def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
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Soliciting Material Pursuant to §240.14a-12 |
Noble Energy, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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TABLE OF CONTENTS
100 Glenborough Drive
Suite 100
Houston, Texas
77067-3610
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 27,
2010
To the Stockholders of
Noble Energy, Inc.:
The annual meeting of stockholders of NOBLE ENERGY, INC., a
Delaware corporation (Company), will be held on
Tuesday, April 27, 2010, at 9:30 a.m., Central Time,
at The Woodlands Waterway Marriott Hotel & Convention
Center, 1601 Lake Robbins Drive, The Woodlands, Texas 77380, for
the following purposes:
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1.
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To elect the nine nominees named in the attached Proxy Statement
as members of the Board of Directors of the Company to serve
until the next annual meeting of the Companys stockholders;
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2.
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To ratify the appointment of the independent auditor by the
Companys Audit Committee; and
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To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.
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The Board of Directors has fixed the close of business on
March 9, 2010 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the meeting
and any adjournment or postponement thereof. Only stockholders
of record at the close of business on the record date are
entitled to notice of, and to vote at, the meeting. A complete
list of the stockholders will be available for examination at
the offices of the Company in Houston, Texas during ordinary
business hours for a period of 10 days prior to the meeting.
A record of the Companys activities during 2009 and its
financial statements for the fiscal year ended December 31,
2009 are contained in the Companys 2009 Annual Report on
Form 10-K.
The Annual Report does not form any part of the material for
solicitation of proxies.
All stockholders are cordially invited to attend the meeting.
Stockholders are urged, whether or not they plan to attend
the meeting, to complete, date and sign the accompanying proxy
card and to return it promptly in the postage-paid return
envelope provided, or, alternatively, to vote their proxy by
telephone or the internet according to the instructions on the
proxy card. If a stockholder who has returned a proxy
attends the meeting in person, the stockholder may revoke the
proxy and vote in person on all matters submitted at the meeting.
By Order of the Board of Directors of
Noble Energy, Inc.
Arnold J. Johnson
Senior Vice President, General Counsel and Secretary
Houston, Texas
March 22, 2010
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE 2010 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 27,
2010.
The Companys Proxy Statement for the 2010 Annual Meeting
of Stockholders, Annual Report to Stockholders for the fiscal
year ended December 31, 2009 and Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 are available
at https://materials.proxyvote.com/655044.
100 Glenborough Drive
Suite 100
Houston, Texas
77067-3610
For Annual Meeting of Stockholders
To Be Held On April 27, 2010
The accompanying proxy, mailed together with this proxy
statement, is solicited by and on behalf of the Board of
Directors (Board of Directors or Board)
of Noble Energy, Inc., a Delaware corporation
(Company), for use at the annual meeting of
stockholders of the Company to be held at
9:30 a.m. Central Time on Tuesday, April 27,
2010, at The Woodlands Waterway Marriott Hotel &
Convention Center, 1601 Lake Robbins Drive, The Woodlands, Texas
77380, and at any adjournment or postponement thereof. The
approximate date on which this proxy statement and the
accompanying proxy will first be mailed to our stockholders is
March 24, 2010.
Shares represented by valid proxies will be voted at the meeting
in accordance with the directions given. If no directions are
given, the shares will be voted in accordance with the
recommendations of our Board unless otherwise indicated. Any
stockholder of the Company returning a proxy has the right to
revoke the proxy at any time before it is voted by communicating
the revocation in writing to Arnold J. Johnson, Secretary, Noble
Energy, Inc., 100 Glenborough Drive, Suite 100, Houston,
Texas
77067-3610,
or by executing and delivering a proxy bearing a later date. No
revocation by written notice or by delivery of another proxy
will be effective until the notice of revocation or other proxy,
as the case may be, has been received by the Company at or prior
to the meeting.
In order for an item of business proposed by a stockholder to be
considered properly brought before the annual meeting of
stockholders as an agenda item or to be eligible for inclusion
in our proxy statement, our By-laws require that the stockholder
give written notice to our Secretary. The notice must specify
certain information concerning the stockholder and the item of
business proposed to be brought before the meeting. The notice
must be received by our Secretary no later than 120 calendar
days before the anniversary of the previous years annual
meeting of stockholders; provided, however, that in the event
that (1) no annual meeting was held in the previous year or
(2) the date of the annual meeting has changed by more than
30 days from the date of the previous years meeting,
notice by the stockholder must be received no later than the
close of business on the tenth day following the earlier of the
day on which notice of the meeting date was mailed or public
disclosure of the meeting date was made for such notice to be
timely. Accordingly, proper notice of a stockholder proposal for
the 2011 annual meeting must be received by us no later than
December 28, 2010.
Voting
Procedures and Tabulation
Holders of record of our common stock may vote using one of the
following three methods:
By Mail: Stockholders of record may vote by
signing, dating and returning the proxy card in the accompanying
postage-paid envelope.
By Telephone: Stockholders of record may call
the toll-free number on the accompanying proxy card to vote by
telephone, in accordance with the instructions included on the
proxy card and through voice prompts received during the call.
By Internet: By accessing the voting website
listed on the accompanying proxy card, stockholders of record
may vote through the internet in accordance with the
instructions included on the proxy card and on the voting
website. Stockholders electing to vote through the internet may
incur telephone and internet access charges.
Proxies submitted by telephone or the internet are treated in
the same manner as if the stockholder had signed, dated and
returned the proxy card by mail. Therefore, stockholders of
record electing to vote by telephone or the internet should not
return their proxy cards by mail.
Stockholders whose shares of our common stock are held in the
name of a bank, broker or other holder of record (that is,
street name) will receive separate instructions from
such holder of record regarding the voting of proxies.
We will appoint one or more inspectors of election to act at the
meeting and to make a written report thereof. Prior to the
meeting, the inspectors will sign an oath to perform their
duties in an impartial manner and according to the best of their
ability. The inspectors will ascertain the number of shares
outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of proxies and
ballots, count all votes and ballots, and perform certain other
duties as required by law.
The inspectors will tabulate the number of votes cast for, or
withheld from, each matter submitted at the meeting for a
stockholder vote. Votes that are withheld will be excluded
entirely from the vote and will have no effect. Under the rules
of the New York Stock Exchange (NYSE), brokers who
hold shares in street name have the discretionary authority to
vote on certain routine items when they have not
received instructions from beneficial owners. For purposes of
our 2010 annual meeting, the ratification of the appointment of
our independent auditor is a routine item. In instances where
brokers are prohibited from exercising discretionary authority
and no instructions are received from beneficial owners with
respect to such item (so-called broker non-votes),
the shares they hold will have no effect on the vote. For
purposes of our 2010 annual meeting, brokers will be prohibited
from exercising discretionary authority with respect to the
election of directors. Therefore, if you hold your shares in
street name and you do not instruct your broker or bank how to
vote in the election of directors, no votes will be cast on your
behalf.
CORPORATE
GOVERNANCE
We are committed to integrity, reliability and transparency in
our disclosures to the public. To this end, we adhere to
corporate governance practices designed to ensure that our
business is conducted in the best interest of our stockholders
and in compliance with our legal and regulatory obligations,
including the listing standards of the NYSE and the rules and
regulations of the Securities and Exchange Commission
(SEC). We monitor developments in the area of
corporate governance.
Recent
Corporate Governance Initiatives
One of our objectives is to promote a culture of corporate
social responsibility that respects the rights and safety of
individuals, as well as the laws, environments and
sustainability of the communities in which we operate. In 2009
we began integrating a number of our ongoing initiatives into a
corporate social responsibility program. Our Environment, Health
and Safety Committee charter was amended to include oversight
responsibility in this area from a Board perspective, and we
adopted a Corporate Social Responsibility Policy that outlines
our vision for the future. A copy of that policy may be found on
our website, www.nobleenergyinc.com.
Director
Independence
The standards applied by our Board in affirmatively determining
whether a director is independent in compliance with
the listing standards of the NYSE generally provide that a
director is not independent if:
1. the director is, or has been within the last three
years, an employee of the Company, or an immediate family member
(defined as including a persons spouse, parents, children,
siblings, mothers- and
fathers-in-law,
sons-and
daughters-in-law,
brothers- and
sisters-in-law,
and anyone, other than domestic employees, who shares such
persons home) is, or has been within the last three years,
an executive officer, of the Company;
2. the director has received, or has an immediate family
member who has received, during any twelve-month period within
the last three years, more than $120,000 per year in direct
compensation from us, other
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than director and committee fees and pension or other forms of
deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service);
3. (a) the director is a current partner or employee
of our internal or external auditor; (b) the director has
an immediate family member who is a current partner of that
firm; (c) the director has an immediate family member who
is a current employee of that firm and personally works on our
audit; or (d) the director or an immediate family member
was, within the last three years, a partner or employee of that
firm and personally worked on our audit during that time;
4. the director or an immediate family member is, or has
been within the last three years, employed as an executive
officer of another company where any of our present executive
officers at the same time serves or served on that
companys compensation committee; or
5. the director is a current employee, or an immediate
family member is a current executive officer, of a company that
has made payments to, or received payments from, us for property
or services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1 million or 2% of such
other companys consolidated gross revenues.
In addition to these objective standards, our Board has adopted
a general standard, also in compliance with the NYSE listing
standards, to the effect that no director qualifies as
independent unless the Board affirmatively
determines that the director has no material relationship with
the Company that could interfere with the directors
ability to exercise independent judgment. Our Board exercises
appropriate discretion in identifying and evaluating the
materiality of any relationships directors may have with us or
with parties that conduct business with us.
On February 16, 2010, our Board reviewed our
directors relationships with the Company (and those of
their immediate family members), including information related
to transactions, relationships or arrangements between the
Company and our directors or parties related to our directors.
The following is a description of categories or types of
transactions, relationships and arrangements considered by our
Board in confirming its determination that these directors are
independent:
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Jeffrey L. Berenson is President and Chief Executive Officer of
Berenson & Company, as well as a director and member
of the Compensation Committee of Epoch Holdings Corporation, a
holding company that provides investment management and advisory
services. Mr. Berenson is a former director of Patina
Oil & Gas Corporation (Patina), which we
acquired by merger in May 2005.
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Michael A. Cawley is President, Chief Executive Officer and
Trustee of The Samuel Roberts Noble Foundation, Inc., which paid
$56,698 to us in 2009 for the use of our aircraft and to which
we paid $12,570 in 2009 for the use of its aircraft.
Mr. Cawley received payments totaling $29,178 in 2009
attributable to his interests in certain oil and gas royalties
that he purchased from the Company in the 1990s. Mr. Cawley
is also a director and member of the Compensation Committee of
Noble Corporation, a publicly-traded drilling company with which
the Company conducted business in 2009.
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Edward F. Cox received payments in 2009 totaling $196,185
attributable to his interests in certain oil and gas royalties
and interests in two general partnerships that hold royalties
and are managed by the Company. Mr. Cox purchased these
interests from the Company in the 1980s and 1990s. Mr. Cox
also recently assumed the position of chair of The New York
Republican State Committee.
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Thomas J. Edelman is Chairman of Berenson & Company,
as well as managing partner of White Deer Energy LP, an energy
private equity fund. Mr. Edelman is the former Chairman and
Chief Executive Officer of Patina, which we acquired by merger
in May 2005.
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Eric P. Grubman is Executive Vice President of the National
Football League and a private equity investor in Vantage Energy.
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Kirby L. Hedrick is a former Executive Vice President of
Phillips Petroleum Company.
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Scott D. Urban is a former Group Vice President, Upstream for
several profit centers at BP and is a partner in Edgewater
Energy Partners, an organizational consulting firm for
energy-related industries. Mr. Urban is
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also a director and chair of the Compensation Committee, and
member of the Nominating and Corporate Governance Committee, of
Pioneer Drilling Company.
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William T. Van Kleef is a director and chair of the Audit
Committee of Oil States International, Inc., a publicly-traded
company that provides specialty products and services to oil and
gas drilling and production companies worldwide and with which
the Company conducted business in 2009.
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After reviewing these categories or types of transactions,
relationships and arrangements, and after applying the NYSE
independence standards described above, our Board affirmatively
determined that no material relationship existed that would
interfere with the ability of Messrs. Berenson, Cawley,
Cox, Edelman, Grubman, Hedrick, Urban or Van Kleef to exercise
independent judgment and that each is independent for Board
membership purposes. Our Board also determined that all members
of our Audit Committee, Corporate Governance and Nominating
Committee and Compensation, Benefits and Stock Option Committee
are independent under the NYSE independence standards and
applicable SEC rules.
Leadership
Structure
Chairman
and Chief Executive Officer
Our Board currently combines the role of chairman of the board
with the role of chief executive officer (CEO), and
maintains a separate empowered lead independent director
position to further strengthen our governance structure. Our
Board believes this provides an efficient and effective
leadership model for the Company. Combining the chairman and CEO
roles fosters clear accountability, effective decision-making
and alignment on corporate strategy.
Our Board believes that the Company is strengthened by the
chairmanship of Mr. Davidson, who provides strategic,
operational and technical expertise, vision and a proven ability
to lead the Company to the successes it has experienced. Under
Mr. Davidsons leadership, the Company has continued
to reflect solid growth. The Board believes that, under the
present circumstances, the interests of the Company and its
stockholders are best served by the leadership and direction of
Mr. Davidson as Chairman and CEO.
Our Board recognizes that no single leadership model is right
for all companies and at all times and that, depending on the
circumstances, other leadership models, such as a separate
independent chairman of the board, might be appropriate.
A key responsibility of the CEO and the Board is ensuring that
an effective process is in place to provide continuity of
Company leadership over the long term. Each year, a full review
of senior leadership succession is conducted by our Board.
During this review, the CEO and the independent directors
discuss candidates for senior leadership positions, succession
timing for those positions and development plans for the
highest-potential candidates. This process ensures continuity of
leadership over the long term and forms the basis on which the
Company makes ongoing leadership assignments.
Lead
Independent Director and Executive Sessions
Our Lead Independent Director, currently Michael A. Cawley, is
elected annually by our Board. Our Lead Independent Director
serves as a key component of our governance structure, subject
to oversight by the independent members of our Board. We have
not experienced any problematic governance or management issues
resulting from our maintaining separate Chairman and CEO and
Lead Independent Director positions. The Lead Independent
Directors responsibilities and authority generally include:
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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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consulting with the Chairman to establish, and approving, the
agenda for each Board meeting;
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discussing with the Chairman and approving the scope of
materials to be delivered to the directors in advance of Board
meetings;
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presiding at all executive sessions of the independent or
non-management directors and all other Board meetings at which
the Chairman is not present;
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serving as a liaison between the Chairman and the independent or
non-management directors;
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coordinating the activities of such directors;
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coordinating the agenda for, and moderating, sessions of the
Boards independent directors and other non-management
directors;
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facilitating communications among the other members of the
Board; and
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consulting with the chairs of the Board committees and
soliciting their participation to avoid diluting their authority
or responsibilities.
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Our Lead Independent Directors responsibilities and
authority are more specifically described in our Corporate
Governance Guidelines.
Our non-management directors hold executive sessions without
management at regularly scheduled meetings of our Board and at
such other times as our Lead Independent Director shall
designate. These sessions take place outside the presence of our
CEO or any of our other employees. The Lead Independent Director
presides at these executive sessions, which allow our
non-management directors the opportunity to separately consider
management performance and broader matters of strategic
significance to us. During 2009, our non-management directors
met five times in executive sessions of the Board.
Audit
Committee
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All members of our Audit Committee have been determined to meet
the standards of independence required of audit committee
members by the NYSE and applicable SEC rules. See Director
Independence above.
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Our Board has determined that all members of our Audit Committee
are financially literate. Our Board has also determined that
William T. Van Kleef possesses accounting or related financial
management expertise within the meaning of the listing standards
of the NYSE and is an audit committee financial
expert within the meaning of applicable SEC rules.
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KPMG LLP, our independent auditor, reports directly to our Audit
Committee.
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Our Audit Committee, consistent with the Sarbanes-Oxley Act of
2002 and the rules adopted thereunder, meets with management and
our independent auditor to receive information concerning, among
other things, the integrity of our financial controls and
reporting.
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Our Audit Committee has adopted a Policy on Reporting Concerns
and Complaints Regarding Accounting, Internal Accounting
Controls and Auditing Matters to enable confidential and
anonymous reporting to the Audit Committee of concerns regarding
questionable accounting matters.
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Compensation,
Benefits and Stock Option Committee
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All members of our Compensation, Benefits and Stock Option
Committee (Compensation Committee) have been
determined to meet the NYSE standards for independence. See
Director Independence above. Further, each member of
our Compensation Committee is a Non-Employee
Director as defined in
Rule 16b-3
under the Securities Exchange Act of 1934, as amended
(Exchange Act), and an outside director
as defined for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended.
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Corporate
Governance and Nominating Committee
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All members of our Corporate Governance and Nominating Committee
(Governance Committee) have been determined to meet
the NYSE standards for independence. See Director
Independence above.
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Our Governance Committee considers candidates for Board
membership suggested by its members and other Board members, as
well as by our management and stockholders. A stockholder who
wishes to
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recommend a prospective nominee for the Board should follow the
procedures described in this proxy statement under the caption
Evaluation of Director Nominees.
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Committee
Charters
Each of our Board committees operates under a charter adopted by
our Board that governs its duties and conduct. A copy of each
charter can be obtained free of charge from our website,
www.nobleenergyinc.com, or by written request to
us at the address appearing on the first page of this proxy
statement to the attention of our Secretary or by calling
(281) 872-3100.
Oversight
of Risk Management
Our risk management program is overseen by our Board and its
committees, with support from our management and external
consultants. Our Board and its committees interact in this
effort through discussions arising out of committee reports at
each regular Board meeting.
Enterprise risk management is a routinely scheduled agenda item
for regular Board meetings, with our Chairman consulting with
our Lead Independent Director to define the topic and scope of
each discussion. A number of other Board processes support our
risk management effort, such as those by which our Board reviews
and approves our capital budget and certain capital projects,
hedging policy, new country entry, significant acquisitions and
divestitures, equity and debt offerings and the delegation of
authority to our management.
Our Audit Committee plays an important role in risk management
by assisting our Board in fulfilling its responsibility to
oversee the integrity of our financial statements and our
compliance with legal and regulatory requirements. The committee
retains, and interacts directly with, our independent auditors
of financial statements and oil and gas reserves, and holds
periodic reviews with our management to address financial and
related disclosures, key legal and regulatory developments and
possible enhancements to our Code of Business Conduct and Ethics.
Our Governance Committees role in our risk management
program includes annually reviewing developments in the area of
corporate governance and our Corporate Governance Guidelines in
order to recommend appropriate actions to our Board. It also
reviews director independence, Board membership and committee
assignments and makes adjustments in order to ensure that we
have the appropriate director expertise to oversee the
Companys evolving business operations.
Our Environment, Health and Safety (EH&S)
Committee plays an important role in risk management by
assisting our Board in determining whether we have appropriate
policies and management systems in place with respect to
EH&S matters and monitoring and reviewing compliance with
applicable EH&S laws, rules and regulations. This includes
periodic reviews of EH&S performance, our annual EH&S
audit schedule and key EH&S legal and regulatory
developments and trends such as climate change.
Our Compensation Committee reviews our proxy statement
Compensation Discussion and Analysis and discusses its
disclosures with our management. It evaluates our CEOs
performance, considering input from our other independent
directors on Company risk management efforts and other criteria.
The committee also reviews our compensation program, most
recently on October 26, 2009, in an effort to ensure that
it does not create any risks that are reasonably likely to have
a material adverse effect on the Company. There are several
design features of our short- and long-term incentive plans for
all employees that reduce the likelihood of excessive
risk-taking: the program design provides a balanced mix of cash
and equity and short-and long-term incentives; the maximum
payout under our short-term incentive plan is capped at 2.5
times the aggregate target bonus pool for all employees; and all
of our regular U.S. employees participate in the same
short-term incentive plan.
Corporate
Governance Guidelines
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We have adopted a set of Corporate Governance Guidelines,
including standards for director qualification and director
responsibilities. The guidelines can be obtained free of charge
from our website, www.nobleenergyinc.com, or by
written request to us at the address appearing on the first page
of this proxy statement to the attention of our Secretary or by
calling
(281) 872-3100.
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Codes of
Business Conduct and Ethics
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We have adopted a Code of Business Conduct and Ethics that
applies to our directors, officers and employees and sets out
our policy regarding laws and business conduct, contains other
policies relevant to business conduct and sets out a process for
reporting violations thereof.
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We have also adopted a Code of Ethics for Chief Executive and
Senior Financial Officers, violations of which are to be
reported to our Audit Committee.
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A copy of these codes can be obtained free of charge from our
website, www.nobleenergyinc.com, or by written
request to us at the address appearing on the first page of this
proxy statement to the attention of our Secretary or by calling
(281) 872-3100.
Amendments to these codes will be promptly posted on our website.
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Personal
Loans to Executive Officers and Directors
We comply with, and operate in a manner consistent with,
applicable law prohibiting extensions of credit in the form of
personal loans to, or for the benefit of, our directors and
executive officers.
Directors
Attendance at Annual Meetings of Stockholders
All of our directors are expected to attend each annual meeting
of our stockholders. A director who is unable to attend the
annual meeting, which it is understood will occur on occasion,
is expected to notify the Chairman of the Board in advance of
such meeting. Attendance at our annual meeting will be
considered by our Governance Committee in assessing each
directors performance. Last year, all of our directors
attended our annual meeting of stockholders.
Communication
with the Board of Directors
Stockholders and other interested parties may contact any member
of our Board, any Board committee or any chair of any such
committee by mail, electronically or by calling our independent,
toll-free compliance line. To communicate by mail with our
Board, any individual director, or any group or committee of
directors, correspondence should be addressed to our Board or
any individual director or group or committee of directors by
either name or title. All correspondence should be sent to Noble
Energy, Inc., Attention: Secretary, at 100 Glenborough Drive,
Suite 100, Houston, Texas
77067-3610.
To communicate with any of our directors electronically,
stockholders should go to our website at
www.nobleenergyinc.com. Under the headings
Corporate Governance/Corporate Governance
Guidelines, you will find a link under Exhibit 3
(Shareholder Communications with Directors) that may
be used for writing an electronic message to our Board, any
individual director, or any group or committee of directors. In
addition, stockholders may call our independent, toll-free
compliance line listed on our website under the heading
Corporate Governance/Audit Committee Complaints
Policy.
All stockholder communications properly received will be
reviewed by the office of our General Counsel to determine
whether the contents represent a message to our directors. Any
contents that are not in the nature of advertising, promotions
of a product or service, or patently offensive material will be
forwarded promptly to the appropriate director or directors.
