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This excerpt taken from the DVN DEF 14A filed Apr 27, 2007. Stock
Option Grants
We grant stock options 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 stock options. On
the grant date, 20% of the stock options are immediately vested
and exercisable.
Table of Contents
An additional 20% of each grant vests and becomes exercisable on
each of the first four anniversary dates of the original grant.
The grant of stock options is intended to align executives’
interests with those of stockholders by providing an incentive
for executives to perform and behave in a manner that enhances
stockholder value. Due to the significance of the risk/reward
profile of stock options, executives stand to gain from their
receipt of stock options only to the extent our common stock
appreciates in value. The vesting schedule is intended to
provide a continuous and consistent incentive to executives over
an extended period.
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