AWARD AGREEMENT (the Agreement) entered into as of
_____________ (the Grant
Date), by and between Devon Energy
Corporation, a Delaware
corporation (the Company) and
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Devon Energy
Corporation 2005 Long-Term
Incentive Plan (the Plan); and
WHEREAS, in connection with the Participants employment with the Company, the Company desires
to award to the Participant ____________ shares of the Companys Common Stock under the Plan subject to
the terms and conditions of this Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants herein
contained, the Participant and the Company agree as follows (all capitalized terms used herein,
unless otherwise defined, have the meaning ascribed to such terms as set forth in the Plan):
1. The Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby
incorporated by reference herein and made a part hereof for all purposes, and when taken with this
Agreement shall govern the rights of the Participant and the Company with respect to the Award (as
2. Grant of Award. The Company hereby grants to the Participant an award (the
Award) of ____________ shares of the Companys Common Stock, par value $.10 (the Stock), on the
terms and conditions set forth herein and in the Plan.
3. Terms of Award.
(a) Escrow of Shares. A certificate or book-entry registration representing the Stock
subject to the Award (the Restricted Stock) shall be issued in the name of the Participant and
shall be escrowed with the Secretary of the Company (the Escrow Agent) subject to removal of the
restrictions placed thereon or forfeiture pursuant to the terms of this Agreement.
(b) Vesting. If the Participants Date of Termination has not occurred as of the
vesting dates specified below (the Vesting Dates), then, the Participant shall be entitled,
subject to the applicable provisions of the Plan and this Agreement having been satisfied, to
receive on or within a reasonable time after the applicable Vesting Dates, on accumulative basis,
the number of shares of Stock determined by multiplying the aggregate shares of Stock subject to
the Award by the designated percentage set forth opposite the Vesting Date. Once vested pursuant
to the terms of this Agreement, the Restricted Stock shall be deemed Vested Stock.
||Percent of Award Vested
The Participant shall forfeit the unvested portion of the Award (including the underlying
Restricted Stock and Accrued Dividends, as such term is hereinafter defined) upon the occurrence
of the Participants
Date of Termination unless the Award becomes vested under the circumstances described in paragraphs
(i), (ii) or (iii) below.
(i) The Award shall become fully vested upon the occurrence of a Change of Control Event
which occurs prior to the Participants Date of Termination. However, if the Participants
employment with the Company, the Subsidiaries, and the Affiliated Entities commenced less than 90
days before the Change of Control Event, (I) the Award shall become fully vested under this
subsection (i) only if the Participants Date of Termination has not occurred before the
90th day following such date of hire, (II) the Award shall become vested under this
sentence on the 90th day following such date of hire.
(ii) If the Participants Date of Termination occurs under circumstances in which the
Participant is entitled to severance benefits from the Company, a Subsidiary, or an Affiliated
Entity under an employment agreement, severance agreement, or the Devon Energy
Severance Plan, and the Participant signs and returns to the Company a release of claims against
the Company in a form prepared by the Company (the Release), the Award shall become fully vested
upon the date the Release becomes effective and the Restricted Stock shall be released within a
reasonable time after the applicable Vesting date. If the Participant fails to sign and return the
Release to the Company or revokes the Release prior to the date the Release becomes effective, the
unvested shares of Restricted Stock subject to the Award shall be forfeited.
(iii) The Committee may in its sole and absolute discretion elect to vest all or a portion of
the unvested shares, subject to the Award upon the Participants Date of Termination if the
Participants Date of Termination occurs by reason of the Participants death, Disability, occurs
on or after the Participants Normal Retirement Date (as such term is defined in the Companys
Retirement Plan) or Early Retirement Date (as such term is defined in the Companys Retirement
Plan), or occurs under other special circumstances (as determined by the Committee).
(c) Voting Rights and Dividends. The Participant shall have all of the voting rights
attributable to the shares of Restricted Stock. Regular quarterly cash dividends declared and paid
by the Company with respect to the shares of Restricted Stock shall be paid to the Participant.
Any extraordinary dividends declared and paid by the Company with respect to shares of Restricted
Stock (Accrued Dividends) shall not be paid to the Participant until such Restricted Stock
becomes Vested Stock. Such Accrued Dividends shall be held by the Company as a general obligation
and paid to the Participant at the time the underlying Restricted Stock becomes Vested Stock.
