As filed with the Securities and Exchange Commission on March__,
1998
FORM S-8
Registration Statement under the Securities Act of 1933
______________________________
DEVON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Oklahoma 73-1474008
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
20 North Broadway, Suite 1500 73102
Oklahoma City, Oklahoma (Zip Code)
(Address of Principal
Executive Office)
______________________________
DEVON ENERGY CORPORATION 1997 STOCK OPTION PLAN
(Full title of the Plan)
Mr. J. Larry Nichols Copies to:
President E. T. Manning, Esq.
Devon Energy Corporation Underwood,Wilson,Berry
20 North Broadway, Suite 1500 Stein & Johnson
Oklahoma City, Oklahoma 73102- A Professional Corporation
8260 1500 Amarillo National Bank
(Name and address of agent Bldg.
for service) 5th at Taylor
Amarillo, Texas 79105
(405) 235-3611
(Telephone number, including area code, of agent for service)
______________________________
Calculation of Registration Fee
_________________________________________________________________
___________________________________________________
Proposed maxi- Proposed maxi-
Amount
Title of securities Amount to be mum offering
mum aggregate of registra-
to be registered registered price per unit
offering price tion fee
_________________________________________________________________
________________________________________________
Common Stock, 2,000,000 $36.125**
$72,250,000** $14,450**
$.10 par value shares*
_________________________________________________________________
_________________________________________________
* Such indeterminable additional amount of common stock, par
value $.10 per share, is hereby registered as may be
required by reason of the anti-dilution provision of the
Devon Energy Corporation 1997 Stock Option Plan.
** Calculated pursuant to Rule 457(h), based on the average of
the high and low prices of the common stock, as reported on
the American Stock Exchange for March 20, 1998.
DEVON ENERGY CORPORATION
2,000,000 Shares of Common Stock,
$.10 Par Value, Offered
Pursuant to
Devon Energy Corporation 1997 Stock Option Plan
General
The Devon Energy Corporation 1997 Stock Option Plan (the
"Plan") authorizes the Compensation and Stock Option Committee
(the "Committee") of Devon Energy Corporation (the "Company") to
grant Nonqualified Stock Options to non-employee members of the
Board of Directors of the Company ("Nonemployee Directors"), and
to employees of the Company, its Subsidiaries and certain
Affiliated Entities ("Eligible Employees"), and Incentive Stock
Options to Eligible Employees who are employees of the Company or
a subsidiary (Nonemployee Directors and Eligible Employees
collectively referred to as "Participants"). The Board of
Directors has reserved 2,000,000 shares of the Company's $.10 par
value common stock ("Common Stock") for grant to Participants
designated by the Committee under the Plan. A description of the
Plan appears below. A copy of the Plan is attached as Exhibit
"A" and the description contained herein is qualified in its
entirety by reference to the complete text of the Plan.
Capitalized terms in this document shall have the same meaning as
in the Plan.
Participants wishing to receive additional information about
the Plan or its administration may contact the Corporate
Secretary at the Company's principal executive office, 20 North
Broadway, Suite 1500 Oklahoma City, Oklahoma 73102-8260
(telephone (405) 235-3611).
Description of the Plan
The Company has adopted the Plan to create incentives
designed to motivate Eligible Employees and to attract and retain
the Eligible Employees and Nonemployee Directors of the Company.
The Plan authorizes the Committee to grant either Nonqualified
Stock Options or Incentive Stock Options under the features
provided for by the Internal Revenue Code of 1986, as amended
(the "Code"). The Plan, upon shareholder approval (which was
granted on May 21, 1997, at the Company's 1997 Annual Meeting of
Shareholders), became effective as of March 26, 1997, and will
terminate ten years later on March 25, 2007, continuing only as
to payment and administration matters. The Plan is not subject
to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA") and is not qualified under Section 401(a) of
the Code. All shares subject to the Plan have been registered at
the Company's expense pursuant to Securities Act of 1933 and are
listed on the American Stock Exchange.
___________________
THIS DOCUMENT CONSTITUTES PART OF THE
PROSPECTUS COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
___________________
March 25, 1998
The Committee
The Plan will be administered by the Committee, which is
composed of not less than two "nonemployee directors" as defined
in Rule 16b-3 of the Securities Exchange Act of 1934. The
Committee members will serve at the pleasure of the Board.
Members of the Committee are eligible to receive Nonqualified
Stock Options under the Plan. The Committee is authorized and
has sole discretion to select Eligible Employees and Nonemployee
Directors to receive Awards, modify Plan requirements, supercede
or discontinue the Plan, establish and revise rules and
regulations, make determinations relating to the administration
of the Plan and to make determinations under, and interpretations
of, the Plan and of any Awards granted under the Plan.
Securities To Be Offered
Two million shares of the Company's Common Stock have been
reserved by the Board of Directors of the Company for grant to
Participants designated by the Committee under the Plan. Each
share, when issued upon exercise of Options granted under the
Plan, will be entitled to one vote on all matters submitted to a
vote of the shareholders of the Company. If an Award terminates
without issuance of the shares which were reserved for such
Award, those shares will again be available for grant under the
Plan. Common Stock delivered upon exercise of an Option may be
authorized and unissued Common Stock, treasury stock, or may be
purchased on the open market or by private purchase. Separate
certificates may be delivered to a Participant upon exercise of
each Option.
Who May Participate in the Plan
Any employee of the Company or its Subsidiaries and
Affiliates and any Nonemployee Director of the Company is
eligible to participate in the 1997 Plan. The selection of
Participants from among employees and directors is within the
sole discretion of the Committee.
Types of Awards
General: Under the terms of the Plan, either Nonqualified Stock
Options or Incentive Stock Options may be granted at any time
prior to midnight March 25, 2007. Eligible Employees who are
employees of the Company may be granted either Nonqualified Stock
Options or Incentive Stock Options. Nonemployee Directors and
Eligible Employees who are employees only of an Affiliate of the
Company or a subsidiary may be granted only Nonqualified Stock
Options.
The Committee is vested with discretion in determining the
terms, restrictions and conditions of each Option, the number of
shares subject to the Option and the manner and time of the
Option's exercise. All terms relating to an Option will be
evidenced by an Award Agreement signed by the Participant and the
Company.
Exercise Price: The exercise price of the Common Stock to be
issued under the Plan for any Option may not be less than the
Fair Market Value of the Common Stock on the Date of Grant. The
Fair Market Value of the Company's Common Stock will be generally
determined by the closing price on the Date of Grant as reflected
on the American Stock Exchange.
Special Rules for Incentive Stock Options: Options issued in the
form of Incentive Stock Options shall not be granted to Directors
who are not also Eligible Employees and shall comply with the
requirements of Section 422 of the Code, including, without
limitation, the requirement that the exercise price of an
Incentive Stock Option not be less than 100% of the Fair Market
Value of the Common Stock on the Date of Grant, the requirement
that each Incentive Stock Option, unless sooner exercised,
terminated or cancelled, expires no later than 10 years from its
Date of Grant, and the requirement that the aggregate Fair Market
Value (determined on the Date of Grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this
Plan or any other plan of the Company, its parent or any
Subsidiary) not exceed $100,000. Under the Plan, Incentive Stock
Options which are in excess of the applicable $100,000 limitation
will be automatically recharacterized as Nonqualified Stock
Options. No Incentive Stock Options may be granted to an
Eligible Employee who, immediately before such grant, owns more
than 10% of the total combined voting power of all classes of
stock of the Company or its subsidiaries, unless the exercise
price is at least 110% of the Fair Market Value of the Common
Stock on the date of Grant and the Incentive Stock Option is
exercisable no more than five years from the Date of Grant.
Eligible Employees: The Committee may grant Options covering up
to 50,000 shares in any year to any Eligible Employee.
Nonemployee Directors: Immediately after each of the Company's
annual meetings of shareholders, on the day of the meeting,
beginning in 1997, the Committee may grant Nonqualified Stock
Options of up to 3,000 shares to each Nonemployee Director.
Payment: The exercise price of an Option may be paid in cash or
by check, by delivering shares of Common Stock, directing the
Company to withhold from the shares to be delivered on exercise a
number of shares equal in value to the exercise price, or any
combination of the foregoing. No credit will be extended by the
Company to finance the exercise of any Option.
Non-Transferability
Options are not transferable during the lifetime of a
Participant. Options may not be assigned or pledged, and they
are not subject to execution or attachment. Options may be
transferred by will or the laws of descent and distribution.
Exercise of Options
Options are exercisable during the lifetime of the
Participant only by the Participant and only in accordance with
the terms and conditions as provided by the Committee in each
individual Award Agreement. A Participant may only exercise an
Option by written notice stating the election to exercise in the
form and manner determined by the Committee. The notice must be
delivered to the Secretary of the Company to be effective. At
the time of exercise of an Option, full payment, in the form of
cash or a check payable to the Company, Common Stock, or a
combination thereof, must be tendered. In lieu thereof, the
Participant may instruct the Company to deliver his stock
certificate representing shares issued upon exercise of the
Option to a broker, who will sell the shares in compliance with
the provisions of the Plan and deliver the Option price and
applicable withholding taxes to the Company. Common Stock
delivered as payment will be valued at its Fair Market Value on
the date of delivery.
Except as may be set forth in the Award Agreement, there is
no requirement that Options be exercised in the order in which
they are granted, and a Participant may exercise any Option which
has become exercisable in accordance with the terms of the Award
Agreement, without regard to any other Options such Participant
may have.
Termination, Death, Disability or Other Special Circumstances
The Committee in its discretion may permit Participants
whose employment is terminated by death, disability or other
special circumstances (as determined by the Committee), to
purchase all or part of any unvested Option. Any Options which
are vested on the date of termination may be exercised within
three months of the date of termination or within one year in the
case of disability, or within three years in the event of death,
but in no event beyond the original Option expiration date.
Withholding
No Common Stock will be issued to a Participant until the
Company receives full payment for the Common Stock purchased,
which payment must also include any required state and federal
withholding taxes. Upon exercise of a Stock Option, the
Participant may direct the Company to retain from the shares of
Common Stock to be issued that number of shares of Common Stock
(based on Fair Market Value) that would satisfy the requirements
for withholding.
Application of Insider Trading Rules
Options constitute "derivative securities," as defined by
the Commission in Rule 16a-1(c) promulgated pursuant to Section
16(b) of the Exchange Act. In general, the acquisition of
derivative securities constitutes a "purchase" for purposes of
Section 16(b) of the Exchange Act. Section 16(b) provides that
profits realized by officer or director Participants from the
purchase and sale of Common Stock within a period of less than 6
months will inure to and be recoverable by the Company. Because
the Plan is designed to comply with the requirements of Rule 16b-
3, however, the grant of Options is exempt under Section 16(b).
