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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Oasis Petroleum Inc | NYSE:OAS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.10 | 0 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Oasis Petroleum Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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By Order of the Board of Directors,
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Nickolas J. Lorentzatos
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Corporate Secretary
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More than doubling core net inventory through the acquisition of approximately 22,000 net core acres in the over-pressured oil window of the Delaware Basin in west Texas, providing a unique and accretive opportunity to add core and consolidated oil inventory that is a great complement to our world-class Williston acreage.
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Completing the Initial Public Offering of Oasis Midstream Partners LP, which monetized resources spent on critical infrastructure and de-levered the Company, allowing Oasis to focus more capital on high-return upstream projects, in addition to providing access to alternate sources of capital for midstream development.
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Developing a strategic plan for greater gas processing capacity in Wild Basin through the design and construction of a second gas plant, and the subsequent assignment of the plant to Oasis Midstream Partners LP, thereby mitigating risk associated with any potential constraints in Williston Basin processing capacity.
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We grew production over 30% from 50,732 Boe per day in 2016 to 66,144 Boe per day in 2017, including the integration of the accretive SM Energy acquisition completed in late 2016.
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We decreased lease operating expenses per Boe to $6.42 per Boe for the quarter ended December 31, 2017.
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We realized remarkably tight differentials with the Oasis Midstream Services direct tie-in to strategic pipeline outlets.
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We successfully launched operations of our second Oasis Well Services fracturing crew, reducing the impact of service cost inflation in a rising commodity price environment.
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We realized an adjusted EBITDA increase of over 40% year over year.
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We decreased company leverage from over 4.5x Debt to last twelve months adjusted EBITDA in the beginning of the year to approximately 3.0x at the end of 2017.
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Proxy Statement 2018 Annual Meeting of Stockholders
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Proposal
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Board Recommends Vote
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Affirmative
Vote Required
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Page Number
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Item 1 — Election of Directors
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FOR
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Plurality of shares cast with Director Resignation Policy
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2
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Item 2 — Ratification of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2018
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FOR
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Majority of shares present
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67
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Item 3 — Advisory vote to approve the Company's Named Executive Officer 2017 compensation
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FOR
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Majority of shares present
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68
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Item 4 — Approval of Amended and Restated 2010 Long-Term Incentive Plan (effective May 3, 2018), including an increase the number of shares available for issuance by 11,250,000 shares
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FOR
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Majority of shares cast
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70
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Item 5 — Approval of amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized common shares
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FOR
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Two-thirds outstanding shares
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80
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Nusz
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Reid
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Cassidy
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Hagale
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McShane
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Shackouls
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Current or past public company boards
(other than OAS)
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Current or past public company CEO
(other than OAS)
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Current or past public company CFO
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Current or past public company executive
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Financial expertise
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E&P operations experience
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E&P services experience
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Taylor L. Reid
Director Since:
2007
Age:
55
President and Chief Operating Officer
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Background
Taylor L. Reid
serves as our Director, President and Chief Operating Officer and as Director and Chief Executive Officer of OMP GP LLC ("OMP GP"). He has served as our Director and Chief Operating Officer (or in similar capacities) since our inception in March 2007 and has 33 years of experience in the oil and gas industry. From November 2006 to February 2007, Mr. Reid worked with Mr. Nusz to form the business plan for Oasis Petroleum LLC and secure funding for the Company. He previously served as Asset Manager Permian and Panhandle Operations with ConocoPhillips from April 2006 to October 2006. Prior to joining ConocoPhillips, he served as General Manager Latin America and Asia Operations with Burlington from March 2004 to March 2006 and as General Manager Corporate Acquisitions and Divestitures from July 1998 to February 2004. From March 1986 to June 1998, Mr. Reid held various operations and managerial positions with Burlington in several regions of the continental United States, including the Permian Basin, the Williston Basin and the Anadarko Basin. He was instrumental in Burlington’s expansion into the Western Canadian Sedimentary Basin from 1999 to 2002. Mr. Reid holds a Bachelor of Science in Petroleum Engineering from Stanford University.
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Skills and Qualifications
As founder and President of the Company, Mr. Reid has exceptional knowledge of the Company and its strategy, finances, and operations. Previously, he has served in various management and operational roles for multiple large publicly traded oil and gas companies and has significant experience in several basins across North America and around the world. Following the Company's acquisition of significant core acreage in the Permian Basin in December 2017, the Board will benefit from his years of experience in the basin. Mr. Reid's deep knowledge of the Company and the industry resulting from his tenure with the Company and various roles at other oil and gas companies make him a critical member of the Board.
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Thomas B. Nusz
Director Since:
2007
Age:
58
Chief Executive Officer
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Background
Thomas B. Nusz
serves as our Director and Chief Executive Officer and as Director and Chairman of the Board of OMP GP. He has served as our Director and Chief Executive Officer (or in similar capacities) since our inception in March 2007. He has 36 years of experience in the oil and gas industry. From April 2006 to February 2007, Mr. Nusz managed his personal investments, developed the business plan for Oasis Petroleum LLC and secured funding for the Company. He was previously a Vice President with Burlington Resources Inc., a formerly publicly traded oil and gas exploration and production company or, together with its predecessors, Burlington, and served as President International Division (North Africa, Northwest Europe, Latin America and China) from January 2004 to March 2006, as Vice President Acquisitions and Divestitures from October 2000 to December 2003 and as Vice President Strategic Planning and Engineering from July 1998 to September 2000 and Chief Engineer for substantially all of such period. He was instrumental in Burlington’s expansion into the Western Canadian Sedimentary Basin from 1999 to 2002. From September 1985 to June 1998, Mr. Nusz held various operations and managerial positions with Burlington in several regions of the United States, including the Permian Basin, the San Juan Basin, the Black Warrior Basin, the Anadarko Basin, onshore Gulf Coast and the Gulf of Mexico. Mr. Nusz was an engineer with Mobil Oil Corporation and for Superior Oil Company from June 1982 to August 1985. He is a current member of the National Petroleum Council, an advisory committee to the Secretary of Energy of the United States. Mr. Nusz holds a Bachelor of Science in Petroleum Engineering from Mississippi State University.
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Skills and Qualifications
As a founder and the Chief Executive Officer of the Company, Mr. Nusz's knowledge of the Company is unparalleled. He is responsible for managing the business, under the oversight and review of the Board, and acts as a bridge between management and the Board, helping both to act with a common purpose. Mr. Nusz has served in various executive positions, as well as management and operational roles for publicly traded oil and gas companies, and he has deep knowledge of the strategic, financial, risk and compliance issues facing a publicly traded company. In addition, Mr. Nusz's industry experience spans multiple regions, domestically and internationally, which is especially beneficial to the Company in the current challenging market environment. Mr. Nusz's deep knowledge of the Company and the industry make him a critical member of the Board.
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Michael McShane
Director Since: 2010
Age:
64
Independent
Lead Director
Committee Memberships:
§
Audit, Chair
§
Compensation
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Background
Michael McShane
has served as our Director since May 2010, and our Lead Director since August 2010, is the Chair of our Audit Committee and serves on our Compensation Committee. Mr. McShane served as a director and President and Chief Executive Officer of Grant Prideco, Inc., a manufacturer and supplier of oilfield drill pipe and other drill stem products, from June 2002 until the completion of the merger of Grant Prideco with National Oilwell Varco, Inc. in April 2008, and Chairman of the Board of Grant Prideco from May 2003 through April 2008. Prior to joining Grant Prideco, Mr. McShane was Senior Vice President - Finance and Chief Financial Officer and director of BJ Services Company, a provider of pressure pumping, cementing, stimulation and coiled tubing services for oil and gas operators, from 1990 to June 2002. Mr. McShane has also served as a director of Complete Production Services, Inc. (NYSE:CPX), an oilfield service provider, since March 2007, and has served as a director of Superior Energy Services, Inc. (NYSE:SPN) since its merger with Complete Production Services in February 2012. Mr. McShane has also served as a director of Spectra Energy Corp (NYSE:SE), a provider of natural gas infrastructure, since April 2008, and has served as a director of Enbridge Inc. (TSE: ENB) since its merger with Spectra. He has also served as a director of Forum Energy Technologies, Inc. (NYSE:FET), a global provider of manufactured and applied technologies to the energy industry, since August 2010, and a director of NCS Multistage Holdings, Inc. (NASDAQ: NCSM), a technology and services company specializing in multistage completions, since December 2012; he has served as Chairman of the Board of NCSM since February 2017. Mr. McShane also serves as an advisor to Advent International, a global private equity firm.
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Skills and Qualifications
Mr. McShane brings a unique perspective to the Board due to his decades of experience in the energy services industry where he has served, at two publicly-traded energy services companies, as Chairman of the Board and Chief Executive Officer and Chief Financial Officer. Currently, he sits on the boards of three publicly-traded energy companies with operations in the oilfield services, infrastructure and energy technology sectors, and he consults for a global private equity firm. Mr. McShane also serves the Board as the Audit Committee's financial expert. Mr. McShane has significant experience with issues, trends and opportunities within the oil and gas industry, providing the Board with valuable expertise when evaluating potential acquisition opportunities and exploration projects.
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serving as chairman of the executive sessions of the independent directors and all other Board meetings at which the Chairman is not present;
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establishing the agenda for each meeting of the non-management directors;
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serving as the Board’s contact for employee and stockholder communications with the Board of Directors;
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calling special meetings of the independent directors when necessary and appropriate;
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serving as a liaison between the Chairman and independent directors;
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consulting with the Chairman to include and provide at meetings of the directors specific agenda items and additional materials suggested by independent directors;
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approving the scheduling of regular and, where feasible, special meetings of the Board to ensure that there is sufficient time for discussion of all agenda items;
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facilitating communications among the other members of the Board; and
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the Board oversees management of the Company’s commodity price risk through regular review with executive management of the Company’s derivatives strategy, and, through the Audit Committee, the oversight of the Company’s policy that limits the Company’s authority to enter into derivative commodity price instruments to a specified level of production, above which management must seek Board approval;
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the Board has established specific dollar limits on the commitment authority of members of senior management and requires Board approval of expenditures exceeding that authority and of other material contracts and transactions; and
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the Board reviews management’s capital spending plans, approves the Company’s capital budget and requires that management present for Board review significant departures from those plans.
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Names, Members, and Meetings
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Principal Functions
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Audit Committee
William J. Cassidy
John E. Hagale
Michael McShane, Chair
Meetings in 2017: 4
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Approves appointment and compensation and reviews performance and independence and pre-approves services of Company's independent auditor
Approves appointment and compensation and reviews performance of internal auditor
Meets with management, independent auditor, and internal auditor in connection with annual audit, review of annual and quarterly financial statements, and in executive sessions
Discusses with management the Company's guidelines and policies with respect to risk assessment and risk management, including with respect to significant financial risk exposures
Establishes and maintains procedures for the submission, receipt, retention and treatment of complaints and concerns received by the Company regarding accounting, internal controls or auditing matters
Monitors compliance with legal and regulatory requirements and the business practices and ethical standards of the Company
Discusses the integrity of the Company's accounting policies, internal controls, financial reporting practices and financial statements with management, internal auditor, and independent auditor
Reviews and approves related-person transactions in accordance with the Board’s procedures
Prepares the Audit Committee report, which is on page 22
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Compensation Committee
William J. Cassidy
Michael McShane
Bobby Shackouls, Chair
Meetings in 2017: 5
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Approves and evaluates the Company’s director and officer compensation plans, policies and programs
Conducts an annual review and evaluation of the CEO’s performance in light of the Company’s goals and objectives
Retains, and is directly responsible for the oversight of, compensation or other consultants to assist in the evaluation of director or executive compensation and otherwise to aid the Compensation Committee in meeting its responsibilities. For additional information on the role of compensation consultants, please see Compensation Discussion and Analysis beginning on page 25
Annually reviews the Company’s compensation-related risk profile to confirm that compensation-related risks are not reasonably likely to have a material adverse effect on the Company
Periodically reviews and discusses with its independent compensation consultants and senior management the Company’s policy on executive severance arrangements, and recommends any proposed changes to the Board to the extent required by the Compensation Committee charter
Reviews the Compensation Discussion and Analysis, disclosures for advisory votes by stockholders on executive compensation, including frequency of such votes, and other relevant disclosures made in the proxy statement
Prepares the Compensation Committee report, which is on page 24
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Nominating & Governance Committee
William J. Cassidy, Chair
John E. Hagale
Bobby S. Shackouls
Meetings in 2017: 5
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Recommends nominees for director, including existing Board members, to the Board and ensures such nominees possess the director qualifications set forth in the Committee's Charter
Recommends members of the Board for committee membership
Proposes Corporate Governance Guidelines for the Company and reviews them annually
Develops and oversees an evaluation process for the Board and its committees
Assess the need for stock ownership guidelines
Reviews and recommends changes to the Company's Certificate of Incorporation and Bylaws
Determine whether each director serving a Board committee is independent under the standards applicable to the committee
Reviews and recommends changes to the Board and committee structure and composition
Discusses succession planning for CEO and senior management
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Guideline
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Holding Period
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CEO
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5 x Base Salary
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Until requirement met
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Other Named Executive Officers
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2 x Base Salary
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Until requirement met
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Non-employee Directors
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3 x Annual Cash Retainer
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Until requirement met
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Corporate Governance Guidelines;
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Charter of the Audit Committee of the Board;
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Charter of the Compensation Committee of the Board;
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Charter of the Nominating and Governance Committee of the Board;
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Code of Business Conduct and Ethics;
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Financial Code of Ethics;
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Related Persons Transactions Policy;
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Insider Trading Policy; and
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Short-swing Trading and Reporting Policy.
