EXHIBIT 99.2
PENNZENERGY COMPANY
RETENTION PLAN
(As Established Effective May 19, 1999)
1. Purpose. The purpose of the PennzEnergy Company Retention Plan is to
(i) ensure the continued employment of all salaried and non-union hourly
employees of the PennzEnergy Company and its subsidiaries through the closing
date of the transaction contemplated by that certain Amended and Restated
Agreement and Plan of Merger by and among Devon Energy Corporation, Devon
Delaware Corporation, Devon Oklahoma Corporation and PennzEnergy Company, dated
as of May 19, 1999, and (ii) secure the continued services of certain key
employees through the earlier of November 30, 1999 or 60 days after the
transaction closing date.
2. Definitions.
(a) Base Salary. An Employee's annual base salary or wages with an
Employer in effect on the day immediately preceding the Effective Date,
including any salary reduction contributions made by such Employee under a
plan or arrangement designed to meet the requirements of Sections 125 and
401(k) of the Internal Revenue Code of 1986, as amended, or any non-
qualified deferred compensation plan or arrangement of the Company, but
excluding any payments made under the Plan and the Special Severance Plan.
(b) Board. Prior to the Closing Date, the Board of Directors of
PennzEnergy, and on and after the Closing Date, the Board of Directors of
Devon.
(c) Cause. Either (i) the continued failure of the Employee to perform
substantially the Employee's duties with the Company (other than any such
failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Employee
which specifically identifies the manner in which the Company believes that
the Employee has not substantially performed the Employee's duties; or (ii)
the engaging by the Employee in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.
(d) Closing Date. The closing date of the Transaction, as defined in
Section 1.2 of the Merger Agreement.
(e) Company. Prior to the Closing Date, PennzEnergy, on and after the
Closing Date, Devon.
(f) Devon. Devon Energy Corporation, an Delaware corporation.
(g) Effective Date. May 19, 1999.
(h) Employee. Any full-time salaried or non-union hourly employee of an
Employer, excluding, however, any individual who is (i) retained as an
independent contractor, (ii) a non-United States citizen working outside the
United States or (iii) exempt grade E5 or higher.
(i) Employer. The Company and each Subsidiary.
(j) Employment. Employment with an Employer.
(k) Key Employee. An Employee designated by the Chairman of the Board
or his designee as eligible to receive the "Retention Payment" under Section
5 of the Plan.
(l) Merger Agreement. The Amended and Restated Agreement and Plan of
Merger by and among Devon Energy Corporation, Devon Delaware Corporation,
Devon Oklahoma Corporation and PennzEnergy Company, dated as of May 19,
1999.
(m) Plan. The PennzEnergy Company Retention Plan.
(n) Special Severance Plan. The PennzEnergy Company Special Severance
Plan.
(o) PennzEnergy. PennzEnergy Company, a Delaware corporation.
(p) Subsidiary. Any corporation or other entity in which the Company,
directly or indirectly, holds a majority of the voting power or profits or
capital interest of such entity.
(q) Transaction. For purposes of this Plan, that certain transaction
contemplated by the Merger Agreement.
3. Continued Employment. The Company shall, subject to Section 12 of the
Plan, provide a commitment of continued Employment to each Employee as of the
Effective Date through the Closing Date in the same or similar position held on
the day immediately preceding the Effective Date and each such Employee shall
continue to earn his or her Base Salary during such Employment, payable in
accordance with the Company's normal payroll practices. In the event the Company
terminates an Employee, other than for Cause, the Company shall pay such
Employee his or her Base Salary through the Closing Date in addition to (and not
as a reduction or offset to any other severance or termination benefits
otherwise payable to such Employee) any benefits to which the Employee is
otherwise entitled under this Plan and the Special Severance Plan.