The acquisition of shares of Common Stock upon the exercise of an
Option does not constitute a purchase under Section 16(b).
In general, the disposition of shares of Common Stock
acquired pursuant to exercise of an Option will constitute a
"sale" under Section 16(b). In the event that shares to be
acquired are used to pay the exercise price, however, that
disposition will be exempt.
Corporate Event
Upon the occurrence of a "Corporate Event" as defined in the
Plan, all Nonqualified Stock Options and Incentive Stock Options
will automatically become fully vested and immediately
exercisable without the requirement of any further act by the
Company or the Participant. For the definition of Corporate
Event and for a more complete description of the effect, see
Article IX of the Plan.
Change of Control and Acquisition Date
Awards granted under the Plan to any Participant may, in the
discretion of the Committee, provide in the Award Agreement that
the Awards will become immediately vested, fully earned and
exercisable upon the Acquisition Date or the Change of Control
Date as those terms are defined in Sections 2.1 and 2.6 of
Article II of the Plan.
Award Agreement
At the time an Option is granted to a Participant, an Award
Agreement will be entered into by the Company and the
Participant. The Award Agreement will set forth the maximum
number of shares of Common Stock which may be purchased by the
Participant and the exercise price. The Committee has discretion
in determining the terms, restrictions and conditions of each
Option, which terms, restrictions and conditions may or may not
be the same in each case. No Participant has any rights as a
shareholder with respect to any shares of Common Stock subject to
an Option prior to the purchase or acquisition of such shares by
exercise of the Option. The Award Agreement does not obligate
the Participant to exercise any Options.
Participants
At this time the Company is not able to determine who among
the Eligible Employees may be selected to receive Options under
the Plan or the number of shares of the Company's Common Stock,
or which Options may be granted to any particular employee. It
is expected, however, that these determinations will be made on
the basis of the employee's responsibilities and present and
potential contribution to the success of the Company, its
Subsidiaries, and Affiliated Entities. Among those who may
qualify as recipients of the Nonqualified Stock Options or
Incentive Stock Options will be officers of the Company and other
key management and key professional employees of the Company, its
Subsidiaries and Affiliated Entities. The total current number
of Eligible Employees is 383 as of March 1, 1998.
The number of Nonemployee Directors is eight (8). No more
than 3,000 shares may be awarded to each such director each year,
and such award may be made only on the date of the Company's
Annual Meeting of Shareholders.
Adjustments
The total number of shares of the Company's Common Stock
which may be purchased under the Plan and the number of shares
subject to outstanding Options and the related exercise prices
will be adjusted in the case of changes in capital structure
resulting from merger, consolidation, reclassification,
recapitalization, stock split, stock dividend or similar
transaction.
Termination and Amendment
The Plan terminates as of midnight, March 25, 2007, but
prior to that date, it may be altered, changed, modified, amended
or terminated by written amendment approved by the Board of
Directors. The Plan may also be modified, suspended or
discontinued by the Committee prior to that date. However, no
action of the Board of Directors or that Committee may, without
the approval of the shareholders, increase the total amount of
Common Stock which may be purchased under Options granted under
the Plan or amend or alter the exercise price to less than the
Fair Market Value on the Date of Grant. No amendment,
modification or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan
without the consent of the Participant.
National Income Tax Consequences
a. United States. Under current federal tax law, the
following are the federal tax consequences generally arising with
respect to Awards under the Plan. A Participant who is granted
an Incentive Stock Option does not realize regular taxable income
at the time of the grant or at the time of exercise, but only at
the time of disposition of the shares. The Participant does,
however, realize alternative minimum taxable income at the time
of exercise equal to the difference between the exercise price
and the market value of the shares on the date of exercise. The
Company is not entitled to any deduction at the time of grant or
at the time of exercise. However, if the Participant makes a
disposition of the shares acquired pursuant to an Incentive Stock
Option before the later of two years from the Date of Grant or
one year from the date the Option is exercised, the Company is
entitled to a deduction equal to the ordinary gain included in
the employee's compensation income. If the Participant makes no
disposition prior to such times, any gain or loss realized on a
subsequent disposition of the shares will be treated as a capital
gain or loss to the employee. Under such circumstances, the
Company will not be entitled to any corresponding deduction for
federal income tax purposes.
The Participant who is granted a Nonqualified Stock Option
does not have taxable income at the time of grant, but does have
ordinary taxable income at the time of exercise equal to the
difference between the exercise price of the shares and the
market value of the shares on the date of exercise. The Company
is entitled to a corresponding deduction for the same amount.
b. Canada. Generally, an employee who is a Canadian
citizen will be deemed to have received income by virtue of
employment in an amount equal to the difference between the value
of Shares when acquired and the Option price in the year in which
the Shares are acquired. A deduction in respect of a portion of
the benefit required to be included in the employee's income may
be permitted in certain circumstances. In effect, this deduction
gives the employee capital gains treatment in respect of the
deemed benefit.
Resale of Option Shares; Insider Reporting
The Company has not imposed any restrictions upon resale of
shares purchased upon exercise of Options. An "affiliate" of the
Company (as defined in the rules of the Securities and Exchange
Act) who wishes to make a public offer or sale of the shares must
do so in compliance with Rule 144 under the Securities Act of
1933, unless the affiliate's securities are included in a current
registration statement on an appropriate form. The definition of
"affiliate" contained in the rules of the Securities and Exchange
Commission is very broad and includes all directors of the
Company. Participants should consult the Secretary of the
Company and their legal advisors prior to the sale of any shares
purchased pursuant to an Option for advice as to compliance with
applicable legal requirements.
Each director and officer of the Company and each person who
beneficially owns more than 10% of any class of the Company's
stock is required by Section 16(a) of the Exchange Act to file
with the Commission an Initial Statement of Beneficial Ownership
of Stock on Form 3 and to report certain changes in beneficial
ownership of the stock on Form 4 within 10 days after the close
of the calendar month in which such change occurs. Such persons
are also required to report annually, within 45 days after the
Company's fiscal year end, on Form 5, transactions which are
exempt from Section 16(b) liability, including grants of Options,
as well as any transaction during the Company's most recent
fiscal year which should have been, but was not, reported on Form
3 or Form 4. Generally, the grant of an Option is reportable on
Form 5 (so long as the Common Stock acquired upon exercise is not
sold until 6 months have elapsed from the date of grant), and the
exercise of an Option is reportable on the next Form 4 or Form 5
due. The sale of stock acquired pursuant to an Option is
reportable on Form 4 by the tenth day of the month following the
sale.
Incorporation of Certain Documents by Reference
The Company is subject to the information requirements of
the Securities and Exchange Act of 1934, as amended ("Exchange
Act"). In accordance therewith, the Company files reports and
other information with the Securities and Exchange Commission
("Commission"). The following documents which have been filed by
the Company with the Commission pursuant to the Exchange Act
(File No. 1-10067), are incorporated by reference herein:
(a) Annual Report on Form 10-K for the year ended December
31, 1997;
(b) Current Report on Form 8-K dated January 20, 1998;
(c) Current Report on Form 8-K dated January 26, 1998;
and
(d) Description of the Company's Common Stock
contained in its Registration Statement on Form 8-B
filed on June 7, 1995.
All reports hereafter filed by the Company pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior
to the filing of a post-effective amendment which indicates that
all of the shares of Common Stock covered by the registration
statement relating to the Plan have been sold or which
deregisters all such shares then remaining unsold, shall be
deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
The Company will deliver or cause to be delivered to each
Participant to whom this document is sent or given a copy of the
Company's annual report to stockholders for its latest fiscal
year, unless such employee otherwise has received a copy of such
report, in which case the Company will promptly furnish, without
charge, a copy of such report on written request of the
Participant.
The Company will provide without charge to any Participant
to whom a copy of this document is delivered, upon written or
oral request of any such person, a copy of any or all of the
information described above which has been incorporated by
reference herein, other than exhibits thereto. Requests for
copies should be directed to the Company's secretary, Marian
Moon, Devon Energy Corporation, 20 North Broadway, Oklahoma City,
Oklahoma 73102, telephone (405) 235-3611.
EXHIBIT A
DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
Table of Contents
Page
ARTICLE I PURPOSE A-1
Section 1.1 Purpose A-1
Section 1.2 Establishment A-1
Section 1.3 Shares Subject to the Plan A-1
Section 1.4 Shareholder Approval A-1
ARTICLE II DEFINITIONS A-1
ARTICLE III ADMINISTRATION A-4
Section 3.1 Administration by Committee A-4
Section 3.2 Committee to Make Rules
and Interpret Plan A-5
ARTICLE IV GRANT OF AWARDS A-5
Section 4.1 Committee to Grant Awards A-5
ARTICLE V ELIGIBILITY A-5
ARTICLE VI STOCK OPTIONS A-6
Section 6.1 Grant of Options A-6
Section 6.2 Conditions of Options A-6
Section 6.3 Options Not Qualifying as
Incentive Stock Options A-7
ARTICLE VII STOCK ADJUSTMENTS A-8
ARTICLE VIII GENERAL A-8
Section 8.1 Amendment or Termination of Plan A-8
Section 8.2 Acceleration of Otherwise
Unexercisable Stock Options on Death,
Disability or Other Special Circumstances A-8
Section 8.3 Non-Transferability of Options A-9
Section 8.4 Withholding Taxes A-9
Section 8.5 Amendments to Awards A-9
Section 8.6 Securities Laws A-9
Section 8.7 Change of Control A-9
Section 8.8 No Right to Continued Employment A-9
Section 8.9 Reliance on Reports A-9
Section 8.10 Construction A-10
Section 8.11 Incentive Stock Options and
Nonqualified Stock Options Granted Separately A-10
Section 8.12 Governing Law A-10
ARTICLE IX ACCELERATION OF OPTIONS UPON CORPORATE
EVENT A-10
ARTICLE I
PURPOSE
Section 1.1 Purpose. This Stock Option Plan is
established by Devon Energy Corporation, an Oklahoma corporation
(the "Company") to create incentives which are designed to
motivate Participants to put forth maximum effort toward the
success and growth of the Company and to enable the Company to
attract and retain experienced individuals who by their position,
ability and diligence are able to make important contributions to
the Company's success. Toward these objectives, the Plan
provides for the granting of Options to Participants on the terms
and subject to the conditions set forth in the Plan.