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Great people + Great assets = Great Opportunity.
We acquire, maintain and grow coveted assets by attracting, developing, and retaining the best people in the industry.
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Do the Right Thing.
We are open and honest. We do what we say we will do, and we are accountable. We treat others with dignity and respect. We build relationships and are good partners.
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Be Passionate.
We are passionate about what we do. We embrace challenge, celebrate success, and always pursue excellence.
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We All Succeed Together.
Success means everyone participates and everyone is expected to contribute. If Oasis does well, we all do well.
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building a house for a deserving family in need through Habitat for Humanity;
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helping underprivileged high school students reach their full potential and graduate from college through OneGoal; and
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assisting youth graduating out of foster care in becoming independent through the HAY Center.
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Safety Modifier.
Consistent with management's belief that safety is the responsibility of everyone at the Company, the Company's safety record affects the compensation of every employee. Each year, when the Compensation Committee assesses the performance of the Company against pre-set goals, it applies a "safety modifier," based on the Company's safety performance for the year. A negative modifier reduces the value of annual performance-based cash incentive awards for all employees below what they would have received based on performance against financial, operational and Initiative metrics.
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Safety Moment.
Oasis employees start every meeting with a "safety moment" about a safety topic of the speaker's choice.
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Safety Timeout.
Oasis operates a flat hierarchy when it comes to safety; anyone on our worksite can bring an abrupt halt to operations to address unsafe conditions or circumstances.
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Safety Leadership.
The Company's Safety Leadership Team meets regularly with management to evaluate and recommend changes to the Company's safety strategy.
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Safety Requirements.
Oasis contractors must adhere to our Contractor EH&S Requirements, which are published on the Company's website.
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Safety Training.
The Company provides regular safety training for employees throughout the organization.
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Adopted and implemented new measurements for leading indicators;
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Established regular publishing of Hazard Alerts, proactive communications of safety-related topics within the Company;
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Formally adopted and rolled out Company Vision Statement for EHS;
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Adopted and implemented a waste management plan;
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Evaluated the feasibility of saltwater reuse in operations; and
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Adopted and implemented an LDAR plan, which was approved by the North Dakota Department of Health.
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an annual cash retainer fee of $65,000, plus cash payments of $1,500 for each Board of Directors’ meeting attended and $1,500 for each committee meeting attended;
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lead director retainer of $25,000;
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committee chairperson fees in the following amounts: (a) Audit Committee chair—$20,000, (b) Compensation Committee chair—$15,000, and (c) Nominating and Governance Committee chair—$11,250;
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an annual equity award for each non-employee director equal to a number of shares of restricted stock having a value of approximately $160,900 on the date of grant, based on the closing price of our common stock on the date of grant.
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Name
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Fees Earned
or Paid in Cash
($)(1)
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Stock Awards
($)(2)
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All Other
Compensation
($)
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Total
($)
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William J. Cassidy
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$
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110,750
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$
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161,226
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$
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—
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$
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271,976
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Ted Collins, Jr.
(3)
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$
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90,500
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$
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161,226
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$
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—
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$
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251,726
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John E. Hagale
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$
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92,000
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$
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161,226
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$
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—
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$
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253,226
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Michael McShane
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$
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137,000
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$
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161,226
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$
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—
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$
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298,226
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Bobby S. Shackouls
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$
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86,000
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$
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161,226
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$
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—
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$
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247,226
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Douglas E. Swanson, Jr.
(4)
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$
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101,000
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$
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161,226
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$
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—
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$
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262,226
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(1)
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Includes annual cash retainer fee, board and committee meeting fees, and committee chair fees for each non-employee director during fiscal year 2017 as more fully explained above.
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(2)
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Reflects the aggregate grant date fair value of restricted stock awards granted under our LTIP in fiscal year 2017, computed in accordance with FASB ASC Topic 718. See Note 11 to our consolidated financial statements on Form 10-K for the year ended December 31, 2017 for additional detail regarding assumptions underlying the value of these equity awards. The grant date fair value for restricted stock awards is based on the closing price of our common stock on the grant date, which was $15.21 per share on January 12, 2017. As of December 31, 2017, each non-employee director held 10,600 outstanding shares of restricted stock. These restricted stock awards vested in full on January 12, 2018.
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(3)
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Mr. Collins, who passed away in January 2018, served on the Board throughout 2017.
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(4)
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Mr. Swanson resigned from the Board on December 11, 2017. His decision to resign from the Board was not the result of any disagreement with the Company.
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Name of Person or Identity of Group
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Number of OAS
Shares
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Percentage
of Class(1)
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Number of OMP Common Units
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Percentage of Class
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Forge Energy, LLC (2)
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46,000,000
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14.5
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%
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The Vanguard Group, Inc. (3)
|
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22,764,649
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7.2
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%
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Dimensional Fund Advisors LP (4)
|
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19,984,071
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6.3
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%
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BlackRock, Inc.(5)
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18,402,669
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5.8
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%
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Thomas B. Nusz(6)(7)
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1,695,491
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*
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5,000
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*
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Taylor L. Reid(6)(8)
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1,787,534
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*
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20,000
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*
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Michael H. Lou(6)
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449,809
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*
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25,000
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*
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Nickolas J. Lorentzatos(6)
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276,813
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*
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5,900
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*
|
William J. Cassidy(6)
|
|
86,090
|
|
|
*
|
|
|
—
|
|
|
*
|
John E. Hagale(6)
|
|
62,200
|
|
|
*
|
|
|
10,000
|
|
|
*
|
Michael McShane(6)
|
|
220,790
|
|
|
*
|
|
|
—
|
|
|
*
|
Bobby S. Shackouls(6)(9)
|
|
78,390
|
|
|
*
|
|
|
—
|
|
|
*
|
All directors and executive officers as a group (8 persons)(6)
|
|
4,657,117
|
|
|
1.5
|
%
|
|
65,900
|
|
|
*
|
*
|
Less than 1%.
|
(1)
|
Based upon an aggregate of 317,362,842 shares outstanding as of March 8, 2018.
|
(2)
|
According to a Schedule 13G, dated February 20, 2018, filed with the SEC by Forge Energy, LLC, it has sole voting power over 46,000,000 shares, and sole dispositive power over 46,000,000 shares. These securities are held directly by Forge Energy, LLC ("Forge Energy"), a wholly-owed subsidiary of Forge Energy Holdings, LLC. EnCap Energy Capital Fund VIII, L.P. is a member of Forge Energy Holdings, LLC and may be deemed to have the power to vote or direct the vote or to dispose or direct the disposition of the shares owned by Forge. EnCap Partners GP, LLC (“EnCap Partners GP”) is the sole general partner of EnCap Partners, LP (“EnCap Partners”), which is the managing member of EnCap Investments Holdings, LLC (“EnCap Holdings”), which is the sole member of EnCap Investments Holdings Blocker, LLC (“EnCap Holdings Blocker”). EnCap Holdings Blocker is the sole member of EnCap Investments GP, L.L.C. (“EnCap Investments GP”), which is the sole general partner of EnCap Investments L.P. (“EnCap Investments LP”). EnCap Investments LP is the general partner of EnCap Equity Fund VIII GP, L.P. (“EnCap Fund VIII GP”), the sole general partner of EnCap Fund VIII. Therefore, EnCap Partners GP, EnCap Partners, EnCap Holdings, EnCap Holdings Blocker, EnCap Investments GP, EnCap Investments LP and EnCap Fund VIII GP may be deemed to beneficially own these securities. The address of Forge Energy is 15727 Anthem Parkway, Suite 501, San Antonio, Texas 78249. The address of EnCap Fund VIII and EnCap Partners GP is 1100 Louisiana Street, Suite 4900, Houston, Texas 77002.
|
(3)
|
According to a Schedule 13G/A, dated February 9, 2018, filed with the SEC by The Vanguard Group, Inc., it has sole voting power over 299,166 of these shares, sole dispositive power over 22,470,174 of these shares, shared voting power over 19,824 of these shares, and shared dispositive power over 294,475 of these shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc. is the beneficial owner of 274,651 of these shares and Vanguard Investments Australia, Ltd., a wholly
|
(4)
|
According to a Schedule 13G, dated February 9, 2018, filed with the SEC by Dimensional Fund Advisors LP ("Dimensional"), Dimensional has sole voting power over 19,588,886 of these shares and sole dispositive power over 19,984,071 of these shares. The address of Dimensional is Building One, 6300 Bee Cave Road, Austin, Texas 78746.
|
(5)
|
According to a Schedule 13G/A, dated January 29, 2018, filed with the SEC by BlackRock, Inc., it has sole voting power over 17,803,696 of these shares, sole dispositive power over 18,402,669 of these shares. BlackRock, Inc. filed this 13G as a parent holding company for the following subsidiaries: BlackRock (Netherlands) B.V.; BlackRock Advisors, LLC; BlackRock Asset Management Canada Limited; BlackRock Asset Management Ireland Limited; BlackRock Asset Management Schweitz AG; BlackRock Financial Management, Inc.; BlackRock Fund Advisors; BlackRock Institutional Trust Company, N.A.; BlackRock International Limited; BlackRock Investment Management (Australia) Limited; BlackRock Investment Management (UK) Ltd; BlackRock Investment Management, LLC; BlackRock Japan Co Ltd; BlackRock Life Limited; and FutureAdvisor, Inc. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
|
(6)
|
Executive officer or director of the Company.
|
(7)
|
As of March 8, 2018, Mr. Nusz has pledged 700,000 of these shares as security for personal loans. The number of Mr. Nusz's pledged shares has decreased by 12.5% as compared to the number disclosed in the Company's proxy statement for the 2017 annual meeting. Except with respect to Mr. Nusz, the Board has not approved any pledges of Company securities by any of our executive officers or directors and does not expect to do so in the future.
|
(8)
|
Mr. Reid has sole voting power over 1,262,534 of these shares and shared voting power over 525,000 of these shares. 525,000 of these shares are held by West Bay Partners, Ltd., a limited partnership formed for family investment purposes. The sole general partner of West Bay, a Texas limited liability company, is controlled by Mr. Reid and his wife, and the limited partners of West Bay consist of Mr. Reid, his immediate family members and trusts formed for their benefit.
|
(9)
|
Mr. Shackouls has sole voting power over 48,245 of these shares, of which 30,145 are held by grantor retained annuity trusts of which Mr. Shackouls is trustee. The remaining 30,145 shares are held by grantor retained annuity trusts of which Mr. Shackouls's wife is trustee.
|
•
|
any person who is known by the Company to be the beneficial owner of more than 5.0% of the Company’s common stock;
|
•
|
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5.0% of the Company’s common stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5.0% of the Company’s common stock; and
|
•
|
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10.0% or greater beneficial ownership interest.
