive for engaging in risky behavior to achieve one objective to the detriment of other objectives; and

	•	executive stock ownership pursuant to our stock ownership guidelines.

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Based on this review and discussion, the Committee believes that the total executive compensation program does not encourage executive officers to take unnecessary or excessive risk.

Conclusion

In summary, after evaluating all of the considerations reviewed by the Committee, the Committee believes the compensation delivered to the named executive officers for 2010 is reasonable and appropriate.

Considerations of Tax Implications

Section 162(m) of the Internal Revenue Code (the “Code”) disallows, with certain exceptions, a federal income tax deduction for compensation over $1,000,000 paid to the Chief Executive Officer or any other named executive officer except the Chief Financial Officer. One exception applies to “performance-based compensation” paid pursuant to stockholder approved employee benefit plans (essentially, compensation that is paid only if the individual’s performance meets pre-established objective performance goals using performance measures approved by our stockholders).

Although we have generally attempted to structure executive compensation so as to preserve deductibility, we also believe that there are circumstances in which our interests are best served by maintaining flexibility in the way compensation is provided, even if it results in the non-deductibility of certain compensation under the Code. A portion of the payments made under our current annual cash compensation program are not deductible in accordance with the provisions of Section 162(m). However, the Committee has determined that the benefit of enhanced flexibility in program design outweighs the value of the lost deduction.

A minor portion of the stock options we granted to our executives are incentive stock options, which allow the executives to defer the payment of certain taxes upon exercise of the options and provide for the characterization of certain gains as long-term capital gains.

Section 422 of the Code limits the amount of incentive stock options that may vest for any one employee each year. Section 422 provides that, to the extent the aggregate fair market value of stock with respect to which incentive stock options become exercisable each year exceeds $100,000, such stock options will be treated as nonqualified stock options. We take this $100,000 limit into consideration when granting incentive stock options to our executives, so that their incentive stock options will not be recharacterized as nonqualified stock options.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Company has reviewed and discussed the preceding Compensation Discussion and Analysis section with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement.

John A. Hill, Chairperson
Robert A. Mosbacher, Jr.
Duane C. Radtke

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SUMMARY COMPENSATION TABLE

The following table and accompanying footnotes summarize the compensation earned, awarded or paid to our named executive officers for the years indicated below. The named executive officers are our Executive Chairman and President and Chief Executive Officer, each of whom served as the Company’s principal executive officer during a portion of 2010, our current and former principal financial officer, and our three other most highly compensated executive officers (other than the individuals who served as our principal executive officer or principal financial officer for a portion of 2010) for the year ended December 31, 2010.


													Change in
													Pension
													Value and
													Nonqualified
													Deferred
							Stock			Option			Compensation		All Other
			Salary		Bonus		Awards			Awards			Earnings		Compensation		Total
Name and Principal Position	Year		($)		($)		($)⁽¹⁾			($)⁽¹⁾			($)⁽²⁾		($)⁽³⁾		($)
J. Larry Nichols		2010		1,400,000		3,000,600		5,499,907			5,500,942			3,156,189		319,113		18,876,751
Executive Chairman		2009		1,400,000		2,100,600		5,582,500			5,761,447			1,034,772		323,241		16,202,560
		2008		1,400,000		3,000,600		6,015,972			5,960,352			3,219,047		339,556		19,935,527

John Richels		2010		1,226,442		2,500,600		5,000,583			5,000,322			3,988,522		193,902		17,910,371
President and		2009		1,150,000		1,400,600		2,743,400			3,017,759			2,080,364		195,647		10,587,770
Chief Executive Officer		2008		1,150,000		2,000,600		3,168,020			2,735,535			2,241,909		186,104		11,482,168

Jeffrey A. Agosta		2010		398,505		550,600		1,148,673	(4)		1,148,524	(4)		333,895		41,054		3,621,251
Executive Vice President and Chief Financial Officer (current principal financial officer)

David A. Hager		2010		675,000		900,600		1,499,808			1,500,631			—		154,108		4,730,147
Executive Vice President		2009		504,952		680,500		2,195,320	(5)		2,110,438	(5)		—		9,302		5,500,511

Darryl G. Smette		2010		610,000		800,600		1,151,015			1,150,528			1,647,878		115,402		5,475,423
Executive Vice President		2009		610,000		630,600		937,860			1,034,516			834,994		116,972		4,164,942
		2008		610,000		900,600		1,045,120			972,347			1,406,109		124,603		5,058,779

Lyndon C. Taylor		2010		550,000		550,600		899,518			900,646			529,820		74,375		3,504,959
Executive Vice President

Danny J. Heatly		2010		343,823		350,600		0			0			819,530		44,686		1,558,639
former Senior Vice		2009		339,900		275,600		625,240			638,776			408,005		40,622		2,328,143
President, Accounting and Chief Accounting Officer (former principal		2008		333,046		350,600		674,886			669,839			435,865		35,001		2,499,237
financial officer)


(1)		The dollar amounts reported in these columns represent the aggregate grant date fair values of the stock and option awards. The assumptions used to value stock and option awards are discussed in Note 12 — Share-Based Compensation of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.

