8-KMaterial Agreements

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Jun 4, 2009)

Filed June 4, 2009For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed an 8-K on June 4, 2009, primarily to report the approval of its 2009 Long-Term Incentive Plan (the "2009 Plan") by its stockholders on June 3, 2009. This plan is a key component of executive and director compensation, aiming to align incentives with long-term shareholder value creation. Investors should note that the details of the 2009 Plan were previously disclosed in the Company's Proxy Statement dated April 24, 2009. Furthermore, the filing details the compensation awarded to non-management members of the Board of Directors on June 3, 2009. This includes grants of restricted stock and stock options, which are designed to incentivize continued service and performance. The specifics of these grants, including vesting schedules and exercise prices, are important for understanding potential future dilution and the board's commitment to the company's success.

Key Highlights

  • 1Stockholder approval of the 2009 Long-Term Incentive Plan (2009 Plan) on June 3, 2009.
  • 2The 2009 Plan is incorporated by reference from the April 24, 2009 Proxy Statement.
  • 3Non-management directors were granted 2,000 shares of restricted stock each.
  • 4Restricted stock vests 25% annually, beginning June 3, 2010.
  • 5Non-management directors were also granted 3,000 stock options each.
  • 6Stock options have an exercise price of $63.42 per share.
  • 7Stock options vest immediately on June 3, 2009, and expire on June 2, 2017.

Frequently Asked Questions

The 2009 Long-Term Incentive Plan is designed to attract, retain, and motivate key employees and directors by providing them with equity-based compensation. This aligns their interests with those of shareholders by incentivizing long-term company performance and value creation.

The restricted stock vests over four years, starting in June 2010. This means the shares will be fully owned by the directors over time, subject to continued service. This can be viewed as a retention tool for the board. Potential dilution from these shares is gradual, occurring as they vest.

Each non-management director received 3,000 stock options with an exercise price of $63.42 per share. These options vest immediately and expire on June 2, 2017. Directors can profit if the stock price rises above the exercise price before expiration, which could lead to future share purchases on the open market or from authorized shares.

More detailed information about the 2009 Long-Term Incentive Plan can be found on pages 54 through 58 of Devon Energy Corporation's Proxy Statement dated April 24, 2009, which is incorporated by reference into this 8-K filing.