|
•
|
any employment of an executive officer if his or her compensation is required to be reported in the Company’s proxy statement pursuant to Item 402 of Regulation S-K promulgated by the SEC ("Item 402");
|
•
|
director compensation which is required to be reported in the Company’s proxy statement pursuant to Item 402;
|
•
|
any transaction with another company at which a Related Person’s only relationship is as an employee (other than an executive officer), director or beneficial owner of less than 10% of that company’s shares is pre-approved or ratified (as applicable) if the aggregate amount involved for any particular service does not exceed the greater of $500,000 or 25% of that company’s total annual revenues; and
|
•
|
charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university at which a Related Person’s only relationship is as an employee (other than an executive officer) or a director is pre-approved or ratified (as applicable) if the aggregate amount involved does not exceed the lesser of $200,000 or 10% of the charitable organization’s total annual receipts.
|
•
|
reviewed and discussed the Company’s audited consolidated financial statements as of and for the year ended December 31, 2017 with management and with the independent registered public accounting firm;
|
•
|
considered the adequacy of the Company’s internal controls and the quality of its financial reporting, and discussed these matters with management and with the independent registered public accounting firm;
|
•
|
reviewed and discussed with the independent registered public accounting firm (1) their judgments as to the quality of the Company’s accounting policies, (2) the written disclosures and letter from the independent registered public accounting firm required by Public Company Accounting Oversight Board Independence Rules, and the independent registered public accounting firm's independence, and (3) the matters required to be discussed by the Public Company Accounting Oversight Board’s AU Section 380, Communication with Audit Committees, and by the Auditing Standards Board of the American Institute of Certified Public Accountants;
|
•
|
discussed with management and with the independent registered public accounting firm the process by which the Company’s chief executive officer and chief financial officer make the certifications required by the SEC in connection with the filing with the SEC of the Company’s periodic reports, including reports on Forms 10-K and 10-Q;
|
•
|
pre-approved all auditing services and non-audit services to be performed for the Company by the independent registered public accounting firm as required by the applicable rules promulgated pursuant to the Exchange Act, considered whether the rendering of non-audit services was compatible with maintaining PricewaterhouseCoopers LLP’s independence, and concluded that PricewaterhouseCoopers LLP’s independence was not compromised by the provision of such services (details regarding the fees paid to PricewaterhouseCoopers LLP in 2017 for audit services, tax services and all other services, are set forth at “Item 2—Ratification of Selection of Independent Registered Public Accounting Firm —Audit and All Other Fees” below); and
|
•
|
based on the reviews and discussions referred to above, recommended to the Board of Directors that the consolidated financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
|
Name
|
|
Title and Position During 2017
|
Thomas B. Nusz
|
|
Chairman and Chief Executive Officer
|
Taylor L. Reid
|
|
President and Chief Operating Officer
|
Michael H. Lou
|
|
Executive Vice President and Chief Financial Officer
|
Nickolas J. Lorentzatos
|
|
Executive Vice President, General Counsel and Corporate Secretary
|
•
|
Align with stockholder outcomes.
Compensation should align the interests of the individual with those of our stockholders with respect to long-term value creation;
|
•
|
Pay for performance.
Compensation should pay for performance, whereby an individual’s total direct compensation is heavily influenced by company performance and directly tied to the attainment of annual company performance targets;
|
•
|
Require individual accountability.
Compensation should reflect each individual's unique qualifications, skills, experience and responsibilities; and
|
•
|
Be competitive.
Compensation should help to attract and retain the most qualified individuals in the oil and gas industry by being competitive with compensation paid to persons having similar responsibilities and duties in other companies in the same and closely related industries.
|
•
|
Long-term Equity Based Incentives
(Performance Share Units)
— Our Named Executive Officers did not earn any shares (out of a maximum of 200% awarded pursuant to the 2014 PSU award) based on fourth-quartile performance for the three-year period for the ended February 14, 2014. They also did not earn any shares for the four-year performance period ended February 14, 2018, following which period the award terminated with no shares earned. See "—2017 Performance Share Units" for more information regarding our performance share units.
|
•
|
Annual Cash Incentive Awards
— Based on the Company's performance against target performance goals set by the Compensation Committee for 2017, the Named Executive Officers were awarded cash incentives at 80% of their respective target award opportunities. See "—Annual Performance-Based Cash Incentive Awards—2017 Performance Goals" for more information regarding the annual performance-based cash incentive awards and the rigor of our 2017 performance goals.
|
Percentage of 50th
Percentile Total Compensation
(3 Year Avg)
|
|
96.4
|
82.0
|
49.6
|
|
|
|
|
CEO Target Pay(1)
|
|
CEO Reported Pay(2)
|
|
CEO Realized Pay
|
||||||
|
|
|
2017 Target Compensation
($)
|
|
2017 Summary Compensation Table($)
|
|
2017 Actual Compensation Paid($)
|
||||||
|
|
|
|
|
|
|
|
||||||
Salary
|
|
820,000
|
|
|
820,000
|
|
|
820,000
|
|
||||
Non-Equity Incentive Plan Compensation(3)
|
|
984,000
|
|
|
787,200
|
|
|
1,574,400
|
|
||||
Stock Awards - Restricted Stock(4)
|
|
2,050,000
|
|
|
2,050,308
|
|
|
2,277,529
|
|
||||
Stock Awards - Performance Share Units(5)
|
|
2,460,000
|
|
|
2,731,113
|
|
|
—
|
|
||||
Option Awards - Class B Units(6)
|
|
N/A
|
|
|
350,400
|
|
|
—
|
|
||||
All Other Compensation(7)
|
|
N/A
|
|
|
30,267
|
|
|
30,267
|
|
||||
Total 2017 Compensation
|
|
$
|
6,314,000
|
|
|
$
|
6,769,288
|
|
|
$
|
4,702,196
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As disclosed under "2017 Executive Compensation Decisions—Annual Performance-Based Cash Incentive Awards" and "—Long-Term Equity-Based Incentives," target annual and long-term award opportunities are set at a multiple of Mr. Nusz's base salary. The Compensation Committee may determine to grant awards above or below the target level taking into account Company performance, market conditions, and other factors it deems appropriate.
|
(2)
|
The amounts indicated as Reported Pay in the table reflect the total direct compensation (calculated as Salary, Non-Equity Incentive Plan Compensation, and the grant value of Long-Term Incentive Awards) for
|
(3)
|
The Realized Pay column reflects the Non-Equity Incentive Plan Compensation Mr. Nusz earned under the Company’s Amended and Restated 2010 Annual Incentive Compensation Plan (the “Incentive Plan”) for the 2016 performance year, which was paid in February 2017.
|
(4)
|
The Realized Pay column reflects the value at vesting of restricted stock that vested during 2017 (26,463 shares valued at vesting of $383,713; 36,740 shares at $542,282; and 93,467 shares at $1,351,533). See the Options Exercises and Stock Vested Table on page 59 for more details.
|
(5)
|
The value included in the Reported Pay column is based on the weighted average grant date fair value price per unit of $16.89, as computed using a Monte Carlo simulation model in accordance with FASB ASC Topic 718. The value of the award using the NYSE closing price of the Company's common stock on January 12, 2017, the grant date, of $15.21 is $2,459,457. No value is included in the Realized Pay column because no shares were earned for the PSU award performance periods that ended in 2017. The 2013 PSU award four-year performance period commenced February 15, 2013 and ended February 14, 2017; and the 2014 PSU award three-year performance period commenced February 14, 2014 and ended February 13, 2017. See the Option Exercises and Stock Vested Table on page 59for more details.
|
(6)
|
In May 2017, members of management, including our Named Executive Officers were issued Class B Units in OMP GP LLC, all of which were unvested as of December 31, 2017. As discussed below under the heading "—OMP GP LLC Class B Unit Awards," the Class B Units in OMP GP LLC are intended to constitute "profits interests" for federal tax purposes. Accordingly, if OMP GP LLC had been liquidated as of the date these Class B Units were granted, the recipients would not have been entitled to receive any distributions with respect to such Class B Units. No Class B Unit value is included in the Target Pay column because Class B Units are not an annual element of our compensation program.
|
(7)
|
Both the Reported Pay and Realized Pay columns in the table reflect the value of "All Other Compensation" that Mr. Nusz received in 2017 as reported in the 2017 Summary Compensation Table on page 54. No value is included in the Target Pay column because the Company has not established targets for these compensation items.
|
•
|
in December 2017, the Compensation Committee approved 2018 long-term incentive awards at each executive officer's target award opportunity, but set a floor share price of $9.00 for our Named Executive Officers, thereby reducing the number of shares each such officer would receive if the Company's stock price did not increase above the $9.00 threshold; the floor price applied to grants to be made in January 2018 and was nearly $0.70 higher than the stock price at the time of the Committee's action (for information about target long-term incentive award opportunities, see "Annual Executive Compensation Decisions—Long-Term Equity-Based Incentives");
|
•
|
in response to the prolonged depression of crude oil prices, the Committee reduced restricted stock and performance share unit ("PSU") awards granted to Named Executive Officers in 2016 significantly below historic levels (60% of target for our CEO and less than 65% for our other Named Executive Officers);
|
•
|
as detailed in the proxy statement for our 2016 Annual Meeting, the Committee significantly reduced each Named Executive Officer's 2015 annual cash incentive award to reflect the challenging market conditions facing the Company instead of the superior Company performance achieved.
|
•
|
beginning with PSUs granted in February 2016, eliminated the opportunity to re-test performance achievement beyond the initial performance period of PSUs (which is a feature of the PSUs granted in February 2015 and prior years) in order to be consistent with current best market practices;
|
•
|
removed the single-trigger equity award vesting provision from all Named Executive Officer Employment Agreements and replaced these provisions with "double-trigger" vesting provisions, in order to be consistent with current best market practices (see "Employment Agreements");
|
•
|
changed the allocation of our Chief Executive Officer's long-term equity-based compensation, beginning with awards in 2015, from 50% PSU and 50% restricted stock to 55% PSU and 45% restricted stock, in order to further align our Chief Executive Officer's compensation opportunities with our Company's performance (see "—Total Compensation Opportunities—Elements of Our Compensation and Why We Pay Each Element").
|
Feedback
|
|
Our Responses
|
|
|
|
|
|
The proxy statement disclosure related to performance goals did not provide enough information to make an informed decision.
|
|
Enhanced Disclosure
Ø
We have enhanced the disclosure of our executive compensation program, including providing significant additional detail related to
the evaluation of the achievement of our performance goals and targets, including metric targets, weights, and assessments.
Ø
In addition, in consultation with a third party consultant, we addressed concerns identified by a proxy advisory firm, including:
ü
pay-for-performance alignment (see "—Total Shareholder Return as a Performance Metric for Performance-Based Pay");
ü
t
he elimination of the re-testing feature of our performance share units ("PSU") (see "Long-Term Equity-Based Incentives—2017 Performance Share Units; Elimination of "Re-Testing" Feature").
|
|
|
|
|
|
Additional detail requested regarding the evaluation of our "Initiatives" performance metric.
|
|
Enhanced Disclosure
We have enhanced our disclosure relating to the "Initiatives" performance metric (see "—Annual Performance-Based Cash Incentive Awards—2017 Performance Goals and Annual Cash Incentive Award Opportunity").
|
|
|
|
|
|
Stockholders were evenly split regarding their desired frequency of our say-on-pay vote. Some stockholders prefer a long-term view of executive compensation in light of performance. Others want an opportunity to provide input more often.
|
|
2017 Move to Annual Say-on-Pay Vote
At our 2017 Annual Meeting, our Board recommended that stockholders vote (and stockholders did vote) to hold a say-on-pay vote annually. After careful consideration, the Board determined that an annual vote is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders regularly.
|
|
|
|
|
|
Additional detail requested regarding the Company's commitment to safety.
|
|
Enhanced Disclosure
We have enhanced disclosure regarding our safety culture and how safety performance affects executive compensation, including as part of the annual "Initiative" performance metric and as a separate modifier of assessed performance (see "Corporate Governance—Corporate Responsibility" and
"—Annual Performance-Based Cash Incentive Awards").
|
|
|
|
|
|
In 2015, 2016 and 2017, stockholders consistently indicated that they understood and supported the structure and individual elements of the Company's executive compensation program.
• they had "no significant concerns" about the Company's executive compensation program;
• the stockholder and the Company are "philosophically aligned" with respect to executive compensation practices;
• the Company is "incredibly thoughtful" with respect to its executive compensation program;
• "the structure of the executive compensation program aligns with best practice;" and
• "executive compensation disclosure is well communicated."
|
|
Continued Commitment to a Balanced Compensation Philosophy
Ø
The feedback we have received from our investors suggests that they support our current compensation philosophy and view our program as well-structured and aligned with performance. We remain committed to following best practices in our executive compensation program, which are highlighted below under "Compensation Program Philosophy and Objectives—Best Practices in Our Executive Compensation Program" and described in greater detail throughout this CD&A.