(2)		The dollar amounts reported in this column reflect the aggregate change in the actuarial present value of each executive officer’s accumulated benefits under our Defined Benefit Plan and the SRIP during the applicable year. The amounts shown were not paid to the executives. None of our named executive officers received above market or preferential earnings on deferred compensation in any of the reported years. Mr. Hager joined the Company after our Defined Benefit Plan was closed to new participants.

(3)		Details of the dollar amounts for 2010 in this column are shown in the table that follows.

(4)		The dollar amounts reported in these entries reflect $148,189 of restricted stock and $147,658 of stock options that were awarded upon Mr. Agosta’s appointment as the Company’s Executive Vice President and Chief Financial Officer in March 2010. It also includes $1,000,484 of restricted stock and $1,000,866 of stock options that were awarded upon the annual grant in December 2010.

(5)		The dollar amounts reported in these entries reflect $893,800 of restricted stock and $677,254 of stock options that were awarded upon Mr. Hager’s employment in March 2009. It also includes $1,301,520 of restricted stock and $1,433,183 of stock options that were awarded upon the annual grant in December 2009.

Commitment Runs Deep

The following table shows the components of “All Other Compensation” for 2010 in the previous table.


									Defined
									Contribution
	Group						Defined		Supplemental
	Term		401(k) Plan		Deferred		Contribution		Executive
	Life		Employer		Compensation		Restoration Plan		Retirement Plan
	Insurance		Match and Retirement		Plan Employer		Employer		Employer		Personal
	Premiums		Contribution⁽²⁾		Match		Contribution		Contribution		Air Travel		Total
Name	($)		($)		($)		($)		($)		($)⁽¹⁾		($)
J. Larry Nichols		14,478		14,700		249,300		—		—		40,635		319,113

John Richels		4,902		14,700		174,300		—		—		—		193,902

Jeffrey A. Agosta		896		14,700		25,458		—		—		—		41,054

David A. Hager		2,622		26,950		7,799		20,796		95,941		—		154,108

Darryl G. Smette		7,524		14,700		75,900		—		—		17,278		115,402

Lyndon C. Taylor		2,548		14,700		57,127		—		—		—		74,375

Danny J. Heatly		3,292		14,700		26,694		—		—		—		44,686


(1)		The incremental cost of personal use of our aircraft is calculated based on our average variable operating costs. Variable operating costs include fuel, engine reserves, maintenance, weather-monitoring, on-board catering, landing/ramp fees and other miscellaneous variable costs. The total annual variable costs are divided by the annual number of hours our aircraft flew to determine an average variable cost per hour. This average variable cost per hour is then multiplied by the hours flown for personal use to determine the incremental cost. The methodology excludes fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries, purchase costs of the aircraft and non-trip related hangar expenses.

(2)		Mr. Hager joined the Company after the Defined Benefit Plan was closed to new entrants. As a result, he also will receive a retirement contribution.

Commitment Runs Deep

GRANTS OF PLAN-BASED AWARDS DURING 2010


									Grant
									Date Fair
			Number of		Number of				Value of
			Shares of		Securities		Exercise or		Stocks and
			Stock or		Underlying		Base Price of		Option
			Units		Options		Option Awards		Awards
Name	Grant Date		(#)⁽¹⁾		(#)⁽²⁾		($/Sh)⁽³⁾		($)⁽⁴⁾
J. Larry Nichols		12/2/2010		74,900					5,499,907
		12/2/2010				187,700		73.43	5,500,943

John Richels		12/2/2010		68,100					5,000,583
		12/2/2010				187,100		73.43	5,000,322

Jeffrey A. Agosta		3/31/2010		2,300					148,189
		3/31/2010				5,900		64.43	147,658
		12/2/2010		13,625					1,000,484
		12/2/2010				37,450		73.43	1,000,866

David A. Hager		12/2/2010		20,425					1,499,808
		12/2/2010				56,150		73.43	1,500,631

Darryl G. Smette		12/2/2010		15,675					1,151,015
		12/2/2010				43,050		73.43	1,150,528

Lyndon C. Taylor		12/2/2010		12,250					899,518
		12/2/2010				33,700		73.43	900,646

Danny J. Heatly		12/2/2010		—					—
		12/2/2010				—		—	—


(1)		Restricted stock vests at the rate of 25% on each of the first four anniversary dates of the original grant. Restricted stock award recipients are entitled to receive dividends on their unvested shares of restricted stock.

(2)		Stock options vest at the rate of 20% on the date of grant and 20% on each of the first four anniversary dates of the grant date.

(3)		The exercise price for stock options is equal to the closing price of our common stock on the date of grant.

(4)		The dollar amounts reported in this column represent the aggregate grant date fair values of the stock and option awards. The assumptions used to value stock and option awards are discussed in Note 12 — Share-Based Compensation of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Commitment Runs Deep

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2010

The following table shows the number of shares covered by exercisable and unexercisable options and unvested restricted stock awards owned by our named executive officers on December 31, 2010.


