AMENDMENT TO NONQUALIFIED STOCK
OPTION AWARD AGREEMENTS
UNDER THE
DEVON ENERGY CORPORATION 2005 LONG-TERM INCENTIVE
PLAN
THIS AMENDMENT TO
NONQUALIFIED STOCK OPTION AWARD AGREEMENTS
(“Amendment”) is entered into as of the ___ day of
, 2008 by and between Devon Energy Corporation, a Delaware
corporation (the “Company”), and
(the “Participant”).
WHEREAS, the
Company and the Participant have previously entered into certain
Nonqualified Stock Option Award Agreements under the Devon Energy
Corporation 2005 Long-Term Incentive Plan listed on Exhibit A
(the “Agreements”), which granted to the Participant
options to purchase shares of Common Stock of the Company (the
“Stock Options”) in exchange for the
Participant’s performance of future services for the Company
pursuant to the terms of the Agreements; and
WHEREAS, the
Company and the Participant desire to amend the Agreements with
respect to the vesting and exercisability of the Stock Options
following the date of retirement of the Participant under certain
circumstances; and
WHEREAS,
Section 12.7 of the Plan permits the Compensation Committee of
the Company’s Board of Directors (the
“Committee”) to amend the Agreements; and
WHEREAS, the
Committee has approved the amendment of the Agreements as set forth
herein.
NOW, THEREFORE,
for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree that the Agreements are
hereby amended as follows:
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1.
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Section 1 is hereby amended by
deleting the definition of “Early Retirement Date” in
Section 1(b) and by inserting the definition of “Normal
Retirement Date” in Section 1(b).
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2.
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Section 1 is hereby amended by
adding a new definition in Section 1(c) as follows:
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““Post-Retirement
Eligible” means the Participant’s Date of Termination
occurs (i) by reason of the Participant’s retirement and
(ii) on or after the Participant has attained age fifty-five
(55) with ten (10) or more Years of Service, as that term
is defined in the Retirement Plan.”
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3.
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The
first sentence of Section 3 is hereby amended to read as
follows:
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“Each installment of Covered
Shares of the Stock Option shall be exercisable on and after the
Vesting Date for such installment as described in the following
schedule (but only if the Participant’s Date
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of Termination
has not occurred before the Vesting Date, except as otherwise
provided in Section 3 of this Award
Agreement):”
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4.
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The
first sentence of Section 3(a) is hereby amended to read as
follows:
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“The Stock Option shall become
fully exercisable upon the occurrence of a Change of Control Event
that occurs (i) prior to the Participant’s Date of
Termination or (ii) if the Participant has retired prior to
such Change of Control Event and is Post-Retirement Eligible,
following the Participant’s Date of
Termination.”
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5.
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Section 3 is hereby amended to
delete from Section 3(c) the phrase “or Early Retirement Date
(as such term is defined in the Company’s Retirement
Plan).”
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6.
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Section 3 is hereby amended to
add a Section 3(d):
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“(d) Notwithstanding any
provision to the contrary in this Award Agreement, if the
Participant is Post-Retirement Eligible, the Participant shall,
subject to the satisfaction of the conditions in Section 10,
be eligible to vest, in accordance with the Vesting Schedule above
in this Section 3, in the installments of the Covered Shares
of the Stock Option that remain unvested on the Date of Termination
as follows:
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Percentage of
Unvested Installments of Covered Shares of
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the Stock Option
Eligible to be Earned by the
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Age at
Retirement
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Participant
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0
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%
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60
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%
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65
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%
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70
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%
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75
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%
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80
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%
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100
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%
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7.
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The
last paragraph of Section 3 is amended to read as
follows:
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“Nothing in this Award
Agreement shall be construed to affect the application of
Section 12.6 of the Plan (relating to Change of Control) to
the extent such Section would otherwise be
applicable.”
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8.
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Section 4 is hereby amended to
read as follows:
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“ Term of Stock Option
. The Stock Option shall cease to be exercisable on the earliest to
occur of:
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(a)
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The
Expiration Date set forth on the Cover Page.
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(b)
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If
the Participant’s Date of Termination occurs by reason of
death, the three-year anniversary of such Date of
Termination.
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(c)
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If
the Participant’s Date of Termination occurs by reason of
Disability, the one-year anniversary of such Date of
Termination.
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(d)
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If
the Participant’s Date of Termination occurs by reason of the
Participant’s retirement and the Participant is
Post-Retirement Eligible, the Expiration Date of the Stock Option;
provided, however, if a Non-Compliance Event (as defined in
Section 10) occurs following such retirement, the Stock Option
shall cease to be exercisable on the one-year anniversary of such
Non-Compliance Event.
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(e)
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If
(i) the Participant’s Date of Termination occurs by
reason of the Participant’s retirement, (ii) the Date of
Termination occurs on or after the Participant’s Normal
Retirement Date, and (iii) the Participant is not
Post-Retirement Eligible, the three-year anniversary of such Date
of Termination (or such later date as may be permitted by the
Committee).
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(f)
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If
the Participant’s Date of Termination occurs under
circumstances in which the Participant is entitled to severance
benefits from the Company, a Subsidiary of the Company, or an
Affiliated Entity under an employment agreement or severance
agreement, the last day of the Severance Period. The
“Severance Period” shall be the longer of:
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(i)
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the
period beginning on the Date of Termination and
continuing
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