Document:

exv10w1

 

Exhibit 10.1

Forms of Award Agreements

under the

Michaels Stores, Inc. 2005 Incentive Compensation Plan

Adopted August 4, 2005

 

 

Employee Stock Option Agreement: Performance Vested Award

 

 

MICHAELS STORES, INC.

STOCK OPTION AGREEMENT

	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	No. of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Option Price:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) an option (the “Option”) to purchase the number of shares of the
Company’s Common Stock set forth above at the price per share set forth above (the “Option Price”).
Terms not defined in this Agreement have the meanings set forth in the Plan.

     The Option will be for a term commencing on the Date of Grant set forth above and ending at
5:00 p.m. Dallas, Texas time on the Expiration Date set forth above. During the term of the
Option, the Option will become exercisable in accordance with the immediately following paragraph;
provided, that in no event will the Participant be entitled to acquire a fraction of a share of
Common Stock pursuant to the Option.

     [Insert Management Objectives to be achieved and time period in which Management Objectives
are to be achieved in order for the Option (or a portion of the Option) to become vested.]

     Notwithstanding the vesting provisions and Expiration Date set forth above, [(a) ]in the event
the Participant’s employment with the Company or any Subsidiary is terminated by long-term
disability (as determined by the Committee in good faith) or death, the portion of the Option which
is unexpired at the time of such termination of employment will automatically become 100% vested
and exercisable and will expire at 5:00 p.m. Dallas, Texas time (i) one day prior to the fifth
anniversary of such long-term disability or (ii) one day prior to the third anniversary of the
Participant’s death[; and (b) subject to the noncompetition provisions set forth below, in the
event of the Participant’s Retirement (as hereinafter defined), [insert effect of Retirement]. For
purposes of this Agreement, the term “Retirement” means the Participant’s termination of employment
with the Company or any Subsidiary at a time when both (A) the Participant has attained at least
age 55 and (B) the sum of the Participant’s full years of employment with the Company and its
Subsidiaries and the Participant’s age in whole years equals 65 or more].

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than [Retirement or ]such long-term disability or death, no further vesting of the
Option will occur after the date of such termination and the Option will expire at 5:00 p.m.
Dallas, Texas time on the 30th calendar day after such termination.

     Payment of the Option Price of any shares purchased under the Option will be made pursuant to
any of the provisions of, and in accordance with, Section 6(c) of the Plan (or any successor
provision).

 

 

     The Option may not be sold, pledged, assigned or transferred in any manner other than by will
or the laws of descent and distribution, pursuant to a qualified domestic relations order or, with
the consent of the Committee, by gifts to family members of the Participant, including to trusts in
which family members of the Participant own more than 50% of the beneficial interests, to
foundations in which family members of the Participant or the Participant control the management of
assets, to other entities in which more than 50% of the voting interests are owned by family
members of the Participant or the Participant and to charitable organizations described in Section
170(c) of the Code.

     [The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President – Human Resources of the Company of such violation; (ii) the
unexpired portion of the Option will expire immediately upon the occurrence of such violation; and
(iii) in the event that the Participant has exercised or purported to exercise all or any part of
the Option on or following the first date of such violation, the Participant will pay to the
Company, immediately upon demand, an amount equal to the before-tax gain realized by the
Participant upon such exercise(s) or purported exercise(s).]

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2

 

Employee Stock Option Agreement: Time Vested Award

 

 

MICHAELS STORES, INC.

STOCK OPTION AGREEMENT

	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	No. of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Option Price:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) an option (the “Option”) to purchase the number of shares of the
Company’s Common Stock set forth above at the price per share set forth above (the “Option Price”).
Terms not defined in this Agreement have the meanings set forth in the Plan.

     The Option will be for a term commencing on the Date of Grant set forth above and ending at
5:00 p.m. Dallas, Texas time on the Expiration Date set forth above. During the term of the
Option, the Option will become exercisable in accordance with the following schedule (the “Vesting
Schedule”):

	 	 	 
	Portion of Option Exercisable	 	On and After
	33 1/3%
	 	First Anniversary of Date of Grant
	66 2/3%
	 	Second Anniversary of Date of Grant
	100%
	 	Third Anniversary of Date of Grant

In no event, however, will the Participant be entitled to acquire a fraction of a share of Common
Stock pursuant to the Option.