Ø
Please see the following sections of this proxy statement for discussions of the Committee's responses to the commodity market and Company performance: "—Pay for Performance and Stockholder Alignment;" "—Conservative Compensation Philosophy;" "—Industry and Company Overview, Company Performance Highlights, and Impact on Compensation Decisions."
Continued Commitment to Clear Communication of the Elements of our Executive Compensation Program
Ø
Except for the addition of annual PSU grants in 2012, which were added in order to increase the amount of compensation directly tied to performance, our named executive officer compensation structure and elements have remained generally consistent year-to-year since our initial public offering in 2010.
Ø
Please see "—Conservative Compensation Philosophy" below for information about modifications that we made to our program in recent years, in order to help ensure our executive compensation program meets certain best market practices.
|
|
|
What We Do
|
|
þ
|
Pay for Performance
- Our executives' total compensation is substantially weighted toward performance-based pay. Our annual performance-based cash incentive awards are based on performance against metrics set in advance which reflect key financial, operational and strategic objectives. At least 50% of our long-term equity compensation awards to Named Executive Officers are PSUs, which are earned based on our relative total shareholder return against our peers.
|
|
þ
|
Robust Stock Ownership
- We have adopted robust stock ownership guidelines for our executives and directors. Named Executive Officers, other than Mr. Nusz, are required to own shares having a value equal to 200% their respective annual base salaries; and for Mr. Nusz, 500% his annual base salary. Our executives are required to hold shares until such ownership requirements are met.
|
|
þ
|
Double-Trigger Change in Control Benefits
- The Employment Agreements contain a "double trigger" accelerated vesting provision, which requires certain termination of employment events to occur in addition to a change in control in order for accelerated vesting of equity awards to occur. No cash payments are made unless a "double trigger" event occurs.
|
|
þ
|
External Benchmarking
- Our Compensation Committee reviews competitive compensation data based on an appropriate group of exploration and production peer companies prior to making annual compensation decisions.
|
|
þ
|
Independent Compensation Consultant
- We have engaged an independent executive compensation consultant who reports directly to the Compensation Committee and provides no other services to the Company.
|
|
þ
|
Focus on Total Compensation
- Our Compensation Committee conducts a detailed analysis of total compensation prior to making annual executive compensation decisions.
|
|
þ
|
Mitigation of Undue Risk
- We carefully consider the degree to which compensation plans and decisions affect risk taking. We do not believe that any of the compensation arrangements in place are reasonably likely to have a material adverse impact on the Company.
|
|
þ
|
Clawback in our Employment Agreements
- In the Employment Agreements, we included clawback provisions applicable to compensation payable or paid pursuant to the Employment Agreements that is deemed incentive compensation and subject to recovery pursuant to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
|
|
What We Don't Do
|
ý
|
Excise Tax Gross-Ups
- Neither our change in control plans nor our employment agreements with each of our Named Executive Officers (the "Employment Agreements") provide for excise tax gross-ups or any other tax gross-ups for perquisites.
|
ý
|
Evergreen Employment Agreements
- The Employment Agreements have three-year terms, expiring March 20, 2021. They were most recently entered into in March 2018. Whether or not the terms of any of these agreements will be extended is a decision that our Compensation Committee will make closer to the time the terms are due to expire.
|
ý
|
Single-trigger Vesting or Payments in Employment Agreements
- None of our equity incentive plans nor any of the Employment Agreements provide for automatic single trigger vesting of unvested equity awards or cash payments solely upon the occurrence of a "change in control" (as defined in the LTIP).
|
ý
|
Hedging or Derivative Transactions in Company Stock
- We prohibit our executives from engaging in any short-term trading, short sales, option trading and hedging transactions related to our common stock. We also prohibit our executives from purchasing our common stock on margin. In addition, our executives are prohibited from pledging Company stock without approval of the Board.
|
ý
|
Perquisites
- We offer minimal perquisites to the Company's executives, including a 401(k) retirement plan, parking and health club dues, which are available to all Company employees.
|
ý
|
No Stock Option Repricing, Reloads, or Exchange without Stockholder Approval
- Our LTIP prohibits stock option repricing, reloading or exchange without stockholder approval. In addition, in 2015, we amended our LTIP in order to limit potential recycling of shares subject to stock options and stock appreciation rights.
|
|
|
|
|
•
|
for the second year in a row, no increases to base salary for any Named Executive Officer for 2016 (base salaries for 2016 were below the 50th percentile of our compensation peer group);
|
•
|
restricted stock and PSU awards granted in 2016 were reduced significantly below prior levels and were granted at approximately 60% of target for our Chief Executive Officer, and less than 65% of target for our other Named Executive Officers (despite significantly exceeding 2015 performance targets); and
|
•
|
no discretionary employer contribution was made to 401(k) plan participants.
|
•
|
increases to the base salaries of Messrs. Reid, Lou and Lorentzatos in order to (i) keep Mr. Lorentzatos' salary in line with the 50th percentile of the 2017 peer group; and (ii) account for the crucial strategic leadership and contributions of Messrs. Reid and Lou and to remain competitive and address retention concerns; and
|
•
|
restricted stock and PSU awards granted in 2017 were granted at each officer's target award opportunity, after previously having been proactively reduced by the Compensation Committee to between 60% and 65% of target in response to the prolonged depression of crude oil prices.
|
Metric
|
|
Weighting
|
|
2017
Performance Goal
|
|
2016
Performance Goal
|
|
2015
Performance Goal
|
|||||||
Production
|
|
|
|
|
|
|
|
|
|||||||
Volume (Boe/d)
|
|
20
|
%
|
|
70,901
|
|
|
48,100
|
|
|
47,100
|
|
|||
Capital Efficiency
|
|
|
|
|
|
|
|
|
|||||||
Proved Developed finding and development cost ($/Boe)
|
|
20
|
%
|
|
$
|
8.58
|
|
|
$
|
17.07
|
|
|
$
|
27.16
|
|
Cost Structure
|
|
|
|
|
|
|
|
|
|||||||
LOE ($/Boe)
|
|
10
|
%
|
|
$
|
7.00
|
|
|
$
|
8.00
|
|
|
$
|
9.75
|
|
G&A ($MM)
|
|
10
|
%
|
|
$
|
97.9
|
|
|
$
|
93
|
|
|
$
|
98
|
|
EBITDAX
($MM)
|
|
20
|
%
|
|
$
|
795
|
|
|
$
|
409
|
|
|
$
|
725
|
|
Initiatives
|
|
20
|
%
|
|
|
|
|
|
|
•
|
We increased average annual production over 30% from 50,732 Boe per day in 2016 to to 66,144 Boe per day in 2017; our 2017 exit rate was approximately 73,000 Boe per day, versus 62,000 in 2016.
|
•
|
We decreased LOE per Boe from $7.60 the fourth quarter of 2016 to $6.42 in the fourth quarter of 2017.
|
•
|
Completed and placed on production 88 gross (58.3 net) operated wells while investing $517.3 million of E&P capital expenditures, which excludes acquisitions, other capital and midstream capital, during 2017.
|
•
|
We more than doubled net core inventory through the acquisition of approximately 22,000 net core acres in the over-pressured oil window of the Delaware Basin, providing a unique and accretive opportunity to add core, consolidated, and oily inventory that is a great complement to our world-class Williston acreage.
|
•
|
We completed the IPO of Oasis Midstream Partners LP in a challenging equity market environment, monetizing resources spent on infrastructure and helping to delever the E&P parent company, allowing Oasis to focus on high-return upstream projects, in addition to providing access to additional capital for midstream development.
|
•
|
We developed strategic plan for greater gas processing capacity in Wild Basin through the design and initiation of construction of a second natural gas processing plant and the subsequent assignment to Oasis Midstream Partners LP.
|
•
|
Net cash provided by operating activities was $507.9 million for the year ended December 31, 2017. Adjusted EBITDA, a non-GAAP financial measure, was $707.7 million for the year ended December 31, 2017. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss) including non-controlling interests and net cash provided by operating activities, see our website or “Non-GAAP Financial Measures” in our Annual Report on Form 10-K, filed with the SEC on February 28, 2018.
|
•
|
We maintained a flexible marketing program, though which the company saw oil differentials decrease from approximately $5.00 per barrel in the beginning to the year to under $0.50 exiting 2017.
|
•
|
We decreased company leverage from over 4.5x Debt to last twelve months adjusted EBITDA in the beginning of the year to approximately 3.0x at the end of 2017.
|
•
|
attracting and retaining key executive officers critical to long-term success;
|
•
|
aligning management’s interests with the long-term interests of the Company’s stockholders;
|
•
|
providing incentives and paying for performance; and
|
•
|
compensating those executive officers fairly and competitively for their responsibilities and accomplishments.
|
Compensation Element
|
|
Purpose
|
|
Target
|
|
Competitive
|
Performance-Based
|
Stockholder Alignment
|
Talent Focus
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
• recognize each executive officer’s unique value and contributions to our success in light of salary norms in the industry and the general marketplace;
• remain competitive for executive-level talent within our industry;
• provide executives with sufficient, regularly-paid income;
• reflect position and level of responsibility
|
|
• by position, the market 50th percentile of our peer group
|
|
ü
|
|
|
ü
|
Annual Performance-based Cash Incentive
|
|
• motivate management to achieve key annual corporate objectives;
• align executives’ interests with our stockholders’ interests
|
|
• percentage of executive base salary which varies by position
• payment made based on achievement of specified Company performance goals
|
|
ü
|
ü
|
ü
|
ü
|
Long-term Equity-based Compensation
Ø
PSU
Ø
Restricted Stock
|
|
• balances short and long-term objectives;
• aligns our executives’ interests with the long-term interests of our stockholders;
• rewards long-term performance relative to industry peers;
• makes our compensation program competitive from a total remuneration standpoint;
• encourages executive retention;
• gives executives the opportunity to share in our long-term value creation
|
|
• percentage of executive base salary which varies by position
• CEO - 45% restricted stock; 55% PSUs
• Other NEOs - 50% restricted stock; 50% PSUs
|
|
ü
ü
|
ü
ü
|
ü
ü
|
ü
ü
|
Other Employee Benefits
|
|
• health and welfare, including medical, dental, short and long-term disability, health club subsidy and 401(k) plan with employer matching of first 6% eligible compensation contributed
|
|
• benefits available to all employees
• limited perquisites
|
|
ü
|
|
ü
|
|
Change of Control and Severance Benefits
|
|
• provide financial security to help ensure that officers remain focused on our performance and the continued creation of stockholder value rather than on the potential uncertainties associated with their own employment;
• change in control benefits are "double trigger"
|
|
• provide industry-competitive compensation package for our executives
|
|
ü
|
|
ü
|
ü
|
•
|
Our compensation philosophy is to foster entrepreneurship at all levels of the Company by awarding long-term equity-based incentives, currently in the form of restricted stock and PSUs, as a significant and integral component of compensation.
|
•
|
We determine the appropriate level for each compensation component based in part, but not exclusively, on our view of internal equity and consistency, and other considerations we deem relevant, such as rewarding extraordinary performance.
|
•
|
We believe that our compensation packages are representative of an appropriate mix of compensation elements, and we anticipate that we will continue to utilize a similar, though not identical, mix of compensation in future years.
|
• Carrizo Oil & Gas, Inc.
|
|
• PDC Energy, Inc.
|
• Denbury Resources Inc.
|
|
• QEP Resources Inc.
|
• Energen Corp.
|
|
• Range Resources Corporation
|
• EP Energy Corporation
|
|
• RSP Permian, Inc.
|
• Gulfport Energy Corp.
|
|
• SM Energy Co.
|
• Laredo Petroleum, Inc.
|
|
• Whiting Petroleum Corporation
|
• Newfield Exploration Company
|
|
• WPX Energy, Inc.
