8-KMaterial Agreements

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Jun 13, 2005)

Filed June 13, 2005For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed an 8-K on June 13, 2005, reporting on the approval and implementation of its 2005 Long Term Incentive Plan (2005 Plan) by its stockholders on June 8, 2005. This plan is designed to incentivize and retain key personnel, particularly members of the Board of Directors. As part of this plan, each director received grants of restricted stock and stock options. The restricted stock vests over a four-year period, starting in June 2006, while the stock options are immediately exercisable and have an expiration date in June 2013. These grants are significant as they align the interests of the Board with those of shareholders through equity participation, a common practice in executive compensation to foster long-term value creation.

Key Highlights

  • 1Devon Energy's stockholders approved the 2005 Long Term Incentive Plan (2005 Plan) on June 8, 2005.
  • 2Board members were granted 2,000 shares of restricted stock each.
  • 3Restricted stock grants vest 25% annually, beginning June 8, 2006.
  • 4Board members were also granted 2,000 stock options each.
  • 5Stock options have an exercise price of $47.55 per share, the closing price on June 8, 2005.
  • 6Stock options are immediately exercisable (vested on June 8, 2005) and expire on June 7, 2013.
  • 7These grants were made under the approved 2005 Plan.

Frequently Asked Questions

The primary purpose of the 2005 Long Term Incentive Plan is to provide a framework for incentivizing and retaining key personnel, specifically the Board of Directors, through equity-based compensation.

Each member of the Board of Directors received grants of 2,000 shares of restricted stock and 2,000 stock options to purchase common stock.

The restricted stock vests 25% per year beginning June 8, 2006, meaning it will be fully vested by June 8, 2009. The stock options were immediately exercisable as of June 8, 2005, and expire on June 7, 2013.

The exercise price for the stock options is $47.55 per share, which was the closing price of Devon Energy's common stock on the New York Stock Exchange on June 8, 2005.