Section 1.2 Establishment. The Plan is effective as of
March 26, 1997, and for a period of 10 years from such date. The
Plan will terminate on March 25, 2007, however; it will continue
in effect until all matters relating to the payment of Awards and
administration of the Plan have been settled.
Section 1.3 Shares Subject to the Plan. Subject to
Articles IV, VII and VIII of this Plan, shares of stock covered
by Options shall consist of 2,000,000 shares of Common Stock.
Section 1.4 Shareholder Approval. The Plan shall be
approved by the holders of a majority of the outstanding shares
of Common Stock present, or represented, and entitled to vote at
a meeting called for such purposes, which approval must occur
within the period ending twelve months after the date the Plan is
adopted by the Board. Pending such approval by the shareholders,
Awards under the Plan may be granted to Participants, but no such
Awards may be exercised or paid prior to receipt of shareholder
approval. In the event shareholder approval is not obtained
within such twelve-month period, all such Awards shall be void.
ARTICLE II
DEFINITIONS
Section 2.1 "Acquisition Date" means the date on which
the Company completes the acquisition of oil and gas properties,
or assets, or a business entity owning such properties or assets
under an acquisition contract ("Acquisition Contract") which
results in a 20% or more increase in the total oil and gas
reserves or total assets of the Company.
(i) For purposes of determining if the 20%
increase in total oil and gas reserves has occurred, the acquisi
tion must result in a 20% or more increase in the total oil and
gas reserves of the Company when compared to the Company's
pre-acquisition reserves. The Company's pre-acquisition reserves
will be the estimated reserve volumes expressed in barrels of oil
equivalent contained in the most recent annual report, adjusted
to the Acquisition Date for subsequent production, drilling,
purchases and sales of reserves (other than the subject
acquisition). In each instance, 6 Mcf of natural gas will be
equal to one barrel of oil.
(ii) For purposes of determining if the 20% or
more increase in the total assets of the Company has occurred,
the gross purchase or acquisition price paid (including any debt
or other liabilities assumed) for the assets or the business
entity owning the assets (as determined pursuant to the final
Acquisition Contract) must equal 20% or more of the sum of (1)
Total Liabilities and Stockholders' Equity minus (2) the Total
Stockholders' Equity and Devon Financing Trust Convertible
Preferred Securities plus (3) the market value of the Company's
outstanding common and preferred stock and Devon Financing Trust
Convertible Preferred Securities (the "Market Capitalization").
For the purpose of this determination, the foregoing items
included in (1) and (2) above shall be based upon the Company's
consolidated financial statement as of the last day of the month
immediately preceding the month in which such purchase or
acquisition occurs; and, for the purpose of determining the
Market Capitalization, the Company's outstanding common and
preferred stock and Devon Financing Trust Convertible Preferred
Securities shall be valued at the weighted average closing price
of such securities for the ten trading days preceding the public
announcement of the execution of the definitive Acquisition
Contract.
Section 2.2 "Affiliated Entity" means any partnership or
limited liability company, a majority of the partnership or other
similar interest thereof is owned or controlled, directly or
indirectly, by the Company or one or more of its Subsidiaries or
Affiliated Entities or a combination thereof. For purposes
hereof, the Company, a Subsidiary or an Affiliate Entity shall be
deemed to have a majority ownership interest in a partnership or
limited liability company if the Company, such Subsidiary or
Affiliated Entity shall be allocated a majority of partnership or
limited liability company gains or losses or shall be or control
the managing director or a general partner of such partnership or
limited liability company.
Section 2.3 "Award" means, any Option granted under the
Plan to a Participant by the Committee pursuant to such terms,
conditions, restrictions, and/or limitations, if any, as the
Committee may establish by the Award Agreement or otherwise.
Section 2.4 "Award Agreement" means any written
instrument that establishes the terms, conditions, restrictions,
and/or limitations applicable to an Award in addition to those
established by this Plan and by the Committee's exercise of its
administrative powers.
Section 2.5 "Board" means the Board of Directors of the
Company.
Section 2.6 "Change of Control Date" means the date on
which one of the following events occurs:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30%
or more of either (i) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions
shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company;
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii), and (iii) of subsection (c) below; or
(b) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date
hereof whose election, appointment or nomination for election by
the Company's shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for purposes of this
definition, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, share exchange, merger or consolidation (a
"Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the indi
viduals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Incumbent Board
providing for such Business Combination, or were elected,
appointed or nominated by the Incumbent Board; or
(d) Approval by the shareholders of the Company of (i)
a complete liquidation or dissolution of the Company or, (ii) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect
to which following such sale or other disposition, (A) more than
50% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respec
tively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their owner
ship, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) less than 30% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors is then beneficially owned, directly
or indirectly, by any Person (excluding any employee benefit plan
(or related trust) of the Company or such corporation), except to
the extent that such Person owned 30% or more of the Outstanding
Company Common Stock or Outstanding Company Voting Securities
prior to the sale or disposition, and (C) at least a majority of
the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Incumbent Board
providing for such sale or other disposition of assets of the
Company, or were elected, appointed or nominated by the Incumbent
Board.
Section 2.7 "Code" means the Internal Revenue Code of
1986, as amended. Reference in the Plan to any Section of the
Code shall be deemed to include any amendments or successor
provisions to such Section and any regulations under such
Section.
Section 2.8 "Committee" means the Compensation and Stock
Option Committee of the Board, or such other committee designated
by the Board, authorized to administer the Plan under Article III
hereof consisting of not less than two "Nonemployee Directors" as
that term is defined in Rule 16b-3 promulgated under the Exchange
Act.
Section 2.9 "Common Stock" means the common stock, par
value $.10 per share, of the Company, and after substitution,
such other stock as shall be substituted therefor as provided in
Article VII.
Section 2.10 "Date of Grant" means the date on which the
granting of an Award is authorized by the Committee or such later
date as may be specified by the Committee in such authorization.
Section 2.11 "Disability" shall have the meaning set forth
in Section 22(e)(3) of the Code.
Section 2.12 "Eligible Employee" means any employee of the
Company, a Subsidiary or an Affiliated Entity.
Section 2.13 "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
Section 2.14 "Fair Market Value" means (A) during such
time as the Common Stock is listed upon the American Stock
Exchange or other exchanges or the Nasdaq/National Market, the
closing price of the Common Stock on such stock exchange or
exchanges or the Nasdaq/National Market on the day for which such
value is to be determined, or if no sale of the Common Stock
shall have been made on any such stock exchange or the
Nasdaq/National Market that day, on the next preceding day on
which there was a sale of such Common Stock or (B) during any
such time as the Common Stock is not listed upon an established
stock exchange or the Nasdaq/National Market, the mean between
dealer "bid" and "ask" prices of the Common Stock in the over-the-
counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc. or (C) during any such time as the Common Stock
cannot be valued pursuant to (A) or (B) above, the fair market
value shall be as determined by the Board considering all
relevant information including, by example and not by limitation,
the services of an independent appraiser.
Section 2.15 "Incentive Stock Option" means an Option
within the meaning of Section 422 of the Code.
Section 2.16 "Nonemployee Director" means any person who
is a member of the Board, and who is not an Eligible Employee.
Section 2.17 "Nonqualified Stock Option" means an Option
which is not an Incentive Stock Option.
Section 2.18 "Option" means an Award granted under Article
VI of the Plan and includes both Non-qualified Options and
Incentive Stock Options to purchase shares of Common Stock.
Section 2.19 "Participant" means a Nonemployee Director or
an Eligible Employee to whom an Award under the Plan has been
granted by the Committee.
Section 2.20 "Plan" means Devon Energy Corporation 1997
Stock Option Plan.
Section 2.21 "Subsidiary" shall have the same meaning set
forth in Section 424 of the Code.
ARTICLE III
ADMINISTRATION
Section 3.1 Administration by Committee. The Committee
shall administer the Plan. Unless otherwise provided in the by-
laws of the Company or the resolutions adopted from time to time
by the Board establishing the Committee, the Board may from time
to time remove members from, or add members to, the Committee.
Vacancies on the Committee, however caused, shall be filled by
the Board. However, at all times the Committee members shall
meet the definition of "Nonemployee Director" as defined in Rule
16b-3 promulgated under the Exchange Act. The Committee shall
hold meetings at such times and places as it may determine. A
majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a
quorum is present or acts reduced to or approved in writing by a
majority of the members of the Committee shall be the valid acts
of the Committee.
Subject to the provisions of the Plan, the Committee shall
have exclusive power to:
(a) Select the Participants to be granted Awards.
(b) Determine the time or times when Awards will be
made.
(c) Determine the form of an Award, whether an
Incentive Stock Option or Nonqualified Stock Option, the number
of shares of Common Stock subject to the Award, all the terms,
conditions (including performance requirements), restrictions
and/or limitations, if any, of an Award, including the time and
conditions of exercise or vesting, and the terms of any Award
Agreement, which may include the waiver or amendment of prior
terms and conditions or acceleration or early vesting or payment
of an Award under certain circumstances determined by the
Committee.
(d) Determine whether Awards will be granted singly or
in combination.
(e) Accelerate the vesting, exercise or payment of an
Award or the performance period of an Award when such action or
actions would be in the best interest of the Company.
(f) Take any and all other action it deems necessary or
advisable for the proper operation or administration of the Plan.
Section 3.2 Committee to Make Rules and Interpret Plan.
The Committee in its sole discretion shall have the authority,
subject to the provisions and the general purpose and intent of
the Plan, to (i) modify the requirements of the Plan to conform
with the law or to meet special circumstances not anticipated or
covered by the Plan; (ii) suspend or discontinue the Plan; (iii)
establish, adopt, or revise rules and regulations; and (iv) make
all such determinations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan. The
Committee's interpretation of the Plan or any Awards granted
pursuant thereto and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding, and
conclusive on all parties.
ARTICLE IV
GRANT OF AWARDS
Section 4.1 Committee to Grant Awards. The Committee
may, from time to time, grant Awards to one or more Participants,
provided, however, that:
(a) Subject to Article VII, the aggregate number of
shares of Common Stock made subject to the Award (i) to any
Eligible Employee who is a Participant in any year may not exceed
50,000 and (ii) to any Nonemployee Director may not exceed 3,000
in any year. The grant of an Award to any Nonemployee Director
will only be made on the date of the Company's annual shareholder
meeting and immediately after the occurrence of such meeting.