	Option Awards									Stock Awards
										Number of			Market Value
	Number of			Number of						Shares or			of Shares
	Securities			Securities						Units of			or Units
	Underlying			Underlying		Option				Stock That			of Stock
	Unexercised			Unexercised		Exercise		Option		Have Not			That Have
	Options (#)			Options (#)		Price		Expiration		Vested			Not Vested
Name	Exercisable			Unexercisable		($)		Date		(#)⁽¹⁾			($)⁽²⁾
J. Larry Nichols		120,000	⁽³⁾				26.43		12/03/2011
		210,000	⁽³⁾				17.43		12/04/2011
		40,000	⁽⁴⁾				34.27		09/14/2012
		210,000	⁽³⁾				23.05		12/02/2012
		125,000	⁽³⁾				38.45		12/08/2012
		141,100	⁽³⁾				66.39		12/11/2013
		143,600	⁽³⁾				71.01		12/11/2014
		122,720	⁽³⁾		30,680		89.15		12/09/2015
		144,000	⁽³⁾		96,000		65.32		12/07/2016
		83,360	⁽³⁾		125,040		63.80		12/07/2017
		37,540	⁽³⁾		150,160		73.43		12/01/2018
											14,625			1,148,209
											46,050			3,615,386
											65,625			5,152,219
											74,900			5,880,399

John Richels		56,000	⁽³⁾				26.43		12/03/2011
		55,000	⁽³⁾				17.43		12/04/2011
		12,000	⁽⁴⁾				34.27		09/14/2012
		106,000	⁽³⁾				23.05		12/02/2012
		42,000	⁽³⁾				38.45		12/08/2012
		43,400	⁽³⁾				66.39		12/11/2013
		63,600	⁽³⁾				71.01		12/11/2014
		61,440	⁽³⁾		15,360		89.15		12/09/2015
		75,960	⁽³⁾		50,640		65.32		12/07/2016
		47,840	⁽³⁾		71,760		63.80		12/07/2017
		37,420	⁽³⁾		149,680		73.43		12/01/2018
											7,300			573,123
											24,250			1,903,868
											32,250			2,531,948
											68,100			5,346,531

Jeffrey A. Agosta		18,000	⁽³⁾				26.43		12/03/2011
		3,200	⁽³⁾				17.43		12/04/2011
		4,338	⁽³⁾				23.05		12/02/2012
		30,000	⁽³⁾				38.45		12/08/2012
		15,800	⁽³⁾				66.39		12/11/2013
		18,000	⁽³⁾				71.01		12/11/2014
		12,880	⁽³⁾		3,220		89.15		12/09/2015
		800	⁽³⁾		200		88.91		12/30/2015
		18,600	⁽³⁾		12,400		65.32		12/07/2016
		10,920	⁽³⁾		16,380		63.80		12/07/2017
		1,180	⁽³⁾		4,720		64.43		03/30/2018
		7,490	⁽³⁾		29,960		73.43		12/01/2018
											1,544			121,219
											188			14,760
											5,500	⁽⁷⁾		431,805
											5,166			405,583
											7,350			577,049
											2,300			180,573
											13,625			1,069,699

Commitment Runs Deep


	Option Awards									Stock Awards
										Number of		Market Value
	Number of			Number of						Shares or		of Shares
	Securities			Securities						Units of		or Units
	Underlying			Underlying		Option				Stock That		of Stock
	Unexercised			Unexercised		Exercise		Option		Have Not		That Have
	Options (#)			Options (#)		Price		Expiration		Vested		Not Vested
Name	Exercisable			Unexercisable		($)		Date		(#)⁽¹⁾		($)⁽²⁾
David A. Hager		3,000	⁽⁵⁾				75.31		03/11/2012
		3,000	⁽⁶⁾				112.59		03/11/2012
		18,000	⁽³⁾		27,000		44.69		03/30/2017
		22,720	⁽³⁾		34,080		63.80		12/07/2017
		11,230	⁽³⁾		44,920		73.43		12/01/2018
											15,000		1,177,650
											15,300		1,201,203
											20,425		1,603,567

Darryl G. Smette		56,000	⁽³⁾				26.43		12/03/2011
		43,000	⁽³⁾				17.43		12/04/2011
		106,000	⁽³⁾				23.05		12/02/2012
		40,000	⁽³⁾				38.45		12/08/2012
		29,400	⁽³⁾				66.39		12/11/2013
		31,800	⁽³⁾				71.01		12/11/2014
		24,160	⁽³⁾		6,040		89.15		12/09/2015
		27,000	⁽³⁾		18,000		65.32		12/07/2016
		16,400	⁽³⁾		24,600		63.80		12/07/2017
		8,610	⁽³⁾		34,440		73.43		12/01/2018
											2,875		225,716
											8,000		628,080
											11,025		865,573
											15,675		1,230,644

Lyndon C. Taylor		15,000	⁽³⁾				68.64		09/29/2013
		15,000	⁽³⁾				66.39		12/11/2013
		24,600	⁽³⁾				71.01		12/11/2014
		19,200	⁽³⁾		4,800		89.15		12/09/2015
		24,180	⁽³⁾		16,120		65.32		12/07/2016
		14,680	⁽³⁾		22,020		63.80		12/07/2017
		6,740	⁽³⁾		26,960		73.43		12/01/2018
											2,275		178,610
											7,200		565,272
											9,900		777,249
											12,250		961,748