7
VOTING
SECURITIES
Only holders of record of our common stock, par value
$3.331/3
per share, at the close of business on March 9, 2010, the
record date for our annual meeting, are entitled to notice of,
and to vote at, the meeting. A majority of the shares of common
stock entitled to vote, present in person or represented by
proxy, is necessary to constitute a quorum. Abstentions and
broker non-votes on filed proxies and ballots are counted as
present for establishing a quorum. On the record date for our
annual meeting, there were issued and outstanding
174,863,203 shares of common stock. Each share of common
stock is entitled to one vote.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tabulation sets forth, as of March 9, 2010,
information with respect to the only persons who were known to
us to be beneficial owners of more than five percent of the
outstanding shares of our common stock, based on statements
filed with the SEC pursuant to Section 13(g) or 13(d) of
the Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
of Common Stock
|
|
Percent
|
Name and Address of Beneficial Owner
|
|
Beneficially Owned
|
|
of Class
|
|
FMR LLC
|
|
|
16,664,830
|
(1)
|
|
|
9.5
|
%
|
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellington Management Company, LLP
|
|
|
13,401,018
|
(2)
|
|
|
7.7
|
%
|
75 State Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackrock, Inc.
|
|
|
10,670,169
|
(3)
|
|
|
6.1
|
%
|
40 East 52nd Street
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital World Investors
|
|
|
9,759,000
|
(4)
|
|
|
5.6
|
%
|
333 South Hope Street
Los Angeles, CA 90071
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Included in the shares of common stock that are beneficially
owned by FMR LLC are (a) 16,573,766 shares
beneficially owned by Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR Corp. and an
investment adviser registered under the Investment Advisers Act
of 1940 (Investment Advisers Act) (which includes
13,433,836 shares held by Fidelity Contrafund, an
investment company), (b) 1,370 shares beneficially
owned by Strategic Advisors, Inc., a wholly-owned subsidiary of
FMR LLC and an investment adviser registered under the
Investment Advisers Act, and (c) 89,694 shares
beneficially owned by Pyramis Global Advisors
Trust Company, an indirect wholly-owned subsidiary of FMR
LLC and a bank as defined under Section 3(a)(6) of the
Exchange Act. |
|
(2) |
|
Wellington Management Company LLP, in its capacity as investment
adviser, may be deemed to beneficially own
13,401,018 shares of common stock, which are held of record
by clients of Wellington Management Company LLP. Wellington has
shared voting power with respect to 5,915,416 shares of
common stock and shared dispositive power with respect to
13,381,318 shares of common stock. |
|
(3) |
|
Blackrock, Inc. is deemed to be the beneficial owner of
10,670,169 shares of common stock and has sole voting and
dispositive power with respect to such shares. |
|
(4) |
|
Capital World Investors is deemed to be the beneficial owner of
9,759,000 shares of common stock as a result of CRMC acting
as investment adviser to various investment companies registered
under the Investment Company Act. Capital World Investors has
sole voting power with respect to 2,900,000 shares of
common stock and dispositive power with respect to
9,759,000 shares of common stock. |
8
PROPOSAL I
ELECTION
OF DIRECTORS
As of the date of this proxy statement, our Board consists of
nine directors, eight of whom are independent. Provided below is
information regarding the business experience of each nominee as
well as the qualifications that led our Board to select each
nominee for election to the Board. All directors are elected
annually to serve until the next annual meeting and until their
successors are elected.
Directors in uncontested elections will be elected by majority
vote of the shares cast at the 2010 annual meeting. A majority
of the votes cast means that the number of votes cast
for a director nominee must exceed the number of
votes cast against that director nominee. In
contested elections (an election in which the number of nominees
for director is greater than the number of directors to be
elected) the vote standard will be a plurality of votes cast.
In accordance with our Corporate Governance Guidelines, our
Board will nominate for election or re-election as a director
only candidates who agree to tender, promptly following the
annual meeting, irrevocable resignations that will be effective
upon (i) the failure to receive the required vote at the
next annual meeting and (ii) acceptance by the Board. In
addition, our Board will fill director vacancies and new
directorships only with candidates who agree to tender the same
form of resignation promptly following their appointment to the
Board.
If an incumbent director fails to receive the required vote for
re-election, then, within 90 days following certification
of the stockholder vote, our Governance Committee will act to
determine whether to accept the directors resignation and
will submit its recommendation for prompt consideration by our
Board, and the Board will act on the Committees
recommendation. Promptly thereafter, our Board will publicly
disclose its decision-making process and decision regarding
whether to accept the directors resignation (or the
reason(s) for rejecting the resignation, if applicable).
Any director who tenders a resignation pursuant to this
provision of our Corporate Governance Guidelines may not
participate in the Governance Committee recommendation or Board
action regarding whether to accept his or her resignation. If
each member of our Governance Committee fails to receive the
required vote in favor of his or her election in the same
election, then a majority of the directors who did receive the
required vote will appoint a committee of independent directors
to consider the resignations and recommend to the Board whether
to accept them. However, if three or fewer independent directors
receive the required vote for election, all directors may
participate in the action regarding whether to accept the
resignations.
Our Board expects that all of the nominees will be available to
serve as directors as indicated. In the event that any nominee
should become unavailable, however, the proxyholders will vote
for a nominee or nominees who would be designated by our Board
unless the Board chooses to reduce the number of directors
serving on our Board.
Company
Nominees for Director
Jeffrey L. Berenson Mr. Berenson,
age 59, is President and Chief Executive Officer of
Berenson & Company, a private investment banking firm
in New York City that he co-founded in 1990. From 1978 until
co-founding Berenson & Company, he was with Merrill
Lynchs Mergers and Acquisitions department, becoming head
of that department in 1986 and then co-head of its Merchant
Banking unit in 1988. Mr. Berenson was appointed to the
Board of Directors of Patina Oil & Gas Corporation
(Patina) in December 2002 and joined our Board upon
completion of our merger with Patina on May 16, 2005. He is
also a member of the Board of Directors of Epoch Holdings
Corporation. Mr. Berenson brings a strong financial and
executive management background to our Board as well as
important historical perspective on the organization and assets
acquired in our Patina merger.
Michael A. Cawley Mr. Cawley,
age 62, has served as President and Chief Executive Officer
of The Samuel Roberts Noble Foundation, Inc.
(Foundation) since February 1, 1992, after
serving as Executive Vice President of the Foundation since
January 1, 1991. Prior to 1991, Mr. Cawley was the
President of Thompson, Cawley, Veazey & Burns, a
professional corporation, attorneys at law. Mr. Cawley has
served as a trustee of the Foundation since 1988 and is also a
director of Noble Corporation. He has served on our Board since
1995 and has been our Lead
9
Independent Director since 2001. Mr. Cawley brings a strong
legal and executive management background to our Board,
complementary to his role as our Lead Independent Director.
Edward F. Cox Mr. Cox, age 63, is
chair of The New York Republican State Committee
(NYRSC) and was previously for more than five years
a partner in the law firm of Patterson Belknap Webb &
Tyler llp, New York, New York, serving as the chair of the
firms corporate department and as a member of its
management committee. He is chair of the New York League of
Conservation Voters Education Fund and for more than five years
prior to his election as NYRSC chair in 2009 was chair of the
community college and charter school committees of the Trustees
of The State University of New York and of the State University
Construction Fund, and was a member of New Yorks
merit selection constitutional Commission on Judicial
Nomination. During the two years leading up to his 2009 election
as NYRSC chair, Mr. Cox served as the New York State Chair
of Senator John McCains presidential campaign. He has
served on our Board since 1984. Mr. Cox brings a strong
legal background to our Board, with experience in corporate
governance matters.
Charles D. Davidson Mr. Davidson,
age 60, has served as our Chief Executive Officer since
October 2000 and has served as Chairman of our Board since April
2001. In addition, he served as our President from October 2000
through April 2009. Prior to October 2000, he served as
President and Chief Executive Officer of Vastar Resources, Inc.
(Vastar) from March 1997 to September 2000 (Chairman
from April 2000) and was a Vastar director from March 1994
to September 2000. From September 1993 to March 1997, he served
as a Senior Vice President of Vastar. From 1972 to October 1993,
he held various positions with ARCO. Mr. Davidson brings a
strong oil and gas operational and executive management
background to our Board, having industry experience in domestic
and international operations.
Thomas J. Edelman Mr. Edelman,
age 59, founded Patina Oil & Gas Corporation and
served as its Chairman and Chief Executive Officer from its
formation in 1996 through its merger with Noble Energy, Inc. in
2005. He co-founded Snyder Oil Corporation and was its President
from 1981 through 1997. He served as Chairman and Chief
Executive Officer and later as Chairman of Range Resources
Corporation from 1988 through 2003. From 1980 to 1981, he was
with The First Boston Corporation and, from 1975 through 1980
with Lehman Brothers Kuhn Loeb Incorporated. Mr. Edelman is
currently Managing Partner of White Deer Energy LP, a
recently-formed energy private equity fund. He is also President
of Lenox Hill Neighborhood House, a Trustee and Chair of the
Investment Committee of The Hotchkiss School, a member of the
Board of Directors of Georgetown University and Chairman of
Berenson & Company. Mr. Edelman brings a strong
financial and executive management background to our Board as
well as important historical perspective on the organization and
assets acquired in our Patina merger.
Eric P. Grubman Mr. Grubman,
age 52, has served as Executive Vice President of the
National Football League since 2004. He was responsible for
Finance and Strategic Transactions from 2004 to 2006, and has
served as the Leagues President of Business Ventures from
2006 to present. Mr. Grubman was a private investor from
2001 to 2004, Co-President of Constellation Energy Group, Inc.
from 2000 to 2001 and Partner and Co-Head of the Energy Group at
Goldman Sachs from 1996 to 2000. He joined our Board on
January 27, 2009. Mr. Grubman brings a strong
financial and executive management background to our Board, and
familiarity with the energy sector through his prior investment
banking experience.
Kirby L. Hedrick Mr. Hedrick,
age 57, served as Executive Vice President over upstream
operations for Phillips Petroleum Company from 1997 until his
retirement in 2000. He joined our Board on August 1, 2002.
Mr. Hedrick brings a strong oil and gas operational and
executive management background to our Board, having industry
experience that includes major international project development.
Scott D. Urban Mr. Urban, age 56,
served in executive management positions at Amoco and its
successor, BP, from 1977 to 2005. At the time of his retirement
from BP in 2005, he was Group Vice President, Upstream for
several profit centers including North America Gas, Alaska,
Egypt and Middle East and, before that, Group Vice President,
Upstream North Sea. He held various positions at Amoco
including, at the time of its merger with BP, Group Vice
President, Worldwide Exploration. Mr. Urban is also a
partner in Edgewater Energy Partners, an organizational
consulting firm for energy-related industries, and a member of
the Board of Directors of Pioneer Drilling. He joined our Board
on October 23, 2007. Mr. Urban brings a strong oil and
gas operational and executive management background to our
Board, having industry experience that includes major
international project development.
10
William T. Van Kleef Mr. Van Kleef,
age 58, served in executive management positions at Tesoro
Corporation (Tesoro) from 1993 to 2005, most
recently as Tesoros Executive Vice President and Chief
Operating Officer. During his tenure at Tesoro, Mr. Van
Kleef held various positions, including President, Tesoro
Refining and Marketing, and Executive Vice President and Chief
Financial Officer. Before joining Tesoro, Mr. Van Kleef, a
Certified Public Accountant, served in various financial and
accounting positions with Damson Oil from 1982 to 1991, most
recently as Senior Vice President and Chief Financial Officer.
He joined our Board on November 11, 2005. Mr. Van
Kleef is also a member of the Board of Directors of Oil States
International, Inc. Mr. Van Kleef brings a strong
financial, accounting and executive management background to our
Board, as well as experience in the downstream side of our
business.
Generally, our By-laws provide that a stockholder must deliver
written notice to our Secretary no later than 120 calendar
days prior to our annual meeting naming the stockholders
nominee(s) for director and specifying certain information
concerning the stockholder and nominee(s) as described below
under the section Evaluation of Director Nominees.
Accordingly, a stockholders nominee(s) for director to be
presented at our 2011 annual meeting of stockholders must be
received by us no later than December 28, 2010.
Our Board unanimously recommends that stockholders vote
FOR the election of each of its nine nominees.
11
INFORMATION
CONCERNING THE BOARD OF DIRECTORS
Our Board held thirteen meetings in 2009, consisting of five
regular meetings, its annual organizational meeting and seven
special meetings, and on one occasion took action by unanimous
written consent.
Evaluation
of Director Nominees
Our Governance Committee believes that the minimum
qualifications for serving as a director of the Company are that
a nominee demonstrate, by significant accomplishment in his or
her field, an ability to make a meaningful contribution to our
Boards oversight of the business and affairs of the
Company and have an impeccable record and reputation for honest
and ethical conduct in both his or her professional and personal
activities. Nominees for director shall be those people who,
after taking into account their skills, expertise, integrity,
diversity, character, judgment, age, independence, corporate
experience, length of service, potential conflicts of interest
and commitments (including, among other things, service on the
boards or comparable governing bodies of other public companies,
private business companies, charities, civic bodies or similar
organizations) and other qualities, are believed to enhance our
Boards ability to manage and direct, in an effective
manner, the affairs and business of the Company, including, when
applicable, to enhance the ability of committees of our Board to
fulfill their duties and to satisfy any independence
requirements imposed by law, regulation or listing standards of
the NYSE.
In general, nominees for director should have an understanding
of the workings of large business organizations such as the
Company and senior level executive experience, as well as the
ability to make independent, analytical judgments, the ability
to be an effective communicator and the ability and willingness
to devote the time and effort to be an effective and
contributing member of our Board. In addition, our Governance
Committee will examine a candidates specific experiences
and skills, time availability in light of other commitments,
potential conflicts of interest and independence from management
and the Company. Our Governance Committee will also seek to have
our Board represent a diversity of backgrounds, experience,
gender and race.
Our Governance Committee will identify potential nominees by
asking current directors and executive officers to notify the
committee if they become aware of persons meeting the criteria
described above who have had a change in circumstances that
might make them available to serve on our Board for
example, retirement as a CEO or CFO of a public company or
exiting government or military service or business and civic
leaders in the communities in which our facilities are located.
Our Governance Committee also, from time to time, will engage
firms that specialize in identifying director candidates. Our
Governance Committee will also consider candidates recommended
by our stockholders.
Once a person has been identified by our Governance Committee as
a potential candidate, the committee may collect and review
available information regarding the person to assess whether the
person should be considered further. If our Governance Committee
determines that the person warrants further consideration, the
committee Chair or another member of our Governance Committee
will contact the individual. Generally, if the person expresses
a willingness to be considered and to serve on our Board, our
Governance Committee will request information, review the
persons accomplishments and qualifications, including in
light of any other candidates that the committee might be
considering, and conduct one or more interviews with the
candidate. In certain instances, Governance Committee members
may contact one or more references provided by the candidate or
may contact other members of the business community or other
persons that may have greater first-hand knowledge of the
candidates accomplishments. Our Governance
Committees evaluation process will be the same whether or
not a candidate is recommended by a stockholder, although our
Board may take into consideration the number of shares held by
the recommending stockholder and the length of time that such
shares have been held.
Our Governance Committee annually reviews its long-term plan for
Board composition, giving consideration to the foregoing
factors. Based on this review in July 2009, the committee
concluded that the current Board size and composition continued
to be appropriate in light of the Companys focus and
operations.
Stockholder
Nominees
Our Governance Committee will consider director nominees of
stockholders, provided that such recommendations are made in
writing to the attention of our Secretary and generally received
not less than 120 days before the
12
anniversary date of the immediately previous years annual
meeting of stockholders. A stockholder must include the
following information with each recommendation for a director
nominee:
|
|
|
|
|
the name and address of the stockholder and evidence of the
stockholders ownership of our stock, including the number
of shares owned and the length of time of ownership, as well as
any other direct or indirect pecuniary or economic interest the
person may have in any of our stock;
|
|
|
|
whether the stockholder intends to appear in person or by proxy
at our annual stockholders meeting to make the nomination;
|
|
|
|
a description of all arrangements or understandings between the
stockholder and the nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
is made;
|
|
|
|
the name, age and business and residence address of the
candidate, the candidates résumé or a listing of
his or her principal occupation or employment and qualifications
to be a member of our Board and the candidates consent to
be named as a director if selected by our Governance Committee
and nominated by our Board; and
|
|
|
|
the class and number of shares of our stock that are
beneficially owned by the candidate and any other direct or
indirect pecuniary economic interest that the candidate may have
in any of our stock.
|
Changes
in the Board of Directors
Bruce A. Smith resigned from our Board effective
February 1, 2008. After evaluation of director candidates
to fill the position vacated by Mr. Smith, Eric P. Grubman
was appointed to our Board on January 27, 2009.
Additionally, on October 27, 2009 our Board determined that
Thomas J. Edelman was independent under the NYSE independence
standards and applicable SEC rules and appointed him to our
Governance Committee.
Committees
of the Board of Directors
Our Board has four standing committees, whose names, current
members and purposes are as follows:
Audit Committee William T. Van Kleef, Chair;
Michael A. Cawley; Eric P. Grubman; and Scott D. Urban. The
primary purpose of our Audit Committee is to: (1) assist
our Board in fulfilling its responsibility to oversee the
integrity of our financial statements, our compliance with legal
and regulatory requirements, the independent auditors
qualifications and independence, and the performance of our
internal audit function and independent auditor and
(2) prepare a committee report as required by the SEC to be
included in our annual proxy statement. Our Audit Committee held
five meetings during 2009. For more details, see information
under the section Report of the Audit Committee.
Compensation, Benefits and Stock Option
Committee Kirby L. Hedrick, Chair; Jeffrey L.
Berenson; and Edward F. Cox. The purpose of our Compensation
Committee is to: (1) review and approve our goals and
objectives in the areas of: (a) salary and bonus
compensation, (b) benefits, and (c) equity-based
compensation, as they relate to our CEO, evaluating our
CEOs performance based on those goals and objectives and,
either as a committee or together with the other independent
directors (as directed by our Board), determine and approve our
CEOs compensation level based on that evaluation;
(2) make recommendations to our Board with respect to
non-CEO executive officer compensation, incentive-compensation
plans and equity-based plans that are subject to Board approval;
and (3) produce an annual report on executive compensation
as required by the SEC to be included, or incorporated by
reference, in our proxy statement or other applicable SEC
filings. Our Board has delegated authority to our Compensation
Committee to determine and approve our compensation philosophy;
the annual salary, bonus, equity-based compensation and other
benefits applicable to our executive officers; and equity-based
compensation applicable to non-executive-officer employees. Our
Compensation Committee held ten meetings during 2009. For more
details, see information under the section Compensation
Discussion and Analysis.
Corporate Governance and Nominating Committee
Michael A. Cawley, Chair; Jeffrey L. Berenson; Edward F. Cox;
Thomas J. Edelman; Eric P. Grubman, Kirby L. Hedrick; Scott D.
Urban; and William T. Van Kleef. The overall purpose of our
Governance Committee is to: (1) take a leadership role in
providing a focus
13
on corporate governance to enable and enhance our short- and
long-term performance; (2) engage in appropriate
identification, selection, retention and development of
qualified directors consistent with criteria approved by our
Board; (3) develop, and recommend to our Board, a set of
corporate governance principles or guidelines applicable to us;
(4) advise our Board with respect to the Boards
composition, procedures and committees; and (5) oversee the
evaluation of our Board and management. Our Governance Committee
held five meetings during 2009.
Environment, Health and Safety Committee
Edward F. Cox, Chair; Charles D. Davidson; Thomas J. Edelman;
Kirby L. Hedrick; and Scott D. Urban. The overall purpose of our
Environment, Health and Safety Committee is to assist our Board
in determining whether we have appropriate policies and
management systems in place with respect to environment, health
and safety (EH&S) matters and to monitor and
review compliance with applicable EH&S laws, rules and
regulations. Our Environment, Health and Safety Committee held
three meetings during 2009.
Meeting
Attendance
All but one of our directors attended at least 75% of the
meetings of our Board and its committees of which such director
was a member during 2009. Mr. Edelman attended 71% of our
Board and applicable committee meetings last year.
Compensation
Committee Interlocks and Insider Participation
Kirby L. Hedrick, Jeffrey L. Berenson and Edward F. Cox served
on our Compensation Committee for all of 2009. There were no
Compensation Committee interlocks nor insider (employee)
participation during 2009.
PROPOSAL II
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITOR
The Audit Committee of our Board has appointed the firm of KPMG
LLP to serve as our independent auditor for the fiscal year
ending December 31, 2010. This firm has audited our
accounts since May 2002. Although action by our stockholders on
this matter is not required, our Audit Committee believes that
it is important to seek stockholder ratification of this
appointment in light of the critical role played by our
independent auditor in maintaining the integrity of our
financial controls and reporting.
One or more representatives of KPMG LLP are expected to be
present at our annual meeting, will be able to make a statement
if they so desire, and will be available to respond to
appropriate questions.
Our Board unanimously recommends that stockholders vote
FOR ratification of the appointment of KPMG LLP as
our independent auditor.
14
SECURITY
OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following tabulation sets forth, as of March 9, 2010,
the shares of common stock beneficially owned by each director,
each named executive officer listed in the Summary Compensation
Table included in this proxy statement, and all directors and
named executive officers as a group.
|
|
|
|
|
|
|
|
|
|
|
Common Stock Beneficially Owned(1)
|
|
|
Number of
|
|
Percent of
|
Name
|
|
Shares(2)(3)
|
|
Class
|
|
Director
|
|
|
|
|
|
|
|
|
Jeffrey L. Berenson
|
|
|
43,819
|
|
|
|
*
|
|
Michael A. Cawley
|
|
|
54,436
|
(4)
|
|
|
*
|
|
Edward F. Cox
|
|
|
24,495
|
(5)
|
|
|
*
|
|
Charles D. Davidson
|
|
|
1,317,473
|
(6)
|
|
|
*
|
|
Thomas J. Edelman
|
|
|
2,095,636
|
(7)
|
|
|
1.2
|
%
|
Eric P. Grubman
|
|
|
15,794
|
|
|
|
*
|
|
Kirby L. Hedrick
|
|
|
74,995
|
|
|
|
*
|
|
Scott D. Urban
|
|
|
26,753
|
|
|
|
*
|
|
William T. Van Kleef
|
|
|
68,995
|
|
|
|
*
|
|
Named Executive Officer (excluding any director named
above)
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
128,860
|
|
|
|
*
|
|
Susan M. Cunningham
|
|
|
320,130
|
|
|
|
*
|
|
Kenneth M. Fisher
|
|
|
46,583
|
|
|
|
*
|
|
David L. Stover
|
|
|
325,386
|
|
|
|
*
|
|
All directors and named executive officers as a group
(13 persons)
|
|
|
4,543,355
|
|
|
|
2.6
|
%
|
|
|
|
* |
|
Represents less than one percent of outstanding shares of common
stock. |
|
(1) |
|
Unless otherwise indicated, all shares are directly held with
sole voting and investment power. |
|
(2) |
|
Includes shares not outstanding but subject to options that are
currently exercisable (or that will become exercisable on or
before May 8, 2010), as follows:
Mr. Berenson 18,612 shares;
Mr. Cawley 50,412 shares;
Mr. Cox 15,412 shares;
Mr. Davidson 1,052,021 shares;
Mr. Edelman 26,612 shares;
Mr. Grubman 10,536 shares;
Mr. Hedrick 65,412 shares;
Mr. Urban 17,929 shares; Mr. Van
Kleef 26,612 shares; Mr. Cook
83,094 shares; Ms. Cunningham
255,085 shares; and Mr. Stover
225,437 shares. |
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(3) |
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Includes restricted stock awards not currently vested, as
follows: 1,200 shares held by each of
Messrs. Berenson, Cawley, Cox, Edelman, Grubman, Hedrick,
Urban, and Van Kleef; Mr. Cook
31,412 shares; Ms. Cunningham
42,466 shares; Mr. Davidson
130,707 shares; Mr. Fisher
46,583 shares; and Mr. Stover
73,598 shares. |
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(4) |
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Mr. Cawley is one of 12 trustees of The Samuel Roberts
Noble Foundation, Inc. The Foundation holds of record
1,427,166 shares of our common stock. As with other
corporate action, the voting of the shares held by the
Foundation requires a majority vote of its trustees at a meeting
at which a quorum of trustees is present. Where there are more
than three trustees of a company and a majority vote is required
for corporate action, no individual trustee is deemed to have
beneficial ownership of securities held by such company.
Accordingly, the 1,427,166 shares held of record by the
Foundation are not reflected in Mr. Cawleys
beneficial ownership of common stock. |
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(5) |
|
Includes 12,000 shares held by spouse. |
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(6) |
|
Includes shares indirectly held in a qualified 401(k) Plan, as
follows: Mr. Davidson 3,234 shares. |
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(7) |
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Includes 1,100,000 shares held under deferred compensation
plans. |
15
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
The first part of our Compensation Discussion and Analysis,
entitled Compensation Considerations in the Current Environment,
discusses how our executive compensation program operates in the
current economic environment. The second part, entitled Overview
of Our Executive Compensation Program, discusses the elements
and provides an analysis of our executive compensation program.
The third part includes a presentation of executive compensation
in tabular form.