4. Retention Bonus. The Company shall pay to an Employee who (i) continues
his or her Employment through the Closing Date or (ii) is terminated by the
Company, other than for Cause, an annual bonus (in lieu of, and not in addition
to, any amount otherwise payable as an
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annual bonus, excluding any benefits provided in Section 5 of the Plan and the
Special Severance Plan) in an amount equal to 150% of the 1999 target bonus for
such Employee's salary grade under the Company's 1999 Annual Incentive Plan or
applicable Pay For Performance Plan, without regard to the Company's performance
in 1999 ("Retention Bonus"). An Employee who voluntarily terminates his or her
Employment, or whose Employment is terminated by reason of death or disability,
prior to the Closing Date shall not receive the Retention Bonus. The Retention
Bonus shall be paid in a lump sum cash payment no later than 10 working days
after the later of the Closing Date or the expiration of the 7-day revocation
period of the Release described in Section 6 of the Plan.
5. Retention Payment. In recognition and furtherance of the important
goal of retaining certain Key Employees to assist with and facilitate the
Transaction, the Company desires to provide an additional financial incentive to
such Key Employees to remain with the Company. Therefore, in addition to (and
not in lieu of) any other benefits under the Plan and the Special Severance
Plan, the Company shall pay to a Key Employee who agrees to continue his or her
Employment until the earlier of (i) November 30, 1999 or (ii) 60 days after the
Closing Date ("Retention Period") a payment equal to six (6) months of such Key
Employee's Base Salary ("Retention Payment"). The above notwithstanding, a Key
Employee who is terminated by the Company, other than due to Cause, prior to the
end of the Retention Period shall receive his or her full Retention Payment.
Any Key Employee who voluntarily terminates his or her Employment, or whose
Employment is terminated by death or disability, prior to November 30, 1999
shall receive a prorated Retention Payment equal to the amount of the Key
Employee's Retention Payment multiplied by a fraction, (i) the numerator of
which is the number of days employed during the period commencing on June 1,
1999 and ending on the date of termination of his or her Employment and (ii) the
denominator of which is 180; provided, however, the Company consents to such
early termination date. The Retention Payment (whether a full or prorated
payment) will be made in a lump sum cash payment no later than 10 working days
after the later of the end of the Retention Period or the expiration of the 7-
day revocation period of the Release described in Section 6 of the Plan. The
Retention Payment under this Section 5 will not be considered or otherwise
included for purposes of determining benefits provided to a Key Employee under
any other plan, agreement or program of the Company.
6. Release. Notwithstanding any provision to the contrary, payment of
the Retention Bonus and Retention Payment under Sections 4 and 5 of the Plan
shall be contingent upon the Employee's execution and return of a valid release
and waiver of claims ("Release") in the form attached as Exhibit A hereto, and
the expiration of the Release's 7 day revocation period. The Employee will be
required to enter into a separate Release with respect to both the Retention
Bonus and Retention Payment as a condition for receiving either benefit under
the Plan. The second such Release, if applicable, shall be in addition to, and
shall not supersede, the previous Release.
7. Other Benefits Payable. Except as otherwise provided, the benefits
payable hereunder shall be payable in addition to, and not in lieu of, all other
accrued or vested or earned but deferred compensation, rights, options or other
benefits that may be owed to an Employee upon or
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following termination, including, but not limited to, earned but unused
vacation, amounts or benefits payable under any bonus or other compensation
plan, stock option plan, stock ownership plan, stock purchase plan, life
insurance plan, health plan, disability plan or similar or successor plan.
8. Payment Obligation Absolute. The obligations of the Company or
Employers to pay or provide the benefits described in the Plan shall be absolute
and unconditional and shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company or an Employer may have against any Employee, subject to
Section 15 of the Plan. In no event shall an Employee be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to or benefits provided to an Employee under any of the provisions of
the Plan, nor shall the amount of any payment hereunder be reduced by any
compensation earned by or benefits provided to an Employee as a result of
employment by another employer.
9. Death of Employee. If an Employee entitled to a benefit under this
Plan dies before receipt of any benefits to which he or she is entitled under
the Plan, such benefit shall be paid to the Employee's spouse or, if none, to
the Employee's estate.
