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This excerpt taken from the DVN DEF 14A filed Apr 24, 2009. Types of
Awards
The new long-term incentive plan provides that any or all of the
following types of awards may be granted:
Stock Options. The Compensation Committee may
grant awards under the plan in the form of options to purchase
shares of our common stock. The Compensation Committee will have
the authority to determine the terms and conditions of each
option, the number of shares subject to the option, and the
manner and time of the option’s exercise.
The exercise price of an option may not be less than the fair
market value of our common stock on the date of grant. The fair
market value of shares of common stock subject to options is
determined by the closing price as reported on the NYSE. As of
March 31, 2009, the closing price of the Company’s
common stock as reported on the NYSE was $44.69. A participant
may pay the exercise price of an option in cash, in shares of
the Company’s common stock or a combination of both,
provided that the exercise price (including required withholding
taxes) may be paid using shares of the Company’s common
stock only to the extent such exercise would not result in a
compensation expense to the Company for financial accounting
purposes. The Compensation Committee may permit the exercise of
stock options through a broker-dealer acting on a
participant’s behalf if in accordance with procedures
adopted by the Company to ensure that the arrangement will not
constitute a personal loan to the participant. Unless sooner
terminated, the stock options granted under the plan expire
eight years from the date of the grant.
Stock Appreciation Rights. The Compensation
Committee may grant awards under the Plan in the form of SARs. A
SAR permits the participant to receive an amount (in cash or
common stock) equal to the number of SARs exercised by the
participant multiplied by the excess of the fair market value of
common stock on the exercise date over the exercise price. The
exercise price of SARs granted under the Plan cannot be less
than the fair market value of a share of common stock on the
date the SAR is granted. The Compensation Committee will have
the authority to determine the terms and conditions of each SAR,
the number of shares subject to the SAR, and the manner and time
payment of amounts attributable to a SAR.
Restricted Stock Awards and
Units. Shares of restricted stock and
restricted stock units awarded under the plan will be subject to
the terms, conditions, restrictions
and/or
limitations, if any, that the Compensation Committee deems
appropriate, including restrictions on continued employment.
Canadian Restricted Stock Units. The
Compensation Committee may authorize the establishment of a
trust for purposes of administering the grant of Canadian
restricted stock units to employees of our Canadian subsidiaries
and affiliated entities who perform the majority of their
employment duties in Canada. The restricted stock units will
have substantially the same after-tax effect for Canadian
employees as the restricted stock awards described above have on
United States employees. Cash contributions will be made to the
trust in amounts that approximate the value
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Commitment Runs Deep
Table of Contents
of units awarded to participants. The trust will be authorized
to purchase shares of our common stock on the open market for
use in settling the Canadian restricted stock units granted
under the Plan. Upon vesting, the trustee of the trust would
distribute the shares of our common stock which have been
allocated to a participant’s account. Due to restrictions
in the Canadian Income Tax Act, the term of a Canadian
restricted stock unit must be limited to three years.
Performance Units. The Plan permits grants of
performance units, which are rights to receive cash or common
stock based upon the achievement of performance goals
established by the Compensation Committee. Such awards are
subject to the fulfillment of conditions that may be established
by the Compensation Committee including, without limitation, the
achievement of performance targets based upon the factors
described above relating to restricted stock awards.
Award Limitations. Subject to certain
adjustment provisions, the Compensation Committee cannot grant
options with respect to more than 800,000 shares of the
Company’s common stock to any participant in any calendar
year. In addition, and subject to certain adjustment provisions,
no more than 400,000 shares of the Company’s common
stock can be awarded to a participant under the Plan as
restricted stock awards, performance units, restricted stock
units or Canadian restricted stock units in any calendar year.
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