Compensation
Considerations in the Current Environment
Our goal continues to be to link compensation strongly to
performance through the use of financial incentives that are
tied to the Companys operational and financial
performance. 2009 was a challenging year in the energy industry
due to the prolonged recession, constraint in the credit markets
and commodity price volatility. We reduced our capital spending
program to $1.3 billion as compared to $2.3 billion
for 2008. We were able nonetheless to move forward on several
major development projects as well as pursue additional
exploration opportunities that resulted in important new
discoveries. In this difficult environment, we believe that our
2009 compensation program was balanced and reasonable.
Our 2009 financial results generally fell short of the records
set in 2008. For example, key 2009 financial results included a
net loss of $131 million, as compared to record net income
of $1.4 billion for 2008; discretionary cash flow of
$1.69 billion, as compared to a record $2.4 billion
for 2008; and cash flows provided by operating activities of
$1.5 billion, as compared to $2.3 billion for 2008.
Discretionary cash flow is a non-GAAP financial measure that is
calculated by adding back depreciation, depletion, amortization
and various other non-cash expense items to net income. Annual
daily production was down approximately 2% from the record set
in 2008, largely due to reduced sales volumes in Israel, and
reserves were down 44 million barrels of oil equivalent
(MMBoe), largely due to lower prices and adjustments
resulting from the SECs new reserve reporting rules.
However, prior to negative revisions caused by lower prices and
the new reserve reporting rules, proved reserve additions
totaled 79 MMBoe representing 103% of 2008 production.
While these financial results were below the records seen in
2008, our total annual stockholder return was considerably
better in 2009, at 46.5% compared to a negative 37.5% in 2008.
Stockholder return represents the change in capital value of our
common stock for the period indicated, plus dividends, expressed
as a percentage.
Our Compensation Committee recognizes that value-creating
performance by a group of executives does not always immediately
translate into financial results or appreciation in our stock
price, particularly in periods of economic stress and commodity
price volatility. The Company made exceptional progress on a
number of strategic objectives during 2008 and 2009 that we
believe contributed to improved stock performance in 2009 and a
considerable enhancement of long-term value for the Company and
its stockholders. For example, in January 2009 we announced a
significant discovery at Tamar, offshore Israel, the largest
discovery in our history. Also during 2009, we made substantial
progress on our significant portfolio of long-term growth
projects, including the sanctioning of the oil development
projects at Aseng (formerly Benita) in offshore Equatorial
Guinea, and at Isabela/Santa Cruz (which we refer to
collectively as Galapagos) in the deepwater Gulf of Mexico, as
well as making important progress on our plans for the Tamar
discovery. These and other major development projects are
expected to create value by offering long-lived, sustained cash
flows after a period of investment, and attractive financial
returns.
Taking these factors into account, executive officer salaries
and payouts under our short-term incentive plan were generally
unchanged in 2009 compared to 2008.
Overview
of Our Executive Compensation Program
Our executive compensation program is overseen by our
Compensation Committee, with input from our management and
outside compensation consultants.
16
Compensation
Program Oversight
Role
of Compensation Committee
The purpose of our Compensation Committee is set out in detail
in the committees charter but generally is to:
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review and approve our goals and objectives relating to CEO
compensation, evaluating our CEOs performance based on
those goals and objectives and determining and approving our
CEOs compensation level based on that evaluation;
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make recommendations to our Board with respect to non-CEO
executive officer compensation; and
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produce an annual report on executive compensation as required
by the SEC to be included, or incorporated by reference, in our
proxy statement or other applicable SEC filings.
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The committee also serves an important role in setting the
overall compensation philosophy, goals and objectives of the
Company.
Our Board has delegated authority to our Compensation Committee
to determine and approve (1) our compensation philosophy,
(2) the compensation of our non-CEO executive officers, and
(3) equity-based compensation applicable to
non-executive-officer employees.
Membership
Our Board appoints our Compensation Committee members and Chair,
and these appointees continue to be members until their
successors are elected and qualified or until their earlier
resignation or removal. Any member of our Compensation Committee
may be removed, with or without cause, by our Board. Our
Governance Committee, after consultation with our Lead
Independent Director, makes recommendations to our Board with
respect to the appointment of Board members to all of its
committees considering, in the case of our Compensation
Committee, criteria such as experience in compensation matters,
familiarity with our management and other key personnel,
understanding of public company compensation issues, time
availability necessary to fulfill committee responsibilities and
independence and other regulatory requirements. No member of our
Compensation Committee participates in any of our employee
compensation programs, and our Board has determined that none of
our Compensation Committee members has any material business
relationship with us.
Independence
We believe that these membership criteria are met by Kirby L.
Hedrick, Jeffrey L. Berenson and Edward F. Cox, who currently
serve on our Compensation Committee and did so throughout 2009.
Each has been determined by our Board to meet the NYSE standards
for independence, to be a Non-Employee Director as
defined in
Rule 16b-3
under the Exchange Act, and to be an outside
director as defined for purposes of Section 162(m) of
the Internal Revenue Code.
Meetings
Our Compensation Committees meeting schedule is determined
annually and meeting agendas are based on an annual calendar of
recurring agenda items approved by the committee. The meeting
agendas may include additional items as determined by the
committee in its discretion, and the committee may also hold
special meetings. Committee meeting agendas are reviewed by our
Lead Independent Director and approved by the committee Chair.
Our Compensation Committee held ten meetings during 2009.
Delegation
of Authority
In an effort to minimize the need for special meetings of our
Compensation Committee to address routine compensation matters
involving non-executive-officer employees, the committee has
delegated limited authority to our CEO to (1) grant stock
options and restricted stock to new hires for employment
inducement purposes, (2) approve cash retention payments,
and (3) make adjustments related to change of control
severance plan participation resulting from organizational
changes affecting employees not participating in the Change of
Control
17
Severance Plan for Executives. Actions taken by our CEO under
these delegations are required to be reported to our
Compensation Committee at its next regularly scheduled meeting
and the committee reviews the appropriateness of the delegation
on an annual basis.
Role
of Management
Our CEO and our Vice President Human Resources
generally attend Compensation Committee meetings and provide
input to the committee with respect to executive compensation,
key job responsibilities, performance objectives and
compensation trends. They also coordinate with our compensation
consultant to ensure that committee requests regarding executive
compensation matters are addressed. We believe that our CEO and
Vice President Human Resources are best qualified to
support the committee in these areas given their understanding
of our business and personnel, compensation program and
competitive environment. In this supporting role they may
provide information and recommendations relevant to establishing
performance measures, weightings, targets, and similar items
that affect compensation, including that of our CEO and other
executive officers, and may request that our Compensation
Committee schedule special meetings to address executive
compensation matters as appropriate. Our CEO is closely involved
in assessing the performance of our executive officers, and
advising our Compensation Committee in that regard. Our CEO and
Vice President Human Resources may also communicate
directly with our compensation consultant in this supporting
role. Our Compensation Committee is not obligated to accept our
managements recommendations with respect to executive
compensation matters, and meets in executive session to discuss
such matters outside of the presence of our management. During
2009, the committee held four executive sessions.
Role
of Compensation Consultant
Our Compensation Committee may retain, at our expense,
independent compensation consultants it deems advisable to
assist it in executive compensation matters. The committee meets
with the compensation consultants, with and outside the presence
of our management, to review findings based on market research
regarding executive compensation and considers those findings in
determining and making adjustments to our executive compensation
program.
The committee continued to retain Towers Perrin as its
independent compensation consultant for purposes of reviewing
our 2009 executive compensation program and providing
comparative market data on compensation practices and programs
based on an analysis of our peer companies and other factors. In
making this decision, the committee considered Towers
Perrins past performance and its familiarity with our
executive compensation program and the compensation programs of
our peer companies and sector, the benefits of retaining the
same consultant compared to those of engaging a different
consultant, and independence taking into account that of the
total approximate $101,000 we paid to Towers Perrin in 2009,
approximately $84,000 represented consulting services in the
area of executive compensation. The committee also considered
the impact of the late-2009 merger of Towers Perrin and Watson
Wyatt, concluding that it did not have a material impact on the
executive compensation consulting services being provided to us
in 2009.
Towers Perrin also provided compensation consulting services to
our Governance Committee in 2009 in reviewing and determining
fees and equity compensation paid or awarded, as the case may
be, to our non-employee directors.
Other
Compensation Considerations
Compensation
Peer Group
When making compensation decisions, we also look at the
compensation of our CEO and other executive officers relative to
that paid to similarly-situated executives at companies that we
consider to be our peers this is often referred to
as benchmarking. We consider benchmarking data in
determining executive officer base salary, our short-term
incentive plan target bonus percentage factors, equity grant
levels and the overall structure of our compensation program. We
believe, however, that a benchmark should be just
that a point of reference for
measurement but not the determinative factor for our
executives compensation. Because comparative compensation
information is just one of the several analytic tools that are
used in setting executive compensation, our
18
Compensation Committee has discretion in determining the nature
and extent of its use. Further, given the limitations associated
with comparative pay information for setting individual
executive compensation, the committee may decide to not use
comparative compensation information at all in the course of
making compensation decisions.
Our Compensation Committee maintained the same peer group of
companies during 2008 and 2009, which consisted of larger and
smaller publicly traded oil and gas exploration and production
companies that have similar operating and financial
characteristics. With the assistance of our CEO and our
compensation consultant, as appropriate, our Compensation
Committee reviews the composition of the peer group annually to
ensure that companies remain relevant for comparative purposes.
After review in January 2010, our Compensation Committee removed
XTO Energy Inc. from that list given its pending merger with
ExxonMobil Corporation, but added Talisman Energy Inc., a
Canadian company with dual listing on the NYSE and a balance of
U.S. and international projects similar in size and scope
to our operations. Our compensation peer group for 2010,
therefore, consists of:
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Anadarko Petroleum Corp.
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Newfield Exploration Company
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Apache Corp.
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Noble Energy, Inc.
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Cabot Oil & Gas Corporation
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Pioneer Natural Resources Company
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Chesapeake Energy Corp.
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Plains Exploration and Production Company
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Devon Energy Corp.
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Range Resources Corporation
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EOG Resources, Inc.
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Southwestern Energy Company
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Forest Oil Corp.
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Talisman Energy Inc.
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Murphy Oil Corp.
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With these changes, we believe that this group of companies
continues to be representative of the sector in which we
operate, and includes companies of similar market size and
geographic scope of operations, nature and relative complexity
of business and roles and responsibilities of executive officers.
Internal
Pay Equity
When making executive compensation decisions, our Compensation
Committee analyzes total compensation with a focus on base
salary, short-term incentive plan and long-term incentive plan
elements. To facilitate this analysis, our CEO and Vice
President Human Resources work with our compensation
consultant to provide the committee comparative compensation
information in these areas for each executive officer, along
with summary information on post-employment compensation trends,
benefits and other relevant factors. This information is
compiled in written report format and includes recent publicly
available information and other market data, as well as tally
sheets detailing the base salary, short-term incentive plan and
long-term incentive plan elements. We believe that this
information provides our Compensation Committee with a
sufficient basis to evaluate executive officer compensation by
presenting a comprehensive review of compensation data on each
executive officer and the opportunity for related discussion
with our compensation consultant.
While comparisons to compensation levels at companies in our
compensation peer group are helpful in assessing the overall
competitiveness of our executive compensation program, we
believe that our program must also be internally consistent and
equitable. In its review of total compensation, our Compensation
Committee considers the relationship between our CEOs
total compensation and that of our other executive officers. The
committee has not adopted a formal policy regarding internal pay
equity, but for 2009 concluded that CEO compensation was
equitable compared to that of our President and Chief Operating
Officer (COO) and other named executive officers in
recognition of the CEOs broad responsibility and
accountability for the Companys strategy and operations,
compliance and controls, investor relations and role as Chairman
of our Board. The 2009 total compensation of our COO was
likewise found to be equitable compared to that of the next
named executive officer in recognition of the COOs broad
responsibility for the Companys worldwide exploration and
production operations, our Compensation Committees views
on that position relative to the other named executive officer
positions and the fact that two of the other named executive
officers report directly to the COO. Internal pay equity was
also considered by our Compensation Committee in approving the
compensation package for the Companys new Chief Financial
Officer (CFO). The Compensation Committee likewise
concluded that the 2009
19
compensation of our other named executive officers was equitable
in light of their respective roles, responsibilities and
reporting relationships.
Objectives
of Our Executive Compensation Program
Our executive compensation program is designed to incentivize
consistent, longer-term performance and achievement of strategic
objectives in a manner that will:
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compensate employees for the value of their contributions;
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provide total compensation that is flexible enough to respond to
changing market conditions and that also aligns compensation
levels with performance; and
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provide total compensation that will attract, motivate and
retain individuals of high quality and support a long-standing
internal culture of loyalty and dedication to our interests.
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We believe that linking executive compensation to Company
performance is in the best interest of our stockholders and, as
an individuals level of responsibility increases, a
greater portion of total compensation should be at risk and the
mix of total compensation should be weighted more heavily in
favor of incentive-based compensation including equity-linked
compensation. As performance goals are met or exceeded,
resulting in increased value to stockholders, our executive
officers should be rewarded commensurately. Our Compensation
Committee believes that our 2009 executive compensation program
achieved these objectives.
Elements
of Our Executive Compensation Program
Our executive compensation program consists of four principal
elements: base salary, a short-term incentive plan, a long-term
incentive plan and post-employment compensation. The following
is a discussion of each of these elements and their respective
roles in our compensation program.
Base
Salary
Base salary provides a cash foundation for our total
compensation program that helps us attract and retain
individuals of high quality. Our Compensation Committee believes
that base salaries for executive officers should be competitive
with comparable positions in peer companies to allow us to
attract and retain such individuals. The policy of our
Compensation Committee generally is to establish base salary
levels that approximate the market median. Competitive
information is obtained through oil and gas industry
compensation surveys and other analyses conducted by our
compensation consultant. Our Compensation Committee analyzes
this information and makes appropriate annual adjustments. Based
on the results of market data provided by Towers Perrin
regarding 2009 executive compensation, and after considering the
impact that the global economic environment and prolonged
recession has had on the job market, no adjustments were made to
executive officers base salaries.
Short-Term
Incentive Plan
Our short-term incentive plan (STIP) is a
performance-based annual incentive bonus plan that is payable in
cash and available to all of our full-time employees, including
executive officers. It provides a performance-based incentive
beyond base salary that is designed to motivate performance and
compensate employees for the value of their annual
contributions. In addition, given its annual nature and
discretionary component, the STIP has flexibility to respond to
changing market conditions.
The target STIP bonus for an employee is the employees
base salary at year-end multiplied by the percentage factor
assigned to the employees salary classification. Target
bonus percentage factors range from 6% to 100%, with factors of
100% for the CEO and from 75% to 90% for the other named
executive officers, with the differences primarily attributable
to each officers respective scope of responsibility within
the Company. Payout under the plan may range from 0 to 2.5 times
the aggregate target bonus pool for all employees.
In January of each year, our Compensation Committee approves
annual STIP performance-based measures, including their relative
weighting and specific targets, in addition to a discretionary
component to be determined by the committee. The measures,
weighting and targets are communicated to our executive officers
at that time. The
20
2009 measures approved by our Compensation Committee on
January 26, 2009 accounted for 50% of the STIP formula and
consisted of quantitative targets for proved reserve additions,
production, controllable unit costs and discretionary cash flow.
Discretionary cash flow is a non-GAAP financial measure that is
calculated by adding back depreciation, depletion, amortization
and various other non-cash expense items to net income.
Our Compensation Committee approves the target for each
performance measure after considering prior year financial and
operational results, the Board-approved budget, planned projects
and capital spending plans for the upcoming year. Our
Compensation Committee also considers that the achievement of
those targets can be significantly affected by availability of
labor and equipment, acquisitions and sales, weather, product
demand and pricing, competition and other industry conditions
that cannot be determined with certainty at the time the targets
are set. This is particularly true in the current economic and
commodity price environment. We believe that our targets are set
aggressively in light of these variables and require achievement
of significant performance.
The targets for the annual STIP performance measures may include
certain adjustments that are not normally included in publicly
reported results. For instance, the production target is
significantly reduced from reported production by discounting
gas volumes sold at a lower price in Equatorial Guinea. In
addition, any significant acquisitions or divestitures are
excluded when considering performance against the production and
discretionary cash flow targets. Also, the reserve target is
adjusted at the end of the year to reflect actual capital
expenditures and the discretionary cash flow target excludes
deferred taxes. Including these adjustments, the targets for
2009 were 56.6 million barrels of oil equivalent for proved
reserve additions, 194.1 thousand barrels of oil equivalent per
day for production, the 50th percentile relative to our
compensation peer group for controllable unit costs for the
12-month
period ending September 30, 2009 and $1.57 billion in
discretionary cash flow. The first three targets were weighted
14% each and the discretionary cash flow target was weighted 8%.
The remaining 50% is the discretionary component determined by
the Compensation Committee.
Payout curves were approved for each measure at the time targets
were set, ranging from a factor of 0 to 2.5, with a 1.0 factor
at each target. The Companys 2009 performance exceeded the
targets for controllable unit costs and discretionary cash flow
but fell short of the targets for production and proved reserve
additions. Our Compensation Committee reviewed information
provided by management on actual performance for each measure as
applied to the measures payout curve to determine the
bonus factor for that measure. Each bonus factor was then
multiplied by the weighting for its respective measure, with the
sum of the four bonus factors, as adjusted for weighting,
yielding the performance-based STIP component.
The discretionary component, which accounted for the remaining
50% of the 2009 STIP formula, was determined by our Compensation
Committee based on the committees review of overall
Company performance, including other performance-based measures
such as total annual stockholder return of 46.5%, falling at the
50th percentile of our peer group; exceptional safety
performance; exceptional exploration performance; and
significant progress on major projects, particularly in West
Africa and Israel. The Committee also took into account the
impact of new SEC rules on the calculation of reserve
replacement, which was unknown when the reserve replacement
target was set.
The sum of the performance-based and discretionary components
was applied to the Companys aggregate target bonus pool to
determine our total bonus amount to be paid. This amount was
then allocated between executive officers and other employees.
In the case of executive officers, the committee considered the
performance of the CEO as measured against operational and
financial goals submitted by the CEO earlier in the year, as
well as the CEOs assessment of the performance of the
other executive officers as measured against goals each
submitted earlier in the year for his or her business unit or
organization, and allocated the pool based on that assessment of
individual performance and each executive officers
respective target bonus percentage factor. A cash payout under
the plan based on the Companys 2009 performance occurred
in February 2010.
The 2010 performance-based measures and specific targets were
approved by our Compensation Committee on January 25, 2010
and communicated to our executive officers. Our Compensation
Committee elected to retain three of the four performance-based
measures used in 2009, each with the same weighting as 2009 but
with different targets. These include production, controllable
unit costs and discretionary cash flow. The performance measure
for proved reserve additions was discontinued, but will be
considered by the committee in determining the discretionary
component which, for 2010, will increase from 50% to 64% of the
STIP formula. This change was made by
21
the committee to allow it discretion to evaluate Company
performance in efforts to sanction major projects in the
deepwater Gulf of Mexico, Israel and West Africa, and the impact
of those projects on reserve bookings. We believe that the
approved targets for 2010 will be appropriately difficult to
achieve since they will be affected by many of the same
challenges and uncertainties as described above. While those
targets are disclosed above in the context of historical 2009
performance, we believe that the disclosure of 2010 targets
would result in competitive harm to us and are therefore omitted
since (1) we are engaged in a highly competitive business,
(2) we may pursue opportunities in areas without first
publicly disclosing our intention to do so and
(3) disclosure of these targets might enable our
competitors to determine our strategic areas of interest and
priorities throughout the year. We also do not believe that the
disclosure of 2010 targets is material to an understanding of
our 2009 executive compensation program as covered by this proxy
statement.
Long-Term
Incentive Plan
Our long-term incentive plan (LTIP) was approved by
our Compensation Committee and adopted by our Board on
January 27, 2004 and is primarily an equity-linked plan
that is available to our executive officers and certain other
key employees determined on an annual basis. It is designed to
attract, motivate and retain individuals of high quality by:
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providing competitive long-term incentive compensation
opportunities;
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rewarding outstanding achievement by those who can most directly
affect our performance and instill a sense of business
ownership; and
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aligning the interests of our employees with those of our
stockholders so as to maximize long-term stockholder value
creation.
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Our Compensation Committee may make grants or awards of stock
options, restricted stock and performance units under our LTIP.
Stock options and restricted stock are granted under our 1992
Plan, which was originally approved by our stockholders in 1992
and most recently amended in 2009. The 1992 Plan permits the use
of nonqualified stock options, with or without stock
appreciation rights, and restricted stock. Pursuant to the 1992
Plan, stock options may be granted for a period of up to ten
years at fair market value, as defined in the 1992 Plan, on the
date of grant and upon such terms and conditions, consistent
with the provisions of the plan, as are specified by our
Compensation Committee at the time of grant. Restricted stock
may be granted by our Compensation Committee subject to such
terms and conditions as may be set by the committee.
In January 2007, and with information regarding competitive
compensation practices from Towers Perrin, our Compensation
Committee reviewed the effectiveness of the LTIP structure in
light of our LTIP and compensation program objectives. Based on
that review, the committee concluded that a combination of stock
options and time-vested restricted stock would reduce plan
complexity and more effectively meet our compensation program
objectives. Accordingly, in 2007 and 2008 our Compensation
Committee made grants of stock options that vested ratably over
a three-year period and restricted stock that vested at the end
of the third year. In January 2009 and 2010 our Compensation
Committee made grants of stock options on the same terms but, in
order to facilitate grant administration while encouraging
retention consistent with our compensation program objectives,
began making 1992 Plan grants of restricted stock that time-vest
20% on the first anniversary of the grant date, an additional
30% on the second anniversary of the grant date and the
remaining 50% on the third anniversary of the grant date.
Approval
of Grants
Stock options and shares of restricted stock are granted to our
executive officers under our 1992 Plan. Our Compensation
Committee approves all such grants, which are determined based
on input from the CEO and market data provided by our
compensation consultant. Grants for the CEO and other executive
officers are approved by our Compensation Committee and
discussed with our Board, outside the presence of the CEO and
the other executive officers. In approving such grants, our
Compensation Committee also assesses the reasonableness of grant
levels considering the Companys relative performance
versus our compensation peer group over the past three years on
measures such as total stockholder return, debt-adjusted per
share production growth and revenue replacement, as well as
executive officer total compensation and internal pay equity.
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The regular Board and Compensation Committee meeting schedule
for the upcoming year is set in April of the prior year, with
regular Board meetings held in January, April, July, October and
December. Our Compensation Committee meetings are usually held
the day before each Board meeting. The timing of these meetings
is not determined by executive officers and is usually in
advance of the announcement of earnings. We do not time the
release of material non-public information for the purpose of
affecting the values of executive compensation. Our Compensation
Committee may be aware of approximate earnings results at the
time of making equity grant decisions, but it does not adjust
the size or timing of grants to reflect possible market reaction.
Generally, annual stock option and restricted stock grants are
approved at a January meeting of our Compensation Committee.
Stock options and restricted stock are granted annually on
February 1 (or the preceding business day if February 1 falls on
a Saturday, Sunday or holiday). It is our policy to make grants
to executive officers and other employees at the same time.
However, specific grants of stock options or restricted stock
may be approved at other regular or special meetings to
recognize the completion of a significant transaction, a change
in an employees responsibility or a specific achievement,
or as an inducement to, or for the retention of, employment. On
March 18, 2009, our Compensation Committee made special
awards to certain employees involved in our Tamar and Gunflint
discoveries, including Messrs. Stover and Cook and
Ms. Cunningham. On November 16, 2009, our Compensation
Committee awarded 35,576 restricted shares of common stock and
granted options to purchase 32,949 shares of common stock
to Kenneth M. Fisher as part of his compensation package in
accepting employment as our CFO. No other special grants were
made to executive officers in 2009. We communicate grants to
executive officers and other employees shortly after the date of
approval, in accordance with our customary human resource
practices.