Danny J. Heatly		13,138	⁽³⁾				26.43		12/03/2011
		162	⁽³⁾				23.05		12/02/2012
		30,000	⁽³⁾				38.45		12/08/2012
		15,800	⁽³⁾				66.39		12/11/2013
		17,100	⁽³⁾				71.01		12/11/2014
		14,400	⁽³⁾		3,600		89.15		12/09/2015
		18,600	⁽³⁾		12,400		65.32		12/07/2016
		10,920	⁽³⁾		16,380		63.80		12/07/2017
											1,734		136,136
											5,166		405,583
											7,350		577,049


(1)		Restricted stock awards granted December 10, 2007, December 31, 2007, December 8, 2008, March 31, 2009, December 8, 2009, March 31, 2010 and December 2, 2010 vest 25% on each anniversary of the grant date.

(2)		Based on a stock price of $78.51, the closing price of our common stock on December 31, 2010.

(3)		Options granted December 4, 2001, December 2, 2002, December 4, 2003, December 9, 2004, September 30, 2005, December 12, 2005, December 12, 2006, December 10, 2007, December 31, 2007, December 8, 2008, March 31, 2009, December 8, 2009 and December 2, 2010 vested 20% on the date of grant and an additional 20% on each anniversary of the grant date.

Commitment Runs Deep


(4)		Options granted September 15, 2004 vested 20% on September 15, 2004, December 4, 2004, December 4, 2005, December 4, 2006, and December 4, 2007.

(5)		Mr. Hager was granted options on August 31, 2007, during his time as a Director of the Company. For Directors, options vest on the date granted.

(6)		Mr. Hager was granted options on June 4, 2008, during his time as a Director of the Company. For Directors, options vest on the date granted.

(7)		Restricted stock awards granted September 9, 2008 vest 50% on September 9, 2011 and September 9, 2012.

OPTION EXERCISES AND STOCK VESTED DURING THE YEAR ENDED
DECEMBER 31, 2010

The table below shows the number of shares of our common stock acquired during 2010 upon the exercise of options. This table also includes information regarding the vesting during 2010 of stock awards previously granted to the named executive officers.


	Option Awards				Stock Awards
	Number of Shares		Value Realized on		Number of Shares		Value Realized on
Name	Acquired on Exercise (#)		Exercise ($)⁽¹⁾		Acquired on Vesting(#)		Vesting ($)⁽²⁾
J. Larry Nichols		140,000		6,230,000		73,375		5,372,715

John Richels		53,000		1,912,210		36,325		2,659,743

Jeffrey A. Agosta		15,472		732,599		8,559		627,717

David A. Hager		—		—		10,100		695,368

Darryl G. Smette		—		—		13,625		997,732

Lyndon C. Taylor		—		—		11,550		845,741

Danny J. Heatly		13,000		640,607		8,561		626,882


(1)		The dollar amounts shown in this column are determined by multiplying the number of options exercised by the difference between the per share exercise price of the options and the per share closing price of our common stock on the exercise date.

(2)		The dollar amounts shown in this column are determined by multiplying the number of stock awards that vested by the per share closing price of our common stock on the vesting date.

Commitment Runs Deep

PENSION BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2010

We maintain three defined benefit retirement plans in which our named executive officers, except Mr. Hager, may participate:


	•	A tax qualified defined benefit retirement plan and related trust for certain employees (the “Defined Benefit Plan”);

	•	A nonqualified Benefit Restoration Plan (the “BRP”) that provides benefits that would be provided under the Defined Benefit Plan except for:


	•	limitations imposed by the Code; and

	•	the exclusion of nonqualified deferred compensation in the definition of compensation.


	•	A nonqualified Supplemental Retirement Income Plan (the “SRIP”) for a small group of executives that provides benefits similar to those provided by the BRP plus certain additional benefits.

On December 31, 2010, the Company adopted an amendment to the Defined Benefit Plan that transferred some of the benefits accrued under the BRP and SRIP to the Defined Benefit Plan. The total accrued benefit for an executive from all pension plans did not change as a result of this amendment. The effect of this transfer is reflected in the Pension Benefit Table below.

The following table shows the estimated present value of accumulated retirement benefits as provided under the Defined Benefit Plan and the SRIP to the named executive officers. Mr. Hager does not participate in the Defined Benefit Plan, the BRP or the SRIP. All other named executive officers are participants in the SRIP, therefore BRP benefits are not included in the table below. SRIP benefits vest after five years of service. Participants who are terminated for cause lose their SRIP benefits and are instead paid under the BRP. Amounts payable under the SRIP or the BRP are reduced by the amounts payable under the Defined Benefit Plan so there is no duplication of benefits. Retirement benefits are calculated based upon years of service and “final average compensation.” Final average compensation consists of the average of the highest three consecutive years’ compensation from salary and cash bonuses out of the last 10 years. The definition of compensation under the Defined Benefit Plan is the same as the definition under the SRIP and BRP except that under the Defined Benefit Plan, nonqualified deferred compensation is excluded and the amount of compensation and pension benefit are limited by the Code.