(d) Vested Stock Removal of Restrictions. Upon Restricted Stock becoming Vested
Stock, all restrictions shall be removed from the certificates or book-entry registrations
representing such Stock and the Secretary of the Company shall deliver to the Participant
certificates or a Direct Registration Statement for the book-entry registration representing such
Vested Stock free and clear of all restrictions, except for any applicable securities laws
restrictions, together with a check in the amount of all Accrued Dividends attributed to such
Vested Stock without interest thereon.
(e) Date of Termination. The Participants Date of Termination means the first day
occurring on or after the Grant Date on which the Participant is not employed by the Company, a
Subsidiary, or an Affiliated Entity on a full-time basis, regardless of the reason for the
termination of employment (or change from full-time to part-time basis); provided that a
termination of employment shall not be deemed to occur by reason of a transfer of the Participant
between the Company, a Subsidiary, and an Affiliated Entity or between two Subsidiaries or two
Affiliated Entities; and further provided that the Participants employment shall not be considered
terminated while the Participant is on a leave of absence from the Company, a Subsidiary, or an
Affiliated Entity approved by the Participants employer. If, as a result of a sale or other
transaction, the Participants employer ceases to be either a Subsidiary or an Affiliated Entity
(and the Participants employer is or becomes an entity that is separate from the Company), and the
Participant is not, at the end of the 30-day period following the transaction, employed by the
Company or an entity that is then a Subsidiary or Affiliated Entity, then the occurrence of such
transaction shall be treated as the Participants Date of Termination caused by the Participant
being discharged by the employer.
4. Legends. The shares of Stock which are the subject of the Award shall be subject
to the following legend:
THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE OR BOOK-ENTRY REGISTRATION ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN AWARD AGREEMENT
FOR DEVON ENERGY
CORPORATION 2005 LONG-TERM INCENTIVE PLAN DATED
____________ . ANY
ATTEMPTED TRANSFER OF THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE OR
BOOK-ENTRY REGISTRATION IN VIOLATION OF SUCH AGREEMENT SHALL BE NULL AND VOID AND
WITHOUT EFFECT. A COPY OF THE AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF DEVON
5. Delivery of Forfeited Shares. The Participant authorizes the Secretary to deliver
to the Company any and all shares of Restricted Stock that are forfeited under the provisions of
this Agreement. The Participant further authorizes the Company to hold as a general obligation of
the Company any Accrued Dividends and to pay such dividends to the Participant at the time the
underlying Restricted Stock becomes Vested Stock.
6. Employment. Nothing in the Plan or in this Agreement shall confer upon the
Participant any right to continue in the employ of the Company or any of its Subsidiaries or
Affiliated Entities, or interfere in any way with the right to terminate the Participants
employment at any time.
7. Nontransferability of Award. The Participant shall not have the right to sell,
assign, transfer, convey, dispose, pledge, hypothecate, burden, encumber or charge the Award or any
Restricted Stock or any interest therein in any manner whatsoever.
8. Notices. All notices or other communications relating to the Plan and this
Agreement as it relates to the Participant shall be in writing and shall be delivered personally or
mailed (U.S. mail) by the Company to the Participant at the then current address as maintained by
the Company or such other address as the Participant may advise the Company in writing.
9. Binding Effect and Governing Law
. This Agreement shall be (i) binding upon and
inure to the benefit of the parties hereto and their respective heirs, successors and assigns
except as may be limited by the Plan, and (ii) governed and construed under the laws of the State
10. Withholding. The Company and the Participant shall comply with all federal and
state laws and regulations respecting the required withholding, deposit and payment of any income,
employment or other taxes relating to the Award (including Accrued Dividends). The Company shall
withhold the employers minimum statutory withholding based upon minimum statutory withholding
rates for federal and state purposes, including payroll taxes, that are applicable to such
supplemental taxable income. Any payment of required withholding taxes by the Participant in the
form of Common Stock shall not be permitted if it would result in an accounting charge with respect
to such shares used to pay such taxes unless otherwise approved by the Committee.
11. Award Subject to Claims of Creditors. The Participant shall not have any interest
in any particular assets of the Company, its parent, if applicable, or any Subsidiary or Affiliated
Entity by reason of the right to earn an Award (including Accrued Dividends) under the Plan and
this Agreement, and the Participant or any other person shall have only the rights of a general
unsecured creditor of the Company, its parent, if applicable, or a Subsidiary or Affiliated Entity
with respect to any rights under the Plan or this Agreement.
12. Captions. The captions of specific provisions of this Agreement are for
convenience and reference only, and in no way define, describe, extend or limit the scope of this
Agreement or the intent of any provision hereof.
13. Counterparts. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original for all purposes, but all of which taken
together shall form one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first