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This excerpt taken from the DVN DEF 14A filed Apr 27, 2007. Restricted
Stock Awards
We also provide Restricted Stock Awards (“RSAs”) to
each of our named executive officers once each year, generally
in the month of December. Approximately 50% of each executive
officer’s annual long-term incentive award is in the form
of restricted stock. One quarter of each award vests on each of
the first four anniversary dates of the original grant. As with
stock options, the vesting schedule is intended to provide a
continuous and consistent incentive to increase stockholder
value over an extended period.
RSAs are grants of our common stock that will only be earned by
an executive officer when the restrictions lapse (that is, once
the RSAs become vested) and only if the individual continues to
be employed by us at that time. Unlike stock options, which
carry significant risk as well as reward opportunity for the
executive officer, RSA awards generally have less down-side
risk. While RSAs provide incentive for the executive officers to
perform and behave in ways that drive longer-term stockholder
value, their lower risk profile make them a very effective means
of attracting and retaining top executive talent in our cyclical
and competitive industry.
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