     Notwithstanding the Vesting Schedule and Expiration Date set forth above, (a) in the event the
Participant’s employment with the Company or any Subsidiary is terminated by long-term disability
(as determined by the Committee in good faith) or death, the portion of the Option which is
unexpired at the time of such termination of employment will automatically become 100% vested and
exercisable and will expire at 5:00 p.m. Dallas, Texas time (i) one day prior to the fifth
anniversary of such long-term disability or (ii) one day prior to the third anniversary of the
Participant’s death; and (b) subject to the noncompetition provisions set forth below, in the event
of the Participant’s Retirement (as hereinafter defined), the portion of the Option which is
unexpired at the time of Retirement will continue to vest and become exercisable following
Retirement in accordance with the Vesting Schedule and will expire at 5:00 p.m. Dallas, Texas time
on the Expiration Date set forth above. For purposes of this Agreement, the term “Retirement”
means the Participant’s termination of employment with the Company or any Subsidiary at a time when
both (A) the Participant has attained at least age 55 and (B) the sum of the Participant’s full
years of employment with the Company and its Subsidiaries and the Participant’s age in whole years
equals 65 or more.

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than Retirement or such long-term disability or death, no further vesting of the
Option will occur after the date of such termination and the Option will expire at 5:00 p.m.
Dallas, Texas time on the 30th calendar day after such termination.

 

 

     Payment of the Option Price of any shares purchased under the Option will be made pursuant to
any of the provisions of, and in accordance with, Section 6(c) of the Plan (or any successor
provision).

     The Option may not be sold, pledged, assigned or transferred in any manner other than by will
or the laws of descent and distribution, pursuant to a qualified domestic relations order or, with
the consent of the Committee, by gifts to family members of the Participant, including to trusts in
which family members of the Participant own more than 50% of the beneficial interests, to
foundations in which family members of the Participant or the Participant control the management of
assets, to other entities in which more than 50% of the voting interests are owned by family
members of the Participant or the Participant and to charitable organizations described in Section
170(c) of the Code.

     The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President – Human Resources of the Company of such violation; (ii) the
unexpired portion of the Option will expire immediately upon the occurrence of such violation; and
(iii) in the event that the Participant has exercised or purported to exercise all or any part of
the Option on or following the first date of such violation, the Participant will pay to the
Company, immediately upon demand, an amount equal to the before-tax gain realized by the
Participant upon such exercise(s) or purported exercise(s).

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2

 

Director Stock Option Agreement

 

 

MICHAELS STORES, INC.

STOCK OPTION AGREEMENT

	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	No. of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Option Price:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) an option (the “Option”) to purchase the number of shares of the
Company’s Common Stock set forth above at the price per share set forth above (the “Option Price”).
Terms not defined in this Agreement have the meanings set forth in the Plan.

     The Option will be for a term commencing on the Date of Grant set forth above and ending at
5:00 p.m. Dallas, Texas time on the Expiration Date set forth above. The Option is fully
exercisable on and after the Date of Grant.

     Notwithstanding the Expiration Date set forth above, in the event of the Participant’s death,
the Option shall automatically expire at 5:00 p.m. Dallas, Texas time one day prior to the third
anniversary of the Participant’s death.

     Payment of the Option Price of any shares purchased under the Option will be made pursuant to
any of the provisions of, and in accordance with, Paragraph 6(c) of the Plan (or any successor
provision).

     The Option may not be sold, pledged, assigned or transferred in any manner other than by will
or the laws of descent and distribution, pursuant to a qualified domestic relations order or, with
the consent of the Committee, by gifts to family members of the Participant, including to trusts in
which family members of the Participant own more than 50% of the beneficial interests, to
foundations in which family members of the Participant or the Participant control the management of
assets, to other entities in which more than 50% of the voting interests are owned by family
members of the Participant or the Participant and to charitable organizations described in Section
170(c) of the Code.

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

 

 

Restricted Stock Award Agreement: Performance Vested Award

 

 

MICHAELS STORES, INC.

