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 |
|
Filed by a Party other than the Registrant o |
|
|
Check the appropriate box: |
|
|
|
o Preliminary Proxy Statement |
|
o
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
|
þ Definitive Proxy Statement |
|
o Definitive Additional Materials |
|
o
Soliciting Material Pursuant to §240.14a-12 |
Devon Energy Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
|
|
þ No fee required. |
|
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
|
|
|
1) Title of each class of securities to which transaction applies: |
|
|
|
2) Aggregate number of securities to which transaction applies: |
|
|
|
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
|
|
|
4) Proposed maximum aggregate value of transaction: |
|
|
|
o Fee paid previously with preliminary materials. |
|
|
|
o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
|
|
|
1) Amount Previously Paid: |
|
|
|
2) Form, Schedule or Registration Statement No.: |
|
|
SEC 1913 (11-01) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
|
|
|
|
|
Devon Energy Corporation
20 North Broadway
Oklahoma City, OK 73102-8260
|
|
|
|
|
|
|
|
April 28, 2010
|
|
|
|
|
Notice of 2010
Annual Meeting of
Stockholders
and
Proxy Statement
Wednesday, June 9, 2010
8:00 a.m. (local time)
The Skirvin Hilton Hotel Continental Room
1 Park Avenue
Oklahoma City, Oklahoma
|
|
|
Dear Devon Stockholder,
You are invited to attend the 2010 Annual Meeting of
Stockholders of Devon Energy Corporation on Wednesday, June 9,
2010. The meeting will be held at 8:00 a.m., local time,
at The Skirvin Hilton Hotel, Continental Room, 1 Park Avenue,
Oklahoma City, Oklahoma.
The Annual Meeting will focus on the formal items of business
announced in the Notice of the 2010 Annual Meeting and Proxy
Statement. Additionally, we will present a report on
Devons operations during 2009.
It is important that your shares be represented and voted at the
meeting. I urge you to submit your proxy using the Internet or
telephone procedures provided in the Notice or, if you have
elected to receive proxy materials by mail, by completing and
mailing your Proxy Card in the envelope provided. If you decide
to attend the Annual Meeting, you will be able to vote in
person, even if you have previously submitted your proxy.
|
|
|
|
|
|
|
|
Sincerely,
|
|
|
|
|
|
|
|
|
|
|
|
J. Larry Nichols
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
Commitment Runs Deep
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON JUNE 9, 2010
|
|
|
Time |
|
8:00 a.m. (local time) on Wednesday, June 9, 2010 |
Place |
|
The Skirvin Hilton Hotel
Continental Room
1 Park Avenue
Oklahoma City, Oklahoma |
Items of Business |
|
To elect one Class I Director
for a term of one year;
|
|
|
To ratify the appointment of the
independent auditors for 2010;
|
|
|
To consider and vote upon the
stockholder proposal set forth in this Proxy Statement, if
presented; and
|
|
|
To transact such other business as
may properly come before the meeting or any adjournments of the
meeting.
|
Who Can Vote |
|
Stockholders of record at the close of business on
April 12, 2010 are entitled to notice of and to vote at the
meeting. You may examine a complete list of stockholders
entitled to vote at the meeting during normal business hours for
the 10 days prior to the meeting at our offices and at the
meeting. |
Voting by Proxy |
|
Please submit a proxy as soon as possible so that your shares
can be voted at the meeting in accordance with your
instructions. You may submit your proxy by: |
|
|
Internet,
|
|
|
telephone,
or
|
|
|
mail.
|
|
|
For specific instructions, please refer to the section entitled
About the Annual Meeting beginning on page 1. |
Important Notice
Regarding the Availability of Proxy Materials
for the Stockholder Meeting to be Held on June 9,
2010:
Our 2010 Proxy
Materials, including the 2010 Proxy Statement, Summary Annual
Report and Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, are available
at www.proxydocs.com/dvn.
|
|
|
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
|
Oklahoma City, Oklahoma
April 28, 2010
|
|
Janice A. Dobbs
Vice President - Corporate Governance
and Corporate Secretary
|
Commitment Runs Deep
TABLE OF
CONTENTS
|
|
|
|
|
1
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|
8
|
|
|
9
|
|
|
9
|
|
|
9
|
|
|
10
|
|
|
11
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
13
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
15
|
|
|
16
|
|
|
18
|
|
|
19
|
|
|
19
|
|
|
20
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
23
|
|
|
25
|
|
|
28
|
|
|
29
|
|
|
29
|
|
|
32
|
|
|
33
|
|
|
34
|
|
|
36
|
|
|
37
|
|
|
39
|
|
|
40
|
|
|
41
|
|
|
42
|
|
|
43
|
|
|
43
|
i
Commitment Runs Deep
|
|
|
|
|
44
|
|
|
45
|
|
|
45
|
|
|
45
|
|
|
45
|
|
|
50
|
|
|
52
|
|
|
52
|
|
|
53
|
|
|
53
|
|
|
53
|
|
|
54
|
|
|
55
|
|
|
56
|
|
|
57
|
|
|
59
|
|
|
59
|
ii
Commitment Runs Deep
Devon
Energy Corporation
20 North Broadway
Oklahoma City, Oklahoma
73102-8260
Proxy
Statement
Annual
Meeting Of Stockholders
June 9,
2010
We are furnishing you this Proxy Statement in connection with
the solicitation of proxies by our Board of Directors to be used
at the Annual Meeting and any adjournment thereof. The Annual
Meeting will be held on Wednesday, June 9, 2010 at
8:00 a.m. We are first sending this Proxy Statement to
our stockholders on or about April 28, 2010.
All references in this Proxy Statement to we, our, us, or the
Company refer to Devon Energy Corporation, including our
subsidiaries and affiliates.
ABOUT THE ANNUAL
MEETING
What is the
purpose of the Annual Meeting?
At our Annual Meeting, stockholders will be asked to:
|
|
|
|
|
elect one Class I Director for a one-year term expiring in
2011;
|
|
|
|
ratify the appointment of our independent auditors for 2010;
|
|
|
|
consider and vote upon the stockholder proposal set forth in
this Proxy Statement, if presented; and
|
|
|
|
transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
|
Who is entitled
to vote?