(b) Any shares of Common Stock related to Awards which
terminate by expiration, forfeiture, cancellation or otherwise
without the issuance of shares of Common Stock shall be available
again for grant under the Plan.
(c) Common Stock delivered by the Company issued
pursuant to an Award under the Plan may be authorized and
unissued Common Stock or Common Stock held in the treasury of the
Company or may be purchased on the open market or by private
purchase.
(d) Separate certificates representing Common Stock to
be delivered to a Participant upon the exercise of any Option
will be issued to such Participant.
ARTICLE V
ELIGIBILITY
Subject to the provisions of the Plan, the Committee shall,
from time to time, select from the Nonemployee Directors and
Eligible Employees those to whom Awards shall be granted and
shall determine the type or types of Awards to be made and shall
establish in the related Award Agreements the terms, conditions,
restrictions and/or limitations, if any, applicable to the Awards
in addition to those set forth in the Plan and the administrative
rules and regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
Section 6.1 Grant of Options. The Committee may, from
time to time, subject to the provisions of the Plan and such
other terms and conditions as it may determine, grant Options to
Participants. These Options may be Incentive Stock Options or
Nonqualified Stock Options, or a combination of both. Each grant
of an Option shall be evidenced by an Award Agreement executed by
the Company and the Participant, and shall contain such terms and
conditions and be in such form as the Committee may from time to
time approve, subject to the requirements of Section 6.2.
Section 6.2 Conditions of Options. Each Option so
granted shall be subject to the following conditions:
(a) Exercise Price. As limited by Section 6.2(e)
below, each Option shall state the exercise price which shall be
set by the Committee at the Date of Grant; provided, however, no
Option shall be granted at an exercise price which is less than
the Fair Market Value of the Common Stock on the Date of Grant.
(b) Form of Payment. The exercise price of an Option
may be paid (i) in cash or by check, bank draft or money order
payable to the order of the Company; (ii) by delivering shares of
Common Stock or other equity securities of the Company having a
Fair Market Value on the date of payment equal to the amount of
the exercise price; (iii) by directing the Company to withhold
from the shares of Common Stock to be delivered to the
Participant upon exercise of the Option, shares of Common Stock
with a Fair Market Value on the date of payment equal to the
amount of the exercise price; or (iv) a combination of the
foregoing. In addition to the foregoing, any Option granted
under the Plan may be exercised by a broker-dealer acting on
behalf of a Participant if (A) the broker-dealer has received
from the Participant or the Company a notice evidencing the
exercise of such Option and instructions signed by the
Participant requesting the Company to deliver the shares of
Common Stock subject to such Option to the broker-dealer on
behalf of the Participant and specifying the account into which
such shares should be deposited, (B) adequate provision has been
made with respect to the payment of any withholding taxes due
upon such exercise or, in the case of an Incentive Stock Option,
upon the premature disposition of such shares and (C) the broker-
dealer and the Participant have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR, Part 220 and any successor
rules and regulations applicable to such exercise.
(c) Exercise of Options. Options granted under the
Plan shall be exercisable, in whole or in such installments and
at such times, and shall expire at such time, as shall be
provided by the Committee in the Award Agreement. Exercise of an
Option shall be by written notice stating the election to
exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of an
Option shall be deemed to be fully paid at the time of exercise
and payment of the exercise price.
(d) Other Terms and Conditions. Among other conditions
that may be imposed by the Committee, if deemed appropriate, are
those relating to (i) the period or periods and the conditions of
exercisability of any Option; (ii) the minimum periods during
which Participants must be employed by the Company, its
Subsidiaries or an Affiliated Entity, or must hold Options before
they may be exercised; (iii) the minimum periods during which
shares acquired upon exercise must be held before sale or
transfer shall be permitted; (iv) conditions under which such
Options or shares may be subject to forfeiture; (v) the frequency
of exercise or the minimum or maximum number of shares that may
be acquired at any one time and (vi) the achievement by the
Company of specified performance criteria.
(e) Special Restrictions Relating to Incentive Stock
Options. Options issued in the form of Incentive Stock Options
shall not be granted to Directors who are not also Eligible
Employees of the Company or a Subsidiary and shall, in addition
to being subject to all applicable terms, conditions,
restrictions and/or limitations established under the Plan or by
the Committee, comply with the requirements of Section 422 of the
Code (or any successor Section thereto), including, without
limitation, the requirement that the exercise price of an
Incentive Stock Option not be less than 100% of the Fair Market
Value of the Common Stock on the Date of Grant, the requirement
that each Incentive Stock Option, unless sooner exercised,
terminated or cancelled, expire no later than 10 years from its
Date of Grant, and the requirement that the aggregate Fair Market
Value (determined on the Date of Grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this
Plan or any other plan of the Company, its parent or any
Subsidiary) not exceed $100,000. Incentive Stock Options which
are in excess of the applicable $100,000 limitation will be
automatically recharacterized as Nonqualified Stock Options as
provided under Section 6.3 of this Plan. No Incentive Stock
Options shall be granted to any Eligible Employee if, immediately
before the grant of an Incentive Stock Option, such Eligible
Employee owns more than 10% of the total combined voting power of
all classes of stock of the Company or its Subsidiaries (as
determined in accordance with the stock attribution rules
contained in Sections 422 and 424(d) of the Code). Provided, the
preceding sentence shall not apply if, at the time the Incentive
Stock Option is granted, the exercise price is at least 110% of
the Fair Market Value of the Common Stock subject to the
Incentive Stock Option, and such Incentive Stock Option by its
terms is exercisable no more than five years from the date such
Incentive Stock Option is granted.
(f) Application of Funds. The cash proceeds received
by the Company from the sale of Common Stock pursuant to Options
will be used for general corporate purposes. Shares received by
the Company in lieu of cash payment will be considered as
treasury stock and may be retired at the Company's discretion.
(g) Shareholder Rights. No Participant shall have a
right as a shareholder with respect to any share of Common Stock
subject to an Option prior to purchase of such shares of Common
Stock by exercise of the Option.
Section 6.3 Options Not Qualifying as Incentive Stock
Options. With respect to all or any portion of any Option
granted under this Plan not qualifying as an "incentive stock
option" under Section 422 of the Code, such Option shall be
considered as a Nonqualified Stock Option granted under this Plan
for all purposes. Further, this Plan and any Incentive Stock
Options granted hereunder shall be deemed to have incorporated by
reference all the provisions and requirements of Section 422 of
the Code (and the Treasury Regulations issued thereunder) which
are required to provide that all Incentive Stock Options granted
hereunder shall be "incentive stock options" described in Section
422 of the Code. Further, in the event that (a) the Committee
grants Incentive Stock Options under this Plan to a Participant,
and, (b) the applicable limitation contained in Section 6.2(e)
herein is exceeded, then, such Incentive Stock Options in excess
of such limitation shall be treated as Nonqualified Stock Options
under this Plan subject to the terms and provisions of the
applicable Award Agreement, except to the extent modified to
reflect recharacterization of the Incentive Stock Options as
Nonqualified Stock Options.
ARTICLE VII
STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently
constituted, shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the
Company or of another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, stock split,
combination of shares or otherwise), or if the number of such
shares of Common Stock shall be increased through the payment of
a stock dividend, or a dividend on the shares of Common Stock or
rights or warrants to purchase securities of the Company shall be
made, then there shall be substituted for or added to each share
available under and subject to the Plan as provided in Section
1.3 hereof, and each share theretofore appropriated or thereafter
subject or which may become subject to Options under the Plan,
the number and kind of shares of stock or other securities into
which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged or to which each
such share shall be entitled, as the case may be, on a fair and
equivalent basis in accordance with the applicable provisions of
Section 424 of the Code; provided, however, with respect to
Options, in no such event will such adjustment result in a
modification of any Option as defined in Section 424(h) of the
Code. In the event there shall be any other change in the number
or kind of the outstanding shares of Common Stock, or any stock
or other securities into which the Common Stock shall have been
changed or for which it shall have been exchanged, then if the
Committee shall, in its sole discretion, determine that such
change equitably requires an adjustment in the shares available
under and subject to the Plan, or in any Award theretofore
granted or which may be granted under the Plan, such adjustments
shall be made in accordance with such determination, except that
no adjustment of the number of shares of Common Stock available
under the Plan or to which any Award relates that would otherwise
be required shall be made unless and until such adjustment either
by itself or with other adjustments not previously made would
require an increase or decrease of at least 1% in the number of
shares of Common Stock available under the Plan or to which any
Award relates immediately prior to the making of such adjustment
(the "Minimum Adjustment"). Any adjustment representing a change
of less than such minimum amount shall be carried forward and
made as soon as such adjustment together with other adjustments
required by this Article VII and not previously made would result
in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Article VII which otherwise would not
result in a Minimum Adjustment shall be made with respect to
shares of Common Stock relating to any Award immediately prior to
exercise, payment or settlement of such Award.
No fractional shares of Common Stock or units of other
securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole
share.
ARTICLE VIII
GENERAL
Section 8.1 Amendment or Termination of Plan. The Board
may suspend or terminate the Plan at any time. In addition, the
Board may, from time to time, amend the Plan in any manner, but
may not without shareholder approval adopt any amendment which
would increase the aggregate number of shares of Common Stock
available under the Plan (except by operation of Article VII) or
decrease the exercise price to less than the Fair Market Value on
the Date of Grant, provided, that any amendment to the Plan shall
require approval of the shareholders if, in the opinion of
counsel to the Company, such approval is required by any Federal
or state law or any regulations or rules promulgated thereunder.
Section 8.2 Acceleration of Otherwise Unexercisable
Options on Death, Disability or Other Special Circumstances.
The Committee, in its sole discretion, may permit (i) a
Participant who terminates employment due to a Disability, (ii)
the personal representative of a deceased Participant, or (iii)
any other Participant who terminates employment upon the
occurrence of special circumstances (as determined by the
Committee) to purchase all or any part of the shares subject to
any unvested Option on the date of the Participant's Disability,
death, or as the Committee otherwise so determines. With respect
to Options which have already vested at the date of such
termination or the vesting of which is accelerated by the
Committee in accordance with the foregoing provision, the
Participant or the personal representative of a deceased
Participant shall automatically have the right to exercise such
vested Options within three months of such date of termination of
employment (or such longer period as shall be provided in the
Award Agreement) or one year in the case of a Participant
suffering a Disability or three years in the case of a deceased
Participant; provided, however, in no event shall the option be
exercisable beyond the original expiration date of the Option.