|
|
|
2016 Base Salary
|
|
% Increase
|
|
2017 Base Salary
|
|||||
Thomas B. Nusz
|
|
$
|
820,000
|
|
|
—
|
|
|
$
|
820,000
|
|
Taylor L. Reid
|
|
$
|
500,000
|
|
|
20
|
%
|
|
$
|
600,000
|
|
Michael H. Lou
|
|
$
|
420,000
|
|
|
14
|
%
|
|
$
|
480,000
|
|
Nickolas J. Lorentzatos
|
|
$
|
360,000
|
|
|
5.6
|
%
|
|
$
|
380,000
|
|
|
|
Threshold
(as % of base salary)
|
|
Target
(as % of base salary)
|
|
Maximum
(as % of base salary)
|
|||
Thomas B. Nusz
|
|
60
|
%
|
|
120
|
%
|
|
240
|
%
|
Taylor L. Reid
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
|
Michael H. Lou
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
|
Nickolas J. Lorentzatos
|
|
40
|
%
|
|
80
|
%
|
|
160
|
%
|
Performance Metric
|
|
Description and Rationale
|
|
|
|
Production (Boe/day)
|
|
Measured in equivalent average annual volumes;
Target is derived from existing (or PDP) and new (or capital) volumes;
Over or under performance is driven primarily by production optimization, weather impacts, well performance and the timing of tying in new wells from our capital program, and access to take-away capacity for produced fluids.
|
Capital Efficiency ($/Boe)
|
|
Measures the investment efficiency of our capital program and is demonstrated by finding and development costs;
Determined by dividing our capital investment in a well by the estimated ultimate recovery of the well in barrels of oil equivalent.
|
Cost Structure
|
|
|
LOE ($/Boe)
|
|
Lease Operating Expense is the routine operating cost on a per barrel of oil equivalent of production basis;
Includes cost elements such as labor, production chemicals, electricity, equipment rentals, equipment replacements, well workover expense, and produced water handling.
|
G&A ($MM)
|
|
Total general and administrative expenses;
Includes all administrative costs, such as cash and non-cash employee compensation; facility leasing and operating costs; third party fees such as legal, accounting, and tax; recruiting, travel and office expenses; and information technology and data services expenses;
These costs are net of field labor costs, which are charged to operating expenses, and intercompany eliminations.
|
EBITDAX
($MM)
|
|
Earnings before interest, taxes, depreciation, and exploration costs;
This measure is a non-GAAP proxy for cash flow which is routinely used in the exploration and production sector and is driven by our operating margins.
|
Initiative
|
|
Objectives
|
|
|
|
Environmental, Health and Safety
|
|
Develop communication plans, both internal and external;
Enhance data capture, tracking, and reporting.
|
Gas Capture and Infrastructure
|
|
Develop short and long term plans for gas capture, movement, and processing in the Williston Basin, as well as regulatory compliance;
Focus on reducing any potential environmental impact from operations.
|
Operations Excellence
|
|
Improve operating efficiencies through planning, communication, automation, and change management.
|
Cost Efficient Growth
|
|
Enhance growth within cash flow in an improving commodity price environment through cost management, efficiencies, and service partner relationships and synergies;
Develop specific strategies for critical goods and services.
|
Strategic Staffing and Employee Development
|
|
Develop and implement a Company specific strategy for hiring, retaining, and developing employees in a growth within cash flow internal environment and competitive external environment;
Develop a curriculum for core, essential, and optional training in technical, leadership, and human development.
|
Enterprise Resource Optimization
|
|
Conduct Company wide investigation and gap analysis on single source quality data access and utilization;
Improve efficiency and scalability of the Oasis people, processes, and systems used to optimize data quality and make business decisions.
|
Post-acquisition Integration
|
|
Develop and document a complete, consistent template for acquisition due diligence through post-acquisition integration, performance monitoring, and look-backs.
|
Metric
|
|
2016 Actual
Performance
|
|
2017
Performance Goal
|
|
Weight
|
|
2017 Result
|
|||||||
|
|
|
|
Actual Performance
|
|
Assessment
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Production
|
|
|
|
|
|
|
|
|
|
|
|||||
Volume (Boe/d)
|
|
49,757
|
|
|
70,901
|
|
|
20
|
%
|
|
66,144
|
|
Below Target
|
||
Capital Efficiency
|
|
|
|
|
|
|
|
|
|
|
|||||
Proved Developed finding and development cost ($/Boe)
|
|
$
|
6.80
|
|
|
$
|
8.58
|
|
|
20
|
%
|
|
10.26
|
|
Below Target
|
Cost Structure
|
|
|
|
|
|
|
|
|
|
|
|||||
LOE ($/Boe)
|
|
$
|
7.29
|
|
|
$
|
7.00
|
|
|
10
|
%
|
|
7.34
|
|
Below Target
|
G&A ($MM)
|
|
$
|
93.0
|
|
|
$
|
97.9
|
|
|
10
|
%
|
|
91.8
|
|
Above Target
|
EBITDAX
($MM)
|
|
$
|
496
|
|
|
$
|
795
|
|
|
20
|
%
|
|
708
|
|
Below Target
|
Initiatives
(1)
|
|
|
|
|
|
20
|
%
|
|
|
|
Above Target
|
||||
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
2017 Cash Incentive Award
|
Thomas B. Nusz
|
|
$787,200
|
Taylor L. Reid
|
|
$480,000
|
Michael H. Lou
|
|
$384,000
|
Nickolas J. Lorentzatos
|
|
$243,200
|
•
|
balances short and long-term objectives;
|
•
|
aligns our executives' interests with the long-term interests of our stockholders;
|
•
|
rewards long-term performance relative to industry peers;
|
•
|
makes our compensation program competitive and helps us attract and retain the most qualified employees, directors and consultants in the oil and gas industry; and
|
•
|
gives executives the opportunity to share in our long-term value creation.
|
|
|
PSU
(multiple of base salary)
|
|
Value of Target Grant
|
|
Percent of Executive LTI Award
|
|
Restricted Stock
(multiple of base salary)
|
|
Value of Target Grant
|
|
Percent of Executive LTI Award
|
||||||
Thomas B. Nusz
|
|
3.00
|
|
$
|
2,460,000
|
|
|
55
|
%
|
|
2.50
|
|
$
|
2,050,000
|
|
|
45
|
%
|
Taylor L. Reid
|
|
2.00
|
|
$
|
1,200,000
|
|
|
50
|
%
|
|
2.00
|
|
$
|
1,200,000
|
|
|
50
|
%
|
Michael H. Lou
|
|
2.00
|
|
$
|
960,000
|
|
|
50
|
%
|
|
2.00
|
|
$
|
960,000
|
|
|
50
|
%
|
Nickolas J. Lorentzatos
|
|
1.50
|
|
$
|
570,000
|
|
|
50
|
%
|
|
1.50
|
|
$
|
570,000
|
|
|
50
|
%
|
Named Executive Officer
|
|
2017 Annual Restricted Stock Grant Received
|
||||
Thomas B. Nusz
|
|
134,800
|
||||
Taylor L. Reid
|
|
78,900
|
||||
Michael H. Lou
|
|
63,100
|
||||
Nickolas J. Lorentzatos
|
|
37,500
|
Named Executive Officer
|
|
2017 Annual PSU Grant Received
|
||||
Thomas B. Nusz
|
|
161,700
|
||||
Taylor L. Reid
|
|
78,900
|
||||
Michael H. Lou
|
|
63,100
|
||||
Nickolas J. Lorentzatos
|
|
37,500
|
• Carrizo Oil & Gas Inc.
|
|
• Range Resources Corporation
|
• Denbury Resources Inc.
|
|
• RSP Permian, Inc.
|
• Energen Corp.
|
|
• SM Energy Co.
|
• EP Energy Corporation
|
|
• Whiting Petroleum Corporation
|
• Gulfport Energy Corp.
|
|
• WPX Energy, Inc.
|
• Laredo Petroleum Inc.
|
|
• The Standard & Poor’s Oil & Gas Exploration & Production Select Industry Index, weighted as a single company
|
• Newfield Exploration Company
|
|
|
• PDC Energy, Inc.
|
|
|
• QEP Resources Inc.
|
|
|
Total Shareholder Return Rank
|
|
% Initial PSUs Eligible to Vest for Performance Period that will become Earned Performance Units
|
|
% Initial PSUs Eligible to Vest for Performance Period that will become Earned Performance Units
|
|
% Initial PSUs Eligible to Vest for Performance Period that will become Earned Performance Units
|
1
|
|
200%
|
|
200%
|
|
200%
|
2
|
|
183%
|
|
182%
|
|
180%
|
3
|
|
167%
|
|
164%
|
|
160%
|
4
|
|
150%
|
|
145%
|
|
140%
|
5
|
|
133%
|
|
127%
|
|
120%
|
6
|
|
117%
|
|
109%
|
|
100%
|
7
|
|
100%
|
|
91%
|
|
80%
|
8
|
|
83%
|
|
73%
|
|
60%
|
9
|
|
67%
|
|
55%
|
|
40%
|
10
|
|
50%
|
|
36%
|
|
20%
|
11
|
|
33%
|
|
18%
|
|
—%
|
12
|
|
17%
|
|
—%
|
|
|
13
|
|
—%
|
|
|
|
|
Named Executive Officer
|
|
Class B Units
Granted May 22, 2017
|
||||
Thomas B. Nusz
|
|
12,000
|
||||
Taylor L. Reid
|
|
11,000
|
||||
Michael H. Lou
|
|
11,000
|
||||
Nickolas J. Lorentzatos
|
|
11,000
|
•
|
Company performance relative to the Company's performance goal guidelines established by the Board at the beginning of the year;
|
•
|
Company performance relative to the Company's operational, financial and strategic initiatives established at the beginning of the year; and
|
•
|
The current year’s economic environment, commodity price fluctuations and other unforeseen influences (adverse or beneficial) that should be considered in the Committee’s evaluation of company and individual officer performance.
|
•
|
competitive benchmarking;
|
•
|
incentive plan design;
|
•
|
peer group selection; and
|
•
|
other trends and developments affecting executive compensation.
|
•
|
whether Longnecker provides any other services to us;
|
•
|
the policies of Longnecker that are designed to prevent any conflict of interest between Longnecker, the Compensation Committee and us
|
•
|
any personal or business relationship between Longnecker and a member of the Compensation Committee or one of our executive officers; and
|
•
|
whether Longnecker owns any shares of our common stock.
|
•
|
assessing the relationship between executive pay and performance;
|
•
|
apprising the Compensation Committee of compensation-related trends, developments in the marketplace and industry best practices;
|
•
|
informing the Compensation Committee of compensation-related regulatory developments;
|
•
|
providing peer group survey data to establish compensation ranges for the various elements of compensation;
|
•
|
providing an evaluation of the competitiveness of the Company’s executive and director compensation and benefits programs; and
|
•
|
advising on the design of the Company’s incentive compensation programs.
|
•
|
Restricted stock and PSU agreements covering grants made to our Named Executive Officers and other service providers in 2011 and later years include language providing that the award may be cancelled and the award recipient may be required to reimburse us for any realized gains to the extent required by applicable law or any clawback policy that we adopt.
|
•
|
The LTIP and the Incentive Plan include provisions specifying that awards under those arrangements are subject to any clawback policy we adopt.
|
•
|
The employment agreements described in more detail under "—Employment Agreements" above contain a clawback provision that enables us to recoup any compensation that is deemed incentive compensation if required by any law, government regulation, stock exchange listing requirement, or Company policy adopted as required by such law, government regulation, or stock exchange listing requirement.
|
•
|
Our Compensation Committee is currently evaluating the practical, administrative and other implications of implementing and enforcing a clawback policy, and intends to adopt a clawback policy in compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 once final rules are promulgated by the SEC.