RESTRICTED STOCK AWARD AGREEMENT

	 	 	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	No. of Restricted Shares:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 	 	 
	 	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) the number of restricted shares of the Company’s Common Stock set
forth above (the “Restricted Shares”). Terms not defined in this Agreement have the meanings set
forth in the Plan.

     The Restricted Shares may not be transferred, sold, pledged, exchanged, assigned or otherwise
encumbered or disposed of by the Participant, except to the Company, until they become vested in
accordance with the immediately following paragraph. Except as hereinafter provided, any purported
transfer, encumbrance or other disposition of the Restricted Shares before they become vested will
be null and void, and the other party to any such purported transaction will not obtain any rights
to or interest in the Restricted Shares. Notwithstanding the foregoing, the Participant may
transfer the Restricted Shares, prior to the time they become vested, pursuant to a qualified
domestic relations order or, with the consent of the Committee, by gifts to family members of the
Participant, including to trusts in which family members of the Participant own more than 50% of
the beneficial interests, to foundations in which family members of the Participant or the
Participant control the management of assets, to other entities in which more than 50% of the
voting interests are owned by family members of the Participant or the Participant and to
charitable organizations described in Section 170(c) of the Code; provided, however, that the
Restricted Shares will remain unvested and subject to forfeiture in the hands of any transferee
until they vest pursuant to the terms of this Agreement in the same manner as if the Restricted
Shares continued to be held by the Participant.

     [Insert Management Objectives to be achieved and time period in which Management Objectives
are to be achieved in order for the Restricted Shares (or a portion of the Restricted Shares) to
become vested.]

     Notwithstanding the vesting provisions set forth above, [(a) ]in the event the Participant’s
employment with the Company or any Subsidiary is terminated by long-term disability (as determined
by the Committee in good faith) or death, the unvested Restricted Shares at the time of such
termination of employment will automatically become 100% vested[, and (b) subject to the
noncompetition provisions set forth below, in the event of the Participant’s Retirement (as
hereinafter defined), [insert effect of Retirement]. For purposes of this Agreement, the term
“Retirement” means the Participant’s termination of employment with the Company or any Subsidiary
at a time when both (A) the Participant has attained at least age 55 and (B) the sum of the
Participant’s full years of employment with the Company and its Subsidiaries and the Participant’s
age in whole years equals 65 or more].

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than [Retirement or ]such long-term disability or death, the unvested Restricted
Shares will be forfeited immediately upon such termination, and the certificates (if any)
representing the unvested Restricted Shares will be canceled.

     Except as otherwise provided herein, the Participant will have all of the rights of a
stockholder with respect to the Restricted Shares, including the right to vote such shares and
receive any dividends

 

 

that may be paid thereon; provided, however, that any additional shares of Common Stock or
other securities that the Participant may become entitled to receive pursuant to a stock dividend,
stock split, combination of shares, recapitalization, merger, consolidation, separation or
reorganization or any other change in the capital structure of the Company will be subject to the
same restrictions as the Restricted Shares.

     Any certificates representing the Restricted Shares will be held in custody by the Treasurer
of the Company, together with a stock power endorsed in blank by the Participant with respect
thereto, until the Restricted Shares vest in accordance with this Agreement. In order for this
Agreement to be effective, the Participant must sign and return such stock power to the attention
of the Treasurer of the Company.

     [The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President — Human Resources of the Company of such violation; (ii) the
unvested Restricted Shares will be forfeited immediately upon the occurrence of such violation, and
the certificates (if any) representing the unvested Restricted Shares will be canceled; and (iii)
if any of the Restricted Shares that were unvested on the first date of such violation were
delivered to the Participant or were otherwise treated as vested after such date, the Participant
will pay to the Company, immediately upon demand, an amount equal to the aggregate Market Value per
Share of the Restricted Shares that were so delivered or otherwise treated as vested, such
aggregate Market Value per Share to be determined as of the first date of such violation.]

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2

 

Restricted Stock Award Agreement: Time Vested Award

 

 

MICHAELS STORES, INC.

RESTRICTED STOCK AWARD AGREEMENT

	 	 	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	No. of Restricted Shares:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 	 	 
	 	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) the number of restricted shares of the Company’s Common Stock set
forth above (the “Restricted Shares”). Terms not defined in this Agreement have the meanings set
forth in the Plan.

