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 officers 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.
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.