Stockholders as of the close of business on April 12, 2010
(the Record Date) are eligible to vote their shares at the
Annual Meeting. As of the Record Date, there were
446,854,081 shares of our common stock outstanding. Each
share of common stock is entitled to one vote at the Annual
Meeting.
How do I
vote?
You may:
|
|
|
|
|
attend the Annual Meeting and vote in person; or
|
|
|
|
dial the toll-free number listed on the Proxy Card or Voting
Instruction Form.
Easy-to-follow
voice prompts allow you to vote your shares and confirm that
your instructions have been properly recorded. Telephone voting
for stockholders of record will be available 24 hours a
day, and will close at 11:59 p.m. Eastern Time on
June 8, 2010; or
|
|
|
|
go to the website printed on the Notice,
www.proxyvote.com, simply follow the instructions on the
screen, then confirm that your instructions have been properly
recorded. If you vote on the
|
1
Commitment Runs Deep
|
|
|
|
|
Internet, you can request electronic delivery of future proxy
materials. Internet voting for stockholders of record will be
available 24 hours a day, and will close at 11:59 p.m.
Eastern Time on June 8, 2010; or
|
|
|
|
|
|
if you elected to receive a paper copy of your proxy materials,
mark your selections on the Proxy Card, date and sign it, and
return the card in the pre-addressed, postage-paid envelope
provided.
|
Why did I receive
a Notice in the mail regarding the Internet availability of
proxy materials this year instead of a full set of proxy
materials?
In connection with recent United States Securities and Exchange
Commission (the SEC) rules that allow companies to furnish proxy
materials over the Internet, we have sent to most of our
stockholders a Notice of Internet Availability of proxy
materials instead of a paper copy of the proxy materials.
Instructions on how to access the proxy materials over the
Internet or to request a paper copy may be found in the Notice.
In addition, stockholders may request to receive proxy materials
in printed form by mail or electronically by email on an ongoing
basis. A stockholders election to receive proxy materials
by mail or email will remain in effect until the stockholder
terminates it.
Why didnt I
receive a Notice in the mail regarding the Internet availability
of proxy materials?
We are providing certain stockholders, including those who have
previously requested to receive paper copies of the proxy
materials, with paper copies of the proxy materials instead of a
Notice. If you would like to reduce the costs incurred by us in
mailing proxy materials, you can consent to receive all future
proxy materials electronically via email or the Internet. To
sign up for electronic delivery, please follow the instructions
provided in your proxy materials. When prompted, indicate that
you agree to receive or access stockholder communications
electronically in the future.
How do I vote the
shares held in my 401(k) Plan?
If you are a current employee participating in the Devon Energy
Incentive Savings Plan (the 401(k) Plan), please follow the
instructions you received via email from Broadridge Financial
Solutions, Inc. (Broadridge).
If you are a former employee participating in the 401(k) Plan
and have shares of our common stock credited to your 401(k) Plan
account as of the Record Date, such shares are shown on the
Voting Instruction Form. You have the right to direct
Fidelity Management Trust Company (the 401(k) Plan Trustee)
regarding how to vote those shares, which you can do by voting
your shares in the same manner as provided above.
The 401(k) Plan Trustee will vote your shares in the 401(k) Plan
account in accordance with your instructions. If instructions
are not received by June 6, 2010, the shares credited to
your account will be voted by the 401(k) Plan Trustee in the
same proportion as it votes shares for which it did receive
timely instructions.
Will each
stockholder in our household receive proxy materials?
Generally, no. We try to provide only one set of proxy materials
to be delivered to multiple stockholders sharing an address
unless you have notified us to the contrary. Any stockholder at
a shared address may request delivery of single or multiple
copies of proxy materials for future meetings by contacting us
at Devon Energy Corporation, Attention: Corporate Secretary, 20
North Broadway, Oklahoma City, Oklahoma
73102-8260,
email: janice.dobbs@dvn.com or call
(405) 235-3611.
If I vote via
telephone or the Internet or by mailing my Proxy Card, may I
still attend the Annual Meeting?
Yes.
2
Commitment Runs Deep
What if I want to
change my vote?
You may revoke your proxy before it is voted by submitting a new
proxy with a later date (by mail, telephone or Internet), by
voting at the Annual Meeting, or by filing a written revocation
with our Corporate Secretary. Your attendance at the Annual
Meeting will not automatically revoke your proxy.
Is my vote
confidential?
Yes. We have procedures to ensure that regardless of whether
stockholders vote by mail, telephone, Internet or in person, all
proxies, ballots and voting tabulations that identify
stockholders are kept permanently confidential, except as
disclosure may be required by federal or state law or as
expressly permitted by a stockholder.
In addition, special procedures have been established to
maintain the confidentiality of shares voted in our 401(k) Plan.
None of our employees will have access to voting information for
shares in the 401(k) Plan.
Who will count
the votes?
Broadridge will tabulate the votes.
What constitutes
a quorum?
A majority of the shares entitled to vote, present in person or
represented by proxy, constitutes a quorum. If you vote by
telephone, Internet or by returning your Proxy Card, you will be
considered part of the quorum. Broadridge, the Inspector of
Election, will treat shares represented by a properly executed
proxy as present at the meeting. Abstentions and broker
non-votes will be counted for purposes of determining a quorum.
A broker non-vote occurs when a nominee holding shares for a
beneficial owner submits a proxy but does not vote on a
particular proposal because the nominee does not have
discretionary voting power for that item and has not received
instructions from the beneficial owner.
How many votes
will be required to approve a proposal?
Election of Directors at the Annual Meeting will be by a
plurality of votes cast at the Annual Meeting. Votes may be cast
in favor of the election of the Director nominee or withheld.
Our Corporate Governance Guidelines and Bylaws contain a
Director Resignation Policy which provides that any nominee for
Director in an uncontested election who receives a greater
number of votes withheld from his or her election
than votes for such election must submit his or her
offer of resignation to the Governance Committee of the Board of
Directors within 90 days from the date of the election. The
Governance Committee will consider all of the relevant facts and
circumstances and recommend to the Board the action to be taken
with respect to such offer of resignation.
With respect to other matters, the affirmative vote of the
holders of a majority of the shares, present in person or by
proxy, and entitled to vote at the Annual Meeting, is required
to take any other action.
Shares cannot be voted at the Annual Meeting unless the holder
of record is present in person or by proxy.