     The Restricted Shares may not be transferred, sold, pledged, exchanged, assigned or otherwise
encumbered or disposed of by the Participant, except to the Company, until they become vested in
accordance with the schedule set forth below (the “Vesting Schedule”). Except as hereinafter
provided, any purported transfer, encumbrance or other disposition of the Restricted Shares before
they become vested will be null and void, and the other party to any such purported transaction
will not obtain any rights to or interest in the Restricted Shares. Notwithstanding the foregoing,
the Participant may transfer the Restricted Shares, prior to the time they become vested, pursuant
to a qualified domestic relations order or, with the consent of the Committee, by gifts to family
members of the Participant, including to trusts in which family members of the Participant own more
than 50% of the beneficial interests, to foundations in which family members of the Participant or
the Participant control the management of assets, to other entities in which more than 50% of the
voting interests are owned by family members of the Participant or the Participant and to
charitable organizations described in Section 170(c) of the Code; provided, however, that the
Restricted Shares will remain unvested and subject to forfeiture in the hands of any transferee
until they vest pursuant to the terms of this Agreement in the same manner as if the Restricted
Shares continued to be held by the Participant.

	 	 	 
	No. of Vested Shares	 	On and After
	(1/3)
	 	First Anniversary of Date of Grant
	(1/3)
	 	Second Anniversary of Date of Grant
	(1/3)
	 	Third Anniversary of Date of Grant

     Notwithstanding the Vesting Schedule set forth above, (a) in the event the Participant’s
employment with the Company or any Subsidiary is terminated by long-term disability (as determined
by the Committee in good faith) or death, the unvested Restricted Shares at the time of such
termination of employment will automatically become 100% vested, and (b) subject to the
noncompetition provisions set forth below, in the event of the Participant’s Retirement (as
hereinafter defined), the unvested Restricted Shares at the time of Retirement will continue to
vest following Retirement in accordance with the Vesting Schedule. For purposes of this Agreement,
the term “Retirement” means the Participant’s termination of employment with the Company or any
Subsidiary at a time when both (A) the Participant has attained at least age 55 and (B) the sum of
the Participant’s full years of employment with the Company and its Subsidiaries and the
Participant’s age in whole years equals 65 or more.

 

 

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than Retirement or such long-term disability or death, the unvested Restricted
Shares will be forfeited immediately upon such termination, and the certificates (if any)
representing the unvested Restricted Shares will be canceled.

     Except as otherwise provided herein, the Participant will have all of the rights of a
stockholder with respect to the Restricted Shares, including the right to vote such shares and
receive any dividends that may be paid thereon; provided, however, that any additional shares of
Common Stock or other securities that the Participant may become entitled to receive pursuant to a
stock dividend, stock split, combination of shares, recapitalization, merger, consolidation,
separation or reorganization or any other change in the capital structure of the Company will be
subject to the same restrictions as the Restricted Shares.

     Any certificates representing the Restricted Shares will be held in custody by the Treasurer
of the Company, together with a stock power endorsed in blank by the Participant with respect
thereto, until the Restricted Shares vest in accordance with this Agreement. In order for this
Agreement to be effective, the Participant must sign and return such stock power to the attention
of the Treasurer of the Company.

     The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President — Human Resources of the Company of such violation; (ii) the
unvested Restricted Shares will be forfeited immediately upon the occurrence of such violation, and
the certificates (if any) representing the unvested Restricted Shares will be canceled; and (iii)
if any of the Restricted Shares that were unvested on the first date of such violation were
delivered to the Participant or were otherwise treated as vested after such date, the Participant
will pay to the Company, immediately upon demand, an amount equal to the aggregate Market Value per
Share of the Restricted Shares that were so delivered or otherwise treated as vested, such
aggregate Market Value per Share to be determined as of the first date of such violation.

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2

 

Appreciation Rights Agreement: Performance Vested Award

 

 

MICHAELS STORES, INC.

APPRECIATION RIGHTS AGREEMENT

	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	No. of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Grant Price:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) appreciation rights (the “Appreciation Rights”) with respect to the
number of shares of the Company’s Common Stock set forth above. The Appreciation Rights are
freestanding Appreciation Rights and are not granted in tandem with Stock Options. Terms not
defined in this Agreement have the meanings set forth in the Plan.

