4. Share-Based Compensation

The following table presents the effects of share-based compensation included in Devon’s accompanying consolidated comprehensive statements of earnings. Devon’s gross general and administrative expense for the first nine months of 2015 and 2014 includes $25 million and $11 million, respectively, 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 2014 in conjunction with the divestiture of Devon’s Canadian conventional assets. For the nine months ended September 30, 2014, approximately $15 million of associated expense for these accelerated awards is included in restructuring costs in the accompanying consolidated comprehensive statements of earnings.



	Nine Months Ended September 30,
	2015		2014

	(Millions)
Gross general and administrative expense for share-based compensation	$	182	$	155
Share-based compensation expense capitalized pursuant to the
full cost method of accounting for oil and gas properties	$	48	$	40
Related income tax benefit	$	37	$	34

Under its 2009 Long-Term Incentive Plan, as amended (the “2009 Plan”), and its 2015 Long-Term Incentive Plan (the “2015 Plan”), Devon granted share-based awards to certain employees and directors in the first nine months of 2015. The following table presents a summary of Devon’s unvested restricted stock awards and units, performance-based restricted stock awards and performance share units granted under the plans.


	Restricted Stock			Performance-Based			Performance
	Awards and Units			Restricted Stock Awards			Share Units
	Awards and Units		Weighted Average Grant-Date Fair Value	Awards		Weighted Average Grant-Date Fair Value	Units			Weighted Average Grant-Date Fair Value

	(Thousands, except fair value data)
Unvested at 12/31/14	4,304	$	60.85	380	$	59.41	1,477		$	70.90
Granted	2,764	$	63.61	236	$	62.02	786		$	84.14
Vested	(1,025)	$	62.59	(58)	$	61.33	(337)		$	66.00
Forfeited	(318)	$	61.72	(29)	$	64.18	(67)		$	79.20
Unvested at 9/30/15	5,725	$	61.82	529	$	60.10	1,859	(1)	$	76.17

____________________________

(1) A maximum of 3.7 million common shares could be awarded based upon Devon’s final total shareholder return ranking relative to Devon’s peer group established under applicable award agreements.

The following table presents the assumptions related to the performance share units granted in 2015, as indicated in the previous summary table.


	2015

Grant-date fair value	$	81.99	-	$	85.05
Risk-free interest rate	1.06%
Volatility factor	26.2%
Contractual term (years)	2.89

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units.


	Restricted Stock		Performance-Based		Performance
	Awards and Units		Restricted Stock Awards		Share Units
Unrecognized compensation cost (millions)	$	234	$	8	$	53
Weighted average period for recognition (years)		2.6		2.8		2.0

2015 Long-Term Incentive Plan

In the second quarter of 2015, Devon’s stockholders approved the 2015 Plan. The 2015 Plan replaces the 2009 Plan. From the effective date of the 2015 Plan, no further awards may be made under the 2009 Plan, and awards previously granted will continue to be governed by the terms of the 2009 Plan. Subject to the terms of the 2015 Plan, awards may be made under the 2015 Plan for a total of 28 million shares of Devon common stock, plus the number of shares available for issuance under the 2009 Plan (including shares subject to outstanding awards under the 2009 Plan that are subsequently forfeited, cancelled or expire). The 2015 Plan authorizes the Compensation Committee, which consists of independent, non-management members of Devon’s Board of Directors, to grant nonqualified and incentive stock options, restricted stock awards or units, Canadian restricted stock units, performance awards or units and stock appreciation rights to eligible employees. The 2015 Plan also authorizes the grant of nonqualified stock options, restricted stock awards or units and stock appreciation rights to non-employee directors. To calculate the number of shares that may be granted in awards under the 2015 Plan, options and stock appreciation rights represent one share and other awards represent three shares.

EnLink Share-Based Awards

In March 2015, the General Partner and EnLink issued restricted incentive units as bonus payments to officers and certain employees for 2014. The combined grant fair value was $7 million, and the total cost was recognized in the first quarter of 2015 due to the awards vesting immediately.

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with the General Partner’s and EnLink’s unvested restricted incentive units and performance units.


	General Partner				EnLink
	Restricted		Performance		Restricted		Performance
	Incentive Units		Units		Incentive Units		Units
Unrecognized compensation cost (millions)	$	20	$	3	$	20	$	3
Weighted average period for recognition (years)		1.7		2.3		1.7		2.3