Terms of
Grants
Stock option grants represent the right to purchase shares of
our common stock over a period of up to ten years at fair market
value, as defined in the 1992 Plan, on the date of grant and
upon such terms and conditions, consistent with the provisions
of the plan, as are specified by our Compensation Committee at
the time of grant. The 1992 Plan defines fair market
value for grant purposes as the average of the reported
high and low trading price of our common stock on the NYSE on
the date of grant (or if there was no reported sale on such
date, on the last preceding date on which any reported sale
occurred). We believe that this method of determining fair
market value is neutral to the use of the closing price of our
common stock and provides a valid representation of fair market
value. Therefore, consistent with the terms of our 1992 Plan, we
continue to grant stock options on this basis.
Stock
Ownership
We encourage, but do not require, stock ownership by our
executive officers and directors. We also do not require our
executive officers and directors to hold a substantial portion
of their equity awards until they retire from service.
Historically, our executive officers have received periodic
grants of shares of restricted stock and stock options under our
1992 Plan, consistent with the objectives of our executive
compensation program, providing them with meaningful equity
ownership in the Company and allowing them to demonstrate their
commitment as stockholders in the Company. We periodically
review stock ownership by our executive officers and directors
and believe that they generally maintain shares sufficiently
significant in value to align their interests with those of our
stockholders. If circumstances change, we will review whether
stock ownership or holding requirements are appropriate.
Post-Employment
Compensation
Our post-employment compensation is provided under qualified and
nonqualified defined benefit plans, qualified and nonqualified
defined contribution plans, and either individual change of
control agreements or, alternatively, a change of control plan.
Through its various components, our post-employment compensation
facilitates our efforts to retain individuals of high quality
and support a long-standing internal culture of loyalty and
dedication to our interests.
23
Qualified
Defined Benefit Plan
Our qualified defined benefit plan (Retirement Plan)
provides employees originally hired before May 1, 2006,
which includes all of our named executive officers except
Mr. Fisher, with retirement income benefits commencing upon
retirement after attaining the normal retirement age of 65 or
upon early or deferred vested retirement after attaining
age 55 and completing 5 years of vesting service.
Early retirement reductions apply if retirement benefits are
commenced prior to age 65. The amount of an employees
monthly Retirement Plan benefit will depend upon the
employees final average monthly compensation, age and the
number of his or her years of credited service (which is limited
to a maximum of 30 years). Monthly Retirement Plan benefits
commencing upon retirement after attaining the normal retirement
age of 65 are calculated using the greater of the following two
formulas:
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Formula 1
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|
Formula 2
|
1.25% × final average monthly
compensation × years of credited service (up to 30) + 0.50%
× final average monthly compensation that exceeds Social
Security covered compensation × years of credited service
(up to 30)
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2% × final average monthly compensation × years of
credited service (up to 20)
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Final average monthly compensation generally means the
employees average monthly compensation from the Company
for the 60 consecutive months prior to retirement that results
in the highest average monthly compensation for the employee.
The compensation taken into account for Retirement Plan purposes
includes the employees salary and STIP payment. The annual
amount of compensation that can be taken into account for
Retirement Plan purposes is limited by the Internal Revenue
Code. This annual compensation limit is $245,000 for 2009 and
2010. The maximum annual benefit that may be paid to an employee
under our Retirement Plan is also limited by the Internal
Revenue Code. This maximum annual benefit is $195,000 for 2009
and 2010.
Our Compensation Committee reviewed our Retirement Plan in 2006
and concluded that an enhanced defined contribution plan would
be better aligned with our compensation program objectives
because it would offer employees more investment choices, be
portable and be more cost-effective to the Company. Accordingly,
beginning on May 1, 2006, our Retirement Plan was closed to
new participants and new employees became eligible to instead
receive an enhanced Company contribution in the qualified
defined contribution plan described below. Employees originally
hired before May 1, 2006, which include all of our named
executive officers except Mr. Fisher, continue to accrue
benefits under the Retirement Plan.
We amended our Retirement Plan effective January 1, 2008 to
allow existing plan participants to elect to receive a lump sum
distribution upon separation from service. Lump sums are
calculated using Internal Revenue Service mandated rates.
Nonqualified
Defined Benefit Plan
Our nonqualified defined benefit plan (Restoration
Plan) is an unfunded plan that provides the benefits under
the Retirement Plans benefit formula that cannot be
provided by the Retirement Plan because of the annual
compensation and annual benefit limitations applicable to the
Retirement Plan under the Internal Revenue Code. The amount of
an employees monthly Restoration Plan benefit will depend
upon the employees final average monthly compensation, age
and the number of his or her years of credited service (which is
limited to a maximum of 30 years). Existing plan
participants were allowed to make a one-time election prior to
January 1, 2008 to receive plan benefits in a lump sum
payment upon separation from service, as permitted by the
transition relief provisions of Internal Revenue Code
Section 409A. Restoration Plan benefits are calculated
using the same methodology utilized for our Retirement Plan.
Employees originally hired prior to May 1, 2006, which
include all of our named executive officers except
Mr. Fisher, continue to accrue benefits under the
Restoration Plan.
24
Qualified
Defined Contribution Plan
Our qualified defined contribution plan (Thrift
Plan) allows employees to make pre-tax contributions to
the plan out of their basic compensation. For the purposes of
the Thrift Plan, basic compensation generally means cash
compensation, including overtime but excluding incentive
payments, bonuses, allowances and other extraordinary
remuneration. The amount of an employees basic
compensation taken into account under the Thrift Plan cannot
exceed the Internal Revenue Code limit, which is $245,000 for
2009 and 2010. The annual contribution made by an employee to
the Thrift Plan cannot exceed 50% of his or her basic
compensation and is limited to a maximum contribution amount
specified under the Internal Revenue Code (which is $16,500 for
2009 and 2010, plus a
catch-up
contribution in each of those years of $5,500 for employees who
are at least 50 years of age). An employees pre-tax
contributions (other than
catch-up
contributions) made to the Thrift Plan are matched by the
Company on a
dollar-for-dollar
basis up to 6% of the employees basic compensation. In
addition, beginning in 2006, the Company makes the following
age-weighted contribution to the Thrift Plan for each
participant whose initial employment date with the Company is on
or after May 1, 2006 (which does not include any of our
named executive officers except Mr. Fisher) and who is
employed by or on authorized leave of absence from the Company
on the last day of the calendar year (or whose retirement,
permanent disability or death occurred during such year while
employed by or on authorized leave of absence from the Company):
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Contribution Percentage
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Contribution Percentage
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for Portion of Basic
|
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for Portion of Basic
|
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Compensation Below
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Compensation Above
|
Age of Participant
|
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the FICA Taxable Wage Base
|
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the FICA Taxable Wage Base
|
Under 35
|
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4
|
%
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8
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%
|
At least 35 but under 48
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7
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%
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|
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10
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%
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At least 48
|
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9
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%
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12
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%
|
|
The contributions made to our Thrift Plan by or for a
participant are credited to accounts maintained for such
participant under the plan. The amounts credited to a
participants accounts are invested at the direction of the
participant in various investment fund options available under
the Thrift Plan, including investment in shares of our common
stock. The amounts credited to a participants accounts
that are attributable to his or her pre-tax contributions are
immediately 100% vested. Amounts attributable to the
Companys matching contributions become 34% vested upon the
completion of one year of service, 67% vested upon the
completion of two years of service, and 100% vested upon the
completion of three years of service. The amounts attributable
to the Companys age-weighted contributions become vested
after three years of service. The amounts credited to a
participants accounts become distributable upon the
participants termination of employment with the Company,
and certain amounts are available for loans, hardship
distributions and in-service withdrawals.
Nonqualified
Deferred Compensation Plan
Our nonqualified deferred compensation plan (Deferred
Compensation Plan) allows executive officers, and certain
other employees, to save for retirement in a tax-effective way
at minimal cost to us. Under the Deferred Compensation Plan,
participants are allowed to defer portions of their salary and
bonus and to receive certain matching and age-weighted
contributions that would have been made to our Thrift Plan if
the Thrift Plan had not been subject to Internal Revenue Code
compensation and contribution limitations. Under this unfunded
program, amounts deferred by the participant are credited
annually with interest at a rate equal to the greater of 125% of
the
120-month
rolling average of
10-year
U.S. Treasury Notes or the
120-month
rolling average of the prime rate as published in The Wall
Street Journal.
Change of
Control Arrangements
We have adopted change of control arrangements for our executive
officers and certain other employees. These arrangements are
intended to preserve morale and productivity and encourage
retention in the face of the disruptive impact of an actual or
rumored change of control of the Company. Based on information
provided by Towers Perrin, we believe that these arrangements
are common practice and align our executive officer interests
with those of our stockholders by enabling our executive
officers to consider corporate transactions that are in the best
interest of stockholders without undue concern over whether the
transactions may jeopardize their continued employment.
25
A change of control will be deemed to have occurred under our
change of control arrangements if any of the following events
occurs:
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individuals who constituted our Board on January 1, 2008
(or such other date as may be specified in individual change of
control agreements) (Incumbent Board) cease to
constitute at least 51% of the Board, provided that any
individual whose election was approved by a vote of at least a
majority of the directors of the Incumbent Board will be
considered a member of the Incumbent Board;
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|
|
our stockholders approve a reorganization, merger or
consolidation whereby the persons who were stockholders
immediately prior to the reorganization, merger or consolidation
do not immediately thereafter own at least 51% of the voting
shares of the new entity;
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|
our stockholders approve a liquidation or dissolution of the
Company or a sale of all or substantially all of our assets to a
non-related party; or
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|
a new person or entity becomes the owner of at least 25% of our
outstanding common stock or voting power in the Company.
|
We believe that these change of control events are an accurate
depiction of circumstances that could reasonably be expected to
result in a material change in the leadership and direction of
the Company, creating uncertainties among employees and
executive officers in such areas as the continuity of
management, continued employment opportunities, and our ability
to execute existing programs.
All of our change of control arrangements include provisions
regarding severance benefits that our executive officers and
certain other employees may be entitled to receive if they are
terminated within two years following a change of control of the
Company. Under these arrangements, if a named executive officer
is terminated for any reason (other than for cause, disability
or death) within two years after a change of control, we will
then pay or provide the following to that named executive
officer:
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all unpaid salary and expenses;
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a lump sum equal to a multiple of his or her annual cash
compensation (made up of annual salary and bonus) ranging from
2.5 times to 2.99 times;
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an amount equal to his or her pro-rata target bonus for the
then-current year;
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life, disability, medical and dental insurance benefits, upon
his or her written request, ranging among named executive
officers from 30 to 36 months or such shorter period until
the executive obtains substantially equivalent coverage from a
subsequent employer;
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the vesting of his or her stock options and restricted
stock; and
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reimbursement for reasonable fees up to $15,000 for
out-placement employment services.
|
If we terminate the named executive officer for cause, no
benefit is payable to, or with respect to, that named executive
officer under our change of control arrangements. A termination
for cause may only be made by the affirmative vote of a majority
of the members of our Board.
Our change of control arrangements also provide for a tax
gross-up
payment to the named executive officer that will fully offset
the effect of (1) any excise tax imposed by
Section 4999 of the Internal Revenue Code upon the benefits
payable under such arrangements (or under any other Company
plan, arrangement or agreement), and (2) any federal, state
or local income tax or additional Section 4999 excise tax
that is attributable to the tax
gross-up
payment.
Our change of control arrangements include a plan or, in the
alternative, individual change of control agreements.
Specifically, on October 24, 2006, our Board approved a
Change of Control Severance Plan for Executives (Executive
Change of Control Plan), which became effective on that
date. The plan covers our executive officers and certain key
employees, provided that they are not already party to
pre-existing change of control agreements with us. All of our
named executive officers, except Messrs. Fisher and Cook,
are parties to pre-
26
existing change of control agreements and therefore may not
participate in the plan at this time. Messrs. Fisher and
Cook currently participate in our Executive Change of Control
Plan.
Severance
Benefit Plan
Our Severance Benefit Plan (Severance Benefit Plan)
is an unfunded plan that provides for severance benefits to
eligible employees, including our executive officers, in certain
instances based upon years of completed service. The severance
benefits are comprised of:
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|
a cash payment of two weeks of base salary pay for every year of
completed service, with a minimum of 12 weeks of pay and a
maximum of 52 weeks of pay;
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|
a pro-rated STIP payment based on the number of months of
employment during the calendar year of termination;
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|
six months of reduced-rate contributions under our medical and
dental plans; and
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|
twelve weeks of coverage under our employee assistance plan.
|
Perquisites: We do not consider perquisites to
be a principal element of executive compensation. In 2009,
certain of our executive officers received non-material personal
benefits, such as club membership dues reimbursement and
comprehensive physical examinations.
Other
Compensation Matters
Health
and Welfare Programs
We offer a number of other benefits to our executive officers
pursuant to benefit programs that provide for broad-based
employee participation. These benefit programs include medical,
dental and vision insurance, long-term disability
(LTD) and short-term disability insurance, life and
accidental death and dismemberment (AD&D)
insurance, health and dependent care flexible spending accounts,
relocation/expatriate programs and services, educational
assistance, employee assistance and certain other benefits.
Indemnification
Agreements
We have entered into an indemnification agreement with each of
our non-employee directors and our executive officers. These
agreements provide for us to indemnify such persons against
certain liabilities that may arise by reason of their status or
service as directors or executive officers and to advance their
expenses incurred as a result of a proceeding as to which they
may be indemnified. We also cover such persons under a
directors and officers liability insurance policy
that we choose, in our discretion, to maintain. These
indemnification agreements are intended to provide
indemnification rights to the fullest extent permitted under
applicable law and are in addition to any other rights the
individual may have under our Certificate of Incorporation,
By-laws and applicable law. We believe these indemnification
agreements enhance our ability to attract and retain
knowledgeable and experienced executive officers and
non-employee directors.
Tax
and Accounting Considerations
Under Section 409A of the Internal Revenue Code, amounts
deferred for an executive officer under a nonqualified deferred
compensation plan may be included in gross income when vested
and subject to a 20% or more additional federal tax, unless the
plan complies with certain requirements related to the timing of
deferral election and distribution decisions.
Section 162(m) of the Internal Revenue Code may limit our
ability to deduct annual compensation in excess of $1,000,000
that is paid to our CEO and other named executive officers,
unless that compensation is performance-based
compensation within the meaning of Section 162(m) and
the regulations promulgated thereunder. We believe that all of
the stock options granted under the 1992 Plan qualify as
performance-based compensation and therefore are not subject to
the deduction limitation of Section 162(m). However, the
salary and STIP payouts paid
27
to our executive officers, the time-vested restricted stock
awards, and certain payments provided for under our change of
control arrangements with the named executive officers are not
exempt from this deduction limit.
Section 280G of the Internal Revenue Code limits our
ability to deduct amounts paid to certain disqualified
individuals, including our executive officers, that are treated
as excess parachute payments. Excess parachute payments are also
subject to an excise tax payable by the recipient of such
payment. Parachute payments are payments that are contingent on
a change in the ownership or effective control of the Company or
in the ownership of a substantial portion of our assets, and
they become excess parachute payments with respect to a
disqualified individual to the extent that the total amount of
the parachute payments made to such individual exceeds a certain
threshold amount. Examples of the types of payments that could
give rise to parachute payments are the accelerated vesting of
stock options and restricted stock upon a change of control and
severance payments made upon a termination of employment in
connection with a change of control.
Although we consider tax deductibility in the design and
administration of our executive compensation plans and program,
we believe that there are circumstances where our interests are
best served by maintaining flexibility in the way compensation
is provided, even if it results in the non-deductibility of
certain compensation under the Internal Revenue Code.
Rules under generally accepted accounting principles determine
the manner in which we account in our financial statements for
grants of equity-based compensation to our employees. Our
accounting policies for equity-based compensation are further
discussed in Notes 2 and 13 to our consolidated financial
statements, included in our 2009 Annual Report on
Form 10-K.
REPORT OF
THE COMPENSATION, BENEFITS
AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
The following report of the Compensation, Benefits and Stock
Option Committee of the Board of Directors shall not be deemed
to be soliciting material or to be filed
with the SEC or subject to the SECs proxy rules, except
for the required disclosure in this proxy statement, or subject
to the liabilities of Section 18 of the Securities Exchange
Act of 1934 (Exchange Act), and the information
shall not be deemed to be incorporated by reference into any
filing made by the Company under the Securities Act of 1933 or
the Exchange Act.
The Compensation, Benefits and Stock Option Committee has
reviewed the Compensation Discussion and Analysis contained in
this Proxy Statement and discussed this disclosure with
management. Based on this review and discussions with
management, the Compensation, Benefits and Stock Option
Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy
Statement and incorporated by reference in the Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 for filing with
the SEC.
March 22, 2010
Compensation, Benefits and
Stock Option Committee
Kirby L. Hedrick, Chair
Jeffrey L. Berenson
Edward F. Cox
28
Summary
Compensation Table
The following table sets forth certain summary information
concerning the compensation earned by our CEO and CFO and each
of our three most-highly compensated executive officers other
than the CEO and CFO (collectively, the named executive
officers) during 2007, 2008 and 2009.
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Change in
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Pension Value
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and Non-
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Non-Equity
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Qualified
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Stock
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Option
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Incentive Plan
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Deferred
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All Other
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Name and
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Salary
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Awards
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Awards
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Compensation
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Compensation
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Compensation
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Total
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Principal Position
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Year
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($)(1)
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|
Bonus($)
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($)(2)
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($)(3)
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($)(4)
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Earnings($)(5)
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($)(6)
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($)
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Charles D. Davidson
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2009
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$
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1,025,000
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|
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$
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2,445,629
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$
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2,445,383
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|
$
|
1,435,000
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|
$
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1,934,613
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$
|
74,386
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|
$
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9,360,011
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|
Chairman and Chief
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2008
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1,025,000
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|
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3,534,599
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|
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2,545,316
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|
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4,354,359
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889,986
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70,908
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12,420,168
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Executive Officer
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2007
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1,025,000
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3,112,356
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3,070,648
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3,821,192
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804,352
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67,901
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11,901,449
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Kenneth M. Fisher(7)
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2009
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62,500
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$
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500,000
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|
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2,399,957
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899,508
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70,000
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505,970
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|
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3,937,935
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|
Senior Vice President and Chief Financial Officer
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Chris Tong(8)
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2009
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259,583
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|
|
|
|
194,688
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|
|
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|
638,320
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|
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|
638,266
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|
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|
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11,856
|
|
|
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|
987,014
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|
|
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|
2,729,727
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|
Senior Vice President
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|
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|
2008
|
|
|
|
|
433,333
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|
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781,114
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|
|
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|
562,511
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|
|
|
|
1,015,599
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|
|
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|
121,071
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|
|
|
|
28,331
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|
|
|
|
2,941,959
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|
and Chief Financial Officer
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|
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2007
|
|
|
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|
410,419
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|
|
|
|
|
|
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625,014
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|
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616,625
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|
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979,545
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|
|
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103,617
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|
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26,585
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|
|
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|
2,761,805
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David L. Stover
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2009
|
|
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600,000
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|
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|
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|
1,662,774
|
|
|
|
|
1,668,488
|
|
|
|
|
756,000
|
|
|
|
|
456,033
|
|
|
|
|
26,199
|
|
|
|
|
5,169,494
|
|
President and Chief
|
|
|
|
2008
|
|
|
|
|
556,250
|
|
|
|
|
|
|
|
|
|
1,686,810
|
|
|
|
|
1,214,697
|
|
|
|
|
1,362,707
|
|
|
|
|
199,415
|
|
|
|
|
22,687
|
|
|
|
|
5,042,566
|
|
Operating Officer
|
|
|
|
2007
|
|
|
|
|
495,836
|
|
|
|
|
|
|
|
|
|
921,869
|
|
|
|
|
909,493
|
|
|
|
|
1,333,932
|
|
|
|
|
133,883
|
|
|
|
|
36,681
|
|
|
|
|
3,831,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
2009
|
|
|
|
|
440,000
|
|
|
|
|
|
|
|
|
|
1,138,344
|
|
|
|
|
1,148,115
|
|
|
|
|
489,720
|
|
|
|
|
402,430
|
|
|
|
|
22,644
|
|
|
|
|
3,641,253
|
|
Senior Vice President
|
|
|
|
2008
|
|
|
|
|
428,333
|
|
|
|
|
|
|
|
|
|
836,257
|
|
|
|
|
602,215
|
|
|
|
|
1,092,242
|
|
|
|
|
156,030
|
|
|
|
|
16,106
|
|
|
|
|
3,131,183
|
|
Exploration
|
|
|
|
2007
|
|
|
|
|
408,335
|
|
|
|
|
|
|
|
|
|
653,380
|
|
|
|
|
644,653
|
|
|
|
|
990,301
|
|
|
|
|
111,311
|
|
|
|
|
15,460
|
|
|
|
|
2,823,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook(9)
|
|
|
|
2009
|
|
|
|
|
385,000
|
|
|
|
|
|
|
|
|
|
763,339
|
|
|
|
|
765,728
|
|
|
|
|
428,505
|
|
|
|
|
708,675
|
|
|
|
|
34,282
|
|
|
|
|
3,085,529
|
|
Senior Vice President International
|
|
|
|
2008
|
|
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
749,021
|
|
|
|
|
381,797
|
|
|
|
|
697,510
|
|
|
|
|
243,559
|
|
|
|
|
29,105
|
|
|
|
|
2,450,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Certain of our named executive officers deferred a portion of
their base salaries under our Deferred Compensation Plan: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
Amount
|
Name
|
|
|
Year
|
|
|
Salary Deferred
|
|
|
Deferred
|
Charles D. Davidson
|
|
|
|
2009
|
|
|
|
|
45
|
%
|
|
|
$
|
461,250
|
|
|
|
|
|
2008
|
|
|
|
|
45
|
%
|
|
|
|
461,250
|
|
|
|
|
|
2007
|
|
|
|
|
45
|
%
|
|
|
|
461,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
2009
|
|
|
|
|
23
|
%
|
|
|
|
71,514
|
|
|
|
|
|
2008
|
|
|
|
|
20
|
%
|
|
|
|
86,667
|
|
|
|
|
|
2007
|
|
|
|
|
20
|
%
|
|
|
|
82,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
2009
|
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
5
|
%
|
|
|
|
24,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
2009
|
|
|
|
|
10
|
%
|
|
|
|
38,500
|
|
|
|
|
|
2008
|
|
|
|
|
10
|
%
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Reflects the aggregate grant date fair value of restricted stock
granted under our 1992 Plan, which was computed in accordance
with FASB ASC Topic 718. Shares granted in 2009 will vest
according to the following schedule: 20% on the first
anniversary of the grant date, an additional 30% on the second
anniversary of the grant date, and the remaining 50% on the
third anniversary of the grant date. Shares granted in 2007 and
2008 will vest 100% on the third anniversary of the grant date.