10. Amendment and Termination. If the Transaction has not occurred, the
Plan shall continue until amended or terminated by the Company. If the
Transaction occurs, the Plan shall continue in full force and effect and shall
not terminate or expire until all Participants who become entitled to any
payments hereunder shall have received such payments in full.
The Plan shall be subject to amendment, change, substitution, deletion,
revocation or termination (collectively, "Amendment") by the Company at any time
prior to the Closing Date other than at the request of a third party who has
taken steps reasonably calculated to effect the Transaction unless such third
party request is a favorable or beneficial Amendment for the Employees and is
agreed to by the Company. On and after the Closing Dates, the Plan shall not be
subject to Amendment in any respect which adversely affects the rights of an
Employee without the consent of that Employee.
The form of any Amendment of the Plan shall be a written instrument signed
by any person authorized to sign by the Board. An Amendment of the Plan in
accordance with the terms hereof shall automatically effect a corresponding
amendment to all Employees' rights hereunder.
This Plan shall automatically terminate after payment of all benefits
payable to all Employees or their Beneficiaries under the Plan.
11. Administration. The Plan shall be administered (i) prior to
the Closing Date, by the Chairman of the Board and any individual or individuals
to whom he has delegated certain administrative responsibilities and (ii) on and
after the Closing Date, by the Chairman of the Board, the Chief Executive
Officer of the Company and any individual or individuals to whom they have
delegated certain administrative responsibilities (as applicable in each case,
the "Plan
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Administrator"). The Plan Administrator shall have the power to make reasonable
rules and regulations required in the administration of the Plan and to make all
determinations necessary for the Plan's administration, except those
determinations which the Plan requires others to make. The Plan Administrator
shall have full and complete authority to construe and interpret the Plan
whenever necessary to carry out its intent and purpose and to facilitate its
administration. In the exercise of such discretionary powers, the Plan
Administrator shall treat all Employees uniformly and equitably under the Plan.
The Plan Administrator shall have the exclusive right to make all determinations
hereunder regarding the participation and eligibility of Employees for benefits,
including, but not limited to, making determinations as to the eligibility, the
amount and benefits payable, the time at which benefits cease to be payable, and
other comparable issues, and the Plan Administrator's good faith interpretation
of the Plan shall be binding and conclusive on all parties. Any dispute as to
the eligibility, type, amount or duration of benefits under the Plan shall be
resolved as provided in Section 14 of the Plan, with such resolution binding and
final on all parties to the dispute. No action may be brought for benefits
provided under this Plan or any amendment or novation thereof, or to enforce any
right hereunder, until after the administrative procedures set forth in Section
14 of the Plan have been exhausted.
12. Termination of Employment; Employment Status. Notwithstanding any
other provision of the Plan, the Company shall at all times prior to and on and
after the Closing Date have the right to terminate an Employee, with or without
Cause. The Plan does not constitute a contract of employment or impose on the
Company or any Employer any obligation to retain the Employee as an Employee, to
change or not change the status of the Employee's Employment, or to change the
policies of the Company or of its Subsidiaries regarding termination of
Employment.
13. Withholding. All amounts payable pursuant to the terms of this Plan
shall be subject to reduction for any and all applicable federal, state or local
income and employment taxes and any other withholdings required to be made
therefrom at law.
14. Claim Procedure. If an Employee or former Employee makes a written
request alleging a right to receive benefits under this Plan or alleging a right
to receive an adjustment in benefits being paid under the Plan, the Company
shall treat it as a claim for benefits. All claims for benefits under the Plan
shall be sent to the Plan Administrator and must be received within 30 days
after termination of employment. If the Plan Administrator determines that any
individual who has claimed a right to receive benefits, or different benefits,
under the Plan is not entitled to receive all or any part of the benefits
claimed, Plan Administrator will inform the claimant in writing of his
determination and the reasons therefore in terms calculated to be understood by
the claimant. The notice will be sent within 90 days of the claim unless the
Plan Administrator determines additional time, not exceeding 90 days, is needed.