Can brokers who
hold shares in street name vote those shares with respect to the
election of Directors if they have received no
instructions?
The New York Stock Exchange (the NYSE) rules have changed and an
uncontested election of directors is no longer considered a
routine matter. This means that brokers may not vote your shares
on the election of directors if you have not given specific
instruction as to how to vote. Please be sure to give specific
voting instructions to your broker so that your vote will be
counted.
3
Commitment Runs Deep
How will you
treat abstentions and broker non-votes?
We will:
|
|
|
|
|
count abstentions and broker non-votes for purposes of
determining the presence of a quorum at the Annual Meeting;
|
|
|
|
treat abstentions as votes not cast but as shares represented at
the Annual Meeting for determining results on actions requiring
a majority of shares present and entitled to vote at the Annual
Meeting;
|
|
|
|
not consider broker non-votes for determining actions requiring
a majority of shares present and entitled to vote at the Annual
Meeting; and
|
|
|
|
consider neither abstentions nor broker non-votes in determining
results of plurality votes.
|
Who pays the
solicitation expenses?
We will bear the cost of solicitation of proxies. Proxies may be
solicited by mail or personally by our Directors, officers or
employees, none of whom will receive additional compensation for
such solicitation. We have retained Georgeson Inc. to assist in
the solicitation of proxies at an estimated cost of $9,500, plus
reasonable expenses. Those holding shares of common stock of
record for the benefit of others, or nominee holders, are being
asked to distribute proxy soliciting materials to, and request
voting instructions from, the beneficial owners of such shares.
We will reimburse nominee holders for their reasonable
out-of-pocket
expenses.
Where can I find
the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual
Meeting, and we will publish final results in a
Form 8-K
which will be filed with the SEC within four business days of
the Annual Meeting. You may obtain a copy of this and other
reports free of charge at www.devonenergy.com, or by
contacting our Investor Relations Department at
(405) 552-4570,
email: investor.relations@dvn.com or the SEC at
(800) 732-0300
or www.sec.gov.
Will your
independent auditors be available to respond to your stockholder
questions?
Yes. The Audit Committee of the Board of Directors has approved
KPMG LLP to serve as our independent auditors for the year
ending December 31, 2010. Representatives of KPMG LLP will
be present at the Annual Meeting. They will have an opportunity
to make a statement, if they desire to do so, and will be
available to respond to stockholder questions.
Where can I reach
you?
Our mailing address is:
Devon Energy Corporation
20 North Broadway
Oklahoma City, Oklahoma
73102-8260
Our telephone number is:
(405) 235-3611
4
Commitment Runs Deep
AGENDA
ITEM 1. ELECTION OF DIRECTOR
Pursuant to provisions of our Restated Certificate of
Incorporation, as amended, and Bylaws, the Board of Directors
shall consist of not less than three nor more than
20 Directors. Currently, the Board is comprised of nine
Directors. Our Restated Certificate of Incorporation and Bylaws
provide for three classes of Directors. These three classes of
Directors currently serve staggered terms, with Class I
having two Directors, Class II having four Directors and
Class III having three Directors. Effective with the 2011
Annual Meeting, Directors shall be elected annually. The nominee
for Director in Class I, to be elected at this Annual
Meeting of Stockholders, will be elected to serve a one-year
term. All Directors to be elected at the 2011 Annual Meeting,
and thereafter, will be elected for a one-year term.
The Board of Directors has nominated for re-election incumbent
Director in Class I, John Richels, whose term expires at
the Annual Meeting. The term of the Director nominee will expire
at the Annual Meeting in the year 2011. The nominee will serve
until his successor is elected and qualified. The term of Thomas
F. Ferguson, a member of Class I, will expire at the 2010
Annual Meeting and the term of Robert L. Howard, a member of
Class II, will expire at the 2011 Annual Meeting. Both
Mr. Ferguson and Mr. Howard will retire at the 2010
Annual Meeting due to the age requirement for Board members in
accordance with the Companys Corporate Governance
Guidelines.
The Board of
Directors recommends a vote FOR the nominee for
election to the Board of Directors.
It is the intention of the persons named in the proxy to vote
proxies FOR the election of the nominee
unless they are instructed otherwise. In the event that the
nominee should fail to stand for election, the persons named in
the proxy intend to vote for a substitute nominee designated by
the Board of Directors. Proxies cannot be voted for a greater
number of persons than the number of nominees named.
|
|
|
|
|
|
|
|
|
John Richels Director since 2007 Mr. Richels, age 59, is a member of the Board of Directors and has served as President of Devon since January 2004. Prior to that, Mr. Richels served as President and Chief Executive Officer of Devon Canada Corporation, a subsidiary of Devon. He has been with the Company since the 1998 acquisition of the Canadian-based Northstar Energy Corporation. Previously, Mr. Richels served as Managing and Chief Operating Partner of the Canadian-based national law firm, Bennett Jones.
Mr. Richels holds a Bachelor of Arts degree in economics from York University and a law degree from the University of Windsor. Mr. Richels has more than 20 years of experience in the energy industry and his knowledge of the industry is extensive. Mr. Richels served as a director of Northstar Energy Corporation from 1993 to 1996 and on the boards of a number of other publicly traded companies. He also served as vice-chairman of the board of governors of the Canadian Association of Petroleum Producers. Mr. Richels has demonstrated his leadership abilities and his commitment to our Company and has made significant contributions to the success of the Company during his tenure. For these reasons, the Board concluded that Mr. Richels is qualified and should serve as a director of the Company.
|
5
Commitment Runs Deep
|
|
|
|
|
|
|
|
|
|
|
Michael M. Kanovsky Director since 1998 Mr. Kanovsky, age 61, is President of Sky Energy Corporation. From 1982 to 1998 he served on the Board of Directors of the Canadian-based Northstar Energy Corporation which was acquired by Devon in 1998. Mr. Kanovsky currently serves as a director of Argosy Energy Inc., ARC Resources Ltd., Bonavista Petroleum Ltd., Pure Technologies Ltd. and TransAlta Corporation.