The vesting of these shares is not contingent upon the
satisfaction of any performance goals. See the Grants of
Plan-Based Awards table for information on restricted stock
granted in 2009. |
|
(3) |
|
Reflects the aggregate grant date fair value of nonqualified
stock options granted under our 1992 Plan. Options represent the
right to purchase shares of common stock at a price per share
equal to fair market value on the date |
29
|
|
|
|
|
of grant. Options will vest ratably over three years in equal
installments on the first, second and third anniversaries of the
date of grant. Vesting of these options is not contingent upon
the satisfaction of any performance goals, although none of the
options may be exercised before the first anniversary (absent a
change of control of the Company) or after the tenth anniversary
of the date of grant. See the Grants of Plan-Based Awards table
for information on stock options granted in 2009. |
|
(4) |
|
Reflects payments under our STIP based on the achievement of
certain performance goals during the year indicated and payout
of performance units previously awarded under our LTIP. STIP
awards earned during the year indicated were paid or deferred in
February of the following year, and performance unit awards
under the LTIP cover the three-year performance period ending on
December 31st of the year indicated, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
|
Name
|
|
|
Year
|
|
|
STIP Payout
|
|
|
Units Payout(a)
|
Charles D. Davidson
|
|
|
|
2009
|
|
|
|
$
|
1,435,000
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
1,435,000
|
|
|
|
$
|
2,919,359
|
|
|
|
|
|
2007
|
|
|
|
|
2,600,000
|
|
|
|
|
1,221,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
2009
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
417,188
|
|
|
|
|
598,411
|
|
|
|
|
|
2007
|
|
|
|
|
656,268
|
|
|
|
|
323,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
2009
|
|
|
|
|
756,000
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
764,296
|
|
|
|
|
598,411
|
|
|
|
|
|
2007
|
|
|
|
|
1,010,655
|
|
|
|
|
323,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
2009
|
|
|
|
|
489,720
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
493,831
|
|
|
|
|
598,411
|
|
|
|
|
|
2007
|
|
|
|
|
667,024
|
|
|
|
|
323,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
2009
|
|
|
|
|
428,505
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
432,437
|
|
|
|
|
265,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Performance units were not awarded after 2006; therefore, the
final payment of performance units was made in May 2009 for the
three-year period ended on December 31, 2008.
|
|
|
|
(5) |
|
Reflects during the year indicated: (a) the aggregate
increase in actuarial present value of the named executive
officers benefits under our Retirement Plan and our
Restoration Plan; and (b) the above-market Deferred
Compensation Plan earnings, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
Increase in
|
|
|
Compensation
|
|
|
|
|
|
|
Retirement and
|
|
|
Above-Market
|
Name
|
|
|
Year
|
|
|
Restoration Plans(a)
|
|
|
Earnings(b)
|
Charles D. Davidson
|
|
|
|
2009
|
|
|
|
$
|
1,757,599
|
|
|
|
$
|
177,014
|
|
|
|
|
|
2008
|
|
|
|
|
795,515
|
|
|
|
|
94,471
|
|
|
|
|
|
2007
|
|
|
|
|
749,258
|
|
|
|
|
55,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
11,856
|
|
|
|
|
|
2008
|
|
|
|
|
115,404
|
|
|
|
|
5,667
|
|
|
|
|
|
2007
|
|
|
|
|
100,860
|
|
|
|
|
2,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
2009
|
|
|
|
|
441,239
|
|
|
|
|
14,794
|
|
|
|
|
|
2008
|
|
|
|
|
191,411
|
|
|
|
|
8,004
|
|
|
|
|
|
2007
|
|
|
|
|
129,041
|
|
|
|
|
4,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
2009
|
|
|
|
|
402,430
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
156,030
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
111,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
2009
|
|
|
|
|
705,759
|
|
|
|
|
2,916
|
|
|
|
|
|
2008
|
|
|
|
|
242,326
|
|
|
|
|
1,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
(a)
|
Beginning of year values for calculating the aggregate increase
in actuarial present value reflect a 6.00% discount rate for the
Retirement Plan and a 6.25% discount rate for the Restoration
Plan; end of year values reflect a 6.00% discount rate. Present
values are based on the same actuarial assumptions and
measurement dates disclosed in Note 12 to our financial
statements in the
Form 10-K
for the year ended December 31, 2009, except that for
purposes of the present value calculations participants are
assumed to work until age 65 and commence their benefits at
that time.
|
|
|
|
|
(b)
|
Above-market earnings in 2009 are based on the difference
between the plan crediting rate of 6.55% and 120% of the annual
long-term Applicable Federal Rate as of September 2008 (5.51%);
earnings in 2008 are based on the difference between the plan
crediting rate of 6.81% and 120% of the annual long-term
Applicable Federal Rate as of September 2007 (6.13%); earnings
in 2007 are based on the difference between the plan crediting
rate of 6.82% and 120% of the annual long-term Applicable
Federal Rate as of September 2006 (6.27%).
|
|
|
|
(6) |
|
All other compensation includes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thrift Plan
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
Matching
|
|
|
Matching
|
|
|
Club
|
|
|
Insurance
|
|
|
Holiday
|
|
|
Physical
|
Name
|
|
|
Year
|
|
|
Payments
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Memberships
|
|
|
Premiums
|
|
|
Bonus
|
|
|
Examinations
|
Charles D. Davidson
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
$
|
14,700
|
|
|
|
$
|
46,800
|
|
|
|
$
|
7,391
|
|
|
|
$
|
2,508
|
|
|
|
$
|
157
|
|
|
|
$
|
2,580
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
|
47,700
|
|
|
|
|
6,743
|
|
|
|
|
2,508
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
48,000
|
|
|
|
|
3,964
|
|
|
|
|
2,280
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
209
|
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
2009
|
|
|
|
$
|
987,014
|
|
|
|
|
14,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
|
12,200
|
|
|
|
|
|
|
|
|
|
2,174
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
11,125
|
|
|
|
|
|
|
|
|
|
1,824
|
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
|
|
|
|
|
|
|
6,934
|
|
|
|
|
2,508
|
|
|
|
|
157
|
|
|
|
|
1,900
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
|
|
|
|
|
|
6,222
|
|
|
|
|
2,508
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
16,250
|
|
|
|
|
4,608
|
|
|
|
|
2,166
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,207
|
|
|
|
|
157
|
|
|
|
|
5,580
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,149
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,824
|
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
|
|
8,400
|
|
|
|
|
7,065
|
|
|
|
|
1,931
|
|
|
|
|
136
|
|
|
|
|
2,050
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
|
7,200
|
|
|
|
|
6,192
|
|
|
|
|
1,756
|
|
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Also included in the value of other compensation in 2009 are the
following items: Mr. Davidson $250 for the
value of his retired laptop computer that he retained under a
Company program; Mr. Fisher $5,625 as an
age-weighted contribution to the Thrift Plan; and
Mr. Tong $51,347 as a payout for accrued
vacation.
31
As reflected in the table above, the salary received by each of
our named executive officers as a percentage of their respective
total compensation during the year indicated was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
of Total
|
Name
|
|
|
Year
|
|
|
Compensation
|
Charles D. Davidson
|
|
|
|
2009
|
|
|
|
|
11.0
|
%
|
|
|
|
|
2008
|
|
|
|
|
9.3
|
%
|
|
|
|
|
2007
|
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
2009
|
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
2009
|
|
|
|
|
9.5
|
%
|
|
|
|
|
2008
|
|
|
|
|
16.6
|
%
|
|
|
|
|
2007
|
|
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
2009
|
|
|
|
|
11.6
|
%
|
|
|
|
|
2008
|
|
|
|
|
14.7
|
%
|
|
|
|
|
2007
|
|
|
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
2009
|
|
|
|
|
12.1
|
%
|
|
|
|
|
2008
|
|
|
|
|
15.7
|
%
|
|
|
|
|
2007
|
|
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
2009
|
|
|
|
|
12.5
|
%
|
|
|
|
|
2008
|
|
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
Mr. Fisher was appointed Senior Vice President and CFO of
the Company effective November 16, 2009 and received a lump
sum cash payment of $500,000 on December 16, 2009 pursuant
to the terms of his compensation arrangement with the Company. |
|
(8) |
|
Mr. Tong retired from the Company effective August 1,
2009. In connection with his retirement, Mr. Tong received
a pro-rated bonus payment of $194,688 and a severance payment of
$987,014. |
|
(9) |
|
Mr. Cook became an executive officer in 2008 and was
determined to be a named executive officer for that year. |
Grants of
Plan-Based Awards
The table below sets forth information regarding grants of
plan-based awards made to our named executive officers during
2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
|
Under Equity Incentive
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
Plan Awards
|
|
|
Plan Awards
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
of Stock and
|
|
|
|
Approval
|
|
|
Grant
|
|
|
Units
|
|
|
Threshold
|
|
|
Target
|
|
|
Max
|
|
|
Threshold
|
|
|
Target
|
|
|
Max
|
|
|
Units (#)
|
|
|
Options (#)
|
|
|
Awards
|
|
|
Option
|
Name
|
|
|
Date(1)
|
|
|
Date(1)
|
|
|
Granted
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(2)
|
|
|
(3)
|
|
|
($/Sh)(4)
|
|
|
Awards(5)
|
Charles D. Davidson
|
|
|
|
1/30/2009
|
|
|
|
|
1/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,708
|
|
|
|
|
130,490
|
|
|
|
$
|
50.205
|
|
|
|
$
|
4,891,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
10/26/2009
|
|
|
|
|
11/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,576
|
|
|
|
|
32,949
|
|
|
|
|
67.460
|
|
|
|
|
3,299,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
1/30/2009
|
|
|
|
|
1/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,713
|
|
|
|
|
34,059
|
|
|
|
|
50.205
|
|
|
|
|
1,276,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
1/30/2009
|
|
|
|
|
1/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,141
|
|
|
|
|
72,710
|
|
|
|
|
50.205
|
|
|
|
|
2,725,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/18/2009
|
|
|
|
|
3/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,906
|
|
|
|
|
15,974
|
|
|
|
|
50.800
|
|
|
|
|
605,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
1/30/2009
|
|
|
|
|
1/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,713
|
|
|
|
|
34,059
|
|
|
|
|
50.205
|
|
|
|
|
1,276,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/18/2009
|
|
|
|
|
3/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,843
|
|
|
|
|
26,624
|
|
|
|
|
50.800
|
|
|
|
|
1,009,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
1/30/2009
|
|
|
|
|
1/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,713
|
|
|
|
|
34,059
|
|
|
|
|
50.205
|
|
|
|
|
1,276,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/18/2009
|
|
|
|
|
3/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,461
|
|
|
|
|
6,656
|
|
|
|
|
50.800
|
|
|
|
|
252,481
|
|
|
|
|
|
(1) |
|
All grants were approved by our Compensation Committee, and were
effective and priced on the date of grant. The committee
approved the dollar value of Mr. Fishers stock option
and restricted stock grants on October 26, 2009 in
connection with his offer of employment, and those grants were
effective and priced on his date of hire. |
|
(2) |
|
Represents the shares of restricted stock granted under our 1992
Plan in 2009. The shares will vest according to the following
schedule: 20% of the award will vest on the first anniversary of
the grant date, an additional 30% of the award will vest on the
second anniversary of the grant date, and the remaining 50% of
the award will vest |
32
|
|
|
|
|
on the third anniversary of the grant date. In the event
Mr. Fisher is terminated by the Company without cause
before the second anniversary of the grant date, 50% of his
restricted stock award will immediately vest.
Mr. Tongs 2009 award of restricted shares was
forfeited upon his retirement on August 1, 2009. |
|
|
|
Dividends declared on shares of restricted stock are accrued
during the three-year restricted period. Accrued dividends will
be paid upon vesting of restricted shares. Dividends accrued
during 2009 as follows: Mr. Davidson $35,070;
Mr. Stover $22,731;
Ms. Cunningham $14,469; and
Mr. Cook $10,482. |
|
(3) |
|
Represents grants of nonqualified stock options under our 1992
Plan. Options represent the right to purchase shares of common
stock at the price per share (equal to fair market value on the
date of grant) indicated in the table. Options will vest ratably
over three years in equal installments on the first, second and
third anniversaries of the date of grant. Mr. Tongs
2009 nonqualified stock option grant was forfeited upon his
retirement on August 1, 2009. |
|
(4) |
|
Exercise price at fair market value is defined in
our 1992 Plan as the average of the reported high and low
trading price of our common stock on the NYSE on the date of
grant. The closing price of our common stock on January 30,
2009, March 18, 2009 and November 16, 2009 was $48.93,
$49.44, and $67.80, respectfully. |
|
(5) |
|
Reflects aggregate grant date fair value of restricted stock and
nonqualified stock options granted to our named executive
officers in 2009 computed in accordance with FASB ASC Topic 718.
Grant date fair value of stock options reported above is as
follows: Mr. Davidson $2,445,383;
Mr. Fisher $899,508; Mr. Tong
$638,266; Mr. Stover $1,362,585 (1/30/2009
grant) and $305,902 (3/18/2009 grant);
Ms. Cunningham $638,266 (1/30/2009 grant) and
$509,850 (3/18/2009 grant); and Mr. Cook
$638,266 (1/30/2009 grant) and $127,462 (3/18/2009 grant). Grant
date fair value of restricted stock reported above is as
follows: Mr. Davidson $2,445,629;
Mr. Fisher $2,399,957;
Mr. Tong $638,320; Mr. Stover
$1,362,750 (1/30/2009 grant) and $300,025 (3/18/2009 grant);
Ms. Cunningham $638,320 (1/30/2009 grant) and
$500,024 (3/18/2009 grant); and Mr. Cook
$638,320 (1/30/2009 grant) and $125,019 (3/18/2009 grant). |
2009
Compensation of CEO
Our Compensation Committee, with input from our other
independent directors, evaluates Mr. Davidsons
performance, with that evaluation supporting the determination
of Mr. Davidsons compensation level. During a year
marked by a prolonged recession, constrained credit markets and
commodity price volatility, the Companys key results
during 2009 under Mr. Davidsons leadership include:
|
|
|
|
|
continued exploration success with announcement of a significant
discovery at Tamar, offshore Israel, the largest discovery in
our history;
|
|
|
|
substantial progress on our significant portfolio of long-term
projects, including the sanctioning of the oil development
projects at Aseng (formerly Benita) in offshore Equatorial
Guinea, and at Isabella/Santa Cruz (which we refer to
collectively as Galapagos) in the deepwater Gulf of Mexico;
|
|
|
|
exceptional safety performance;
|
|
|
|
discretionary cash flow of $1.69 billion;
|
|
|
|
total annual stockholder return for 2009 of 46.5%;
|
|
|
|
a decrease of 44 MMBoe in total proved reserves, largely
due to negative revisions caused by lower prices and the new SEC
reserve reporting rules; and
|
|
|
|
a net loss of $131 million.
|
Mr. Davidson earned a total salary of $1,025,000 in 2009.
He did not receive a base salary increase in 2009. Based on the
results of Towers Perrins review of 2009 executive
compensation, our Compensation Committee determined that
Mr. Davidsons salary was appropriate based on the
market median for his position relative to our compensation peer
group giving consideration to the scope and nature of our
operations.
Mr. Davidson received a total STIP payment of $1,435,000 in
February 2010, based on our Compensation Committees review
of overall performance of the Company for 2009, as well as
Mr. Davidsons performance as
33
measured against operational and financial goals for 2009 that
he submitted earlier in the year. Mr. Davidsons STIP
payment for 2009 performance did not change compared to 2008.
Mr. Davidson was granted awards under our LTIP of 130,490
stock options and 48,708 shares of restricted stock on
January 30, 2009, based in part on market data from Towers
Perrin and considering our performance against our compensation
peer group and Mr. Davidsons leadership performance.
We believe that Mr. Davidsons compensation level is
consistent with the objectives of our compensation program,
provides an appropriate mix of salary and incentive
compensation, rewards leadership performance by
Mr. Davidson that has produced some key results by the
Company in 2009 and provides motivation for the future
achievement of short-term and long-term goals necessary to
stockholder value creation. We also believe that it is
internally consistent and equitable compared to our other
executive officers in recognition of Mr. Davidsons
broad responsibility and accountability for the Companys
strategy and operations, compliance and controls, investor
relations and role as Chairman of our Board.
2009
Compensation of Other Named Executive Officers
In determining the compensation of Messrs. Stover, Cook and
Tong and Ms. Cunningham for 2009, our Compensation
Committee considered their respective roles, responsibilities
and reporting within the Company; their respective contributions
to the overall performance of the Company; the performance of
their respective business units or organizations; comparisons to
our compensation peer group; and internal pay equity.
Based on the results of Towers Perrins review of 2009
executive compensation, none of our other named executive
officers received an increase in base salary as our Compensation
Committee determined that their respective salaries were
appropriate based on the median for their respective positions
relative to our compensation peer group giving consideration to
the scope and nature of our operations.
After reviewing the overall performance of the Company for 2009
and the contributions to that performance of each non-CEO named
executive officer and his or her respective business unit or
organization, our Compensation Committee approved the following
STIP payments: Mr. Stover $756,000;
Ms. Cunningham $489,720; and
Mr. Cook $428,505. The STIP payments for 2009
performance for Mr. Stover, Mr. Cook and
Ms. Cunningham decreased approximately 1%, compared to
2008. We believe that these STIP payments are appropriate in
light of the Companys performance in 2009 and reflect the
relative contributions of these executive officers, including
Mr. Stovers role in the growth of our domestic and
international businesses and the Companys exceptional
safety performance; Mr. Cooks role in the progress
made in our international development projects; and
Ms. Cunninghams role in our exploration success at
Tamar, offshore Israel, and Gunflint, deepwater Gulf of Mexico.
Mr. Fisher joined the Company on November 16, 2009 and
received a pro-rated STIP payment of $70,000. Mr. Tong
retired from the Company on August 1, 2009 and received a
pro-rated bonus payment of $194,688.
On January 30, 2009, our Compensation Committee approved
stock option grants and restricted stock awards under our LTIP
for our other named executive officers. Mr. Stover was
granted options to purchase 72,710 shares of common stock
and Messrs. Tong and Cook and Ms. Cunningham were each
granted options to purchase 34,059 shares of common stock.
Mr. Stover was awarded 27,141 shares of restricted
stock and Messrs. Tong and Cook and Ms. Cunningham
were each awarded 12,713 shares of restricted stock. Our
Compensation Committee considered the Companys performance
against our compensation peer group plus individual performance
in determining the level of these grants. These grants were also
based on market data from Towers Perrin regarding our
compensation program and appropriate long-term incentive grant
levels in light of compensation peer group practices.
On March 18, 2009, our Compensation Committee approved
special awards to certain employees involved in our Tamar and
Gunflint discoveries, including awards to Messrs. Stover
and Cook, and Ms. Cunningham, as reflected in the Grants of
Plan-Based Awards table.
34
Kenneth M. Fisher was appointed as Senior Vice President and
Chief Financial Officer of the Company effective
November 16, 2009. Pursuant to the terms of
Mr. Fishers employment, he is entitled to receive:
|
|
|
|
|
an annual base salary of $500,000;
|
|
|
|
eligibility in the STIP with a target bonus percentage of 80% of
his base salary (which was prorated in 2009 based on his date of
employment);
|
|
|
|
a cash payment of $500,000 on or before December 16, 2009;
|
|
|
|
a cash payment of $500,000 on or around May 16, 2010;
|
|
|
|
an award of 35,576 shares of restricted stock; and
|
|
|
|
a grant of options to purchase 32,949 shares of our common
stock at an exercise price of $67.46 per share.
|
Our Compensation Committee determined Mr. Fishers
compensation package giving consideration to his qualifications
and experience, our compensation consultants evaluation of
current market conditions for his position, input from
Mr. Davidson as to his expected roles and responsibilities,
internal pay equity with other executive officers, and
compensation and benefits Mr. Fisher would forfeit with his
then-current employer.
35
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect
to restricted stock and stock options held by our named
executive officers as of December 31, 2009.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Plan
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value
|
|
|
Awards:
|
|
|
Plan Awards:
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares
|
|
|
Number of
|
|
|
Market or Payout
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
or Units of
|
|
|
Unearned
|
|
|
Value of Unearned
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock
|
|
|
Shares, Units or
|
|
|
Shares, Units or
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unearned
|
|
|
Option
|
|
|
Option
|
|
|
Held That
|
|
|
Held That
|
|
|
Other Rights
|
|
|
Other Rights That
|
|
|
|
Options (#
|
|
|
Options (#
|
|
|
Options
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have Not
|
|
|
Have Not Vested
|
Name
|
|
|
Exercisable)
|
|
|
Unexercisable)
|
|
|
(#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
Vested ($)(7)
|
|
|
Vested (#)
|
|
|
($)
|
Charles D. Davidson
|
|
|
|
160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18.9375
|
|
|
|
|
10/2/2010
|
|
|
|
|
58,262
|
(6)
|
|
|
$
|
4,149,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.6050
|
|
|
|
|
1/29/2011
|
|
|
|
|
48,459
|
(8)
|
|
|
|
3,451,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.2700
|
|
|
|
|
2/1/2012
|
|
|
|
|
48,708
|
(9)
|
|
|
|
3,468,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.6825
|
|
|
|
|
2/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.2325
|
|
|
|
|
2/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.8700
|
|
|
|
|
2/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.7925
|
|
|
|
|
5/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.4650
|
|
|
|
|
8/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45.9400
|
|
|
|
|
2/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109,412
|
|
|
|
|
54,706
|
(1)
|
|
|
|
|
|
|
|
|
53.4150
|
|
|
|
|
2/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,733
|
|
|
|
|
83,467
|
(2)
|
|
|
|
|
|
|
|
|
72.9400
|
|
|
|
|
2/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,490
|
(3)
|
|
|
|
|
|
|
|
|
50.2050
|
|
|
|
|
1/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
|
|
|
|
|
32,949
|
(4)
|
|
|
|
|
|
|
|
|
67.4600
|
|
|
|
|
11/16/2019
|
|
|
|
|
35,576
|
(10)
|
|
|
|
2,533,723
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.0350
|
|
|
|
|
12/16/2012
|
|
|
|
|
17,257
|
(6)
|
|
|
|
1,229,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.6825
|
|
|
|
|
2/1/2013
|
|
|
|
|
23,126
|
(8)
|
|
|
|
1,647,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.2325
|
|
|
|
|
2/1/2014
|
|
|
|
|
27,141
|
(9)
|
|
|
|
1,932,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.8700
|
|
|
|
|
2/1/2015
|
|
|
|
|
5,906
|
(11)
|
|
|
|
420,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.4650
|
|
|
|
|
8/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45.9400
|
|
|
|
|
2/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,407
|
|
|
|
|
16,203
|
(1)
|
|
|
|
|
|
|
|
|
53.4150
|
|
|
|
|
2/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,916
|
|
|
|
|
39,833
|
(2)
|
|
|
|
|
|
|
|
|
72.9400
|
|
|
|
|
2/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,710
|
(3)
|
|
|
|
|
|
|
|
|
50.2050
|
|
|
|
|
1/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,974
|
(5)
|
|
|
|
|
|
|
|
|
50.8000
|
|
|
|
|
3/18/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.9250
|
|
|
|
|
4/23/2011
|
|
|
|
|
12,231
|
(6)
|
|
|
|
871,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.2700
|
|
|
|
|
2/1/2012
|
|
|
|
|
11,465
|
(8)
|
|
|
|
816,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.6825
|
|
|
|
|
2/1/2013
|
|
|
|
|
12,713
|
(9)
|
|
|
|
905,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.2325
|
|
|
|
|
2/1/2014
|
|
|
|
|
9,843
|
(11)
|
|
|
|
701,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.8700
|
|
|
|
|
2/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.4650
|
|
|
|
|
8/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45.9400
|
|
|
|
|
2/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,970
|
|
|
|
|
11,485
|
(1)
|
|
|
|
|
|
|
|
|
53.4150
|
|
|
|
|
2/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,874
|
|
|
|
|
19,748
|
(2)
|
|
|
|
|
|
|
|
|
72.9400
|
|
|
|
|
2/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,059
|
(3)
|
|
|
|
|
|
|
|
|
50.2050
|
|
|
|
|
1/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,624
|
(5)
|
|
|
|
|
|
|
|
|
50.8000
|
|
|
|
|
3/18/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.2325
|
|
|
|
|
2/1/2014
|
|
|
|
|
10,195
|
(6)
|
|
|
|
726,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.8700
|
|
|
|
|
2/1/2015
|
|
|
|
|
10,269
|
(8)
|
|
|
|
731,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45.9400
|
|
|
|
|
2/1/2016
|
|
|
|
|
12,713
|
(9)
|
|
|
|
905,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38.3400
|
|
|
|
|
6/16/2016
|
|
|
|
|
2,461
|
(11)
|
|
|
|
175,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,512
|
|
|
|
|
6,756
|
(1)
|
|
|
|
|
|
|
|
|
53.4150
|
|
|
|
|
2/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,260
|
|
|
|
|
12,520
|
(2)
|
|
|
|
|
|
|
|
|
72.9400
|
|
|
|
|
2/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,059
|
(3)
|
|
|
|
|
|
|
|
|
50.2050
|
|
|
|
|
1/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,656
|
(5)
|
|
|
|
|
|
|
|
|
50.8000
|
|
|
|
|
3/18/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Stock options vested February 1, 2010. |
|
(2) |
|
50% of stock options vested February 1, 2010; and 50% of
stock options vest February 1, 2011. |
|
(3) |
|
331/3%
of stock options vested February 1, 2010;
331/3%
of stock options vest February 1, 2011; and
331/3%
of stock options vest February 1, 2012. |
|
(4) |
|
331/3%
of stock options vest November 16, 2010;
331/3%
of stock options vest November 16, 2011; and
331/3%
of stock options vest November 16, 2012. |
36
|
|
|
(5) |
|
331/3%
of stock options vested March 18, 2010;
331/3%
of stock options vest March 18, 2011; and
331/3%
of stock options vest March 18, 2012. |
|
(6) |
|
Restricted stock vested February 1, 2010. |
|
(7) |
|
Market value based on December 31, 2009 closing price of
$71.22. |
|
(8) |
|
Restricted stock vests February 1, 2011. |
|
(9) |
|
20% of restricted stock vested January 30, 2010; 30% of
restricted stock vests January 30, 2011; and 50% of
restricted stock vests January 30, 2012. |
|
(10) |
|
20% of restricted stock vests November 16, 2010; 30% of
restricted stock vests November 16, 2011; and 50% of
restricted stock vests November 16, 2012. |
|
(11) |
|
20% of restricted stock vested March 18, 2010; 30% of
restricted stock vests March 18, 2011; and 50% of
restricted stock vests March 18, 2012. |
Stock
Option Exercises and Stock Vesting
The following table sets forth certain information with respect
to vesting of restricted stock and the exercise of stock options
held by our named executive officers during fiscal year 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
|
Number of Shares
|
|
|
Value Realized on
|
Name
|
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Acquired on Vesting (#)
|
|
|
Vesting ($)(1)
|
Charles D. Davidson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,181
|
|
|
|
$
|
862,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,514
|
|
|
|
|
658,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,522
|
|
|
|
|
176,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,522
|
|
|
|
|
176,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,560
|
|
|
|
|
228,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares of restricted stock granted to our named executive
officers on February 1, 2006 vested on February 1,
2009. Income was recognized on vesting based on the average of
the high and low trading price of our common stock on
February 1, 2009 ($50.205). Dividends that accrued on the
shares of restricted stock that vested on February 1, 2009
during the restricted period were paid in 2009 as follows:
Mr. Davidson $23,538; Mr. Tong
$4,825; Mr. Stover $4,825;
Ms. Cunningham $4,825; and
Mr. Cook $5,872. |
|
(2) |
|
Our Compensation Committee took action on June 17, 2009 to
accelerate the vesting on a prorated portion of
Mr. Tongs 2007 and 2008 restricted stock awards in
connection with his retirement on August 1, 2009.
