DEVON ENERGY CORP/DE (Form: 10-Q, Received: 05/09/2014 16:21:06)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-32318

DEVON ENERGY CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		73-1567067
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer identification No.)

333 West Sheridan Avenue, Oklahoma City, Oklahoma		73102-5015
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (405) 235-3611

Former name, address and former fiscal year, if changed from last report: Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

On April 23, 2014, 407.9 million shares of common stock were outstanding.

DEVON ENERGY CORPORATION

FORM 10-Q

TABLE OF CONTENTS


Part I. Financial Information
Item 1. Financial Statements
Consolidated Comprehensive Statements of Earnings			3
Consolidated Statements of Cash Flows			4
Consolidated Balance Sheets			5
Consolidated Statements of Stockholders’ Equity			6
Notes to Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			40

Part II. Other Information
Item 1. Legal Proceedings			42
Item 1A. Risk Factors			42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 3. Defaults Upon Senior Securities			42
Item 4. Mine Safety Disclosures			42
Item 5. Other Information			42
Item 6. Exhibits			43

Signatures			44

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements” as defined by the United States Securities and Exchange Commission (“SEC”). Such statements are those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions. Such forward-looking statements are based on our examination of historical operating trends, the information used to prepare our December 31, 2013 reserve reports and other data in our possession or available from third parties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially from our expectations due to a number of factors, such as changes in the supply of and demand for oil, natural gas and natural gas liquids (“NGLs”) and related products and services; exploration or drilling programs; our ability to successfully complete mergers, acquisitions and divestitures; political or regulatory events; general economic and financial market conditions; and other risks and factors discussed in this report.

All subsequent written and oral forward-looking statements attributable to Devon Energy Corporation, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We assume no duty to update or revise our forward-looking statements based on new information, future events or otherwise.

Part I. Financial Information

Item 1. Financial Statements

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED COMPREHENSIVE STATEMENTS OF EARNINGS


	Three Months Ended March 31,
	2014			2013
	(Unaudited) (In millions, except per share amounts)
Oil, gas and NGL sales	$	2,557		$	1,804
Oil, gas and NGL derivatives		(320	)		(320	)
Marketing and midstream revenues		1,488			487

Total operating revenues		3,725			1,971

Lease operating expenses		598			525
Marketing and midstream operating expenses		1,305			363
General and administrative expenses		211			150
Production and property taxes		137			113
Depreciation, depletion and amortization		739			704
Asset impairments		—			1,913
Restructuring costs		37			38
Other operating items		8			22

Total operating expenses		3,035			3,828

Operating income (loss)		690			(1,857	)
Net financing costs		112			103
Other nonoperating items		18			2

Earnings (loss) before income taxes		560			(1,962	)
Income tax expense (benefit)		231			(623	)

Net earnings (loss)		329			(1,339	)
Net earnings attributable to noncontrolling interests		5			—

Net earnings (loss) attributable to Devon	$	324		$	(1,339	)

Net earnings (loss) per share attributable to Devon:
Basic	$	0.80		$	(3.34	)
Diluted	$	0.79		$	(3.34	)
Comprehensive earnings (loss):
Net earnings (loss)	$	329		$	(1,339	)
Other comprehensive loss, net of tax:
Foreign currency translation		(298	)		(183	)
Pension and postretirement plans		3			4

Other comprehensive loss, net of tax		(295	)		(179	)

Comprehensive earnings (loss)	$	34		$	(1,518	)

See accompanying notes to consolidated financial statements.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2014			2013
	(Unaudited) (In millions)
Cash flows from operating activities:
Net earnings (loss)	$	329		$	(1,339	)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Depreciation, depletion and amortization		739			704
Asset impairments		—			1,913
Deferred income tax expense (benefit)		208			(623	)
Derivatives and other financial instruments		307			305
Cash settlements on derivatives and financial instruments		(54	)		114
Other noncash charges		108			83
Net change in working capital		(152	)		(158	)
Change in long-term other assets		(88	)		(6	)
Change in long-term other liabilities		13			9

Net cash from operating activities		1,410			1,002

Cash flows from investing activities:
Acquisition of GeoSouthern		(5,935	)		—
Capital expenditures		(1,583	)		(1,926	)
Proceeds from property and equipment divestitures		142			29
Purchases of short-term investments		—			(871	)
Redemptions of short-term investments		—			1,988
Redemptions of long-term investments		57			1
Other		37			(3	)

Net cash from investing activities		(7,282	)		(782	)

Cash flows from financing activities:
Proceeds from borrowings of long-term debt, net of issuance costs		3,346			—
Net short-term debt borrowings		257			508
Long-term debt repayments		(1,577	)		—
Proceeds from stock option exercises		11			—
Dividends paid on common stock		(90	)		(81	)
Excess tax benefits related to share-based compensation		1			3
Distributions to noncontrolling interests		(100	)		—
Other		(4	)		—

Net cash from financing activities		1,844			430

Effect of exchange rate changes on cash		(11	)		(12	)

Net change in cash and cash equivalents		(4,039	)		638

Cash and cash equivalents at beginning of period		6,066			4,637

Cash and cash equivalents at end of period	$	2,027		$	5,275

See accompanying notes to consolidated financial statements.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	March 31,			December 31,
	2014			2013
	(Unaudited)
	(In millions, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	2,027		$	6,066
Accounts receivable		2,580			1,520
Other current assets		413			419

Total current assets		5,020			8,005

Property and equipment, at cost:
Oil and gas, based on full cost accounting:
Subject to amortization		79,399			73,995
Not subject to amortization		3,821			2,791

Total oil and gas		83,220			76,786
Other		8,801			6,195

Total property and equipment, at cost		92,021			82,981
Less accumulated depreciation, depletion and amortization		(54,592	)		(54,534	)

Property and equipment, net		37,429			28,447

Goodwill		9,155			5,858
Other long-term assets		1,161			567

Total assets	$	52,765		$	42,877

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,581		$	1,229
Revenues and royalties payable		1,529			786
Short-term debt		3,773			4,066
Other current liabilities		697			574

Total current liabilities		7,580			6,655

Long-term debt		11,739			7,956
Asset retirement obligations		2,218			2,140
Other long-term liabilities		933			834
Deferred income taxes		5,249			4,793
Stockholders’ equity:
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 408 million and 406 million shares in 2014 and 2013, respectively		41			41
Additional paid-in capital		3,836			3,780
Retained earnings		15,644			15,410
Accumulated other comprehensive earnings		973			1,268

Total stockholders’ equity attributable to Devon		20,494			20,499
Noncontrolling interests		4,552			—

Total stockholders’ equity		25,046			20,499

Commitments and contingencies (Note 17)
Total liabilities and stockholders’ equity	$	52,765		$	42,877

See accompanying notes to consolidated financial statements.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


											Accumulated
					Additional						Other									Total
	Common Stock				Paid-In			Retained			Comprehensive			Treasury			Noncontrolling			Stockholders’
	Shares		Amount		Capital			Earnings			Earnings			Stock			Interests			Equity
	(Unaudited)
	(In millions)
Three Months Ended March 31, 2014
Balance as of December 31, 2013		406	$	41	$	3,780		$	15,410		$	1,268		$	—		$	—		$	20,499
Net earnings		—		—		—			324			—			—			5			329
Other comprehensive loss, net of tax		—		—		—			—			(295	)		—			—			(295	)
Stock option exercises		—		—		11			—			—			—			—			11
Restricted stock grants, net of cancellations		2		—		—			—			—			—			—			—
Common stock repurchased		—		—		—			—			—			(3	)		—			(3	)
Common stock retired		—		—		(3	)		—			—			3			—			—
Common stock dividends		—		—		—			(90	)		—			—			—			(90	)
Share-based compensation		—		—		47			—			—			—			—			47
Share-based compensation tax benefits		—		—		1			—			—			—			—			1
Acquisition of noncontrolling interests		—		—		—			—			—			—			4,652			4,652
Distributions to noncontrolling interests		—		—		—			—			—			—			(100	)		(100	)
Other		—		—		—			—			—			—			(5	)		(5	)

Balance as of March 31, 2014		408	$	41	$	3,836		$	15,644		$	973		$	—		$	4,552		$	25,046

Three Months Ended March 31, 2013
Balance as of December 31, 2012		406	$	41	$	3,688		$	15,778		$	1,771		$	—		$	—		$	21,278
Net loss		—		—		—			(1,339	)		—			—			—			(1,339	)
Other comprehensive loss, net of tax		—		—		—			—			(179	)		—			—			(179	)
Common stock repurchased		—		—		—			—			—			(6	)		—			(6	)
Common stock retired		—		—		(6	)		—			—			6			—			—
Common stock dividends		—		—		—			(81	)		—			—			—			(81	)
Share-based compensation		—		—		32			—			—			—			—			32
Share-based compensation tax benefits		—		—		3			—			—			—			—			3

Balance as of March 31, 2013		406	$	41	$	3,717		$	14,358		$	1,592		$	—		$	—		$	19,708

See accompanying notes to consolidated financial statements.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Significant Accounting Policies

The accompanying unaudited financial statements and notes of Devon Energy Corporation (“Devon”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements and notes should be read in conjunction with the financial statements and notes included in Devon’s 2013 Annual Report on Form 10-K.

The accompanying unaudited interim financial statements furnished in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of Devon’s results of operations and cash flows for the three-month periods ended March 31, 2014 and 2013 and Devon’s financial position as of March 31, 2014.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Devon and entities in which it holds a controlling interest. All intercompany transactions have been eliminated. Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Investments in non-controlled entities, over which Devon has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. In applying the equity method of accounting, the investments are initially recognized at cost, and subsequently adjusted for Devon’s proportionate share of earnings, losses, and distributions. Investments accounted for using the equity method and cost method are reported as a component of other long-term assets.

As discussed more fully in Note 2, on March 7, 2014, Devon completed a business combination whereby Devon controls both EnLink Midstream Partners, LP (the “Partnership”) and its general partner entity, EnLink Midstream, LLC (“EnLink”). Devon controls both the Partnership’s and EnLink’s operations; therefore, the Partnership and EnLink’s accounts are included in Devon’s accompanying consolidated financial statements subsequent to the completion of the transaction. The portions of the Partnership and EnLink’s net earnings and stockholders’ equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in the accompanying consolidated comprehensive statements of earnings and consolidated balance sheets.

Intangible Assets

EnLink’s long-term assets include intangible assets, consisting of customer relationships. These assets are amortized on a straight-line basis over the expected periods of benefits, which range from fifteen to twenty years.

2. Acquisitions and Divestitures

Formation of EnLink Midstream, LLC and EnLink Midstream Partners, LP

On March 7, 2014, Devon, Crosstex Energy, Inc. and Crosstex Energy, LP (together with Crosstex Energy, Inc., “Crosstex”) completed a business combination to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business. The new business consists of the Partnership and EnLink, a master limited partnership and a general partner entity, respectively, which are both publicly traded entities.

In exchange for a controlling interest in both EnLink and the Partnership, Devon contributed its equity interest in a newly formed Devon subsidiary EnLink Midstream Holdings, LP (“EnLink Holdings”) and $100 million in cash. EnLink Holdings owns Devon’s midstream assets in the Barnett Shale in north Texas and the Cana and Arkoma Woodford Shales in Oklahoma, as well as Devon’s economic interest in Gulf Coast Fractionators in Mt. Belvieu, Texas. The Partnership and EnLink each own 50 percent of EnLink Holdings.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The ownership of EnLink is approximately:

•

70% - Devon

•

30% - Public unitholders

The ownership of the Partnership is approximately:

•

52% - Devon

•

41% - Public unitholders

•

7% - EnLink

This business combination was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, EnLink Holdings was the accounting acquirer because its parent company, Devon, obtained control of EnLink and the Partnership as a result of the business combination. Consequently, EnLink Holdings’ assets and liabilities retained their carrying values. Additionally, the Crosstex assets acquired and liabilities assumed by the Partnership and EnLink in the business combination, as well as EnLink’s noncontrolling interest in the Partnership, were recorded at their fair values which were measured as of the acquisition date, March 7, 2014. The excess of the purchase price over the estimated fair values of Crosstex’s net assets acquired was recorded as goodwill. The purchase price allocation has been prepared on a preliminary basis pending receipt of a final valuation report and is subject to material change.

The following table summarizes the preliminary estimate of the purchase price and its allocation to the assets acquired and liabilities assumed (in millions, except unit price).


Crosstex Energy, Inc. outstanding common shares:
Held by public shareholders		48.0
Restricted shares		0.4

Total subject to conversion		48.4
Exchange ratio		1.0	x

Converted shares		48.4
Crosstex Energy, Inc. common share price ⁽¹⁾	$	37.60

Crosstex Energy, Inc. consideration	$	1,823

Partnership outstanding units:
Common units held by public unitholders		75.1
Preferred units held by third party ⁽²⁾		17.1
Restricted units		0.4

Total		92.6
Partnership common unit price ⁽³⁾	$	30.51

Partnership common units value	$	2,825

Partnership outstanding unit options value	$	4

Total fair value of noncontrolling interests ⁽³⁾	$	2,829

Total consideration and fair value of noncontrolling interests	$	4,652

(1)	The final purchase price is based on the fair value of Crosstex Energy Inc.’s common shares as of the closing date, March 7, 2014.

(2)	The Partnership converted the preferred units to common units in February 2014.

(3)	The final purchase price is based on the fair value of the Partnership’s common shares as of the closing date, March 7, 2014.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The preliminary allocation of the purchase price is as follows (in millions):


Current assets	$	438
Property, plant and equipment, net		2,412
Intangible assets		427
Equity investment		222
Goodwill ⁽¹⁾		3,420
Other long term assets		1
Current liabilities		514
Long-term debt		1,454
Deferred income taxes		199
Other long-term liabilities		101

Total consideration and fair value of noncontrolling interests	$	4,652

(1)

Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized and is not deductible for tax purposes.

GeoSouthern Energy Acquisition

On November 20, 2013, Devon entered into a Purchase and Sale Agreement with GeoSouthern Energy Corporation (“GeoSouthern”) and a wholly owned subsidiary of GeoSouthern to acquire GeoSouthern’s interests in certain affiliates (the “Acquired Companies”) that own certain oil and gas properties, leasehold mineral interest and related assets located in the Eagle Ford Shale. On February 28, 2014, the GeoSouthern acquisition closed and GeoSouthern transferred the Acquired Companies to Devon in exchange for the aggregate purchase price of approximately $6.0 billion. Devon funded the acquisition price with cash on hand and debt financing. In connection with the GeoSouthern acquisition, Devon acquired approximately 82,000 net acres located in DeWitt and Lavaca counties in south Texas. The transaction was accounted for using the acquisition method, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The purchase price allocation has been prepared on a preliminary basis and is subject to material change. The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed in the transaction (in millions).


Cash and cash equivalents	$	95
Other current assets		252
Proved properties		5,039
Unproved properties		1,010
Midstream assets		85
Current liabilities		445
Long-term liabilities		6

Net assets acquired	$	6,030

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

EnLink and GeoSouthern Operating Results

The following table presents EnLink’s and GeoSouthern’s operating revenues and net earnings included in Devon’s consolidated statements of earnings subsequent to the transactions described above.


	GeoSouthern		EnLink
	(In millions)
Total operating revenues	$	154	$	199
Total operating expenses		74		197

Operating income	$	80	$	2

Pro Forma Financial Information

The following unaudited pro forma financial information has been prepared assuming both the EnLink formation and the GeoSouthern acquisition occurred on January 1, 2013. The pro forma information is not intended to reflect the actual results of operations that would have occurred if the business combination and acquisition had been completed at the dates indicated. In addition, they do not project Devon’s results of operations for any future period.


	Three Months Ended March 31,
	2014		2013
	(In millions)
Total operating revenues	$	4,372	$	2,548
Net earnings (loss)	$	347	$	(1,333	)
Noncontrolling interests	$	18	$	16
Net earnings (loss) attributable to Devon	$	329	$	(1,349	)
Net earnings (loss) per common share attributable to Devon	$	0.81	$	(3.30	)

Canadian Conventional Assets Divestiture

In November 2013, Devon announced plans to divest certain non-core properties located throughout Canada and the U.S. In the first quarter of 2014, Devon completed minor divestiture transactions for $142 million. On April 1, 2014, Devon sold the majority of its Canadian conventional assets to Canadian Natural Resources Limited for approximately $2.7 billion after taxes ($3.125 billion in Canadian dollars).

3. Derivative Financial Instruments

Objectives and Strategies

Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production. These instruments are used to manage the inherent uncertainty of future revenues due to commodity price volatility and typically include financial price swaps, basis swaps, costless price collars and call options. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. Devon periodically enters into foreign exchange forward contracts to manage its exposure to fluctuations in exchange rates. Additionally, EnLink manages its exposure to fluctuations in commodity prices by hedging the impact of market fluctuations.

Devon does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.

Counterparty Credit Risk

By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are acceptable credit risks. It is Devon’s policy to enter into derivative contracts only with investment grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon’s derivative contracts contain provisions that provide for collateral payments, depending on levels of exposure and the credit rating of the counterparty. As of March 31, 2014, Devon did not hold any cash collateral from its counterparties.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Commodity Derivatives

As of March 31, 2014, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX West Texas Intermediate futures price. The second table presents Devon’s oil derivatives that settle against the Western Canadian Select index.


	Price Swaps				Price Collars						Call Options Sold
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q2-Q4 2014		75,000	$	94.14		68,555	$	89.36	$	100.40		42,000	$	116.43
Q1-Q4 2015		65,750	$	90.10		—	$	—	$	—		28,000	$	116.43
Q1-Q4 2016		—	$	—		—	$	—	$	—		18,500	$	103.11


	Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q2-Q4 2014	Western Canadian Select		9,236	$	(18.19	)

As of March 31, 2014, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The second table presents Devon’s natural gas derivatives that settle against the AECO index.


	Price Swaps				Price Collars						Call Options Sold
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)
Q2-Q4 2014		800,000	$	4.42		460,000	$	4.03	$	4.51		500,000	$	5.00
Q1-Q4 2015		160,000	$	4.39		225,000	$	4.04	$	4.32		550,000	$	5.09
Q1-Q4 2016		—	$	—		—	$	—	$	—		400,000	$	5.00

Basis Swaps

Period

Index

Volume
(MMBtu/d)

Weighted Average Differential
to Henry Hub ($/MMBtu)

Q2-Q4 2014

AECO

94,781

(0.52

)

Interest Rate Derivatives


Notional	Rate Received			Rate Paid			Expiration
(In millions)
$100		Three month LIBOR			0.92	%		December 2016
$100		1.76	%		Three month LIBOR			January 2019

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Foreign Currency Derivatives

As of March 31, 2014, Devon had the following open foreign currency derivative positions:

Forward Contract

Currency

Contract
Type

CAD
Notional

Weighted Average
Fixed Rate Received

Expiration

(In millions)

(CAD-USD)

Canadian Dollar

Sell

3,000

0.898

April 2014

Canadian Dollar

Sell

1,312

0.893

June 2014

Financial Statement Presentation

The following table presents the net gains and losses recognized in the accompanying comprehensive statements of earnings associated with derivative financial instruments. Net gains and losses associated with Devon’s commodity derivatives are presented in oil, gas and NGL derivatives in the accompanying comprehensive statements of earnings. Net gains and losses associated with EnLink’s midstream commodity derivatives are presented in marketing and midstream revenues in the accompanying comprehensive statements of earnings. Net gains and losses associated with Devon’s interest rate and foreign currency derivatives are presented in other nonoperating items in the accompanying comprehensive statements of earnings.


	Three Months Ended March 31,
	2014			2013
	(In millions)
Commodity derivatives	$	(320	)	$	(320	)
EnLink commodity derivatives		(1	)		—
Foreign currency derivatives		14			15

Net losses recognized in comprehensive statements of earnings	$	(307	)	$	(305	)

The following table presents the derivative fair values included in the accompanying balance sheets.


	Balance Sheet Caption	March 31, 2014		December 31, 2013
		(In millions)
Asset derivatives:
Commodity derivatives	Other current assets	$	—	$	75
Commodity derivatives	Other long-term assets		39		28
EnLink commodity derivatives	Other current assets		1		—
Interest rate derivatives	Other current assets		1		—

Total asset derivatives		$	41	$	103

Liability derivatives:
Commodity derivatives	Other current liabilities	$	205	$	58
Commodity derivatives	Other long-term liabilities		71		62
EnLink commodity derivatives	Other current liabilities		1		—
EnLink commodity derivatives	Other long-term liabilities		1		—
Interest rate derivatives	Other long-term liabilities		1		—
Foreign currency derivatives	Other current liabilities		32		1

Total liability derivatives		$	311	$	121

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

4. Share-Based Compensation

The following table presents the effects of share-based compensation included in Devon’s accompanying comprehensive statements of earnings. Devon’s gross general and administrative expense for the first quarter of 2014 includes $1 million of unit-based compensation related to grants made under EnLink’s long-term incentive plans. The vesting for certain share-based awards was accelerated in the first quarter of 2014 in conjunction with the divestiture of Devon’s Canadian conventional assets. The associated expense for these accelerated awards is included in restructuring costs in the accompanying comprehensive statements of earnings. See Note 6 for further details.


	Three Months Ended March 31,
	2014		2013
	(In millions)
Gross general and administrative expense	$	57	$	40
Share-based compensation expense capitalized pursuant to the full cost method of accounting for oil and gas properties	$	13	$	15
Related income tax benefit	$	7	$	6

Under its 2009 Long-Term Incentive Plan, as amended, Devon granted share-based awards to certain employees in the first quarter of 2014. The following sections include information related to these awards.

Restricted Stock Awards and Units

The following table presents a summary of Devon’s unvested restricted stock awards and units.


	Restricted Stock Award & Units			Weighted Average Grant-Date Fair Value
	(In thousands)
Unvested at December 31, 2013		3,292		$	59.76
Granted		2,829		$	61.02
Vested		(45	)	$	61.91
Forfeited		(96	)	$	59.84

Unvested at March 31, 2014		5,980		$	60.30

As of March 31, 2014, Devon’s unrecognized compensation cost related to unvested restricted stock awards and units was $279 million. Such cost is expected to be recognized over a weighted-average period of 2.7 years.

Performance Based Restricted Stock Awards

The following table presents a summary of Devon’s performance based restricted stock awards.


	Performance Restricted Stock Awards			Weighted Average Grant-Date Fair Value
	(In thousands)
Unvested at December 31, 2013		316		$	56.25
Granted		234		$	61.33
Vested		(75	)	$	53.45

Unvested at March 31, 2014		475		$	59.20

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

As of March 31, 2014, Devon’s unrecognized compensation cost related to these awards was $12 million. Such cost is expected to be recognized over a weighted-average period of 1.9 years.

Performance Share Units

The following table presents a summary of the grant-date fair values of performance share units granted in 2014 and the related assumptions.


	2014
Grant-date fair value	$	70.18	—	$	81.05
Risk-free interest rate					0.54	%
Volatility factor					28.8	%
Contractual term (in years)					2.89

The following table presents a summary of Devon’s performance share units.


	Performance Share Units			Weighted Average Grant-Date Fair Value
	(In thousands)
Unvested at December 31, 2013		925		$	66.64
Granted		708		$	77.77
Forfeited		(100	)	$	79.74

Unvested at March 31, 2014 ⁽¹⁾		1,533		$	70.92

(1)	A maximum of 3.1 million common shares could be awarded based upon Devon’s final total shareholder return ranking.

As of March 31, 2014, Devon’s unrecognized compensation cost related to unvested units was $63 million. Such cost is expected to be recognized over a weighted-average period of 2.1 years

5. Asset Impairments

In the first quarter of 2013, Devon recognized asset impairments related to its oil and gas property and equipment as presented below.


	Three Months Ended March 31, 2013
	Gross		Net of Taxes
	(In millions)
U.S. oil and gas assets	$	1,110	$	707
Canada oil and gas assets		803		601

Total asset impairments	$	1,913	$	1,308

Oil and Gas Impairments

Under the full-cost method of accounting, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the full-cost “ceiling” at the end of each quarter. The ceiling is calculated separately for each country and is based on the present value of estimated future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum, net of related tax effects. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months.

The oil and gas impairments resulted primarily from declines in the U.S. and Canada full-cost ceilings. The lower ceiling values resulted primarily from decreases in the 12-month average trailing prices for oil, bitumen and NGLs, which reduced proved reserve values.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

6. Restructuring Costs

Canadian Divestitures

In the first quarter of 2014, Devon recognized $37 million of estimated employee related costs associated with its Canadian non-core asset divestitures. Approximately $14 million of the employee related costs resulted from accelerated vesting of share-based grants, which are non-cash charges.

Office Consolidation

In October 2012, Devon announced plans to consolidate its U.S. personnel into a single operations group centrally located at the company’s headquarters in Oklahoma City. As of December 31, 2013, Devon had completed this initiative and incurred $134 million of restructuring costs associated with the office consolidation.

Financial Statement Presentation

The schedule below summarizes restructuring costs presented in the accompanying comprehensive statements of earnings related to the Canadian divestitures and office consolidation.


	Three Months Ended March 31,
	2014		2013
	(In millions)
Canada divestitures:
Employee related costs	$	37	$	—
Office consolidation:
Lease obligations and other		—		38

Restructuring costs	$	37	$	38

The schedule below summarizes Devon’s restructuring liabilities.


	Other Current Liabilities			Other Long-Term Liabilities			Total
	(In millions)
Balance as of December 31, 2013	$	27		$	18		$	45
Changes due to Canadian divestitures		21			2			23
Changes due to office consolidation		(20	)		(1	)		(21	)

Balance as of March 31, 2014	$	28		$	19		$	47

Balance as of December 31, 2012	$	52		$	9		$	61
Changes due to office consolidation		1			9			10

Balance as of March 31, 2013	$	53		$	18		$	71

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

7. Other Operating Items

The components of other operating items in the accompanying consolidated statements of earnings include the following:


	Three Months Ended March 31,
	2014			2013
	(In millions)
Accretion of asset retirement obligations		29			28
Gain on sale of assets		(15	)		(1	)
Other		(6	)		(5	)

Other operating items	$	8		$	22

8. Earnings (Loss) Per Share Attributable to Devon

The following table reconciles net earnings (loss) attributable to Devon and common shares outstanding used in the calculations of basic and diluted earnings per share.


				Common			Earnings (loss)
	Earnings (loss)			Shares			per Share
	(In millions, except per share amounts)
Three Months Ended March 31, 2014:
Net earnings attributable to Devon	$	324			407
Attributable to participating securities		(2	)		(4	)

Basic earnings per share		322			403		$	0.80
Dilutive effect of potential common shares issuable		—			2

Diluted earnings per share	$	322			405		$	0.79

Three Months Ended March 31, 2013:
Net loss attributable to Devon	$	(1,339	)		406
Attributable to participating securities		(1	)		(4	)

Basic loss per share		(1,340	)		402		$	(3.34	)
Dilutive effect of potential common shares issuable		—			—

Diluted loss per share	$	(1,340	)		402		$	(3.34	)

Certain options to purchase shares of Devon’s common stock are excluded from the dilution calculation because the options are antidilutive. These excluded options totaled 6.3 million shares and 7.7 million shares during the three-month periods ended March 31, 2014 and 2013, respectively.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

9. Other Comprehensive Earnings

Components of other comprehensive earnings consist of the following:


	Three Months Ended March 31,
	2014			2013
	(In millions)
Foreign currency translation:
Beginning accumulated foreign currency translation	$	1,448		$	1,996
Change in cumulative translation adjustment		(313	)		(191	)
Income tax benefit		15			8

Ending accumulated foreign currency translation		1,150			1,813

Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits		(180	)		(225	)
Recognition of net actuarial loss and prior service cost in earnings ⁽¹⁾		5			6
Income tax expense		(2	)		(2	)

Ending accumulated pension and postretirement benefits		(177	)		(221	)

Accumulated other comprehensive earnings, net of tax	$	973		$	1,592

(1)	These accumulated other comprehensive earnings components are included in the computation of net periodic benefit cost, which is a component of general and administrative expenses on the accompanying comprehensive statements of earnings (see Note 15 for additional details).

10. Supplemental Information to Statements of Cash Flows


	Three Months Ended March 31,
	2014			2013
	(In millions)
Net change in working capital accounts:
Accounts receivable	$	(455	)	$	(122	)
Other current assets		(27	)		(1	)
Accounts payable		20			83
Revenues and royalties payable		391			3
Other current liabilities		(81	)		(121	)

Net change in working capital	$	(152	)	$	(158	)

Interest paid (net of capitalized interest)	$	137		$	139
Income taxes paid (received)	$	38		$	(11	)

On March 7, 2014, Devon completed a business combination to form EnLink. With the exception of a $100 million cash payment to noncontrolling interests, the business combination was a non-monetary transaction. See Note 2 for additional details.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

11. Accounts Receivable

The components of accounts receivable include the following:


	March 31, 2014			December 31, 2013
	(In millions)
Oil, gas and NGL sales	$	1,185		$	851
Joint interest billings		537			447
Marketing and midstream revenues		793			172
Other		76			61

Gross accounts receivable		2,591			1,531
Allowance for doubtful accounts		(11	)		(11	)

Net accounts receivable	$	2,580		$	1,520

12. Goodwill

The table below provides a summary of Devon’s goodwill, by assigned reporting unit. The changes to Devon’s goodwill in the first quarter of 2014 largely relate to EnLink. Included in the assets Devon contributed to EnLink Holdings was $402 million of goodwill, which is in the table below. The additional EnLink goodwill of $3.4 billion represents the goodwill recognized on the EnLink transaction described in Note 2. The decrease in Devon’s Canadian goodwill was primarily due to changes in the exchange rate between the United States dollar and the Canadian dollar, as well as goodwill removed in conjunction with minor asset divestitures.


	March 31,		December 31,
	2014		2013
	(In millions)
U.S.	$	2,618	$	2,618
Canada		2,715		2,838
EnLink		3,822		402

Total	$	9,155	$	5,858

13. Debt


	March 31, 2014		December 31, 2013
	(In millions)
Devon debt
Commercial paper	$	1,575	$	1,317
5.625% due January 15, 2014		—		500
Floating rate due December 15, 2015		500		500
2.40% due July 15, 2016		500		500
Floating rate due December 15, 2016		350		350
1.20% due December 15, 2016		650		650
Term loan due February 28, 2017		1,000		—
1.875% due May 15, 2017		750		750
8.25% due July 1, 2018		125		125
2.25% due December 15, 2018		750		750
6.30% due January 15, 2019		700		700
Term loan due February 28, 2019		1,000		—
4.00% due July 15, 2021		500		500
3.25% due May 15, 2022		1,000		1,000
7.50% due September 15, 2027		150		150

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)


7.875% due September 30, 2031		1,250			1,250
7.95% due April 15, 2032		1,000			1,000
5.60% due July 15, 2041		1,250			1,250
4.75% due May 15, 2042		750			750
Net discount on debentures and notes		(20	)		(20	)

Total Devon debt		13,780			12,022

EnLink debt
Credit facilities		103			—
Other borrowings		15
8.875% due February 15, 2018		189			—
2.70% due April 1, 2019		400			—
7.125% due June 1, 2022		197			—
4.40% due April 1, 2024		450			—
5.60% due April 1, 2044		350			—
Net premium on debentures and notes		28			—

Total EnLink debt		1,732			—

Total debt		15,512			12,022
Less amount classified as short-term debt ⁽¹⁾		3,773			4,066

Total long-term debt	$	11,739		$	7,956

(1)

March 31, 2014 short-term debt consists of $2.0 billion term loan drawn in conjunction with the GeoSouthern acquisition, $1.6 billion of commercial paper and the EnLink $189 million senior note along with the associated $9 million premium, which was redeemed on April 18, 2014. December 31, 2013 short-term debt consists of $2.25 billion of senior notes issued in conjunction with the GeoSouthern acquisition, $1.3 billion of commercial paper and $500 million of senior notes due January 15, 2014.

Commercial Paper

As of March 31, 2014, Devon had $1.6 billion of outstanding commercial paper at an average rate of 0.23 percent.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Credit Lines

Devon has a $3.0 billion syndicated, unsecured revolving line of credit (the “Senior Credit Facility”). As of March 31, 2014, there were no borrowings under the Senior Credit Facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65 percent. As of March 31, 2014, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 28.3 percent.

Term Loans

In December 2013, in conjunction with the GeoSouthern acquisition, Devon entered into a term loan agreement with a group of major financial institutions. In February 2014, Devon drew $2.0 billion of term loans to finance, in part, the GeoSouthern acquisition and to pay transaction costs. Under the term loan agreement, $1.0 billion of the term loans have a maturity of three years, and the remaining $1.0 billion have a maturity of five years (the “5-Year Loans”). The 5-Year Loans will provide for the partial amortization of principal during the last two years that they are outstanding. Loans outstanding under the term loan agreement, at Devon’s election, bear interest at various fixed rate options for periods up to six months. Such rates are generally less than the prime rate. However, Devon may elect to borrow at the prime rate.

Devon intends to repay the $2.0 billion term loans in the second quarter of 2014 using Canadian divestiture proceeds that will be repatriated to the U.S. Accordingly, amounts outstanding under the term loans have been classified as short-term debt in the consolidated balance sheet as of March 31, 2014.

EnLink Debt

Senior Notes

The table below summarizes the fair value of EnLink’s debt as of March 7, 2014, the formation date of EnLink. The premiums are being amortized using the effective interest method. EnLink’s debt is non-recourse to Devon.


	March 7, 2014 Fair Value of Debt		Effective Rate of Debt
	(In millions)
8.875% due February 15, 2018 (principal of $725 million)	$	760		7.7	%
7.125% due June 1, 2022 (principal of $197 million)		226		5.3	%
Credit facilities		468

Total long-term debt	$	1,454

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Credit Facilities

The Partnership has a $1.0 billion unsecured revolving credit facility, which includes a $500 million letter of credit subfacility. As of March 31, 2014, there were no borrowings under the $1.0 billion credit facility.

The $1.0 billion credit facility will mature on the fifth anniversary of the initial funding date, which was March 7, 2014, unless EnLink requests, and the requisite lenders agree, to extend it pursuant to its terms. The credit facility contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining a ratio of consolidated indebtedness to EnLink’s consolidated EBITDA (as defined in the credit facility, which definition includes projected EnLink EBITDA from certain capital expansion projects) of no more than 5.0 to 1.0. If EnLink consummates one or more acquisitions in which the aggregate purchase price is $50 million or more, the maximum allowed ratio of consolidated indebtedness to EnLink’s consolidated EBITDA will increase to 5.5 to 1.0 for the quarter of the acquisition and the three following quarters.

EnLink also has a $250 million revolving credit facility, which includes a $125 million letter of credit subfacility, as well as an additional credit agreement in association with E2 Energy Services LLC under which EnLink can borrow up to $20 million. As of March 31, 2014, EnLink’s outstanding borrowings under the $250 million credit facility was $103 million and $15 million in association with the E2 Energy Services LLC credit agreement.

The $250 million credit facility will mature on March 7, 2019. The credit facility contains certain financial, operational and legal covenants. The financial covenants will be tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter, and include (i) maintaining a maximum consolidated leverage ratio (as defined in the credit facility, but generally computed as the ratio of consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) of 4.00 to 1.00, provided that the maximum consolidated leverage ratio is 4.50 to 1.00 during an acquisition period (as defined in the credit facility) and (ii) maintaining a minimum consolidated interest coverage ratio (as defined in the credit facility, but generally computed as the ratio of consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges to consolidated interest charges) of 2.50 to 1.00 at all times prior to the occurrence of an investment grade event (as defined in the credit facility).

14. Asset Retirement Obligations

The schedule below summarizes changes in Devon’s asset retirement obligations.