Mr. Kanovsky, a professional engineer, holds a Bachelor of Science degree in mechanical engineering from Queens University (Kingston, ON) as well as a Masters degree in Business Administration from the Richard Ivey School of Business at the University of Western Ontario (London, ON). Mr. Kanovsky is a founder of both Northstar Energy Corporation and Bonavista Energy Trust. Mr. Kanovsky has more than 27 years of experience and his knowledge of the energy industry is extensive. For these reasons, the Board concluded that Mr. Kanovsky is qualified and should serve as a director of the Company.
|
|
|
|
|
|
J. Todd Mitchell Director since 2002 Mr. Mitchell, age 51, served as President of Mitchell Family Corporation (formerly GPM, Inc.), a family-owned investment company, from 1998 to 2006, and as Vice President of Strategic Planning from 2006 to 2007. He currently serves as President of Two Seven Ventures, LLC, a private energy investment company. Mr. Mitchell served on the Board of Directors of Mitchell Energy & Development Corp. from 1993 to 2002.
Mr. Mitchell holds a Bachelor of Science degree in Geology from Colorado College, a Masters degree in Geology from the University of Texas and a Masters degree in Environmental Sustainability, with distinction, from Edinburgh University. Mr. Mitchell has more than 17 years of experience working in the energy industry, first as a principal in a start-up company related to natural gas exploration and geo-physics, and more recently in a leadership role at Two Seven. He has demonstrated sound business judgment and knowledge of the energy industry. For these reasons, the Board concluded that Mr. Mitchell is qualified and should serve as a director of the Company.
|
6
Commitment Runs Deep
|
|
|
|
|
J. Larry Nichols Director since 1971 Mr. Nichols, age 67, is a co-founder of Devon and serves as Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. Nichols is a director of Baker Hughes Incorporated and Sonic Corp. Since January 1, 2009, Mr. Nichols has served as Chairman of the Board of Directors of the American Petroleum Institute.
Mr. Nichols holds a Bachelor of Arts degree in Geology from Princeton University and a law degree from the University of Michigan. Mr. Nichols role in the founding of Devon, as well as its growth and continued success over a period of 40 years, is unsurpassed. Mr. Nichols decades of knowledge and experience and his proven contribution to the energy industry continue to be an immeasurable asset to the Company. Mr. Nichols has demonstrated strong business, management and leadership skills, as evidenced by his successful performance as Chairman and Chief Executive Officer of the Company. For these reasons, the Board concluded that Mr. Nichols is qualified and should serve as a director of the Company.
|
|
|
|
|
|
Robert A. Mosbacher, Jr. Director since 2009 Mr. Mosbacher, age 58, returned to the Board of Directors in April 2009. Mr. Mosbacher previously served as a member of the Board from 1999 until 2005, at which time he resigned to accept an appointment by the Bush administration to serve as President and Chief Executive Officer of the Overseas Private Investment Corporation (OPIC), an independent agency of the U.S. government that supports private capital investment in emerging markets around the world, where he served until January 2009.
Mr. Mosbacher received a law degree in 1977 from Southern Methodist University and a Bachelor of Arts degree from Georgetown University in 1973. Mr. Mosbachers leadership at OPIC contributed to the successful development of the global marketplace. Mr. Mosbacher also served as President and Chief Executive Officer of Mosbacher Energy Company, an independent oil and gas exploration and production company, from 1986 to 2005. Mr. Mosbacher currently serves as a director of Calpine Corporation. Mr. Mosbachers experience in the industry and his well-rounded business acumen are widely acknowledged. For these reasons, the Board concluded that Mr. Mosbacher is qualified and should serve as a director of the Company.
|
7
Commitment Runs Deep
|
|
|
|
|
|
|
|
|
John A. Hill Director Since 2000 Mr. Hill, age 68, has been with First Reserve Corporation, an oil and gas investment management company, since 1983 and is currently its Vice Chairman and Managing Director. Prior to creating First Reserve Corporation, Mr. Hill was President and Chief Executive Officer of several investment banking and asset management companies. He served as the Deputy Associate Director of the Office of Management and Budget and as Deputy Administrator of the Federal Energy Administration during the Ford administration. Mr. Hill is Chairman of the Board of Trustees of the Putnam Funds in Boston, a Trustee of Sarah Lawrence College and a director of various companies controlled by First Reserve Corporation.
Mr. Hill holds a Bachelor of Arts degree in Economics from Southern Methodist University and pursued graduate studies there as a Woodrow Wilson Fellow. Mr. Hill has 27 years of experience managing investments in the oil and gas business. This business experience demonstrates his leadership skill and success in the industry. Mr. Hill brings his extensive investment experience to the Board, which enhances the knowledge of the Board and provides useful insights to management. For these reasons, the Board concluded that Mr. Hill is qualified and should serve as a director of the Company.
|
|
|
|
|
|
Mary P. Ricciardello Director Since 2007 Ms. Ricciardello, age 54, joined the Board of Directors in 2007. She retired in 2002 after a 20-year career with Reliant Energy Incorporated, a leading independent power producer and marketer. Ms. Ricciardello began her career with Reliant in 1982 and served in various financial management positions with the company including Comptroller, Vice President and most recently as Senior Vice President and Chief Accounting Officer. She also serves as a director of U.S. Concrete, Inc. and Noble Corporation. Ms. Ricciardello is a Certified Public Accountant.
Ms. Ricciardello holds a Bachelor of Science degree in Business Administration from the University of South Dakota and a Masters degree in Business Administration with emphasis in Finance from the University of Houston. Ms. Ricciardello is qualified as a financial expert, with over 20 years of knowledge and experience in corporate finance and tax matters. Ms. Ricciardello has held audit committee chairmanships in a NYSE and NASDAQ company, and has served as editorial advisor for the Journal of Accountancy. As a result of her business career and her experience as a director of other publicly held companies, Ms. Ricciardello provides knowledgeable advice to the Companys other directors and to senior management. For these reasons, the Board concluded that Ms. Ricciardello is qualified and should serve as a director of the Company.
|
8
Commitment Runs Deep
CORPORATE
GOVERNANCE
Board of
Directors Information
Our Board of Directors met seven times in 2009. All Directors
attended 75% or more of the total meetings of the Board of
Directors and Committees on which they served. We require a
majority of our Directors to be in attendance at our Annual
Meetings of Stockholders. All Directors attended the 2009 Annual
Meeting.