     The number of shares of Common Stock to be issued to the Participant on the exercise of the
Appreciation Rights will be the number of shares of Common Stock having an aggregate Market Value
per Share on the date of exercise equal to ___% of the aggregate Spread of the Appreciation Rights
that are exercised, rounded down to the nearest whole share[, provided, however, that the maximum
Spread per share of Common Stock may not exceed $___]. No Appreciation Rights may be exercised
except at a time when the Spread is positive.

     The term of the Appreciation Rights will commence upon the Date of Grant and, unless earlier
terminated in accordance with the provisions below, will expire at 5:00 p.m. Dallas, Texas time on
the Expiration Date set forth above. During the term of the Appreciation Rights, the Appreciation
Rights will become vested and may be exercised in accordance with the immediately following
paragraph.

     [Insert Management Objectives to be achieved and time period in which Management Objectives
are to be achieved in order for the Appreciation Rights (or a portion of the Appreciation Rights)
to become vested.]

     Notwithstanding the vesting provisions and Expiration Date set forth above, [(a) ]in the event
the Participant’s employment with the Company or any Subsidiary is terminated by long-term
disability (as determined by the Committee in good faith) or death, the portion of the Appreciation
Rights which is unexpired at the time of such termination of employment will automatically become
100% vested and exercisable and will expire at 5:00 p.m. Dallas, Texas time (i) one day prior to
the fifth anniversary of such long-term disability or (ii) one day prior to the third anniversary
of death[; and (b) subject to the noncompetition provisions set forth below, in the event of the
Participant’s Retirement (as hereinafter defined), [insert effect of Retirement]. For purposes of
this Agreement, the term “Retirement” means the Participant’s termination of employment with the
Company or any Subsidiary at a time when both (A) the Participant has attained at least age 55 and
(B) the sum of the Participant’s full years of employment with the Company and its Subsidiaries and
the Participant’s age in whole years equals 65 or more].

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than [Retirement or ]such long-term disability or death, no further vesting of the
Appreciation Rights will occur after the date of such termination and the Appreciation Rights will
expire at 5:00 p.m. Dallas, Texas time on the 30th calendar day after such termination.

 

 

     The Appreciation Rights granted hereby may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution, pursuant to a qualified
domestic relations order or, with the consent of the Committee, by gifts to family members of the
Participant, including to trusts in which family members of the Participant own more than 50% of
the beneficial interests, to foundations in which family members of the Participant or the
Participant control the management of assets, to other entities in which more than 50% of the
voting interests are owned by family members of the Participant or the Participant and to
charitable organizations described in Section 170(c) of the Code.

     [The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President — Human Resources of the Company of such violation; (ii) the
unexpired portion of the Appreciation Rights will expire immediately upon the occurrence of such
violation; and (iii) in the event that the Participant has exercised or purported to exercise all
or any part of the Appreciation Rights on or following the first date of such violation, the
Participant will pay to the Company, immediately upon demand, an amount equal to the before-tax
gain realized by the Participant upon such exercise(s) or purported exercise(s).]

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2

 

Appreciation Rights Agreement: Time Vested Award

 

 

MICHAELS STORES, INC.

APPRECIATION RIGHTS AGREEMENT

	 	 	 	 	 	 	 
	 

	 	Participant:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	No. of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Grant Price:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 

     Under the terms and conditions of the Michaels Stores, Inc. 2005 Incentive Compensation Plan
(the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Michaels
Stores, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set
forth above (the “Participant”) appreciation rights (the “Appreciation Rights”) with respect to the
number of shares of the Company’s Common Stock set forth above. The Appreciation Rights are
freestanding Appreciation Rights and are not granted in tandem with Stock Options. Terms not
defined in this Agreement have the meanings set forth in the Plan.

     The number of shares of Common Stock to be issued to the Participant on the exercise of the
Appreciation Rights will be the number of shares of Common Stock having an aggregate Market Value
per Share on the date of exercise equal to ___% of the aggregate Spread of the Appreciation Rights
that are exercised, rounded down to the nearest whole share[, provided, however, that the maximum
Spread per share of Common Stock may not exceed $___]. No Appreciation Rights may be exercised
except at a time when the Spread is positive.