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)(1)
|
|
Bonus ($)
|
|
Stock
Awards
($)(2)
|
|
Option Awards
($)(3)
|
|
Non-Equity Incentive Plan Compensation
($)(4)
|
|
All Other
Compensation
($)(5)
|
|
Total
($)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Thomas B. Nusz
|
|
2017
|
|
$
|
820,000
|
|
|
$
|
—
|
|
|
$
|
4,781,421
|
|
|
$
|
350,400
|
|
|
$
|
787,200
|
|
|
$
|
30,267
|
|
|
$
|
6,769,288
|
|
Chairman and
Chief Executive Officer
|
|
2016
|
|
$
|
820,000
|
|
|
$
|
—
|
|
|
$
|
2,220,528
|
|
|
$
|
—
|
|
|
$
|
1,574,400
|
|
|
$
|
21,189
|
|
|
$
|
4,636,117
|
|
|
2015
|
|
$
|
820,000
|
|
|
$
|
—
|
|
|
$
|
2,916,376
|
|
|
$
|
—
|
|
|
$
|
984,000
|
|
|
$
|
24,594
|
|
|
$
|
4,744,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Taylor L. Reid
|
|
2017
|
|
$
|
591,667
|
|
|
$
|
—
|
|
|
$
|
2,532,690
|
|
|
$
|
321,200
|
|
|
$
|
480,000
|
|
|
$
|
24,564
|
|
|
$
|
3,950,121
|
|
President and Chief Operating Officer
|
|
2016
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
1,048,956
|
|
|
$
|
—
|
|
|
$
|
800,000
|
|
|
$
|
19,908
|
|
|
$
|
2,368,864
|
|
|
2015
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
1,302,067
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
19,908
|
|
|
$
|
2,321,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Michael H. Lou
|
|
2017
|
|
$
|
475,000
|
|
|
$
|
—
|
|
|
$
|
2,025,510
|
|
|
$
|
321,200
|
|
|
$
|
384,000
|
|
|
$
|
22,967
|
|
|
$
|
3,228,677
|
|
Executive Vice
President and Chief Financial Officer
|
|
2016
|
|
$
|
420,000
|
|
|
$
|
—
|
|
|
$
|
881,328
|
|
|
$
|
—
|
|
|
$
|
672,000
|
|
|
$
|
20,208
|
|
|
$
|
1,993,536
|
|
2015
|
|
$
|
420,000
|
|
|
$
|
—
|
|
|
$
|
1,093,775
|
|
|
$
|
—
|
|
|
$
|
420,000
|
|
|
$
|
19,908
|
|
|
$
|
1,953,683
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Nickolas J. Lorentzatos
|
|
2017
|
|
$
|
378,333
|
|
|
$
|
—
|
|
|
$
|
1,203,750
|
|
|
$
|
321,200
|
|
|
$
|
243,200
|
|
|
$
|
24,564
|
|
|
$
|
2,171,047
|
|
Executive Vice
President, General
Counsel and
Corporate Secretary
|
|
2016
|
|
$
|
360,000
|
|
|
$
|
—
|
|
|
$
|
579,744
|
|
|
$
|
—
|
|
|
$
|
460,800
|
|
|
$
|
19,908
|
|
|
$
|
1,420,452
|
|
2015
|
|
$
|
360,000
|
|
|
$
|
—
|
|
|
$
|
703,107
|
|
|
$
|
—
|
|
|
$
|
288,000
|
|
|
$
|
19,908
|
|
|
$
|
1,371,015
|
|
(1)
|
Reflects the base salary earned by each Named Executive Officer during the fiscal year indicated.
|
(2)
|
Reflects the aggregate grant date fair value of restricted stock awards and PSUs under our LTIP granted in the fiscal year indicated, computed in accordance with FASB ASC Topic 718, and does not reflect the actual value that may be realized by the executive. See Note 13 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional detail regarding assumptions underlying the value of these equity awards. For fiscal year 2017, the grant date fair value for restricted stock awards is based on the closing price of our common stock on January 12, 2017, the grant date for those awards, which was $15.21 per share. The grant date fair value for the PSUs granted on January 12, 2017 was calculated based on the initial number of PSUs granted at a weighted average grant date fair value price per unit of $16.89, as computed using a Monte Carlo simulation model in accordance with FASB ASC Topic 718. Assuming that the highest level of the performance condition is achieved, the grant date fair value for these awards would have been: for Mr. Nusz – $5,462,226, Mr. Reid – $2,665,242, Mr. Lou – $2,131,518, and Mr. Lorentzatos – $1,266,750.
|
(3)
|
In May 2017, Messrs. Nusz, Reid, Lou, and Lorentzatos, along with other officers and management employees, were each issued Class B Units in OMP GP LLC, all of which were unvested as of December 31, 2017. We believe that, despite the fact that the Class B Units do not require the payment of an exercise price, they are most similar economically to stock options, and as such, they are properly classified as "options" under the definition provided in Item 402(a)(96)(i) of Regulation S-K as an instrument with an "option-like feature." As discussed under "—OMP GP LLC Class B Unit Awards" and "Executive Compensation-Potential Payments Upon Termination and Change in Control—OMP GP LLC Class B Units" in this proxy statement, the Class B Units in OMP GP LLC are intended to constitute "profits interests" for federal tax purposes and are not traditional options. Amounts included in this column reflect the grant date fair value of the Class B Units, calculated in accordance with FASB ASC Topic 718.
|
(4)
|
For fiscal year 2017, reflects amounts earned for services performed in 2017 pursuant to the annual performance-based cash incentive awards granted to the Named Executive Officers under the Incentive Plan. The amounts reported in the table were paid to the Named Executive Officers in February 2018. The
|
(5)
|
The following items are reported in the “All Other Compensation” column for fiscal year 2017:
|
Name
|
|
Health Club
Dues
|
|
Parking
|
|
401(k) Plan
Match
|
|
|
Tax Reimbursement(a)
|
|
Total
|
||||||||||
Thomas B. Nusz
|
|
$
|
—
|
|
|
$
|
4,008
|
|
|
$
|
16,200
|
|
|
|
$
|
10,059
|
|
|
$
|
30,267
|
|
Taylor L. Reid
|
|
$
|
—
|
|
|
$
|
4,008
|
|
|
$
|
16,200
|
|
|
|
$
|
4,356
|
|
|
$
|
24,564
|
|
Michael H. Lou
|
|
$
|
600
|
|
|
$
|
4,008
|
|
|
$
|
16,200
|
|
|
|
$
|
2,159
|
|
|
$
|
22,967
|
|
Nickolas J. Lorentzatos
|
|
$
|
—
|
|
|
$
|
4,008
|
|
|
$
|
16,200
|
|
|
|
$
|
4,356
|
|
|
$
|
24,564
|
|
Name
|
|
Grant Date
|
|
Date of
Compen-sation
Committee
Action (if
different from
Grant Date)
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2)
(In Shares)
|
|
All Other
Stock Awards:
Number of
Shares
of
Stock or Units
(#)(3)
|
|
All Other Option Awards: Number of Securities Underlying Options
(#)(4)
|
|
Grant Date
Fair Value
of
Stock and Option
Awards
($)(5)
|
|||||||||||||||||||||
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
||||||||||||||||||||||||
Thomas B. Nusz
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,800
|
|
|
|
|
$
|
2,050,308
|
|
||||||||||
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
21,021
|
|
|
171,402
|
|
|
323,400
|
|
|
|
|
|
|
$
|
2,731,113
|
|
||||||||
|
|
5/22/2017
|
|
5/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
$
|
350,400
|
|
||||||||||
|
|
|
|
|
|
$
|
492,000
|
|
|
$
|
984,000
|
|
|
$
|
1,968,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Taylor L. Reid
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,900
|
|
|
|
|
$
|
1,200,069
|
|
||||||||||
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
10,257
|
|
|
84,423
|
|
|
157,800
|
|
|
|
|
|
|
$
|
1,332,621
|
|
||||||||
|
|
5/22/2017
|
|
5/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
$
|
321,200
|
|
||||||||||
|
|
|
|
|
|
$
|
300,000
|
|
|
$
|
600,000
|
|
|
$
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Michael H. Lou
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,100
|
|
|
|
|
$
|
959,751
|
|
||||||||||
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
8,203
|
|
|
67,517
|
|
|
126,200
|
|
|
|
|
|
|
$
|
1,065,759
|
|
||||||||
|
|
5/22/2017
|
|
5/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
$
|
321,200
|
|
||||||||||
|
|
|
|
|
|
$
|
240,000
|
|
|
$
|
480,000
|
|
|
$
|
960,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Nickolas J. Lorentzatos
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
|
|
|
|
$
|
570,375
|
|
||||||||||
|
|
1/12/2017
|
|
12/15/2016
|
|
|
|
|
|
|
|
4,875
|
|
|
40,125
|
|
|
75,000
|
|
|
|
|
|
|
$
|
633,375
|
|
||||||||
|
|
5/22/2017
|
|
5/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
$
|
321,200
|
|
||||||||||
|
|
|
|
|
|
$
|
152,000
|
|
|
$
|
304,000
|
|
|
$
|
608,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents annual performance-based cash incentive awards granted under the Incentive Plan during fiscal year 2017 for services performed in 2017. The awards were paid below the "target" level for each Named Executive Officer, based on performance achievement for 2017, as reported in the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table for 2017. The awards (including performance goals and targets) are described in more detail above under “—Compensation Discussion and Analysis—Annual Performance-Based Cash Incentive Awards—2017 Performance Goals and Annual Cash Incentive Award Opportunity.”
|
(2)
|
Reflects PSUs granted under our LTIP in 2017. Amounts reported (a) in the “Threshold” column reflect 13% of the initial number of PSUs granted in 2017, which is the minimum amount payable under the PSU awards (assuming a TSR rank of 15th of 16 peers), (b) in the “Target” column reflect 107% of the initial number of PSUs granted in 2017, which is the target amount payable under the PSU awards (assuming a TSR rank of 8th of 16 peers), and (c) in the “Maximum” column reflect 200% of the initial number of PSUs granted in 2017, which is the maximum amount that may be earned pursuant to the awards (assuming a TSR rank of 1st of 16 peers). If relative TSR is below the 13th percentile, then 0% of the initial number of PSUs granted in 2017 will be earned. The number of our common shares actually received by the Named Executive Officer at the end of each designated performance period may vary from the initial number allocated to that period, based on our relative TSR as compared to the TSR of the other peer group companies. The PSUs are subject to a designated two-year, three-year, and four-year performance periods, each of which began on January 12, 2017. The PSUs (including performance goals and targets) are described in more detail above under “—Compensation Discussion and Analysis—Annual Executive Compensation Decisions—Long-Term Equity-Based Incentives.”
|
(3)
|
Reflects restricted stock awards granted under our LTIP in 2017. These awards will vest over a three-year period. The first 1/3 tranche vested on January 12, 2018, the second 1/3 tranche will vest on January 12, 2019, and the final 1/3 tranche will vest on January 12, 2020, in each case, subject to the Named Executive Officer's continued employment. The awards are described in more detail above under “—Compensation Discussion and Analysis—Annual Executive Compensation Decisions—Long-Term Equity-Based Incentives.”
|
(4)
|
In May 2017, Messrs. Nusz, Reid, Lou, and Lorentzatos, along with other officers and management employees, were each issued Class B Units in OMP GP LLC, all of which were unvested as of December 31, 2017. We believe that, despite the fact that the Class B Units do not require the payment of an exercise price, they are most similar economically to stock options, and as such, they are properly classified as "options" under the definition provided in Item 402(a)96)(i) of Regulation S-K as an instrument with an "option-like feature." As discussed under "—OMP GP LLC Class B Unit Awards" and "Executive Compensation-Potential Payments Upon Termination and Change in Control—OMP GP LLC Class B Units" in this proxy statement, the Class B Units in OMP GP LLC are intended to constitute "profits interests" for federal tax purposes and are not traditional options.
|
(5)
|
Reflects the aggregate grant date fair value of restricted stock awards and PSUs under our LTIP and Class B Units in OMP GP LLC granted in the fiscal year indicated, computed in accordance with FASB ASC Topic 718, and does not reflect the actual value that may be realized by the executive. See Note 13 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional detail regarding assumptions underlying the value of these equity awards. For fiscal year 2017, the grant date fair value for restricted stock awards is based on the closing price of our common stock on January 12, 2017, the grant date for those awards, which was $15.21 per share. The grant date fair value for the PSUs granted on January 12, 2017 was calculated based on the initial number of PSUs granted at a weighted average grant date fair value price per unit of $16.89, as computed using a Monte Carlo simulation model in accordance with FASB ASC Topic 718. The grant date fair value of the Class B Units has been calculated in accordance with FASB ASC Topic 718.