Section 8.3 Non-Transferability of Options. Except as
otherwise herein provided, any Option granted shall not be
transferable otherwise than by will or the laws of descent and
distribution, and the Option may be exercised, during the
lifetime of the Participant, only by him. More particularly (but
without limiting the generality of the foregoing), the Option
shall not be assigned, transferred (except as provided above),
pledged or hypothecated in any way whatsoever, shall not be
assignable 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 Option contrary to the provisions hereof shall be null and
void and without effect.
Section 8.4 Withholding Taxes. A Participant may pay the
amount of taxes required by law upon the exercise or payment of
an Award (i) in cash, (ii) by delivering to the Company shares of
Common Stock having a Fair Market Value on the date of payment
equal to the amount of such required withholding taxes, or (iii)
by directing the Company to withhold from the shares of Common
Stock to be delivered to the Participant upon exercise or payment
of the Award shares of Common Stock having a Fair Market Value on
the date of payment equal to the amount of such required
withholding taxes.
Section 8.5 Amendments to Awards. The Committee may at
any time amend the terms of any Award Agreement, whether or not
presently exercisable, earned, paid or vested, to accelerate
vesting of Awards.
Section 8.6 Securities Laws. The Company shall have no
obligation to issue or deliver certificates representing shares
of Common Stock subject to Awards prior to:
(a) the obtaining of any approval from, or satisfaction
of any waiting period or other condition imposed by, any
governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable; and
(b) the completion of any registration or other
qualification of such shares under any state or Federal law or
ruling of any governmental body which the Committee shall, in its
sole discretion, determine to be necessary or advisable.
Section 8.7 Change of Control. Awards granted under the
Plan to any Participant may, in the discretion of the Committee,
provide that such Awards shall be immediately vested, fully
earned and exercisable upon the Acquisition Date or the Change of
Control Date.
Section 8.8 No Right to Continued Employment.
Participation in the Plan shall not give any Nonemployee Director
any right to remain a Nonemployee Director of the Company or any
Eligible Employee any right to remain in the employ of the
Company, any Subsidiary or any Affiliated Entity. The adoption
of this Plan shall not be deemed to give any Director, Eligible
Employee or any other individual any right to be selected as a
Participant or to be granted an Award.
Section 8.9 Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified
in relying or acting in good faith upon any report made by the
independent public accountants of the Company and its
Subsidiaries and upon any other information furnished in
connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been
a member of the Committee or of the Board be liable for any
determination made or other action taken or any omission to act
in reliance upon any such report or information or for any action
taken, including the furnishing of information, or failure to
act, if in good faith.
Section 8.10 Construction. Masculine pronouns and other
words of masculine gender shall refer to both men and women. The
titles and headings of the sections in the Plan are for the
convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall
control.
Section 8.11 Incentive Stock Options and Nonqualified
Stock Options Granted Separately. Since the Committee is
authorized to grant Nonqualified Stock Options and Incentive
Stock Options to Participants, the grants thereof and Award
Agreements relating thereto will be made separately and totally
independent of each other. Except as it relates to the total
number of shares of Stock which may be issued under the Plan, the
grant or exercise of a Nonqualified Stock Option shall in no
manner affect the grant and exercise of any Incentive Stock
Options. Similarly, the grant and exercise of an Incentive Stock
Option shall in no manner affect the grant and exercise of any
Nonqualified Stock Options.
Section 8.12 Governing Law. The Plan shall be governed by
and construed in accordance with the laws of the State of
Oklahoma except as superseded by applicable Federal law.
ARTICLE IX
ACCELERATION OF OPTIONS UPON CORPORATE EVENT
If the Company shall, pursuant to action by the Board, at
any time propose to dissolve or liquidate or merge into,
consolidate with, or sell or otherwise transfer all or
substantially all of its assets to another corporation and
provision is not made pursuant to the terms of such transaction
for the assumption by the surviving, resulting or acquiring
corporation of outstanding Options under the Plan, or for the
substitution of new options therefor, the Committee shall cause
written notice of the proposed transaction to be given to each
Participant no less than forty days prior to the anticipated
effective date of the proposed transaction, and his Option shall
become 100% vested and, prior to a date specified in such notice,
which shall be not more than ten days prior to the anticipated
effective date of the proposed transaction, each Participant
shall have the right to exercise his Option to purchase any or
all of the Common Stock then subject to such Option. Each
Participant, by so notifying the Company in writing, may, in
exercising his Option, condition such exercise upon, and provide
that such exercise shall become effective at the time of, but
immediately prior to, the consummation of the transaction, in
which event such Participant need not make payment for the Common
Stock to be purchased upon exercise of such Option until five
days after written notice by the Company to such Participant that
the transaction has been consummated. If the transaction is
consummated, each Option, to the extent not previously exercised
prior to the date specified in the foregoing notice, shall
terminate on the effective date of such consummation. If the
transaction is abandoned, (i) any Common Stock not purchased upon
exercise of such Option shall continue to be available for
purchase in accordance with the other provisions of the Plan and
(ii) to the extent that any Option not exercised prior to such
abandonment shall have vested solely by operation of this Article
IX, such vesting shall be deemed annulled, and the vesting
schedule set forth in the Participant's Option Agreement shall be
reinstituted, as of the date of such abandonment.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The registrant incorporates herein by reference the
following documents filed with the Securities and Exchange
Commission (the "Commission");
(a) the registrant's latest annual report filed pursuant to
Sections 12(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act");
(b) all other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year
covered by the annual report referenced to in (a) above; and
(c) the description of the registrant's common stock
contained in its registration statement filed under the Exchange
Act, and any amendment or report filed for the purpose of
updating such description.
All reports hereafter filed by the registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior
to the filing of a post-effective amendment which indicates that
all of the shares of the registrant's common stock covered by
this registration statement have been sold or which deregisters
all such shares then remaining unsold, shall be deemed to be
incorporated herein by reference and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None
Item 6. Indemnification of Directors and Officers.
Section 1031 of the Oklahoma General Corporation Act, under
which Act the registrant is incorporated, authorizes the
indemnification of officers and directors under certain
circumstances. Paragraph "Thirteenth" of the Certificate of
Incorporation of the registrant and Article VI of the Bylaws of
the registrant provide indemnification of directors, officers and
agents under certain circumstances. These circumstances may be
sufficiently broad to indemnify such persons for liabilities
under the Securities Act of 1933. Article "Ninth" of the
Company's Articles of Incorporation limit the personal liability
of directors to its stockholders except for certain
circumstances. Liability under Federal Securities law is not one
of the circumstances which is excepted. In addition, the
registrant maintains insurance policies which insure its officers
and directors against certain liabilities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Certificate of Incorporation, as amended
(incorporated by reference to Exhibit B to Registrant's
Definitive Proxy Statement for its 1995 Annual Meeting
of Shareholders, filed on April 21, 1995).
4.2 Registrant's Certificate of Amendment of
Certificate of Incorporation (incorporated by reference
to Exhibit 2 to Registrant's Current Report on Form 8-K
dated December 31, 1996).
4.3 Bylaws (incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form 8-B filed
on June 7, 1995.
4.4 Form of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to Registrant's Registration
Statement on Form 8-B filed on June 7, 1995).
4.5 Devon Energy Corporation 1997 Stock Option Plan
(incorporated by reference to Exhibit A to Registrant's
Definitive Proxy Statement for the 1997 Annual Meeting
of Shareholders, filed on April 3, 1997).
4.6 Form of Incentive Stock Option Award Agreement.
4.7 Form of Nonqualified Stock Option Award Agreement
for Employees.
4.8 Form of Nonqualified Stock Option Award Agreement
for Nonemployee Directors.
5 Opinion of Underwood,Wilson,Berry,Stein & Johnson,
a Professional Corporation.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of LaRoche Petroleum Consultants, Ltd.
23.3 Consent of AMH Group, Ltd.
23.4 Consent of Underwood,Wilson,Berry,Stein & Johnson,
a Professional Corporation (included in Exhibit 5 of
this Registration Statement).
24 Powers of Attorney
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii)
do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purposes of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Oklahoma City, State of Oklahoma, on the 25th day of
March, 1998.
DEVON ENERGY CORPORATION
By: J. Larry Nichols, President
J. Larry Nichols, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on March 25, 1998.
John W. Nichols J. Larry Nichols
John W. Nichols, Chairman of J. Larry Nichols, President, Chief
the Board and Director Executive Officer and Director
William T. Vaughn Danny J. Heatly
William T. Vaughn, Vice President Danny J. Heatly, Controller
- - Finance
Luke R. Corbett Thomas F. Ferguson
Luke R. Corbett, Director Thomas F. Ferguson, Director
David M. Gavrin Michael E. Gellert
David M. Gavrin, Director Michael E. Gellert, Director
Tom J. McDaniel H. R. Sanders, Jr.
Tom J. McDaniel, Director H. R. Sanders, Jr., Director
Lawrence H. Towell
Lawrence H. Towell, Director
'
Index to Exhibits
Exhibit
No. Page
4.6 Form of Incentive Stock Option Award Agreement
4.7 Form of Nonqualified Stock Option Award Agreement
for Employees
4.8 Form of Nonqualified Stock Option Award Agreement for
Nonemployee Directors
5 Opinion and Consent of Underwood,Wilson,Berry,Stein &
Johnson, a Professional Corporation
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of LaRoche Petroleum Consultants, Ltd.
23.3 Consent of AMH Group, Ltd.
24 Powers of Attorney
EXHIBIT 4.6
<PAGE>
1997 Incentive Stock Option
No. _____
DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
__________________________________
INCENTIVE STOCK OPTION
AWARD AGREEMENT
Participant
Name:______________________ Grant Date:___________, 199_
Vesting Schedule
Percent of
Stock
Exercise Dates:
Option Exercisable
Shares Subject to Option:____________
Expiration Date:______________, 2007
Exercise Price: $_______________
Special Terms and Conditions:
INCENTIVE STOCK OPTION
AWARD AGREEMENT
UNDER THE DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Award
Agreement"), made as of the grant date set forth on the cover
page of this Award Agreement (the "Cover Page") at Oklahoma City,
Oklahoma, by and between the participant named on the Cover Page
(the "Participant") and DEVON ENERGY CORPORATION (the "Company"):
WITNESSETH:
WHEREAS, the Participant is an employee of the Company or
any Subsidiary of the Company, and it is important to the Company
that the Participant be encouraged to remain in the employ of the
Company or a Subsidiary of the Company; and
WHEREAS, in recognition of such facts, the Company desires
to provide to the Participant an opportunity to purchase shares
of the common stock of the Company, as hereinafter provided,
pursuant to the "Devon Energy Corporation 1997 Stock Option Plan"
(the "Plan"), a copy of which has been provided to the
Participant; 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. Grant of Incentive Stock Option. The Company
hereby grants to the Participant an incentive stock option (the
"Incentive Stock Option") 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 shares of its common
stock, par value $.10 (the "Stock") set forth on the Cover Page,
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 exercise price
set forth on the Cover Page (the "Exercise Price").