     The term of the Appreciation Rights will commence upon the Date of Grant and, unless earlier
terminated in accordance with the provisions below, will expire at 5:00 p.m. Dallas, Texas time on
the Expiration Date set forth above. During the term of the Appreciation Rights, the Appreciation
Rights will become vested and may be exercised in accordance with the following schedule (the
“Vesting Schedule”):

	 	 	 
	Portion of Appreciation Rights Exercisable	 	On or After
	33 1/3%
	 	First Anniversary of Date of Grant
	66 2/3%
	 	Second Anniversary of Date of Grant
	100%
	 	Third Anniversary of Date of Grant

     Notwithstanding the Vesting Schedule and Expiration Date set forth above, (a) in the event the
Participant’s employment with the Company or any Subsidiary is terminated by long-term disability
(as determined by the Committee in good faith) or death, the portion of the Appreciation Rights
which is unexpired at the time of such termination of employment will automatically become 100%
vested and exercisable and will expire at 5:00 p.m. Dallas, Texas time (i) one day prior to the
fifth anniversary of such long-term disability or (ii) one day prior to the third anniversary of
the Participant’s death; and (b) subject to the noncompetition provisions set forth below, in the
event of the Participant’s Retirement (as hereinafter defined), the portion of the Appreciation
Rights which is unexpired at the time of Retirement will continue to vest and become exercisable
following Retirement in accordance with the Vesting Schedule and will expire at 5:00 p.m. Dallas,
Texas time on the Expiration Date set forth above. For purposes of this Agreement, the term
“Retirement” means the Participant’s termination of employment with the Company or any Subsidiary
at a time when both (A) the Participant has attained at least age 55 and (B) the sum of the
Participant’s full years of employment with the Company and its Subsidiaries and the Participant’s
age in whole years equals 65 or more.

 

 

     In the event the Participant’s employment with the Company or any Subsidiary is terminated for
any reason other than Retirement or such long-term disability or death, no further vesting of the
Appreciation Rights will occur after the date of such termination and the Appreciation Rights will
expire at 5:00 p.m. Dallas, Texas time on the 30th calendar day after such termination.

     The Appreciation Rights granted hereby may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution, pursuant to a qualified
domestic relations order or, with the consent of the Committee, by gifts to family members of the
Participant, including to trusts in which family members of the Participant own more than 50% of
the beneficial interests, to foundations in which family members of the Participant or the
Participant control the management of assets, to other entities in which more than 50% of the
voting interests are owned by family members of the Participant or the Participant and to
charitable organizations described in Section 170(c) of the Code.

     The Participant acknowledges that he or she is employed by the Company or a Subsidiary in a
capacity that will necessarily allow the Participant access to confidential information regarding
the business of the Company and its Subsidiaries. The Participant understands that if he or she
becomes engaged in the business of a competitor of the Company or any of its Subsidiaries, it will
be inevitable that the Participant will use or disclose such confidential information to or for the
benefit of such competitor. Therefore, the Participant agrees that for a period of two years
following the date of the Participant’s Retirement, the Participant will not directly or indirectly
participate, in any capacity, in the ownership, management, operation or control of, or have any
financial interest in, any business which is in competition with any business conducted by the
Company or any Subsidiary in the United States or Canada. In the event that the Participant
violates any of the noncompetition provisions set forth above, (i) the Participant will promptly
notify the Senior Vice President — Human Resources of the Company of such violation; (ii) the
unexpired portion of the Appreciation Rights will expire immediately upon the occurrence of such
violation; and (iii) in the event that the Participant has exercised or purported to exercise all
or any part of the Appreciation Rights on or following the first date of such violation, the
Participant will pay to the Company, immediately upon demand, an amount equal to the before-tax
gain realized by the Participant upon such exercise(s) or purported exercise(s).

     The Participant hereby accepts and agrees to be bound by all the terms and conditions of the
Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no
amendment will adversely affect the rights of the Participant under this Agreement without the
Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts,
each of which will be deemed an original, but all of which together constitute one and the same
instrument.