Commitment Runs Deep

Pension Benefits Table


		Number of Years		Present Value of		Payments During Last
		Credited Service		Accumulated Benefit		Fiscal Year
Name	Plan Name	(#)		($)⁽¹⁾		($)
J. Larry Nichols	Defined Benefit Plan		41		2,334,404		—
	SRIP		41		25,929,386		—

John Richels^(2)(3)(4)	Defined Benefit Plan		7		1,342,819		—
	SRIP		15		10,911,551		—

Jeffrey A. Agosta	Defined Benefit Plan		14		628,346		—
	SRIP		14		321,054		—

David A. Hager⁽⁵⁾	Defined Benefit Plan		—		—		—
	SRIP		—		—		—

Darryl G. Smette⁽²⁾	Defined Benefit Plan		24		2,295,423		—
	SRIP		24		7,861,358		—

Lyndon C. Taylor	Defined Benefit Plan		6		650,472		—
	SRIP		6		396,553		—

Danny J. Heatly⁽²⁾	Defined Benefit Plan		22		1,477,847		—
	SRIP		22		1,274,401		—


(1)		We calculated the present value of each named executive officer’s accumulated benefits as of December 31, 2010 under our pension plans assuming 25% of participants would elect a single life annuity, 15% of participants would elect a 50% joint and survivor annuity and 60% would elect a 100% joint and survivor annuity. We assumed that each named executive officer would begin receiving payments at normal retirement age (age 65) and would be vested in those payments. The present value is calculated using the 2011 PPA Static mortality table and a discount rate of 5.5%. No pre-retirement decrements were used in this calculation.

(2)		Messrs. Smette and Richels are eligible for early retirement under the Defined Benefit Plan and the SRIP. Mr. Heatly was eligible for early retirement under the SRIP. See the following “Defined Benefit Plan — Early Retirement” for a description of the eligibility requirements and benefits payable under our Defined Benefit Plan.

(3)		Years of credited service for Mr. Richels for the Defined Benefit Plan are determined based on time worked in the U.S. For the SRIP, Mr. Richels’ service is based on time worked in the U.S. and Canada while with the Company. Mr. Richels’ Canadian service is included for benefit eligibility purposes (vesting and early retirement) in both plans.

(4)		Benefits payable to Mr. Richels under the SRIP are reduced by benefits under our Pension Plan for Employees of Devon Canada Corporation, a subsidiary of the Company. Mr. Richels’ benefit under the Pension Plan for Employees of Devon Canada Corporation is frozen and Mr. Richels’ future pension benefits are accruing under the Defined Benefit Plan and the SRIP.

(5)		Mr. Hager joined the Company after our Defined Benefit Plan was closed to new participants. As a result, he will not receive a benefit under the plans described in this table.

Commitment Runs Deep

Defined Benefit Plan

The Defined Benefit Plan is a qualified defined benefit retirement plan which provides benefits based upon employment service with us. Employees hired before October 1, 2007, became eligible to participate in the Defined Benefit Plan when they earned one year of service and attained the age of 21 years. Employees who were hired after September 30, 2007, are not eligible to participate in the Defined Benefit Plan. Each eligible employee who retires is entitled to receive monthly retirement income, based upon their final average compensation, years of credited service and reduced by Social Security benefits payable to the employee. Contributions by employees are neither required nor permitted under the Defined Benefit Plan. Benefits are computed based on straight-life annuity amounts. Benefits under the Defined Benefit Plan are limited for certain highly compensated employees, including our named executive officers, in order to comply with certain requirements of ERISA and the Code.

Normal Retirement

Employees, including the named executive officers, are eligible for normal retirement benefits under the Defined Benefit Plan upon reaching age 65. Normal retirement benefits for the employees participating in the Defined Benefit Plan are equal to 65% of the participant’s final average compensation less any benefits due to the participant under Social Security, multiplied by a fraction, the numerator of which is his or her credited years of service (up to a maximum of 25 years) and the denominator of which is 25.

Early Retirement

Employees, including the named executive officers, are eligible for early retirement benefits under the Defined Benefit Plan after (i) attaining age 55, and (ii) earning at least 10 years of credited service. Early retirement benefits are equal to a percentage of the normal retirement income the participant would otherwise be entitled to if he or she had commenced benefits at age 65 depending on the participant’s age when he or she elects to begin receiving benefits:


	Percentage of
Age When	Normal Retirement
Benefits Begin	Income
65		100	%
64		97	%
63		94	%
62		91	%
61		88	%
60		85	%
59		80	%
58		75	%
57		70	%
56		65	%
55		60	%

Deferred Vested Pension

Participants in the Defined Benefit Plan are fully vested in their accrued benefits after five years of service. If the participant’s employment is terminated after attaining five years of service but before eligibility for early retirement, the participant is entitled to a deferred vested pension based on his or her accrued benefit on the date of termination. An unreduced deferred vested pension is payable at age 65.