	Three Months Ended March 31,
	2014			2013
	(In millions)
Asset retirement obligations as of beginning of period	$	2,228		$	2,095
Liabilities incurred		45			43
Liabilities settled		(14	)		(28	)
Revision of estimated obligation		69			63
Liabilities assumed by others		(9	)		(4	)
Accretion expense on discounted obligation		29			28
Foreign currency translation adjustment		(51	)		(26	)

Asset retirement obligations as of end of period		2,297			2,171
Less current portion		79			79

Asset retirement obligations, long-term	$	2,218		$	2,092

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

15. Retirement Plans

The following table presents the components of net periodic benefit cost for Devon’s pension and postretirement benefit plans. Net periodic benefit costs for the postretirement benefit plans were $0 for all periods presented below.


	Pension Benefits
	Three Months Ended March 31,
	2014			2013
	(In millions)
Service cost	$	7		$	9
Interest cost		14			13
Expected return on plan assets		(13	)		(15	)
Amortization of prior service cost ⁽¹⁾		1			1
Net actuarial loss ⁽¹⁾		4			5

Net periodic benefit cost ⁽²⁾	$	13		$	13

(1)	These net periodic benefit costs were reclassified out of other comprehensive earnings in the current period.

(2)	Net periodic benefit cost is a component of general and administrative expenses on the accompanying comprehensive statements of earnings.

16. Stockholders’ Equity

Dividends

Devon paid common stock dividends of $90 million and $81 million in the first three months of 2014 and 2013, respectively. The quarterly cash dividend was $0.20 per share in the first quarter of 2013. Devon increased the dividend rate to $0.22 per share in the second quarter of 2013.

17. Commitments and Contingencies

Devon is party to various legal actions arising in the normal course of business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

Royalty Matters

Numerous oil and natural gas producers and related parties, including Devon, have been named in various lawsuits alleging royalty underpayments. The suits allege that the producers and related parties used below-market prices, made improper deductions, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with oil, natural gas and NGLs produced and sold. Devon’s largest exposure for such matters relates to royalties associated with Devon’s operations in New Mexico. Devon expects to mediate or go to trial before the end of 2014 as ordered by the court in the first quarter of 2014. Devon does not currently believe that it is subject to material exposure with respect to such royalty matters.

Environmental Matters

Devon is subject to certain laws and regulations relating to environmental remediation activities associated with past operations, such as the Comprehensive Environmental Response, Compensation, and Liability Act and similar state statutes. In response to liabilities associated with these activities, loss accruals primarily consist of estimated uninsured remediation costs. Devon’s monetary exposure for environmental matters is not expected to be material.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Other Matters

Devon is involved in other various routine legal proceedings incidental to its business. However, to Devon’s knowledge, there were no other material pending legal proceedings to which Devon is a party or to which any of its property is subject.

18. Fair Value Measurements

The following tables provide carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables and accrued expenses included in the accompanying balance sheets approximated fair value at March 31, 2014 and December 31, 2013. Therefore, such financial assets and liabilities are not presented in the following tables.


							Fair Value Measurements Using:
	Carrying Amount			Total Fair Value			Level 1 Inputs		Level 2 Inputs			Level 3 Inputs
	(In millions)
March 31, 2014 assets (liabilities):
Cash equivalents	$	1,227		$	1,227		$	99	$	1,128		$	—
Commodity derivatives	$	39		$	39		$	—	$	39		$	—
Commodity derivatives	$	(276	)	$	(276	)	$	—	$	(276	)	$	—
EnLink commodity derivatives	$	1		$	1		$	—	$	1		$	—
EnLink commodity derivatives	$	(2	)	$	(2	)	$	—	$	(2	)	$	—
Interest rate derivatives	$	1		$	1		$	—	$	1		$	—
Interest rate derivatives	$	(1	)	$	(1	)	$	—	$	(1	)	$	—
Foreign currency derivatives	$	(32	)	$	(32	)	$	—	$	(32	)	$	—
Debt	$	(15,512	)	$	(16,811	)	$	—	$	(16,811	)	$	—
Obligations under capital lease	$	23		$	23		$	—	$	23		$	—
December 31, 2013 assets (liabilities):
Cash equivalents	$	5,305		$	5,305		$	4,191	$	1,114		$	—
Long-term investments	$	62		$	62		$	—	$	—		$	62
Commodity derivatives	$	103		$	103		$	—	$	103		$	—
Commodity derivatives	$	(120	)	$	(120	)	$	—	$	(120	)	$	—
Foreign currency derivatives	$	(1	)	$	(1	)	$	—	$	(1	)	$	—
Debt	$	(12,022	)	$	(12,908	)	$	—	$	(12,908	)	$	—

The following methods and assumptions were used to estimate the fair values in the tables above.

Level 1 Fair Value Measurements

Cash equivalents — Amounts consist primarily of U.S. and Canadian treasury securities and money market investments. The fair value approximates the carrying value.

Level 2 Fair Value Measurements

Cash equivalents — Amounts consist primarily of Canadian agency and provincial securities and commercial paper investments. The fair value approximates the carrying value.

Commodity, interest rate and foreign currency derivatives — The fair values of commodity, interest rate and foreign currency derivatives are estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Debt — Devon’s debt instruments do not actively trade in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity. The fair value of Devon’s commercial paper and EnLink’s credit facility is the carrying value.

Obligations under capital leases — The fair value of obligations under capital leases was calculated using inputs from third-party banks.

Level 3 Fair Value Measurements

Long-term investments — Devon’s long-term investments as of December 31, 2013 consisted entirely of auction rate securities. In the first quarter of 2014, Devon redeemed all these securities for approximately $57 million, or $5 million below their carrying value.

19. Segment Information

Devon manages its operations through distinct operating segments, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of the businesses. However, Devon’s Canadian operating segment is reported as a separate reporting segment primarily due to the significant differences between the U.S. and Canadian regulatory environments. Devon’s U.S. and Canadian segments are all primarily engaged in oil and gas exploration and production activities.

With the formation of EnLink in the first quarter of 2014, Devon considers EnLink to be an operating segment that is distinct from its existing operating segments. EnLink’s operations consist of midstream assets and operations located across the United States. Additionally, EnLink has a management team that is primarily responsible for capital and resource allocation decisions. Therefore, EnLink is presented as a separate reporting segment. For the reporting periods prior to the formation of EnLink, Devon has reclassified, from its U.S. segment to the EnLink segment, all asset-level amounts related to the midstream assets that it contributed to EnLink Holdings.

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)


	U.S.			Canada			EnLink		Eliminations			Total
	(In millions)
Three Months Ended March 31, 2014:
Revenues from external customers	$	2,616		$	684		$	425	$	—		$	3,725
Intersegment revenues	$	—		$	—		$	298	$	(298	)	$	—
Depreciation, depletion and amortization	$	497		$	194		$	48	$	—		$	739
Interest expense	$	100		$	19		$	5	$	(9	)	$	115
Earnings before income taxes	$	396		$	92		$	72	$	—		$	560
Income tax expense	$	186		$	21		$	24	$	—		$	231
Net earnings	$	210		$	71		$	48	$	—		$	329
Net earnings attributable to noncontrolling interests	$	—		$	—		$	5	$	—		$	5
Net earnings attributable to Devon	$	210		$	71		$	43	$	—		$	324
Property and equipment, net	$	24,857		$	8,369		$	4,203	$	—		$	37,429
Total assets	$	30,085		$	13,384		$	9,354	$	(58	)	$	52,765
Capital expenditures	$	7,089		$	442		$	82	$	—		$	7,613

Three Months Ended March 31, 2013:
Revenues from external customers	$	1,219		$	539		$	213	$	—		$	1,971
Intersegment revenues	$	—		$	—		$	314	$	(314	)	$	—
Depreciation, depletion and amortization	$	424		$	235		$	45	$	—		$	704
Interest expense	$	96		$	19		$	—	$	(5	)	$	110
Asset impairments	$	1,110		$	803		$	—	$	—		$	1,913
Earnings before income taxes	$	(1,119	)	$	(880	)	$	37	$	—		$	(1,962	)
Income tax benefit	$	(408	)	$	(228	)	$	13	$	—		$	(623	)
Net earnings (loss)	$	(711	)	$	(652	)	$	24	$	—		$	(1,339	)
Capital expenditures	$	1,171		$	584		$	83	$	—		$	1,838

December 31, 2013:
Property and equipment, net	$	18,201		$	8,478		$	1,768	$	—		$	28,447
Total assets	$	27,080		$	13,560		$	2,237	$	—		$	42,877

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis addresses material changes in our results of operations and capital resources and uses for the three-month period ended March 31, 2014, compared to the three-month period ended March 31, 2013, and in our financial condition and liquidity since December 31, 2013. For information regarding our critical accounting policies and estimates, see our 2013 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Overview of 2014 Results

Key components of our financial performance are summarized below.


	Three Months Ended March 31,
	2014		2013			Change
	($ in millions, except per share amounts)
Net earnings (loss) attributable to Devon	$	324	$	(1,339	)		+124	%
Adjusted earnings attributable to Devon ⁽¹⁾	$	547	$	270			+103	%
Earnings (loss) per share attributable to Devon	$	0.79	$	(3.34	)		+76	%
Adjusted earnings per share attributable to Devon ⁽¹⁾	$	1.34	$	0.66			+102	%
Production (MBoe/d)		690.9		686.9			+1	%
Realized price per Boe	$	41.13	$	29.18			+41	%
Adjusted operating income per Boe ⁽²⁾	$	25.47	$	18.06			+41	%
Operating cash flow	$	1,410	$	1,002			+41	%
Capitalized costs	$	7,613	$	1,838			+314	%
Shareholder distributions	$	90	$	81			+11	%

(1)

Adjusted earnings and adjusted earnings per share attributable to Devon are financial measures not prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). For a description of adjusted earnings and adjusted earnings per share attributable to Devon, as well as reconciliations to the comparable GAAP measures, see “Non-GAAP Measures” in this Item 2.

(2)

Computed as revenues from commodity sales, commodity derivatives settlements and marketing and midstream operations, less expenses for lease operations, marketing and midstream operations, general and administrative, production and property taxes and interest, with the result divided by total production.

During the three-month period ended March 31, 2014, our adjusted earnings, adjusted earnings per share and adjusted operating income per Boe all increased compared to 2013. The improved 2014 results were driven primarily by increases in oil and gas prices, liquids volumes and oil realizations. These factors also contributed to higher adjusted operating cash flow, which when combined with a reduction in capital expenditures, excluding the GeoSouthern acquisition, caused our cash flow deficit to narrow considerably in 2014.

During the first quarter of 2014, we made significant progress toward three strategic initiatives that are focused on building value per share. On February 28, 2014, we closed the GeoSouthern acquisition and acquired GeoSouthern’s Eagle Ford Shale assets and operations in south Texas for approximately $6.0 billion. This acquisition included approximately 250 MMBoe of proved reserves. Additionally, during the month of March 2014, our Eagle Ford assets produced 49 MBoe/d, including 31 MBbls/d of oil.

Additionally, on March 7, 2014, we, Crosstex Energy, Inc. and Crosstex Energy, L.P. (collectively “Crosstex”) completed a transaction to combine substantially all of our U.S. midstream assets with Crosstex’s assets to form a new midstream business referred to as EnLink. This transaction, including Devon’s controlling ownership of EnLink, is described more fully in “Part I. Financial Information – Item 1. Financial Statements – Note 2” in this report. The results of operations from our assets contributed to EnLink are included in our consolidated financial statements for all periods presented. Additionally, the results of operations for all assets contributed to EnLink are included in our consolidated financial statements subsequent to the completion of the transaction. The portions of EnLink’s net earnings and stockholders’ equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in our consolidated comprehensive statements of earnings and consolidated balance sheets.

Finally, on April 1, 2014, we sold the majority of our Canadian conventional assets to Canadian Natural Resources Limited for approximately $2.7 billion after taxes ($3.125 billion in Canadian dollars). This divestiture included approximately 170 MMBoe of proved reserves. Production associated with the divested properties was approximately 79.0 MBoe/d, including 357 MMcf/d of natural gas. We expect to repatriate the divestiture proceeds to the U.S. in the second quarter of 2014 to repay borrowings used to fund a portion of the GeoSouthern acquisition.

Results of Operations

Oil, Gas and NGL Production


	Three Months Ended March 31,
	2014		2013		Change
Oil (MBbls/d)
Anadarko Basin		9.3		8.5		+10	%
Barnett Shale		2.3		1.8		+29	%
Eagle Ford		10.8		—		N/M
Mississippian-Woodford Trend		9.5		2.0		+366	%
Permian Basin		55.1		40.4		+36	%
Rockies		8.0		6.7		+21	%
Other		2.5		3.3		- 27	%

U.S. core and emerging properties		97.5		62.7		+56	%
Canadian heavy oil		26.3		28.5		- 7	%

Total core and emerging properties		123.8		91.2		+36	%
Non-core properties		14.6		16.8		- 13	%

Total		138.4		108.0		+28	%

Bitumen (MBbls/d)
Canadian heavy oil		51.7		54.3		- 5	%
Gas (MMcf/d)
Anadarko Basin		281.2		270.1		+4	%
Barnett Shale		931.0		1,057.3		- 12	%
Eagle Ford		21.8		—		N/M
Mississippian-Woodford Trend		28.0		5.1		+453	%
Permian Basin		121.0		87.9		+38	%
Rockies		64.8		79.9		- 19	%
Other		139.7		159.9		- 13	%

U.S. core and emerging properties		1,587.5		1,660.2		- 4	%
Canadian heavy oil		19.4		20.6		- 6	%

Total core and emerging properties		1,606.9		1,680.8		- 4	%
Non-core properties		585.2		743.2		- 21	%

Total		2,192.1		2,424.0		- 10	%

NGLs (MBbls/d)
Anadarko Basin		29.2		24.4		+19	%
Barnett Shale		55.1		53.1		+4	%
Eagle Ford		2.6		—		N/M
Mississippian-Woodford Trend		4.7		0.2		+2114	%
Permian Basin		16.2		12.6		+29	%
Rockies oil		0.9		0.8		+20	%
Other		10.4		10.5		0	%

U.S. core and emerging properties		119.1		101.6		+17	%
Non-core properties		16.3		18.9		- 14	%

Total		135.4		120.5		+12	%

Combined (MBoe/d)
Anadarko Basin		85.3		77.9		+10	%
Barnett Shale		212.6		231.1		- 8	%
Eagle Ford		17.0		—		N/M
Mississippian-Woodford Trend		18.9		3.1		+510	%
Permian Basin		91.4		67.6		+35	%
Rockies		19.7		20.7		- 5	%
Other		36.4		40.6		- 11	%

U.S. core and emerging properties		481.3		441.0		+9	%
Canadian heavy oil		81.2		86.2		- 6	%

Total core and emerging properties		562.5		527.2		+7	%
Non-core properties		128.4		159.7		- 20	%

Total		690.9		686.9		+1	%

Oil, Gas and NGL Pricing


	Three Months Ended March 31,
	2014 ⁽¹⁾		2013 ⁽¹⁾		Change
Oil (per Bbl)
U.S.	$	91.66	$	87.45		+5	%
Canada	$	71.26	$	57.12		+25	%
Total	$	86.24	$	76.08		+13	%
Bitumen (per Bbl)
Canada	$	54.99	$	28.42		+93	%
Gas (per Mcf)
U.S.	$	4.33	$	2.81		+54	%
Canada	$	4.14	$	3.02		+37	%
Total	$	4.30	$	2.85		+51	%
NGLs (per Bbl)
U.S.	$	29.66	$	26.28		+13	%
Canada	$	51.80	$	47.33		+9	%
Total	$	31.15	$	28.04		+11	%
Combined (per Boe)
U.S.	$	39.44	$	28.32		+39	%
Canada	$	46.71	$	31.59		+48	%
Total	$	41.13	$	29.18		+41	%

(1)	The prices presented exclude any effects due to oil, gas and NGL derivatives.

Commodity Sales

The volume and price changes in the tables above caused the following changes to our oil, gas and NGL sales between the three months ended March 31, 2014 and 2013 .


	Three Months Ended March 31,
	Oil		Bitumen			Gas			NGLs		Total
	(In millions)
2013 sales	$	739	$	140		$	621		$	304	$	1,804
Change due to volumes		209		(8	)		(61	)		38		178
Change due to prices		127		124			286			38		575

2014 sales	$	1,075	$	256		$	846		$	380	$	2,557

Upstream sales increased $178 million in the first quarter of 2014 due to a 20 percent increase in our liquids production, partially offset by a 10 percent decline in our gas production. As a result of continued development of our oil properties, primarily in the Permian Basin, Mississippian-Woodford Trend and in our recently acquired Eagle Ford Shale properties, oil sales increased $209 million. Additionally, our NGL sales increased $38 million primarily as a result of continued drilling in the liquids-rich gas portions of the Cana-Woodford, Mississippian-Woodford Trend, Permian Basin and Eagle Ford. These increases were partially offset by declines in our dry gas production, which resulted in a $61 million decrease in sales. Bitumen sales decreased $8 million primarily due to higher royalties on our Jackfish thermal heavy oil projects in Canada.

Upstream sales increased $575 million in the first quarter of 2014, primarily due to a 41 percent increase in our realized price without hedges. Gas sales were the most significantly impacted with an increase of $286 million, largely due to higher North American regional index prices upon which our gas sales are based. Oil and bitumen sales increased $251 million due to prices and realizations. Additionally, NGL sales increased $38 million as a result of an 11 percent increase in our realized price without hedges. The largest contributors to the higher liquids prices were an increase in the average NYMEX West Texas Intermediate index price and tighter bitumen and heavy oil differentials as well as higher NGL prices in the Mont Belvieu, Texas index.

Oil, Gas and NGL Derivatives

A summary of our open commodity derivative positions is included in Note 3 to the financial statements included in “Item 1. Consolidated Financial Statements” of this report. The following tables provide financial information associated with our commodity derivatives. The first table presents the cash settlements and fair value gains and losses recognized as components of our revenues. The subsequent tables present our oil, bitumen, gas and NGL prices with, and without, the effects of the cash settlements. The prices do not include the effects of fair value gains and losses.


	Three Months Ended March 31,
	2014			2013
	(In millions)
Cash settlements:
Oil derivatives	$	(36	)	$	32
Gas derivatives		(64	)		53
NGL derivatives		—			1

Total cash settlements		(100	)		86

Losses on fair value changes:
Oil derivatives		(89	)		(147	)
Gas derivatives		(131	)		(256	)
NGL derivatives		—			(3	)

Total losses on fair value changes		(220	)		(406	)

Oil, gas and NGL derivatives	$	(320	)	$	(320	)


	Three Months Ended March 31, 2014
	Oil (Per Bbl)			Bitumen (Per Bbl)		Gas (Per Mcf)			NGLs (Per Bbl)			Boe (Per Boe)
Realized price without hedges	$	86.24		$	54.99	$	4.30		$	31.15		$	41.13
Cash settlements of hedges ⁽¹⁾		(2.88	)		—		(0.33	)		(0.02	)		(1.61	)

Realized price, including cash settlements	$	83.36		$	54.99	$	3.97		$	31.13		$	39.52


	Three Months Ended March 31, 2013
	Oil (Per Bbl)			Bitumen (Per Bbl)		Gas (Per Mcf)			NGLs (Per Bbl)			Boe (Per Boe)
Realized price without hedges	$	76.08		$	28.42	$	2.85		$	28.04		$	29.18
Cash settlements of hedges ⁽¹⁾		3.29			—		0.24			0.13			1.39

Realized price, including cash settlements	$	79.37		$	28.42	$	3.09		$	28.17		$	30.57

(1)	Cash settlements of oil hedges include settlements from our Western Canadian Select basis swaps presented in Note 3 to the financial statements included in “Item 1. Consolidated Financial Statements” of this report.

Cash settlements as presented in the tables above represent realized gains or losses related to various commodity derivatives. In addition to cash settlements, we also recognize fair value changes on our commodity derivatives in each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationships between contract prices and the associated forward curves. Including the cash settlements discussed above, our commodity derivatives incurred net losses of $320 million during both the first three months of 2014 and 2013.

Marketing and Midstream Revenues and Operating Expenses


	Three Months Ended March 31,
	2014			2013			Change
	($ in millions)
Operating revenues	$	1,488		$	487			+205	%
Product purchases		(1,254	)		(313	)		+301	%
Operations and maintenance expenses		(51	)		(50	)		+2	%

Operating profit	$	183		$	124			+47	%

During the first three months of 2014, marketing and midstream operating profit increased $59 million, primarily due to higher prices and volumes. Of the $59 million increase, $47 million is attributable to EnLink’s operations. EnLink’s Oklahoma segment, which includes the Cana plant and gathering system, was the largest driver of the increase. The remaining increase in operating profit relates to Devon’s marketing activities.

Besides the impact to our overall operating profit, Devon’s marketing activities were the primary driver of the increases in both operating revenues and product purchases. The associated marketing revenues increased approximately $830 million while product purchases increased approximately $810 million in the comparative periods. The higher marketing revenues and product purchases are primarily due to new commitments we have entered into to secure capacity on downstream oil pipelines.

Lease Operating Expenses (“LOE”)


	Three Months Ended March 31,
	2014		2013		Change
LOE ($ in millions):
U.S.	$	344	$	288		+20	%
Canada		254		237		+7	%

Total	$	598	$	525		+14	%

LOE per Boe:
U.S.	$	7.20	$	6.32		+14	%
Canada	$	17.58	$	14.59		+20	%
Total	$	9.61	$	8.49		+13	%

LOE increased $1.12 per Boe during the first three months of 2014. The largest contributor to the higher unit cost relates to our Canadian operations. The higher Canadian unit costs largely result from higher Canadian royalties paid in the first quarter of 2014. As Canadian royalties increase, our net production volumes decrease, causing upward pressure on our per-unit operating costs. Improved price realizations, particularly related to our thermal heavy oil operations, resulted in higher royalties in the first quarter of 2014. Additionally, Jackfish 1 reached payout in the second quarter of 2013, contributing to higher royalties post payout. Besides an increase in Canadian royalties, upward cost pressures at Jackfish and Lloydminster also contributed to the higher per unit costs in Canada. The higher unit cost in the U.S. was primarily related to our liquids production growth, particularly in the Permian Basin and Rockies, where projects generally require a higher cost to produce per unit than our gas projects. Additionally, we experienced upward pressures on costs in certain operating areas, which also contributed to the higher LOE per Boe.

General and Administrative Expenses (“G&A”)


	Three Months Ended March 31,
	2014			2013			Change
	($ in millions)
Gross G&A	$	331		$	283			+17	%
Capitalized G&A		(83	)		(99	)		- 16	%
Reimbursed G&A		(37	)		(34	)		+7	%

Net G&A	$	211		$	150			+41	%

Net G&A per Boe	$	3.40		$	2.43			+40	%

Net G&A and net G&A per Boe increased during the first three months of 2014 largely due to higher employee compensation and benefits, $22 million in one-time costs related to the EnLink and GeoSouthern transactions and lower capitalized G&A. The higher employee compensation and benefits costs were primarily related to share-based awards, which cause our G&A to be higher in the quarter in which our annual share-based grant is made. The grant related to our 2013 compensation cycle was made in the first quarter of 2014. The grant related to our 2012 compensation cycle was made in the fourth quarter of 2012. Additionally, higher employee severance costs in 2014 as well as expansion of our workforce as a part of growing production operations at certain of our key areas also contributed to the increase.

Production and Property Taxes


	Three Months Ended March 31,
	2014			2013			Change
	($ in millions)
Production	$	87		$	60			+44	%
Property and other		50			53			-5	%

Production and property taxes	$	137		$	113			+21	%

Percentage of oil, gas and NGL sales:
Production		3.40	%		3.35	%		+1	%
Property and other		1.95	%		2.92	%		- 33	%

Total		5.35	%		6.27	%		- 15	%

Production and property taxes as a percentage of oil, gas and NGL sales, decreased during the first three months of 2014, primarily due to ad valorem and other taxes that do not change in direct correlation with oil, gas and NGL sales, as well as higher Canadian revenues with no associated production taxes.

Depreciation, Depletion and Amortization (“DD&A”)


	Three Months Ended March 31,
	2014		2013		Change
DD&A ($ in millions):
Oil & gas properties	$	659	$	627		+5	%
Other properties		80		77		+4	%

Total	$	739	$	704		+5	%

DD&A per Boe:
Oil & gas properties	$	10.59	$	10.13		+5	%
Other properties		1.30		1.25		+4	%

Total	$	11.89	$	11.38		+4	%

DD&A from our oil and gas properties increased during the first three months of 2014 largely due to higher DD&A rates. The higher rates resulted from our oil and gas drilling and development activities and the GeoSouthern acquisition, which were partially offset by the effect of the asset impairments recognized in the first quarter of 2013.

Asset Impairments


	Three Months Ended March 31, 2013
	Gross		Net of Taxes
	(In millions)
U.S. oil and gas assets	$	1,110	$	707
Canada oil and gas assets		803		601

Total asset impairments	$	1,913	$	1,308

Oil and Gas Impairments

Under the full-cost method of accounting, capitalized costs of oil and gas properties are subject to a quarterly full-cost ceiling test. The oil and gas asset impairments resulted primarily from declines in the U.S. and Canada full-cost ceilings. The lower ceiling values resulted primarily from decreases in the 12-month average trailing prices for oil, bitumen and NGLs, which reduced proved reserve values.

Net Financing Costs


	Three Months Ended March 31,
	2014			2013			Change
	($ in millions)
Interest based on debt outstanding	$	125		$	118			+7	%
Capitalized interest		(16	)		(11	)		+53	%
Other fees and expenses		6			3			+70	%

Interest expense		115			110			+4	%
Interest income		(3	)		(7	)		- 70	%

Net financing costs	$	112		$	103			+9	%

Net financing costs increased during the first three months of 2014 primarily due to higher average debt borrowings along with a decrease in interest income due to a decline in short-term investments and cash equivalents. The additional borrowings primarily relate to funding of the GeoSouthern acquisition.

Restructuring Costs


	Three Months Ended March 31,
	2014		2013
	(In millions)
Canadian divestitures	$	37	$	—
Office consolidation		—		38

Restructuring costs	$	37	$	38

Canadian Divestitures

In the first quarter of 2014, we recognized $37 million of estimated employee related costs associated with our Canadian non-core asset divestitures. Approximately $14 million of the employee related costs resulted from accelerated vesting of share-based grants, which are non-cash charges.

Office Consolidation

In the first quarter of 2013, we incurred $38 million of restructuring costs associated with the consolidation of our U.S. personnel into one location in Oklahoma City. This amount includes $23 million related to office space that is subject to non-cancellable operating lease agreements that we ceased using as a part of the office consolidation. We also recognized $9 million of asset impairment charges for leasehold improvements and furniture associated with the office consolidation.

Income Taxes

The following table presents our total income tax expense (benefit) and a reconciliation of our effective income tax rate to the U.S. statutory income tax rate.


	Three Months Ended March 31,
	2014			2013
Total income tax expense (benefit) (in millions)	$	231		$	(623	)

U.S. statutory income tax rate		35	%		(35	%)
State income taxes		1	%		(1	%)
Taxation on Canadian operations		(3	%)		4	%
Deferred taxes on formation of EnLink		9	%		—
Other		(1	%)		—

Effective income tax rate		41	%		(32	%)

In the first quarter of 2014, we recorded a $48 million deferred tax liability in conjunction with the formation of EnLink, which impacted our effective tax rate as reflected in the table above.

In the second quarter of 2014, we expect to repatriate to the U.S. the after-tax Canadian conventional asset divestiture proceeds of approximately $2.7 billion. Our consolidated balance sheets at December 31, 2013 and March 31, 2014 include the deferred tax liability related to this planned repatriation.

Capital Resources, Uses and Liquidity

Sources and Uses of Cash

The following table presents the major changes in our cash and short-term investments.


	Three Months Ended March 31,
	2014			2013
	(In millions)
Operating cash flow	$	1,410		$	1,002
GeoSouthern acquisition, net of cash received		(5,935	)		—
Capital expenditures		(1,583	)		(1,926	)
Distributions to noncontrolling interests		(100	)		—
Distributions to Devon shareholders		(90	)		(81	)
Debt activity, net		2,026			508
Divestitures of property and equipment		142			29
Other		91			(11	)

Net change in cash and short-term investments	$	(4,039	)	$	(479	)

Cash and short-term investments at end of period	$	2,027		$	6,501

Operating Cash Flow

Net cash provided by operating activities (“operating cash flow”) was a significant source of capital in the first three months of 2014. Our operating cash flow increased 41 percent during 2014 primarily due to higher commodity prices, higher oil realizations and production growth, partially offset by higher expenses.

During the first three months of 2014 and 2013, our operating cash flow funded approximately 90 percent and 50 percent, respectively, of our capital expenditures, excluding the approximately $6.0 billion GeoSouthern acquisition. Leveraging our liquidity, we used cash balances and debt to fund the remainder of our cash-based capital expenditures.

Capital Expenditures

The amounts in the table below reflect cash payments for capital expenditures, including cash paid for capital expenditures incurred in prior periods.


	Three Months Ended March 31,
	2014		2013
	(In millions)
Development	$	1,149	$	1,327
Exploration		106		198
GeoSouthern acquisition - oil and gas		5,850		—
Other acquisitions		22		31

Subtotal		7,127		1,556
Capitalized G&A and interest		79		92

Total oil and gas		7,206		1,648
Midstream		193		219
GeoSouthern acquisition - midstream		85		—
Corporate and other		34		59

Total capital expenditures	$	7,518	$	1,926

Our capital expenditures consist of amounts related to our oil and gas exploration and development operations, our midstream operations and other corporate activities. The vast majority of our capital expenditures are for the acquisition, drilling and development of oil and gas properties, which totaled $7.2 billion and $1.6 billion in the first three months of 2014 and 2013, respectively. The increase in capital spending was due to the approximately $6.0 billion GeoSouthern acquisition. Excluding this acquisition, exploration and development capital spending decreased 18 percent in the first three months of 2014, primarily due to a decline in new venture acreage acquisitions and utilization of the drilling carries in 2014 from our Sinopec and Sumitomo joint venture arrangements.

Capital expenditures for our midstream operations are primarily for the construction and expansion of natural gas processing plants, natural gas gathering systems and oil pipelines. Historically, our midstream capital expenditures have largely been impacted by our oil and gas drilling activities. However, in the future, our midstream capital expenditures will be impacted primarily by EnLink’s operations, as well as by our oil and gas drilling activities.

Debt Activity, Net

During the first three months of 2014, we increased our debt borrowings a net amount of $2.0 billion, which primarily related to additional borrowings used to fund a portion of the GeoSouthern acquisition cost. We also utilized net commercial paper borrowings of $257 million to fund capital expenditures in excess of our operating cash flow. Our debt decreased $500 million due to repayment of senior notes due on January 15, 2014. Additionally, our debt increased $1.7 billion in the first quarter of 2014 in connection with the EnLink transaction, which closed on March 7, 2014. This increase solely arises because we control EnLink and, therefore, consolidate EnLink’s accounts, including its debt, with Devon’s. EnLink’s debt is non-recourse to Devon.

During the first three months of 2013, we utilized net commercial paper borrowings of $508 million to fund capital expenditures in excess of our operating cash flow.

Distributions to Devon shareholders

The following table summarizes our common stock dividends (amounts in millions) during the first three months of 2014 and 2013. In the second quarter of 2013, we increased our quarterly dividend to $0.22 per share.


	Three Months Ended March 31,
	2014				2013
	Amount		Per Share		Amount		Per Share
Dividends	$	90	$	0.22	$	81	$	0.20

Distributions to noncontrolling interests

In conjunction with the formation of EnLink, we paid $100 million to holders of EnLink’s publicly traded units in the first quarter of 2014.

Divestitures

In November 2013, we announced plans to divest certain non-core properties located throughout Canada and the U.S. In the first quarter of 2014, we completed minor divestiture transactions and received proceeds of $142 million.

Liquidity

Historically, our primary sources of capital and liquidity have been our operating cash flow, asset divestiture proceeds and cash on hand. Additionally, we maintain revolving lines of credit and a commercial paper program, which can be accessed as needed to supplement operating cash flow and cash balances. Other available sources of capital and liquidity include debt and equity securities that can be issued pursuant to our shelf registration statement filed with the SEC. We estimate the combination of these sources of capital will continue to be adequate to fund future capital expenditures, debt repayments and other contractual commitments. The following sections discuss changes to our liquidity subsequent to filing our 2013 Annual Report on Form 10-K.

Operating Cash Flow

Our operating cash flow is sensitive to many variables, the most volatile of which are the prices of the oil, gas and NGLs we produce. We expect operating cash flow to continue to be our primary source of liquidity. To mitigate some of the risk inherent in prices, we have utilized various derivative financial instruments to set minimum and maximum prices on a portion of our 2014 production. The key terms to our open oil, gas and NGL derivative financial instruments as of March 31, 2014 are presented in “Part I. Financial Information – Item 1. Financial Statements – Note 3” in this report.

Credit Availability

As of March 31, 2014, we had $3.0 billion of available capacity under our syndicated, unsecured revolving line of credit (the “Senior Credit Facility”), net of letters of credit outstanding. We also have access to $3.0 billion of short-term credit under our commercial paper program. At March 31, 2014, we had $1.6 billion of commercial paper borrowings outstanding.

The Senior Credit Facility contains only one material financial covenant. This covenant requires us to maintain a ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65 percent. As of March 31, 2014, we were in compliance with this covenant with a debt-to-capitalization ratio of 28.3 percent.

The Partnership has a $1.0 billion unsecured revolving credit facility, which includes a $500 million letter of credit subfacility. EnLink also has a $250 million revolving credit facility, which includes a $125 million letter of credit subfacility, as well as an additional credit agreement in association with E2 Energy Services LLC under which EnLink can borrow up to $20 million. As of March 31, 2014, there were no borrowings under the $1.0 billion credit facility, and there was $103 million borrowed under the $250 million credit facility and $15 million borrowed in association with the E2 Energy Services LLC credit facility.

Asset Divestitures

On April 1, 2014, we sold the majority of our Canadian conventional assets to Canadian Natural Resources Limited for approximately $2.7 billion after taxes ($3.125 billion in Canadian dollars). In the second quarter of 2014, we plan to repatriate the sale proceeds into the U.S. and repay the $2.0 billion term loan that funded a portion of the GeoSouthern acquisition cost.

Contractual Obligations

A summary of our contractual obligations as of March 31, 2014, is provided in the following table.


	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(In millions)
Debt (1)	$	15,504	$	3,773	$	2,000	$	2,325	$	7,406
Interest expense (2)		8,143		553		1,087		975		5,528
Purchase obligations (3)		6,216		643		1,817		1,756		2,000
Operational agreements (4)		5,555		721		1,770		1,694		1,370
Asset retirement obligations (5)		1,574		46		79		77		1,372
Drilling and facility obligations (6)		372		337		27		2		6
Lease obligations (7)		277		33		72		61		111
Other (8)		298		133		67		45		53

Total	$	37,939	$	6,239	$	6,919	$	6,935	$	17,846

(1)	Debt amounts represent scheduled maturities of our debt obligations at March 31, 2014, excluding $8 million of net premiums included in the carrying value of debt.

(2)	Interest expense represents the scheduled cash payments on long-term, fixed-rate debt and an estimate of our floating-rate debt.

(3)

Purchase obligation amounts represent contractual commitments primarily to purchase condensate at market prices for use at our heavy oil projects in Canada. We have entered into these agreements because condensate is an integral part of the heavy oil transportation process. Any disruption in our ability to obtain condensate could negatively affect our ability to transport heavy oil at these locations. Our total obligation related to condensate purchases expires in 2021. The value of the obligation in the table above is based on the contractual volumes and our internal estimate of future condensate market prices.

(4)

Operational agreements represent commitments to transport or process certain volumes of oil, gas and NGLs for a fixed fee. We have entered into these agreements to aid the movement of our production to downstream markets. The operational agreements in the table above are as of March 31, 2014 but have been adjusted for the agreements transferred to Canadian Natural Resources Limited as a part of the sale of the Canadian conventional assets in April 2014.Operational agreements include approximately $2.2 billion of obligations between Devon and EnLink. The terms of the contracts with EnLink are summarized in the following table.