Section 2. Times of Exercise of Incentive Stock Option.
After, and only after, the conditions of Section 10 hereof have
been satisfied, the Participant shall be eligible to exercise the
Incentive Stock Option pursuant to the vesting schedule set forth
on the Cover Page (the "Vesting Schedule"). If the Participant's
employment with the Company (or of any one or more of the
Subsidiaries of the Company) remains full-time and continuous at
all times prior to any of the exercise dates specified on the
Cover Page (the "Exercise Dates"), then the Participant shall be
entitled, subject to the applicable provisions of the Plan and
this Award Agreement having been satisfied, to exercise on or
after the applicable Exercise Date, on a cumulative basis, the
number of Incentive Stock Options determined by multiplying the
aggregate number of shares of Stock subject to the Incentive
Stock Option set forth on the Cover Page by the designated
percentage set forth on the Cover Page.
Section 3. Term of Incentive Stock Option. Subject to
earlier termination as hereafter provided, the Incentive Stock
Option shall expire at the close of business on the expiration
date set forth on the Cover Page and may not be exercised after
such expiration date; provided, however, in no event shall the
term of the Incentive Stock Option be longer than ten years from
the Date of Grant. At all times during the period commencing
with the date the Incentive Stock Option is granted to the
Participant and ending on the earlier of the expiration of the
Incentive Stock Option or the date which is three months prior to
the date the Incentive Stock Option is exercised by the
Participant, the Participant must be an employee of either (i)
the Company, (ii) a Subsidiary of the Company, or (iii) a
corporation or a parent or a Subsidiary of such corporation
issuing or assuming an Incentive Stock Option in a transaction to
which Section 424 of the Code applies.
Section 4. Nontransferability of Incentive Stock Option.
Except as otherwise herein provided, the Incentive Stock Option
shall not be transferable otherwise than by will or the laws of
descent and distribution, and the Incentive Stock Option may be
exercised during the lifetime of the Participant only by the
Participant. More particularly (but without limiting the
generality of the foregoing), the Incentive Stock Option may not
be assigned, transferred (except as provided above), pledged or
hypothecated in any way whatsoever, shall not be assignable 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
Incentive Stock Option contrary to the provisions hereof shall be
null and void and without effect.
Section 5. Employment. So long as the Participant shall
continue to be a full-time and continuous employee of the Company
or one or more of the Subsidiaries of the Company, the Incentive
Stock Option shall not be affected by any change of duties or
position. Nothing in the Plan or in this Award Agreement shall
confer upon the Participant any right to continue in the employ
of the Company or any of the Subsidiaries or Affiliated Entities
of the Company, or interfere in any way with the right to
terminate the Participant's employment at any time.
Section 6. Special Rules With Respect to Incentive Stock
Options. With respect to the Incentive Stock Option granted
hereunder, the following special rules shall apply:
(a) Annual Limitation on Exercise of Incentive Stock
Options. Except as provided in Section 8 herein, in no event
during any calendar year will the aggregate Fair Market Value,
determined as of the time the Incentive Stock Option is granted,
of the Stock for which the Participant may first have the right
to exercise under the Incentive Stock Option and any other
"incentive stock options" granted under all plans qualified under
Section 422 of the Code which are sponsored by the Company, its
parent or its Subsidiaries or Affiliated Entities exceed
$100,000.
(b) Acceleration of Otherwise Unexercisable Incentive
Stock Options on Death, Disability or Other Special
Circumstances. The Committee, in its sole discretion, may permit
(i) a Participant who terminates employment due to a Disability,
(ii) the personal representative of a deceased Participant, or
(iii) any other Participant who terminates employment upon the
occurrence of special circumstances (as determined by the
Committee) to purchase all or any part of the shares subject to
the Incentive Stock Option for which the applicable Exercise
Date(s) has not yet occurred on the date of the Participant's
death, termination of his employment due to a Disability, or as
the Committee otherwise so determines. With respect to shares
subject to the Incentive Stock Option for which the applicable
Exercise Date has occurred or for which the Committee has
permitted purchase in accordance with the foregoing provision,
the Participant, or the representative of a deceased Participant,
shall automatically have the right to purchase such shares within
three months of such date of termination of employment, one year
in the case of a Participant suffering a Disability or three
years in the case of a deceased Participant, but not beyond the
Expiration Date.
Section 7. Method of Exercising Incentive Stock Option.
(a) Procedures for Exercise. The manner of exercising
the Incentive Stock Option herein granted shall be by written
notice to the Secretary of the Company at the time the Incentive
Stock Option, or part thereof, is to be exercised, and in any
event prior to the expiration of the Incentive Stock Option.
Such notice shall state the election to exercise the Incentive
Stock Option, the number of shares of Stock to be purchased upon
exercise, the form of payment to be used, and shall be signed by
the person so exercising the Incentive Stock Option.
(b) Form of Payment. Payment of the full Exercise
Price for shares of Stock purchased under this Award Agreement
shall accompany the Participant's written notice of exercise,
together with full payment for any applicable withholding taxes.
Payment shall be made (i) in cash or by check, draft or money
order payable to the order of the Company; (ii) by delivering
Stock or other equity securities of the Company having a Fair
Market Value on the date of payment equal to the amount of the
Exercise Price; (iii) by directing the Company to withhold shares
of Stock having a Fair Market Value at the date of payment equal
to the amount of the Exercise Price from the shares of Stock to
be delivered to the Participant upon exercise of the Incentive
Stock Option to the foregoing procedure which may be available
for the exercise of the Incentive Stock Option, the Participant
may deliver to the Company a notice of exercise which includes an
irrevocable instruction to the Company to deliver the stock
certificate representing the shares of Stock being purchased,
issued in the name of the Participant, to a broker approved by
the Company and authorized to trade in the Stock of the Company.
Upon receipt of such notice, the Company shall acknowledge
receipt of the executed notice of exercise and forward this
notice to the broker. Upon receipt of the copy of the notice
which has been acknowledged by the Company, and without waiting
for issuance of the actual stock certificate with respect to the
exercise of the Incentive Stock Option, the broker may sell the
Stock or any portion thereof. The broker shall deliver directly
to the Company that portion of the sales proceeds sufficient to
cover the Exercise Price and withholding taxes, if any. For all
purposes of effecting the exercise of the Incentive Stock Option,
the date on which the Participant gives the notice of exercise to
the Company, together with payment for the shares of Stock being
purchased and any applicable withholding taxes, shall be the date
of exercise. If a notice of exercise and payment are delivered
at different times, the date of exercise shall be the date the
Company first has in its possession both the notice and full
payment as provided herein.
(c) Further Information. In the event the Incentive
Stock Option is exercised, pursuant to the foregoing provisions
of this Section 7, by any person other than the Participant due
to the death of the Participant, such notice shall also be
accompanied by appropriate proof of the right of such person to
exercise the Incentive Stock Option. The notice so required
shall be given by personal delivery to the Secretary of the
Company or by registered or certified mail, addressed to the
Company at 20 North Broadway, Suite 1500, Oklahoma City, Oklahoma
73102-8260, and it shall be deemed to have been given when it is
so personally delivered or when it is so 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 8. Acceleration of Incentive Stock Option Upon
"Corporate Event". In the case of a "Corporate Event" as defined
in Article IX of the Plan, this Incentive Stock Option will
automatically become fully vested and immediately exercisable
without the requirement of any further act by the Company or the
Participant. See Article IX of the Plan for a more complete
description of the effect of the occurrence of a Corporate Event.
Section 9. Acceleration of Incentive Stock Option Upon
"Change of Control" and Acquisition Date". In the event that a
Change of Control Date or Acquisition Date (as defined in
Sections 2.1 and 2.6 of the Plan) occurs with respect to the
Company, any and all Incentive Stock Options under this Award
Agreement become automatically fully vested and immediately
exercisable with such acceleration to occur without the
requirement of any further act by either the Company or the
Participant.
Section 10. Securities Law Restrictions. The Incentive
Stock Option shall be exercised and 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 shares of Stock subject to
the Incentive 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. The Participant acknowledges that any stock
certificate representing Stock purchased under such circumstances
will be issued with a restricted securities legend.
Section 11. Disqualifying Disposition of Stock. If the
Participant shall make a disposition (within the meaning of
Section 424(c) of the Code and the rules and regulations
thereunder) of any shares of Stock covered by the Incentive Stock
Option within one year after the date of exercise of the
Incentive Stock Option or within two years after the Date of
Grant of the Incentive Stock Option, then in either such event
the Participant shall promptly notify the Company, by delivery of
written notice to the Secretary of the Company, of (i) the date
of disposition, (ii) the number of shares of Stock covered by the
Incentive Stock Option which were disposed of and (iii) the price
at which such shares of Stock were disposed of or the amount of
any other consideration received on such disposition. The
Company may make such provision as it may deem appropriate for
the withholding of any applicable federal, state or local taxes
that it determines it may be obligated to withhold or pay in
connection with the exercise of the Incentive Stock Option or the
disposition of shares of Stock acquired upon exercise of the
Incentive Stock Option.
Section 12. Notices. All notices or other communications
relating to the Plan and this Option 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.
IN WITNESS WHEREOF, the parties have executed this Option
Agreement as of the date and year first above written.