Commitment Runs Deep

Alternatively, the participant may elect to receive a reduced benefit as early as age 55. The benefit payable prior to age 65 is a percentage of his or her normal retirement benefit based on his or her age at the time the benefit begins, as shown in the table below:


Age at Election to	Percentage of
Receive Deferred	Normal Retirement
Vested Pension	Income
65		100.00	%
64		90.35	%
63		81.88	%
62		74.40	%
61		67.79	%
60		61.91	%
59		56.68	%
58		52.00	%
57		47.80	%
56		44.03	%
55		40.63	%

If a participant is:


	•	involuntarily terminated for any reason other than death or “cause,” is between the ages of 50 and 55 and has at least 10 years of credited service, or

	•	involuntarily terminated for any reason other than “cause” within two years following a change in control and has at least 10 years of credited service regardless of the participant’s age,

then the participant may elect to have his or her benefits under the Defined Benefit Plan paid at any time on or after the age of 55 subject to the same percentage reduction in benefits as set forth under “Early Retirement” applicable to the participant.

Benefit Restoration Plan

The BRP is a nonqualified defined benefit retirement plan, the purpose of which is to restore retirement benefits for certain selected key management and highly compensated employees because their benefits under the Defined Benefit Plan are limited in order to comply with certain requirements of ERISA and the Code or because their final average compensation is reduced as a result of contributions into our Deferred Compensation Plan. Benefits under the BRP are equal to 65% of the executive’s final average compensation less any benefits due to the executive under Social Security, multiplied by a fraction, the numerator of which is his or her years of credited service (not to exceed 25) and the denominator of which is 25. The BRP benefit is reduced by the benefit that is otherwise payable under the Defined Benefit Plan. An employee must be selected by the Compensation Committee in order to be eligible for participation in the BRP. The same early retirement reduction factors that apply under the Defined Benefit Plan are applicable under the BRP. Participants become vested in retirement benefits under the BRP at the same time as the participant becomes vested for retirement benefits under the Defined Benefit Plan.

Supplemental Retirement Income Plan

The SRIP is another nonqualified defined benefit retirement plan for a small group of our key executives, the purpose of which is to provide additional retirement benefits for these executives. An employee must be selected by the Compensation Committee in order to be eligible for participation in the SRIP. Participants in the SRIP become vested in the SRIP benefits after five years of service. If the executive is

Commitment Runs Deep

terminated for “cause” as that term is defined in the executive’s employment agreement, then all benefits under the SRIP are forfeited and the executive would receive benefits under the BRP. If the executive is receiving benefits under the SRIP, he is not eligible for benefits under the BRP.

The SRIP provides for retirement income equal to 65% of the executive’s final average compensation less any benefits due to the participant under Social Security, multiplied by a fraction, the numerator of which is his credited years of service (not to exceed 20) and the denominator of which is 20. For those participating in the plan as of January 24, 2002 (“Grandfathered Participants”), the SRIP benefit is reduced by a fraction of the benefits otherwise accrued under the Defined Benefit Plan, the numerator of which is years of credited service (not greater than 20) and the denominator of which is 20. For those who become participants after January 24, 2002, the SRIP benefit is reduced by the full benefits otherwise accrued under the Defined Benefit Plan. Of the named executive officers, Messrs. Agosta and Taylor are not Grandfathered Participants. In the case of Mr. Richels, his SRIP benefit is also reduced by amounts payable to him under the defined contribution provisions of our Canadian Pension Plan.

The same early retirement reduction factors that apply under the Defined Benefit Plan are applicable under the SRIP. Early retirement benefits are payable under the SRIP after attaining age 55 and earning at least 10 years of service or, if earlier, 20 years of service regardless of age. The early retirement benefit prior to age 55 is the actuarial equivalent to the age 55 early retirement benefit. In the event that a named executive officer is terminated “without cause” or terminates his or her employment for “good reason” as those terms are defined in our employment agreements with our named executive officers, then the executive will be 100% vested in his accrued SRIP benefit. If a change in control event occurs, the executive will be 100% vested and his benefit will be an amount equal to the normal retirement annuity payable immediately, unreduced for early commencement, paid in a lump sum. Otherwise, the benefit will be paid monthly pursuant to the annuity option selected by the executive. Additionally, the SRIP provides that if the executive is terminated “without cause” or terminates his or her employment for “good reason” within 24 months of a change in control event, the executive will be entitled to an additional three years of service credit and age in determining benefits. The SRIP may be informally funded through a rabbi trust arrangement.

NONQUALIFIED DEFERRED COMPENSATION IN 2010

The following table shows information about our nonqualified deferred compensation plans, which are further described below.


			Company		Aggregate
	Executive		Contributions		Earnings in		Aggregate		Aggregate
	Contributions in		in Last Fiscal		Last Fiscal		Distributions in		Balance at Last
	Last Fiscal Year		Year		Year		Last Fiscal Year		Fiscal Year End
Name	($)⁽¹⁾		($)⁽²⁾		($)		($)		($)
J. Larry Nichols Deferred Compensation Plan		210,000		249,300		234,885		188,022		2,126,722

John Richels Deferred Compensation Plan		157,587		174,300		137,540		134,452		1,295,147

Jeffrey A. Agosta Deferred Compensation Plan		119,551		25,458		92,186		—		802,184

David A. Hager
Deferred Compensation Plan		40,650		7,799		8,573		—		72,739
Defined Contribution Restoration Plan		—		20,796		1,643		—		22,439
Defined Contribution Supplemental Executive Retirement Plan		—		95,941		5,744		—		101,685

Darryl G. Smette Deferred Compensation Plan		74,400		75,900		118,007		109,468		1,284,800

Lyndon C. Taylor Deferred Compensation Plan		169,500		57,127		87,041		—		698,471

Danny J. Heatly Deferred Compensation Plan		37,129		26,694		16,584		—		1,031,955

Commitment Runs Deep


(1)		The amounts in this column are also included in the Summary Compensation Table on page , in the salary column or the bonus column.