Contract	Contract Terms (Years)		Minimum Gathering Volume Commitment (MMcf/d)		Minimum Processing Volume Commitment (MMcf/d)		Minimum Volume Commitment Term (Years)		Annual Rate Escalators
Bridgeport gathering and processing contract		10		850		650		5		CPI
East Johnson County gathering contract		10		125		—		5		CPI
Northridge gathering and processing contract		10		40		40		5		CPI
Cana gathering and processing contract		10		330		330		5		CPI

(5)

Asset retirement obligations represent estimated discounted costs for future dismantlement, abandonment and rehabilitation costs. The obligations in the table above are as of March 31, 2014 but have been adjusted for the estimated obligations transferred to Canadian Natural Resources Limited as a part of the sale of the Canadian conventional assets in April 2014.

(6)	Drilling and facility obligations represent contractual agreements with third-party service providers to procure drilling rigs and other related services for developmental and exploratory drilling and facilities construction.

(7)	Lease obligations consist primarily of non-cancelable leases for office space and equipment used in our daily operations.

(8)	These amounts include $227 million related to uncertain tax positions. The “other” in the table above as of March 31, 2014 has been adjusted for the obligations transferred to Canadian Natural Resources Limited as a part of the sale of the Canadian conventional assets in April 2014.

Critical Accounting Estimates

Devon conducts its annual goodwill impairment test as of October 31 each year. At October 31, 2013, the date of our last goodwill impairment test, the fair values of our U.S. and Canadian reporting units exceeded their related carrying values. The fair value of our U.S. reporting unit substantially exceeded its carrying value. However, the fair value of our Canadian reporting unit is not substantially in excess of its carrying value. As of October 31, 2013, the fair value of our Canadian reporting unit exceeded its carrying value by approximately 11 percent. As of March 31, 2014, we had $2.7 billion of goodwill allocated to the Canadian reporting unit. Significant decreases to our stock price, decreases in commodity prices, negative deviations from projected Canadian reporting unit earnings or unfavorable changes in reserves could result in a goodwill impairment charge. A goodwill impairment charge would have no effect on liquidity or capital resources. However, it would adversely affect our results of operations in that period.

Non-GAAP Measures

We make reference to “adjusted earnings attributable to Devon” and “adjusted earnings per share attributable to Devon” in “Overview of 2014 Results” in this Item 2 that are not required by or presented in accordance with GAAP. These non-GAAP measures should not be considered as alternatives to GAAP measures. Adjusted earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain non-cash or non-recurring items that are typically excluded by securities analysts in their published estimates of our financial results. Our non-GAAP measures are typically used as a quarterly performance measure. Items may appear to be recurring while comparing on an annual basis. In the below table, restructuring costs were incurred in each period. However, these costs relate to different restructuring programs. Amounts excluded for the first quarter of 2014 relate to our Canadian divestiture program and amounts excluded for the first quarter of 2013 relate to our office consolidation. For more information on our restructuring programs see Note 6 to the financial statements included in this report. We believe these non-GAAP measures facilitate comparisons of our performance to earnings estimates published by securities analysts. We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers.

Adjusted Earnings and Adjusted Earnings Per Share Attributable to Devon

Below are reconciliations of our adjusted earnings and earnings per share attributable to Devon to their comparable GAAP measures.


	Three Months Ended March 31,
	2014			2013
	(In millions, except per share amounts)
Net earnings (loss) attributable to Devon (GAAP)	$	324		$	(1,339	)
Adjustments (net of taxes):
Derivatives and other financial instruments		221			213
Cash settlements on derivatives and financial instruments		(64	)		64
Deferred income taxes on formation of EnLink		48			—
Restructuring costs		28			24
Gain on sale of assets		(10	)		—
Asset impairments		—			1,308

Adjusted earnings attributable to Devon (Non-GAAP)	$	547		$	270

Earnings (loss) per share attributable to Devon (GAAP)	$	0.79		$	(3.34	)
Adjustments (net of taxes):
Derivatives and other financial instruments		0.54			0.53
Cash settlements on derivatives and financial instruments		(0.16	)		0.16
Deferred income taxes on formation of EnLink		0.12			—
Restructuring costs		0.07			0.06
Gain on sale of assets		(0.02	)		—
Asset impairments		—			3.25

Adjusted earnings per share attributable to Devon (Non-GAAP)	$	1.34		$	0.66

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

We have commodity derivatives that pertain to a portion of our production for the last nine months of 2014, as well as 2015 and 2016. The key terms to our open oil, gas and NGL derivative financial instruments as of March 31, 2014 are presented in “Part I. Financial Information – Item 1. Financial Statements – Note 3” in this report.

The fair values of our commodity derivatives are largely determined by estimates of the forward curves of the relevant price indices. At March 31, 2014, a 10 percent change in the forward curves associated with our commodity derivative instruments would have changed our net asset positions by the following amounts:


	10% Increase			10% Decrease
	(In millions)
Gain (loss):
Gas derivatives	$	(269	)	$	235
Oil derivatives	$	(597	)	$	539

Interest Rate Risk

At March 31, 2014, we had total debt outstanding of $15.5 billion. Of this amount, $11.0 billion bears fixed interest rates averaging 4.9 percent. The remaining $4.5 billion of debt is comprised of commercial paper borrowings that bear interest rates averaging 0.23 percent and floating rate debt that at March 31, 2014 had rates averaging 1.3 percent. Our commercial paper borrowings typically have maturities between 1 and 90 days.

As of March 31, 2014, we had open interest rate swap positions that are presented in “Part I. Financial Information – Item 1. Financial Statements – Note 3” in this report. The fair values of our interest rate swaps are largely determined by estimates of the forward curves of the 3 month LIBOR rate. A 10 percent change in these forward curves would not have materially impacted our balance sheet at March 31, 2014.

Foreign Currency Risk

Our net assets, net earnings and cash flows from our Canadian subsidiaries are based on the U.S. dollar equivalent of such amounts measured in the Canadian dollar functional currency. Assets and liabilities of the Canadian subsidiaries are translated to U.S. dollars using the applicable exchange rate as of the end of a reporting period. Revenues, expenses and cash flow are translated using an average exchange rate during the reporting period. A 10 percent unfavorable change in the Canadian-to-U.S. dollar exchange rate would not materially impact our March 31, 2014 balance sheet.

Our non-Canadian foreign subsidiaries have a U.S. dollar functional currency. However, one of these foreign subsidiaries holds Canadian-dollar cash and engages in short-term intercompany loans with Canadian subsidiaries that are based in Canadian dollars. The value of the Canadian-dollar cash and intercompany loans increases or decreases from the remeasurement of the cash and loans into the U.S. dollar functional currency. Additionally, at March 31, 2014, we held foreign currency exchange forward contracts to hedge exposures to fluctuations in exchange rates on the Canadian-dollar cash and intercompany loans. The increase or decrease in the value of the forward contracts is offset by the increase or decrease to the U.S. dollar equivalent of the Canadian-dollar cash and intercompany loans. Based on the amount of the cash and intercompany loans as of March 31, 2014, a 10 percent change in the foreign currency exchange rates would not have materially impacted our balance sheet.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to Devon, including its consolidated subsidiaries, is made known to the officers who certify Devon’s financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of March 31, 2014, to ensure that the information required to be disclosed by Devon in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

Changes in Internal Control Over Financial Reporting

In conjunction with the formation of EnLink in the first quarter of 2014, we implemented additional internal controls related to EnLink’s financial amounts included in our consolidated financial statements. Except for these changes, there were no other changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. Other Information

Item 1. Legal Proceedings

There have been no material changes to the information included in Item 3. “Legal Proceedings” in our 2013 Annual Report on Form 10-K.

Item 1A. Risk Factors

There have been no material changes to the information included in Item 1A. “Risk Factors” in our 2013 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding purchases of our common stock that were made by us during the first quarter of 2014.


Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share
January 1 – January 31		22,626	$	59.73
February 1 – February 28		14,873	$	61.68
March 1 – March 31		7,054	$	65.80

Total		44,553	$	61.34

(1)	Share repurchases represent shares received by us from employees and directors for the payment of personal income tax withholding on restricted stock vesting and stock option exercises.

Under the Devon Energy Corporation Incentive Savings Plan (the “Plan”), eligible employees may purchase shares of our common stock through an investment in the Devon Stock Fund (the “Stock Fund”), which is administered by an independent trustee. Eligible employees purchased approximately 18,600 shares of our common stock in the first quarter of 2014, at then-prevailing stock prices, that they held through their ownership in the Stock Fund. We acquired the shares of our common stock sold under the Plan through open-market purchases.

Similarly, under the Devon Canada Corporation Savings Plan (the “Canadian Plan”), eligible Canadian employees may purchase shares of our common stock through an investment in the Canadian Plan, which is administered by an independent trustee, Sun Life Assurance Company of Canada. Eligible Canadian employees purchased approximately 700 shares of our common stock in the first quarter of 2014, at then-prevailing stock prices, that they held through their ownership in the Canadian Plan. We acquired the shares sold under the Canadian Plan through open-market purchases. These shares and any interest in the Canadian Plan were offered and sold in reliance on the exemptions for offers and sales of securities made outside of the U.S., including under Regulation S for offers and sales of securities to employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the U.S.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

(a) Exhibits required by Item 601 of Regulation S-K are as follows:


Exhibit Number		Description

10.1		Devon Energy Corporation Incentive Savings Plan, as amended and restated effective January 1, 2013.

10.2		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.3		Devon Energy Corporation Amendment 2014-2, executed March 7, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.4		Devon Energy Corporation Amendment 2014-3, executed March 19, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.5		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan.

10.6		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Benefit Restoration Plan.

10.7		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Defined Contribution Restoration Plan.

10.8		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Contribution Plan.

10.9		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Retirement Income Plan.

31.1		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INDEX TO EXHIBITS


Exhibit Number		Description

10.1		Devon Energy Corporation Incentive Savings Plan, as amended and restated effective January 1, 2013.

10.2		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.3		Devon Energy Corporation Amendment 2014-2, executed March 7, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.4		Devon Energy Corporation Amendment 2014-3, executed March 19, 2014, to the Devon Energy Corporation Incentive Savings Plan.

10.5		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan.

10.6		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Benefit Restoration Plan.

10.7		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Defined Contribution Restoration Plan.

10.8		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Contribution Plan.

10.9		Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Retirement Income Plan.

31.1		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 10.1

DEVON ENERGY CORPORATION

INCENTIVE SAVINGS PLAN

As Amended and Restated Effective January 1, 2013

TABLE OF CONTENTS


		Page
ARTICLE I	BACKGROUND AND STATEMENT OF PURPOSE		1

1.01	Background		1
1.02	Purposes		1
1.03	Rights Affected		1
1.04	Qualification under the Internal Revenue Code		1
1.05	Documents		1

ARTICLE II	DEFINITIONS		2

2.01	“Account”		2
2.02	“Actual Deferral Percentage”		2
2.03	“Affiliated Company”		2
2.04	“Alternate Payee”		2
2.05	“Annual Addition”		2
2.06	“Asset Allocation Fiduciary”		3
2.07	“Automatic Enrollment Date”		3
2.08	“Average Actual Deferral Percentage”		3
2.09	“Average Contribution Percentage”		3
2.10	“Beneficiary”		3
2.11	“Benefit Payment Date”		3
2.12	“Board of Directors”		3
2.13	“Code”		4
2.14	“Committee”		4
2.15	“Company”		4
2.16	“Company Common Stock”		4
2.17	“Company Common Stock Account”		4
2.18	“Company Common Stock Fund”		4
2.19	“Company Retirement Contribution”		4
2.20	“Company Retirement Contribution Account”		4
2.21	“Company Retirement Contribution Eligible Participant”		4
2.22	“Compensation”		4
2.23	“Contribution Percentage”		5
2.24	“Disability”		6
2.25	“Effective Date”		6
2.26	“Eligible Borrower”		6
2.27	“Eligible Employee”		6
2.28	“Employee”		7
2.29	“Employment Commencement Date”		7
2.30	“Employer”		7
2.31	“ERISA”		7
2.32	“Highly Compensated Employee”		7
2.33	“Hour of Service”		7
2.34	“Investment Committee”		7
2.35	“Investment Fund”		8
2.36	“Loan Account”		8

TABLE OF CONTENTS

(continued)


		Page
2.37	“Matching Contribution”		8
2.38	“Matching Contribution Account”		8
2.39	“Named Fiduciary”		8
2.40	“Non-Highly Compensated Employee”		8
2.41	“Normal Retirement Age”		8
2.42	“Participant”		8
2.43	“Participating Employer”		8
2.44	“Pension Plan”		8
2.45	“Period of Severance”		8
2.46	“Plan”		9
2.47	“Plan Year”		9
2.48	“QDRO”		9
2.49	“Qualified Matching Contribution”		9
2.50	“Qualified Matching Contribution Account”		9
2.51	“Qualified Military Service”		9
2.52	“Qualified Nonelective Contribution”		9
2.53	“Qualified Nonelective Contribution Account”		9
2.54	“Reemployment Commencement Date”		9
2.55	“Rollover Account”		9
2.56	“Rollover Contributions”		9
2.57	“Roth 401(k) Account”		10
2.58	“Roth 401(k) Contribution”		10
2.59	“Roth Rollover Account”		10
2.60	“Roth Rollover Contributions”		10
2.61	“Salary Deferral Account”		10
2.62	“Salary Deferrals”		10
2.63	“Severance from Service”		10
2.64	“Severance Date”		10
2.65	“Spouse”		10
2.66	“Target Fund”		11
2.67	“Thunder Creek Employee”		11
2.68	“Trust Agreement”		11
2.69	“Trustee”		11
2.70	“Trust Fund”		11
2.71	“Valuation Date”		11
2.72	“Years of Credited Service”		11
2.73	“Years of Service”		11

ARTICLE III	PARTICIPATION ELIGIBILITY		13

3.01	Eligibility to Participate		13
3.02	Ineligible Employees		13
3.03	Re-employment		13
3.04	Transfer of Employment		13
3.05	Procedure for and Effect of Participation		13
3.06	Plan Mergers and Asset Transfers		13

TABLE OF CONTENTS

(continued)


		Page
ARTICLE IV	CONTRIBUTIONS		14

4.01	Salary Deferral Contributions and Roth 401(k) Contributions		14
4.02	Increase in or Reduction of Salary Deferrals and/or Roth 401(k) Contributions		15
4.03	Combined Limit on Contributions		15
4.04	Company Retirement Contributions		15
4.05	Matching Contributions		17
4.06	Rollover Contributions		18
4.07	Qualified Nonelective Contributions and Qualified Matching Contributions		19
4.08	Contributions With Respect to Military Service		20
4.09	Timing of Contributions		21
4.10	Contingent Nature of Contributions		21
4.11	Exclusive Benefit; Refund of Contributions		21

ARTICLE V	LIMITATIONS ON CONTRIBUTIONS		23

5.01	Calendar Year Limitation on Salary Deferrals and Roth 401(k) Contributions		23
5.02	Nondiscrimination Limitations on Salary Deferrals, Roth 401(k) Contributions, and Matching Contributions		24
5.03	Correction of Discriminatory Contributions		25
5.04	Annual Additions Limitations		26

ARTICLE VI	INVESTMENT AND VALUATION OF TRUST FUND; MAINTENANCE OF ACCOUNTS		28

6.01	Investment of Assets		28
6.02	Investment in Investment Funds		28
6.03	Investment Elections		28
6.04	Change of Election		29
6.05	Transfers Between Investment Funds		29
6.06	Individual Accounts		29
6.07	Valuation		29
6.08	Voting and Tender of Mutual Fund Shares		29
6.09	Special Rules for Company Common Stock Fund		30
6.10	Fiduciary Responsibility		31
6.11	Transfer of Employment to a Participating Employer		32

ARTICLE VII	VESTING		33

7.01	Full and Immediate Vesting of Salary Deferrals, Roth 401(k) Contributions, Qualified Nonelective Contributions, Qualified Matching Contributions and Rollovers		33
7.02	Vesting of Employer Contributions		33
7.03	Effects of Certain Periods of Severance		34
7.04	Forfeiture of Nonvested Amounts and Restoration upon Reemployment		34

iii

TABLE OF CONTENTS

(continued)


		Page
ARTICLE VIII	BENEFIT DISTRIBUTIONS		35

8.01	Death Benefits		35
8.02	Benefits upon Severance from Service		35
8.03	Form and Timing of Benefit Payment		36
8.04	Withdrawals		37
8.05	Beneficiary Designation Right		39
8.06	Domestic Relations Orders		40
8.07	Post Distribution Credits		41
8.08	Direct Rollovers		41
8.09	Waiver of 2009 Required Distributions		42

ARTICLE IX	PARTICIPANT LOANS		43

9.01	Loans in General		43
9.02	Loans as Trust Fund Investments		44

ARTICLE X	PROVISIONS RELATING TO TOP-HEAVY PLANS		48

10.01	Definitions		48
10.02	Determination of Top-Heavy Status		49
10.03	Top-Heavy Plan Minimum Allocation		50

ARTICLE XI	ALLOCATION AND DELEGATION OF AUTHORITY		51

11.01	Delegation		51
11.02	Authority and Responsibilities of the Committee		51
11.03	Authority and Responsibilities of the Trustee		51
11.04	Authority and Responsibilities of the Investment Committee		51
11.05	Authority and Responsibilities of the Asset Allocation Fiduciary		52
11.06	Limitations on Obligations of Named Fiduciaries		52
11.07	Designation and Delegation		52
11.08	Engagement of Assistants and Advisers		52
11.09	Payment of Expenses		52
11.10	Indemnification		52
11.11	Bonding		53

ARTICLE XII	ADMINISTRATION		54

12.01	Committee		54
12.02	Authority and Responsibility of the Committee		54
12.03	Investment Committee		56
12.04	Committee Procedures		56
12.05	Serving in More than One Capacity		56
12.06	Appointment of the Trustee		56
12.07	Reporting and Disclosure		56
12.08	Construction of the Plan		57

TABLE OF CONTENTS

(continued)


		Page
12.09	Compensation of the Committee and the Investment Committee		57
12.10	Ministerial Functions		57
12.11	Allocation of Duties and Responsibilities		57

ARTICLE XIII	APPLICATION FOR BENEFITS AND CLAIMS PROCEDURES		58

13.01	Application for Benefits		58
13.02	Claims Procedure		58

ARTICLE XIV	AMENDMENT AND TERMINATION		61

14.01	Amendment		61
14.02	Amendments to the Vesting Schedule		61
14.03	Plan Termination		62
14.04	Mergers and Consolidations of Plans		62

ARTICLE XV	CHANGE OF CONTROL		63

15.01	Change of Control		63
15.02	Amendment of this ARTICLE XV by the Company		65

ARTICLE XVI	MISCELLANEOUS PROVISIONS		66

16.01	Nonalienation of Benefits		66
16.02	No Contract of Employment		66
16.03	Severability of Provisions		66
16.04	Heirs, Assigns and Personal Representatives		66
16.05	Headings and Captions		66
16.06	Gender and Number		66
16.07	Controlling Law		67
16.08	Funding Policy		67
16.09	Title to Assets; Source of Benefits		67
16.10	Payments to Minors, Etc		67
16.11	Reliance on Data and Consents		67
16.12	Deemed Acceptance of Act or Omission by a Plan Fiduciary		67
16.13	Lost Payees		68
16.14	No Warranties		68
16.15	Multiple Employer Plan Provisions		68
16.16	Notices		69

APPENDIX A	DIRECT TRANSFER FROM KERR-MCGEE CORPORATION SAVINGS INVESTMENT PLAN		A-1

APPENDIX B	PENNZENERGY COMPANY SAVINGS AND INVESTMENT PLAN MERGER		B-1

APPENDIX C	SANTA FE ENERGY SNYDER SAVINGS INVESTMENT PLAN MERGER		C-1

APPENDIX D	MITCHELL ENERGY & DEVELOPMENT CORP. THRIFT & SAVINGS PLAN MERGER		D-1

APPENDIX E	OCEAN RETIREMENT SAVINGS PLAN MERGER		E-1

APPENDIX F	THUNDER CREEK GAS SERVICES, L.L.C. RETIREMENT SAVINGS PLAN MERGER		F-1

ARTICLE I

BACKGROUND AND STATEMENT OF PURPOSE

1.01 Background . The Devon Energy Corporation Incentive Savings Plan (the “ Plan ”) is maintained by Devon Energy Corporation (the “ Company ”). The Plan was originally established by the Company on January 1, 1990. The Plan was amended and restated effective as of October 1, 2007. The Plan most recently was amended and restated generally effective January 1, 2012 to reflect certain design changes, incorporate amendments and make certain other clarifying changes. The Plan again is amended and restated generally effective January 1, 2013 (the “ Effective Date ”), except as otherwise required by law or provided herein, to (a) incorporate recent amendments and (b) to make certain other clarifying changes.

1.02 Purposes . The purposes of the Plan are to encourage systematic savings to meet the financial needs of Eligible Employees both during active employment and during retirement and to make available a number of investment vehicles for such savings.

1.03 Rights Affected . Except as otherwise required by law or an amendment or as provided to the contrary herein, the provisions of this amended and restated Plan shall apply only to Employees who complete an Hour of Service on or after the Effective Date. The rights of any other person shall be governed by the Plan as in effect on the date of his Severance from Service, except to the extent expressly provided in any amendment adopted subsequently thereto.

1.04 Qualification under the Internal Revenue Code . It is intended that the Plan be a qualified profit-sharing plan within the meaning of Code section 401(a), that the requirements of Code section 401(k) or 414(v) be satisfied as to that portion of the Plan represented by contributions made pursuant to Participant Salary Deferral elections, that the requirements of Code section 401(m) be satisfied as to that portion of the Plan represented by Matching Contributions and that the trust or other funding vehicle associated with the Plan be exempt from federal income taxation pursuant to the provisions of Code section 501(a). The Company Common Stock Fund has been designated an employee stock ownership plan as defined in Code section 4975(e)(7).

1.05 Documents . The Plan consists of the Plan document as set forth herein, and any amendment thereto. Certain provisions relating to the Plan and its operation are contained in the corresponding Trust Agreement (or documents establishing any other funding vehicle for the Plan), and any amendments, supplements, appendices and riders to any of the foregoing.

ARTICLE II

DEFINITIONS

2.01 “ Account ” shall mean the entire interest of a Participant in the Plan. A Participant’s Account shall consist of one or more separate accounts reflecting the various types of contributions permitted under the Plan, as hereinafter provided. Without limiting the foregoing, the term “Account” shall also include any separate account established for purposes of accounting for the assets that have been transferred to the Trust Fund from another plan. Participants’ rights with respect to such separate accounts shall be determined in accordance with the terms of the Plan or, if applicable, the terms of the Plan as in effect at the time such separate accounts were established.

2.02 “ Actual Deferral Percentage ” shall mean the ratio (expressed as a percentage to the nearest one-hundredth of one percent) of (a) (1) an active Participant’s Salary Deferrals and Roth 401(k) Contributions for the Plan Year (excluding any Salary Deferrals and Roth 401(k) Contributions that are (A) taken into account in determining the Contribution Percentage, (B) distributed to an active Participant who is not a Highly Compensated Employee pursuant to a claim for distribution under Section 5.01, (C) returned to the Participant pursuant to Section 5.04 or (D) contributed pursuant to Section 4.01(b)), plus (2) at the election of the Committee, any portion of the Qualified Nonelective Contributions allocated to the Participant for the Plan Year permitted to be taken into account under Code section 401(k), plus (3) in the case of any Highly Compensated Employee who is eligible to participate in more than one cash or deferred arrangement maintained by the Employer or an Affiliated Company, elective deferrals made on his behalf under all such arrangements (excluding those that are not permitted to be aggregated with the Plan under Treas. Reg. §1.401(k)-1(b)(4)) for the Plan Year, to (b) the Participant’s Compensation for the entire Plan Year, including the portion of the Plan Year when he was an Employee but was not eligible to participate in the Plan.

2.03 “ Affiliated Company ” shall mean any entity which (a) with the Company or a Participating Employer, as applicable, constitutes (1) a “controlled group of corporations” within the meaning of Code section 414(b), (2) a “group of trades or businesses under common control” within the meaning of Code section 414(c), or (3) an “affiliated service group” within the meaning of Code section 414(m), or (b) is required to be aggregated with the Company or a Participating Employer, as applicable, pursuant to Treasury Regulations under Code section 414(o). An entity shall be considered an Affiliated Company only with respect to such period as the relationship described in the preceding sentence exists. For purposes of Section 2.05 or 5.04, “Affiliated Company” shall mean an Affiliated Company, but determined with “more than 50 percent” substituted for the phrase “at least 80 percent” in Code section 1563(a)(1) when applying Code sections 414(b) and (c).

2.04 “ Alternate Payee ” shall mean the person entitled to receive payment of benefits under the Plan pursuant to a QDRO.

2.05 “ Annual Addition ” shall mean, for any Participant for any Plan Year, the sum of the following amounts allocated to a Participant’s Accounts under the Plan and any other qualified defined contribution plan maintained by the Employer or an Affiliated Company:

(a) Employer contributions (including Matching Contributions, Salary Deferral amounts, except Salary Deferrals contributed pursuant to Section 4.01(b) or distributed pursuant to Section 5.01, Roth 401(k) Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and Qualified Matching Contributions);

(b) Participant contributions (including mandatory or voluntary employee contributions made under a qualified defined benefit plan of the Employer or an Affiliated Company, but excluding Rollover Contributions and amounts repaid pursuant to Section 9.02(f));

(d) amounts described in Code section 415(l)(1) (relating to contributions allocated to individual medical accounts which are part of a pension or annuity plan) and Code section 419A(d)(2) (relating to contributions allocated to post-retirement medical benefit accounts for key employees).

2.06 “ Asset Allocation Fiduciary ” shall mean, if and to the extent appointed by the Investment Committee, the Named Fiduciary with the authority and responsibilities set forth in Section 11.05.

2.07 “ Automatic Enrollment Date ” shall mean, for each Eligible Employee who has an Employment Commencement Date on and after January 1, 2008 and who does not make an affirmative election to make (or not to make) Salary Deferrals to the Plan in accordance with Section 4.01, the first day of the payroll period commencing as soon as administratively practicable following the Eligible Employee’s Employment Commencement Date.

2.08 “ Average Actual Deferral Percentage ” shall mean the average (expressed as a percentage to the nearest one-hundredth of one percent) of the Actual Deferral Percentages of a specified group of active Participants.

2.09 “ Average Contribution Percentage ” shall mean the average (expressed as a percentage to the nearest one-hundredth of one percent) of the Contribution Percentages of a specified group of active Participants.

2.10 “ Beneficiary ” shall mean the person or entity designated or otherwise determined to be such in accordance with Section 8.05.

2.11 “ Benefit Payment Date ” shall mean, for any Participant or Beneficiary of a deceased Participant, the date as of which the first benefit payment from a Participant’s Account is due; provided, however, that the Benefit Payment Date applicable to any amount withdrawn pursuant to Section 8.03 shall not be taken into account in determining the Participant’s Benefit Payment Date with respect to the remainder of his Account.

2.12 “ Board of Directors ” shall mean the board of directors of the Company or a committee of the Board of Directors to which the Board of Directors has delegated some or all of its responsibilities hereunder.

2.13 “ Code ” shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time, and any successor statute of similar purpose.

2.14 “ Committee ” shall mean the Benefits Committee appointed by the Compensation Committee of the Board of Directors to administer the Plan or an individual or entity to which the Committee has delegated some or all of its responsibilities.

2.15 “ Company ” shall mean Devon Energy Corporation, a Delaware corporation, and its successors.

2.16 “ Company Common Stock ” shall mean the voting common stock of Devon Energy Corporation.

2.17 “ Company Common Stock Account ” shall mean the Account to which the Trustee shall credit: (a) the Participant’s allocable share of Company Common Stock Fund purchased by the Trustee or contributed by the Company to the Trust Fund for that year; (b) the Participant’s allocable share of any forfeitures of Company Common Stock Fund arising under the Plan during that year; and (c) any stock dividends declared and paid during that year on Company Common Stock credited to the Participant’s Company Common Stock Account.

2.18 “ Company Common Stock Fund ” shall mean a separate Investment Fund invested primarily in Company Common Stock.

2.19 “ Company Retirement Contribution ” shall mean a contribution made by an Employer pursuant to Section 4.04.

2.20 “ Company Retirement Contribution Account ” shall mean so much of a Participant’s Account attributable to Company Retirement Contributions allocated to such Participant’s Account, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable thereagainst and all withdrawals and distributions therefrom.

2.21 “ Company Retirement Contribution Eligible Participant ” shall mean a Participant who: (i) became employed before October 1, 2007 and voluntarily elected to cease or to not begin accruing a benefit under the Pension Plan; (ii) has an Employment Commencement Date on or after October 1, 2007; (iii) has an Employment Commencement Date before October 1, 2007 and ceases to be an active participant under the Pension Plan; (iv) is a nonresident alien Employee paid through the Employer’s United States payroll; or (v) is a Thunder Creek Employee.

2.22 “ Compensation ” shall mean for any Employee for any Plan Year:

(a) Except as otherwise provided in this definition, (i) all base pay, overtime pay and annual discretionary performance bonuses (which, by example, shall not include stay payments, signing bonuses, Christmas or holiday bonuses, or retention bonuses, among other items) paid to a Participant by the Employer during a Plan Year, (ii) any amounts deferred or excluded from gross income pursuant to Code section 401(k), 125 (which shall be deemed to include any amounts not available to a Participant in cash in lieu of group health coverage

because the Participant is unable to certify that he has other health coverage, so long as the Employer does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the Employer’s health plan), 402(e)(3), 402(h) or 403(b) with respect to employee benefit plans sponsored by the Employer and (iii) amounts that are not includible in the gross income of the Participant by reason Code section 132(f)(4).

(b) Compensation shall include the amount of any differential military wage payments paid to the Participant by the Employer with respect to any period of active military service in accordance with Code sections 3401(h) and 414(u)(12).

(c) Only $200,000 of a Participant’s Compensation (adjusted in accordance with Code section 401(a)(17)(B)) shall be taken into account for purposes of the Plan.

(d) Notwithstanding anything to the contrary herein, Compensation shall not include (i) amounts paid to a Participant after termination of employment as a cash out or payment of unused vacation pay, sick pay or other paid time off or (ii) other amounts paid to a Participant after termination of employment, other than payments made within three weeks of the date of termination of employment and which is regular pay that is paid in accordance with the Employer’s normal payroll processes and which would have been paid to the Participant prior to the termination of employment if the Participant had continued in the employment of the Employer. By way of example, and not limitation, Compensation shall not include severance pay or severance bonus amounts regardless of when such amounts are paid to a Participant.

(e) For purposes of Section 4.08, “Compensation” shall mean the Compensation, as defined in subsection (a), that the Participant would have received during a period of Qualified Military Service (or, if the amount of such Compensation is not reasonably certain, the Participant’s average earnings from the Employer or an Affiliated Company for the 12-month period immediately preceding the Participant’s period of Qualified Military Service); provided, however, that the Participant returns to work within the period during which his right to reemployment is protected by law.

(f) For purposes of applying the nondiscrimination limitations of Section 5.02, the Annual Additions limitations of Section 5.04, the top-heavy provisions of ARTICLE X, and the definition of Highly Compensated Employee, Compensation shall mean compensation as defined in Treas. Reg. § 1.415(c)-2(d)(4) (including all of the mandatory and optional items of compensation described in the special timing rules set forth in Treas. Reg. § 1.415(c)-2(e)).

2.23 “ Contribution Percentage ” shall mean the ratio (expressed as a percentage to the nearest one-hundredth of one percent) of (a) (1) the Matching Contributions allocated to an active Participant’s Account for the Plan Year (excluding any Matching Contributions forfeited pursuant to ARTICLE V), plus (2) at the election of the Committee, any portion of the Qualified Nonelective Contributions or Qualified Matching Contributions allocated to the Participant for the Plan Year required or permitted to be taken into account under Code section 401(m), plus (3) in the case of any Highly Compensated Employee who is eligible to participate in more than one plan maintained by the Employer or an Affiliated Company to which employee or matching contributions are made, after-tax employee contributions and employer matching contributions made on his behalf under all such plans (excluding those that are not permitted to be aggregated

with the Plan under Treas. Reg. §1.401(m)-1(b)(4)) for the Plan Year, to (b) the Participant’s Compensation for the entire Plan Year, including the portion of the Plan Year when he was an Employee but was not eligible to participate in the Plan. For purposes of determining Contribution Percentages, the Employer or the Committee may take Salary Deferrals into account (excluding Salary Deferrals contributed pursuant to Section 4.01(b)) and Roth 401(k) Contributions, in accordance with Treasury Regulations, so long as the requirements of Section 5.02(a) are met both when the Salary Deferrals used in determining Contribution Percentages are and are not included in determining Actual Deferral Percentages.

2.24 “ Disability ” shall mean the definition of such term under the federal Social Security Act where the Participant becomes entitled to, and commences receipt of, disability benefits under such Act.

2.25 “ Effective Date ” shall mean January 1, 2013, the effective date of this amended and restated Plan. The original effective date of the Plan is January 1, 1990.

2.26 “ Eligible Borrower ” means a Participant or Beneficiary who meets the eligibility requirements of Section 9.01(a) for a loan from the Plan.

2.27 “ Eligible Employee ” means:

(a) Except as otherwise provided by this definition, each Employee of the Employer.

(b) Eligible Employees do not include: (1) Employees whose terms and conditions of employment are determined through collective bargaining and set forth in a collective bargaining agreement to which the Employer is a party, where the issue of retirement benefits has been the subject of good faith bargaining, unless such agreement provides for the participation of such Employees in the Plan; (2) any person who is an Employee solely by reason of being a leased employee within the meaning of Code section 414(n) or 414(o); (3) an Employee of the Employer who is a nonresident alien and who does not receive from the Employer any earned income under Code section 911(d)(2) that constitutes income from sources within the United States under Code section 861(a)(3), provided, however, that, a nonresident alien who is paid through the Employer’s United States payroll, shall not be included in this clause (3); (4) any person whose services have been obtained through a separate contract and who is classified as a fee-for-service worker, leased employee, or an independent contractor or otherwise as a person who is not treated as an employee for purposes of withholding federal employment taxes, regardless of any contrary governmental or judicial determination relating to such employment status or tax withholding obligation; (5) any Employee who is employed by a non-U.S. Affiliated Company and whose services with such non-U.S. Affiliated Company are covered by a secondment agreement (or similar agreement) with the Employer; and (6) any person who is classified as an “intern” under the Employer’s standard personnel policies. If a person described in the preceding sentence is subsequently reclassified as, or determined to be, an employee by the Internal Revenue Service, any other governmental agency or authority, or a court, or if an Employer or Affiliated Company is required to reclassify such an individual as an employee as a result of such reclassification or determination (including any reclassification by an Employer or Affiliated Company in settlement of any claim or action relating to such individual’s employment status), such individual shall not become eligible to become a Participant in this Plan by reason of such reclassification or determination.

2.28 “ Employee ” shall mean any person who is employed by the Employer or an Affiliated Company and who is classified by the Employer or Affiliated Company as a common-law employee. A person who is not otherwise employed by an Employer or Affiliated Company shall be deemed to be employed by any such company if (i) he is a leased employee with respect to whose services such Employer or Affiliated Company is the recipient, within the meaning of Code section 414(n) or 414(o), but to whom Code section 414(n)(5) does not apply, or (ii) under common law agency rules, he has performed services for the Employer and/or a related person (within the meaning of Code section 414(n)(6)) under the direction and control of such Employer and/or related person, pursuant to an agreement between the Employer and any other individual or entity, on a substantially full-time basis for a period of at least one year.

2.29 “ Employment Commencement Date ” shall mean, with respect to any person, the first date on which that person performs an Hour of Service or, with respect to a person who has incurred a Period of Severance, the first date following the Period of Severance on which that person performs an Hour of Service.

2.30 “ Employer ” shall mean the Company and any Affiliated Company and Participating Employer as may from time to time participate in the Plan by authorization of the Board of Directors and authorization of the board of directors of such Affiliated Company or Participating Employer, as the case may be.