	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	MICHAELS STORES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Signature of Participant

	 	 	 	Title:	 	 

2exv10w39

 

EXHIBIT
10.39

EMPLOYEE NONQUALIFIED STOCK OPTION

AWARD AGREEMENT

UNDER THE DEVON ENERGY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

     THIS NONQUALIFIED STOCK OPTION AGREEMENT (the “Award Agreement”), entered into as of
_______________ (the “Grant Date”), by and between Devon Energy Corporation (the “Company”) and
________________________ (the “Participant”):

WITNESSETH:

     WHEREAS, the Participant is an employee of the Company or a 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 a 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 2005 Long-Term Incentive 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. Definitions. Words, terms, or phrases used in this Agreement shall have
the meanings set forth in this Section 1:

     (a) The Participant’s “Date of Termination” means the first day occurring on or
after the Grant Date on which the Participant is not employed by the Company, a Subsidiary of the
Company, or an Affiliated Entity on a full-time basis, regardless of the reason for the termination
of employment (or change from full-time to part-time basis); provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the Participant between the
Company, a Subsidiary, and an Affiliated Entity or between two Subsidiaries or two Affiliated
Entities; and further provided that the Participant’s employment shall not be considered terminated
while the Participant is on a leave of absence from the Company, a Subsidiary, or an Affiliated
Entity approved by the Participant’s employer. If, as a result of a sale or other transaction, the
Participant’s employer ceases to be either a Subsidiary or an Affiliated Entity (and the
Participant’s employer is or becomes an entity that is separate from the Company), and the
Participant is not, at the end of the 30-day period following the transaction, employed by the
Company or an entity that is then a Subsidiary or Affiliated Entity, then the occurrence of such
transaction shall be treated as the Participant’s Date of Termination caused by the Participant
being discharged by the employer.

     (b) The Participant’s “Early Retirement Date” shall be the Early Retirement Date
determined in accordance with the Retirement Plan.

     (c) The Participant’s “Normal Retirement Date” shall be the Normal Retirement Date
determined in accordance with the Retirement Plan.

1

 

     (d) The “Retirement Plan” means the Retirement Plan for Employees of Devon Energy
Corporation.

     Section 2. Grant of Stock Option. The Company hereby grants to the Participant a
nonqualified stock option (the “Stock Option”) that is not intended to qualify under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”), to purchase all or any part of the
number of Covered Shares (as set forth on the Cover Page) of its common stock, par value $.10 (the
“Stock”), under and subject to the terms and conditions of this Award Agreement and the Plan which
is incorporated herein by reference and made a part hereof for all purposes. The purchase price
for each share to be purchased hereunder shall be the option price set forth on the Cover Page (the
“Exercise Price”).

     Section 3. Times of Exercise of Stock Option. Each installment of Covered Shares of
the Stock Option shall be exercisable on and after the Vesting Date for such installment as
described in the following schedule (but only if the Participant’s Date of Termination has not
occurred before the Vesting Date):

Vesting Schedule

	 	 	 	 	 	 	 	 	 
	 	 	Vesting Date	 	Percent of Award Vested	 	 
	 

	 	«Vestdate1»
	 	 	20	%	 	 
	 

	 	«Vestdate2»
	 	 	20	%	 	 
	 

	 	«Vestdate3»
	 	 	20	%	 	 
	 

	 	«Vestdate4»
	 	 	20	%	 	 
	 

	 	«Vestdate5»
	 	 	20	%	 	 

     (a) The Stock Option shall become fully exercisable upon the occurrence of a Change
of Control Event which occurs prior to the Participant’s Date of Termination. However, if the
Participant’s employment with the Company, the Subsidiaries, and the Affiliated Entities commenced
less than 90 days before the Change of Control Event, (i) the Stock Option shall become fully
exercisable under this Section (a) only if the Participant’s Date of Termination has not occurred
before the 90th day following such date of hire, (ii) the Stock Option shall become
vested under this sentence on the 90th day following such date of hire.