(2)		The amounts in this column are also included in the Summary Compensation Table on page , in the “All Other Compensation” column.

401(k) Plan

The 401(k) Plan is a qualified defined contribution plan that provides for a Company matching contribution of up to 6% of compensation. The Defined Benefit Plan was closed to new entrants on October 1, 2007. Supplemental contributions of 8% to 16% of compensation that are determined based on years of benefit service were added to the 401(k) Plan for employees who are not accruing benefits in the Defined Benefit Plan.

Deferred Compensation Plan

The Deferred Compensation Plan is designed to allow each executive to contribute up to 50% of his or her base salary and up to 100% of his or her bonus and receive a Company match beyond the contribution limits prescribed by the IRS with regard to our 401(k) Plan. The Deferred Compensation Plan provides executives a tax effective means to defer a portion of their cash compensation at a minimal cost to the Company.

Supplemental Contribution Restoration Plans

The Supplemental Contribution Restoration Plans (the “SCRPs”) are two nonqualified supplemental defined contribution plans. The purpose of the SCRPs is to ensure that participants in the 401(k) Plan who are eligible to receive the supplemental contribution, receive the full supplemental contribution despite the limitations imposed by the Code. A contribution will be made by the Company in an amount equal to the difference between the supplemental contribution that the Company would have contributed under the 401(k) Plan in the absence of the Code limitations, and the actual amount contributed.

Defined Contribution Supplemental Executive Retirement Plan

The Defined Contribution Supplemental Executive Retirement Plan (the “DC SERP”) is a nonqualified supplemental executive retirement plan that provides benefits in lieu of the SRIP to a small group of key executives who are not eligible to participate in the Defined Benefit Plan and the SRIP. Under the DC SERP, an executive is eligible to receive a contribution of a specified percentage of compensation annually. This contribution will be offset by supplemental contributions to the 401(k) Plan and contributions to the SCRPs. An employee must be selected by the Compensation Committee in order to be eligible for participation in the DC SERP. A participant in the DC SERP becomes 50% vested after five years of service and vests at the rate of 10% for another five years. At age 62, a participant will be 100% vested with five years of service. In the event of a change in control or a named executive officer is terminated “without cause” or terminates employment for “good reason,” as those terms are defined in our employment agreements with our named executive officers, then the executive will be 100% vested in his or her DC SERP account. Additionally, the DC SERP provides that if the executive is terminated “without cause” or terminates for “good reason” within 24 months of a change in control event, the executive will be entitled to an additional three years of contribution. A participant will be 100% vested in the event of death or disability. Payment of DC SERP accounts will be in the form of a lump sum payment. The DC SERP may be informally funded through a rabbi trust arrangement.

Commitment Runs Deep

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

We will be obligated to make certain payments to our named executive officers or potentially accelerate the vesting of their equity awards and retirement benefits upon termination of their employment or upon a change in control pursuant to the following plans or agreements:


	•	employment agreements entered into with each of our named executive officers;

	•	the Defined Benefit Plan;

	•	the 401(k) Plan;

	•	the BRP, the SRIP, the SCRPs or the DC SERP, depending on the circumstances of the executive officer’s termination;

	•	the 2005 Long-Term Incentive Plan; and

	•	the 2009 Long-Term Incentive Plan.

The following tables provide the estimated compensation and present value of benefits potentially payable to each named executive officer upon a change in control of the Company or a termination of employment of the named executive officer. The benefit values shown do not include benefits that are broadly available to substantially all salaried employees. The amounts shown assume that the termination or change in control occurred on December 31, 2010. The actual amounts to be paid can only be determined at the time of such executive’s actual separation from the Company.

Please see the narrative for the following tables for a discussion of the methods of calculating the payments required upon termination of our named executive officers in the manners set forth in each column. The footnotes for each of the following tables are presented after the final table. The amounts shown do not include any amounts with respect to tax gross-up payments in favor of the named executive officers because the employment agreements between the Company and each of the named executive officers were amended in March 2011 to eliminate the tax gross-up payment obligations. Because Mr. Heatly retired from the Company in March 2011, we have not included a separate table for him. Instead, the narrative summary that follows the tables provides a summary of the arrangements applicable to Mr. Heatly.