2.31 “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and any successor statute of similar purpose.

2.32 “ Highly Compensated Employee ” shall mean any Employee who performed services for an Employer or an Affiliated Company during the Plan Year for which a determination is being made (the “ Determination Year ”) and who:

(a) was at any time in the Determination Year or the immediately preceding Determination Year a 5% owner, as defined in Code section 416(i); or

(b) for the immediately preceding Determination Year, received Compensation from the Employer or an Affiliated Company in excess of $80,000, as adjusted by the Secretary of the Treasury in accordance with Code section 414(q).

2.33 “ Hour of Service ” shall mean, for any Employee, an hour for which he is directly or indirectly compensated, or is entitled to be compensated by the Employer or an Affiliated Company, for the performance for duties, including each hour for which he is absent for Qualified Military Service; provided, that the Employee returns to service with the Employer or Affiliated Company within such period as his right to re-employment is protected by law.

2.34 “ Investment Committee ” shall mean the Retirement Plans Investment Committee appointed by the Compensation Committee of the Board of Directors as provided herein.

2.35 “ Investment Fund ” shall mean any of the funds established pursuant to Section 6.02 for the investment of the assets of the Trust Fund.

2.36 “ Loan Account ” shall mean the Account described in Section 9.02 and shall have the meaning set forth therein.

2.37 “ Matching Contribution ” shall mean an Employer contribution made pursuant to Section 4.05.

2.38 “ Matching Contribution Account ” shall mean so much of a Participant’s Account as consists of amounts attributable to Matching Contributions allocated to such Participant’s Account, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable thereagainst and by all withdrawals and distributions therefrom.

2.39 “ Named Fiduciary ” shall mean the Compensation Committee of the Board of Directors, the Trustee, the Investment Committee, the Committee and, if and to the extent appointed, the Asset Allocation Fiduciary. Each Named Fiduciary shall have only those particular powers, duties, responsibilities and obligations as are specifically delegated to him under the Plan or the Trust Agreement. Any fiduciary, if so appointed, may serve in more than one fiduciary capacity and may also serve in a non-fiduciary capacity.

2.40 “ Non-Highly Compensated Employee ” shall mean an Employee who is not a Highly Compensated Employee.

2.41 “ Normal Retirement Age ” shall mean age 65.

2.42 “ Participant ” shall mean an Eligible Employee who meets the eligibility requirements of Section 3.01 and who becomes a Participant as provided in ARTICLE III hereof, or a person who has an undistributed interest in the Trust Fund.

2.43 “ Participating Employer ” means Thunder Creek Gas Services, LLC and any other entity whose employees may be permitted to participate in the Plan by authorization of the Board of Directors but that is not an Affiliated Company.

2.44 “ Pension Plan ” shall mean the Retirement Plan for Employees of Devon Energy Corporation (or any successor plan) as amended from time to time.

2.45 “ Period of Severance ” shall mean a 12-consecutive month period beginning on an Employee’s Severance Date or any anniversary thereof and ending on the next succeeding anniversary of such Severance Date during which the Employee is not credited with at least one Hour of Service. In the case of an Employee who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first day of such absence shall not constitute a Period of Severance. For the purposes of this Section, an absence from work for maternity or paternity reasons means an absence (a) by reason of the pregnancy of the Employee, (b) by reason of the birth of a child of the Employee, (c) by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee, or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement. An Employee’s absence from work for maternity or paternity reasons shall be determined in accordance with such uniform and nondiscriminatory procedures as the Committee may establish.

2.46 “ Plan ” shall mean the Devon Energy Corporation Incentive Savings Plan, as set forth herein, and as the same may from time to time hereafter be amended.

2.47 “ Plan Year ” means the 12-month period that begins January 1 and ends December 31.

2.48 “ QDRO ” shall mean a “qualified domestic relations order” within the meaning of section 206(d)(3)(B) of ERISA and Code section 414(p).

2.49 “ Qualified Matching Contribution ” shall mean a contribution made by an Employer pursuant to Section 4.07.

2.50 “ Qualified Matching Contribution Account ” shall mean so much of a Participant’s Account as consists of amounts attributable to Qualified Matching Contributions allocated to such Participant’s Account, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

2.51 “ Qualified Military Service ” shall mean any service in the uniformed services (as defined in chapter 43 of title 38, United States Code) where the Participant’s right to reemployment is protected by law.

2.52 “ Qualified Nonelective Contribution ” shall mean a contribution made by an Employer pursuant to Section 4.07.

2.53 “ Qualified Nonelective Contribution Account ” shall mean so much of a Participant’s Account as consists of amounts attributable to Qualified Nonelective Contributions allocated to such Participant’s Account, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

2.54 “ Reemployment Commencement Date ” shall mean, with respect to any person, the first date on which that person performs an Hour of Service following his or her most recent Severance from Service.

2.55 “ Rollover Account ” shall mean so much of a Participant’s Account as consists of his Rollover Contributions that are not Roth Rollover Contributions, including all earnings and gains attributable thereto, and reduced by all losses attributable thereto, all expenses chargeable thereto and all withdrawals and distributions therefrom.

2.56 “ Rollover Contributions ” shall mean amounts contributed by an Eligible Employee pursuant to Section 4.06.

2.57 “ Roth 401(k) Account ” shall mean so much of the Participant’s Account under the Plan as is comprised of the Roth 401(k) Contributions credited to the Participant under the Plan, including all earnings and gains attributable thereto, and reduced by all losses attributable thereto, all expenses chargeable thereto and all withdrawals and distributions therefrom.

2.58 “ Roth 401(k) Contribution ” shall mean so much of a Participant’s Account as is attributable to Salary Deferrals irrevocably designated by the Participant as Roth 401(k) Contributions pursuant to Section 4.01(a)(3).

2.59 “ Roth Rollover Account ” shall mean so much of a Participant’s Account as to consist of his Roth Rollover Contribution, including all earnings and gains attributable thereto, and reduced by all losses attributable thereto, all expenses chargeable thereto and all withdrawals and distributions therefrom.

2.60 “ Roth Rollover Contributions ” shall mean amounts contributed by an Eligible Employee pursuant to Section 4.06 and attributable to a direct rollover from a designated Roth contribution account (within the meaning of Code section 402A(b)(2)).

2.61 “ Salary Deferral Account ” shall mean so much of a Participant’s Account as consists of his Salary Deferrals, including all earnings and gains attributable thereto, and reduced by all losses attributable thereto, all expenses chargeable thereto and all withdrawals and distributions therefrom.

2.62 “ Salary Deferrals ” shall mean the portion of a Participant’s Compensation (other than Roth 401(k) Contributions) that is reduced in accordance with Sections 4.01(a) and 4.01(b) and with respect to which a corresponding contribution is made to the Plan by the Employer pursuant to Section 4.01(d).

2.63 “ Severance from Service ” shall mean, for any Employee, his severance from employment, death, retirement, voluntary or involuntary termination, or any other absence or termination that causes him to cease to be an Employee.

2.64 “ Severance Date ” shall mean the earlier of (a) the date on which an Employee incurs a Severance from Service, or (b) the first anniversary of the date that the Employee is otherwise first absent from work from the Employer and all Affiliated Companies (with or without pay) for any other reason (other than a period of long-term disability under a long-term disability plan or program sponsored by the Employer or an approved leave of absence granted in writing by the Employer according to a uniform rule applied without discrimination; provided, that the Employee returns to the employ of the Employer upon completion of the approved leave); provided, however, that an Employee shall not be considered to have had a Severance Date during a period of Qualified Military Service if he returns to active service with the Employer or an Affiliated Company within such period during which his reemployment rights are protected by law.

2.65 “ Spouse ” shall mean “spouse” as defined by the Defense of Marriage Act (Pub. L. No. 104-199) or any superseding federal law that applies for purposes of ERISA. The term “Spouse” shall also include a former Spouse of a Participant to the extent required by a QDRO.

2.66 “ Target Fund ” shall have the meaning assigned in Section 6.02(b).

2.67 “ Thunder Creek Employee ” shall mean an Employee of Thunder Creek Gas Services, LLC.

2.68 “ Trust Agreement ” shall mean the trust instrument executed by the Company and the Trustee for purposes of providing a vehicle for investment of the assets of the Plan.

2.69 “ Trustee ” shall mean the party or parties so designated pursuant to the Trust Agreement and each of their respective successors.

2.70 “ Trust Fund ” shall mean all of the assets of the Plan held by the Trustee under the Trust Agreement.

2.71 “ Valuation Date ” shall mean each business day and such other dates as determined by the Committee.

2.72 “ Years of Credited Service ” shall mean the service credited to a Company Retirement Contribution Eligible Participant for purposes of determining the amount of such Participant’s Company Retirement Contributions pursuant to Section 4.04. The following rules shall apply in calculating Years of Credited Service under the Plan:

(a) Except as otherwise provided herein, Years of Credited Service shall mean the sum of (1) the years of benefit accrual service earned under the Pension Plan, and (2) Years of Service credited under the Plan for periods after December 31, 2007.

(b) For any Company Retirement Contribution Eligible Participant with a Severance from Service on or after October 1, 2007, Years of Credited Service shall not include any Years of Service accumulated prior to such Severance from Service.

(c) For any Company Retirement Contribution Eligible Participant who is a Thunder Creek Employee, Years of Credited Service shall mean Years of Service credited under the Plan.

2.73 “ Years of Service ” shall mean the service credited to an Employee for purposes of determining an Employee’s vested interest in his Account. The following rules shall apply in calculating Years of Service under this Plan.

(a) An Employee shall be credited with full and partial Years of Service for the period from his Employment Commencement Date to his Severance Date. Years of Service shall be calculated on the basis that 12 consecutive months of employment equal one year and nonconsecutive periods of service for vesting purposes that are not disregarded under Section 7.03 shall be aggregated. Fractional periods of a year will be expressed in terms of days. The following additional rules shall apply in calculating Years of Service under this subsection (a):

(1) If an Employee retires, quits or is discharged or otherwise experiences a Severance from Service, the period commencing on the Employee’s Severance Date and ending on the first date on which he again performs an Hour of Service shall be taken into account, if such date is within 12 consecutive months of the date on which he last performed an Hour of Service.

(2) If an Employee is absent from work for a reason other than one specified in Section 2.61 and within 12 months of the first day of such absence, the Employee retires, quits or is discharged, or otherwise experiences a Severance from Service, the period commencing on the first day of such absence and ending on the first day he again performs an Hour of Service shall be taken into account, if such day is within 12 months of the date his absence began.

(3) If a Participant has a Period of Severance, Years of Service before the Period of Severance shall be taken into account only after he completes one Year of Service following the end of such Period of Severance.

(4) Years of Service shall include employment with (i) an Affiliated Company or (ii) a Participating Employer.

ARTICLE III

PARTICIPATION ELIGIBILITY

3.01 Eligibility to Participate .

(a) Each Eligible Employee as of the Effective Date who was eligible to participate in the Plan immediately before the Effective Date shall be eligible to participate in the Plan as of the Effective Date.

(b) Each other Eligible Employee shall be eligible to participate in the Plan immediately upon his Employment Commencement Date.

3.02 Ineligible Employees . In the event an Employee who is not an Eligible Employee becomes an Eligible Employee, such Employee shall be eligible to participate in the Plan immediately upon becoming an Eligible Employee. In the event a Participant becomes ineligible to participate because he is no longer an Eligible Employee, such Employee shall participate immediately upon again becoming an Eligible Employee.

3.03 Re-employment . An Employee or Participant who incurs a Severance Date shall become eligible to participate in the Plan immediately upon his date of rehire as an Eligible Employee.

3.04 Transfer of Employment . If a Participant transfers employment from one Employer to another Employer, such transfer shall not be deemed a Severance from Service for purposes of the Plan.

3.05 Procedure for and Effect of Participation . Each Participant shall complete such forms, either in writing via electronic means, and provide such data as are reasonably required by the Committee as a precondition of such participation. Participation shall commence as soon as administratively practicable after the later of the Eligible Employee’s Employment Commencement Date and the date on which the Eligible Employee has completed the required enrollment procedures for the Plan. Notwithstanding the foregoing, an Eligible Employee shall become a Participant on his Automatic Enrollment Date if such Eligible Employee is deemed to have made an election to reduce his Compensation as set forth in Section 4.01(a)(1). By becoming a Participant, each Eligible Employee shall for all purposes be deemed conclusively to have assented to the terms and provisions of the Plan, the corresponding Trust Agreement, and to all amendments to such instruments.

3.06 Plan Mergers and Asset Transfers . Individuals who have Accounts in the Plan by reason of an asset transfer or plan merger with and into the Plan, but who do not otherwise commence participation in the Plan in accordance with this ARTICLE III shall be subject to the Plan’s terms in the same manner as any other Participant who accumulated an Account in the Plan and then experienced a Severance from Service.

ARTICLE IV

CONTRIBUTIONS

4.01 Salary Deferral Contributions and Roth 401(k) Contributions .

(a) Elections .

(1) Subject to Section 3.04 and the limitations set forth herein and in ARTICLE V, each Participant may elect to reduce any Compensation received during a payroll period beginning on and after the effective date of the election, through payroll reductions, by an amount up to 50% and contribute such amounts to the Plan as Salary Deferrals. Any such election shall be denominated in such percentage multiples or dollar amounts as the Committee may prescribe and shall otherwise be subject to such uniform and non-discriminatory procedures as the Committee may establish. Amounts contributed to the Plan as Salary Deferrals shall be contributed to the Participant’s Salary Deferral Account.

(2) Eligible Employees with an Automatic Enrollment Date shall be deemed to have made an election, effective as of such Automatic Enrollment Date, to reduce his Compensation by 3% and to contribute such amounts to the Plan as Salary Deferrals.

(3) Each Participant may irrevocably designate, in the manner prescribed by the Benefits Committee, in whole percentages, all or any portion of the Salary Deferrals contributed to the Plan under Section 4.01(a)(1) as Roth 401(k) Contributions. Such amounts shall be contributed, through payroll deductions, to a Participant’s Roth 401(k) Account with respect to any payroll period after the date of the election. Any election made under this Section 4.01(a)(3) shall be prospective only.

(4) If a Participant makes a hardship withdrawal from his Accounts under Section 8.04(b), he shall be prohibited from making Salary Deferrals and/or Roth 401(k) Contributions for six months after receipt of the hardship withdrawal.

(b) Additional Salary Deferrals and Roth 401(k) Contributions . Each Participant who has attained, or will attain, age 50 prior to the end of the Participant’s taxable year may elect to reduce his Compensation by an amount equal to the lesser of (A) $5,000 (or such other amount as may be applicable under Code section 414(v)) or (B) the excess of the Participant’s Compensation over the Salary Deferrals and Roth 401(k) Contributions contributed on the Participant’s behalf under subsection (a) above for the Plan Year; provided, however, that Salary Deferrals or Roth 401(k) Contributions shall not be treated as contributed pursuant to this subsection (b) unless the Participant is unable to make additional Salary Deferrals or Roth 401(k) Contributions for the Plan Year under subsection (a) due to limitations imposed by the Plan or applicable federal law. Any such election shall be subject to such uniform and nondiscriminatory procedures as the Committee may establish. Salary Deferrals for the Plan Year under this subsection (b) shall not be subject to the limitations described in ARTICLE V.

(c) Limitation on Salary Deferral Elections and Roth 401(k) Contributions . The Salary Deferrals and/or Roth 401(k) Contributions set forth in a Participant’s elections shall be tentative and shall become final only after the Employer or the Committee has made such adjustments thereto as they (or either of them) deem necessary to maintain the qualified status of the Plan and to satisfy all applicable requirements of Code sections 401(k), 401(m) and/or 414(v).

(d) Contribution and Allocation of Salary Deferrals and Roth 401(k) Contributions . The Employer shall contribute to the Plan with respect to each Plan Year an amount equal to the Salary Deferrals and/or Roth 401(k) Contributions of its Eligible Employees for such Plan Year, as determined pursuant to Salary Deferral and Roth 401(k) Contributions elections in force pursuant to this Section. There shall be allocated to the Salary Deferral Account and/or Roth 401(k) Account of each Participant the Salary Deferrals and/or Salary Deferrals designated as Roth 401(k) Contributions contributed by the Employer to the Plan with respect to that Participant.

4.02 Increase in or Reduction of Salary Deferrals and/or Roth 401(k) Contributions . An active Participant may, in the manner prescribed by the Committee, elect to increase or reduce the rate of his Salary Deferrals and/or Roth 401(k) Contributions (including the cessation or recommencement of such Salary Deferrals and/or Roth 401(k) Contributions) within the limits described in Section 4.01. Any new election made pursuant to this Section shall be prospectively effective as soon as administratively feasible following the Committee’s receipt of the election and shall be subject to such uniform and non-discriminatory procedures as the Committee may establish.

4.03 Combined Limit on Contributions . The Committee, in its sole discretion, may limit the maximum amount of the Salary Deferrals, Roth 401(k) Contributions and Matching Contributions for all Participants or any class of Participants to the extent it determines that such limitation is appropriate or that such limitation is necessary to comply with the applicable requirements of Code sections 401(a), (k) and (m).

4.04 Company Retirement Contributions . The Employer shall make Company Retirement Contributions with respect to each Company Retirement Contribution Eligible Participant as set forth in this Section 4.04. A Company Retirement Contributions Eligible Participant is not required to make Salary Deferrals and/or Roth 401(k) Contributions in order to be eligible to receive Company Retirement Contributions.

(a) Employment Commencement Dates On or After August 1, 2011 . With respect to each Company Retirement Contribution Eligible Participant not entitled to a Company Retirement Contribution set forth in subparagraph (b) below, the Employer shall make a Company Retirement Contribution to the Plan equal to 8% of such Participant’s Compensation for the Plan Year.

(b) Employment Commencement Dates Before August 1, 2011 and Grandfathered Company Retirement Contribution Eligible Participants . With respect to each Company Retirement Contribution Eligible Participant who (i) has an Employment Commencement Date before August 1, 2011 and (ii) does not have a Severance from Service on or after August 1, 2011, and each Grandfathered Company Retirement Contribution Eligible Participant, the Employer shall make a Company Retirement Contribution to the Plan equal to the product of (A) the contribution rate from the table below for such individual based upon his

Years of Credited Service determined as of the first day of the Plan Year, multiplied by (B) such individual’s Compensation for the Plan Year; provided, however, that, effective for Plan Years beginning on and after January 1, 2012, in the event that the anniversary of such individual’s Employment Commencement Date occurring during a Plan Year would result in an increase in the contribution rate based on the table below, the Employer’s Company Retirement Contribution to the Plan for the Plan Year shall be calculated by applying (I) the lower contribution rate to such individual’s Compensation for the Plan Year until the first payroll period after the anniversary of the Employment Commencement Date and (II) the higher contribution rate to such individual’s Compensation for the remainder of the Plan Year beginning on the first payroll period after the anniversary of the Employment Commencement Date. For Plan Years beginning before January 1, 2012, Years of Credited Service shall be determined at the beginning of the applicable Plan Year for which the Company Retirement Contribution is made with respect to such Company Retirement Contribution Eligible Participant, and, in making such determination, partial Years of Credited Service will be rounded up to the next whole Year of Credited Service.


Years of Credited Service		Contribution Rate
0 – 9		8%
10 – 14		12%
15 or more		16%

(c) Allocation of Company Retirement Contributions . Company Retirement Contributions shall be contributed to the Plan by the Employer and allocated to the Company Retirement Contribution Accounts of the Company Retirement Contribution Eligible Participants at such time as the Employer deems to be appropriate, in its sole discretion.

(d) Additional Company Retirement Contribution . Notwithstanding anything in this Section 4.04 to the contrary, for the Plan Year ending on December 31, 2010 and subsequent Plan Years, the Employer shall make an additional Company Retirement Contribution to each Special Company Retirement Contribution Participant (as defined in Section 4.04(e) below) in an amount equal to the difference, if any, between such Participant’s Minimum Company Retirement Contribution (as defined in Section 4.04(e) below) and such Participant’s Company Retirement Contribution determined under subsection (a) or (b) of this Section 4.04, as the case may be. Any such additional Company Retirement Contribution shall be allocated to the Company Retirement Contribution Account of the Special Company Retirement Contribution Participant.

(e) Definitions . For purposes of this Section 4.04:

(1) “ Grandfathered Company Retirement Contribution Eligible Participant ” shall mean a Company Retirement Contribution Eligible Participant who (A) received an offer of employment from an Employer on or before August 1, 2011 that included the contribution rate(s) described in the table in subsection (b); (B) accepted such offer; (C) has an Employment Commencement Date on or after August 1, 2011 and (D) does not have a Severance from Service after becoming a Grandfathered Company Retirement Contribution Eligible Participant.

(2) “ Minimum Company Retirement Contribution ” shall mean 7.5% of the Special Company Retirement Contribution Participant’s Minimum Company Retirement Contribution Compensation (as defined below) with respect to the applicable Plan Year.

(3) “ Minimum Company Retirement Contribution Compensation ” shall mean compensation as defined in Treas. Reg. § 1.415(c)-2(d)(2) and including differential wage payments described in Code section 414(u)(12) made by reason of Qualified Military Service. Only $200,000 (adjusted in accordance with Code section 401(a)(17)(B)) of a Participant’s Minimum Company Retirement Contribution Compensation shall be counted.

(4) “ Special Company Retirement Contribution Participant ” shall mean a Participant who (A) is a Non-Highly Compensated Employee, (B) is at least 21 years old, (C) has at least one Year of Service; and (D) is an Employee on the last day of the applicable Plan Year.

4.05 Matching Contributions .

(a) Matching Contributions and Matching Rates . Subject to the limitations described in ARTICLE V, with respect to each Plan Year, the Employer may contribute to the Plan, on behalf of each Participant who has made Salary Deferrals and/or Roth 401(k) Contributions, a Matching Contribution in an amount as the Employer determines, in its sole discretion, equal to a percentage of such Participant’s Salary Deferrals and/or Roth 401(k) Contributions under Section 4.01(a) for the Plan Year. The Matching Contribution may be subject to such other limitations as the Employer deems appropriate for such Plan Year. No minimum Hours of Service are required for a Participant to be eligible for a Matching Contribution. The matching rate that applies to a Participant shall be determined on the basis of the Participant’s classification as of the first day of the applicable Plan Year to which the matching rate shall apply; provided, however, that if a Participant’s classification is projected to change during the Plan Year, such change in classification shall be deemed to occur on the first day of the applicable Plan Year to which the matching rate shall apply. The matching rates shall be based on the Participant’s classification, the eligibility for which shall be determined by the Employer in a uniform and nondiscriminatory manner, as follows:

(1) A Participant who has attained the fifth anniversary of the later of his or her (i) Employment Commencement Date and (ii) Reemployment Commencement Date shall receive a Matching Contribution equal to 100% of such Participant’s Salary Deferrals and/or Roth 401(k) Contributions, so long as such Salary Deferrals and/or Roth Contributions do not exceed 6% of the Participant’s Compensation for the Plan Year;

(2) A Participant who has not yet attained the fifth anniversary of the later of his or her (i) Employment Commencement Date and (ii) Reemployment Commencement Date shall receive a Matching Contribution equal to 100% of such Participant’s Salary Deferrals and/or Roth 401(k) Contributions, so long as such Salary Deferrals and/or Roth Contributions do not exceed 3% of the Participant’s Compensation for the Plan Year; and

(3) A Participant who (i) was an active participant in the Pension Plan on October 1, 2007, (ii) elected to continue to accrue benefits under the Pension Plan and (iii) is not a Company Retirement Contribution Eligible Participant, shall receive a Matching Contribution equal to 100% of such Participant’s Salary Deferrals and/or Roth 401(k) Contributions, so long as such Salary Deferrals and/or Roth Contributions do not exceed 6% of the Participant’s Compensation for the Plan Year.

(b) Allocation . Matching Contributions made pursuant to this Section 4.05 shall be allocated to the Matching Contribution Accounts of the Participants who are eligible to share in such contributions at such time as the Employer deems to be appropriate, in its sole discretion. If Matching Contributions are allocated prior to the end of the Plan Year, such allocations shall be made to the Matching Contribution Accounts of the Participants who are otherwise eligible to receive them regardless of whether such Participant has a Severance from Service.

(c) True-Up Matching Contribution . In the event that the Employer makes Matching Contributions more frequently than once per Plan Year, the Employer may make a one-time “True-Up Matching Contribution” to a Participant for a Plan Year equal to the amount by which, if any, the sum of all prior Matching Contributions made during the Plan Year on behalf of the Participant is less than the amount of the Matching Contribution that would have been made on behalf of the Participant if the Matching Contribution had been calculated and made only once at the end of the Plan Year. Unless otherwise determined by the Employer at the time the Employer designates the nature and amount of the Matching Contribution, a Participant must be an Employee on the last day of a Plan Year in order to be eligible to receive a True-Up Matching Contribution for that Plan Year.

4.06 Rollover Contributions . Subject to such uniform and nondiscriminatory procedures established by the Committee, the Plan shall accept, as “Rollover Contributions” made on behalf of any Eligible Employee, cash equal to: (1) all or a portion of the amount (excluding after-tax contributions) received by the Eligible Employee as a distribution from, or (2) an amount (excluding after-tax contributions) transferred directly to the Plan (pursuant to Code section 401(a)(31)) on the Eligible Employee’s behalf by the trustee of an eligible rollover plan as defined in Section 8.08, but only if the deposit qualifies as a rollover as defined in Code section 402 (or Code section 408, with respect to a rollover from an individual retirement account under Code section 408(b)). Rollover Contributions may include Roth Rollover Contributions but only to the extent that such amounts are transferred directly to the Plan on the Eligible Employee’s behalf by the trustee of an “applicable retirement plan” (as described in Code section 402A(e)(1)) and only to the extent that the rollover is permitted under the rules of Code section 402(c). If the amount received does not qualify as a rollover, the amount (plus any earnings attributable thereto) shall be refunded to the Eligible Employee. To the extent not attributable to Roth Rollover Contribution, Rollover Contributions shall be allocated to the Eligible Employee’s Rollover Account and invested in accordance with the provisions of ARTICLE VI. A Rollover Contribution that is a Roth Rollover Contribution shall be allocated to the Eligible Employee’s Roth Rollover Account and invested in accordance with the provisions of ARTICLE VI; provided, however that any such Roth Rollover Contribution must be accompanied by a statement from the plan administrator of the distributing plan indicating either (i) that the Roth Rollover Contribution is a qualified distribution within the meaning of Code section 402A or (ii) the first year of the five taxable year period for the Eligible Employee and the portion of the distribution attributable to basis.

4.07 Qualified Nonelective Contributions and Qualified Matching Contributions .

(a) Qualified Nonelective Contributions . Subject to the limitations described in ARTICLE V, the Employer may, in its discretion, make “Qualified Nonelective Contributions” for a Plan Year, which shall be allocated within 12 months after the close of the Plan Year for which such contributions are related to the Qualified Nonelective Contribution Accounts of some or all of those active Participants who are not Highly Compensated Employees for the Plan Year, as determined by the Employer at the time such contributions are made, in an amount necessary to satisfy at least one of the tests in Section 5.02. Notwithstanding the foregoing, if Actual Deferral Percentages or Contribution Percentages of Participants who are not Highly Compensated Employees computed for the prior Plan Year are used in conducting the tests set forth in Section 5.02 for a Plan Year, any Qualified Nonelective Contributions for the Plan Year shall be allocated no later than the end of the Plan Year being so tested. To the extent permitted by applicable law, Qualified Nonelective Contributions for a Plan Year shall be allocated in one of the following methods:

(1) In the ratio in which each such Non-Highly Compensated Employee’s Compensation for the Plan Year for which the Qualified Nonelective Contribution is being made bears to the total such Compensation of all such Non-Highly Compensated Employees for such Plan Year.

(2) To the lowest-paid Participant or Participants, who are Non-Highly Compensated Employees, in an amount equal to the lesser of the amount that, (A) when allocated to the Participant (alone, or in conjunction with either an allocation of Qualified Matching Contributions or a return of contributions under Section 5.03(a) or 5.03(b)), causes the nondiscrimination tests described in Sections 5.02(a) and 5.02(b) to be satisfied for the Plan Year, (B) the amount that is equal to the maximum Annual Addition permitted under Section 5.04 that may be contributed for the Participant for the Plan Year, or (C) for Plan Years beginning on or after January 1, 2006, the amount permitted to be allocated under Treas. Reg. § 1.401(k)-2(a)(6) or § 1.401(m)-2(a)(6), as applicable.

(b) Qualified Matching Contributions . The Employer may, in its sole discretion, elect to make “Qualified Matching Contributions” in any amount to satisfy any of the nondiscrimination tests described in Sections 5.02(a) and/or 5.02(b) for a Plan Year within 12 months after the close of the Plan Year to which such contribution relates. Notwithstanding the foregoing, if Actual Deferral Percentages or Contribution Percentages of Participants who are not Highly Compensated Employees computed for the prior Plan Year are used in conducting the tests set forth in Section 5.02 for a Plan Year, any Qualified Matching Contributions for the Plan Year shall be allocated no later than the end of the Plan Year being so tested. Qualified Matching Contributions for a Plan Year shall be allocated to the Accounts of Participants who are Non-Highly Compensated Employees and who would be eligible for an allocation of Matching Contributions in accordance with Section 4.05 and in the ratio in which the Salary Deferrals for such Plan Year of each Participant who is a Non-Highly Compensated Employee and who is eligible for a Matching Contribution for such Plan Year bear to the total Salary Deferrals of all such Non-Highly Compensated Employees for such Plan Year.

(c) Other Corrections . Notwithstanding the foregoing, Qualified Nonelective Contributions and Qualified Matching Contributions may also be made to facilitate correction under any Internal Revenue Service correction program.

4.08 Contributions With Respect to Military Service .

(a) Salary Deferral Contributions and Roth 401(k) Contributions . A Participant who returns to employment with the Employer or an Affiliated Company following a period of Qualified Military Service shall be permitted to make additional Salary Deferrals and/or Roth 401(k) Contributions, within the limits described in Section 4.01, up to an amount equal to the Salary Deferrals and/or Roth 401(k) Contributions that the Participant would have been permitted to contribute to the Plan if he had continued to be employed and received Compensation during the period of Qualified Military Service. Salary Deferrals and Roth 401(k) Contributions under this Section may be made during the period that begins on the date such Participant returns to employment and which has the same length as the lesser of (i) three multiplied by the period of Qualified Military Service and (ii) five years.

(b) Company Retirement Contributions . The Employer shall contribute to the Plan, on behalf of each Participant who returns from Qualified Military Service as described in subsection (a) and who is a Company Retirement Contribution Eligible Participant, an amount equal to the Company Retirement Contributions that would have been required under Section 4.04 had such Participant continued to be employed and received Compensation during the period of Qualified Military Service.

(c) Matching Contributions . The Employer shall contribute to the Plan, on behalf of each Participant who has made Salary Deferrals and/or Roth 401(k) Contributions under subsection (a), an amount equal to the Matching Contribution that would have been required under Section 4.05 had such Salary Deferrals and/or Roth 401(k) Contributions been made during the period of Qualified Military Service.

(d) Qualified Nonelective Contributions and Qualified Matching Contributions . The Employer shall contribute to the Plan, on behalf of each Participant who returns from Qualified Military Service as described in subsection (a), an amount equal to the Qualified Nonelective Contributions or Qualified Matching Contributions that would have been required under Section 4.07 had such Participant continued to be employed and received Compensation during the period of Qualified Military Service.

(e) Limitations on Contributions . To the extent required by Code sections 414(u) and 414(v), the Salary Deferrals, Roth 401(k) Contributions, Company Retirement Contributions, Matching Contributions, Qualified Nonelective Contributions and Qualified Matching Contributions made under this Section shall be subject to the limitations described in ARTICLE V for the Plan Year to which such contributions relate.

(f) Reduction of Amounts Contributed During Period of Qualified Military Service . Notwithstanding anything in this Section to the contrary, any Salary Deferral, Roth 401(k) Contribution, Company Retirement Contribution, Matching Contribution, Qualified Nonelective Contributions or Qualified Matching Contributions made to the Plan on behalf of a Participant while such Participant is on a period of Qualified Military Service shall reduce any Salary Deferral, Roth 401(k) Contribution, Company Retirement Contribution, Matching Contribution, Qualified Nonelective Contributions or Qualified Matching Contributions that can be made on behalf of such Participant under the terms of this Section if the Participant returns to employment with the Employer or an Affiliated Company following a period of Qualified Military Service.

4.09 Timing of Contributions . Company Retirement Contributions and Matching Contributions for any Plan Year under this Article shall be made no later than the last date on which amounts so paid may be deducted for federal income tax purposes for the taxable year of the Employer in which the Plan Year ends. Except as otherwise set forth in Section 4.07, Qualified Nonelective Contributions and Qualified Matching Contributions for any Plan Year shall be made no later than 12 months after the close of the Plan Year to which the contribution relates. Amounts contributed as Salary Deferrals and Roth 401(k) Contributions shall be remitted to the Trustee as soon as administratively practicable following the month in which such contributions were withheld from the Participant’s Compensation. The requirements of this Section shall not apply to contributions made pursuant to Section 4.08 with respect to Qualified Military Service.

4.10 Contingent Nature of Contributions . Each contribution made by the Employer pursuant to the provisions of this Article is made expressly contingent on its deductibility for federal income tax purposes for the fiscal year with respect to which such contribution is made, and no such contribution shall be made for any year to the extent it would exceed the deductible limit for such year as set forth in Code section 404. Contributions by the Employer or any Affiliated Company for any Employee who should have been included as a Participant but was erroneously omitted, contributions necessary to satisfy the top heavy requirements of Code section 416, and contributions for reemployed Participants made to restore the undistributed portion of the reemployed Participant’s account balance are not conditioned upon the deductibility of the contribution to the Employer or Affiliated Company.

4.11 Exclusive Benefit; Refund of Contributions . All contributions made to the Plan are made for the exclusive benefit of the Participants and their Beneficiaries, and such contributions shall not be used for, nor diverted to, purposes other than for the exclusive benefit of the Participants and their Beneficiaries (including the costs of maintaining and administering the Plan and corresponding trust). Notwithstanding the foregoing, to the extent that such refunds do not, in themselves, deprive the Plan of its qualified status, refunds of contributions shall be made to the Employer under the following circumstances and subject to the following limitations:

(a) Initial Nonqualification . If, upon the timely filing of a determination letter application on the qualified status of the Plan, the Plan is determined not to initially satisfy the qualification requirements of Code section 401(a), and if the Employer declines to amend the Plan to satisfy such qualification requirements of Code section 401(a), contributions made prior to the determination that the Plan has failed to qualify shall be returned to the Employer within one year of such determination.

(b) Disallowance of Deduction . To the extent that a federal income tax deduction is disallowed, in whole or in part, for any contribution made by an Employer, or such contribution is otherwise nondeductible and recovery thereof is permitted, the Trustee shall refund to the Employer the amount so disallowed within one year of the date of such disallowance or as otherwise permitted by applicable administrative rules.

(c) Mistake of Fact . In the case of a contribution that is made in whole or in part by reason of a mistake of fact, so much of the Employer contribution as is attributable to the mistake of fact shall be returnable to the Employer upon demand, upon presentation of evidence of the mistake of fact to the Trustee and of calculations as to the impact of such mistake. Demand and repayment must be effectuated within one year after the payment of the contribution to which the mistake applies.

In the event that any refund is paid to the Employer hereunder, such refund shall be made without regard to net investment gains attributable to the contribution, but shall be reduced to reflect net investment losses attributable thereto.

