Exhibit No. 10.20
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the Award Agreement), entered into as of
(the Date of Grant), by and between DEVON ENERGY
CORPORATION (the Company) and
%%FIRST_NAME%-% %%MIDDLE_NAME%-% %%LAST_NAME%-%
WHEREAS, the Participant is a nonemployee 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 a
nonqualified stock option to purchase %%TOTAL_SHARES_GRANTED%-%
shares of the Common Stock of the
Company (the Covered Shares), as hereinafter provided, pursuant to the Devon Energy
2009 Long-Term Incentive Plan (the Plan), a copy of which is attached hereto.
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. 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 Code, to
purchase all or any part of the Covered Shares (the Stock Option) 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 Covered Share to be purchased
hereunder shall be the exercise price set forth on the Cover Page (the Exercise Price).
Section 2. Times of Exercise of Stock Option. The Stock Option shall be fully exercisable on
and after the Date of Grant.
Section 3. 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 Participants Date of Termination.
(c) If the Participants Date of Termination occurs by reason of the Participants Mandatory
Retirement, the Expiration Date set forth on the Cover Page.
Section 4. Nontransferability of Stock Option. The Stock Option may be exercised during the
lifetime of the Participant only by the Participant. Without limiting the generality of the
previous sentence, the Stock Option shall not be assigned, transferred (except as provided above),
pledged or hypothecated in any way whatsoever, shall not be assigned by operation of law and shall
not be subject to execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Stock Option contrary to the provisions hereof
shall be null and void and without effect. However, in the event of a Participants death, the
Stock Option may be transferred in accordance with the provisions of a Participants will, the
applicable laws of descent and distribution or, a beneficiary designation that is in a form
approved by the Committee.
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Section 5. Method of Exercising Stock Option.
(a) Procedures for Exercise. The Stock Option may be exercised prior to the Expiration Date
by providing written notice in the form prescribed by the Company to the Secretary of the Company
or following the electronic exercise procedures adopted by the Company. The written notice shall
state the election to exercise the Stock Option, the number of Covered Shares to be purchased upon
exercise, the form of payment to be used, and shall be signed by the person exercising the Stock
(b) Form of Payment. Payment of the full Exercise Price for the Covered Shares purchased
under this Award Agreement shall accompany the Participants notice of exercise, together with full
payment of applicable withholding taxes, if any. Payment shall be made (i) in cash or by check,
draft or money order payable to the order of the Company; (ii) by delivering shares of Common Stock
having a Fair Market Value on the date of payment equal to the amount of the Exercise Price, but
only to the extent such form of payment would not result in a compensation expense to the Company
for financial accounting purposes with respect to the shares of Common Stock used to pay the
Exercise Price unless otherwise determined by the Committee; or (iii) a combination of the
(c) Further Information
. In the event the Stock Option is exercised, pursuant to the
foregoing provisions of this Section 5, by any person other than the Participant due to the
Participants death, notice shall also be accompanied by appropriate proof of such persons right
to exercise the Stock Option. The notice so required shall be given electronically, by personal
delivery to the Secretary of the Company or by registered or certified mail, addressed to the
Company at 20 North Broadway, Oklahoma
73102-8260, Attention: Secretary, and it
shall be deemed to have been given when it is delivered or when it is deposited in the United
States mail in an envelope addressed to the Company, as aforesaid, properly stamped for delivery as
a registered or certified letter.
Section 6. Securities Law Restrictions. The Stock Option shall be exercised and Common Stock
issued only upon compliance with the Securities Act of 1933, as amended (the Act), and any other
applicable securities law, or pursuant to an exemption therefrom. If deemed necessary by the
Company to comply with the Act or any applicable laws or regulations relating to the sale of
securities, the Participant, at the time of exercise and as a condition imposed by the Company,
shall represent, warrant and agree that the Covered Shares subject to the Stock Option are being
purchased for investment and not with any present intention to resell the same and without a view
to distribution, and the Participant shall, upon the request of the Company, execute and deliver to
the Company an agreement to such effect.
Section 7. Notices. All notices or other communications relating to the Plan and this Award
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.
Section 8. Definitions. Words, terms, or phrases used in this Award Agreement shall have the
meanings set forth in this Section 8. Capitalized terms used in this Award Agreement but not
defined herein shall have the meaning designated in the Plan.
(a) Act has the meaning set forth in Section 6.
(b) Award Agreement has the meaning set forth in the preamble.
(c) Code means Internal Revenue Code of 1986, as amended.
(d) Company has the meaning set forth on the Cover Page.
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(e) Covered Shares has the meaning set forth in the preamble.
(f) Date of Grant has the meaning set forth in the preamble.
(g) Date of Termination means the first day occurring on or after the Date of Grant on which
the Participant is not a member of the Board.
(h) Exercise Price has the meaning set forth in Section 1.
(i) Expiration Date has the meaning set forth on the Cover Page.
(j) Mandatory Retirement means the Participants mandatory retirement from the Board of
Directors at the next annual meeting of shareholders following the date the Participant reaches his
(k) Participant has the meaning set forth in the preamble.
(l) Plan has the meaning set forth in the preamble.
||DEVON ENERGY CORPORATION
||a Delaware corporation
||%%CITY%-%, %%STATE%-%, %%ZIPCODE%-%
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