J. Larry Nichols


	Retirement/
	Voluntary	Termination	Termination	Change in
Benefits and Payments	Termination	Without Cause	With Cause	Control			Disability	Death
($)	($)	($)	($)	($)			($)	($)
Base Salary/Bonus⁽¹⁾	—	13,200,000	—		13,200,000		—		—
SRIP⁽²⁾⁽³⁾	25,929,000	25,929,000	—		27,326,000	⁽⁴⁾	25,929,000		23,156,000	⁽⁵⁾
BRP⁽²⁾⁽³⁾	—	—	25,929,000		—		—		—
Accelerated Vesting of Stock Options⁽⁶⁾	—	3,868,391	—		3,868,391		—		3,868,391
Accelerated Vesting of Restricted Stock⁽⁷⁾	—	15,796,213	—		15,796,213		—		15,796,213
Health Care Benefits⁽⁸⁾	—	34,561	—		34,561		—		—
Post-Retirement Health Care⁽⁹⁾	—	—	—		—		—		—
Outplacement Services⁽¹⁰⁾	—	35,000	—		35,000		—		—
Total⁽¹¹⁾	25,929,000	58,863,165	25,929,000		60,260,165		25,929,000		42,820,604

Commitment Runs Deep

John Richels


	Retirement/
	Voluntary	Termination	Termination	Change in
Benefits and Payments	Termination	Without Cause	With Cause	Control			Disability	Death
($)	($)	($)	($)	($)			($)	($)
Base Salary/Bonus⁽¹⁾	—	9,900,000	—		9,900,000		—		—
SRIP⁽²⁾⁽³⁾	13,604,000	13,604,000	—		20,828,000	⁽⁴⁾	13,604,000		12,688,000	⁽⁵⁾
BRP⁽²⁾⁽³⁾	—	—	—		—		—		—
Accelerated Vesting of Stock Options⁽⁶⁾	—	2,483,906	—		2,483,906		—		2,483,906
Accelerated Vesting of Restricted Stock⁽⁷⁾	—	10,355,470	—		10,355,470		—		10,355,470
Health Care Benefits⁽⁸⁾	—	34,561	—		34,561		—		—
Post-Retirement Health Care⁽⁹⁾	—	—	—		738		—		—
Outplacement Services⁽¹⁰⁾	—	35,000	—		35,000		—		—
Total⁽¹¹⁾	13,604,000	36,412,937	—		43,637,675		13,604,000		25,527,376

Jeffrey A. Agosta


	Retirement/
	Voluntary	Termination	Termination	Change in
Benefits and Payments	Termination	Without Cause	With Cause	Control			Disability	Death
($)	($)	($)	($)	($)			($)	($)
Base Salary/Bonus⁽¹⁾	—	2,310,000	—		2,310,000		—		—
SRIP⁽²⁾⁽³⁾	271,000	271,000	—		2,969,000	⁽⁴⁾	87,000		383,000	⁽⁵⁾
BRP⁽²⁾⁽³⁾	—	—	111,000		—		—		—
Accelerated Vesting of Stock Options⁽⁶⁾	—	623,160	—		623,160		—		623,160
Accelerated Vesting of Restricted Stock⁽⁷⁾	—	2,800,488	—		2,800,488		—		2,800,488
Health Care Benefits⁽⁸⁾	—	51,718	—		51,718		—		—
Post-Retirement Health Care⁽⁹⁾	—	—	—		—		—		—
Outplacement Services⁽¹⁰⁾	—	35,000	—		35,000		—		—
Total	271,000	6,091,366	111,000		8,789,366		87,000		3,806,648

Commitment Runs Deep

David A. Hager


	Retirement/
	Voluntary	Termination	Termination	Change in
Benefits and Payments	Termination	Without Cause	With Cause	Control		Disability	Death
($)	($)	($)	($)	($)		($)	($)
Base Salary/Bonus⁽¹⁾	—	4,065,000	—		4,065,000	—		—
DC SERP⁽¹²⁾	359,135	359,135	—		1,456,685	359,135		359,135
SCRPs⁽¹³⁾	22,439	22,439	—		22,439	22,439		22,439
Accelerated Vesting of Stock Options⁽⁶⁾	—	1,642,650	—		1,642,650	—		1,642,650
Accelerated Vesting of Restricted Stock⁽⁷⁾	—	3,982,420	—		3,982,420	—		3,982,420
Health Care Benefits⁽⁸⁾	—	51,718	—		51,718	—		—
Post-Retirement Health Care⁽⁹⁾	—	—	—		—	—		—
Outplacement Services⁽¹⁰⁾	—	35,000	—		35,000	—		—
Total⁽¹¹⁾	381,574	10,158,362	—		11,255,912	381,574		6,006,644

Darryl G. Smette


	Retirement/
	Voluntary	Termination	Termination	Change in
Benefits and Payments	Termination	Without Cause	With Cause	Control			Disability	Death
($)	($)	($)	($)	($)			($)	($)
Base Salary/Bonus⁽¹⁾	—	4,530,000	—		4,530,000		—		—
SRIP⁽²⁾⁽³⁾	8,366,000	8,366,000	—		9,329,000	⁽⁴⁾	8,366,000		7,566,000	⁽⁵⁾
BRP⁽²⁾⁽³⁾	—	—	8,066,000		—		—		—
Accelerated Vesting of Stock Options⁽⁶⁾	—	774,241	—		774,241		—		774,241
Accelerated Vesting of Restricted Stock⁽⁷⁾	—	2,950,013	—		2,950,013		—		2,950,013