ARTICLE V

LIMITATIONS ON CONTRIBUTIONS

5.01 Calendar Year Limitation on Salary Deferrals and Roth 401(k) Contributions .

(a) Notwithstanding anything contained herein to the contrary, Salary Deferrals and Roth 401(k) Contributions made on behalf of an active Participant under this Plan together with elective deferrals (as defined in Code section 402(g)) and Roth deferrals made under any other plan or arrangement maintained by the Employer or an Affiliated Company shall not exceed such amount as is applicable for a calendar year under Code section 402(g) and the Treasury Regulations thereunder for any calendar year (including, if applicable, the amount of Salary Deferrals permitted to be made pursuant to Section 4.01(b) of the Plan for a calendar year as catch-up contributions under Code section 414(v)). Participants who formerly participated in another plan not maintained by the Employer or an Affiliated Company prior to their Employment Commencement Date may notify the Plan Administrator of such prior plan participation and shall provide documentation of any contributions credited under such prior plan. Furthermore, should a Participant claim that his Salary Deferrals and/or Roth 401(k) Contributions under this Plan when added to his other elective deferrals under any other plan or arrangement (whether or not maintained by an Employer or an Affiliated Company) exceed the limit imposed by Code section 402(g) for the calendar year in which the deferrals occurred, the Committee shall distribute, by April 15 of the following calendar year, the amount of Salary Deferrals (including, if applicable, Salary Deferrals made pursuant to Section 4.01(b) as catch-up contributions) and/or Roth 401(k) Contributions specified in the Participant’s claim, plus income thereon determined in the manner described in Section 5.03(c) or recharacterize such excess Salary Deferrals as Salary Deferrals contributed pursuant to Section 4.01(b) to the extent permitted by Code section 414(v) and regulations issued thereunder. The Participant’s claim shall be in writing and shall be submitted to the Committee prior to March 1 following the calendar year in which such deferrals occurred. A Participant shall be deemed to have made a claim for distribution of excess deferrals from the Plan to the extent that his Salary Deferrals and/or Roth 401(k) Contributions together with his elective deferrals under any other plan or arrangement maintained by the Employer or an Affiliated Company exceed the limit imposed by Code section 402(g) for the calendar year. For purposes of determining the necessary reduction, (1) Salary Deferrals previously distributed pursuant to Section 5.03(a) or returned to the Participant pursuant to Section 5.04 shall be treated as distributed under this Section, and (2) Salary Deferrals not taken into account in determining Matching Contributions under Section 4.05 shall be reduced first.

(b) In the event a Participant receives a distribution of excess Salary Deferrals and/or Roth 401(k) Contributions pursuant to subsection (a), the Participant shall forfeit any Matching Contributions (plus income thereon determined as described in Section 5.03(c)) allocated to the Participant by reason of the distributed Salary Deferrals and/or Roth 401(k) Contributions. Amounts forfeited shall be used first to reduce future Matching Contributions made pursuant to Section 4.05 and then Company Retirement Contributions made pursuant to Section 4.04.

5.02 Nondiscrimination Limitations on Salary Deferrals, Roth 401(k) Contributions, and Matching Contributions .

(a) Salary Deferral and Roth 401(k) Contribution Limitations . With respect to Salary Deferrals for any Plan Year (excluding Salary Deferrals contributed pursuant to Section 4.01(b)) and Roth 401(k) Contributions, one of the following tests must be satisfied:

(1) The Average Actual Deferral Percentage for active Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Actual Deferral Percentage for all other active Participants for the Plan Year multiplied by 1.25; or

(2) The Average Actual Deferral Percentage for active Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Actual Deferral Percentage for all other active Participants for the Plan Year multiplied by two; provided, that the Average Actual Deferral Percentage for such Highly Compensated Employees does not exceed the applicable Average Actual Deferral Percentage for all other active Participants by more than two percentage points.

(b) Matching Contribution Limitations . With respect to Matching Contributions for any Plan Year, one of the following tests must be satisfied:

(1) The Average Contribution Percentage for active Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for all other active Participants for the Plan Year multiplied by 1.25; or

(2) The Average Contribution Percentage for active Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for all other active Participants for the Plan Year multiplied by two; provided, that the Average Contribution Percentage for such Highly Compensated Employees does not exceed the applicable Average Contribution Percentage for all other active Participants by more than two percentage points.

(c) For purposes of subsections (a) and (b), this Plan shall be aggregated and treated as a single plan with other plans maintained by the Employer or an Affiliated Company to the extent that this Plan is aggregated with any such other plan for purposes of satisfying Code section 410(b) (other than Code section 410(b)(2)(A)(ii)).

(d) If the Committee elects to apply Code section 410(b)(4)(B) in determining whether Salary Deferrals and any Qualified Nonelective Contributions and Qualified Matching Contributions treated as Salary Deferrals under Section 4.07 meet the requirements of Section 5.02(a) or determining whether Matching Contributions (other than Qualified Matching Contributions treated as Salary Deferrals for the Plan Year under Section 4.07) meet the requirements of Section 5.02(b), the Committee may either exclude from consideration all Participants (other than Highly Compensated Employees) who have not met the minimum age and service requirements of Code section 410(a)(1)(A), or disaggregate the Employees who have not met such minimum age and service requirements and test them separately.

(e) The determination and treatment of the Salary Deferrals, Roth 401(k) Contributions, Matching Contributions, Qualified Nonelective Contributions, and Qualified Matching Contributions, Actual Deferral Percentage and Contribution Percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

5.03 Correction of Discriminatory Contributions .

(a) If the nondiscrimination tests of Section 5.02(a) are not satisfied with respect to Salary Deferrals for any Plan Year, the Committee shall (1) determine the amount by which the Actual Deferral Percentage for the Highly Compensated Employee or Employees with the highest Actual Deferral Percentage for the Plan Year would need to be reduced to comply with the limit in Section 5.02(a); (2) convert the excess percentage amount determined under clause (1) into a dollar amount; and (3) reduce the Salary Deferrals of the Highly Compensated Employee or Employees with the greatest dollar amount of Salary Deferrals by the lesser of (A) the amount by which the Highly Compensated Employee’s Salary Deferrals exceeds the Salary Deferrals of the Highly Compensated Employee with the next highest dollar amount of Salary Deferrals or (B) the amount of the excess dollar amount determined under clause (2). This process shall be repeated until the Salary Deferrals of Highly Compensated Employees have been reduced by an amount equal to the excess dollar amount determined under clause (2). The Salary Deferrals of any Highly Compensated Employee which must be reduced pursuant to this subsection (a) shall be reduced (i) first, by distributing Salary Deferrals not taken into account in determining Matching Contributions under Section 4.05, and (ii) then, by distributing Salary Deferrals not described in clause (i), within 12 months of the close of the Plan Year with respect to which the reduction applies, and the provisions of Section 5.01(b) regarding the forfeiture of related Matching Contributions shall apply. For purposes of determining the necessary reduction, Salary Deferrals previously distributed pursuant to Section 5.01 shall be treated as distributed under this Section 5.03(a) and Salary Deferrals contributed pursuant to Section 4.01(b) shall not be taken into account. Notwithstanding the foregoing, at the election of the Committee and in accordance with rules uniformly applicable to all affected Participants, the Actual Deferral Percentage reduction described in this Section may be accomplished, in whole or in part, by recharacterizing excess Salary Deferrals as Salary Deferrals contributed pursuant to Section 4.01(b) to the extent permitted by Code section 414(v) and regulations issued thereunder. For purposes of this subsection (a), Roth 401(k) Contributions shall be treated in the same manner as Salary Deferrals. To the extent the Participant made both Salary Deferrals and Roth 401(k) Contributions to the Plans, excess amounts shall be distributed from the Participant’s Salary Deferral Account before the Participant’s Roth 401(k) Contribution Account.

(b) If the nondiscrimination tests of Section 5.02(b) are not satisfied with respect to Matching Contributions for any Plan Year, the Committee shall (1) determine the amount by which the Actual Contribution Percentage for the Highly Compensated Employee or Employees with the highest Actual Contribution Percentage for the Plan Year would need to be reduced to comply with the limit in Section 5.02(b); (2) convert the excess percentage amount determined under clause (1) into a dollar amount; and (3) reduce the excess contributions of the Highly Compensated Employee or Employees with the greatest dollar amount of Matching Contributions by the lesser of (A) the amount by which the dollar amount of the affected Highly Compensated Employee’s Matching Contributions exceeds the dollar amount of the Matching

Contributions of the Highly Compensated Employee with the next highest dollar amount of Matching Contributions or (B) the amount of the excess dollar amount determined under clause (2). This process shall be repeated until the Matching Contributions of the Highly Compensated Employees has been reduced by an amount equal to the excess dollar amount determined under clause (2). The Matching Contributions of any Highly Compensated Employee that must be reduced pursuant to this subsection (b) shall be reduced by distributing Matching Contributions (or forfeiting such Matching Contributions if the Participant is not vested in such amounts), within 12 months of the close of the Plan Year with respect to which the reduction applies. Amounts forfeited under this subsection (b) shall be applied in the following order of priority: (i) first, to restore a reemployed Participant’s Account as provided under Section 7.04 and to restore the Account of a Participant who was unlocatable as provided under Section 15.12, (ii) next, to reduce future Matching Contributions made pursuant to Section 4.05, (iii) next, to reduce future Company Retirement Contributions made pursuant to Section 4.04, (iv) next, to satisfy the top-heavy minimum allocation provisions under Section 10.03, (v) next, to provide Qualified Nonelective Contributions or Qualified Matching Contributions under Section 4.07, and (vi) to reduce the reasonable expenses of the administration of the Plan.

(c) Any distribution, recharacterization or forfeiture of Salary Deferrals, Roth 401(k) Contributions or Matching Contributions necessary pursuant to subsection (a) or (b) shall include a distribution or forfeiture of the income, if any, allocable to such contributions. Such income shall be equal to the allocable gain or loss for the Plan Year (determined by multiplying the income allocable to the Participant’s Salary Deferrals, Roth 401(k) Contributions or Matching Contributions, as applicable, for the Plan Year by a fraction, the numerator of which is the Participant’s excess Salary Deferrals, Roth 401(k) Contributions or Matching Contributions, as applicable, for the Plan Year and the denominator is the sum of the Participant’s Salary Deferral Account, Roth 401(k) Account or Matching Contribution Account, as applicable, as of the beginning of the Plan Year plus any contributions made to the applicable Account during the Plan Year).

(d) Notwithstanding anything in this Section to the contrary, for any Highly Compensated Employee who is an active Participant in the Plan while eligible to participate in any other qualified retirement plan maintained by the Employer or an Affiliated Company (excluding any such plan which is not permitted to be aggregated with the Plan pursuant to Treas. Reg. §1.401(k)-1(b)(4)) under which the Employee has made employee contributions or elective deferrals, or is credited with employer matching contributions for the year, the Committee shall coordinate corrective actions under this Plan and such other plan for the year.

(e) In lieu of or in addition to the actions described in subsections (a) through (d) of this Section, to satisfy the tests in Section 5.02, the Employer may make Qualified Nonelective Contributions or Qualified Matching Contributions as described in Section 4.07.

5.04 Annual Additions Limitations . In no event shall the Annual Addition on behalf of any Participant for any Plan Year exceed the lesser of:

(1) $40,000, adjusted in accordance with Code section 415(d), or

(2) 100% of such Participant’s Compensation for the Plan Year.

The limitation referred to in subsection (2) above shall not apply to any contribution for medical benefits within the meaning of Code section 401(h) or 419A(f)(2) which is otherwise treated as an Annual Addition under Code section 415(l)(1) or 419A(d)(2).

If the amount otherwise allocable to the Account of a Participant would exceed the amount described above as a result of the reallocation of forfeitures (if any available), a reasonable error in estimating the Participant’s Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code section 402(g)) that may be made under the limitations of Code section 415, or such other circumstances as permitted by law, the Committee shall take the following steps to correct such violation:

(a) First, the Committee shall reduce the Annual Addition under this Plan by determining the portion, if any, of such excess amount that is attributable to the Participant’s Salary Deferrals, Roth 401(k) Contributions, Matching Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and/or Qualified Matching Contributions, if any, until such excess amount has been exhausted. To the extent any portion of a Participant’s Salary Deferrals or Roth 401(k) Contributions are determined to be excess under this Section, such Salary Deferrals or Roth 401(k) Contributions, with income thereon, shall be returned to the Participant as soon as administratively practicable; provided, however, that excess Salary Deferrals and Roth 401(k) Contributions under this Section may be recharacterized as made under Section 4.01(b) to the extent permitted under Code section 414(v) and regulations issued thereunder. To the extent any portion of the Matching Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and/or Qualified Matching Contributions allocable to a Participant are determined to be excess under this Section, while the Participant remains an Eligible Employee, his excess Matching Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and/or Qualified Matching Contributions shall be held in a suspense account (which shall share in investment gains and losses of the Fund) by the Trustee until the following Plan Year (or any succeeding Plan Years), at which time such amounts shall be allocated to the Participant’s Account before any Matching Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and/or Qualified Matching Contributions are made on his behalf for the Plan Year. When the Participant ceases to be an Eligible Employee, his excess Matching Contributions, Company Retirement Contributions, Qualified Nonelective Contributions and/or Qualified Matching Contributions held in the suspense account shall be allocated in the following Plan Year (or any succeeding Plan Years) to the Accounts of other Participants in the Plan. Furthermore, the Committee shall perform any other actions as may be necessary to preserve the Plan’s status as a qualified plan.

(b) Second, the Annual Addition shall be reduced under such other plans as may be maintained by the Employer in accordance with the provisions set forth therein.

(c) Notwithstanding the foregoing, any distribution of amounts otherwise allocable to the Account of a Participant as described above shall be made in accordance with the rules and procedures set forth in Rev. Proc. 2008-50 (or, effective April 1, 2013, Rev. Proc. 2013-12) and any successor thereto.

ARTICLE VI

INVESTMENT AND VALUATION OF TRUST FUND;

MAINTENANCE OF ACCOUNTS

6.01 Investment of Assets . All existing assets of the Trust Fund and all future contributions shall be invested by the Trustee in accordance with the terms of the Trust Agreement and Section 6.02.

6.02 Investment in Investment Funds .

(a) General . Except as provided in subsection (b) and (c) hereof, the Investment Committee shall designate the available Investment Funds to which a Participant shall direct the investment of amounts credited to his Account. The Investment Committee, in its sole discretion, may from time to time designate additional Investment Funds of the same or different types or modify, cease to offer or eliminate any existing Investment Funds. A portion of the Trust Fund, as determined by the Investment Committee, may be held in the form of uninvested cash or in a liquid asset account for temporary periods pending reinvestment, distribution, or for other liquidity purposes.

(b) Company Common Stock Fund Status as Employee Stock Ownership Plan . The Company Common Stock Fund constitutes an “employee stock ownership plan” for purposes of Code section 4975(e)(7). Consistent with the requirements of Code section 4975(e)(7) and applicable law, it is the Company’s intent that the Company Common Stock Fund shall be a permanent investment option with respect to the Plan that invests primarily in the Company’s Common Stock without regard to considerations relating to: (1) diversification of assets, (2) the risk of investments in Company Common Stock, (3) the amount of income provided by Company Common Stock, and (iv) the fluctuation in the fair market value of Company Common Stock. As such, except to the extent otherwise required by applicable law, the Investment Committee shall not have the authority to remove the Company Common Stock Fund from the Plan.

(c) Default Investment Funds . The Company designates the age appropriate Target Date Retirement Fund (the “ Target Fund ”) as the Investment Fund that shall be the “default” investment fund for purposes of Participants (by reason of the automatic enrollment provisions of Section 4.01 or otherwise) who do not make an affirmative election in accordance with Section 6.03 to invest all or a portion of their Account among the Plan’s available Investment Funds. The Target Fund is an Investment Fund that provides a mixture of fixed income and equity investments that are matched to an individual’s age and assumed retirement age of 65. The Target Fund is the Investment Fund that the Company has designated as the Plan’s “qualified default investment alternative” for purposes of section 404(c)(5) of ERISA.

6.03 Investment Elections . Each Participant, upon commencing or recommencing active participation under Section 4.01, shall direct, in the form and at the time prescribed by the Committee, the investment of contributions made on his behalf in any one or more of the available Investment Funds in accordance with such uniform and non-discriminatory procedures and limitations as the Committee may prescribe. Without limiting a Participant’s rights pursuant

to reallocate his Company Retirement Contribution Account pursuant to Section 6.05, the Committee may prescribe the Investment Funds that are available for the investment of the Company Retirement Contributions at the time they are contributed to the Plan and allocated to the Company Retirement Contribution Accounts of the Company Retirement Contribution Eligible Participants.

6.04 Change of Election . Each Participant may change his investment direction with respect to the investment of his future contributions at the time or times prescribed by the Committee, by making a new election in such form, at such time in advance, and in accordance with other uniform and non-discriminatory procedures and subject to such restrictions as the Committee or its delegate may prescribe.

6.05 Transfers Between Investment Funds . Subject to such limits as imposed by the Investment Committee, a Participant may reallocate his entire Account among and between the available Investment Funds (subject to such specific rules and limits applicable to the Company Common Stock Fund as described in Section 6.09) at any time. Each Participant may elect to make such transfers at the time or times prescribed by the Committee, by making a transfer election in such form, at such time in advance, and in accordance with other uniform and non-discriminatory procedures and subject to such restrictions as the Committee or its delegate may prescribe or as may otherwise be imposed by the Investment Fund(s) involved in the transfer.

6.06 Individual Accounts . There shall be maintained on the books of the Plan with respect to each Participant, an Account with such separate sub-accounts as are necessary to account for the types and amounts contributions made to and by the Participant under the Plan. Each such Account and sub-account shall separately reflect the Participant’s interest in each Investment Fund relating to such Account and sub-account. Each Participant shall receive, at periodic intervals, a statement of his Account showing the balances in each Investment Fund. A Participant’s interest in any Investment Fund shall be determined and accounted for based on his beneficial interest in any such fund, and no Participant shall have any interest in or rights to any specific asset of any Investment Fund.

6.07 Valuation . As of each Valuation Date, the Trustee shall adjust the net credit balance of each Participant’s Account, in the respective investment fund of the Trust Fund, upward or downward, pro rata, so that the aggregate of such unit credit balances will equal the net worth of each Investment Fund of the Trust Fund as of that Valuation Date, using fair market values as determined by the Trustee.

6.08 Voting and Tender of Mutual Fund Shares . To the extent that shares of one or more of the regulated investment companies offered by the Investment Funds are allocated to Participants’ Accounts, the Trustee shall vote or tender such shares solely in accordance with written instructions furnished to it by each Participant (or Beneficiary of a deceased Participant); provided, that the Trustee shall be responsible for delivery to each Participant (or Beneficiary of a deceased Participant) of all notices, proxies and proxy soliciting materials related to any such shares. Any such instructions shall remain in the strict confidence of the Trustee. Shares, including fractional shares, for which voting or tender instructions are not received shall not be voted or tendered.

6.09 Special Rules for Company Common Stock Fund .

(a) Investment in Company Common Stock Fund . A Participant, other than a Participant who is an Employee of a Participating Employer, shall be eligible to direct investment of a percentage, in an amount up to 15%, of Salary Deferrals, Roth 401(k) Contributions and/or Rollover Contributions into the Company Common Stock Fund. No Participant may direct the investment of any of his then-existing Account balances into the Company Common Stock Fund. To the extent that Matching Contributions are made on Salary Deferrals and/or Roth 401(k) Contribution that are directed for investment into the Company Common Stock Fund, such Matching Contributions shall automatically be directed for investment into the Company Common Stock Fund. A Participant’s investment in the Company Common Stock Fund shall be credited to his Company Common Stock Account.

(b) Diversification of Company Common Stock . A Participant may elect to reallocate up to 100% of the Company Common Stock Fund held in his Company Common Stock Account to any one or more of the Investment Funds at any time.

(c) Sale, Purchase and Valuation of Company Common Stock . The Trustee shall either sell or buy Company Common Stock as provided in this Section 6.09 within a reasonable time following receipt of any such direction, considering all of the then-existing market conditions with respect to the Company Common Stock. Upon receiving direction to sell or buy Company Common Stock, such direction shall remain in effect until completed, and the Participant may not cancel such previous direction. If the Trustee determines that such quotations or trading prices do not accurately reflect the market value, the fair market value of the Company Common Stock as of the Valuation Date shall be determined by an independent appraiser meeting requirements similar to the requirements of the Department of Labor Regulations promulgated under section 3(18) of ERISA

(d) Special Rule Regarding Appraisal of Company Common Stock . If at any time the Company Common Stock held in the Company Common Stock Fund is not readily tradable on an established securities market, all valuations of such Company Common Stock with respect to activities carried on by the Plan shall be made by an independent appraiser meeting the requirements of Code section 401(a)(28).

(e) Dividends on Company Common Stock Fund . A Participant may make an election, in accordance with the uniform and non-discriminatory procedures prescribed by the Committee that provide such opportunity no less frequently than annually, that all cash dividends paid by the Company with respect to shares of Company Common Stock held in the Company Common Stock Fund and allocated to such Participant’s Company Common Stock Account on the record date for the dividend shall either be reinvested in the Company Common Stock Fund or distributed to the Participant. A Participant who does not make an affirmative election to receive dividends in cash will be deemed to have chosen to have those dividends reinvested into the Company Common Stock Fund. Notwithstanding anything in the Plan to the contrary, a Participant shall have a fully (100%) vested and nonforfeitable interest in any cash dividends paid by the Company with respect to shares of Company Common Stock held in the Company Common Stock Fund.

(f) Voting of Company Common Stock . All whole and fractional shares of Company Common Stock allocated to a Participant’s or Beneficiary’s Company Common Stock Account shall be voted by the Trustee as the Participant or Beneficiary directs in writing from time to time. The Trustee shall solicit the directions from each Participant or Beneficiary before each annual or special stockholders’ meeting of the Company, from each Member. Upon timely receipt of the directions, the Trustee shall vote those shares in accordance with the directions received. Unless otherwise provided in the Trust Agreement, shares for which timely receipt of directions is not received shall not be voted by the Trustee.

(g) Tender of Company Common Stock . The Trustee, in its sole discretion, shall determine the manner in which to respond to any offer to purchase, exchange or otherwise dispose of Company Common Stock made by any person or entity other than a Participant or Beneficiary. If the Company Common Stock is sold, exchanged or disposed of, the proceeds shall be reinvested in the Company Common Stock Fund.

(h) Distribution of Company Common Stock . When a Participant is entitled to a distribution of his Account under the Plan, the Participant may elect to receive either cash or Company Common Stock that is allocated to his Company Common Stock Account. If cash is to be received from the Company Common Stock Account, then, the Trustee will use reasonable efforts to sell such Company Common Stock and the proceeds from such sale (less all reasonable expenses incurred in such sale) will be distributed to the Participant. If the Participant elects to receive shares of Company Common Stock, then the shares of Company Common Stock plus cash in lieu of fractional shares (less all reasonable expenses incurred in such sale) will be distributed to the Participant.

(i) Put Option . If the Company Common Stock held in the Company Common Stock Fund is not readily tradable on an established securities market (within the meaning of Code section 409(h)(1)(B)), any Participant who is entitled to a distribution of such Company Common Stock shall have the right to require the Company to repurchase such Company Common Stock in accordance with Code section 409(h) and the Treasury Regulations promulgated thereunder.

(j) Special Rules . The Company has established the Company Common Stock Fund to be, and currently intends the Company Common Stock Fund remain, an unleveraged employee stock ownership plan with respect to qualifying employer securities that are publically traded within the meaning of Treas. Reg. § 54.4975-7(b)(iv). In the event that an exempt loan is used to acquire any portion of the Company Common Stock Fund or if the Company Common Stock ceases to be publically traded or is subject to a trading limitation when distributed, or if the Company becomes an S corporation, the Company Common Stock Fund and any exempt loan will be administered, notwithstanding anything in the Plan to the contrary, in accordance with Code section 409 (including, without limitation, Code sections 409(h)(2) and 409(p)) and Treas. Reg. §§ 54.4975-7 and 54.4975-11 (including, without limitation, Treas. Reg. § 54975-11(a)(3)).

6.10 Fiduciary Responsibility . This Plan is intended to constitute a plan described in section 404(c) of ERISA, and Title 29 of the Code of Federal Regulations § 2550.404c-1. Neither the Company, an Employer, the Committee, the Investment Committee, the Trustee nor any other Plan fiduciary shall be liable for any losses that are the direct and necessary result of investment instructions provided by any Participant, Beneficiary or Alternate Payee.

6.11 Transfer of Employment to a Participating Employer . Notwithstanding anything herein to the contrary, any Employee (hereinafter referred to as “ Transferring Employee ”) who transfers his employment with one Employer (hereinafter referred to as “ Old Employer ”) who is participating in this Plan to another Employer (hereinafter referred to as “ New Employer ”) who is participating in this Plan, then, such transfer of employment shall not be considered an interruption of employment, and, if such Employee is a Participant, his Accounts (“ Transferred Accounts ”) shall be transferred within the Trust Fund to reflect such transfer of employment to the New Employer. Years of Service with the Old Employer shall be treated as Years of Service with the New Employer for all purposes under the Plan; and, the Transferred Accounts of each Transferring Employee which are transferred as provided herein will be maintained as the separate Transferred Account of such Transferring Employee, and no further contributions will be made by the New Employer to the Transferred Account attributable to such Transferring Employee.

ARTICLE VII

VESTING

7.01 Full and Immediate Vesting of Salary Deferrals, Roth 401(k) Contributions, Qualified Nonelective Contributions, Qualified Matching Contributions and Rollovers . A Participant, at all times, shall have a fully (100%) vested and nonforfeitable interest in the portion of his Account attributable to Salary Deferrals, Qualified Nonelective Contributions, Qualified Matching Contributions, and Rollover Contributions (including all earnings, dividends and gains attributable to such contributions).

7.02 Vesting of Employer Contributions .

(a) Matching Contributions and Company Retirement Contributions . A Participant’s interest in the portion of his Account attributable to Matching Contribution, Company Retirement Contributions or any other Employer contributions not otherwise referenced in Section 7.01 (including all earnings, dividends and gains attributable to such contributions) shall vest based on his Years of Service in accordance with the following schedule:


Years of Service		Vested Percentage
Less than 1 year		0%
1 year		25%
2 years		50%
3 years		75%
4 or more years		100%

(b) Accelerated Vesting upon Death, Normal Retirement Age and Disability Retirement Date . Notwithstanding anything in the Plan to the contrary, a Participant’s interest in the portion of his Account that is subject to the vesting schedule described in Section 7.02(a) hereof shall be fully (100%) vested and nonforfeitable upon:

(1) the Participant’s death while an Eligible Employee. In addition, in the event a Participant dies during a period of Qualified Military Service, such Participant shall be treated for purposes of this Section 7.02(b) as if he resumed employment and then died while an Eligible Employee.

(2) the Participant reaching Normal Retirement Age while an Eligible Employee.

7.03 Effects of Certain Periods of Severance.

(a) If a Participant had a vested interest in his Account at the time he incurred a Period of Severance and he is later reemployed by the Company or an Affiliated Company, his Years of Service before his Period of Severance shall be taken into account for purposes of determining his vested interest in his Account.

(b) If a Participant had no vested interest in his Account at the time he incurred a Period of Severance and he is later reemployed by the Company or an Affiliated Company, his Years of Service before his Period of Severance shall be taken into account for purposes of determining his vested interest in his Account only if he (1) completes a Year of Service as described in Section 2.73(a)(3), and (2) completes an Hour of Service at a time when his consecutive Periods of Severance do not equal or exceed five. Otherwise, such Participant’s pre-severance Years of Service shall be cancelled.

(c) Notwithstanding anything in subsection (a) or (b) to the contrary, if a Participant or Employee has incurred five or more consecutive Periods of Severance, under no circumstances shall his Years of Service after he again completes an Hour of Service be counted in determining his vested interest in the portion of his Account attributable to periods before his Period of Severance.

7.04 Forfeiture of Nonvested Amounts and Restoration upon Reemployment .

(a) The Account of a Participant who has had a Severance from Service shall be closed, and the forfeitable amount held therein shall be forfeited on the earlier of:

(1) the date on which he receives a distribution of his entire vested interest in his Account (for these purposes, a Participant who incurs a Severance from Service without a vested interest in his Account shall be deemed to have received a distribution of his entire vested interest in his Account on the date of his Severance from Service); or

(2) the fifth anniversary of his Severance Date.

(b) Amounts forfeited from a Participant’s Account under subsection (a) shall be applied in the following order of priority: (1) first, to reduce the reasonable expenses of the administration of the Plan that are not otherwise paid by the Employer or satisfied through other means; (2) next, to restore a reemployed Participant’s Account as provided under this Section and to restore the Account of a Participant who could not be located as provided under Section 15.12, (3) next, to reduce future Matching Contributions made pursuant to Section 4.05, (4) next, to reduce future Company Retirement Contributions made pursuant to Section 4.04, (5) next, to provide Qualified Nonelective Contributions or Qualified Matching Contributions under Section 4.07, (6) next, to satisfy the top-heavy minimum allocation provisions under Section 10.03.

(c) If a Participant who has received a distribution described in subsection (a)(1), whereby any part of his Account has been forfeited, again becomes an Eligible Employee prior to the fifth anniversary of his Severance Date, the amount so forfeited shall be restored (unadjusted by any subsequent gains and losses) to his Account; provided, that the Participant repays to the Trustee the full amount of any such distribution prior to the fifth anniversary of the date such Participant again becomes an Eligible Employee. Amounts restored under this subsection (c) shall be funded through current forfeitures or additional contributions by the Participant’s Employer.

ARTICLE VIII

BENEFIT DISTRIBUTIONS

8.01 Death Benefits .

(a) Amount and form of Death Benefit . Subject to Section 9.02(f), in the event of a Participant’s death prior to his Benefit Payment Date, his Beneficiary shall be entitled to receive a death benefit equal to the vested balance of his Account, determined as of the Valuation Date related to the Benefit Payment Date for the Participant’s Beneficiary. The Beneficiary shall have the option to select any form of payment under Section 8.03.

(b) Time of Distribution . Death benefits shall be paid to the Participant’s Beneficiary as soon as practicable after the Participant’s death; provided, however, that, in the event that the Participant dies after commencement of distributions but before all of his vested Account balance is distributed, the remaining portion of his vested Account balance shall continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant’s death.

(c) Regulatory Requirements . Distributions under this Section shall otherwise comply with the requirements of Code section 401(a)(9), including the incidental death benefit requirements, in accordance with the final Treasury Regulations under Code section 401(a)(9) that were published on April 17, 2002.

8.02 Benefits upon Severance from Service .

(a) Amount of Benefit . Subject to Section 9.02(f), the Plan benefit payable to a Participant upon such Participant’s Severance from Service for reasons other than death, shall be equal to the vested balance of his Account, determined as of the Valuation Date related to the Benefit Payment Date for the Participant.

(b) Time of Distribution .

(1) General Rule . Distribution of benefits under this Section to the Participant shall be made as soon as practicable after the Participant’s Severance from Service; provided, however, that in the case of a Participant whose vested Account balance exceeds $5,000, no distribution shall be made at such time without the written consent of the Participant. If the Participant does not so consent, then distribution will be deferred until any subsequent date elected by the Participant in writing or such other manner acceptable to the Committee pursuant to such uniform and non-discriminatory procedures as the Committee may impose; provided, however, that benefit payments shall begin no later than the applicable date under Section 8.02(b)(3).

(2) Cash Out of Amounts of $5,000 or Less . In the event a Participant’s vested Account balance (excluding amounts attributable to rollovers and earnings allocable thereon) is $5,000 or less at the time of the Participant’s Severance from Service, the Committee shall direct the payment of the Participant’s vested Account balance in a lump sum cash payment to the Participant as soon as practicable after the Participant’s Severance from

Service; provided, however, that, for cash outs pursuant to this subsection (2), if such Account balance is greater than $1,000 and the Participant does not consent to the distribution of such Account balance, then the Committee shall pay the distribution in a direct rollover described in Section 8.08 to an individual retirement plan of a designated trustee or insurer selected by the Committee, in its sole discretion, for such purposes.

(3) Required Distribution Dates .

(A) Except as otherwise elected by the Participant or provided in this Section, the Benefit Payment Date for any Participant shall not be later than the 60th day following the close of the Plan Year in which the later of the following events occurs: (i) the Participant reaches age 65, (ii) the tenth anniversary of the year in which the Participant commenced participation in the Plan or (iii) the Participant has a Severance from Service.

(B) Notwithstanding any provision in the Plan to the contrary, a Participant’s Benefit Payment Date shall not be later than April 1 of the calendar year following the later of (I) the calendar year in which the Participant attains age 70 ¹ ⁄ ₂ ; or (II) in the case of a Participant who is not a 5% owner (within the meaning of Code section 416(i)) with respect to the Plan Year ending in the calendar year in which the Participant attains age 70 ¹ ⁄ ₂ , the calendar year in which the Participant’s Severance from Service occurs.

(C) Distributions under this Section 8.02 shall otherwise comply with the requirements of Code section 401(a)(9) and the final regulations published thereunder on April 17, 2002, including the incidental death benefit requirements of Treas. Reg. §1.401(a)(9)-5.

(c) Election Period . A Participant’s election to commence payment must be made within the 180-day period ending on the Benefit Payment Date elected by the Participant and in no event earlier than the date the Committee provides the Participant with written information relating to his right to defer payment and his right to make a direct rollover as set forth in Section 8.08. Such information must be supplied not less than 30 days or more than 180 days prior to the Benefit Payment Date. Notwithstanding the preceding sentence, a Participant’s Benefit Payment Date may occur less than 30 days after such information has been supplied to the Participant; provided, that, after the Participant has received such information and has been advised of his right to a 30-day period to make a decision regarding the distribution, the Participant affirmatively elects a distribution.

8.03 Form and Timing of Benefit Payment . A Participant’s Account shall be distributed to the Participant or his Beneficiaries in cash in the form of either (a) a single, lump sum or (b) substantially equal payments in monthly, quarterly, semi-annual or annual installments for a period less than the life expectancy of the Participant or his Beneficiaries, as the case may be; provided, however, that portion of a withdrawal or distribution consisting of the Company Common Stock Fund shall be made in either cash or stock, as the Participant or his Beneficiaries may elect. Any fractional shares of Company Common Stock will be paid in cash.

8.04 Withdrawals . A Participant may, in the manner prescribed by the Committee, request a withdrawal from his Account in accordance with the following rules:

(a) In-Service Withdrawals .

(1) Upon written application submitted to the Committee, a Participant who has attained age 59 ¹ / ₂ may withdraw up to 100% of his vested Accounts. A Participant may direct the vested Accounts from which a withdrawal pursuant to this paragraph shall be made; provided, however, that a from Accounts attributable to Employer contributions shall be taken from the Participant’s vested Matching Contribution Account and Company Retirement Contribution Account on a pro-rata basis. The portion of a withdrawal consisting of the Company Common Stock Fund shall be made in either cash or stock, as the Participant may elect. Any fractional shares of Company Common Stock will be paid in cash.

(2) Upon written application submitted to the Committee, a Participant may withdraw up to 100% of his Rollover Account and/or Roth Rollover Account.

(b) Hardship Withdrawals . Each Participant who has exhausted all of his or her withdrawal rights under subsection (a) hereof, and any in-service withdrawal rights set forth in an Appendix hereto, shall have the right to make a withdrawal from his Salary Deferral Account and Roth 401(k) Account. If the Committee determines that a requested withdrawal is on account of an immediate and heavy financial need of the Participant, and the withdrawal is necessary to satisfy such financial need, the Committee shall permit the Participant to withdraw all or a portion of his Salary Deferral Account and Roth 401(k) Account; provided, however, that the aggregate amount of a Participant’s withdrawals from each of his Salary Deferral Account and Roth 401(k) Account shall not exceed the Participant’s undistributed Salary Deferrals or Roth 401(k) Contributions, respectively. For Participants with both a Salary Deferral Account and a Roth 401(k) Account, withdrawals shall be taken from such accounts on a pro-rata basis.