     (b) If the Participant’s Date of Termination occurs under circumstances in which the
Participant is entitled to severance benefits from the Company, a Subsidiary, or an Affiliated
Entity under an employment agreement, severance agreement, or the Devon Energy Corporation
Severance Plan, the Stock Option shall become fully exercisable effective as of the Participant’s
Date of Termination if the Participant signs and returns to the Company a release of claims against
the Company in a form prepared by the Company (the “Release”) and the Participant does not revoke
the Release prior to the date the Release becomes effective. If the Participant fails to sign and
return the Release to the Company or revokes the Release prior to the date the Release becomes
effective, the unvested options subject to this Award Agreement shall be forfeited.

     (c) The Committee may in its sole and absolute discretion elect to vest all or a
portion of the unvested options subject to this Award Agreement upon the Participant’s Date of
Termination if the Participant’s Date of Termination occurs by reason of the Participant’s death,
Disability, occurs on or after the Participant’s Normal Retirement Date (as such term is defined in
the Company’s Retirement Plan) or Early Retirement Date (as such term is defined in the Company’s
Retirement Plan), or occurs under other special circumstances (as determined by the Committee).

2

 

The Stock Option may be exercised on or after the Participant’s Date of Termination only as to that
portion of the Covered Shares for which it was exercisable immediately prior to such Date of
Termination, or became exercisable upon the Date of Termination. Nothing in this Award Agreement
shall be construed to affect the application of Section 11.6 of the Plan (relating to Change of
Control), to the extent such Section would otherwise be applicable.

     Section 4. Term of Stock Option. The Stock Option shall cease to be exercisable on
the earliest to occur of:

     (a) The Expiration Date set forth on the Cover Page.

     (b) If the Participant’s Date of Termination occurs by reason of death, the
three-year anniversary of such Date of Termination.

     (c) If the Participant’s Date of Termination occurs by reason of Disability, and
Section (d) below (relating to Retirement) does not apply, the one-year anniversary of such Date of
Termination.

     (d) If the Participant’s Date of Termination occurs on or after the Participant’s
Normal Retirement Date, the three-year anniversary of such Date of Termination.

     (e) If the Participant’s Date of Termination occurs on or after the Participant’s
Early Retirement Date but prior to the Participant’s Normal Retirement Date, and Section (b) above
(relating to termination because of death) does not apply, the one-year anniversary of such Date of
Termination (or such later date as may be permitted by the Committee).

     (f) If the Participant’s Date of Termination occurs under circumstances in which the
Participant is entitled to severance benefits from the Company, a Subsidiary of the Company, or an
Affiliated Entity under an employment agreement or severance agreement, the last day of the
Severance Period. The “Severance Period” shall be the longer of:

(i) the period beginning on the Date of Termination and continuing through the end
of the period during which such severance benefits are paid to the Participant; or

(ii) the period described in the following clause (b), if the amount of the
Participant’s severance benefits is determined in whole or in part as being equal to
the product of (a) the Participant’s salary rate, multiplied by (b) a period
over which such benefit would be computed.

     (g) If the Participant’s Date of Termination occurs and Sections (b), (c), (d), (e),
and (f) are not applicable, the three month anniversary of such Date of Termination.

     Section 5. Nontransferability of Stock Option.

     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, 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.

3

 

     Section 6. 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 its Subsidiaries or Affiliated Entities, or interfere in any
way with the right to terminate the Participant’s employment at any time.

     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 applicable withholding taxes, if any. Payment shall be made (i) in
cash or by check, draft or money order payable to the order of the Company; (ii) by delivering
shares of Company common stock having a Fair Market Value on the date of payment equal to the
amount of the exercise price, but only to the extent such exercise of an Option would not result in
a compensation expense to the Company for financial accounting purposes with respect to the shares
used to pay the exercise price unless otherwise determined by the Committee; or (iii) a combination
of the foregoing.

     (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, written 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, Oklahoma City, Oklahoma 73102-8260, Attention: Secretary, 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. 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 9. Notices. All notices or other communications relating to the Plan and
this Award Agreement as it relates to the Participant shall be in writing and shall be delivered
personally or mailed (U.S. Mail) by the Company to the Participant at the then current address as
maintained by the Company or such other address as the Participant may advise the Company in
writing.

4

 

	 	 	 
	“COMPANY”

	 	DEVON ENERGY CORPORATION
	 

	 	a Delaware corporation
	 
	 	 
	“PARTICIPANT”

	 	 
	 

	 	 
	 

	 	 
	 

	 	 

5

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