DEVON ENERGY CORPORATION, an
Oklahoma corporation
By: J. Larry Nichols
J. Larry Nichols, President and
Chief Executive Officer
"PARTICIPANT"
Name: ________________________
Address: _____________________
Telephone: __________________
<PAGE>
EXHIBIT 4.7
<PAGE>
EMPLOYEE AWARD
1997 Nonqualified Stock Option
No. _____
DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
__________________________________
EMPLOYEE
NONQUALIFIED STOCK OPTION
AWARD AGREEMENT
Participant
Name:______________________ Grant Date:___________, 199_
Vesting Schedule
Percent of
Stock
Vesting Date: Option
Exercisable
Shares Subject to Option:____________
Expiration Date:______________, 2007
Exercise Price: $_______________
Special Terms and Conditions:
<PAGE>
EMPLOYEE NONQUALIFIED STOCK OPTION
AWARD AGREEMENT
UNDER THE DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
THIS STOCK OPTION AGREEMENT (the "Award Agreement"),
made as of the grant date set forth on the cover page of
this Award Agreement (the "Cover Page") at Oklahoma City,
Oklahoma, by and between the participant named on the Cover
Page (the "Participant") and DEVON ENERGY CORPORATION (the
"Company"):
WITNESSETH:
WHEREAS, the Participant is an employee of the Company
or any Subsidiary or Affiliated Entity of the Company, and
it is important to the Company that the Participant be
encouraged to remain in the employ of the Company or any
Subsidiary or Affiliated Entity of the Company; and
WHEREAS, in recognition of such facts, the Company
desires to provide to the Participant an opportunity to
purchase shares of the common stock of the Company, as
hereinafter provided, pursuant to the "Devon Energy
Corporation 1997 Stock Option Plan" (the "Plan"), a copy of
which has been provided to the Participant; 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. Grant of Stock Option. The Company
hereby grants to the Participant an a nonqualified stock
option (the "Stock Option"), to purchase all or any part of
the number of shares of its common stock, par value $.10
(the "Stock") set forth on the Cover Page, 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 exercise price
set forth on the Cover Page (the "Exercise Price").
Section 2. Times of Exercise of Stock Option.
After, and only after, the conditions of Section 10 hereof
have been satisfied, the Participant shall be eligible to
exercise the Stock Option pursuant to the vesting schedule
set forth on the Cover Page (the "Vesting Schedule"). If
the Participant's employment with the Company (or of any one
or more of the Subsidiaries or an Affiliated Entity of the
Company) remains full-time and continuous at all times prior
to any of the exercise dates specified on the Cover Page
(the "Exercise Dates"), then the Participant shall be
entitled, subject to the applicable provisions of the Plan
and this Award Agreement having been satisfied, to exercise
on or after the applicable Exercise Date, on a cumulative
basis, the number of Stock Options determined by multiplying
the aggregate number of shares of Stock subject to the Stock
Option set forth on the Cover Page by the designated
percentage set forth on the Cover Page.
Section 3. Term of Stock Option. Subject to
earlier termination as hereafter provided, the Stock Option
shall expire at the close of business on the expiration date
set forth on the Cover Page and may not be exercised after
such expiration date; provided, however, in no event shall
the term of the Stock Option be longer than ten years from
the Date of Grant. At all times during the period
commencing with the date the Stock Option is granted to the
Participant and ending on the earlier of the expiration of
the Stock Option or the date which is three months prior to
the date the Stock Option is exercised by the Participant,
the Participant must be an employee of either (i) the
Company, (ii) a Subsidiary of the Company, or (iii) an
Affiliated Entity.
Section 4. Nontransferability of Stock Option.
Except as otherwise herein provided, the Stock Option shall
not be transferable otherwise than by will or the laws of
descent and distribution, and the Stock Option may be
exercised during the lifetime of the Participant only by the
Participant. More particularly (but without limiting the
generality of the foregoing), the Stock Option may not be
assigned, transferred (except as provided above), pledged or
hypothecated in any way whatsoever, shall not be assignable
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.
Section 5. Employment. So long as the Participant
shall continue to be a full-time and continuous employee of
the Company or one or more of the Subsidiaries or Affiliated
Entities of the Company, the Stock Option shall not be
affected by any change of duties or position. Nothing in
the Plan or in this Award Agreement shall confer upon the
Participant any right to continue in the employ of the
Company or any of the Subsidiaries or Affiliated Entities of
the Company, or interfere in any way with the right to
terminate the Participant's employment at any time.
Section 6. Acceleration of Stock Options on Death,
Disability or Other Special Circumstances. The Committee, in
its sole discretion, may permit (i) a Participant who
terminates employment due to a Disability, (ii) the personal
representative of a deceased Participant, or (iii) any other
Participant who terminates employment upon the occurrence of
special circumstances (as determined by the Committee) to
purchase all or any part of the shares subject to the
Nonqualified Stock Option for which the applicable Exercise
Date(s) has not yet occurred on the date of the
Participant's death, termination of his employment due to a
Disability, or as the committee otherwise so determines.
With respect to shares subject to the Stock Option for which
the applicable Vesting Date has occurred, or for which the
Committee has permitted purchase in accordance with the
foregoing provision, the Participant, or the representative
of a deceased Participant, shall automatically have the
right to purchase such shares within three months of such
date of termination of employment, one year in the case of a
Participant suffering a Disability or three years in the
case of a deceased Participant, but not beyond the
Expiration Date.
Section 7. Method of Exercising Stock Option.
(a) Procedures for Exercise. The manner of
exercising the Stock Option herein granted shall be by
written notice to the Secretary of the Company at the time
the Stock Option, or part thereof, is to be exercised, and
in any event prior to the expiration of the Stock Option.
Such notice shall state the election to exercise the Stock
Option, the number of shares of Stock to be purchased upon
exercise, the form of payment to be used, and shall be
signed by the person so exercising the Stock Option.
(b) Form of Payment. Payment of the full Exercise
Price for shares of Stock purchased under this Award
Agreement shall accompany the Participant's written notice
of exercise, together with full payment for any applicable
withholding taxes. Payment shall be made (i) in cash or by
check, draft or money order payable to the order of the
Company; (ii) by delivering Stock or other equity securities
of the Company having a Fair Market Value on the date of
payment equal to the amount of the Exercise Price; (iii) by
directing the Company to withhold shares of Stock having a
Fair Market Value at the date of payment equal to the amount
of the Exercise Price from the shares of Stock to be
delivered to the Participant upon exercise of the Stock
Option to the foregoing procedure which may be available for
the exercise of the Stock Option, the Participant may
deliver to the Company a notice of exercise which includes
an irrevocable instruction to the Company to deliver the
stock certificate representing the shares of Stock being
purchased, issued in the name of the Participant, to a
broker approved by the Company and authorized to trade in
the Stock of the Company. Upon receipt of such notice, the
Company shall acknowledge receipt of the executed notice of
exercise and forward this notice to the broker. Upon
receipt of the copy of the notice which has been
acknowledged by the Company, and without waiting for
issuance of the actual stock certificate with respect to the
exercise of the Stock Option, the broker may sell the Stock
or any portion thereof. The broker shall deliver directly
to the Company that portion of the sales proceeds sufficient
to cover the Exercise Price and withholding taxes, if any.
For all purposes of effecting the exercise of the Stock
Option, the date on which the Participant gives the notice
of exercise to the Company, together with payment for the
shares of Stock being purchased and any applicable
withholding taxes, shall be the date of exercise. If a
notice of exercise and payment are delivered at different
times, the date of exercise shall be the date the Company
first has in its possession both the notice and full payment
as provided herein.
(c) Further Information. In the event the Stock
Option is exercised, pursuant to the foregoing provisions of
this Section 7, by any person other than the Participant due
to the death of the Participant, such notice shall also be
accompanied by appropriate proof of the right of such person
to exercise the Stock Option. The notice so required shall
be given by personal delivery to the Secretary of the
Company or by registered or certified mail, addressed to the
Company at 20 North Broadway, Suite 1500, Oklahoma City,
Oklahoma 73102-8260, and it shall be deemed to have been
given when it is so personally delivered or when it is so
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 8. Acceleration of Stock Option Upon
"Corporate Event". In the case of a "Corporate Event" as
defined in Article IX of the Plan, this Stock Option will
automatically become fully vested and immediately
exercisable without the requirement of any further act by
the Company or the Participant. See Article IX of the Plan
for a more complete description of the effect of the
occurrence of a Corporate Event.
Section 9. Acceleration of Stock Option Upon
"Change of Control" and "Acquisition Date". In the event
that a Change of Control Date or Acquisition Date (as
defined in Sections 2.1 and 2.6 of the Plan) occurs with
respect to the Company, any and all Stock Options under this
Award Agreement become automatically fully vested and
immediately exercisable with such acceleration to occur
without the requirement of any further act by either the
Company or the Participant.
Section 10. Securities Law Restrictions. The Stock
Option shall be exercised and 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 shares of Stock 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. The Participant acknowledges that any stock
certificate representing Stock purchased under such
circumstances will be issued with a restricted securities
legend.
Section 11. Notices. All notices or other
communications relating to the Plan and this Option
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.
IN WITNESS WHEREOF, the parties have executed this
Option Agreement as of the date and year first above
written.
DEVON ENERGY CORPORATION, an
Oklahoma corporation
By: J. Larry Nichols
J. Larry Nichols, President and
Chief Executive Officer
"PARTICIPANT"
Name:
Address:
Telephone:
<PAGE>
EXHIBIT 4.8
<PAGE>
NONEMPLOYEE DIRECTOR AWARD
1997 Nonqualified Stock Option
No. _____
DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
__________________________________
NONEMPLOYEE DIRECTOR
NONQUALIFIED STOCK OPTION
AWARD AGREEMENT
Participant
Name:______________________ Grant Date:___________, 199_
Vesting Schedule
Percent of Stock
Vesting Date: Option Exercisable
Shares Subject to Option:____________
Expiration Date:______________, 2007
Exercise Price: $_______________
Special Terms and Conditions:
<PAGE>
NONEMPLOYEE DIRECTOR NONQUALIFIED STOCK OPTION
AWARD AGREEMENT
UNDER THE DEVON ENERGY CORPORATION
1997 STOCK OPTION PLAN
THIS STOCK OPTION AGREEMENT (the "Award Agreement"), made as
of the grant date set forth on the cover page of this Option
Agreement (the "Cover Page") at Oklahoma City, Oklahoma, by and
between the participant named on the Cover Page (the
"Participant") and DEVON ENERGY CORPORATION (the "Company"):
WITNESSETH:
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 an opportunity to purchase shares
of the common stock of the Company, as hereinafter provided,
pursuant to the "Devon Energy Corporation 1997 Stock Option Plan"
(the "Plan"), a copy of which has been provided to the
Participant; 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. Grant of Stock Option. The Company hereby
grants to the Participant an a nonqualified stock option (the
"Stock Option"), to purchase all or any part of the number of
shares of its common stock, par value $.10 (the "Stock") set
forth on the Cover Page, 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 exercise price set forth on the Cover Page
(the "Exercise Price").