(1) A distribution shall be deemed to be on account of an immediate and heavy financial need of a Participant when the distribution is on account of:

(A) expenses incurred or necessary for medical care of the Participant, the Participant’s Spouse, or any dependents of the Participant that would be deductible under Code section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income);

(B) the purchase (excluding mortgage payments) of a principal residence for the Participant;

(C) the payment of tuition, related educational fees and room and board for up to the next 12 months of post-secondary education for the Participant, his Spouse, children or dependents (as defined in Code section 152 without regard to Code sections 152(b)(1), (b)(2) and (d)(1)(B));

(D) expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income);

(E) the need to prevent the eviction of the Participant from, or foreclosure on the mortgage of, the Participant’s principal residence;

(F) payments for burial or funeral expenses for the Participant’s deceased parent, Spouse, children or dependents (as defined in Code section 152 and without regarding to Code section 152(d)(1)(B));

(G) federal, state or local income taxes or penalties reasonably anticipated to result from the distribution; or

(H) such other circumstances as may be prescribed by the Secretary of the Treasury or his delegate.

(2) A withdrawal shall be necessary to satisfy the financial need of a Participant if:

(A) a Participant making such application represents in writing to the Committee that he has an immediate and heavy financial need, that the amount requested to be withdrawn is necessary to relieve such need, and that such need cannot be relieved:

(B) through reimbursement or compensation by insurance or otherwise;

(C) by reasonable liquidation of the Participant’s assets, including those assets of his Spouse and minor children that are reasonably available to him, to the extent such liquidation would not itself cause an immediate and heavy financial need;

(D) by cessation of Salary Deferrals and/or Roth 401(k) Contributions; or

(E) by other currently available distributions or nontaxable (at the time of the loan) loans from this Plan or any other plan maintained by the Employer or by any other employer, or by borrowing from commercial sources on reasonable commercial terms, in an amount sufficient to satisfy the need.

(3) If the Participant does not represent in writing to the Committee that he has an immediate and heavy financial need, a withdrawal shall be deemed necessary to satisfy the financial need of a Participant if:

(A) the amount of the withdrawal does not exceed the amount of the Participant’s immediate and heavy financial need, including, at the election of the Participant, any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution;

(B) the Participant has obtained all currently available distributions (including, if currently available pursuant to Section 6.09(e), by electing to receive dividend distributions in cash, but other than hardship distributions) and non-taxable loans under this Plan, if applicable, and all other qualified retirement plans maintained by the Employer and all Affiliated Companies, unless the Participant certifies that the amount that may be obtained through all currently permissible distributions and non-taxable loans under this Plan shall not be sufficient to satisfy the financial need; and

(4) If the Participant withdraws any amount from his Salary Deferral Account and/or Roth 401(k) Account pursuant to Section 8.03, or withdraws any elective deferrals under any other qualified retirement plan maintained by the Employer or an Affiliated Company which other plan conditions such withdrawal upon the Participant’s being subject to rules similar to those stated in this paragraph (4), such Participant may not make Salary Deferrals and/or Roth 401(k) Contributions under this Plan or employee contributions (other than mandatory contributions under a defined benefit plan) or, to the extent required by applicable law, elective deferrals under any other plan of deferred compensation maintained by the Employer or an Affiliated Company for a period of six months commencing on the date of his receipt of the withdrawal.

(d) Notwithstanding anything in this Section to the contrary, no Participant shall be permitted to withdraw any portion of his Account pledged as security for a loan pursuant to ARTICLE IX.

8.05 Beneficiary Designation Right .

(a) Spouse as Beneficiary . The Beneficiary of a death benefit payable pursuant to Section 8.01 shall be the Participant’s Spouse as of the Participant’s date of death; provided, however, that the Participant may designate a Beneficiary other than his Spouse pursuant to subsection (b) if:

(1) the requirements of subsection (c) are satisfied, or

(2) the Participant has no Spouse, or

(3) the Committee determines that the Spouse cannot be located or such other circumstances exist under which Spousal consent is not required, as prescribed by Treasury Regulations.

(b) Beneficiary Designation Right . Each Participant who is permitted to designate a Beneficiary other than his Spouse pursuant to subsection (a) shall have the right to designate one or more primary and one or more contingent Beneficiaries to receive any benefit becoming payable upon the Participant’s death. All Beneficiary designations shall be in writing in a form satisfactory to the Committee. Each Participant shall be entitled to change his Beneficiaries at any time and from time to time by filing a written notice of such change with the Committee. However, the Participant’s Spouse must again consent in writing to such change, unless (1) the change is a revocation of the prior consent or (2) one of the exceptions described in subsection (a)(2)or (a)(3) applies.

In the event that the Participant fails to designate a Beneficiary to receive a benefit that becomes payable pursuant to Section 8.01, or in the event that the Participant is predeceased by all designated primary and contingent Beneficiaries, the death benefit shall be payable to the Participant’s estate.

After a Participant’s death, any Beneficiary of the deceased Participant may designate one or more secondary beneficiaries to receive the Beneficiary’s interest in the Plan attributable to the Participant’s benefits after the Beneficiary’s death, to the extent such designation is not inconsistent with the Participant’s beneficiary designation. If the Beneficiary fails to designate a beneficiary or if none of his designated beneficiaries survive him, the death benefit shall be payable to the Beneficiary’s estate.

(c) Form and Content of Spouse’s Consent . A Spouse may consent to the designation of one or more Beneficiaries other than such Spouse; provided, that such consent shall be in writing, must consent to the specific alternate beneficiary or beneficiaries designated, must acknowledge the effect of such consent, and must be witnessed by a Plan representative or notary public. Such Spouse’s consent shall be irrevocable, unless expressly made revocable. The consent of a Spouse in accordance with this subsection (c) shall not be effective with respect to any subsequent Spouse of the Participant.

8.06 Domestic Relations Orders .

(a) General . Except as otherwise provided in this Section, an Alternate Payee shall have no rights to a Participant’s benefit and shall have no rights under this Plan other than those rights specifically granted to the Alternate Payee pursuant to a QDRO. Notwithstanding the foregoing, an Alternate Payee shall have the right to make a claim for any benefits awarded to the Alternate Payee pursuant to a QDRO, as provided in ARTICLE XIII. Any interest of an Alternate Payee in the Account of a Participant, other than an interest payable solely upon the Participant’s death pursuant to a QDRO which provides that the Alternate Payee shall be treated as the Participant’s surviving spouse, shall be separately accounted for by the Trustee in the name and for the benefit of the Alternate Payee.

(1) Distribution . Notwithstanding anything in this Plan to the contrary, a QDRO may provide that any benefits of a Participant payable to an Alternate Payee that are separately accounted for shall be distributed immediately or at any other time specified in the order. If the order does not specify the time at which benefits shall be payable to the Alternate Payee, the Alternate Payee may elect to have benefits commence at any time after the order is determined to be qualified.

(b) Withdrawals . Unless a QDRO establishing a separate account for an Alternate Payee provides to the contrary, an Alternate Payee for whom a separate account is established shall not be permitted to make any withdrawals under ARTICLE VIII.

(c) Death Benefits . Unless a QDRO establishing a separate account for an Alternate Payee provides to the contrary, an Alternate Payee for whom a separate account is established shall have the right to designate a Beneficiary, in the same manner as provided in Section 8.05 with respect to a Participant (except that no Spousal consent shall be required), who

shall receive benefits payable to an Alternate Payee which have not been distributed at the time of an Alternate Payee’s death. Upon an Alternate Payee’s death, a separate account shall be established for any such Beneficiary. If the Alternate Payee for whom a separate account is established does not designate a Beneficiary, or if the Beneficiary predeceases the Alternate Payee, benefits payable to the Alternate Payee that have not been distributed shall be paid to the Alternate Payee’s estate.

(d) Investment Direction . Unless a QDRO establishing a separate account for an Alternate Payee provides to the contrary, an Alternate Payee for whom a separate account is established shall have the right to direct the investment of any portion of a Participant’s Accounts payable to the Alternate Payee under such order in the same manner as provided in ARTICLE VI with respect to a Participant, which amounts shall be separately accounted for by the Trustee in the Alternate Payee’s name.

(e) Loans . An Alternate Payee shall not be permitted to receive a loan under ARTICLE IX.

8.07 Post Distribution Credits . In the event that, after the payment of a single-sum distribution under this Plan (other than an in-service benefit distribution described in Section 8.04), any funds shall be subsequently credited to the Participant’s Account, such additional funds shall be paid to the Participant or applied for the Participant’s Account as promptly as practicable thereafter.

8.08 Direct Rollovers . In the event any payment or payments to be made under the Plan to a Participant, a Beneficiary, or an Alternate Payee would constitute an “eligible rollover distribution,” such individual may request that such payment or payments be transferred directly from the Trust to the trustee of an “eligible rollover plan.” Any such request shall be made in the form prescribed by the Committee for such purpose, at such time in advance as the Committee may specify.

For purposes of this Section,

(a) “ eligible rollover distribution ” shall mean a distribution from the Plan, excluding (1) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) over the life (or life expectancy) of the individual, the joint lives (or joint life expectancies) of the individual and the individual’s designated Beneficiary, or a specified period of 10 or more years, (2) any distribution to the extent such distribution is required under Code section 401(a)(9), and (3) any hardship distribution; and

(b) “ eligible rollover plan ” shall mean (1) an individual retirement account described in Code section 408(a), (2) an individual retirement annuity described in Code section 408(b) (other than an endowment contract), (3) an annuity plan described in Code section 403(a), (4) a qualified plan, the terms of which permit the acceptance of rollover distributions, (5) an eligible deferred compensation plan described in Code section 457(b) that is maintained by an eligible employer described in Code section 457(e)(i)(A) that shall separately account for the distribution, or (6) an annuity contract described in Code section 403(b); provided, however, that, effective January 1, 2007, with respect to a distribution (or portion of a distribution)

consisting of after-tax employee contributions, the term “eligible rollover plan” shall mean a plan described in clauses (4) and (6) that separately accounts for such amounts transferred and earnings on such amounts or a plan described in clause (1) or (2). Effective January 1, 2008, an “eligible rollover plan” shall also mean an individual retirement account described in Code section 408A; provided, that the distribution to the individual retirement account described in Code section 408A constitutes a “qualified rollover contribution” under Code section 408A(e). Notwithstanding the foregoing, if any portion of an eligible rollover distribution is attributable to payments or distributions from a Participant’s Roth 401(k) Account, an eligible rollover plan with respect to such portion shall include only another designated Roth 401(k) account described in Code section 402A or a Roth individual retirement account described in Code section 408A, and only to the extent the rollover is permitted under the rules of Code section 402(c). Effective January 1, 2007, in the case of a distribution to a non-spouse Beneficiary who is a designated Beneficiary within the meaning of Code section 401(a)(9)(E), an “eligible rollover plan” is an individual retirement account established on behalf of the designated Beneficiary that will be treated as an inherited individual retirement account pursuant to the provisions of Code section 402(c)(11).

8.09 Waiver of 2009 Required Distributions . Notwithstanding anything in this ARTICLE VIII to the contrary, a Participant or Beneficiary who would have been required to receive required minimum distributions for 2009 but for enactment of Code section 401(a)(9)(H) (“ 2009 RMDs ”), and who would have satisfied that requirement by receiving distributions that are (i) equal to the 2009 RMDs, or (ii) one or more payments in a series of substantially equal distributions that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Participant, the joint lives (or joint life expectancy) of the Participant and the Participant’s designated Beneficiary, or for a period of at least 10 years, will not receive those distributions for 2009 unless the Participant or Beneficiary chooses to receive such distributions. Participants and Beneficiaries described in the preceding sentence will be given the opportunity to elect to receive the distributions described in the preceding sentence. A direct rollover will be offered only for distributions that would be eligible rollover distributions (as defined in Section 8.08) without regard to Code section 401(a)(9)(H).

ARTICLE IX

PARTICIPANT LOANS

9.01 Loans in General .

(a) Permissibility . Each Participant or Beneficiary who satisfies such uniform and nondiscriminatory conditions as may from time to time be adopted by the Committee may apply for a loan from the Plan.

(b) Application . Subject to such uniform and nondiscriminatory rules as may from time to time be adopted by the Committee, the Trustee, upon application by such Eligible Borrower in such manner as may be approved by the Committee, may make a loan or loans to such applicant.

(1) Loans shall be at least $1,000 in amount, and in no event shall total loans exceed the lesser of (A) 50% of the vested balance of such Eligible Borrower’s Accounts, or (B) $50,000, reduced by the excess, if any, of (i) the highest outstanding balance of all loans during the 12 months prior to the time the new loan is to be made over (ii) the outstanding balance of loans made to the Eligible Borrower prior to the date such new loan is made. Loans under any other qualified plan sponsored by the Employer or any Affiliated Company shall be aggregated with loans under the Plan in determining whether or not the limitation stated herein has been exceeded.

(2) Pending the final determination by the Plan Administrator of whether a domestic relations order is a QDRO, no loan to any Eligible Borrower may exceed an amount greater than the maximum permissible loan amount that would be available assuming that the benefit described in the domestic relations order had already been distributed to the alternate payee under a QDRO; provided, however, that the Committee may, in its sole discretion, adopt a policy that universally prohibits loans to an otherwise Eligible Borrower pending the final determination of a whether a domestic relations order is a QDRO.

(d) Equality of Borrowing Opportunity . Loans shall be available to all Eligible Borrowers who are parties in interest on a reasonably equivalent and nondiscriminatory basis. Loans shall not be made available to Eligible Borrowers who are or were Highly Compensated Employees in an amount greater than the amount available to other Eligible Borrowers.

(e) Loan Statement . Every Eligible Borrower receiving a loan hereunder will receive a statement from the Committee clearly reflecting the charges involved in each transaction, including the dollar amount and annual interest rate of the finance charges. The statement will provide all information required to meet applicable “truth-in-lending” laws.

(f) Restriction on Loans . The Committee will not approve any loan if it is the belief of the Committee that such loan, if made, would constitute a prohibited transaction (within the meaning of section 406 of ERISA or Code section 4975(c)), would constitute a distribution

taxable for federal income tax purposes, or would imperil the status of the Plan or any part thereof under Code section 401(k). An Eligible Borrower may have no more than two loans outstanding at any time, which may include no more than one loan that is for the purchase of a primary residence.

9.02 Loans as Trust Fund Investments . All loans shall be considered as fixed income investments of a segregated account of the Trust Fund (a “ loan fund ”) directed by the borrower. Accordingly, the following conditions shall apply with respect to each such loan:

(a) Security . All loans shall be secured by the pledge of such portion of the Eligible Borrower’s Account as is sufficient to secure repayment of the loan.

(b) Interest Rate . The interest rate on any loan shall be commensurate with the prevailing interest rate charged on similar commercial loans under like circumstances by persons in the business of lending money and shall be determined by the Committee.

(c) Loan Term . Loans shall be for terms of up to five years or, with respect to a loan used to acquire a dwelling unit which will be used as the principal residence of the Eligible Borrower, 15 years; provided, however, that if the Eligible Borrower is absent from work for the performance of military service in any branch of the uniformed services (as defined in chapter 43 of title 38, United States Code), any payments may be suspended during such period of military service and, if suspended, shall resume following the completion of the period of such military service. Any such resumed payments shall be made, following the period of such military service, at least as frequently as, and in an amount not less than, the original loan payments. In the event of such military service, the term of the loan may be extended by a period not to exceed the original term of the loan plus the period of such military service. With respect to loans that are outstanding when an Eligible Borrower begins a period of such military service, the interest rate on any such loans shall be limited to 6% to the extent required to comply with section 207 of the Service members Civil Relief Act (or any successor statute thereto); provided, that the Committee may require that the Eligible Borrower has provided the Committee with written notice and a copy of the military orders calling the Eligible Employee to military service and any orders further extending military service no later than 180 days after the date of the Eligible Employee’s termination or release from military service. Any loan fees charged to the Accounts of the Eligible Borrower during the period of military service shall be included as interest for purposes of calculating the maximum 6% interest rate.

(d) Promissory Note . Any loan made to an Eligible Borrower under this Article shall be evidenced by the promissory note returned to the Eligible Borrower after the loan has been processed. Such promissory note shall contain the irrevocable consent of the Eligible Borrower to the payroll withholding described in subsection (f), if applicable. The Committee shall have the right to require the Eligible Borrower to submit revised materials to the extent the Committee determines it is necessary to comply with ERISA or the Code.

(e) Refinancing of Loans . Eligible Borrower may not refinance an existing loan.

(f) Default and Remedies . In the event that:

(1) an Eligible Borrower (other than an Eligible Borrower who continues to be a party in interest) has a Severance from Service and fails to make adequate arrangements, as determined by the Committee, in its sole discretion, to continue to make installment payments and does not repay the full unpaid balance of the loan plus applicable interest within such time as may be designated by the Committee; or

(2) in the case of a deceased Eligible Borrower, the Beneficiary fails to repay the full unpaid balance of the loan plus applicable interest within such time as may be designated by the Committee; or

(3) the Eligible Borrower fails to pay any installment by the end of the calendar quarter following the calendar quarter in which the installment pay became delinquent as provided in Section 9.02(g)(2); or

(4) the Eligible Borrower (A) makes an assignment for the benefit of creditors, (B) files a petition for bankruptcy, (C) is adjudicated insolvent or bankrupt, or (D) becomes the subject of any wage earner plan under the federal Bankruptcy Code as now or hereafter in effect, or under any applicable state insolvency law; or

(5) there is started against the Eligible Borrower any bankruptcy, insolvency or other similar proceeding which has not been dismissed by the 60th day after the date on which the proceeding was started, or the Eligible Borrower consents to or approves of any such proceeding or the appointment of any receiver for the Eligible Borrower or any substantial part of the Eligible Borrower’s property, or the appointment of any such receiver is not discharged within 60 days;

the unpaid balance of the loan, with interest due thereon, shall become immediately due and payable. In the event that a loan becomes immediately due and payable (in “ default ”), the Eligible Borrower (or his Beneficiary in the event of his death) may satisfy the loan by paying the outstanding balance in full within 60 days of receiving written notice from the Committee of such default; provided, however, that any such satisfaction of a loan in default must be made no later than the last day of the grace period, if any, designated by the Committee (which grace period shall not extend beyond the last day of the calendar quarter following the calendar quarter in which the required installment was due). Otherwise, any such outstanding loan or loans (plus unpaid interest) shall be deducted from any benefit which is or becomes payable to the Eligible Borrower or his Beneficiary from the amount and the portions of his Account pledged as security for the loan as soon as is practicable after such default; provided, however, that if the Eligible Borrower has not died or incurred a Severance from Service, the Eligible Borrower’s Salary Deferral Account and Roth 401(k) Contributions Account shall only be used to reduce the Eligible Borrower’s indebtedness at such time as the Eligible Borrower is entitled to a distribution under Section 8.02 or a withdrawal under Section 8.04 from his Salary Deferral Account and Roth 401(k) Contributions Account. Such action shall not operate as a waiver of the rights of the Employer, the Committee, the Trustee or the Plan under applicable law.

(g) Repayment .

(1) Loans shall be amortized and repaid in equal installments (not less frequently than quarterly) through payroll withholding; provided, however, that the Committee, in its sole discretion, may authorize an Eligible Borrower who has incurred a Severance from Service or a disability or transferred to an Affiliated Company, or who is otherwise not actively employed by an Employer, to repay his loan by making direct installment payments. Notwithstanding the foregoing, in the event of an Eligible Borrower’s unpaid leave of absence, the Committee may suspend the Eligible Borrower’s installment payment for up to 12 months; provided, however, (i) the loan must still be repaid by the end of the term of the loan, which may be extended by the Committee, in its sole discretion, as provided herein, and (ii) the remaining balance of the loan must be reamortized upon the Eligible Borrower’s recommencing active employment. In the event that repayment of a loan is suspended as provided in this subsection (g), the term of such loan may be extended provided that such extension shall in no event be longer than the maximum period allowable for such loan at the time it was made as provided in subsection (c) above.

(2) An installment payment shall be delinquent if the Eligible Borrower fails to pay the installment payment within 30 days of the date the installment payment is due.

(3) Loans may be prepaid in full at any time without penalty. Partial prepayment is not permitted.

(4) No distribution of an Eligible Borrower’s Accounts shall be made to the Eligible Borrower or the Eligible Borrower’s Beneficiary or estate until all loans, together with accrued interest, have been paid in full.

(h) Loan Fees . Fees properly chargeable in connection with a loan may be charged, in accordance with a uniform and nondiscriminatory policy established by the Committee, against the Account of the Eligible Borrower to whom the loan is granted.

(i) Applicable Accounts and Investment Funds .

(1) At such time as it is determined that an Eligible Borrower is to receive a loan from the Plan, the loan shall be made from the Eligible Borrower’s applicable Account in the order and precedence indicated hereafter and such amount shall be deemed to be credited to a separate Account established for such purposes (the “ Loan Account ”), with a corresponding debit to occur to his Account as of the first day of the month in which such loan occurs: (i) first, an Account holding Roth Rollover Contributions, if applicable; (ii) second, an Account holding Rollover Contributions that are not Roth Rollover Contributions, if applicable, (iii) third, an Account holding after-tax contributions, if applicable, (iv) fourth, an Account holding Roth 401(k) Contributions, if applicable; and (iv) third, an Account holding Salary Deferrals, if applicable. Loans shall not be permitted from any amounts attributable to Matching Contributions, Company Retirement Contributions or other Employer contributions. All loans shall be funded from the Investment Funds in which the Eligible Borrower’s Account that is being debited is invested on a pro-rata basis.

(2) All interest payments to be made pursuant to the terms and provisions of the loan shall be credited to the applicable Account in such a manner so that the Loan Account will reflect unpaid principal and interest from time to time. The earnings attributable to the Loan Account shall be allocable only to the Loan Account of such Eligible Borrower and shall not considered as general earnings of the Trust Fund to be allocated to other Eligible Borrowers. Other than for the limited purposes of establishing a separate account for the allocation of the interest thereto, a Eligible Borrower’s Loan Account shall, for all other purposes, be considered as a part of the applicable Account.

(3) Loan repayments to the Plan by the Eligible Borrower shall be invested in the Investment Funds on the basis of the Eligible Borrower’s current investment election under Section 6.03, or the Eligible Borrower’s most recent investment election, if no investment election is currently in effect, unless the Eligible Borrower elects otherwise in accordance with rules prescribed by the Committee.

ARTICLE X

PROVISIONS RELATING TO TOP-HEAVY PLANS

10.01 Definitions . For purposes of this Article, the following terms shall have the following meanings:

(a) “ Aggregation Group ” shall mean the group of qualified plans sponsored by the Employer or by an Affiliated Company formed by including in such group (1) all such plans in which a Key Employee participates in the Plan Year containing the Determination Date, including any frozen or terminated plan that was maintained within the five-year-period ending on the Determination Date; (2) all such plans which enable any plan described in clause (1) to meet the requirements of either Code section 401(a)(4) or 410; and (3) such other qualified plans sponsored by the Employer or an Affiliated Company as the Employer elects to include in such group, as long as the group, including those plans electively included, continues to meet the requirements of Code sections 401(a)(4) and 410.

(b) “ Determination Date ” shall mean the last day of the preceding Plan Year or, in the case of the first Plan Year, the last day of such Plan Year.

(c) “ Key Employee ” shall mean a person employed or formerly employed by the Employer or an Affiliated Company who, during the Plan Year, was any of the following:

(1) An officer of the Employer having an annual Compensation of more than $140,000 or such other amount as may be in effect under Code section 416(i)(1)(A)(i). The number of persons to be considered officers in any Plan Year and the identity of the persons to be so considered shall be determined pursuant to the provisions of Code section 416(i) and the regulations published thereunder.

(2) A 5% owner of the Employer.

(3) A person who is both an Employee whose annual Compensation exceeds $150,000 and who is a 1% owner of the Employer.

The beneficiary of any deceased Participant who was a Key Employee shall be considered a Key Employee for the same period as the deceased Participant would have been so considered.

(d) “ Key Employee Ratio ” shall mean the ratio (expressed as a percentage) for any Plan Year, calculated as of the Determination Date with respect to such Plan Year, determined by dividing the amount described in paragraph (1) hereof by the amount described in paragraph (2) hereof, after deduction from both such amounts of the amount described in paragraph (3) hereof.

(1) The amount described in this paragraph (1) is the sum of (A) the aggregate of the present value of all accrued benefits of Key Employees under all qualified defined benefit plans included in the Aggregation Group, (B) the aggregate of the balances in all of the accounts standing to the credit of Key Employees under all qualified defined contribution

plans included in the Aggregation Group, and (C) the sum of the amount of any in-service distributions during the period of five Plan Years ending on the Determination Date, and the amount of any other distributions during the one-year period ending on the Determination Date, to or on behalf of any Key Employee for all plans in the Aggregation Group.

(2) The amount described in this paragraph (2) is the sum of (A) the aggregate of the present value of all accrued benefits of all Participants under all qualified defined benefit plans included in the Aggregation Group, (B) the aggregate of the balances in all of the accounts standing to the credit of all Participants under all qualified defined contribution plans included in the Aggregation Group, and (C) the sum of the amount of any in-service distributions during the period of five Plan Years ending on the Determination Date, and the amount of any other distributions during the one-year period ending on the Determination Date, and the amount of any other distributions during the one-year period ending on the Determination Date, to or on behalf of any Participant from all plans in the Aggregation Group.

(3) The amount described in this paragraph (3) is the sum of (A) all rollover contributions (or similar transfers) to plans included in the Aggregation Group initiated by an Employee from a plan sponsored by an employer which is not the Employer or an Affiliated Company, (B) any amount that would have been included under paragraph (1) or (2) hereof with respect to any person who has not rendered service to any Employer at any time during the one-year period ending on the Determination Date, and (C) any amount that is included in paragraph (2) hereof for, on behalf of, or on account of, a person who is a Non-Key Employee as to the Plan Year of reference but who was a Key Employee as to any earlier Plan Year.

The present value of accrued benefits under any defined benefit plan shall be determined under the method used for accrual purposes for all plans maintained by the Employer and all Affiliated Companies if a single method is used by all such plans, or otherwise, the slowest accrual method permitted under Code section 411(b)(1)(C).

(e) “ Non-Key Employee” shall mean any Employee or former Employee who is not a Key Employee as to that Plan Year, or a beneficiary of a deceased Participant who was a Non-Key Employee.

10.02 Determination of Top-Heavy Status . The Plan shall be deemed “top-heavy” as to any Plan Year if, as of the Determination Date with respect to such Plan Year, either of the following conditions are met:

(a) The Plan is not part of an Aggregation Group and the Key Employee Ratio, determined by substituting the “Plan” for the “Aggregation Group” each place it appears in Section 10.01(d), exceeds 60%, or

(b) The Plan is part of an Aggregation Group, and the Key Employee Ratio of such Aggregation Group exceeds 60%.

10.03 Top-Heavy Plan Minimum Allocation . The aggregate allocation made under the Plan to the Account of each active Participant who is a Non-Key Employee for any Plan Year in which the Plan is a Top-Heavy Plan and who remained in the employ of the Employer or an Affiliated Company through the end of such Plan Year (whether or not in the status of Eligible Employee) shall be not less than the lesser of:

(a) 3% of the Compensation of each such Participant for such Plan Year; or

(b) The percentage of such Compensation so allocated under the Plan to the Account of the Key Employee for whom such percentage is the highest for such Plan Year.

(c) If any person who is an active Participant in the Plan is a Participant under any defined benefit pension plan qualified under Code section 401(a) sponsored by the Employer or an Affiliated Company, there shall be substituted “5%” for “3%” in subsection (a). For the purposes of determining whether or not the provisions of this Section have been satisfied, (1) contributions or benefits under chapter 2 of the Code (relating to tax on self-employment income), chapter 21 of the Code (relating to Federal Insurance Contributions Act), title II of the Social Security Act, or any other Federal or state law are disregarded; (2) all defined contribution plans in the Aggregation Group shall be treated as a single plan; and (3) elective deferrals under all plans in the Aggregation Group shall be disregarded. For the purposes of determining whether or not the requirements of this Section have been satisfied, contributions allocable to the account of the Participant under any other qualified defined contribution plan that is part of the Aggregation Group shall be deemed to be contributions made under the Plan, and, to the extent thereof, no duplication of such contributions shall be required hereunder solely by reason of this Section. Subsection (b) shall not apply in any Plan Year in which the Plan is part of an Aggregation Group containing a defined benefit pension plan (or a combination of such defined benefit pension plans) if the Plan enables a defined benefit pension plan required to be included in such Aggregation Group to satisfy the requirements of either Code section 401(a)(4) or 410. In determining the amount of Employer contributions that are needed to satisfy the requirements of this Section, amounts contributed under Section 4.01 for Non-Key Employees shall not be taken into account.

ARTICLE XI

ALLOCATION AND DELEGATION OF AUTHORITY

11.01 Delegation . A fiduciary shall have only those specific powers, duties, responsibilities and obligations as are specifically given to him or her under this Plan or under the Trust Agreement or delegated to him or her by another fiduciary. In general, the Employer, by action of the Board of Directors or a committee thereof, shall have the sole responsibility for making contributions provided for under 4.1(d), 4.4, 4.5 and 4.7; and the Compensation Committee of the Board of Directors shall have the sole authority to appoint and remove the Trustee, the members of the Committee and the Investment Committee, and the Company, by action of the Board of Directors or a committee thereof, shall have the sole authority to curtail or terminate, in whole or in part, this Plan or the Trust Agreement and, except as otherwise provided herein with respect to shared authority, to amend the Plan. The Committee shall have the sole responsibility for the administration of this Plan, which responsibility is specifically described in this Plan and the Trust Agreement, except for the responsibility of the Investment Committee. The Investment Committee shall have the sole responsibility for the selection and monitoring of the Investment Funds, establishing investment objectives, deciding whether to appoint and appointing the Asset Allocation Fiduciary and selecting and monitoring any fiduciary consultant or advisor. The Trustee shall have the sole responsibility for the administration of the Trust Fund and the management of the assets held in the Trust Fund, all as specifically provided in the Trust Agreement. The Asset Allocation Fiduciary shall have the sole responsibility for the determination of the allocation of investments within any Target Fund or portfolio, which shall be made from other investment alternatives selected by the Investment Committee.

11.02 Authority and Responsibilities of the Committee . The Committee shall have the authority and responsibilities imposed by ARTICLE XII hereof, except to the extent delegated to other persons or otherwise provided for herein. With respect to the said authority and responsibility, the Committee shall be a “Named Fiduciary,” and, as such, shall have no authority and responsibility other than as granted in the Plan, or as imposed by law.

11.03 Authority and Responsibilities of the Trustee . The Trustee shall be the “Named Fiduciary” with respect to those powers and duties set forth in the Trust Agreement. The Trustee shall keep complete and accurate accounts of all of the assets of, and the transactions involving, the Trust Fund. All such accounts shall be open to inspection by the Committee during normal business hours.

11.04 Authority and Responsibilities of the Investment Committee . The Investment Committee shall have the authority and responsibilities imposed by ARTICLE XII hereof, except to the extent delegated to other persons or otherwise provided for herein. With respect to said authority and responsibility, the Investment Committee shall be a “Named Fiduciary” and, as such, shall have no authority and responsibility other than as granted in the Plan or as imposed by law.

11.05 Authority and Responsibilities of the Asset Allocation Fiduciary . If and to the extent appointed by the Investment Committee, the Asset Allocation Fiduciary shall have the authority and responsibilities for the determination of the allocation of investments within any Target Fund or portfolio, which shall be made from other investment alternatives selected by the Investment Committee, except to the extent delegated to other persons or otherwise provided for herein. With respect to said authority and responsibility, the Asset Allocation Fiduciary shall be a “Named Fiduciary” and, as such, shall have no authority and responsibility other than as granted in the Plan or as imposed by law. If the Investment Committee does not appoint an Asset Allocation Fiduciary, the Investment Committee shall have the authority and responsibilities set forth in this section.

11.06 Limitations on Obligations of Named Fiduciaries . No Named Fiduciary shall have authority or responsibility to deal with matters other than as delegated to it under this Plan, under the Trust Agreement, or by operation of law. Except as provided by section 405 of ERISA, a Named Fiduciary shall not in any event be liable for breach of fiduciary responsibility or obligation by another fiduciary (including other Named Fiduciaries) if the responsibility or authority of the act or omission deemed to be a breach was not within the scope of the said Named Fiduciary’s authority or delegated responsibility. The determination of any Named Fiduciary as to any matter involving its responsibilities hereunder shall be conclusive and binding on all persons.

11.07 Designation and Delegation . Each Named Fiduciary may designate other persons to carry out such of its responsibilities hereunder for the operation and administration of the Plan as it deems advisable and delegate to the persons so designated such of its powers as it deems necessary to carry out such responsibilities. Such designation and delegation shall be subject to such terms and conditions as the Named Fiduciary deems necessary or proper. Any action or determination made or taken in carrying out responsibilities hereunder by the persons so designated by the Named Fiduciary shall have the same force and effect for all purposes as if such action or determination had been made or taken by such Named Fiduciary.

11.08 Engagement of Assistants and Advisers . Any Named Fiduciary shall have the right to hire, at the expense of the Trust Fund, such professional assistants, counsel and consultants as it, in its sole discretion, deems necessary or advisable.

11.09 Payment of Expenses . The reasonable expenses incurred by the Named Fiduciaries in connection with the operation of the Plan, including but not limited to, the expenses incurred by reason of the engagement of professional assistants, counsel and consultants, shall be expenses of the Plan and shall be payable from the Trust Fund at the direction of the Committee. The Employer shall have the option, but not the obligation, to pay any such expenses, in whole or in part, and by so doing, to relieve the Trust Fund from the obligation of bearing such expenses. Payment of any such expenses by any Employer on any occasion shall not bind the Employer to thereafter pay any similar expenses.

11.10 Indemnification . Each person who is a Named Fiduciary or a member of any committee or board comprising a Named Fiduciary (other than the Trustee), and each employee of the Employer who is a delegee of a Named Fiduciary, may be indemnified by the Employer against costs, expenses and liabilities (other than amounts paid in settlement to which the Employer does not consent) reasonably incurred by him in connection with any action to which he may be a party by reason of his service as a Named Fiduciary to the extent permitted under

applicable law. The foregoing right to indemnification shall be in addition to such other rights as the person may enjoy as a matter of law or by reason of insurance coverage of any kind, but shall not extend to costs, expenses and/or liabilities otherwise covered by insurance or that would be so covered by any insurance then in force if such insurance contained a waiver of subrogation. Rights granted hereunder shall be in addition to and not in lieu of any rights to indemnification to which the person may be entitled pursuant to the bylaws of the Company. Service as a Named Fiduciary shall be deemed in partial fulfillment of the person’s function as an employee, officer and/or director of the Company, if he serves in that capacity as well as in the role of Named Fiduciary.

11.11 Bonding . The Committee shall arrange for such bonding as is required by law for persons who are Employees and/or members of the Board of Directors, but no bonding in excess of the amount required by law shall be considered required by the Plan. The Company shall obtain, and pay the expense of, any bond required by law.

ARTICLE XII

ADMINISTRATION

12.01 Committee . The Committee, which shall consist of at least one person, shall be appointed by and serve at the pleasure of the Compensation Committee of the Board of Directors. The termination of a Committee member’s employment shall automatically constitute a resignation from the Committee. The Committee shall act by a majority of its members with minutes being recorded for each meeting. Such minutes shall be made available to any member upon written request.