The Board is governed by the laws of the state of Delaware, our
Restated Certificate of Incorporation, as amended, Bylaws,
Corporate Governance Guidelines, Charters of the Boards
standing committees and various federal laws. Copies of the
following governance documents are available at
www.devonenergy.com and in print to any stockholder upon
request:
|
|
|
|
|
Restated Certificate of Incorporation;
|
|
|
|
Certificate of Amendment of Restated Certificate of
Incorporation;
|
|
|
|
Bylaws;
|
|
|
|
Corporate Governance Guidelines;
|
|
|
|
Code of Business Conduct and Ethics;
|
|
|
|
Code of Ethics for Chief Executive Officer (CEO), Chief
Financial Officer (CFO) and Chief Accounting Officer (CAO);
|
|
|
|
Foreign Corrupt Practices Act Policy and Procedures; and
|
|
|
|
Committee Charters.
|
Amendments to and waivers from any provision of the Code of
Ethics for the CEO, CFO, and CAO will be posted on our website.
Also, on our website is information on our Environmental, Health
and Safety Initiatives, and our Corporate Responsibility Report.
Practices for
Considering Diversity
The charter of the Governance Committee provides that it shall
annually review the appropriate skills and characteristics of
members of the Board of Directors in the context of the then
current
make-up of
the Board. This assessment includes the following factors:
diversity (including diversity of skills, background and
experience); business or professional background; financial
literacy and expertise; availability and commitment;
independence; and other criteria that the Governance Committee
or the full Board finds to be relevant. It is the practice of
the Governance Committee to consider these factors when
screening and evaluating candidates for nomination to the Board
of Directors.
9
Commitment Runs Deep
Committees
The Board of Directors has a standing Audit Committee,
Compensation Committee, Governance Committee and Reserves
Committee. The following table shows the current membership of
each committee, each committees functions, and the number
of meetings each committee held in 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Meetings
|
Committee and Members
|
|
Functions of Committee
|
|
|
|
in 2009
|
|
|
|
|
|
|
|
|
|
Audit
Thomas F.
Ferguson(1)(2)
|
|
|
|
Monitors the integrity of the Companys financial
statements and reporting system;
|
|
|
|
9
|
Michael M. Kanovsky
J. Todd Mitchell
|
|
|
|
Ensures that the Company complies with legal and regulatory
requirements;
|
|
|
|
|
Mary P.
Ricciardello(2)
|
|
|
|
Monitors the independent auditors qualifications and
independence;
|
|
|
|
|
|
|
|
|
Monitors the performance of the Companys internal auditors
and independent auditors;
|
|
|
|
|
|
|
|
|
Monitors the Companys corporate risk exposure and the
procedures the Company has undertaken to monitor, control, and
report corporate risk;
|
|
|
|
|
|
|
|
|
Monitors the business practices and ethical standards of the
Company; and
|
|
|
|
|
|
|
|
|
Performs such other duties and responsibilities as the Board
shall approve and assign to the Committee.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
Robert L.
Howard(1)
|
|
|
|
Reviews and approves compensation philosophy and strategy for
the Company;
|
|
|
|
6
|
John A. Hill
Robert A. Mosbacher, Jr.
|
|
|
|
Directs management to administer the annual compensation process
in accordance with the stated compensation strategy of the
Company and any requirements of the appropriate regulatory
bodies;
|
|
|
|
|
|
|
|
|
Reviews and approves the Companys employee benefit and
incentive programs;
|
|
|
|
|
|
|
|
|
Annually reviews and determines total compensation for the CEO
and any other employee that is a member of the Board of
Directors, currently the President;
|
|
|
|
|
|
|
|
|
Reviews and approves total compensation for the Companys
executive officers in consultation with the CEO;
|
|
|
|
|
|
|
|
|
Reviews with the CEO and advises the Board with regard to
executive officer succession planning; and
|
|
|
|
|
|
|
|
|
Performs such other duties and responsibilities as the Board
shall approve and assign to the Committee.
|
|
|
|
|
10
Commitment Runs Deep
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Meetings
|
Committee and Members
|
|
Functions of Committee
|
|
|
|
in 2009
|
Governance
John A.
Hill(1)
|
|
|
|
Identifies and recommends qualified individuals to become Board
members;
|
|
|
|
4
|
Robert A. Mosbacher, Jr.
Mary P. Ricciardello
|
|
|
|
Evaluates and recommends nominees for election as directors at
the annual stockholders meetings or for appointment
between annual stockholders meetings;
|
|
|
|
|
|
|
|
|
Evaluates and recommends compensation or revisions to
compensation for members of the Board;
|
|
|
|
|
|
|
|
|
Develops, recommends and reviews corporate governance guidelines
for the Company; and
|
|
|
|
|
|
|
|
|
Performs such other duties and responsibilities as the Board
shall approve and assign to the Committee.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves
J. Todd
Mitchell(1)
Robert L. Howard
|
|
|
|
Performs an annual review and evaluation of the Companys
consolidated oil, natural gas and natural gas liquids reserves;
|
|
|
|
2
|
Michael M. Kanovsky
|
|
|
|
Verifies the integrity of the Companys reserves evaluation
and reporting system;
|
|
|
|
|
|
|
|
|
Assesses the disclosure for the Companys compliance with
legal and regulatory requirements related to its oil, natural
gas and natural gas liquids reserves;
|
|
|
|
|
|
|
|
|
Investigates and verifies the qualifications and independence of
the Companys independent engineering consultants;
|
|
|
|
|
|
|
|
|
Monitors the performance of the Companys independent
engineering consultants;
|
|
|
|
|
|
|
|
|
Monitors and evaluates the business practices and ethical
standards of the Company in relation to the preparation and
disclosure of its oil and gas reserves; and
|
|
|
|
|
|
|
|
|
Performs such other duties and responsibilities as the Board
shall approve and assign to the Committee.
|
|
|
|
|
|
|
|
(1) |
|
Chairman |
|
(2) |
|
Audit Committee financial expert |
Director
Independence
In accordance with our Corporate Governance Guidelines, the
Board considers transactions and relationships between each
Director or any member of the Directors immediate family
and us, our subsidiaries and affiliates. The Board has
affirmatively determined that each of the current Directors,
with the exception of our Chairman and CEO, J. Larry Nichols,
and our President, John Richels, is an independent Director as
defined by the standards for director independence established
by applicable laws, rules, and listing standards, including,
without limitation, the standards for independent directors
established by the NYSE and the SEC, has no material
relationship with us that would interfere with the exercise of
independent judgment and, therefore, is independent under our
Corporate Governance Guidelines and standards established by the
NYSE.
