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This excerpt taken from the DVN DEF 14A filed Apr 24, 2009. Canadian Tax
Treatment
Stock Options. A participant who is granted a
stock option does not have taxable income on the date of grant.
Instead, tax liability is deferred until the time that the stock
option is exercised. At the time of exercise, the participants
are subject to tax on the difference between the value of the
underlying shares acquired on the exercise of the stock option
and the exercise price paid to acquire the shares. Generally,
the participant will only be taxed on 50% of the difference in
value. However, in certain circumstances, participants may also
defer the recognition of this income until disposition of the
shares. We will not be entitled to a deduction for Canadian tax
purposes.
Canadian Restricted Stock Units. A participant
who is granted a Canadian restricted stock unit will not have
taxable income at the time of grant. Taxable income will instead
occur as the participant becomes vested and shares of common
stock are distributed to the participant. We will be entitled to
a deduction for the payments made to the trust. However, the
deduction will be deferred to the year in which the shares are
vested and distributed to the participants.
58
Commitment Runs Deep
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