5,850 shares of the 11,700 restricted shares granted to
Mr. Tong in 2007 and 2,142 shares of the 10,709
restricted shares granted in 2008 vested on August 1, 2009.
Income was recognized on vesting based on the average of the
high and low trading price of our common stock on July 31,
2009 ($60.31). Mr. Tong also received payment of the
dividends that accrued on these shares during the restricted
period in the amount of $10,697 in 2009. |
37
Pension
Benefits
The amounts reported in the table below reflect the present
value of accumulated benefits as of December 31, 2009 for
the named executive officers under our Retirement Plan and
Restoration Plan. The estimates assume that benefits are
received in the form of a ten-year certain and life annuity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Years of
|
|
|
Present Value of
|
|
|
Payments During
|
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Last Fiscal Year
|
Name
|
|
|
Plan Name
|
|
|
Service(1)
|
|
|
Benefit ($)(2)
|
|
|
($)
|
Charles D. Davidson
|
|
|
Retirement Plan
|
|
|
|
9
|
|
|
|
$
|
374,254
|
|
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
|
9
|
|
|
|
|
4,297,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
Retirement Plan
|
|
|
|
7
|
|
|
|
|
182,743
|
|
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
|
7
|
|
|
|
|
766,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
Retirement Plan
|
|
|
|
9
|
|
|
|
|
254,850
|
|
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
|
9
|
|
|
|
|
758,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
Retirement Plan
|
|
|
|
29
|
|
|
|
|
605,745
|
|
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
|
29
|
|
|
|
|
1,108,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The above named executive officers are fully vested in their
retirement benefits. Each is eligible for immediate commencement
and can elect an unlimited lump sum option for his or her
Retirement Plan benefit. For the Restoration Plan benefit,
participants previously elected to receive their benefit as
either an annuity or lump sum, and specified the timing for
receipt of benefits. Each of the above named executive officers
elected to receive a lump sum from the Restoration Plan.
Mr. Davidson and Ms. Cunningham elected to receive
their Restoration Plan benefits upon separation of service and
Messrs. Stover and Cook elected to receive their
Restoration Plan benefits at the later of age 55 or
separation of service. The following amounts would be payable to
our named executive officers from our Retirement Plan and
Restoration Plan effective January 1, 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
Retirement
|
|
|
Restoration
|
|
|
|
Age at
|
|
|
Plan Monthly
|
|
|
Plan
|
|
|
Plan
|
Name
|
|
|
12/31/2009
|
|
|
Annuity
|
|
|
Lump Sum
|
|
|
Lump Sum
|
Charles D. Davidson
|
|
|
|
59.83
|
|
|
|
$
|
3,138
|
|
|
|
$
|
517,158
|
|
|
|
$
|
5,933,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
52.17
|
|
|
|
|
744
|
|
|
|
|
186,674
|
|
|
|
|
821,142(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
54.00
|
|
|
|
|
1,098
|
|
|
|
|
259,207
|
|
|
|
|
768,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
52.58
|
|
|
|
|
6,467
|
|
|
|
|
1,219,410
|
|
|
|
|
1,478,999(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Not payable until the later of separation of service or
attainment of age 55. An actuarially equivalent amount will
be payable at that time. |
|
|
|
(2) |
|
Represents the actuarial present value of the accumulated
pension benefits as of December 31, 2009 under our
Retirement Plan and Restoration Plan. Present values are based
on the same actuarial assumptions and measurement dates
described in Note 12 to our consolidated financial
statements, included in our 2009 Annual Report on
Form 10-K. |
38
Nonqualified
Deferred Compensation Table
The following table sets forth certain information with respect
to contributions made to our Deferred Compensation Plan by our
named executive officers during fiscal year 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Withdrawals/
|
|
|
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings
|
|
|
Distributions in
|
|
|
Aggregate Balance at
|
Name
|
|
|
Last FY ($)(1)
|
|
|
Last FY ($)(2)
|
|
|
in Last FY ($)(3)
|
|
|
Last FY
|
|
|
Last FYE ($)(4)
|
Charles D. Davidson
|
|
|
$
|
1,896,250
|
|
|
|
$
|
46,800
|
|
|
|
$
|
1,089,136
|
|
|
|
$
|
|
|
|
|
$
|
17,672,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth M. Fisher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Tong
|
|
|
|
196,670
|
|
|
|
|
|
|
|
|
|
73,011
|
|
|
|
|
|
|
|
|
|
1,194,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
|
152,859
|
|
|
|
|
|
|
|
|
|
91,045
|
|
|
|
|
|
|
|
|
|
1,457,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney D. Cook
|
|
|
|
81,744
|
|
|
|
|
8,400
|
|
|
|
|
17,979
|
|
|
|
|
|
|
|
|
|
317,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Davidson deferred 100% of the STIP payment he earned in
2008 (otherwise paid in 2009) ($1,435,000) and 45% ($461,250) of
base salary in 2009. Mr. Tong deferred 30% of the STIP
payment he earned in 2008 (paid in 2009) ($125,156) and 23%
($71,514) of base salary in 2009. Mr. Stover deferred 20%
of the STIP payment he earned in 2008 (paid in 2009) ($152,859).
Mr. Cook deferred 10% ($38,500) of base salary in 2009. |
|
(2) |
|
Represents matching contributions of 100% of the first 6% of
base salary deferred, to the extent not matched in our Thrift
Plan. |
|
(3) |
|
Interest is paid at the greater of 125% of the
120-month
rolling average of the
10-year
Treasury Note, or the
120-month
rolling average of the Prime Rate. Interest paid in 2009 is
based on Prime Rate average of 6.55%, compounded monthly. |
|
(4) |
|
All named executive officers are 100% vested in these balances. |
The matching contributions and a portion of the interest
earnings credited to the Deferred Compensation Plan accounts of
our named executive officers are reflected in the All
Other Compensation and the Change in Pension
Value columns of the Summary Compensation Table above,
respectively.
Potential
Payments and Benefits Upon Termination of Employment
The tables below estimate the amount of compensation payable to
each of our named executive officers upon voluntary and
involuntary termination of employment, termination following a
change of control and in the event of disability or death, in
each case effective as of December 31, 2009. The actual
amount of compensation payable to each of our named executive
officers can only be determined at the time of his or her
separation from the Company.
Payments
Made Upon Termination
Upon termination of employment for reasons other than
disability, death or in connection with a change of control,
each named executive officer is entitled to receive amounts
earned during his or her term of employment. Such amounts
include:
|
|
|
|
|
amounts credited under our Deferred Compensation Plan;
|
|
|
|
unused vacation pay; and
|
|
|
|
amounts accrued and vested under our Retirement Plan and
Restoration Plan.
|
39
Payments
Made Upon Retirement
In the event of the retirement of a named executive officer, in
addition to the items identified above, the named executive
officer:
|
|
|
|
|
will have until the earlier of (1) the fifth anniversary of
his or her retirement date or (2) the expiration of the
remainder of the outstanding ten-year option term, to exercise
all stock options that are vested as of his or her retirement
date;
|
|
|
|
may elect to continue to participate in our medical and dental
plans at subsidized retiree rates until he or she reaches
age 65 (continued coverage for medical and dental benefits
for the named executive officers dependents may also be
elected at subsidized retiree rates); and
|
|
|
|
may continue to receive life insurance coverage until the
attainment of age 65 at subsidized premium rates.
|
Payments
Made Upon Death or Disability
In the event of the death or disability of a named executive
officer, in addition to the benefits listed under the headings
Payments Made Upon Termination and Payments
Made Upon Retirement above, the named executive officer or
his or her named beneficiary will receive benefits under our
disability plan or payments under our life insurance plan, as
appropriate.
Payments
Made Upon a Change of Control
We have entered into change of control arrangements with each of
our named executive officers. If a named executive
officers employment is terminated within two years after a
change of control of the Company, he or she may be entitled to
receive certain severance benefits pursuant to the terms of his
or her change of control arrangement. These benefits are
described above more fully in this proxy statement under the
heading Change of Control Arrangements.
Charles
D. Davidson
The following table shows the potential payments to
Mr. Davidson, Chairman and CEO, in the event of his
termination of employment as of December 31, 2009.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
Executive Benefits and
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
|
Payments Upon Separation
|
|
|
12/31/2009(1)
|
|
|
12/31/2009(1)
|
|
|
12/31/2009
|
|
|
12/31/2009(1)
|
|
|
Death on 12/31/2009
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
$
|
8,516,517
|
(9)
|
|
|
|
|
|
|
|
|
|
|
STIP Payments
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
|
|
|
1,025,000
|
(9)
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,716,287
|
(10)
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
11,069,654
|
(11)
|
|
|
$
|
11,069,654
|
(3)
|
|
|
$
|
11,069,654
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
|
$
|
6,450,230
|
(4)
|
|
|
$
|
6,450,230
|
(4)
|
|
|
|
6,450,230
|
(4)
|
|
|
|
5,450,821
|
(15)
|
|
|
|
3,354,108
|
(17)
|
Deferred Compensation Plan
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
Health & Welfare Benefits
|
|
|
|
21,433
|
(6)
|
|
|
|
21,433
|
(6)
|
|
|
|
22,495
|
(12)
|
|
|
|
21,433
|
(6)
|
|
|
|
|
|
Disability Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16)
|
|
|
|
|
|
Life Insurance Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(18)
|
Excise Tax &
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,400,000
|
(13)
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
Employment Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
$
|
6,471,663
|
|
|
|
$
|
6,471,663
|
|
|
|
$
|
35,215,183
|
|
|
|
$
|
16,541,908
|
|
|
|
$
|
15,423,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Davidson was eligible for early retirement as of
December 31, 2009. Upon his termination of employment he
will be entitled to retiree benefits under all of our benefit
plans. |
|
(2) |
|
Mr. Davidson would not be entitled to a STIP payment for
2009 in the event of his termination of employment on
December 31, 2009, other than in the event of a change of
control. Employees must be employed on the STIP payment date,
which occurred in February 2010, in order to receive payment. |
40
|
|
|
(3) |
|
All unvested shares of restricted stock will be forfeited as a
result of Mr. Davidsons voluntary or involuntary
termination of employment, unless the Board, in its discretion,
takes action to accelerate the vesting of these shares. All
unvested shares of restricted stock will vest in the event of
termination of employment as a result of death or disability as
follows: 2007 award 58,262 shares; 2008
award 48,459 shares; and 2009 award
48,708 shares. Value is based on the closing price of our
common stock on December 31, 2009 ($71.22). |
|
(4) |
|
Reflects the total lump sum payable to Mr. Davidson under
our Retirement Plan and Restoration Plan as of January 1,
2010. Due to plan changes made effective January 1, 2008,
all employees are eligible for immediate commencement of
benefits upon separation from service and can elect a lump sum
payment of their accrued Retirement Plan benefits. Based on a
December 31, 2009 termination date,
Mr. Davidsons monthly age 65 retirement benefits
from our Retirement Plan would be $4,477. If Mr. Davidson
commences his retirement benefits immediately following
termination on December 31, 2009, his monthly benefits from
our Retirement Plan, reduced for early commencement, would be
$3,138. For the Restoration Plan benefit, participants
previously elected to receive their benefit as either an annuity
or lump sum, and elected specific timing of receiving their
benefits. Mr. Davidson elected to receive a lump sum from
the Restoration Plan upon separation of service. The lump sum
payable to Mr. Davidson from our Restoration Plan based on
a December 31, 2009 termination date is $5,933,072. |
|
(5) |
|
Mr. Davidson would not be entitled to any additional
benefit under our Deferred Compensation Plan in the event of his
termination of employment other than the vested amount included
in the table following Note 18. |
|
(6) |
|
Reflects the present value of expected future medical and dental
benefits that will be paid by the Company in connection with
Mr. Davidsons participation in the medical and dental
plans as a retiree. Assumptions used for this calculation are
the same assumptions disclosed in Note 12 to our financial
statements in the
Form 10-K
for the year ended December 31, 2009, for post-retirement
calculations. |
|
(7) |
|
Mr. Davidson is entitled to six weeks of paid vacation each
calendar year. Unused vacation does not carry over from year to
year. We have assumed for purposes of this table that
Mr. Davidson used all of his vacation during 2009 and would
therefore not be entitled to payment for any unused vacation in
the event of his termination on December 31, 2009. In the
event of termination during the year, all amounts of unused
vacation would be paid based on Mr. Davidsons salary. |
|
(8) |
|
Mr. Davidson is not a party to any agreement that provides
for a severance payment absent termination of employment
following a change of control. However, our Severance Benefit
Plan provides for a severance payment in certain instances based
upon years of completed service. If Mr. Davidson is
entitled to a severance payment under the plan, he would receive
two weeks of pay for every year of completed service, plus a
prorated STIP payment based on his STIP target percentage (100%)
for a total payment of $1,379,808. |
|
(9) |
|
We entered into a Change of Control Agreement with
Mr. Davidson that provides for severance benefits in the
event that Mr. Davidsons employment terminates within
two years after a change of control of the Company. Under
Mr. Davidsons Change of Control Agreement, if
Mr. Davidson is terminated following a change of control
(other than termination by the Company for cause or by reason of
death or disability), he is entitled to receive a lump sum
severance payment equal to 2.99 times his annual cash
compensation. Cash compensation for purposes of calculating
severance is the sum of annual base salary and the greater of
target bonus for the current year and the average STIP paid for
the three years prior to the change of control.
Mr. Davidson is also entitled to a prorated STIP payment
based on his termination date in the year of the change of
control. |
|
(10) |
|
Vesting of stock options accelerates in the event of a change of
control. Represents the difference between the exercise price of
each stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all unvested stock options
held by Mr. Davidson as of December 31, 2009. |
|
(11) |
|
Vesting of restricted stock accelerates in the event of a change
of control. Represents the value of all restricted stock held by
Mr. Davidson on December 31, 2009 based on the closing
price of our common stock on December 31, 2009 ($71.22). |
|
(12) |
|
Mr. Davidsons Change of Control Agreement provides
for continued medical, dental, life, AD&D, and LTD benefits
for a period of 36 months following a change of control.
The value reflected is the total estimated cost to us to provide
these benefits. Mr. Davidson is also entitled to continue
his medical and dental coverage following this
36-month
period as a participant in our retiree medical plan at
subsidized premium rates as discussed above. The value reflected
also includes the present value of the expected future medical
and dental |
41
|
|
|
|
|
benefits that will be paid by us in connection with
Mr. Davidsons participation in the retiree medical
plan following the
36-month
period. |
|
(13) |
|
Mr. Davidson is entitled to a
gross-up
payment for any excise tax due in connection with a change of
control pursuant to Internal Revenue Code Sections 280G and
4099. The estimated
gross-up
payment for Mr. Davidson based on a December 31, 2009
change of control and the closing price of our common stock on
December 31, 2009 of $71.22 is approximately $4,400,000. |
|
(14) |
|
Mr. Davidsons Change of Control Agreement provides
for reimbursement for reasonable fees up to $15,000 for
out-placement employment services. |
|
(15) |
|
In the event of Mr. Davidsons termination of
employment due to permanent and total disability, his
age 65 retirement benefits from our Retirement Plan and
Restoration Plan will be calculated as if he had continued to
work until age 65. The value reflected represents the
actuarial present value of Mr. Davidsons age 65
benefits based on a disability date of December 31, 2009.
The calculation is based on Mr. Davidsons final
average compensation as of his date of disability. Upon
commencement of his benefits at age 65,
Mr. Davidsons monthly benefit from our Retirement
Plan and Restoration Plan would be $67,349. In the event that
Mr. Davidson elects to immediately commence his retirement
benefits, the amounts payable will be as described in
Note 4 above. |
|
(16) |
|
Our LTD benefits are fully insured through CIGNA. Eligibility
for benefits is determined by CIGNA only after the
employees termination of employment because of a medical
condition. Benefits pay at 60% of monthly income, capped at
$15,000 per month. |
|
(17) |
|
In the event of Mr. Davidsons death while an active
employee, his named beneficiary is entitled to a death benefit
under our Retirement Plan and Restoration Plan. The death
benefit payable in the event of his death on December 31,
2009 is $3,354,108. This lump sum payment was calculated based
on the same actuarial assumptions utilized in our
Form 10-K
filing for the year ended December 31, 2009 and the GAR
1994 mortality tables as required by our Retirement Plan and
Restoration Plan. The accrued death benefit was reduced for
early commencement. |
|
(18) |
|
We provide group term life insurance coverage equal to two times
base salary, capped at $1,000,000. |
In addition to the payments Mr. Davidson may receive upon
the termination of his employment, he will continue to hold
stock options that were vested immediately prior to his
termination. Mr. Davidson also will be entitled to receive
the vested balance of his contributions to our Deferred
Compensation Plan. The table below shows the vested benefits
that Mr. Davidson has accumulated as of December 31,
2009 and the benefits he will receive as a result of his
termination of employment on that date. We refer to the combined
amounts as the total walk-away amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Vested Benefits as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options(1)
|
|
|
$
|
42,590,800
|
|
|
|
$
|
42,590,800
|
|
|
|
$
|
42,590,800
|
|
|
|
$
|
42,590,800
|
|
|
|
$
|
42,590,800
|
|
Deferred Compensation Plan
|
|
|
|
17,672,510
|
|
|
|
|
17,672,510
|
|
|
|
|
17,672,510
|
|
|
|
|
17,672,510
|
|
|
|
|
17,672,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Vested Benefits
|
|
|
$
|
60,263,310
|
|
|
|
$
|
60,263,310
|
|
|
|
$
|
60,263,310
|
|
|
|
$
|
60,263,310
|
|
|
|
$
|
60,263,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments Upon Separation:
|
|
|
|
6,471,663
|
|
|
|
|
6,471,663
|
|
|
|
|
35,215,183
|
|
|
|
|
16,541,908
|
|
|
|
|
15,423,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Walk-Away Value
|
|
|
$
|
66,734,973
|
|
|
|
$
|
66,734,973
|
|
|
|
$
|
95,478,493
|
|
|
|
$
|
76,805,218
|
|
|
|
$
|
75,687,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the difference between the exercise price of each
stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all stock options vested and
exercisable as of December 31, 2009. |
42
Kenneth
M. Fisher
The following table shows the potential payments to
Mr. Fisher, Senior Vice President and CFO, in the event of
his termination of employment as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
Executive Benefits and
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
Payments Upon Separation
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
(7)
|
|
|
$
|
2,250,000
|
(8)
|
|
|
|
|
|
|
|
|
|
|
STIP Payments
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
|
|
|
400,000
|
(8)
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123,888
|
(9)
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
(2)
|
|
|
$
|
1,266,861
|
(2)
|
|
|
|
2,533,723
|
(10)
|
|
|
$
|
2,533,723
|
(2)
|
|
|
$
|
2,533,723
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
5,625
|
(3)
|
|
|
|
5,625
|
(3)
|
Deferred Compensation Plan
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
Health & Welfare Benefits
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
45,618
|
(11)
|
|
|
|
|
(5)
|
|
|
|
|
|
Disability Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
|
|
|
|
|
Life Insurance Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(15)
|
Excise Tax &
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
(12)
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
Employment Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
$
|
|
|
|
|
$
|
1,266,861
|
|
|
|
$
|
6,568,229
|
|
|
|
$
|
2,539,348
|
|
|
|
$
|
3,539,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Fisher would not be entitled to a STIP payment for 2009
in the event of his termination of employment on
December 31, 2009, other than in the event of a change of
control. Employees must be employed on the STIP payment date,
which occurred in February 2010, in order to receive payment. |
|
(2) |
|
All unvested shares of restricted stock will be forfeited as a
result of Mr. Fishers voluntary termination of
employment, unless the Board, in its discretion, takes action to
accelerate the vesting of these shares. In the event of
Mr. Fishers involuntary termination of employment
without cause on December 31, 2009, 50% of his restricted
shares awarded in 2009 will vest and the remaining 50% of the
restricted shares will be forfeited. All unvested shares of
restricted stock (35,576 shares awarded in 2009) will
vest in the event of termination of employment as a result of
death or disability. Value is based on the closing price of our
common stock on December 31, 2009 ($71.22). |
|
(3) |
|
Mr. Fisher is a participant in our Profit Sharing Plan. In
the event of his termination of employment for any reason other
than death or disability on December 31, 2009, all profit
sharing contributions made on behalf of Mr. Fisher will be
forfeited. In the event of termination of employment due to
death or disability, Mr. Fisher will vest in all profit
sharing contributions made on his behalf. |
|
(4) |
|
Mr. Fisher would not be entitled to any additional benefit
under our Deferred Compensation Plan in the event of his
termination of employment. |
|
(5) |
|
Mr. Fisher would not be eligible to participate in our
retiree medical and dental plans in the event of his termination
of employment on December 31, 2009. |
|
(6) |
|
Mr. Fisher is entitled to five weeks of paid vacation each
calendar year. Unused vacation does not carry over from year to
year. We have assumed for purposes of this table that
Mr. Fisher used all of his vacation during 2009 and would
therefore not be entitled to payment for any unused vacation in
the event of his termination on December 31, 2009. In the
event of termination during the year, all amounts of unused
vacation would be paid based on Mr. Fishers salary. |
|
(7) |
|
Mr. Fisher is not a party to any agreement that provides
for a severance payment absent termination of employment
following a change of control. However, our Severance Benefit
Plan provides for a severance payment in certain instances based
upon years of completed service. If Mr. Fisher is entitled
to a severance payment under the plan, he would receive two
weeks of pay for every year of completed service, plus a
prorated STIP payment based on his STIP target percentage (80%)
for a total payment of $515,385. |
43
|
|
|
(8) |
|
Our Executive Change of Control Plan provides for severance
benefits in the event that Mr. Fishers employment
terminates within two years after a change of control of the
Company. Under the plan, if Mr. Fisher is terminated
following a change of control (other than termination by the
Company for cause or by reason of death or disability), he is
entitled to receive a lump sum severance payment equal to 2.5
times his annual cash compensation. Cash compensation for
purposes of calculating severance is the sum of annual base
salary and the greater of target bonus for the current year and
the average STIP paid for the three years prior to the change of
control. Mr. Fisher is also entitled to a prorated STIP
payment based on his termination date in the year of the change
of control. |
|
(9) |
|
Vesting of stock options accelerates in the event of a change of
control. Represents the difference between the exercise price of
each stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all unvested stock options
held by Mr. Fisher as of December 31, 2009. |
|
(10) |
|
Vesting of restricted stock accelerates in the event of a change
of control. Represents the value of all restricted stock held by
Mr. Fisher on December 31, 2009 based on the closing
price of our common stock on December 31, 2009 ($71.22). |
|
(11) |
|
Our Executive Change of Control Plan provides for continued
medical, dental, life, AD&D, and LTD benefits for a period
of 30 months following a change of control. The value
reflected is the total estimated cost to us to provide these
benefits. |
|
(12) |
|
Mr. Fisher is entitled to a
gross-up
payment for any excise tax due in connection with a change of
control pursuant to Internal Revenue Code Sections 280G and
4099. The estimated
gross-up
payment for Mr. Fisher based on a December 31, 2009
change of control and the closing price of our common stock on
December 31, 2009 of $71.22 is approximately $1,200,000. |
|
(13) |
|
Our Executive Change of Control Plan provides for reimbursement
for reasonable fees up to $15,000 for out-placement employment
services. |
|
(14) |
|
Our LTD benefits are fully insured through CIGNA. Eligibility
for benefits is determined by CIGNA only after the
employees termination of employment because of a medical
condition. Benefits pay at 60% of monthly income, capped at
$15,000 per month. |
|
(15) |
|
We provide group term life insurance coverage equal to two times
base salary, capped at $1,000,000. |
Mr. Fisher joined the Company in November 2009 and will not
be entitled to any additional payments or benefits other than
those set forth in the table above upon the termination of his
employment.