Section 2. Times of Exercise of Stock Option. After,
and only after, the conditions of Section 9 hereof have been
satisfied, the Participant shall be eligible to exercise the
Stock Option from and after the vesting date set forth on the
Cover Page (the "Vesting Date").
Section 3. Term of Stock Option. Subject to earlier
termination as hereafter provided, the Stock Option shall expire
at the close of business on the expiration date set forth on the
Cover Page and may not be exercised after such expiration date;
provided, however, in no event shall the term of the Stock Option
be longer than ten years from the Date of Grant. At all times
during the period commencing with the date the Stock Option is
granted to the Participant and ending on the earlier of the
expiration of the Stock Option or the date which is three months
prior to the date the Stock Option is exercised by the
Participant, the Participant must be a director of the Company.
Section 4. Nontransferability of Stock Option. Except
as otherwise herein provided, the Stock Option shall not be
transferable otherwise than by will or the laws of descent and
distribution, and the Stock Option may be exercised, during the
lifetime of the Participant, only by the Participant. More
particularly (but without limiting the generality of the
foregoing), the Stock Option may not be assigned, transferred
(except as provided above), pledged or hypothecated in any way
whatsoever, shall not be assignable 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.
Section 5. Acceleration of Stock Options on Death,
Disability or Other Special Circumstances. With respect to
shares subject to the Stock Option for which the applicable
Vesting Date has occurred, the Participant, or the representative
of a deceased Participant, shall automatically have the right to
purchase such shares within three months of the date of
termination of the Participant's status as a director of the
Company, one year in the case of a Participant suffering a
Disability or three years in the case of a deceased Participant,
but not beyond the Expiration Date.
Section 6. Method of Exercising Stock Option.
(a) Procedures for Exercise. The manner of exercising
the Stock Option herein granted shall be by written notice to the
Secretary of the Company at the time the Stock Option, or part
thereof, is to be exercised, and in any event prior to the
expiration of the Stock Option. Such notice shall state the
election to exercise the Stock Option, the number of shares of
Stock to be purchased upon exercise, the form of payment to be
used, and shall be signed by the person so exercising the Stock
Option.
(b) Form of Payment. Payment of the full Exercise
Price for shares of Stock purchased under this Award Agreement
shall accompany the Participant's written notice of exercise,
together with full payment for any applicable withholding taxes.
Payment shall be made (i) in cash or by check, draft or money
order payable to the order of the Company; (ii) by delivering
Stock or other equity securities of the Company having a Fair
Market Value on the date of payment equal to the amount of the
Exercise Price; (iii) by directing the Company to withhold shares
of Stock having a Fair Market Value at the date of payment equal
to the amount of the Exercise Price from the shares of Stock to
be delivered to the Participant upon exercise of the Stock Option
to the foregoing procedure which may be available for the
exercise of the Stock Option, the Participant may deliver to the
Company a notice of exercise which includes an irrevocable
instruction to the Company to deliver the stock certificate
representing the shares of Stock being purchased, issued in the
name of the Participant, to a broker approved by the Company and
authorized to trade in the Stock of the Company. Upon receipt of
such notice, the Company shall acknowledge receipt of the
executed notice of exercise and forward this notice to the
broker. Upon receipt of the copy of the notice which has been
acknowledged by the Company, and without waiting for issuance of
the actual stock certificate with respect to the exercise of the
Stock Option, the broker may sell the Stock or any portion
thereof. The broker shall deliver directly to the Company that
portion of the sales proceeds sufficient to cover the Exercise
Price and withholding taxes, if any. For all purposes of
effecting the exercise of the Stock Option, the date on which the
Participant gives the notice of exercise to the Company, together
with payment for the shares of Stock being purchased and any
applicable withholding taxes, shall be the date of exercise. If
a notice of exercise and payment are delivered at different
times, the date of exercise shall be the date the Company first
has in its possession both the notice and full payment as
provided herein.
(c) Further Information. In the event the Stock Option
is exercised, pursuant to the foregoing provisions of this
Section 6, by any person other than the Participant due to the
death of the Participant, such notice shall also be accompanied
by appropriate proof of the right of such person to exercise the
Stock Option. The notice so required shall be given by personal
delivery to the Secretary of the Company or by registered or
certified mail, addressed to the Company at 20 North Broadway,
Suite 1500, Oklahoma City, Oklahoma 73102-8260, and it shall be
deemed to have been given when it is so personally delivered or
when it is so 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 7. Acceleration of Stock Option Upon "Corporate
Event". In the case of a "Corporate Event" as defined in Article
IX of the Plan, this Stock Option will automatically become fully
vested and immediately exercisable without the requirement of any
further act by the Company or the Participant. See Article IX of
the Plan for a more complete description of the effect of the
occurrence of a Corporate Event.
Section 8. Acceleration of Stock Option Upon "Change of
Control" and Acquisition Date". In the event that a Change of
Control Date or Acquisition Date (as defined in Sections 2.1 and
2.6 of the Plan) occurs with respect to the Company, any and all
Stock Options under this Award Agreement become automatically
fully vested and immediately exercisable with such acceleration
to occur without the requirement of any further act by either the
Company or the Participant.
Section 9. Securities Law Restrictions. The Stock
Option shall be exercised and 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 shares of Stock 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. The
Participant acknowledges that any stock certificate representing
Stock purchased under such circumstances will be issued with a
restricted securities legend.
Section 10. Notices. All notices or other communications
relating to the Plan and this Option 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.
IN WITNESS WHEREOF, the parties have executed this Option
Agreement as of the date and year first above written.
DEVON ENERGY CORPORATION, an
Oklahoma corporation
By: J. Larry Nichols
J. Larry Nichols, President and
Chief Executive Officer
"PARTICIPANT"
Name: ____________________________
Address: __________________________
Telephone: ________________________
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EXHIBIT 5
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Underwood, Wilson,Berry, Stein & Johnson, P.C.
A PROFESSIONAL CORPORATION
JEROME W. JOHNSON ATTORNEYS AND COUNSELLORS AT LAW D. LYNN TATE
JAMES A. BESSELMAN 1500 AMARILLO NATIONAL BANK BUILDING DAN L. SCHAAP
E.T. MANNING P. O. BOX 9158 SALLY HOLT EMERSON
DON M. DEAN AMARILLO, TEXAS 79105-9158 GAVIN J. GADBERRY
A.W. SORELLE III TELEPHONE (806) 376-5613 MICHELLE A. EGGLESTON
GERALD G. BYBEE FAX (806) 379-0316 CHRISTOPHER K. WRAMPELMEIER
MICHAEL H. LOFTIN www.usa-soft.com/ulf CHARLES A. MALLARD
THOMAS R. DIXON, JR. GRANT ADAMS
KELLY UTSINGER OF COUNSEL: GINGER P. NELSON
SHARON E. WHITE CLIFFORD A. STEIN CHAD PIERCE
PATRICK B. MOSLEY WINSTON R. SMITH MARK D. TILLMAN
T. ALAN RHODES EDWARD H. HILL MICHAEL S. SMILEY
JAMES W. WESTER
WRITER'S DIRECT E-MAIL: MARCH 23, 1998 WRITER'S DIRECT DIAL:
[email protected] (806) 379-0391
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Re: Shares of Devon Energy Corporation, Par Value $.10 to be
issued pursuant to Devon Energy Corporation 1997 Stock Option Plan
We are serving as counsel for Devon Energy Corporation which
has filed a Registration Statement on Form S-8 with the
Securities and Exchange Commission in connection with the Devon
Energy Corporation 1997 Stock Option Plan (the "Plan"), for the
registration of a maximum of 2,000,000 shares of common stock,
par value $.10 per share, of Devon Energy Corporation (the
"Company") which may be granted pursuant to the Plan.
In rendering the opinion hereinafter expressed, we have
examined such corporate records and documents of the Company
and made such other factual investigation as we deem necessary.
Based on the foregoing, we are of the opinion that:
1. The Company is duly organized and existing under the laws
of the State of Oklahoma.
2. When the shares of the Company's common stock, up to a
maximum of 2,000,00 shares, are issued and paid for pursuant to
the Plan, such shares will be duly and validly authorized and
legally issued, fully paid and nonassessable in accordance with
the Oklahoma General Corporation Act.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the reference to our name
therein.
Very truly yours,
UNDERWOOD,WILSON,BERRY,STEIN
& JOHNSON, P.C.
EXHIBIT 23.1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Devon Energy Corporation:
We consent to incorporation by reference in the registration
statement on Form S-8 of Devon Energy Corporation of our
report dated January 26, 1998, relating to the consolidated
balance sheets of Devon Energy Corporation and subsidiaries
as of December 31, 1997, 1996, and 1995, and the related
consolidated statements of operations, stockholders' equity,
and cash flows for the years then ended, which report
appears in the December 31, 1997 annual report on Form 10-K
of Devon Energy Corporation
KPMG Peat Marwick LLP
Oklahoma City, Oklahoma
March 24, 1998
EXHIBIT 23.2
Exhibit 23.2
ENGINEER'S CONSENT
We consent to the reference to our appraisal report for
Devon Energy Corporation as of December 31, 1997,
incorporated herein by reference.
LAROCHE PETROLEUM CONSULTANTS, LTD.
March 23, 1998
EXHIBIT 23.3
Exhibit 23.3
ENGINEER'S CONSENT
We consent to the reference to our appraisal report for
Devon Energy Corporation as of December 31, 1997,
incorporated herein by reference.
AMH GROUP, LTD.
March 23, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints J. Larry
Nichols, H. Allen Turner and Marian Moon, and each or any
one of them, his true and lawful attorney-in-fact and agent,
each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place, and stead,
in any and all capacities, to sign any or all amendments
(including post-effective amendments) and supplements to
this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agents, each acting
alone, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each
acting alone, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
John W. Nichols J. Larry Nichols
John W. Nichols, Chairman of J. Larry Nichols, President, Chief
the Board and Director Executive Officer and Director
William T. Vaughn Danny J. Heatly
William T. Vaughn, Vice President Danny J. Heatly, Director
- - Finance and Chief Financial
Officer
Luke R. Corbett Thomas F. Ferguson
Luke R. Corbett, Director Thomas F. Ferguson, Director
David M. Gavrin Michael E. Gellert
David M. Gavrin, Director Michael E. Gellert, Director
Tom J. McDaniel H. R. Sanders, Jr.
Tom J. McDaniel, Director H. R. Sanders, Jr., Director
Lawrence H. Towell
Lawrence H. Towell, Director