11
Commitment Runs Deep
Lead
Director
The Board has a Lead Director whose primary responsibility is to
preside over the executive session of the Board meeting in which
Mr. Nichols, Mr. Richels and other members of
management do not participate. The Lead Director also performs
other duties that the Board may from time to time delegate to
assist the Board in the fulfillment of its responsibilities. In
2009, the Lead Director presided over seven executive sessions
of the Board.
Thomas F. Ferguson has served as our Lead Director since 2008
and will serve in that position until his retirement at the
Annual Meeting, at which time the Board of Directors will
appoint a successor.
Board Involvement
in Risk Oversight
The full Board has primary responsibility for risk oversight,
with the Boards standing committees supporting the Board
by addressing the risks inherent in their respective areas of
oversight. Devons Board has delegated certain risk
oversight responsibilities to the Audit Committee.
The Audit Committees responsibilities in this area include:
|
|
|
|
|
discussing guidelines and policies to govern the process by
which risk management is handled;
|
|
|
|
knowing the extent to which management has established effective
enterprise risk management of the Company;
|
|
|
|
ensuring a mutual understanding between management and the Board
regarding Devons overall acceptance of risk;
|
|
|
|
understanding or, as applicable, providing a critique of the
Companys risk philosophy and acceptance of risk;
|
|
|
|
reviewing the Companys portfolio of risk and considering
it against the Companys risk appetite;
|
|
|
|
being apprised of the most significant risk exposures and the
steps management has taken to monitor and control such
exposures; and
|
|
|
|
representing the views and desires of the Companys key
stakeholders.
|
Leadership
Structure
As stated in the Companys Corporate Governance Guidelines,
the Board reserves the right to determine, from time to time,
how to configure the leadership of the Board and the Company in
the way that best serves the Company. The Board specifically
reserves the right to vest the responsibilities of Chairman of
the Board and Chief Executive Officer in the same individual.
J. Larry Nichols currently serves as Chairman of the Board
and Chief Executive Officer. At the time of his election, the
Board believed that it was in the best interests of the Company
to have a single person serve as Chairman and Chief Executive
Officer to provide unified leadership and direction. The Board
currently has no fixed policy with respect to combining or
separating the offices of Chairman of the Board and Chief
Executive Officer. Although the Board still believes this
structure is in the Companys best interest, the Board may
separate these positions in the future should circumstances
change.
The Companys Corporate Governance Guidelines provide that
at any time the Chief Executive Officer holds the position of
Chairman of the Board, the Board shall appoint an independent
Director to serve as the Lead Director.
12
Commitment Runs Deep
Director
Communication
Any stockholder or other interested party may contact any of the
Devon Directors, including the Lead Director or Non-Management
Directors as a group, by:
|
|
|
|
|
U.S. mail to Lead Director or to Non-Management Directors,
c/o Office
of the Corporate Secretary, Devon Energy Corporation, 20 North
Broadway, Oklahoma City, Oklahoma
73102-8260;
|
|
|
|
calling our Non-Management Director access line at
(866) 888-6179; or
|
|
|
|
sending an email to nonmanagement.directors@dvn.com.
|
A Management Director may be contacted by:
|
|
|
|
|
U.S. mail to Management Directors,
c/o Office
of the Corporate Secretary, Devon Energy Corporation, 20 North
Broadway, Oklahoma City, Oklahoma
73102-8260;
|
|
|
|
Contacting the Office of the Corporate Secretary at
(405) 235-3611; or
|
|
|
|
sending an email to janice.dobbs@dvn.com.
|
All calls or correspondence are anonymous and kept confidential
to the extent possible. All such communications, other than
advertisements or commercial solicitations, will be forwarded to
the appropriate Director(s) for review.
Compensation
Committee Interlocks and Insider Participation
During 2009, the Compensation Committee was comprised of three
independent Non-Management Directors with no interlocking
relationships as defined by the SEC.
Compensation
Committee Consultant
In 2009, Hewitt Associates LLC (Hewitt) or (the
Compensation Consultant) was engaged by the
Compensation Committee to provide the services described in the
Compensation Discussion and Analysis on page 24 and was
also engaged by the Boards Governance Committee to provide
a director compensation benchmarking analysis. Independent of
the Compensation Committee and under a separate services
agreement, management hired the Canadian business unit of Hewitt
to provide benefits administration services in 2009 for a
Canadian subsidiary of the Company. The respective services
provided to the Compensation and Governance Committees and our
Canadian subsidiary involved different personnel, oversight and
operations within Hewitt.
After a review of all services provided by Hewitt to the Company
and its subsidiaries during 2009, the Compensation Committee
determined that the executive compensation advice received from
the Compensation Consultant during the year was sound and
independent of other services provided by Hewitt. The table
below identifies the executive and non-executive compensation
consulting fees paid by the Company to Hewitt for services
provided during the fiscal year ended December 31, 2009:
|
|
|
|
|
|
|
2009
|
|
|
Executive and Director Compensation Consulting Fees
|
|
$
|
165,000
|
|
Other Compensation Consulting Fees
|
|
$
|
160,000
|
|
|
|
|
|
|
Total
|
|
$
|
325,000
|
|
|
|
|
|
|
Other compensation consulting fees include the cost of services
provided by Hewitts Canadian business to our Canadian
subsidiary and a fee in the approximate amount of $3,000 for a
compensation survey.
Other compensation consulting fees include the cost of services
provided by Hewitts Canadian business to Devon Canada
Corporation and a fee in the approximate amount of $3,000 for a
compensation survey purchased in the United States.
13
Commitment Runs Deep
Related Party
Transactions
We have adopted a Code of Business Conduct and Ethics (the
Code) that applies to all of our Directors, officers
and employees. The Code is posted at www.devonenergy.com.