The notice shall make specific reference to the pertinent Plan provisions on
which the denial is based, and describe any additional material or information
that is necessary. Such notice shall, in addition, inform the claimant what
procedure the claimant should follow to take advantage of the review procedures
set forth below in the event the claimant desires to contest the denial of the
claim. The claimant may within 90 days thereafter submit in writing to the
Company a notice that the claimant contests the denial of his or her claim by
the Plan
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Administrator and desires a further review. The Company shall within 60 days
thereafter review the claim and authorize the claimant to appear personally and
review pertinent documents and submit issues and comments relating to the claim
to the persons responsible for making the determination on behalf of the
Company. The Company will render its final decision with specific reasons
therefore in writing and will transmit it to the claimant within 60 days of the
written request for review, unless the Company determines additional time, not
exceeding 60 days, is needed.
15. Right of Recovery. The Company shall have the right to recover any
payment made to an Employee in excess of the amount to which the Employee is
entitled under the terms of this Plan. Such recovery may be from the Employee
or the Beneficiary thereby enriched.
16. Spendthrift Provisions. No benefit, right or interest of any person
hereunder shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, seizure, attachment, or legal,
equitable, or other process, or be liable for, or subject to, the debts,
liabilities, or other obligations of such person, except as expressly authorized
or required by the Plan or otherwise required by a law enforceable with respect
to the Plan as determined in the sole and absolute discretion of the Plan
Administrator.
17. Governing Law. To the extent not preempted by federal law, the
validity, interpretation, construction and performance of the Plan shall in all
respects be governed by the laws of the State of Delaware, without reference to
principles of conflict of law.
18. Validity and Severability. The invalidity or unenforceability of any
provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
19. Captions. The captions contained herein are inserted only as a matter
of convenience and for reference and in no way define, limit, enlarge or
describe the scope or intent of the Plan, and in no way shall affect the Plan or
the construction of any provisions thereof.
20. No Duplicate Benefits. No Employee shall be entitled to benefits under
the Plan for more than one position. The benefits payable shall be the highest
level of benefits to which the Employee is entitled by virtue of his title.
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EXHIBIT A
PENNZENERGY COMPANY RETENTION PLAN
RELEASE AND WAIVER OF CLAIMS
In connection with the anticipated merger by and among Devon Energy
Corporation, Devon Delaware Corporation, Devon Oklahoma Corporation and
PennzEnergy Company ("Transaction"), the undersigned employee ("Employee") is
eligible for a [Retention Bonus][Retention Payment] under the PennzEnergy
Company Retention Plan (the "Plan").
In consideration of the agreement of PennzEnergy Company and, on and
after the closing date of the Transaction, Devon Energy Corporation
(collectively or individually, as applicable, "Company") to pay Employee the
[Retention Bonus][Retention Payment] under the Plan, the receipt and sufficiency
of which are hereby acknowledged, Employee hereby knowingly and voluntarily
releases and forever discharges PennzEnergy Company, Devon Energy Corporation,
Devon Delaware Corporation, Devon Oklahoma Corporation, Pennzoil-Quaker State
Company, and their officers, directors, agents, servants, and employees, their
successors, assigns, and insurers, and their parents, subsidiaries and
affiliates, and any and all persons, firms, organizations, and corporations from
any and all damages, losses, causes of action, expenses, demands, liabilities,
and claims on behalf of Employee, Employee's heirs, executors, administrators,
and assigns with respect to all matters relating to Company and Employee hereby
accepts this payment in full settlement of all such damages, losses, causes of
action, expenses, demands, liabilities, and claims Employee now has or may have
with respect to such matters, as evidenced by Employee's execution of this
release and waiver of claims agreement ("Release").
This Release includes, but is not limited to, claims arising under the
Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act, as amended; the Older Workers' Benefit Protection Act of 1990,
as amended; the Civil Rights Act of 1866, as amended; the Civil Rights Act of
1991; the Rehabilitation Act of 1973, as amended; the Americans with
Disabilities Act of 1990; the Worker Adjustment and Retraining Notification Act
of 1988; the Pregnancy Discrimination Act of 1978; the Equal Pay Act; the
Employee Retirement Income Security Act of 1974, as amended; the Family and
Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Health
and Safety Act; the Texas Commission on Human Rights Act; the Texas Labor Code;
and any claims for breach of contract, tort, including, but not limited to,
fraudulent inducement or misrepresentation, defamation, slander, wrongful
termination or other retaliation claims in connection with workers' compensation
claims or whistleblower status or any claim under any other state or federal
statute or regulation, in equity or at common law.