12.02 Authority and Responsibility of the Committee . The Committee shall be the Plan “administrator” as such term is defined in section 3(16) of ERISA, and as such, except as otherwise set forth under the terms of the Plan, shall have the following duties and responsibilities:

(a) to adopt and enforce such rules and regulations and prescribe the use of such forms as may be deemed necessary to carry out the provisions of the Plan;

(b) to maintain and preserve records relating to Participants, former Participants, Beneficiaries and Alternate Payees in accordance with Section 12.07;

(c) to prepare and furnish to Participants, Beneficiaries and Alternate Payees all information and notices required under federal law or the provisions of this Plan;

(d) to prepare and file or publish with the Secretary of Labor, the Secretary of the Treasury, their delegates and all other appropriate government officials all reports and other information required under law to be so filed or published;

(e) to provide directions to the Trustee with respect to methods of benefit payment, valuations at dates other than regular Valuation Dates and on all other matters where called for in the Plan or requested by the Trustee;

(f) to determine all questions of the eligibility of Employees and of the status of rights of Participants, Beneficiaries and Alternate Payees, to make factual determinations, to construe the provisions of the Plan, to correct defects therein and to supply omissions thereto;

(g) to determine the amount, manner and timing of any distribution of benefits or any withdrawal under the Plan;

(h) to approve the repayment of any loan to a Participant under the Plan;

(i) to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Committee’s responsibilities under the Plan;

(j) to arrange for bonding, if required by law;

(k) to interpret the Plan and make other determinations as described in Section 11.08;

(l) to provide procedures for determination of claims for benefits and to establish rules, not inconsistent with the provisions or purposes of the Plan, as it may deem necessary or desirable for the proper administration of the Plan or transaction of its business;

(m) to resolve any claim for benefits in accordance with ARTICLE XIII;

(n) to determine whether any domestic relations order constitutes a QDRO and to take such action as the Committee deems appropriate in light of such domestic relations order;

(o) to make such determinations as are required pursuant to the provisions of Section 8.04 hereof;

(p) to retain records on elections and waivers by Participants, their spouses and their Beneficiaries and Alternate Payees;

(q) to select an independent qualified public accountant to examine, at the expense of the Company, the Trustee’s accounts and records and render an opinion;

(r) to perform such other functions and duties as are set forth in the Plan that are not specifically given to another Named Fiduciary;

(s) to allocate among themselves who shall be responsible for specific fiduciary duties and to designate fiduciaries (other than the Committee members ) to carry out fiduciary responsibilities (other than Trustee responsibilities) under the Plan; provided that such allocation shall be reduced to writing, signed by all Committee members and filed in a permanent Committee minute book;

(t) to take such voluntary corrective action as it considers necessary and appropriate to remedy any inequity that results from incorrect information received or communicated in good faith or as a consequence of administrative or operational error. Such steps may include, but shall not be limited to, taking any action required under the employee plans compliance resolution system of the Internal Revenue Service, any asset management or fiduciary conduct error correction program available through the Department of Labor, any similar correction program instituted by the Internal Revenue Service, Department of Labor or other administrative agency, reallocation of plan assets, adjustments in amounts of future payments to Participants, Beneficiaries or Alternate Payees under QDROs, and institution and prosecution of actions to recover benefit payments made in error or on the basis of incorrect or incomplete information;

(u) to maintain continuing review of ERISA and the Code, and implementing regulations thereto, and suggest changes and modifications to the Company in connection with amendments to the Plan; and

(v) to perform such functions and duties as are necessary to carry out its responsibilities under the Plan.

12.03 Investment Committee . The Investment Committee, which consist of at least one person, shall be appointed by and serve at the pleasure of the Compensation Committee of the Board of Directors. The termination of an Investment Committee member’s employment shall automatically constitute a resignation from the Investment Committee. The Investment Committee shall have the following duties and responsibilities:

(a) selection and monitoring of the Investment Funds;

(b) establishment of investment objectives;

(c) evaluating and recommending to the Company organizations to provide services to the Plan, such as trustee, custodian, asset performance evaluation and recordkeeping services;

(d) selection and monitoring of any fiduciary consultant or other advisor who performs services on behalf of the Plan with respect to the Investment Funds; and

(e) selection and appointment of an Asset Allocation Fiduciary.

12.04 Committee Procedures . The Committee and the Investment Committee may act at a meeting or in writing without a meeting. The Company shall appoint a chairman of each of the Committee and the Investment Committee. Each of the Committee and the Investment Committee may appoint a secretary, who may or may not be a member of the committee. Each of the Committee and the Investment Committee may adopt such bylaws, regulations and charters as it deems desirable for the conduct of its affairs; provided, however, that such bylaws, regulations and charters shall not be inconsistent with any charters that may be established by the Company. All decisions of each committee shall be made by the vote of the majority (if more than one person be serving as a member), including actions in writing taken without a meeting.

12.05 Serving in More than One Capacity . An individual person may serve in more than one capacity as a fiduciary.

12.06 Appointment of the Trustee . The Compensation Committee of the Board of Directors shall have sole responsibility for appointing and removing the Trustee.

12.07 Reporting and Disclosure . To the extent required by applicable law, the Committee shall keep all individual and group records relating to Plan Participants, Beneficiaries and Alternate Payees, and all other records necessary for the proper operation of the Plan. Such records shall be made available to the Employer and to each Participant, Beneficiary and Alternate Payee for examination during normal business hours except that a Participant, Beneficiary or Alternate Payee shall examine only such records as pertain exclusively to the examining Participant, Beneficiary or Alternate Payee and those records and documents relating to all Participants generally. The Committee shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder. This provision shall not be construed as imposing upon the Committee the responsibility or authority for the preparation, preservation, publication or filing of any document required to be prepared, preserved or filed by the Trustee or by any other Named Fiduciary to whom such responsibilities are delegated by law or by this Plan.

12.08 Construction of the Plan . The Committee shall take such steps as are considered necessary and appropriate to remedy any inequity that results from incorrect information received or communicated in good faith or as the consequence of an administrative error. The Committee shall have full discretionary power and authority to make factual determinations, to interpret the Plan, to make benefit eligibility determinations, and to determine all questions arising in the administration, interpretation and application of the Plan. The Committee shall correct any defect, reconcile any inconsistency, resolve any ambiguity or supply any omission with respect to the Plan. All such corrections, reconciliations, interpretations, determinations, and completions of Plan provisions shall be final, binding and conclusive upon the parties, including the Employer, the Employees, their families, dependents, Beneficiaries and any Alternate Payees. The Committee shall have no authority, discretion, or power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan.

12.09 Compensation of the Committee and the Investment Committee . Any members of the Committee or the Investment Committee who are Employees shall not receive compensation with respect to their services as such.

12.10 Ministerial Functions . The Committee shall delegate its ministerial duties or functions to such person or persons as the Committee shall select. Such person or persons shall be responsible for the general administration of the Plan under the policy guidance of the Committee. Such person may be in the employ of the Employer and shall be compensated for services and expenses by the Employer according to its normal employment policies, without special or additional compensation for his service hereunder.

12.11 Allocation of Duties and Responsibilities . The Committee may allocate among its members or Employees any of its duties and responsibilities not already allocated under the Plan or may designate persons other than members or Employees to carry out any of the Plan Administrator’s duties and responsibilities under the Plan.

ARTICLE XIII

APPLICATION FOR BENEFITS AND CLAIMS PROCEDURES

13.01 Application for Benefits . Each Participant, Beneficiary or Alternate Payee believing himself or herself eligible for benefits under the Plan shall apply for such benefits by applying to the Committee (or a person named by the Committee to receive claims under the Plan) in the form and manner specified by the Committee. Before the date on which benefit payments commence, each such application must be supported by such information and data as the Committee deems relevant and appropriate. Evidence of age, marital status (and, in the appropriate instances, death), and location of residence shall be required of all applicants for benefits. In the event a Participant, Beneficiary or Alternate Payee fails to apply to the Committee prior to the applicable required distribution date described in Sections 8.01(c) or 8.02(b)(3), the Committee shall make diligent efforts to locate such Participant, Beneficiary or Alternate Payee and obtain such application. In the event the Participant, Beneficiary, or Alternate Payee fails to make application by the applicable date described in Section 8.01(c) or 8.02(b)(3), the Committee shall commence distribution as of such date without such application. However, if the Committee fails to locate the Participant, Beneficiary or Alternate Payee so that distribution as of the applicable date described in Section 8.01(c) or 8.02(b)(3) is not possible, the Participant, Beneficiary or Alternate Payee shall be considered a lost payee as described in Section 16.13; provided, however, that, in the event that the Participant, Beneficiary or Alternate Payee is located, payment shall be made as soon as administratively practicable after the date on which the Participant, Beneficiary or Alternate Payee is located.

13.02 Claims Procedure .

(a) Establishment of Claims Procedures . The Committee shall establish claims and appeals procedures in accordance with this Section 13.02 and applicable law and shall afford a reasonable opportunity to any Participant whose claim for benefits has been denied for a full and fair review of the decision denying such claim.

(b) Appeals of Denied Claims for Benefits . In the event that any claim for benefits is denied in whole or in part, the Participant, Beneficiary or Alternate Payee whose claim has been so denied shall be notified of such denial in writing or electronically by the Committee (or a person named by the Committee to receive claims under the Plan). For purposes of this Section, the person or persons designated to determine initial claims shall be referred to as the “Claims Fiduciary” and the person or persons designated to determine appeals shall be referred to as the “Named Appeals Fiduciary,” and any references to the Claims Fiduciary or Named Appeals Fiduciary in this Section 13.02 shall mean the Committee (and references to the Committee shall also mean the Claims Fiduciary or Named Appeals Fiduciary) as the context so provides. The Claims Fiduciary will review such request and respond within a reasonable time after receiving the claim. The notice advising of the denial shall be furnished to the Participant, Beneficiary or Alternate Payee within 90 days of receipt of the benefit claim by the Committee, unless special circumstances require an extension of time to process the claim. If an extension is required, the Claims Fiduciary shall provide notice of the extension prior to the termination of the applicable period. In no event may the extension exceed a total of 180 days from the date of the original receipt of the claim. The notice advising of the denial shall specify

the reason or reasons for denial, make specific reference to pertinent Plan provisions, describe any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed), and shall advise the Participant, Beneficiary or Alternate Payee, as the case may be, of the procedure for the appeal of such denial and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review. All appeals shall be made by the following procedure:

(1) The Participant, Beneficiary or Alternate Payee whose claim has been denied shall file with the Claims Fiduciary a notice of desire to appeal the denial. Such notice shall be filed within 60 days of notification by Claims Fiduciary, as the case may be, of claim denial, shall be made in writing, and shall set forth all of the facts upon which the appeal is based. In connection with any such appeal, the Participant, Beneficiary or Alternative Payee shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits. Appeals not timely filed shall be barred.

(2) The Named Appeals Fiduciary shall consider the merits of the claimant’s written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Named Appeals Fiduciary shall deem relevant, without regard to whether such information was submitted or considered in the initial determination.

(3) The Named Appeals Fiduciary shall ordinarily render a determination upon the appealed claim within 60 days after its receipt which determination shall be accompanied by a written or electronic statement setting forth (i) the reasons therefor; (ii) specific references to the pertinent Plan provisions on which the decisions is based; (iii) a description of the claimant’s right to, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits; (iv) a description of any voluntary appeal procedures offered by the Plan; and (v) a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA. However, in special circumstances the Named Appeals Fiduciary may extend the response period for up to an additional 60 days, in which event it shall notify the claimant in writing prior to commencement of the extension. Any determination rendered by the Named Appeals Fiduciary shall be final and binding upon all parties.

(4) If the Claimant challenges the decision of the Named Appeals Fiduciary, a review by a court shall be permitted only in accordance with subsection (d) below, Failure to comply with the time limits set forth above will bar the claimant from filing suit in court. Any review by a court shall be limited to the facts, evidence and issues presented during the claims procedure set forth above. Facts and evidence that become known to the claimant after having exhausted the review process may be submitted for reconsideration of the review in accordance with the time limits established in above. Issues not raised during the review process shall be deemed waived.

(c) Authority to Determine Claims . The Committee has exclusive authority to decide all claims under the Plan. The Committee has exclusive authority to review and resolve any appeal of a denied claim. The Committee is a Plan fiduciary with full discretionary authority to do the following: to make findings of fact; to interpret the Plan and resolve ambiguities therein; to determine whether a claimant is eligible for benefits; to decide the amount, form and timing of benefits; and to resolve any other matter which is raised by a claimant or identified by the Committee. In the case of an appeal, the decision of the Committee shall be final and binding upon all parties.

(d) Exhaustion of Claims Procedures . A claim or action (1) to recover benefits allegedly due under the provisions of the Plan or by reason of any law, (2) to enforce rights under the Plan, (3) to clarify rights to future benefits under the Plan, or (4) any other claim or action that relates to the Plan and seeks a remedy, ruling, or judgment of any kind against the Plan or a Plan fiduciary or party in interest may not be filed in any court until the claimant has exhausted the Plan’s claim and appeal process for any and all reasons the claimant believes his claim should be approved. In addition, any such claim or action must be filed no later than 36 months after, as appropriate, the date the first benefit payment was made or due, the date the Committee or its delegate first denied the claimant’s request, or the earliest date the claimant knew or should have known the material facts on which such claim or action is based. Any claim or action filed after the end of this 36-month period shall be time-barred.

(e) Reliance on Records . The records of the Employer and any Affiliated Company with respect to length of employment, employment history, compensation, absences from employment and all other relevant matters may be conclusively relied on by the Committee for purposes of determining an individual’s eligibility or entitlement to Plan benefits, the amount of Plan benefits payable to an individual, the appropriate timing of payment of Plan benefits to an individual, and so forth. If an individual claiming benefits under the Plan believes those records are incorrect, the individual may provide documentation supporting his or her position to the Committee for review and consideration. However, the decision of the Committee with respect to any records dispute shall be final and binding on all parties.

ARTICLE XIV

AMENDMENT AND TERMINATION

14.01 Amendment . The provisions of the Plan may be amended at any time and from time to time by the Company; provided, however, that:

(a) No amendment shall increase the duties or liabilities of the Committee or of the Trustee without the consent of that party;

(b) No amendment shall deprive any Participant, Beneficiary or Alternate Payee of any of the benefits to which he is entitled under the Plan with respect to contributions previously made, nor shall any amendment decrease the vested percentage of any Participant’s Account nor result in the elimination or reduction of a benefit “protected” under Code section 411(d)(6), unless otherwise permitted or required by law;

(c) No amendment shall provide for the use of funds or assets held to provide benefits under the Plan other than for the benefit of Participants and their Beneficiaries or Alternate Payees or to meet the administrative expenses of the Plan, except as may be specifically authorized by statute or regulation.

Each amendment shall be approved by or pursuant to a resolution adopted by the Board of Directors (or its duly authorized delegate); provided, however, that the Committee (or its duly authorized delegate) may make (1) any technical, administrative or compliance amendment to the Plan and (2) any amendment to the Plan that will not result in a material increase in cost of the Plan to the Company, as the Committee (or its duly authorized delegate) shall deem necessary or appropriate in its sole discretion, including any amendment and restatement of the Plan to include such amendments.

14.02 Amendments to the Vesting Schedule .

(a) If the vesting schedule under this Plan is amended, each active Participant who has completed at least three Years of Service prior to the end of the election period specified in this Section may elect, during such election period, to have the vested percentage of his Account determined without regard to such amendment.

(b) For the purposes of this Section, the election period shall begin as of the date on which the amendment changing the vesting schedule is adopted, and shall end on the latest of the following dates:

(1) the date occurring 60 days after the Plan amendment is adopted; or

(2) the date which is 60 days after the day on which the Plan amendment becomes effective; or

(3) the date which is 60 days after the day the Participant is issued written notice of the Plan amendment by the Committee or by the Employer; or

(4) such later date as may be specified by the Committee.

The election provided for in this Section shall be made in writing and shall be irrevocable when made.

14.03 Plan Termination .

(a) It is the intention of the Company that this Plan will be permanent. However, each entity constituting the Employer reserves the right to terminate its participation in this Plan by action of its board of directors or other governing body. Furthermore, the Company reserves the power to terminate the Plan at any time for any reason by action of the Board of Directors.

(b) Any termination of the Plan shall become effective as of the date designated by the Board of Directors. Except as expressly provided elsewhere in the Plan, prior to the satisfaction of all liabilities with respect to the benefits provided under this Plan, no termination shall cause any part of the funds or assets held to provide benefits under the Plan to be used other than for the benefit of Participants and their Beneficiaries or Alternate Payees or to meet the administrative expenses of the Plan. Upon termination or partial termination of the Plan, or upon complete discontinuance of contributions, the rights of all affected persons to benefits accrued to the date of such termination shall be nonforfeitable. Upon termination of the Plan, Accounts shall be distributed in accordance with applicable law.

14.04 Mergers and Consolidations of Plans . Pursuant to action by the Board of Directors, the Plan may be merged or consolidated with, or a portion of its assets and liabilities may be transferred to, another qualified plan. In the event of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each Participant shall have a benefit in the surviving or transferee plan if such plan were then terminated immediately after such merger, consolidation or transfer that is equal to or greater than the benefit he would have had immediately before such merger, consolidation or transfer in the plan in which he was then a participant had such plan been terminated at that time and no such merger, consolidation or transfer shall result in the elimination or reduction of a benefit “protected” under Code section 411(d)(6), unless otherwise permitted or required by applicable law. For the purposes hereof, former Participants, Beneficiaries and Alternate Payees shall be considered Participants.

ARTICLE XV

CHANGE OF CONTROL

15.01 Change of Control .

(a) General . In the event that there is a Change of Control (as defined in Section 15.01(b)) of the Company, then, the Accounts of all Participants in the Plan shall become immediately fully (100%) vested and nonforfeitable as of the date of the Change of Control.

(b) Definition of Change of Control . For purposes of this Section 15.01, the term “ Change of Control ” shall mean, and shall be deemed to have occurred, each time the date on which one of the events described in paragraphs (1), (2), (3), or (4) below occurs; provided that if a Change of Control occurs by reason of an acquisition by any Person that comes within the provisions of paragraph (1) below), no addition Change of Control shall be deemed to occur under such paragraph (1) by reason of subsequent changes in holdings by such Person (except if the holdings by such Person are reduced below 30% and thereafter increase to 30% or above). For the purpose of this paragraph (b), the term “ Company ” shall include Devon Energy Corporation, a Delaware corporation, and any successor thereto.

(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “ Person ”) if, immediately after such acquisition, such Person has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (I) the then outstanding shares of common stock of the Company (the “ Outstanding Company Common Stock ”) or (II) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ”); provided, however, that the following acquisitions shall not constitute a Change of Control: (A) any acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B), and (C) of paragraph (3) below.

(2) Individuals who, as of the Effective Date, constitute the Board of Directors (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, appointment or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for purposes of this definition, any such individual whose initial assumption of office occurs as a result of an actual or publicly threatened election contest (as such terms are used in Rule 14a-11 promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or publicly threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors.

(3) A reorganization, share exchange, merger or consolidation (a “ Business Combination ”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the ultimate parent entity resulting from such Business Combination (including, without limitation, an entity which, as a result of such transaction, has ownership of the Company or all or substantially all of the assets of the Company either directly or through one or more subsidiaries) in substantially the same relative proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding common stock of the ultimate parent entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Incumbent Board providing for such Business Combination, or were elected, appointed or nominated by the Incumbent Board.

(4) Approval by the shareholders of the Company of (A) a complete liquidation or dissolution of the Company or, (B) the sale or other disposition of all or substantially all of the assets of the Company, other than to an entity with respect to which following such sale or other disposition, (i) more than 50% of, respectively, the then outstanding shares of common stock of such entity and the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same relative proportions as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) less than 30% of, respectively, the then outstanding shares of common stock of such entity and the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by any Person (excluding any employee benefit plan (or related trust) of the Company or such entity), except to the extent that such Person owned 30% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities prior to the sale or disposition, and (iii) at least a majority of the members of the board of directors of such entity were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Incumbent Board providing for such sale or other disposition of assets of the Company, or were elected, appointed or nominated by the Incumbent Board.

15.02 Amendment of this ARTICLE XV by the Company . Notwithstanding any of the provisions in this Plan to the contrary, this ARTICLE XV may be amended or deleted in any manner as the Company determines prior to the time that a Change of Control occurs. Upon or after a Change of Control, this ARTICLE XV may not be amended, modified or terminated without the consent of the affected Participant unless such amendment, modification or termination is necessary to satisfy the requirements of the Code and the failure to satisfy such requirements of the Code would result in the disqualification of the Plan.

ARTICLE XVI

MISCELLANEOUS PROVISIONS

16.01 Nonalienation of Benefits .

(a) Except as provided in Section 15.01(b), none of the payments, benefits or rights of any Participant, Alternate Payee or Beneficiary shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such Participant, Alternate Payee or Beneficiary. Except as provided in Section 15.01(b), no Participant, Alternate Payee or Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary or Beneficiaries as hereinabove provided.

(b) Compliance with the provisions and conditions of (1) any QDRO, (2) any federal tax levy made pursuant to Code section 6331, or (3) subject to the provisions of Code section 401(a)(13), a judgment relating to the Participant’s conviction of a crime involving the Plan or a judgment, order, decree or settlement agreement between the Participant and the Secretary of Labor or the Pension Benefit Guaranty Corporation relating to a violation (or an alleged violation) of part 4 of subtitle B of title I of ERISA shall not be considered a violation of this provision.

16.02 No Contract of Employment . Neither the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Participant or Employee, or any person whomsoever, the right to be retained in the service of the Employer, and all Participants and other Employees shall remain subject to discharge to the same extent as if the Plan had never been adopted.

16.03 Severability of Provisions . If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.

16.04 Heirs, Assigns and Personal Representatives . This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant, Beneficiary and Alternate Payee, present and future (except that no successor to the Employer shall be considered a Plan sponsor unless that successor adopts the Plan).

16.05 Headings and Captions . The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

16.06 Gender and Number . Except where otherwise clearly indicated by context, the masculine and the neuter shall include the feminine and the neuter, the singular shall include the plural, and vice-versa.

16.07 Controlling Law . This Plan shall be construed and enforced according to the laws of the State of Oklahoma to the extent not preempted by federal law, which shall otherwise control. All contributions to the Trust Fund shall be deemed to take place in the State of Oklahoma.

16.08 Funding Policy . The Investment Committee appointed under Section 12.03 (or the Committee, if no Investment Committee has been appointed) shall establish, and communicate to the Trustee, a funding policy and method consistent with the objectives of the Plan and of the Trust Fund.

16.09 Title to Assets; Source of Benefits . No person shall have any right to, or interest in, any assets of the Trust Fund, except as provided from time to time under the Plan, and then only to the extent of the benefits payable under the Plan to such person or out of the assets of the Trust Fund. All payments of benefits as provided for in the Plan shall be made from the assets of the Trust Fund, and neither the Employer nor any other person shall be liable therefore in any manner.

16.10 Payments to Minors, Etc . Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefore shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment (which may be in installments) shall fully discharge the Trustee, the Committee, the Employer and all other parties with respect thereto.

16.11 Reliance on Data and Consents . The Employer, the Trustee, the Committee, all fiduciaries with respect to the Plan, and all other persons or entities associated with the operation of the Plan, the management of its assets, and the provision of benefits thereunder, may reasonably rely on the truth, accuracy and completeness of all data provided by any Participant, Beneficiary or Alternate Payee, including, without limitation, data with respect to age, health and marital status. Furthermore, the Employer, the Trustee, the Committee and all fiduciaries with respect to the Plan may reasonably rely on all consents, elections and designations filed with the Plan or those associated with the operation of the Plan and its corresponding trust by any Participant, the spouse of any Participant, any Beneficiary of any Participant, any Alternate Payee of any Participant or the representatives of such persons without duty to inquire into the genuineness of any such consent, election or designation. None of the aforementioned persons or entities associated with the operation of the Plan, its assets and the benefits provided under the Plan shall have any duty to inquire into any such data, and all may rely on such data being current to the date of reference, it being the duty of the Participants, spouses of Participants, Beneficiaries and Alternate Payees to advise the appropriate parties of any change in such data.

16.12 Deemed Acceptance of Act or Omission by a Plan Fiduciary . If a Plan fiduciary (as determined under ERISA) or an individual or entity with authority delegated by a Plan fiduciary, acts or fails to act with respect to a Participant or a Participant’s Account under the Plan and the Participant has direct or indirect knowledge of such act or failure to act, the Participant’s failure to notify the Plan fiduciary (or the Plan fiduciary’s delegate) within a reasonable period of time that such act or failure to act was incorrect or inconsistent with the Participant’s intent or election shall be deemed to be an acceptance and ratification of the Plan fiduciary’s (or the Plan fiduciary’s delegate) act or failure to act.

16.13 Lost Payees . A benefit shall be deemed forfeited, and first used to pay Plan expenses, then used to reduce future Matching Contributions or future Discretionary Contributions by the Employer that last employed the Participant, if the Committee is unable to locate a Participant, a Beneficiary or an Alternate Payee to whom payment is due; provided, however, that such benefit shall be reinstated, without any earnings from the date deemed forfeited to the date reinstated, if a claim is made by the party to whom properly payable.

16.14 No Warranties . Neither the Board of Directors nor its members nor the Committee nor the Company nor any Employer nor any Affiliated Company nor the Trustee warrants or represents in any way that the value of each Participant’s Accounts will increase or will not decrease. The Participant assumes all risk in connection with any change in values.

16.15 Multiple Employer Plan Provisions . Notwithstanding any other provision in the Plan to the contrary, unless the Plan is a collectively bargained multiemployer plan described in Treas. Reg. § 1.413-1(a), the following provisions will apply with respect to any Participating Employer:

(a) Employees of a Participating Employer will be treated separately for purposes of testing under the provisions of Code sections 401(a)(4), 401(a)(26), 401(k), 401(m), and, if the Company and the Participating Employer do not share Employees, Code section 416. Furthermore, the terms of Code section 410(b) will be applied separately on an employer-by-employer basis by the Company (and Employers that are Affiliated Companies of the Company) and each Participating Employer, taking into account the generally applicable rules described in Code section 401(a)(5), 414(b) and 414(c).

(b) Employees of the Participating Employer will be treated as part of a single employer plan for purposes of eligibility to participate under ARTICLE III and under the provisions of Code section 410(a). Furthermore, the terms of Code section 411 relating to vesting under the Plan as described in ARTICLE VII will be applied as if all Employees of all Employers were employed by a single employer, except that the rules regarding Periods of Severance will be applied under such regulations as may be prescribed by the Secretary of Labor.

(c) Contributions made by any such Participating Employer will be held in a common Trust Fund with contributions made by other Employers, and all such contributions will be available to pay the benefits of any Participant, Beneficiary or Alternate Payee.

(d) The failure of either the Company or any such Participating Employer to satisfy the qualification requirements under the provisions of Code section 401(a), as modified by the provisions of Code section 413(c), will result in the disqualification of the Plan for all such Employers maintaining the Plan.

(e) A Participating Employer may terminate participation in the Plan by delivering written notice to the Company, the Committee and the Trustee; but in accordance with Section 14.03, only the Company can terminate the Plan. Such Participating Employer may thereupon request a transfer of Trust Fund assets attributable to its Employees from this Plan to any successor qualified retirement plan maintained by the Participating Employer or its successor. The Committee may, however, refuse to make such transfer if it determines, in its

sole discretion, that such transfer would operate to the detriment of any Participant, jeopardize the continued qualification of the Plan, or does not comply with any requirements of the Internal Revenue Service. If a request for, and approval of, a transfer of assets from this Plan to any successor qualified retirement plan maintained by the Participating Employer or its successor is not made or approved, Participants who are no longer Employees because the Participating Employer terminates its Plan participation will be entitled to the commencement of their benefits within a reasonable time thereafter as if the Plan had been terminated under Section 14.03.

16.16 Notices . Each Participant, Beneficiary and Alternate Payee shall be responsible for furnishing the Committee with the current and proper address for the mailing of notices, reports and benefit payments. Any notice required or permitted to be given shall be deemed given if directed to the person to whom addressed at such address and mailed by regular United States mail, first-class and prepaid. If any check mailed to such address is returned as undeliverable to the addressee, mailing of checks will be suspended until the Participant, Beneficiary or Alternate Payee furnishes the proper address. This provision shall not be construed as requiring the mailing of any notice or notification if the regulations issued under ERISA deem sufficient notice to be given by the posting of notice in appropriate places, or by any other publication device.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

This amended and restated version of the Devon Energy Corporation Incentive Savings Plan is executed this 28 ^th day January, 2013.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

APPENDIX A

DIRECT TRANSFER FROM KERR-MCGEE CORPORATION

SAVINGS INVESTMENT PLAN

This Appendix A shall apply with regard to those Employees (whether or not Participants under this Plan) whose Accounts under the Plan include amounts transferred to the Trust Fund from the Kerr-McGee Savings Investment Plan (the “ KM Plan ”) in connection with the merger, effective as of January 1, 1997, of the KM Plan with and into the Plan.

1.	Plan Merger . The KM Plan shall be merged with and into the Plan, effective as of January 1, 1997. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the KM Plan, except as provided in this Appendix.

Date of Plan Participation . All Employees with undistributed account balances in the KM Plan that were merged with and into the Plan shall be eligible to become Participants in the Plan effective January 1, 1997. Any individual who participated in the KM Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, January 1, 1997, shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as out lined in Section 3.06.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of January 1, 1997, or as soon as administratively practicable thereafter, assets and liabilities from the trust fund for the KM Plan shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the trust fund for the KM Plan shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the KM Plan (“ KM Plan Participants ”) as set forth in this Appendix

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each employee who has an account balance from the KM Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the KM Plan or the Plan had then terminated).

(c)

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4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Vesting of KM Plan Participants . Notwithstanding anything to the contrary herein, KM Plan Participants shall be 100% vested in all KM Accounts.

(b)

KM Accounts .

(i)

“ SMART Savings Contributions Account, ” as defined in the KM Plan, shall mean those monies held in that account which are transferred to the Plan. The SMART Savings Contributions Account shall be considered a part of the Salary Deferral Account.

(ii)

“ KM Matching Contributions Account, ” as defined in the KM Plan under the term “Matching Contributions Account,” shall mean those monies held in that account which are transferred to the Plan. The KM Matching Contributions Account shall be considered part of the Matching Contributions Account.

(iii)

“ CAPITAL Savings Contributions Account, ” as defined in the KM Plan, means the monies held in that account which are transferred to the Plan. The CAPITAL Savings Contributions Account represents after-tax contributions (nondeductible contributions) for all purposes.

(c)

KM Account Withdrawals . The following provisions shall apply to the KM Accounts of any Participant:

(i)

A Participant may withdraw any portion of the value of his CAPITAL Savings Contributions Account in whole dollars. In addition, a Participant may withdraw vested amounts from his KM Matching Contributions Account, except that a Participant who has not been a Participant under the KM Plan and/or the Plan for at least five years shall not be permitted to make such a withdrawal with respect to any Matching Contributions which have not been credited to his Matching Contributions Account for at least two years. Except as may be required by law, such withdrawal shall be first from the CAPITAL Savings Contributions Account and then from the Matching Contributions Account.

(ii)

All withdrawal requests pursuant to this Appendix shall be filed with the Committee and shall be made on such withdrawal request form and in such manner as the Committee may prescribe from time to time. In addition, withdrawals and withdrawal payments pursuant to this Appendix shall be subject to and made in accordance with such rules and procedures as the Committee may prescribe from time to time, including rules governing the withdrawal and charging of withdrawal payments among

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the subaccounts in the Participant’s KM Account in the case of a withdrawal of less than 100% of the funds available for withdrawal. Withdrawals from a Participant’s CAPITAL Savings Contribution Account shall be attributed to the Participant’s CAPITAL Savings Contributions made prior to January 1, 1987, to the extent allowed by the Code.

(iii)

A Participant shall not be permitted to make more than one in-service withdrawal from his KM Account under the provisions of subsection (i) above during any 12-month period.

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APPENDIX B

PENNZENERGY COMPANY SAVINGS AND

INVESTMENT PLAN MERGER

This Appendix B shall apply with regard to those employees who were previously employed by PennzEnergy Company (“ Pennz ”) whose Accounts under the Plan include amounts transferred to the Plan from the PennzEnergy Company Savings and Investment Plan (the “ Pennz Plan ”) in connection with the merger, effective as of November 1, 2000, of the Pennz Plan with and into the Plan.

1.	Plan Merger . The Pennz Plan shall be merged with and into the Plan, effective as of November 1, 2000. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the Pennz Plan, except as provided in this Appendix.

Date of Plan Participation . Any participant in the Pennz Plan on October 31, 2000 shall become a Participant in the Plan on November 1, 2000; provided, however, that any individual who participated in the Pennz Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, November 1, 2000 shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as outlined in Section 3.06 of the Plan.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of November 1, 2000, or as soon as administratively practicable thereafter, assets and liabilities from the trust fund for the Pennz Plan shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the trust fund for the Pennz Plan shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the Pennz Plan (“ Pennz Plan Participants ”) as set forth in this Appendix.

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each Pennz employee who has an account balance from the Pennz Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the Pennz Plan or the Plan had then terminated).

(c)

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4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Vesting of Pennz Accounts . Pennz Accounts that were fully (100%) vested and nonforfeitable when transferred to the Trust Fund as set forth in Section 3(a) of this Appendix shall remain fully (100%) vested and nonforfeitable in this Plan, including:

(i)

Pennz Accounts of any Participant who was a participant in the Pennz Plan and who was subject to immediate taxation on his employer matching contributions under the Pennz Plan pursuant to applicable Canadian income tax laws.

(ii)

Pennz Accounts of any Participant who was employed by Pennzoil Sulphur Company as of June 30, 1994 whose service with the Pennzoil Sulphur Company is terminated from and after July 1, 1994 and on or before December 31, 1995.

(iii)

Pennz Accounts of any Participant who terminated service by reason of the sale of Vermejo Park by Pennzoil Company on or about June 1, 1996.

(iv)

Any portion of Pennz Accounts which were previously in the Pennz Plan and were invested in shares of Pennzoil-Quaker State Company, or the proceeds of the sale of such stock.

(v)

Pennz Accounts of any Participant who was a participant in the Pennz Plan and who was an employee of Pennz in active service on May 19, 1999 and who terminated employment with Pennz or the Company prior to the second anniversary of the closing date of the “Transaction” contemplated by, and as defined in, the Amended and Restated Agreement and Plan of Merger by and among the Company, Devon Oklahoma Corporation and Pennz, dated as of May 19, 1999.

(b)

Special Vesting of Certain Pennz Plan Participants . Notwithstanding anything to the contrary herein, any Participant who is a Pennz Plan Participant and whose employment with the Company terminated between August 18, 2000 and August 18, 2002 will be 100% vested in all of his Accounts in the Plan.

(c)

Pennz After-Tax Contribution Account and Withdrawals . The following provisions shall apply to the Pennz After-Tax Contribution Account of any Participant:

(i)

“ Pennz After-Tax Contribution Account ” shall mean the separate Account representing a Participant’s nondeductible contributions that were made to the Pennz Plan and transferred to the Plan as described in Section 3(a) of this Appendix, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

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(ii)

A Participant may, in the manner prescribed by the Committee, request a withdrawal from his Pennz After-Tax Contribution Account. No forfeitures will occur solely as a result of the Participant’s withdrawal of all or part of his Pennz After-Tax Contribution Account. After receipt of the request, the Committee shall cause the Trustee to pay over the designated amount in not less than 90 days from the date such request shall have been delivered to the Committee.

(iii)

All Pennz After-Tax Contributions made prior to January 1, 1987 will be maintained in a separate subaccount (the “ Pre-1987 Account ”) which is part of the Participant’s Pennz After-Tax Contribution Account. Withdrawals made from the Pre-1987 Account made under subsection (ii) above will not include any earnings attributable to such Pre-1987 Account.

(iv)

All Pennz After-Tax Contributions made after December 31, 1986 will be maintained in a separate subaccount (the “ After-1986 Account ”) which is part of the Participant’s Pennz After-Tax Contribution Account. Withdrawals made from the After-1986 Account as provided under subsection (ii) above will include earnings attributable to such After-1986 Account. The amount of earnings on Pennz After-Tax Contributions which must be distributed with each withdrawal will be calculated by multiplying the total amount of earnings then held in the After-1986 Account by a fraction the numerator of which is the amount of Pennz After-Tax Contributions that is included in the distribution and the denominator of which is the balance of all Pennz After-Tax Contributions then held in the After-1986 Account.

(d)

Withdrawal of Rollover Account . A Participant who is a Pennz Plan Participant may withdraw any or all of his Rollover Account by giving 30 days’ prior notice to the Committee.