The Code describes our policies and standards for protecting our
integrity and provides guidance to our Directors, officers and
employees in recognizing and properly resolving any ethical and
legal issues that may be encountered while conducting our
business. The Code serves as a reference for all Directors,
officers and employees in fulfilling their responsibility to
conduct business in a legal and ethical manner. Any waiver of
any provisions of the Code on behalf of an executive officer or
Director may only be approved by the Board of Directors or a
committee designated by the Board of Directors. It is the policy
of the Audit Committee to review the terms and substance of any
potential related party transaction for purposes of determining
whether a waiver to the Code should be granted.
Our Audit Committee reviews information relating to
relationships involving each of our Non-Management Directors to
determine if the Director meets all independence standards. The
Board confirms the independence of each such Director upon
receiving the Audit Committee recommendation.
Since the beginning of 2009 there have been no related
person transactions as defined by applicable SEC
regulations.
Director
Compensation for the Year Ended December 31, 2009
Under our Corporate Governance Guidelines, Non-Management
Director compensation is determined annually by the Board of
Directors acting upon the recommendation of the Governance
Committee. Directors who are also employees receive no Director
compensation. The following table shows compensation for
Non-Management Directors for 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
Total
|
Name
|
|
|
in Cash ($)
|
|
|
($)(1)(3)
|
|
|
($)(1)(3)
|
|
|
($)
|
Thomas F. Ferguson
|
|
|
|
92,000
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
298,621
|
|
David A.
Hager(2)
|
|
|
|
23,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,000
|
|
John A. Hill
|
|
|
|
91,000
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
297,621
|
|
Robert L. Howard
|
|
|
|
89,000
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
295,621
|
|
Michael M. Kanovsky
|
|
|
|
83,000
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
289,621
|
|
J. Todd Mitchell
|
|
|
|
87,500
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
294,121
|
|
Robert A. Mosbacher, Jr.
|
|
|
|
58,500
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
265,121
|
|
Mary P. Ricciardello
|
|
|
|
87,000
|
|
|
|
|
126,840
|
|
|
|
|
79,781
|
|
|
|
|
293,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Stock and option awards were made to all Directors on
June 3, 2009. The stock awarded on June 3, 2009 was
valued at $63.42 per share and the options awarded on
June 3, 2009 were at an exercise price of $63.42 with a
value of $26.59 per share. The dollar amounts reported in these
columns represent the aggregate grant date fair values of the
stock and option awards granted in 2009. The assumptions used to
value stock and option awards are discussed in Note
12 Share-Based Compensation of the Notes to
Consolidated Financial Statements included in our Annual Report
on
Form 10-K
for the year ended December 31, 2009. |
|
(2) |
|
Mr. Hager resigned from the Board of Directors on
March 11, 2009 to accept the position of Executive Vice
President Exploration and Production effective
March 23, 2009. |
14
Commitment Runs Deep
|
|
|
(3) |
|
The following table represents the number of unvested stock
awards and the number of outstanding and unexercised option
awards held by each of our Non-Management Directors as of
December 31, 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Stock
|
|
|
Outstanding Option
|
Name
|
|
|
Awards
|
|
|
Awards
|
Thomas F. Ferguson
|
|
|
|
5,000
|
|
|
|
|
34,000
|
|
David A. Hager
|
|
|
|
|
|
|
|
|
|
|
John A. Hill
|
|
|
|
5,000
|
|
|
|
|
36,200
|
|
Robert L. Howard
|
|
|
|
5,000
|
|
|
|
|
16,000
|
|
Michael M. Kanovsky
|
|
|
|
5,000
|
|
|
|
|
40,000
|
|
J. Todd Mitchell
|
|
|
|
5,000
|
|
|
|
|
28,000
|
|
Robert A. Mosbacher, Jr.
|
|
|
|
2,000
|
|
|
|
|
3,000
|
|
Mary P. Ricciardello
|
|
|
|
4,500
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Retainer
and Meeting Fees
The following is a schedule of annual retainers and meeting fees
for Non-Management Directors in effect during 2009:
|
|
|
|
|
Type of Fee
|
|
Amount
|
|
|
Annual Board Retainer
|
|
$
|
50,000
|
|
Additional Annual Retainer to Chairman of Audit Committee
|
|
$
|
15,000
|
|
Additional Annual Retainer to Chairman of Compensation,
Governance and Reserves Committees
|
|
$
|
10,000
|
|
Additional Annual Retainer to Audit Committee Members
|
|
$
|
2,000
|
|
Fee for each Board Meeting attended in person
|
|
$
|
2,000
|
|
Fee for each Board Meeting attended via telephone
|
|
$
|
1,000
|
|
Fee for each Committee Meeting attended in person
|
|
$
|
2,000
|
|
Fee for each Committee Meeting attended via telephone
|
|
$
|
1,000
|
|
Each Non-Management Director is reimbursed for
out-of-pocket
expenses incurred while serving as a Director.
Annual Equity
Awards
In June 2009, our Non-Management Directors were granted an
annual award of 3,000 stock options and 2,000 shares of
restricted stock under our 2005 Long-Term Incentive Plan. Stock
and option awards to Non-Management Directors are granted
immediately following each Annual Meeting. Options vest on the
date of grant and are granted at an exercise price equal to the
closing price of our common stock on that date. Unexercised
options will expire eight years from the date of grant. With
respect to restricted stock awards, 25% of each award vests on
each anniversary of the date of grant. Cash dividends on shares
of restricted stock are paid at the same times and in the same
amounts as on other shares of our common stock.
15
Commitment Runs Deep
GOVERNANCE
COMMITTEE REPORT
The Governance Committee operates under a written charter
approved by the Board of Directors. The Charter may be viewed at
www.devonenergy.com. The Governance Committee is
currently comprised of three independent Directors.
The Governance Committee is responsible for proposing qualified
candidates to serve on the Board of Directors and reviews with
the Board special director qualifications, taking into account
the composition and skills of the entire Board and specifically
ensuring a sufficient number of the members of the Board are
financially literate. The Governance Committee will consider
nominees recommended by stockholders and will give appropriate
consideration in the same manner as given to other nominees.
Stockholders who wish to submit director nominees for election
at our 2011 Annual Meeting of Stockholders may do so by
submitting in writing such nominees name, in compliance
with the procedures required by our Bylaws, to the Governance
Committee of the Board of Directors, Attention: Chairman,
c/o Office
of the Corporate Secretary, Devon Energy Corporation, 20 North
Broadway, Oklahoma City, Oklahoma
73102-8260.