Further, by accepting the payments described, Employee agrees not to
sue Company or the related persons and entities described above. Employee
acknowledges that Company has not promised him/her continued employment nor
represented that Employee will be rehired in the future. In addition, in
signing this Release, Employee expressly represents that no promise or agreement
which is not expressed in this Release has been made to Employee and that he/she
is relying on his/her own judgment in signing this Release and is not relying on
any statement or representation of Company, its affiliates or any of their
agents. Employee acknowledges that he/she is signing this Release with full
knowledge and consent which was not procured through fraud, duress or mistake
and that this Release has not had the effect of misleading or failing to inform
Employee.
Employee shall have forty-five (45) days to decide whether to sign
this Release and be bound by its terms. Employee shall have the right to revoke
or cancel this Release within seven (7) days after he/she has signed it. This
cancellation or revocation can be accomplished by delivery of a written
notification to Company. In the event that this Release is canceled or revoked,
Company shall have no obligation to furnish the payments described in this
Release. EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS BEEN ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS RELEASE AND HAS HAD AN ADEQUATE
OPPORTUNITY TO SEEK ADVICE OF HIS/HER OWN CHOOSING. Employee acknowledges that
he/she has read this Release, has had an opportunity to ask questions and have
it explained to him/her and that he/she understands that this Release will have
the effect of knowingly and voluntarily waiving any action Employee might
pursue, including breach of contract, personal injury, retaliation,
discrimination on the basis of race, age, gender, national origin, or disability
and any other claims arising prior to the date of this Release. Further,
Company agrees to release Employee from all claims arising out of his/her
employment with Company.
Employee acknowledges that payment of this [Retention Bonus][Retention
Payment] by Company is not an admission by Company or its officers, directors,
agents, servants, and employees, their successors, assigns, and insurers, and
their parents, subsidiaries and affiliates that they engaged in any wrongful or
unlawful act or violated any federal or state law or regulation.
Should any of the provisions set forth in this Release be determined
to be invalid by a court, agency or other tribunal of competent jurisdiction, it
is agreed such determination shall not affect the enforceability of other
provisions of this Release.
Employee acknowledges that this Release sets forth the entire
understanding and agreement between Employee and Company concerning the subject
matter of this Release and supersedes any prior or contemporaneous oral and/or
written agreements or representations, if any, between Employee and Company.
Employee further agrees that the existence and all terms of this
Release shall be kept strictly confidential and that any disclosure to anyone
for any purpose whatsoever (save and except disclosure to Employee's spouse,
financial advisors or institutions for financial statement purposes, attorney,
or as required by law) by Employee or his/her agents, representatives, heirs,
children, spouse, employees or spokespersons shall be a breach of this Release
and Company may elect either to cease performance hereunder or enforce this
Release; provided, however, in the event Company believes a breach of
confidentiality has occurred, Employee will be given notice and thirty (30) days
to respond.
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Should Employee be contacted or served with legal process seeking to
compel him/her to disclose any such information, Employee agrees to notify
Company's General Counsel immediately, in order that Company may seek to resist
such process if it so chooses. If Employee is called upon to serve as a witness
or consultant in or with respect to any potential litigation, litigation, or
regulatory proceeding, Employee agrees to cooperate with Company to the full
extent permitted by law, and Company agrees that any such call shall be with
reasonable notice, shall not unnecessarily interfere with Employee's later
employment, and shall provide for payment for Employee's time and costs expended
in such matters.
This Release shall be governed by and construed in accordance with the
laws of the State of Texas, and where applicable, the laws of the United States.
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Employee Signature Company Representative
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Date Signed Date Signed
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Employee Printed Name
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