44
David L.
Stover
The following table shows the potential payments to
Mr. Stover, President and COO, in the event of his
termination of employment as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
Executive Benefits and
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
Payments Upon Separation
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
(7)
|
|
|
$
|
3,609,126
|
(8)
|
|
|
|
|
|
|
|
|
|
|
STIP Payments
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
|
|
|
540,000
|
(8)
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,142,690
|
(9)
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
|
|
|
5,229,685
|
(10)
|
|
|
$
|
5,229,685
|
(2)
|
|
|
$
|
5,229,685
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
|
$
|
1,007,816
|
(3)
|
|
|
$
|
1,007,816
|
(3)
|
|
|
|
1,007,816
|
(3)
|
|
|
|
1,995,965
|
(14)
|
|
|
|
340,712
|
(16)
|
Deferred Compensation Plan
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
Health & Welfare Benefits
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
33,527
|
(11)
|
|
|
|
|
(5)
|
|
|
|
|
|
Disability Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15)
|
|
|
|
|
|
Life Insurance Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(17)
|
Excise Tax &
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,900,000
|
(12)
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
Employment Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
$
|
1,007,816
|
|
|
|
$
|
1,007,816
|
|
|
|
$
|
14,447,844
|
|
|
|
$
|
7,225,650
|
|
|
|
$
|
6,570,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Stover would not be entitled to a STIP payment for 2009
in the event of his termination of employment on
December 31, 2009, other than in the event of a change of
control. Employees must be employed on the STIP payment date,
which occurred in February 2010, in order to receive payment. |
|
(2) |
|
All unvested shares of restricted stock will be forfeited as a
result of Mr. Stovers voluntary or involuntary
termination of employment, unless the Board, in its discretion,
takes action to accelerate the vesting of these shares. All
unvested shares of restricted stock will vest in the event of
termination of employment as a result of death or disability as
follows: 2007 award 17,257 shares; 2008
award 23,126 shares; and 2009
awards 33,047 shares. Value is based on the
closing price of our common stock on December 31, 2009
($71.22). |
|
(3) |
|
Reflects the total lump sum payable to Mr. Stover under our
Retirement Plan and Restoration Plan as of January 1, 2010.
Due to plan changes made effective January 1, 2008, all
employees are eligible for immediate commencement of benefits
upon separation from service and can elect a lump sum payment of
their accrued Retirement Plan benefits. Based on a
December 31, 2009 termination date, Mr. Stovers
monthly age 65 retirement benefits from our Retirement Plan
would be $2,637. If Mr. Stover commences his retirement
benefits immediately following termination of employment on
December 31, 2009, his monthly benefits from our Retirement
Plan, reduced for early commencement, would be $744. For the
Restoration Plan benefit, participants previously elected to
receive their benefit as either an annuity or lump sum, and
elected specific timing of receiving their benefits.
Mr. Stover elected to receive a lump sum from the
Restoration Plan at the later of attainment of age 55 or
separation of service. Mr. Stovers Restoration Plan
lump sum amount as of December 31, 2009 is $821,142. An
actuarially equivalent amount will be payable to Mr. Stover
at the time he attains age 55 (in 2012) based on the
interest rates in effect at that time. |
|
(4) |
|
Mr. Stover would not be entitled to any additional benefit
under our Deferred Compensation Plan in the event of his
termination of employment other than the vested amount included
in the table following Note 17. |
|
(5) |
|
Mr. Stover would not be eligible to participate in our
retiree medical and dental plans in the event of his termination
of employment on December 31, 2009. |
|
(6) |
|
Mr. Stover is entitled to six weeks of paid vacation each
calendar year. Unused vacation does not carry over from year to
year. We have assumed for purposes of this table that
Mr. Stover used all of his vacation during 2009 and would
therefore not be entitled to payment for any unused vacation in
the event of his termination on |
45
|
|
|
|
|
December 31, 2009. In the event of termination during the
year, all amounts of unused vacation would be paid based on
Mr. Stovers salary. |
|
(7) |
|
Mr. Stover is not a party to any agreement that provides
for a severance payment absent termination of employment
following a change of control. However, our Severance Benefit
Plan provides for a severance payment in certain instances based
upon years of completed service. If Mr. Stover is entitled
to a severance payment under the plan, he would receive two
weeks of pay for every year of completed service, plus a
prorated STIP payment based on his STIP target percentage (90%)
for a total payment of $701,538. |
|
(8) |
|
We entered into a Change of Control Agreement with
Mr. Stover that provides for severance benefits in the
event that Mr. Stovers employment terminates within
two years after a change of control of the Company. Under
Mr. Stovers Change of Control Agreement, if
Mr. Stover is terminated following a change of control
(other than termination by the Company for cause or by reason of
death or disability), he is entitled to receive a lump sum
severance payment equal to 2.5 times his annual cash
compensation. Cash compensation for purposes of calculating
severance is the sum of annual base salary and the greater of
target bonus for the current year and the average STIP paid for
the three years prior to the change of control. Mr. Stover
is also entitled to a prorated STIP payment based on his
termination date in the year of the change of control. |
|
(9) |
|
Vesting of stock options accelerates in the event of a change of
control. Represents the difference between the exercise price of
each stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all unvested stock options
held by Mr. Stover as of December 31, 2009. |
|
(10) |
|
Vesting of restricted stock accelerates in the event of a change
of control. Represents the value of all restricted stock held by
Mr. Stover on December 31, 2009 based on the closing
price of our common stock on December 31, 2009 ($71.22). |
|
(11) |
|
Mr. Stovers Change of Control Agreement provides for
continued medical, dental, life, AD&D, and LTD benefits for
a period of 30 months following a change of control. The
value reflected is the total estimated cost to us to provide
these benefits. |
|
(12) |
|
Mr. Stover is entitled to a
gross-up
payment for any excise tax due in connection with a change of
control pursuant to Internal Revenue Code Sections 280G and
4099. The estimated
gross-up
payment for Mr. Stover based on a December 31, 2009
change of control and the closing price of our common stock on
December 31, 2009 of $71.22 is approximately $1,900,000. |
|
(13) |
|
Mr. Stovers Change of Control Agreement provides for
reimbursement for reasonable fees up to $15,000 for
out-placement employment services. |
|
(14) |
|
In the event of Mr. Stovers termination of employment
due to permanent and total disability, his age 65
retirement benefits from our Retirement Plan and Restoration
Plan will be calculated as if he had continued to work until
age 65. The value reflected represents the actuarial
present value of Mr. Stovers age 65 benefits
based on a disability date of December 31, 2009. The
calculation is based on Mr. Stovers final average
compensation as of his date of disability. Upon commencement of
his benefits at age 65, Mr. Stovers monthly
benefit from our Retirement Plan and Restoration Plan would be
$38,549. |
|
(15) |
|
Our LTD benefits are fully insured through CIGNA. Eligibility
for benefits is determined by CIGNA only after the
employees termination of employment because of a medical
condition. Benefits pay at 60% of monthly income, capped at
$15,000 per month. |
|
(16) |
|
In the event of Mr. Stovers death while an active
employee, his named beneficiary is entitled to a death benefit
under the Retirement Plan and Restoration Plan. The death
benefit payable in the event of Mr. Stovers death on
December 31, 2009 is $340,712. This lump sum payment was
calculated based on the same actuarial assumptions utilized in
our
Form 10-K
filing for the year ended December 31, 2009 and the GAR
1994 mortality tables as required by our Retirement Plan and
Restoration Plans. The accrued death benefit was reduced for
early commencement. |
|
(17) |
|
We provide group term life insurance coverage equal to two times
base salary, capped at $1,000,000. |
In addition to the payments Mr. Stover may receive upon the
termination of his employment, he will continue to hold stock
options that were vested immediately prior to his termination.
Mr. Stover also will be entitled to receive the vested
balance of his contributions to our Deferred Compensation Plan.
The table below shows the
46
vested benefits that Mr. Stover has accumulated as of
December 31, 2009 and the benefits he will receive as a
result of his termination of employment on that date. We refer
to the combined amounts as the total walk-away
amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Vested Benefits as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options(1)
|
|
|
$
|
5,403,090
|
|
|
|
$
|
5,403,090
|
|
|
|
$
|
5,403,090
|
|
|
|
$
|
5,403,090
|
|
|
|
$
|
5,403,090
|
|
Deferred Compensation Plan
|
|
|
|
1,457,043
|
|
|
|
|
1,457,043
|
|
|
|
|
1,457,043
|
|
|
|
|
1,457,043
|
|
|
|
|
1,457,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Vested Benefits
|
|
|
$
|
6,860,133
|
|
|
|
$
|
6,860,133
|
|
|
|
$
|
6,860,133
|
|
|
|
$
|
6,860,133
|
|
|
|
$
|
6,860,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments Upon Separation:
|
|
|
|
1,007,816
|
|
|
|
|
1,007,816
|
|
|
|
|
14,447,844
|
|
|
|
|
7,225,650
|
|
|
|
|
6,570,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Walk-Away Value
|
|
|
$
|
7,867,949
|
|
|
|
$
|
7,867,949
|
|
|
|
$
|
21,337,977
|
|
|
|
$
|
14,085,783
|
|
|
|
$
|
13,430,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the difference between the exercise price of each
stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all stock options vested and
exercisable as of December 31, 2009. |
Susan M.
Cunningham
The following table shows the potential payments to
Ms. Cunningham, Senior Vice President
Exploration, in the event of her termination of employment as of
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
Executive Benefits and
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
Payments Upon Separation
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
(7)
|
|
|
$
|
2,475,480
|
(8)
|
|
|
|
|
|
|
|
|
|
|
STIP Payments
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
|
|
|
330,000
|
(8)
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,463,902
|
(9)
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
|
|
|
3,294,067
|
(10)
|
|
|
$
|
3,294,067
|
(2)
|
|
|
$
|
3,294,067
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
|
$
|
1,027,480
|
(3)
|
|
|
$
|
1,027,480
|
(3)
|
|
|
$
|
1,027,480
|
(3)
|
|
|
|
1,831,022
|
(14)
|
|
|
|
368,243
|
(16)
|
Deferred Compensation Plan
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
(4)
|
Health & Welfare Benefits
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
44,154
|
(11)
|
|
|
|
|
(5)
|
|
|
|
|
|
Disability Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15)
|
|
|
|
|
|
Life Insurance Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
880,000
|
(17)
|
Excise Tax &
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
|
|
|
|
(6)
|
Employment Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
$
|
1,027,480
|
|
|
|
$
|
1,027,480
|
|
|
|
$
|
8,650,083
|
|
|
|
$
|
5,125,089
|
|
|
|
$
|
4,542,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Ms. Cunningham would not be entitled to a STIP payment for
2009 in the event of her termination of employment on
December 31, 2009, other than in the event of a change of
control. Employees must be employed on the STIP payment date,
which occurred in February 2010, in order to receive payment. |
|
(2) |
|
All unvested shares of restricted stock will be forfeited as a
result of Ms. Cunninghams voluntary or involuntary
termination of employment, unless the Board, in its discretion,
takes action to accelerate the vesting of these shares. All
unvested shares of restricted stock will vest in the event of
termination of employment as a result of death or disability as
follows: 2007 award 12,231 shares; 2008
award 11,465 shares; and 2009
awards 22,556 shares. Value is based on the
closing price of our common stock on December 31, 2009
($71.22). |
|
(3) |
|
Reflects the total lump sum payable to Ms. Cunningham under
our Retirement Plan and Restoration Plan as of January 1,
2010. Due to plan changes made effective January 1, 2008,
all employees are eligible for immediate commencement of
benefits upon separation from service and can elect a lump sum
payment of their accrued Retirement Plan benefits. Based on a
December 31, 2009 termination date,
Ms. Cunninghams monthly age 65 |
47
|
|
|
|
|
retirement benefits from our Retirement Plan would be $3,296. If
Ms. Cunningham commences her retirement benefits
immediately following termination of employment on
December 31, 2009, her monthly benefits from our Retirement
Plan, reduced for early commencement, would be $1,098. For the
Restoration Plan benefit, participants previously elected to
receive their benefit as either an annuity or lump sum, and
elected specific timing of receiving their benefits.
Ms. Cunningham elected to receive a lump sum from the
Restoration Plan upon separation of service. The lump sum
payable to Ms. Cunningham from our Restoration Plan based
on a December 31, 2009 termination date is $768,273. |
|
(4) |
|
Ms. Cunningham would not be entitled to any additional
benefit under our Deferred Compensation Plan in the event of her
termination of employment. |
|
(5) |
|
Ms. Cunningham would not be eligible to participate in our
retiree medical and dental plans in the event of her termination
of employment on December 31, 2009. |
|
(6) |
|
Ms. Cunningham is entitled to six weeks of paid vacation
each calendar year. Unused vacation does not carry over from
year to year. We have assumed for purposes of this table that
Ms. Cunningham used all of her vacation during 2009 and
would therefore not be entitled to payment for any unused
vacation in the event of her termination on December 31,
2009. In the event of termination during the year, all amounts
of unused vacation would be paid based on
Ms. Cunninghams salary. |
|
(7) |
|
Ms. Cunningham is not a party to any agreement that
provides for a severance payment absent termination of
employment following a change of control. However, our Severance
Benefit Plan provides for a severance payment in certain
instances based upon years of completed service. If
Ms. Cunningham is entitled to a severance payment under the
plan, she would receive two weeks of pay for every year of
completed service, plus a prorated STIP payment based on her
STIP target percentage (75%) for a total payment of $465,385. |
|
(8) |
|
We entered into a Change of Control Agreement with
Ms. Cunningham that provides for severance benefits in the
event that Ms. Cunninghams employment terminates
within two years after a change of control of the Company. Under
Ms. Cunninghams Change of Control Agreement, if
Ms. Cunningham is terminated following a change of control
(other than termination by the Company for cause or by reason of
death or disability), she is entitled to receive a lump sum
severance payment equal to 2.5 times her annual cash
compensation. Cash compensation for purposes of calculating
severance is the sum of annual base salary and the greater of
target bonus for the current year and the average STIP paid for
the three years prior to the change of control.
Ms. Cunningham is also entitled to a prorated STIP payment
based on her termination date in the year of the change of
control. |
|
(9) |
|
Vesting of stock options accelerates in the event of a change of
control. Represents the difference between the exercise price of
each stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all unvested stock options
held by Ms. Cunningham as of December 31, 2009. |
|
(10) |
|
Vesting of restricted stock accelerates in the event of a change
of control. Represents the value of all restricted stock held by
Ms. Cunningham on December 31, 2009 based on the
closing price of our common stock on December 31, 2009
($71.22). |
|
(11) |
|
Ms. Cunninghams Change of Control Agreement provides
for continued medical, dental, life, AD&D, and LTD benefits
for a period of 30 months following a change of control.
The value reflected is the total estimated cost to us to provide
these benefits. |
|
(12) |
|
Ms. Cunningham is entitled to a
gross-up
payment for any excise tax due in connection with a change of
control pursuant to Internal Revenue Code Sections 280G and
4099. We estimate that no
gross-up
payment will be made to Ms. Cunningham based on a
December 31, 2009 change of control and the $71.22 closing
price of our common stock on December 31, 2009. |
|
(13) |
|
Ms. Cunninghams Change of Control Agreement provides
for reimbursement for reasonable fees up to $15,000 for
out-placement employment services. |
|
(14) |
|
In the event of Ms. Cunninghams termination of
employment due to permanent and total disability, her
age 65 retirement benefits from our Retirement Plan and
Restoration Plan will be calculated as if she had continued to
work until age 65. The value reflected represents the
actuarial present value of Ms. Cunninghams
age 65 benefits based on a disability date of
December 31, 2009. The calculation is based on
Ms. Cunninghams final |
48
|
|
|
|
|
average compensation as of her date of disability. Upon
commencement of her benefits at age 65,
Ms. Cunninghams monthly benefit from our Retirement
Plan and Restoration Plan would be $29,488. |
|
(15) |
|
Our LTD benefits are fully insured through CIGNA. Eligibility
for benefits is determined by CIGNA only after the
employees termination of employment because of a medical
condition. Benefits pay at 60% of monthly income, capped at
$15,000 per month. |
|
(16) |
|
In the event of Ms. Cunninghams death while an active
employee, her named beneficiary is entitled to a death benefit
under our Retirement Plan and Restoration Plan. The death
benefit payable in the event of her death on December 31,
2009 is $368,243. This lump sum payment was calculated based on
the same actuarial assumptions utilized in our
Form 10-K
filing for the year ended December 31, 2009 and the GAR
1994 mortality tables as required by our Retirement Plan and
Restoration Plans. The accrued death benefit was reduced for
early commencement. |
|
(17) |
|
We provide group term life insurance coverage equal to two times
base salary, capped at $1,000,000. |
In addition to the payments Ms. Cunningham may receive upon
the termination of her employment, she will continue to hold
stock options that were vested immediately prior to her
termination. Ms. Cunningham also will be entitled to
receive the vested balance of her contributions to our Deferred
Compensation Plan. The table below shows the vested benefits
that Ms. Cunningham has accumulated as of December 31,
2009 and the benefits she will receive as a result of her
termination of employment on that date. We refer to the combined
amounts as the total walk-away amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Vested Benefits as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options(1)
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
Deferred Compensation Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Vested Benefits
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
$
|
9,182,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments Upon Separation:
|
|
|
|
1,027,480
|
|
|
|
|
1,027,480
|
|
|
|
|
8,650,083
|
|
|
|
|
5,125,089
|
|
|
|
|
4,542,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Walk-Away Value
|
|
|
$
|
10,210,175
|
|
|
|
$
|
10,210,175
|
|
|
|
$
|
17,832,778
|
|
|
|
$
|
14,307,784
|
|
|
|
$
|
13,725,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the difference between the exercise price of each
stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all stock options vested and
exercisable as of December 31, 2009. |
49
Rodney D.
Cook
The following table shows the potential payments to
Mr. Cook, Senior Vice President International,
in the event of his termination of employment as of
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
Executive Benefits and
|
|
|
Termination on
|
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
Payments Upon Separation
|
|
|
12/31/2009(1)
|
|
|
|
12/31/2009(1)
|
|
|
12/31/2009
|
|
|
12/31/2009(1)
|
|
|
12/31/2009
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
$
|
2,012,149
|
(9)
|
|
|
|
|
|
|
|
|
|
|
STIP Payments
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
|
|
|
288,750
|
(9)
|
|
|
|
|
(2)
|
|
|
|
|
(2)
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
971,957
|
(10)
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
2,538,138
|
(11)
|
|
|
$
|
2,538,138
|
(3)
|
|
|
$
|
2,538,138
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
|
$
|
2,698,409
|
(4)
|
|
|
$
|
2,698,409
|
(4)
|
|
|
|
2,698,409
|
(4)
|
|
|
|
1,310,639
|
(15)
|
|
|
|
1,140,254
|
(17)
|
Deferred Compensation Plan
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
Health & Welfare Benefits
|
|
|
|
165,250
|
(6)
|
|
|
|
165,250
|
(6)
|
|
|
|
172,954
|
(12)
|
|
|
|
165,250
|
(6)
|
|
|
|
165,250
|
|
Disability Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16)
|
|
|
|
|
|
Life Insurance Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
770,000
|
(18)
|
Excise Tax &
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(13)
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
(7)
|
Employment Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
$
|
2,863,659
|
|
|
|
$
|
2,863,659
|
|
|
|
$
|
9,697,357
|
|
|
|
$
|
4,014,027
|
|
|
|
$
|
4,613,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Cook was eligible for early retirement as of
December 31, 2009. Upon his termination of employment he
will be entitled to retiree benefits under all of our benefit
plans. |
|
(2) |
|
Mr. Cook would not be entitled to a STIP payment for 2009
in the event of his termination of employment on
December 31, 2009, other than in the event of a change of
control. Employees must be employed on the STIP payment date,
which occurred in February 2010, in order to receive payment. |
|
(3) |
|
All unvested shares of restricted stock will be forfeited as a
result of Mr. Cooks voluntary or involuntary
termination of employment, unless the Board, in its discretion,
takes action to accelerate the vesting of these shares. All
unvested shares of restricted stock will vest in the event of
termination of employment as a result of death or disability as
follows: 2007 award 10,195 shares; 2008
award 10,269 shares; and 2009
awards 15,174 shares. Value is based on the
closing price of our common stock on December 31, 2009
($71.22). |
|
(4) |
|
Reflects the total lump sum payable to Mr. Cook under our
Retirement Plan and Restoration Plan as of January 1, 2010.
Due to plan changes made effective January 1, 2008, all
employees are eligible for immediate commencement of benefits
upon separation from service and can elect a lump sum payment of
their accrued Retirement Plan benefits. Based on a
December 31, 2009 termination date, Mr. Cooks
monthly age 65 retirement benefits from our Retirement Plan
would be $22,096. If Mr. Cook commences his retirement
benefits immediately following termination on December 31,
2009, his monthly benefits from our Retirement Plan, reduced for
early commencement, would be $6,467. For the Restoration Plan
benefit, participants previously elected to receive their
benefit as either an annuity or lump sum, and elected specific
timing of receiving their benefits. Mr. Cook elected to
receive a lump sum payment from the Restoration Plan at the
later of attainment of age 55 or separation of service.