|
|
|
Stock Awards
|
|
Option Awards
|
|||||||||||||||||
|
|
Restricted Stock Awards
|
|
PSUs
|
|
GP Unit Awards
|
|||||||||||||||
Name
|
|
Number of Shares of Stock
That Have
Not Vested(1)
|
|
Market Value of
Shares of Stock
That Have
Not Vested(2)
|
|
Equity Incentive Plan Awards:
Number of
Unearned Shares
that Have
Not Vested(3)
|
|
Equity Incentive
Plan Awards: Market or
Payout Value of
Unearned Shares
that Have
Not Vested(4)
|
|
Number of Securities Underlying Unexercised Options Unexercisable(5)
|
|
Option Exercise Price(6)
|
|
Option Expiration Date(6)
|
|||||||
Thomas B. Nusz
|
|
422,873
|
|
|
$
|
3,556,362
|
|
|
856,524
|
|
|
$
|
7,203,363
|
|
|
12,000
|
|
|
N/A
|
|
N/A
|
Taylor L. Reid
|
|
230,933
|
|
|
$
|
1,942,146
|
|
|
373,197
|
|
|
$
|
3,138,587
|
|
|
11,000
|
|
|
N/A
|
|
N/A
|
Michael H. Lou
|
|
192,560
|
|
|
$
|
1,619,429
|
|
|
306,863
|
|
|
$
|
2,580,718
|
|
|
11,000
|
|
|
N/A
|
|
N/A
|
Nickolas J. Lorentzatos
|
|
117,797
|
|
|
$
|
990,673
|
|
|
199,503
|
|
|
$
|
1,677,816
|
|
|
11,000
|
|
|
N/A
|
|
N/A
|
Name
|
|
One-Time
Retention Grant (a)
|
|
2015 Annual Award (b)
|
|
2016 Annual Award (c)
|
|
2017 Annual Award (d)
|
|
Total
|
|||||
Thomas B. Nusz
|
|
64,400
|
|
|
36,740
|
|
|
186,933
|
|
|
134,800
|
|
|
422,873
|
|
Taylor L. Reid
|
|
38,580
|
|
|
17,920
|
|
|
95,533
|
|
|
78,900
|
|
|
230,933
|
|
Michael H. Lou
|
|
34,140
|
|
|
15,053
|
|
|
80,267
|
|
|
63,100
|
|
|
192,560
|
|
Nickolas J. Lorentzatos
|
|
17,820
|
|
|
9,677
|
|
|
52,800
|
|
|
37,500
|
|
|
117,797
|
|
(a)
|
The shares subject to the One-Time Retention Grant vest in full on the earlier to occur of a change in control or the Named Executive Officer’s termination of employment due to death or disability, by us without cause, by the executive for good reason, or upon retirement (upon attaining age 60 and continuous employment from the date of grant until the three year anniversary of the award).
|
(b)
|
The shares subject to the 2015 Annual Award vest in three substantially equal annual installments. The first 1/3 tranche vested on January 15, 2016. The second tranche vested on January 15, 2017 and the final tranche vested on January 15, 2018. The accelerated vesting provisions applicable to these awards are described below under “—Potential Payments upon Termination and Change in Control.”
|
(c)
|
The shares subject to the 2016 Annual Award vest in three substantially equal annual installments. The first 1/3 tranche vested on January 20, 2017. The second tranche vested on January 20, 2018 and the final tranche will vest on January 20, 2019. The accelerated vesting provisions applicable to these awards are described below under “—Potential Payments upon Termination and Change in Control.”
|
(d)
|
The shares subject to the 2017 Annual Award vest in three substantially equal annual installments. The first 1/3 tranche vested on January 12, 2018. The second tranche will vest on January 12, 2019 and the final tranche will vest on January 12, 2020. The accelerated vesting provisions applicable to these awards are described below under “—Potential Payments upon Termination and Change in Control.”
|
(2)
|
This column reflects the closing price of our common stock on December 29, 2017 (the last trading day of fiscal year 2017), which was $8.41, multiplied by the number of outstanding shares of restricted stock.
|
(3)
|
For the PSU awards granted in 2014, 2015, 2016, and 2017, reflects the initial number of PSUs granted to each of the Named Executive Officers on the date indicated, multiplied by the performance level percentage indicated, which in accordance with SEC rules is the next higher performance level for each award that exceeds 2017 performance. The number of shares reported in the table above are shown for PSUs granted:
|
•
|
On February 14, 2014, at a performance level of 75% applied to the following initial number of PSUs: (a) Mr. Nusz—48,290, (b) Mr. Reid—23,560, (c) Mr. Lou—14,840, and (d) Mr. Lorentzatos—12,720. The initial performance period for these awards commenced on February 14, 2014 and ended on February 13, 2017, and no shares were earned. However, pursuant to the terms of the awards, up to
|
•
|
On January 15, 2015, at a performance level of 125% applied to the following initial number of PSUs: (a) Mr. Nusz—132,260, (b) Mr. Reid—53,760, (c) Mr. Lou—45,160, and (d) Mr. Lorentzatos—29,030. The initial performance period for these awards commenced on January 15, 2015 and ends on January 14, 2018.
|
•
|
On January 20, 2016, at a performance level of 150% applied to the following initial number of PSUs: (a) Mr. Nusz—336,400, (b) Mr. Reid—143,300, (c) Mr. Lou—120,400, and (d) Mr. Lorentzatos—79,200. The designated performance periods for these awards each commenced on January 20, 2016 and end on January 19, 2018, 2019, and 2020.
|
•
|
On January 12, 2017, at a performance level of 93% applied to the following initial number of PSUs: (a) Mr. Nusz—161,700, (b) Mr. Reid—78,900, (c) Mr. Lou—63,100, and (d) Mr. Lorentzatos—37,500. The designated performance periods for these awards each commenced on January 12, 2017 and end on January 11, 2019, 2020, and 2021.
|
(4)
|
This column reflects the closing price of our common stock on December 29, 2017 (the last trading day of fiscal year 2017), which was $8.41, multiplied by a number of PSUs based on the performance level percentage indicated in footnote (3) with respect to each PSU award.
|
(5)
|
We believe that, despite the fact that the Class B Units do not require the payment of an exercise price, they are most similar economically to stock options, and as such, they are properly classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an "option-like feature." As of December 31, 2017, these Class B Units were unvested, and Messrs. Nusz, Reid, Lou, and Lorentzatos were not eligible to received distributions from OMP GP. Contingent upon continuous service through each such date, the Class B Units will vest on the tenth anniversary of the date of grant; and such officers will be eligible to receive distributions from OMP GP on the second anniversary of the date of grant, including distributions paid for periods prior to such anniversary (see "—OMP GP LLC Class B Unit Awards").
|
(6)
|
The Class B Units are not traditional options and, therefore, there is no exercise price or expiration date associated with them.
|
|
|
Stock Awards
|
|||||
Name
|
|
Number of Shares Acquired
on Vesting(1)
|
|
Value Realized on Vesting (2)
|
|||
Thomas B. Nusz
|
|
156,670
|
|
|
$
|
2,277,529
|
|
Taylor L. Reid
|
|
83,923
|
|
|
$
|
1,220,954
|
|
Michael H. Lou
|
|
64,257
|
|
|
$
|
934,035
|
|
Nickolas J. Lorentzatos
|
|
45,416
|
|
|
$
|
660,705
|
|
(1)
|
Reflects the following restricted stock awards and PSUs held by our Named Executive Officers that vested during fiscal year 2017:
|
Name
|
|
2014 Annual
Award (a)
|
|
2015 Annual Award (b)
|
|
2016 Annual
Award (c)
|
|
Promotion Awards (d)
|
|
Total
|
|||||
Thomas B. Nusz
|
|
26,463
|
|
|
36,740
|
|
|
93,467
|
|
|
—
|
|
|
156,670
|
|
Taylor L. Reid
|
|
13,153
|
|
|
17,920
|
|
|
47,767
|
|
|
5,083
|
|
|
83,923
|
|
Michael H. Lou
|
|
9,070
|
|
|
15,054
|
|
|
40,133
|
|
|
—
|
|
|
64,257
|
|
Nickolas J. Lorentzatos
|
|
6,597
|
|
|
9,676
|
|
|
26,400
|
|
|
2,743
|
|
|
45,416
|
|
(a)
|
The final 1/3 tranche of shares subject to the 2014 Annual Award vested on February 14, 2017.
|
(b)
|
The second 1/3 tranche of shares subject to the 2015 Annual Award vested on January 15, 2017.
|
(c)
|
The first 1/3 tranche of shares subject to the 2016 Annual Award vested on January 20, 2017.
|
(d)
|
For Messrs. Reid and Lorentzatos, reflects shares that were awarded to them on January 15, 2014 in connection with their promotions to President and Chief Operating Officer and to Executive Vice President, General Counsel and Corporate Secretary, respectively. The final 1/3 tranche vested on January 15, 2017.
|
(2)
|
The value realized upon vesting of restricted stock or PSUs, as applicable, is based on the following:
|
Named Executive Officer
|
|
Termination Due to
Death or Disability
|
|
Termination
Without Cause or
for Good Reason(1)
|
|
Termination
Without Cause or
for Good Reason
Following a Change
in Control
|
|
Change in
Control
|
||||||||
Thomas B. Nusz
|
|
|
|
|
|
|
|
|
||||||||
Salary(2)
|
|
$
|
820,000
|
|
|
$
|
1,640,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bonus Amounts(2)
|
|
$
|
787,200
|
|
|
$
|
2,755,200
|
|
|
$
|
984,000
|
|
|
$
|
984,000
|
|
COBRA Premiums(3)
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
—
|
|
Change in Control Payments(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,276,608
|
|
|
$
|
—
|
|
Accelerated Equity Vesting(5)
|
|
$
|
14,971,255
|
|
|
$
|
10,759,725
|
|
|
$
|
10,759,725
|
|
|
$
|
3,556,362
|
|
Class B Units(6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,400
|
|
|
$
|
—
|
|
Total(7)
|
|
$
|
16,614,573
|
|
|
$
|
15,191,043
|
|
|
$
|
18,406,851
|
|
|
$
|
4,540,362
|
|
Taylor L. Reid
|
|
|
|
|
|
|
|
|
||||||||
Salary(2)
|
|
$
|
600,000
|
|
|
$
|
1,200,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bonus Amounts(2)
|
|
$
|
480,000
|
|
|
$
|
1,680,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
COBRA Premiums(3)
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
—
|
|
Change in Control Payments(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,737,500
|
|
|
$
|
—
|
|
Accelerated Equity Vesting(5)
|
|
$
|
6,980,073
|
|
|
$
|
5,080,733
|
|
|
$
|
5,080,733
|
|
|
$
|
1,942,147
|
|
Class B Units(6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321,200
|
|
|
$
|
—
|
|
Total(7)
|
|
$
|
8,096,191
|
|
|
$
|
7,996,851
|
|
|
$
|
9,775,551
|
|
|
$
|
2,542,147
|
|
Michael H. Lou
|
|
|
|
|
|
|
|
|
||||||||
Salary(2)
|
|
$
|
480,000
|
|
|
$
|
480,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bonus Amounts(2)
|
|
$
|
384,000
|
|
|
$
|
864,000
|
|
|
$
|
480,000
|
|
|
$
|
480,000
|
|
COBRA Premiums(3)
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
—
|
|
Change in Control Payments(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,067,740
|
|
|
$
|
—
|
|
Accelerated Equity Vesting(5)
|
|
$
|
5,715,100
|
|
|
$
|
4,200,147
|
|
|
$
|
4,200,147
|
|
|
$
|
1,619,430
|
|
Class B Units(6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321,200
|
|
|
$
|
—
|
|
Total(7)
|
|
$
|
6,615,218
|
|
|
$
|
5,580,265
|
|
|
$
|
8,105,205
|
|
|
$
|
2,099,430
|
|
Nickolas J. Lorentzatos
|
|
|
|
|
|
|
|
|
||||||||
Salary(2)
|
|
$
|
380,000
|
|
|
$
|
380,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bonus Amounts(2)
|
|
$
|
243,200
|
|
|
$
|
547,200
|
|
|
$
|
304,000
|
|
|
$
|
304,000
|
|
COBRA Premiums(3)
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
36,118
|
|
|
$
|
—
|
|
Change in Control Payments(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,255,656
|
|
|
$
|
—
|
|
Accelerated Equity Vesting(5)
|
|
$
|
3,655,802
|
|
|
$
|
2,668,489
|
|
|
$
|
2,668,489
|
|
|
$
|
990,673
|
|
Class B Units(6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321,200
|
|
|
$
|
—
|
|
Total(7)
|
|
$
|
4,315,120
|
|
|
$
|
3,631,807
|
|
|
$
|
5,585,463
|
|
|
$
|
1,294,673
|
|
(1)
|
Also reflects amounts for termination due to non-extension of the Employment Agreements.