(e)

In-Service Withdrawals . A Participant who is a Pennz Plan Participant and has participated in the Pennz Plan and/or this Plan for at least five full Plan Years shall be entitled, at his election, to receive a distribution of all or any portion of his vested Employer Contribution Account attributable to the balance in his Employer Contribution Account on November 1, 2000, provided that the Participant has previously withdrawn the entire amount of his “Prior Plan Account” (as defined in the Pennz Plan) and his Rollover Account, if any, and the Participant is not on suspended status; provided, further, that a Participant may make only one withdrawal under this subsection (e) every five full Plan Years.

(f)

Loans to Pennz Plan Participants . Notwithstanding anything in the Plan to the contrary, the Committee may make a loan with a term not in excess of 20 years to a Participant who is a Pennz Plan Participant if the proceeds of such loan are used to purchase any dwelling within a reasonable time that is to be used as a principal residence of the Participant.

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APPENDIX C

SANTA FE ENERGY SNYDER SAVINGS

INVESTMENT PLAN MERGER

This Appendix C shall apply with regard to those employees who were previously employed by Santa Fe Snyder Corporation or any subsidiary (“ Santa Fe ”) whose Accounts under the Plan include amounts transferred to the Plan from Santa Fe Energy Snyder Savings Investment Plan (the “ Santa Fe Plan ”) in connection with the merger, effective January 1, 2001, of the Santa Fe Plan with and into the Plan.

1.	Plan Merger . The Santa Fe Plan shall be merged with and into the Plan, effective as of January 1, 2001. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the Santa Fe Plan, except as provided in this Appendix.

Date of Plan Participation . Each Participant who was employed by the Employer on August 29, 2000 and continued to be employed by such Employer immediately thereafter shall continue to participate in the Plan in accordance with its terms. Notwithstanding anything in to the contrary herein, any Employee who was employed by Santa Fe immediately prior to the merger of a subsidiary of the Company with and into Santa Fe on August 29, 2000 shall not be eligible to participate in the Plan. Any participant in the Santa Fe Plan on December 31, 2000 shall become a Participant in the Plan on January 1, 2001. Any individual who participated in the Santa Fe Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, January 1, 2001 shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as outlined in Section 3.06 of the Plan.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of January 1, 2001, or as soon as administratively practicable thereafter, assets and liabilities from the trust fund for the Santa Fe Plan shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the trust fund for the Santa Fe Plan shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the Santa Fe Plan (“ Santa Fe Plan Participants ”) as set forth in this Appendix.

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each Santa Fe employee who has an account balance from the Santa Fe Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the Santa Fe Plan or the Plan had then terminated).

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(c)

4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Vesting of Certain Santa Fe Plan Participants . Notwithstanding anything to the contrary herein, any Participant who became a participant in the Santa Fe Plan on the original effective date of the Santa Fe Plan, or was a participant in the Santa Fe Plan on May 5, 1999 (including those who became participants in the Santa Fe Plan upon the merger of the Snyder Oil Corporation Profit Sharing and Savings Plan into the Santa Fe Plan) shall be 100% vested in all of his Accounts at all times after such applicable event.

(b)

Santa Fe After-Tax Contribution Account and Withdrawals . The following provisions shall apply to the Santa Fe After-Tax Contribution Account of any Participant:

(i)

“ Santa Fe After-Tax Contribution Account ” shall mean the separate Account representing a Participant’s nondeductible contributions that were held in his SFP Plan Participant Contributions Account in the Santa Fe Plan and merged into the Plan as described in Section 3(a) of this Appendix, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

(ii)

A Participant may, in the manner prescribed by the Committee, request a withdrawal from his Santa Fe After-Tax Contribution Account. No forfeitures will occur solely as a result of the Participant’s withdrawal of all or part of his Santa Fe After-Tax Contribution Account. After receipt of the request, the Committee shall cause the Trustee to pay over the designated amount in not less than 90 days from the date such request shall have been delivered to the Committee.

(iii)

All Santa Fe After-Tax Contributions made prior to January 1, 1987 will be maintained in a separate subaccount (the “ Pre-1987 Account ”) which is part of the Participant’s Santa Fe After-Tax Contribution Account. Withdrawals made from the Pre-1987 Account made under subsection (ii) above will not include any earnings attributable to such Pre-1987 Account.

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(iv)

All Santa Fe After-Tax Contributions made after December 31, 1986 will be maintained in a separate subaccount (the “ After-1986 Account ”) which is part of the Participant’s Santa After-Tax Contribution Account. Withdrawals made from the After-1986 Account as provided under subsection (ii) above will include earnings attributable to such After-1986 Account. The amount of earnings on Santa Fe After-Tax Contributions which must be distributed with each withdrawal will be calculated by multiplying the total amount of earnings then held in the After-1986 Account by a fraction the numerator of which is the amount of Santa Fe After-Tax Contributions that is included in the distribution and the denominator of which is the balance of all Santa Fe After-Tax Contributions then held in the After-1986 Account.

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APPENDIX D

MITCHELL ENERGY & DEVELOPMENT CORP.

THRIFT & SAVINGS PLAN MERGER

This Appendix D shall apply with regard to those employees who were previously employed by Mitchell Energy & Development Corp. (“ Mitchell ”) whose Accounts under the Plan include amounts transferred to the Plan from Mitchell Energy & Development Corp. Thrift & Savings Plan (the “ Mitchell Savings Plan ”) in connection with the merger, effective March 1, 2002, of the Mitchell Plan and the Mitchell Energy Development Corp. Thrift & Savings Trust (the “ Mitchell Trust ”) with and into the Plan.

Plan Merger . The Mitchell Savings Plan shall be merged with and into the Plan, and the Trust Fund shall accept the assets and liabilities of the Mitchell Trust, effective as of March 1, 2002. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the Mitchell Savings Plan, except as provided in this Appendix.

Date of Plan Participation . All Employees who are “members” (the “ Members ”) (as such term is defined in the Mitchell Savings Plan) in the Mitchell Savings Plan immediately prior to March 1, 2002 shall be eligible to become Participants in the Plan upon March 1, 2002. Any individual who participated in the Mitchell Savings Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, March 1, 2002, shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as outlined in Section 3.06 of the Plan.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of March 1, 2002, or as soon as administratively practicable thereafter, assets and liabilities from the Mitchell Trust shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the Mitchell Trust shall constitute the beginning balances of the individual accounts in the Plan of the Members and shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the Mitchell Savings Plan (“ Mitchell Savings Plan Participants ”) as set forth in this Appendix.

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each Mitchell employee who has an account balance from the Mitchell Savings Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the Mitchell Savings Plan or the Plan had then terminated).

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(c)

Segregation of Transferred Amounts . The Committee shall separately account for the amounts transferred to the Plan pursuant to subsection (a) above for record-keeping purposes and shall establish such segregated accounts or sub-accounts as are necessary to provide for this separate accounting. These separate accounts and sub-accounts shall be referred to collectively as the “ Mitchell Accounts .” Except as otherwise provided in Appendix, the Mitchell Accounts shall be treated in the same manner as all other Accounts under the Plan. Notwithstanding the foregoing, the “Cash or Deferred Accounts” and “Member Match Contribution Accounts” (each as defined under the Mitchell Savings Plan) of Mitchell Savings Plan Participants shall be maintained as “Salary Deferral Accounts” and “Matching Contribution Accounts” under the Plan.

4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Years of Service Rules for Certain Mitchell Savings Plan Participants . Any Employee who was in active employment of Mitchell and who became an employee of an Employer or Affiliated Company on the date the Company acquired the stock of and merged with Mitchell (January 24, 2002) (the “ Acquisition Date ”) shall receive credit for Years of Service under the Plan consisting of (i) the years and months of service for vesting credited to the Employee under the Mitchell Savings Plan prior to the Mitchell Savings Plan’s vesting computation period during which the merger of the Mitchell Savings Plan into the Plan occurs and (ii) the greater of (A) the Years of Service that would be credited to the Employee under the Plan for his service during the eligibility computation period of the Plan during which the merger of the Mitchell Savings Plan into the Plan occurs or (B) the vesting service credited to the Employee under the Mitchell Savings Plan as of March 1, 2002 less the vesting service taken into account under the foregoing clause (i)

(b)

Vesting for Mitchell Savings Plan Participants . Any unvested portions of the transferred account balances credited to the Mitchell Accounts shall continue to vest in accordance with the terms of the Plan. Notwithstanding the foregoing, however, any Mitchell Savings Plan Participant whose employment is involuntarily terminated within one year of the Acquisition Date shall be fully (100%) vested in his Merged Plan Account as of such date.

(c)

Optional Forms of Benefit Preserved . Any forms of distribution available under the Mitchell Savings Plan, but not available under the Plan on the day before the March 1, 2002, shall be available solely as to the assets held in the Mitchell Accounts attributable to participation in the Mitchell Savings Plan. In addition, any forms of distribution available under the Plan on the day before the March 1, 2002 shall be available as to amounts credited to all Accounts maintained under the Plan, including the Mitchell Accounts.

D-2

APPENDIX E

OCEAN RETIREMENT SAVINGS PLAN MERGER

This Appendix E shall apply with regard to those employees who were previously employed by Ocean Energy, Inc. (“ Ocean ”) whose Accounts under the Plan include amounts transferred to the Plan from the Ocean Retirement Savings Plan (the “ Ocean Plan ”) in connection with the merger, effective as of January 1, 2004, of the Ocean Plan with and into the Plan.

1.	Plan Merger . The Ocean Plan shall be merged with and into the Plan, effective as of January 1, 2004. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the Ocean Plan, except as provided in this Appendix.

Date of Plan Participation . Effective January 1, 2004, every Employee who was employed by Ocean as of April 25, 2003, was an active participant in the Ocean Plan and is an Employee as of January 1, 2004 shall be a Participant in the Plan. An individual who participated in the Ocean Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, January 1, 2004 shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as outlined in Section 3.06 of the Plan.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of January 1, 2004, or as soon as administratively practicable thereafter, assets and liabilities from the trust fund for the Ocean Plan shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the trust fund for the Ocean Plan shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the Ocean Plan (“ Ocean Plan Participants ”) as set forth in this Appendix.

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each Ocean employee who has an account balance from the Ocean Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the Ocean Plan or the Plan had then terminated).

(c)

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4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Ocean Accounts . The Ocean Accounts shall be held in this Plan and credited to the applicable corresponding account in this Plan.

(i)

“ Ocean After-Tax Account ” shall mean the separate Account representing a Participant’s nondeductible contributions that were made to the Ocean Plan and transferred to the Plan as described in Section 3(a) of this Appendix, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

(ii)

“ Ocean Before-Tax Account ” shall mean the account established pursuant to the Ocean Plan that represents a Participant’s deferrals under Section 401(k) of the Code into the Ocean Plan, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom. The Ocean Before-Tax Account will be credited and held pursuant to the terms of the Salary Deferral Account in this Plan.

(iii)

“ Ocean Employer Discretionary Contribution Account ” shall mean the profit sharing contribution account maintained in the Ocean Plan, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom. The Ocean Employer Discretionary Contribution Account shall be subject to the vesting schedule described this Appendix.

(iv)

“ Ocean Employer Matching Contribution Account ” shall mean the account which held Ocean Employer Matching Contributions pursuant to the terms of the Ocean Plan, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom. The Ocean Employer Matching Contribution Account shall be considered a part of the Matching Contribution Account in this Plan, but shall be subject to the vesting schedule described this Appendix.

(v)

“ Ocean ESOP Account ” shall mean the special account established pursuant to the terms of the Ocean Plan which was considered to be an “employee stock ownership plan” pursuant to the terms of the Code and the Ocean Plan, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom. The Ocean ESOP Account shall be maintained as a separate account in this Plan, but shall be distributed at the same time and in the same manner as the Ocean Discretionary Contribution Account. An Ocean Participant’s benefit in the Ocean ESOP Account shall be fully (100%) vested and nonforfeitable effective April 25, 2003, if such Ocean participant was employed by Ocean on such date.

E-2

(vi)

“ Ocean Rollover Contribution Account ” shall mean the separate account established pursuant to the terms of the Ocean Plan, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom. The Ocean Rollover Contribution Account shall be held and administered in accordance with the terms of the Rollover Account in this Plan.

(vii)

“ Ocean Loan Account ” shall mean an Ocean Participant’s separate account established pursuant to the terms of the Ocean Plan in the event such participant has a loan outstanding pursuant to the terms of the Ocean Plan as of December 31, 2003. The Ocean Loan Account shall be maintained as part of the Loan Account in this Plan.

Notwithstanding the foregoing, effective on and after January 1, 2004, no additional contributions shall be made to any of the Ocean Accounts other than with respect to repayment of any loans under the Ocean Loan Account. All future Contributions made to this Plan will be credited to the applicable Account maintained in this Plan that is not an Ocean Account.

(b)

Year of Service . Effective January 1, 2004, Years of Service under the Plan shall include service with Ocean or any of its subsidiaries with respect to those employees of Ocean or any of its subsidiaries who were (i) employed by Ocean on April 25, 2003, (ii) participants in the Ocean Plan on December 31, 2003 and (iii) employed by the Company on December 31, 2003. The calculation of Years of Service of an Ocean Participant shall be determined in accordance with the applicable provisions of this Plan. Except as provided in this subsection with respect to the recognition of employment service for determining Years of Service, the Ocean Participants shall be considered as newly hired Employees.

(c)

Vesting of Ocean Accounts . Except as otherwise set forth in Section 4(d) of this Appendix, the Ocean Employer Discretionary Contribution Account and Employer Matching Contribution Account (together, the “ Ocean Employer Contribution Accounts ”) of a Participant who is an Ocean Plan Participant shall vest in accordance with the following schedule:

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Years of Service		Vested Percentage
Less than 1 year		0%
1 year		34%
2 years		67%
3 or more years		100%

(d)

Special Accelerated Vesting for Ocean Participants . If an Ocean Participant shall cease to be employed by reason of reduction in force, as hereinafter described, such Ocean Participant shall have a fully (100%) vested and nonforfeitable interest in his Ocean Employer Discretionary Account and Ocean Employer Matching Contribution Account which were previously contributed by Ocean and which were not otherwise fully (100%) vested and nonforfeitable. The employment of an Ocean Participant shall be considered as being terminated because of a “reduction in force” if such termination is the result of a manpower reduction or reorganization by the Employer.

(e)

Ocean After-Tax Contribution Account and Withdrawals . The following provisions shall apply to the Ocean After-Tax Contribution Account of any Participant:

(i)

A Participant may, in the manner prescribed by the Committee, request a withdrawal from his Ocean After-Tax Contribution Account. No forfeitures will occur solely as a result of the Participant’s withdrawal of all or part of his Ocean After-Tax Contribution Account. After receipt of the request, the Committee shall cause the Trustee to pay over the designated amount in not less than 90 days from the date such request shall have been delivered to the Committee.

(ii)

All Ocean After-Tax Contributions made prior to January 1, 1987 will be maintained in a separate subaccount (the “ Pre-1987 Account ”) which is part of the Participant’s Ocean After-Tax Contribution Account. Withdrawals made from the Pre-1987 Account made under subsection (i) above will not include any earnings attributable to such Pre-1987 Account.

(iii)

All Ocean After-Tax Contributions made after December 31, 1986 will be maintained in a separate subaccount (the “ After-1986 Account ”) which is part of the Participant’s Ocean After-Tax Contribution Account. Withdrawals made from the After-1986 Account as provided under subsection (i) above will include earnings attributable to such After-1986 Account. The amount of earnings on Ocean After-Tax Contributions which must be distributed with each withdrawal will be calculated by multiplying the total amount of earnings then held in the After-1986 Account by a fraction the numerator of which is the amount of Ocean After-Tax Contributions that is included in the distribution and the denominator of which is the balance of all Ocean After-Tax Contributions then held in the After-1986 Account.

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(f)

In-Service Withdrawals for Ocean Accounts .

(i)

An Ocean Participant may withdraw from his Ocean After-Tax Account and/or Ocean Rollover Contribution Account any or all amounts held in such Accounts.

(ii)

An Ocean Participant who has withdrawn all amounts in his Ocean After-Tax Account and Ocean Rollover Contribution Account may withdraw from his Ocean Employer Matching Contribution Account any or all amounts held in such Ocean Account that have been so held for 24 months or more, but not in excess of such Participant’s vested interest in such Ocean Account.

(iii)

An Ocean Participant who has attained age 59 ¹ ⁄ ₂ may withdraw from his Ocean Before-Tax Account, his Ocean Employer Matching Contribution Account and his Ocean Rollover Contribution Account an amount not exceeding such Participant’s vested interest in the then-value of such Ocean Accounts. Such withdrawal shall come first, from the Participant’s Ocean Before-Tax Account, second, from the Participant’s Vested Interest in his Ocean Employer Matching Contribution Account and, finally, from his Ocean Rollover Contribution Account.

(iv)

An Ocean Participant who has a financial hardship, as determined by the Committee, and who has made all available withdrawals pursuant to this Plan and pursuant to the provisions of any other plans of the Employer and any Affiliated Company of which he is a member and who has obtained all available loans pursuant to ARTICLE IX and pursuant to the provisions of any other plans of the Employer and any Affiliated Company of which he is a member may withdraw from his Ocean Employer Matching Contribution Account and his Ocean Before-Tax Account amounts not to exceed the lesser of (1) such Participant’s vested interest in such Ocean Accounts or (2) the amount determined by the Committee as being available for withdrawal pursuant to this subsection. Such withdrawal shall come, first, from the Ocean Participant’s vested interest in his Ocean Employer Matching Contribution Account and, then, from his Ocean Before-Tax Account. For purposes of this subsection, “financial hardship” shall mean the immediate and heavy financial needs of the Ocean Participant. A withdrawal based upon financial hardship pursuant to this subsection shall not exceed the amount required to meet the immediate financial need created by the hardship and not reasonably available from other resources of the Ocean Participant. The amount required to meet the immediate financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. The determination

E-5

of the existence of an Ocean Participant’s financial hardship and the amount required to be distributed to meet the need created by the hardship shall be made by the Committee. The decision of the Committee shall be final and binding, provided that all Participants similarly situated shall be treated in a uniform and nondiscriminatory manner. A withdrawal shall be deemed to be made on account of an immediate and heavy financial need of an Ocean Participant if the withdrawal is for:

(A)

Expenses for medical care described in Code section 213(d) previously incurred by the Ocean Participant, the Ocean Participant’s spouse, or any dependents of the Ocean Participant (as defined in Code section 152) or necessary for those persons to obtain medical care described in Code section 213(d) and not reimbursed or reimbursable by insurance;

(B)

Costs directly related to the purchase of a principal residence of the Ocean Participant (excluding mortgage payments);

(C)

Payment of tuition and related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the Ocean Participant or the Ocean Participant’s spouse, children, or dependents (as defined in Code section 152);

(D)

Payments necessary to prevent the eviction of the Ocean Participant from his principal residence or foreclosure on the mortgage of the Ocean Participant’s principal residence; or

(E)

Such other financial needs that the Commissioner of Internal Revenue may deem to be immediate and heavy financial needs through the publication of revenue rulings, notices, and other documents of general applicability.

The above notwithstanding: (1) withdrawals under this subsection from an Ocean Participant’s Ocean Before-Tax Account shall be limited to the sum of the Ocean Participant’s Before-Tax Contributions to the Plan, plus income allocable thereto and credited to the Ocean Participant’s Ocean Before-Tax Account as of December 31, 1988, less any previous withdrawals of such amounts, and (2) withdrawals from an Ocean Participant’s Ocean Employer Contributions Accounts attributable to contributions after December 31, 1988 that constitute income allocable thereto or attributable to qualified nonelective contributions or qualified matching contributions shall not be permitted. An Ocean Participant who makes a withdrawal from his Ocean Before-Tax Account under this subsection may not make Salary Deferrals under the Plan or any other qualified or nonqualified plan of the Employer or any Affiliated Company for a period of six months following the date of such withdrawal. Further, such Ocean Participant may not make Salary Deferrals and Roth 401(k)

E-6

Contributions under the Plan or any other plan maintained by the Employer or any Affiliated Company for such Ocean Participant’s taxable year immediately following the taxable year of the withdrawal in excess of the applicable limit set forth in Code section 402(g) for such next taxable year less the amount of such Ocean Participant’s elective contributions for the taxable year of the withdrawal.

(g)

Restrictions on Ocean In-Service Withdrawals .

(i)

All withdrawals pursuant to this Appendix shall be made in accordance with the procedures established by the Committee.

(ii)

Notwithstanding the provisions of this subsection (g), not more than one withdrawal pursuant to Section 4(f)(ii) of this Appendix or two withdrawals pursuant to Section 4(f)(iii) of this Appendix may be made in any one Plan Year, and no withdrawal shall be made from an Ocean Account to the extent such Ocean Account has been pledged to secure a loan from the Plan.

(iii)

If a Participant’s Ocean Account from which a withdrawal is made is invested in more than one Investment Fund, the withdrawal shall be made pro rata from each Investment Fund in which such Ocean Account is vested.

(iv)

All withdrawals under Section 4(f) of this Appendix shall be paid in cash.

(v)

Any withdrawal hereunder that constitutes an “eligible rollover distribution,” as defined in Section 8.08(a) of the Plan, shall be subject to the provisions of Section 8.08 of the Plan.

(vi)

Section 4(f) of this Appendix shall not be applicable to an Ocean Participant following termination of employment and the amounts in such Ocean Participant’s Ocean Accounts shall be distributable only in accordance with the other provisions of ARTICLE VIII of the Plan.

E-7

APPENDIX F

THUNDER CREEK GAS SERVICES, L.L.C.

RETIREMENT SAVINGS PLAN MERGER

This Appendix F shall apply with regard to those employees who are employed or were previously employed by Thunder Creek Gas Services, LLC (“ Thunder Creek ”) whose Accounts under the Plan include amounts transferred to the Plan from the Thunder Creek Gas Services, L.L.C. Retirement Savings Plan (the “ Thunder Creek Plan ”) in connection with the merger, effective December 18, 2009 of the Thunder Creek Plan with and into the Plan.

Plan Merger . The Thunder Creek Plan shall be merged with and into the Plan, effective as of December 18, 2009. The provisions of the Plan shall become fully applicable to the participants, former participants, beneficiaries and alternate payees of the Thunder Creek Plan, except as provided in this Appendix.

Date of Plan Participation . Any participant in the Thunder Creek Plan on December 17, 2009 shall become a Participant in the Plan on December 18, 2009. Any individual who participated in the Thunder Creek Plan but who terminated employment prior to, and who does not have an Employment Commencement Date on or after, December 18, 2009 shall not become a Participant in the Plan, except for a limited purpose, including, without limitation, investment allocation and distributions, as outlined in Section 3.06 of the Plan.

3.	Asset Transfer Provisions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Transfer of Plan Assets . Effective as of December 18, 2009, or as soon as administratively practicable thereafter, assets and liabilities from the trust fund for the Thunder Creek Plan shall be transferred to the Trust Fund. All assets and liabilities transferred to the Plan from the trust fund for the Thunder Creek Plan shall be administered in accordance with the generally applicable terms of the Plan, together with such other provisions that are applicable to former participants in the Thunder Creek Plan (“ Thunder Creek Plan Participants ”) as set forth in this Appendix.

(b)

Regulatory Requirements . As required by Treas. Reg. § 414(l)-1(d), each Thunder Creek employee who has an account balance from the Thunder Creek Plan transferred to the Plan shall receive a benefit immediately after the transfer contemplated under subsection (a) above that is equal to or greater than the benefit that he would have been entitled to receive immediately before such transfer (as if either the Thunder Creek Plan or the Plan had then terminated).

(c)

F-1

4.	Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Definitions.

(i)

“ Thunder Creek Employer Contributions ” shall mean the employer contributions made to the Thunder Creek Plan before its merger into the Plan on December 18, 2009.

(ii)

“ Thunder Creek Employer Contributions Account ” shall mean the separation Account that holds the Thunder Creek Employer Contributions made to a Thunder Creek Plan Participant and that were merged into the Plan as described in Section 3(a) of this Appendix, including all earnings and gains attributable thereto and reduced by all losses attributable thereto, all expenses chargeable there against and by all withdrawals and distributions therefrom.

(b)

Special Vesting of Thunder Creek Employer Contributions . Except as otherwise set forth in this Appendix, the Thunder Creek Employer Contributions Contribution Account of a Participant who is a Thunder Creek Plan Participant shall vest in accordance with the following schedule:


Years of Service		Vested Percentage
Less than 3 years		0%
3 or more years		100%

F-2

Exhibit 10.2

AMENDMENT 2014-1

TO THE

DEVON ENERGY CORPORATION

INCENTIVE SAVINGS PLAN

The Devon Energy Corporation Incentive Savings Plan (the “ Plan ”) is amended effective as of February 28, 2014, or such later date as of the occurrence of the “Closing” of the transactions described in the Purchase and Sale Agreement among GeoSouthern Intermediate Holdings, LLC, Devon Energy Production Company, L. P., and GeoSouthern Energy Corporation, dated November 20, 2013, as follows:

1. A new Appendix G (“ Special Provisions for GeoSouthern Continued Employees ”) is hereby added at the end of the Plan to read as follows:

“APPENDIX G

SPECIAL PROVISIONS FOR GEOSOUTHERN CONTINUED EMPLOYEES

This Appendix G shall apply with regard to those employees who (a) remain employed by GeoSouthern Energy Corporation or one of its affiliates (“ GeoSouthern ”) until the closing of the transaction set forth in the GeoSouthern Purchase Agreement (as defined in Section 3 of this Appendix) and (b) become Employees of the Company in connection with such transaction.

Transfer of Employees from GeoSouthern. Each GeoSouthern Continued Employee (as defined in Section 3 of this Appendix) shall become an Eligible Employee upon the “Closing Date” (as defined in the GeoSouthern Purchase Agreement) in accordance with the terms of the Plan. The provisions of the Plan shall apply to each GeoSouthern Continued Employee, except as provided in this Appendix. Notwithstanding any provision of the Plan or this Appendix to the contrary, no GeoSouthern Continued Employee shall be eligible for a Company Retirement Contribution at a rate determined under Section 4.04(b) of the Plan.

Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Employment Commencement Date or Reemployment Commencement Date for Participation Eligibility and Matching Contributions for GeoSouthern Continued Employees . A GeoSouthern Continued Employee’s Employment Commencement Date or Reemployment Commencement Date for purposes of (i) participation under Article III of the Plan and (ii) determining his rate of Matching Contributions under Section 4.05 of the Plan shall be the date of the GeoSouthern Continued Employee’s most recent employment commencement date or reemployment commencement date, as the case may be, with GeoSouthern.

(b)

Years of Service . A GeoSouthern Continued Employee’s Years of Service under the Plan shall include service with GeoSouthern previously recognized under any profit sharing or 401(k) plan sponsored by GeoSouthern.”

Definitions . For purposes of this Appendix G, the following terms shall have the following meanings:

(i)

“ GeoSouthern Continued Employee ” shall mean a “Continued Employee,” as defined in the GeoSouthern Purchase Agreement.

(ii)

“ GeoSouthern Purchase Agreement ” shall mean the Purchase and Sale Agreement among GeoSouthern Intermediate Holdings, LLC, Devon Energy Production Company, L. P., and GeoSouthern Energy Corporation, dated November 20, 2013.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Devon Energy Corporation Incentive Savings Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

[ Signature Page to Amendment 2014-1 to the Devon Energy Corporation Incentive Savings Plan ]

Exhibit 10.3

AMENDMENT 2014-2

TO THE

DEVON ENERGY CORPORATION

INCENTIVE SAVINGS PLAN

The Devon Energy Corporation Incentive Savings Plan (the “ Plan ”) is amended effective as of March 7, 2014, or such later date as of the occurrence of the “Closing” of the “Mergers” as defined under the Agreement and Plan of Merger by and among Devon Energy Corporation, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers, L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc., dated October 21, 2013, as follows:

1. A new Appendix H (“ Special Provisions for Employees Transferring to EnLink Midstream Operating, LP ”) is hereby added at the end of the Plan as follows:

“APPENDIX H

SPECIAL PROVISIONS FOR EMPLOYEES

TRANSFERRING TO ENLINK MIDSTREAM OPERATING, LP

This Appendix H shall apply with regard to those Employees who (a) transfer to EnLink Midstream Operating, LP in connection with the closing of the transaction set forth in the EnLink Merger Agreement (as defined in Section 3 of this Appendix) and (b) cease being Eligible Employees upon such transfer.

1. Transfer of Employees to EnLink Midstream Operating, LP . Each Transferring Employee (as defined in Section 3 of this Appendix) shall cease to be an Eligible Employee on his Severance from Service in accordance with the terms of the Plan. The provisions of the Plan shall apply to such Transferring Employee, except as provided in this Appendix.

2. Special Conditions . Notwithstanding the provisions of the Plan, the following provisions shall apply:

(a)

Special Eligibility for True-Up Matching Contribution . An EnLink Transferring Employee shall continue to be eligible to receive a True-Up Matching Contribution for the quarter in which he becomes an employee of EnLink Midstream Operating, LP even though such Participant is not an Employee on the last day of such applicable quarter of the Plan Year.

(b)

Special Vesting for EnLink Transferring Employees . An EnLink Transferring Employee shall have a fully (100%) vested and nonforfeitable interest in the portion of his Account that is subject to the vesting schedule described in Section 7.02(a) of the Plan.

(c)

Special Rollover of Loans . An EnLink Transferring Employee who is an Eligible Borrower may make a direct rollover, as described in Section 8.08 of the Plan, of the full unpaid balance of any loan plus applicable interest to any “qualified employer plan” (as defined in Code section 72(p)(4) that

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-2 to the Devon Energy Corporation Incentive Savings Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

[ Signature Page to Amendment 20142 to the Devon Energy Corporation Incentive Savings Plan ]

Exhibit 10.4

AMENDMENT 2014-3

TO THE

DEVON ENERGY CORPORATION

INCENTIVE SAVINGS PLAN

The Devon Energy Corporation Incentive Savings Plan (the “ Plan ”) is amended, effective January 1, 2014, as follows:

1. The first sentence of Section 4.04(b) of the Plan (‘” Employment Commencement Dates Before August 1, 2011 and Grandfathered Company Retirement Contribution Eligible Participants ”) is amended to delete the phrase “the first payroll period after the anniversary of the Employment Commencement Date” in both places in which it is found and replace it with “the first payroll period on or after the anniversary of the Employment Commencement Date”.

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-3 to the Devon Energy Corporation Incentive Savings Plan to be executed this 19 ^th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 10.5

AMENDMENT 2014-1

TO THE

DEVON ENERGY CORPORATION

NON-QUALIFIED DEFERRED COMPENSATION PLAN

The Devon Energy Corporation Non-Qualified Deferred Compensation Plan (the “ Plan ”) is amended, effective December 3, 2013, as follows:

1. Section 5.1 of the Plan is amended to add a new flush paragraph to the end of the Section to read as follows:

Notwithstanding the forgoing, a Participant who is a “Transferring Employee” (as defined below) shall continue to be eligible to receive a Supplemental Company Contribution for the quarter in which he becomes an employee of EnLink Midstream Operating, LP even though such Participant is not an Eligible Employee on the last day of such applicable calendar quarter of the Plan Year. For purposes of this Plan (i) a Transferring Employee shall mean a Participant whose employment with the Company or any subsidiary is transferred to EnLink Midstream Operating, LP as of the Transfer Date, and (ii) the Transfer Date shall mean March 7, 2014, or such later date as of the occurrence of the “Closing” of the “Mergers” as defined under the Agreement and Plan of Merger by and among Devon Energy Corporation, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers, L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc., dated October 21, 2013.

2. Section 7.4 of the Plan is amended to add the following sentences to the end of the Section to read as follows:

For the avoidance of doubt, a Participant who is a “Transferring Employee” (as defined in Section 5.1) shall become fully vested in any unvested Supplemental Company Contributions and Credited Earnings thereon effective as of the “Transfer Date” (as defined in Section 5.1).

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 10.6

AMENDMENT 2014-1

TO THE

DEVON ENERGY CORPORATION

BENEFIT RESTORATION PLAN

The Devon Energy Corporation Benefit Restoration Plan (the “ Plan ”) is amended, effective December 3, 2013, as follows:

1. Section 4.2(a) of the Plan is amended to add the following sentences to the end of the Section to read as follows:

For the avoidance of doubt, a Participant who is a “Transferring Employee” (as defined below) shall become fully vested in any unvested Restoration Benefit effective as of the “Transfer Date” (as defined below). For purposes of this Plan (i) a Transferring Employee shall mean a Participant whose employment with the Company or any subsidiary is transferred to EnLink Midstream Operating, LP as of the Transfer Date, and (ii) the Transfer Date shall mean March 7, 2014, or such later date as of the occurrence of the “Closing” of the “Mergers” as defined under the Agreement and Plan of Merger by and among Devon Energy Corporation, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers, L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc., dated October 21, 2013.

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 10.7

AMENDMENT 2014-1

TO THE

DEVON ENERGY CORPORATION

DEFINED CONTRIBUTION RESTORATION PLAN

The Devon Energy Corporation Defined Contribution Restoration Plan (the “ Plan ””) is amended, effective December 3, 2013, as follows:

1. Section 6.4 of the Plan is amended to add the following sentences to the end of the Section to read as follows:

For the avoidance of doubt, a Participant who is a “Transferring Employee” (as defined below) shall become fully vested in any unvested Company Contributions and Credited Earnings thereon effective as of the “Transfer Date” (as defined below). For purposes of this Plan (i) a Transferring Employee shall mean a Participant whose employment with the Company or any subsidiary is transferred to EnLink Midstream Operating, LP as of the Transfer Date, and (ii) the Transfer Date shall mean March 7, 2014, or such later date as of the occurrence of the “Closing” of the “Mergers” as defined under the Agreement and Plan of Merger by and among Devon Energy Corporation, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers, L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc., dated October 21, 2013.

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Plan to be executed this 7 ^th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 10.8

AMENDMENT 2014-1

TO THE

DEVON ENERGY CORPORATION

SUPPLEMENTAL CONTRIBUTION PLAN

The Devon Energy Corporation Supplemental Contribution Plan (the “ Plan ”) is amended, effective December 3, 2013, as follows:

1. Section 6.4 of the Plan is amended to add the following sentences to the end of the Section to read as follows:

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 10.9

AMENDMENT 2014-1

TO THE

SUPPLEMENTAL RETIREMENT INCOME PLAN OF

DEVON ENERGY CORPORATION

The Supplemental Retirement Income Plan of Devon Energy Corporation (the “ Plan ”) is amended, effective December 3, 2013, as follows:

1. Section 4.2(a) of the Plan is amended to add the following sentences to the end of the Section to read as follows:

Notwithstanding the foregoing, a Participant who is a “Transferring Employee” (as defined below) shall become fully vested in any unvested Supplemental Benefit effective as of the “Transfer Date” (as defined below). For purposes of this Plan (i) a Transferring Employee shall mean a Participant whose employment with the Company or any subsidiary is transferred to EnLink Midstream Operating, LP as of the Transfer Date, and (ii) the Transfer Date shall mean March 7, 2014, or such later date as of the occurrence of the “Closing” of the “Mergers” as defined under the Agreement and Plan of Merger by and among Devon Energy Corporation, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers, L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc., dated October 21, 2013.

IN WITNESS WHEREOF, Devon Energy Corporation (acting through its authorized delegate) has caused this Amendment 2014-1 to the Plan to be executed this 7th day of March 2014.


DEVON ENERGY CORPORATION

By:		/s/ Frank W. Rudolph
Name:		Frank W. Rudolph
Title:		Executive Vice President, Human Resources

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Richels, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Devon Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014

/s/ John Richels

John Richels

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas L. Mitchell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Devon Energy Corporation;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014

/s/ Thomas L. Mitchell

Thomas L. Mitchell

Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Devon Energy Corporation (“Devon”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Richels, President and Chief Executive Officer of Devon, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Devon.

/s/ John Richels

John Richels

President and Chief Executive Officer

May 9, 2014

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Devon Energy Corporation (“Devon”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas L. Mitchell, Executive Vice President and Chief Financial Officer of Devon, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Devon.

/s/ Thomas L. Mitchell

Thomas L. Mitchell

Executive Vice President and Chief Financial Officer

May 9, 2014