Mr. Cooks Restoration Plan lump sum amount as of
December 31, 2009 is $1,478,999. An actuarially equivalent
amount will be payable to Mr. Cook at the time he attains
age 55 (in 2012) based on the interest rates in effect
at that time. |
|
(5) |
|
Mr. Cook would not be entitled to any additional benefit
under our Deferred Compensation Plan in the event of his
termination of employment other than the vested amount included
in the table following Note 18. |
|
(6) |
|
Reflects the present value of expected future medical and dental
benefits that will be paid by the Company in connection with
Mr. Cooks participation in the medical and dental
plans as a retiree. Assumptions used for |
50
|
|
|
|
|
this calculation are the same assumptions disclosed in
Note 12 to our financial statements in the
Form 10-K
for the year ended December 31, 2009, for post-retirement
calculations. |
|
(7) |
|
Mr. Cook is entitled to six weeks of paid vacation each
calendar year. Unused vacation does not carry over from year to
year. We have assumed for purposes of this table that
Mr. Cook used all of his vacation during 2009 and would
therefore not be entitled to payment for any unused vacation in
the event of his termination on December 31, 2009. In the
event of termination during the year, all amounts of unused
vacation would be paid based on Mr. Cooks salary. |
|
(8) |
|
Mr. Cook is not a party to any agreement that provides for
a severance payment absent termination of employment following a
change of control. However, our Severance Benefit Plan provides
for a severance payment in certain instances based upon years of
completed service. If Mr. Cook is entitled to a severance
payment under the plan, he would receive two weeks of pay for
every year of completed service, plus a prorated STIP payment
based on his STIP target percentage (75%) for a total payment of
$673,750. |
|
(9) |
|
Our Executive Change of Control Plan provides for severance
benefits in the event that Mr. Cooks employment
terminates within two years after a change of control of the
Company. Under the Plan, if Mr. Cook is terminated
following a change of control (other than termination by the
Company for cause or by reason of death or disability), he is
entitled to receive a lump sum severance payment equal to 2.5
times his annual cash compensation. Cash compensation for
purposes of calculating severance is the sum of annual base
salary and the greater of target bonus for the current year and
the average STIP paid for the three years prior to the change of
control. Mr. Cook is also entitled to a prorated STIP
payment based on his termination date in the year of the change
of control. |
|
(10) |
|
Vesting of stock options accelerates in the event of a change of
control. Represents the difference between the exercise price of
each stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all unvested stock options
held by Mr. Cook as of December 31, 2009. |
|
(11) |
|
Vesting of restricted stock accelerates in the event of a change
of control. Represents the value of all restricted stock held by
Mr. Cook on December 31, 2009 based on the closing
price of our common stock on December 31, 2009 ($71.22). |
|
(12) |
|
Our Executive Change of Control Plan provides for continued
medical, dental, life, AD&D, and LTD benefits for a period
of 30 months following a change of control. The value
reflected is the total estimated cost to us to provide these
benefits. Mr. Cook is also entitled to continue his medical
and dental coverage following this
30-month
period as a participant in our retiree medical plan at
subsidized premium rates as discussed above. The value reflected
also includes the present value of the expected future medical
and dental benefits that will be paid by us in connection with
Mr. Cooks participation in the retiree medical plan
following the
30-month
period. |
|
(13) |
|
Mr. Cook is entitled to a
gross-up
payment for any excise tax due in connection with a change of
control pursuant to Internal Revenue Code Sections 280G and
4099. The estimated
gross-up
payment for Mr. Cook based on a December 31, 2009
change of control and the closing price of our common stock on
December 31, 2009 of $71.22 is approximately $1,000,000. |
|
(14) |
|
Our Executive Change of Control Plan provides for reimbursement
for reasonable fees up to $15,000 for out-placement employment
services. |
|
(15) |
|
In the event of Mr. Cooks termination of employment
due to permanent and total disability, his age 65
retirement benefits from our Retirement Plan and Restoration
Plan will be calculated as if he had continued to work until
age 65. The value reflected represents the actuarial
present value of Mr. Cooks age 65 benefits based
on a disability date of December 31, 2009. The calculation
is based on Mr. Cooks final average compensation as
of his date of disability. Upon commencement of his benefits at
age 65, Mr. Cooks monthly benefit from our
Retirement Plan and Restoration Plan would be $24,707. In the
event that Mr. Cook elects to immediately commence his
retirement benefits, the amounts payable will be as described in
Note 4 above. |
|
(16) |
|
Our LTD benefits are fully insured through CIGNA. Eligibility
for benefits is determined by CIGNA only after the
employees termination of employment because of a medical
condition. Benefits pay at 60% of monthly income, capped at
$15,000 per month. |
51
|
|
|
(17) |
|
In the event of Mr. Cooks death while an active
employee, his named beneficiary is entitled to a death benefit
under our Retirement Plan and Restoration Plan. The death
benefit payable in the event of Mr. Cooks death on
December 31, 2009 is $1,140,254. This lump sum payment was
calculated based on the same actuarial assumptions utilized in
our
Form 10-K
filing for the year ended December 31, 2009 and the GAR
1994 mortality tables as required by our Retirement Plan and
Restoration Plan. The accrued death benefit was reduced for
early commencement. |
|
(18) |
|
We provide group term life insurance coverage equal to two times
base salary, capped at $1,000,000. |
In addition to the payments Mr. Cook may receive upon the
termination of his employment, he will continue to hold stock
options that were vested immediately prior to his termination.
Mr. Cook also will be entitled to receive the vested
balance of his contributions to our Deferred Compensation Plan.
The table below shows the vested benefits that Mr. Cook has
accumulated as of December 31, 2009 and the benefits he
will receive as a result of his termination of employment on
that date. We refer to the combined amounts as the total
walk-away amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Involuntary
|
|
|
in Connection With a
|
|
|
|
|
|
|
|
|
|
Termination on
|
|
|
Termination on
|
|
|
Change of Control on
|
|
|
Disability on
|
|
|
Death on
|
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
|
|
12/31/2009
|
Vested Benefits as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options(1)
|
|
|
$
|
1,437,338
|
|
|
|
$
|
1,437,338
|
|
|
|
$
|
1,437,338
|
|
|
|
$
|
1,437,338
|
|
|
|
$
|
1,437,338
|
|
Deferred Compensation Plan
|
|
|
|
317,618
|
|
|
|
|
317,618
|
|
|
|
|
317,618
|
|
|
|
|
317,618
|
|
|
|
|
317,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Vested Benefits
|
|
|
$
|
1,754,956
|
|
|
|
$
|
1,754,956
|
|
|
|
$
|
1,754,956
|
|
|
|
$
|
1,754,956
|
|
|
|
$
|
1,754,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments Upon Separation:
|
|
|
|
2,863,659
|
|
|
|
|
2,863,659
|
|
|
|
|
9,697,357
|
|
|
|
|
4,014,027
|
|
|
|
|
4,613,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Walk-Away Value
|
|
|
$
|
4,618,615
|
|
|
|
$
|
4,618,615
|
|
|
|
$
|
11,452,313
|
|
|
|
$
|
5,768,983
|
|
|
|
$
|
6,368,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the difference between the exercise price of each
stock option and the closing price of our common stock on
December 31, 2009 ($71.22) on all stock options vested and
exercisable as of December 31, 2009. |
Director
Compensation
Our director compensation program consists of two principal
elements: annual retainer and committee fees and equity grants
of stock options and restricted stock. Our Governance Committee
reviews our director compensation program annually. Towers
Perrin provided services to our Governance Committee in 2009 to
assist it in reviewing and determining fees and equity
compensation paid or awarded, as the case may be, to our
non-employee directors. Based upon that review, grants of stock
options and awards of restricted stock were made to our
non-employee directors on February 1, 2009.
Annual Retainer and Committee
Fees: Non-employee directors receive an annual
retainer of $50,000 and a fee of $2,000 for each Board or
committee meeting attended. With the exception of our Audit
Committee and Compensation Committee, the chair of each
committee, if not also an employee or officer of the Company,
receives an additional annual fee of $7,500. The chair of the
Audit Committee receives an additional annual fee of $15,000 and
the chair of the Compensation Committee receives an additional
annual fee of $10,000. The position of Lead Independent
Director, which is filled by a non-employee director, receives
an additional annual fee of $20,000. All annual fees are paid
pro rata on a monthly basis. Non-employee directors are entitled
to participate in our Non-Employee Director Fee Deferral Plan.
Under the terms of this plan, non-employee directors may, during
a specified period of time each year, elect to have all or any
portion of their director fees deferred for future payment by
the Company. We also reimburse directors for travel, lodging and
related expenses they incur in attending Board and committee
meetings and director continuing education programs relevant to
their service on our Board.
Equity Grants: The 2005 Stock Plan for
Non-Employee Directors of Noble Energy, Inc. (the 2005
Plan) provides for grants of stock options and awards of
restricted stock to our non-employee directors. This includes up
to a maximum of 11,200 stock options on the date of initial
election to our Board, annual grants of 2,800 options per
non-employee director on February 1 of each year, and
discretionary grants by our Board (with the February 1 annual
and the discretionary grants made to a non-employee director
during any calendar year being limited to a
52
combined maximum of 11,200 options). Options are issued with an
exercise price equal to the market price of our common stock on
the date of grant and may be exercised one year after the date
of grant. The options expire ten years from the date of grant.
The 2005 Plan also provides for the awarding to a non-employee
director of up to a maximum of 4,800 shares of restricted
stock on the date of initial election to our Board, annual
awards of 1,200 shares of restricted stock per non-employee
director on February 1 of each year, and discretionary awards by
our Board (with the February 1 annual and the discretionary
awards made to a non-employee director during any calendar year
being limited to a combined maximum of 4,800 shares of
restricted stock). Restricted stock is restricted for a period
of at least one year from the date of award.
Director Compensation for 2009: The table
below sets forth certain information concerning the compensation
earned in 2009 by our non-employee directors who served in 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
|
or Paid in
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
Name
|
|
|
Cash ($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Jeffrey L. Berenson
|
|
|
$
|
104,000
|
|
|
|
$
|
76,282
|
|
|
|
$
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
248,995
|
|
Michael A. Cawley
|
|
|
|
121,500
|
|
|
|
|
76,282
|
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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266,495
|
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Edward F. Cox
|
|
|
|
119,500
|
|
|
|
|
76,282
|
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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264,495
|
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Thomas J. Edelman
|
|
|
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74,000
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|
|
|
|
76,282
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|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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218,995
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Eric P. Grubman
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|
|
|
84,000
|
|
|
|
|
201,307
|
|
|
|
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193,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
479,087
|
|
Kirby L. Hedrick
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|
|
|
118,000
|
|
|
|
|
76,282
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|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,995
|
|
Scott D. Urban
|
|
|
|
98,000
|
|
|
|
|
76,282
|
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
242,995
|
|
William T. Van Kleef
|
|
|
|
107,000
|
|
|
|
|
76,282
|
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
251,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(1) |
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Reflects fees paid or earned by our non-employee directors in
2009. Each non-employee director earned the following: an annual
retainer of $50,000 and $2,000 for each Board or committee
meeting attended. Mr. Cawley received an additional $20,000
for serving as our Lead Independent Director. Mr. Van Kleef
received an additional $15,000 for serving as Chair of our Audit
Committee. Mr. Hedrick received an additional $10,000 for
serving as Chair of our Compensation Committee. Messrs. Cox
and Cawley each received an additional $7,500 for serving as
Chair of our Environment, Health and Safety Committee and our
Governance Committee, respectively. |
|
(2) |
|
Reflects the aggregate grant date fair value for restricted
stock awards to our non-employee directors in 2009 under our
2005 Plan, computed in accordance with FASB ASC Topic 718.
Restricted stock awarded to our non-employee directors in 2009
will vest on the one-year anniversary of the grant date. The
vesting of the restricted shares will accelerate in the event of
a change of control of the Company. Each non-employee director
received an award of 1,559 shares of restricted stock on
February 1, 2009 that was unvested as of December 31,
2009. Mr. Grubman also received an award of
2,499 shares of restricted stock upon his initial election
to our Board on January 27, 2009 that was unvested as of
December 31, 2009. |
|
(3) |
|
Reflects the aggregate grant date fair value for nonqualified
stock options granted to our non-employee directors in 2008 and
2009 under our 2005 Plan, computed in accordance with FASB ASC
Topic 718. Options represent the right to purchase shares of
common stock at a fixed price per share equal to fair market
value on the date of grant. Our 2005 Plan defines fair
market value as the closing price of our common stock on
the NYSE on the date of grant. Options granted to our
non-employee directors in 2009 will vest on the one-year
anniversary of the grant date. The vesting of the options will
accelerate in the event of a change of control of the Company.
Vesting of these options is not contingent upon the satisfaction
of any performance criteria, although none of the options may be
exercised until the first anniversary (absent a change of
control of the Company) or after the tenth anniversary of the
date of grant. Each non-employee director received 3,761
nonqualified stock options on February 1, 2009 that were
unvested as of December 31, 2009. Mr. Grubman also
received an award |
53
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of 6,775 nonqualified stock options upon his initial election to
our Board on January 27, 2009 that was unvested as of
December 31, 2009. The following directors have option
awards outstanding as of December 31, 2009:
Mr. Berenson 18,612;
Mr. Cawley 50,412; Mr. Cox
15,412; Mr. Edelman 291,226;
Mr. Grubman 10,536;
Mr. Hedrick 65,412; Mr. Urban
17,929; and Mr. Van Kleef 26,612. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors
and executive officers, and persons who beneficially own more
than 10% of our common stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of our
common stock. Directors, executive officers and more than 10%
stockholders are required by SEC regulations to provide us with
copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of the
reports furnished to us and written representations that no
other reports were required, all Section 16(a) filing
requirements applicable to our directors, officers and more than
10% beneficial owners were complied with during the year ended
December 31, 2009.
CERTAIN
TRANSACTIONS
In the ordinary course of our business, we purchase products or
services from, or engage in other transactions with, various
third parties. Occasionally, these transactions may involve
entities that are affiliated with one or more members of our
Board. When they occur, these transactions are conducted in the
ordinary course and on an arms-length basis.
Review
and Approval of Related Party Transactions
We review all relationships and transactions in which the
Company and our directors and executive officers or their
immediate family members are participants to determine whether
such persons have a direct or indirect material interest. We
have developed and implemented processes and controls to obtain
information from our directors and executive officers with
respect to related person transactions and for then determining,
based on the facts and circumstances, whether the Company or a
related person has a direct or indirect material interest in the
transaction. As required under SEC rules, transactions that are
determined to be directly or indirectly material to the Company
or a related person are disclosed in our annual proxy statement.
In addition, our Governance Committee or Board (if appropriate)
reviews and approves or ratifies any related person transaction
that is required to be disclosed. In the course of its review
and approval or ratification of a disclosable related person
transaction, consideration is given to:
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the nature of the related persons interest in the
transaction;
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|
the material terms of the transaction, including, without
limitation, the amount and type of transaction;
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|
the importance of the transaction to the related person;
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the importance of the transaction to the Company;
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|
|
|
whether the transaction would impair the judgment of a director
or executive officer to act in the best interest of the
Company; and
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any other matters deemed appropriate.
|
Any director who is a related person with respect to a
transaction under review may not participate in the
deliberations or vote respecting approval or ratification of the
transaction; provided, however, that such director may be
counted in determining the presence of a quorum at the meeting
where the transaction is considered.
Related
Party Transactions
Since the beginning of fiscal year 2009, there have been no
transactions in excess of $120,000 between the Company and a
related person in which the related person had a direct or
indirect material interest.
54
REPORT OF
THE
AUDIT COMMITTEE
To the Stockholders of
Noble Energy, Inc.:
The primary purpose of the Audit Committee of the Companys
Board of Directors is to: (1) assist the Board of Directors
in fulfilling its responsibility to oversee the integrity of the
Companys financial statements, the Companys
compliance with legal and regulatory requirements, the
independent auditors qualifications and independence, and
the performance of the Companys internal audit function
and independent auditor and (2) prepare a committee report
as required by the SEC to be included in the Companys
annual proxy statement. The Audit Committees function is
more fully described in its charter, which was adopted by the
Audit Committee and the Board of Directors on March 4, 2004
and most recently amended on January 27, 2009 in connection
with the Audit Committees annual review of its charter. A
copy of the charter is available on our website at
www.nobleenergyinc.com under the Corporate
Governance section and is also available in print to any
stockholder who requests it. The Audit Committee held five
(5) meetings during 2009, including regular meetings and a
special meeting addressing the
Form 10-K
filing, earnings release and related matters, and on one
occasion took action by unanimous written consent.
Throughout 2009 and continuing to-date, the Audit Committee has
been comprised entirely of independent directors, as defined and
required by current NYSE listing standards and
Section 10A(m)(3) of the Securities Exchange Act of 1934,
as amended, and as so determined by our Board of Directors. The
Board of Directors also determined that Mr. Van Kleef is an
audit committee financial expert as that term is
defined in Item 401(h) of
Regulation S-K.
Review
and Discussion
The Audit Committee has reviewed and discussed the
Companys audited financial statements with management. It
has also discussed with KPMG LLP, the Companys independent
auditor, the matters required to be discussed by Statement of
Auditing Standards No. 61 (Communication with Audit
Committees), as amended by SAS No. 90 (Audit Committee
Communications). Additionally, KPMG LLP has provided to the
Audit Committee the written disclosures required by applicable
requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with
the Audit Committee concerning independence, and the committee
discussed the auditors independence with management and
the auditors.
The Audit Committee also has considered whether KPMG LLPs
rendering of non-audit services to the Company is compatible
with maintaining its independence. The Audit Committee has
concluded that the rendering of the non-audit services by KPMG
LLP has not impaired its independence.
Based on the Audit Committees discussions with management
and the independent auditor, and its review of the
representations of management and the report of KPMG LLP to the
Audit Committee, the Audit Committee recommended to the Board of
Directors the inclusion of the audited consolidated financial
statements in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009, as filed with the SEC.
March 22, 2010
Audit Committee
William T. Van Kleef, Chair
Michael A. Cawley
Eric P. Grubman
Scott D. Urban
55
MATTERS
RELATING TO THE INDEPENDENT AUDITOR
Accounting
Fees and Services for Fiscal Years 2009 and 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
%
|
|
|
2008
|
|
|
%
|
|
|
Audit Fees(1)
|
|
$
|
1,707,500
|
|
|
|
81.6
|
|
|
$
|
1,810,400
|
|
|
|
89.2
|
|
Audit Related Fees(2)
|
|
|
382,000
|
|
|
|
18.3
|
|
|
|
216,300
|
|
|
|
10.7
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Fees(3)
|
|
|
1,500
|
|
|
|
0.1
|
|
|
|
1,500
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,091,000
|
|
|
|
100.0
|
|
|
$
|
2,028,200
|
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Services rendered in 2009 and 2008 include auditing our
financial statements included in the Companys annual
report filed on
Form 10-K
and our internal controls over financial reporting. Services
also include quarterly reviews of our interim financial
statements filed on
Form 10-Q
and audit consultation. |
|
(2) |
|
Includes fees paid for foreign statutory and domestic retirement
and thrift plan audits and other audit-related work. |
|
(3) |
|
Includes fees paid for online accounting research subscription. |
Audit
Committee Pre-Approval Policies and Procedures
The Audit Committee approves all audit and non-audit services to
be provided by our independent auditor prior to the receipt of
such services. The Audit Committee Chair has the authority to
pre-approve services of up to $25,000 rendered by our
independent auditor. Any pre-approval of services by the Audit
Committee Chair shall be reported to the Audit Committee at its
next scheduled meeting.
All audit-related services, tax services and other services for
2009 set forth in the table above were pre-approved by the Audit
Committee Chair or the Audit Committee, as provided above, which
in either case determined that such services would not impair
the independence of our auditor and are consistent with the
SECs rules on auditor independence.
56
STOCKHOLDER
PROPOSALS AND OTHER MATTERS
Stockholder proposals intended to be brought before the annual
meeting of stockholders as an agenda item or to be included in
our proxy statement relating to our 2011 annual meeting of
stockholders, which is currently scheduled to be held on
April 26, 2011, must be received by us at our office in
Houston, Texas, addressed to our Secretary, no later than
December 28, 2010.
We will bear the cost of solicitation of proxies. Solicitation
may be made by mail, personal interview, telephone or telegraph
by our officers, agents or employees, who will receive no
additional compensation for these efforts. To aid in the
solicitation of proxies, we have employed the firm of Georgeson,
Inc., which will receive a fee of approximately $8,500 plus
out-of-pocket
expenses. We will bear the reasonable expenses incurred by
banks, brokerage firms, custodians, nominees and fiduciaries in
forwarding proxy material to beneficial owners.
Our Board does not intend to present any other matter at the
meeting and knows of no other matters that will be presented.
However, if any other matter comes before the meeting, the
persons named in the enclosed proxy intend to vote thereon in
accordance with their best judgment.
Houston, Texas
March 22, 2010
By Order of the Board of Directors of
Noble Energy, Inc.
Arnold J. Johnson
Senior Vice President, General Counsel and Secretary
57
NOBLE ENERGY, INC.
ANNUAL MEETING OF STOCKHOLDERS
April 27, 2010
9:30 a.m. Central Time
The Woodlands Waterway Marriott Hotel & Convention Center
1601 Lake Robbins Drive
The Woodlands, Texas 77380
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Noble Energy, Inc. |
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100 Glenborough Drive, Suite 100 |
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Houston, Texas 77067-3610
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proxy |
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This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 27, 2010. |
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The shares of stock you hold in your account will be voted as you specify on the reverse side. |
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If no choice is specified, the proxy will be voted FOR Items 1 and 2. |
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By signing the proxy, you revoke all prior proxies and appoint Charles D. Davidson and Kenneth M.
Fisher, and each of them, with full power of substitution to vote your shares on the matters shown on
the reverse side and any other matters which may come before the Annual Meeting and all adjournments or
postponements. |
See reverse for voting instructions.
There are three ways to vote your Proxy
Your telephone or Internet vote authorizes the Named Proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
VOTE BY PHONE TOLL FREE 1-800-560-1965 QUICK ¬¬¬ EASY ¬¬¬ IMMEDIATE
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Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days
a week, until 12:00 noon (CT) on April 26, 2010. |
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Please have your proxy card and the last four digits of your Social
Security Number or Tax Identification Number available. Follow the
simple instructions the voice prompt provides you.
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VOTE BY INTERNET www.eproxy.com/nbl QUICK ¬¬¬ EASY ¬¬¬ IMMEDIATE
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Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 noon (CT) on April 26, 2010.
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Please have your proxy card and the last four digits of your Social Security Number or Tax Identification
Number available. Follow the simple instructions to obtain your records and create an electronic ballot.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope weve provided.
If you vote by Phone or Internet, please do not mail your Proxy Card
ò Please detach here ò
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The Board of Directors Recommends
a Vote FOR Items 1 (all nominees) and 2. |
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1. |
Election of directors: |
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For |
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Against |
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Abstain |
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For |
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Against |
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Abstain |
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01 Jeffrey L. Berenson |
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o |
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o |
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o |
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06 Eric P. Grubman |
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o |
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o |
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o |
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02 Michael A. Cawley |
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o |
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o |
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o |
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07 Kirby L. Hedrick |
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o |
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o |
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o |
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03 Edward F. Cox |
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o |
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o |
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o |
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08 Scott D. Urban |
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o |
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o |
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o |
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04 Charles D. Davidson |
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o |
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o |
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o |
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09 William T. Van Kleef |
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o |
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o |
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o |
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05 Thomas J. Edelman |
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o |
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o |
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o |
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2.
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To ratify the appointment of KPMG LLP as the Companys independent auditor.
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o For
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o Against
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o Abstain |
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3. |
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In their discretion, the proxies are authorized to vote upon such other business or matters as may properly come before the meeting and any adjournment or postponement thereof.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1 and 2.
Address Change? Mark Box o Indicate changes below:
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Date |
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Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in
joint tenancy, all persons should sign. Trustees, administrators,
etc., should include title and authority. Corporations should
provide full name of corporation and title of authorized officer
signing the Proxy.
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