UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As previously disclosed, Devon Energy Corporation (the “Company”) completed a merger transaction (the “Merger”) with WPX Energy, Inc. (“WPX”) on January 7, 2021, pursuant to which WPX became a wholly-owned subsidiary of the Company. In connection with the closing of the Merger, certain outstanding WPX restricted stock units previously granted to directors and employees of WPX were converted into corresponding restricted stock units with respect to shares of common stock of the Company (the “Converted RSUs”). Except with respect to any performance-based vesting condition (which were deemed satisfied based on actual performance as of the closing of the Merger), each Converted RSU continued to be governed by the same terms and conditions as were applicable to the corresponding WPX restricted stock unit prior to the Merger, which did not include any rights to dividends or dividend equivalents.
On December 1, 2021, the Board of Directors of the Company approved amending the terms of all outstanding Converted RSUs to entitle their holders, which include former directors and employees of WPX who joined the Company following the Merger, to dividend equivalent rights (“DERs”), including with respect to any dividends previously declared by the Company since the Merger (such amending action, the “Amendment”). Payment of any DERs to a holder will only occur if and after the underlying Converted RSUs vest according to their terms. Since the Company historically granted equity incentive awards with dividend rights or DERs, the Amendment will conform the treatment of this compensation practice between holders of the Converted RSUs and holders of the Company’s other equity incentive awards. In addition, the Amendment is intended to better align the interests of the holders of the Converted RSUs with the Company’s stockholders more generally through their shared participation in the Company’s “fixed plus variable” dividend strategy.
Along with and on the same terms as all other outstanding Converted RSUs, the Amendment amends the terms of the Converted RSUs held by the Company’s President and Chief Executive Officer, Richard E. Muncrief, who was the Chairman and Chief Executive Officer of WPX prior to the closing of the Merger. Subject to the terms of his outstanding Converted RSUs, the Amendment will entitle Mr. Muncrief to DERs of approximately $1.46 million in cash with respect to dividends declared in 2021 as well as DERs for any future dividends declared during the remaining vesting periods of his Converted RSUs.
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 hereunto duly authorized.
| DEVON ENERGY CORPORATION | ||
| By: | /s/ Christopher J. Kirt | |
| Christopher J. Kirt | ||
| Vice President Corporate Governance and Secretary | ||
Date: December 3, 2021