|
(2)
|
Based on annualized base salary and target bonus percentage in effect for each Named Executive Officer as of December 31, 2017. For purposes of calculating any pro-rata bonus, the dollar value of the bonus awards actually awarded to each Named Executive Officer by our Compensation Committee for 2017 service was used, without pro-ration, since December 31, 2017 was the last day of the calendar year to which such bonus related. For purposes of quantifying the amount of the severance payments to Messrs. Nusz, Reid, Lou and Lorentzatos in the event of their termination without “cause” or for “good reason,” (a) the “Salary” amount was calculated as the base salary that the Named Executive Officer would have received for a period of 12 months, for Messrs. Lou and Lorentzatos, and 24 months, for Messrs. Nusz and Reid, and (b) the “Bonus Amount” was calculated, for Messrs. Lou and Lorentzatos, as the target bonus in effect for 2017, plus the pro-rata bonus amount, and for Messrs. Nusz and Reid as 2 times the target bonus in effect for 2017, plus the pro-rata bonus amount.
|
(3)
|
Reflects 18 months’ worth of COBRA premiums at $2,006.56 per month.
|
(4)
|
Based on annualized base salary and the average bonus paid to each Named Executive Officer for 2015 and 2016.
|
(5)
|
The value of accelerated equity awards is based upon the closing price per share of our common stock on December 29, 2017 (the last trading day of fiscal year 2017), which was $8.41, multiplied by the number of outstanding shares of restricted stock or PSUs that would vest upon the occurrence of the event indicated. We calculated the number of PSUs that would become earned upon the occurrence of the event indicated according to the provisions of the Notice of Grant of Performance Awards for each PSU award as follows: (i) upon termination due to death or disability, 200% of the initial PSUs; (ii) upon occurrence of a change in control, the percentage of initial PSUs earned depends on which quartile or percentile the Company's TSR percentage falls relative to the other companies in the PSU comparator group, assuming the applicable performance period ended on the date of the change in control; and (iii) upon termination without cause or for good reason, the percentage of initial PSUs earned is determined at the end of the originally stated performance period; however, for purposes of the event indicated in this clause (iii), we have calculated assumed performance at the end of the applicable originally stated performance period using the same formula stated in footnote (3) to the "Outstanding Equity Awards at Fiscal Year End" table above because we believe it represents a reasonable estimate of the Company's TSR performance at the end of each originally stated performance period. The values reported in the table above only take into account awards that were outstanding on December 31, 2017, and do not include the awards granted to our Named Executive Officers in January 2018, which are discussed above in the CD&A.
|
(6)
|
The Class B Units are intended to constitute “profits interests" for federal tax purposes and as such, the actual value of the Class B Units was not readily quantifiable as of December 31, 2017. For purposes of this table, the value of the accelerated Class B Units is based upon the grant date fair value of the Class B Units, calculated in accordance with FASB ASC Topic 718, multiplied by the number of outstanding Class B Units that would become vested upon the occurrence of the event indicated.
|
(7)
|
The aggregate total amount of compensation payable in connection with the triggering events has not been reduced to reflect any cut back in benefits or payments that would be made in connection with a change in control pursuant to the terms of the Employment Agreements. The Employment Agreements provide that golden parachute payments will be paid in full or reduced to fall within the 280G safe harbor amount, whichever will provide a better net after-tax position for a Named Executive Officer. For purposes of this disclosure, we have reflected the maximum amount potentially payable to each Named Executive Officer under each given scenario even though such maximum amounts could be reduced pursuant to the cutback language included in the Employment Agreements.
|
•
|
The median of the annual total compensation of all employees of our company (other than the CEO) was $121,966; and
|
•
|
The annual total compensation of our CEO, as reported in the Summary Compensation Table included elsewhere within this Proxy Statement, was $6,769,288.
|
•
|
Based on this information, for 2017 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was reasonably estimated to be 56 to 1.
|
•
|
We determined that, as of December 31, 2017, our employee population consisted of approximately 585 individuals with all of these individuals located in the United States (as reported in Item 1, Business, in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2018 (our “Annual Report”)). This population consisted of our full-time, part-time, and temporary employees.
|
•
|
We used a consistently applied compensation measure to identify our median employee of comparing the amount of salary reflected in our payroll records as reported to the Internal Revenue Service on Form W-2 for 2017; the annual cash incentive award granted in respect of 2017 performance; and the annual equity awards granted to our employees in 2017.
|
•
|
We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis. Since all of our employees, including our CEO, are located in the United States, we did not make any cost of living adjustments in identifying the median employee.
|
•
|
After we identified our median employee, we combined all of the elements of such employee’s compensation for the 2017 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $121,966. The difference between such employee’s salary, wages and overtime pay and the employee’s annual total compensation represents the value of such employee’s annual equity awards granted in 2017 and contributions in the amount of $4,146 that we made on the employee’s behalf to our 401(k) plan for the 2017 year.
|
•
|
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report.
|
|
|
2017
|
|
2016
|
||||
Audit Fees(1)
|
|
$
|
1,955
|
|
|
$
|
1,240
|
|
Tax Fees(2)
|
|
147
|
|
|
38
|
|
||
All Other Fees(3)
|
|
3
|
|
|
2
|
|
||
Total
|
|
$
|
2,105
|
|
|
$
|
1,280
|
|
(1)
|
Audit fees represent fees for professional services provided in connection with: (a) the annual audits of the Company’s consolidated financial statements and effectiveness of internal control over financial reporting; (b) the review of the Company’s quarterly consolidated financial statements; and (c) review of the Company’s other filings with the SEC, including review and preparation of registration statements, comfort letters, consents and research necessary to comply with generally accepted auditing standards for the years ended December 31, 2017 and 2016.
|
(2)
|
Tax fees represent tax return preparation and consultation on tax matters.
|
(3)
|
All other fees include any fees billed that are not audit, audit related, or tax fees. In 2017 and 2016, these fees related to accounting research software.
|
•
|
Be competitive.
Compensation should help to attract and retain the most qualified individuals in the oil and gas industry by being competitive with compensation paid to persons having similar responsibilities and duties in other companies in the same and closely related industries;
|
•
|
Be aligned with stockholder interests.
Compensation should align the interests of the individual with those of our stockholders with respect to long-term value creation;
|
•
|
Pay for performance.
Compensation should pay for performance, whereby an individual’s total direct compensation is heavily influenced by company performance and directly tied to the attainment of annual company performance targets; and
|
•
|
Encourage individual accountability.
Compensation should reflect each individual's contribution to the attainment of annual company performance targets, and the unique qualifications, skills, experience and responsibilities of the individual.
|
•
|
Equity-based awards generally incorporate a three-year vesting period to emphasize long-term performance and executive officer commitment;
|
•
|
Our annual performance-based cash incentive awards incorporate numerous financial and/or strategic performance metrics in order to properly balance risk with the incentives to drive our key annual financial and/or strategic initiatives and impose maximum payouts to further manage risk and the possibility of excessive payments;
|
•
|
We have focused our executives on long-term stockholder value creation through our use of equity-based awards, including PSUs tied to relative TSR performance, and the adoption of stock ownership guidelines that encourage our senior executives to own a significant amount of the Company’s stock; and
|
•
|
Cash payments under the Change in Control and Severance Benefit Plan and similar provisions of employment agreements, including equity-based award acceleration, require a double trigger (i.e., a termination of employment in connection with a change in control).
|
|
|
|
|
|
•
|
attract and retain the most qualified employees, directors and consultants ("participants") in the oil and gas industry by being competitive with compensation paid to persons having similar responsibilities and duties in other companies in the same and closely related industries;
|
•
|
reflect the unique qualifications, skills, experience and responsibilities of each participant:
|
•
|
pay for performance, whereby a participant's compensation is influenced by company performance;
|
•
|
align the interests of the participant with those of our stockholders with respect to long-term value creation; and
|
•
|
provide participants with additional incentive and reward opportunities designed to enhance the profitable growth of the Company.
|
•
|
No discounted options or other awards may be granted;
|
•
|
Awards are non-transferrable, except to an award recipient’s immediate family member or related family trust, pursuant to a qualified domestic relations order or by will or the laws and descent and distribution;
|
•
|
No automatic award grants are made to any eligible individual;
|
•
|
Awards granted prior to January 1, 2018 may be designed to meet the requirements for deductibility as “performance-based compensation” under Section 162(m);
|
•
|
Limitations on the maximum number or amount of awards that may be granted to certain individuals during any calendar year;
|
•
|
No repricing of stock options or stock appreciation rights without stockholder approval;
|
•
|
Awards are subject to potential reduction, cancellation, forfeiture or other clawback under certain specified circumstances; and
|
•
|
No recycling of shares subject to options or stock appreciation rights that are withheld or tendered to pay the exercise price of the Award or to satisfy any tax withholding obligation or that are covered by an option or stock appreciation right that is exercised.
|
Total Restricted Stock Awards Outstanding (Unvested)
|
|
5,044,582
|
|
Total Performance Share Unit Awards Outstanding (Unvested)(1)
|
|
2,540,273
|
|
Total Stock Option Awards Outstanding
|
|
None
|
|
Total Shares Available for Grant Under the LTIP
|
|
1,565,978
|
|
Total Common Shares Outstanding
|
|
317,362,842
|
|
(1)
|
As of March 8, 2018, represents shares subject to performance share unit, or PSU, awards outstanding, assuming the payout level of 125% of the initial number of PSUs awarded.
|
Equity Compensation Plan Information as of December 31, 2017
|
|||||
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)
|
Weighted-average exercise price of outstanding options, warrants and rights(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a))(c)
|
||
Equity compensation plans approved by security holders
|
3,745,420(2)
|
0
|
|
3,788,166(3)
|
|
Equity compensation plans not approved by security holders (1)
|
0
|
0
|
|
0
|
|
Total
|
3,745,420(2)
|
$
|
—
|
|
3,788,166(3)
|
(3)
|
Does not take into account grants under the 2014 LTIP in January 2018. For awards outstanding and shares remaining available for issuance under the 2014LTIP as of the Record Date, please see the chart in this Item above.
|
|
|
|
|
|
Proposal
|
|
Board Vote Recommendation
|
Item 1 — Election of Directors
|
|
FOR
|
Item 2 — Ratification of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2018
|
|
FOR
|
Item 3 — Advisory vote to approve the Company's Named Executive Officer 2017 compensation
|
|
FOR
|
Item 4 — Approval of Amended and Restated 2010 Long Term Incentive Plan, including to increase the number of shares available for issuance by 11,250,000 shares
|
|
FOR
|
Item 5 — Approval of amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized common shares
|
|
FOR
|
•
|
voting at a later time by Internet or telephone until 11:59 p.m. (Eastern Time) on Wednesday, May 2, 2018;
|
•
|
voting in person at the Annual Meeting;
|
•
|
delivering to the Company's Corporate Secretary a proxy with a later date or a written revocation of your most recent proxy; or
|
•
|
giving notice to the inspector of elections at the Annual Meeting.
|
Proposal
|
|
Vote
Required
|
|
Page Number
|
||
Item 1 — Election of Directors
|
|
Plurality of shares cast
Director Resignation Policy - Directors required to submit resignation to the Board if more "withheld" votes than "for" votes are received
Effect of Abstentions - None
Effect of Broker Non-vote - None
|
|
2
|
||
Item 2 — Ratification of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2018
|
|
Majority of shares present
Effect of Abstentions - vote against
No Broker Non-votes - Discretionary Item
|
|
67
|
||
Item 3 — Advisory vote to approve the Company's Named Executive Officer 2017 compensation
|
|
Majority of shares present
Effect of Abstentions - vote against
Effect of Broker Non-vote - None
|
|
68
|
||
Item 4 — Item 4 — Approval of Amended and Restated 2010 Long Term Incentive Plan, including to increase the number of shares available for issuance by 11,250,000 shares
|
|
Majority of shares cast
Effect of Abstentions - vote against
Effect of Broker Non-vote - None
|
|
70
|
||
Item 5 — Approval of amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized common shares
|
|
Two-thirds outstanding shares
Effect of Abstentions - vote against
No Broker Non-votes - Discretionary Item
|
|
80
|
|
|
|
By Order of the Board of Directors
|
|
|
|
|
|
|
|
Nickolas J. Lorentzatos
|
|
Corporate Secretary
|
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