NON-MANAGEMENT DIRECTOR
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE
DEVON ENERGY CORPORATION
2005 LONG-TERM INCENTIVE PLAN
THIS NONQUALIFIED
STOCK OPTION AGREEMENT (the “Award Agreement”), entered
into as of «Grant_Date» (the “Grant
Date”), by and between DEVON ENERGY CORPORATION (the
“Company”) and «FirstName»
«MiddleName» «LastName» (the
“Participant”);
WHEREAS, the
Participant is a non-management Director of the Company, and it is
important to the Company that the Participant be encouraged to
remain a director of the Company; and
WHEREAS, in
recognition of such facts, the Company desires to provide to the
Participant an opportunity to purchase «Shares»
shares of the common stock of the Company, as hereinafter provided,
pursuant to the “Devon Energy Corporation 2005 Long-Term
Incentive Plan”, as amended and restated June 7, 2006
(the “Plan”), a copy of which is attached hereto;
and
WHEREAS, any
capitalized terms used but not defined herein have the same
meanings given them in the Plan.
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for
good and valuable consideration, the Participant and the Company
hereby agree as follows:
Section 1. Definitions . Words, terms, or
phrases used in this Agreement shall have the meanings set forth in
this Section 1:
(a) The
Participant’s “Date of Termination” means the
first day occurring on or after the Grant Date on which the
Participant is not a member of the Board.
(b) “Mandatory
Retirement” means the Participant’s mandatory
retirement from the Board of Directors at the next annual meeting
of shareholders following the date the Participant reaches his
73 rd
birthday.
Section 2. Grant of Stock Option . The Company
hereby grants to the Participant a nonqualified stock option (the
“Stock Option”) that is not intended to qualify under
Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”), to purchase all or any part of the number
of Covered Shares (as set forth on the Cover Page) of its common
stock, par value $.10 (the “Stock”), under and subject
to the terms and conditions of this Award Agreement and the Plan
which is incorporated herein by reference and made a part hereof
for all purposes. The purchase price for each share to be purchased
hereunder shall be the option price set forth on the Cover Page
(the “Exercise Price”).
Section 3. Times of Exercise of Stock Option .
The Stock Option shall be fully exercisable on and after the Grant
Date.
Section 4. Term of Stock Option . The Stock
Option shall cease to be exercisable on the earliest to occur
of:
(a) The
Expiration Date set forth on the Cover Page.
(b) The
three-year anniversary of the Participant’s Date of
Termination.
(c) If the
Participant’s Date of Termination occurs by reason of the
Participant’s Mandatory Retirement, the Expiration Date set
forth on the Cover Page.