Pursuant to our Bylaws, stockholders may recommend a director
nominee by delivering a timely notice to our Corporate Secretary
at the address above. Such a recommendation must be received
between February 8, 2011 and March 10, 2011 in order
to be considered timely. The stockholders notice must
contain:
|
|
|
|
|
all information relating to each person being nominated that is
required to be disclosed with respect to such person pursuant to
Regulation 14A under the Securities Exchange Act of 1934,
as amended, including such persons written consent to
being named in the Proxy Statement as a nominee and to serving
as a Director, if elected;
|
|
|
|
the name and address of the stockholder giving the notice and
the beneficial owner, if any;
|
|
|
|
the class and number of shares of our stock which are owned
beneficially and of record by the stockholder giving the notice
and the beneficial owner, if any;
|
|
|
|
a description of all arrangements or understandings between the
stockholder giving the notice and any other person or persons
(including their names) in connection with the
nomination; and
|
|
|
|
a representation that the stockholder intends to appear in
person or by proxy at the Annual Meeting to bring such business
before the meeting.
|
The Board will take reasonable steps to ensure that a diverse
group of qualified candidates are in the pool from which the
nominees for the Board are chosen. The Governance Committee may,
at its discretion, seek third-party resources to assist in the
process and will make final director candidate recommendations
to the Board. Our Board of Directors considered the experience,
qualifications, attributes and skills of each of the continuing
members of the Board of Directors and the nominee for election
at the 2010 annual meeting. The basic qualifications, which are
identified in our Corporate Governance Guidelines, that the
Governance Committee looks for in a Director include such
factors as:
|
|
|
|
|
integrity and accountability;
|
|
|
|
informed judgment;
|
|
|
|
peer respect; and
|
|
|
|
high performance standards.
|
Following election to the Board, the Corporate Governance
Guidelines provide for:
|
|
|
|
|
mandatory retirement at the Annual Meeting following the
73rd birthday of a director;
|
|
|
|
required ownership of Devon common stock equal to five times the
Directors annual retainer;
|
|
|
|
a recommendation that a Director not serve on more than five
public company boards in addition to serving on the
Companys Board;
|
16
Commitment Runs Deep
|
|
|
|
|
majority voting, which requires a nominee for
Director in an uncontested election to submit an offer of
resignation to the Governance Committee within 90 days of
the date of the election if the director receives a greater
number of withheld votes than for votes.
The Governance Committee will then consider all of the relevant
facts and circumstances and recommend to the full Board the
action to be taken with respect to the offer to resign;
|
|
|
|
approval of the Governance Committee to serve as a Director,
officer or employee of a competitor of the Company; and
|
|
|
|
prompt notification to the Chairman of the Board and Chairman of
the Governance Committee upon the acceptance of a directorship
of any other public company or any assignment to the Audit or
Compensation Committees of the board of any public company.
|
The Governance Committee also plays a leadership role in shaping
the Companys corporate governance. It undertakes an annual
corporate governance self-assessment, consisting of a thorough
review of the Companys corporate governance practices. The
Governance Committee reviews the Companys practices and
best practices followed by other companies. The goal is to
maintain a corporate governance framework for the Company that
is effective and functional and that fully addresses the
interests of the Companys stakeholders. The Governance
Committee determined that the Company operates under many
corporate governance best practices. The Governance Committee
may from time to time recommend enhanced corporate governance
standards to the Board. The Board voted to approve these
standards which are reflected in:
|
|
|
|
|
the Corporate Governance Guidelines;
|
|
|
|
the Charters for each of the Boards Committees; and
|
|
|
|
an expanded Code of Business Conduct and Ethics for all
Directors, officers and employees.
|
The standards reflected in these documents implement and
strengthen the Companys corporate governance practices.
These documents, and others related to corporate governance, are
available at www.devonenergy.com.
With the Companys fundamental corporate governance
practices firmly in place and annually evaluated, the Governance
Committee is prepared to respond quickly to new regulatory
requirements and emerging best practices. The Governance
Committee intends to continue to require an annual evaluation of
the effectiveness of the Board and its Committees and an annual
self-assessment of the performance and effectiveness by each
member of the Board to enable the Company to maintain its
position at the forefront of corporate governance best practices.
John A. Hill, Chairman
Robert A. Mosbacher, Jr.
Mary P. Ricciardello
17
Commitment Runs Deep
AUDIT COMMITTEE
REPORT
The Board of Directors maintains an Audit Committee which is
currently comprised of four independent Directors. The Board and
the Audit Committee believe that the Audit Committees
current membership satisfies the rules of the NYSE that govern
audit committee composition, including the requirement that
audit committee members all be independent directors as that
term is defined under the listing standards of the NYSE. Also,
for purposes of complying with the listing standards of the
NYSE, the Board has determined that Michael M. Kanovskys
simultaneous service on the audit committees of more than three
public companies does not impair his ability to effectively
serve on the Companys Audit Committee. The Audit Committee
operates under a written charter approved by the Board of
Directors. The Charter is available at
www.devonenergy.com.
The Audit Committee oversees the Companys financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the preparation of
the financial statements and the establishment and maintenance
of the system of internal controls. This system is designed to
provide reasonable assurance regarding the achievement of
objectives in the areas of reliability of financial reporting,
effectiveness and efficiency of operations and compliance with
applicable laws and regulations. In fulfilling its oversight
responsibilities, the Audit Committee reviewed with management
internal controls over financial reporting in accordance with
the standards of the Public Company Accounting Oversight Board
and the audited financial statements in the Annual Report. This
review included a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness
of significant judgments, and the clarity of disclosures in the
financial statements.
In fulfilling its duties during 2009, the Audit Committee:
|
|
|
|
|
reviewed with the independent auditors their opinion on the
conformity of the Companys audited financial statements
with U.S. generally accepted accounting principles and the
effective operation of the Companys internal controls over
financial reporting;
|
|
|
|
reviewed with independent auditors their judgments as to the
quality, not just the acceptability, of the Companys
accounting principles and other matters;
|
|
|
|
discussed with the independent auditors other matters under
generally accepted auditing standards, including Statement on
Auditing Standards No. 61, Communication with Audit
Committees;
|
|
|
|
discussed with the independent auditors the auditors
independence, including the matters in the written disclosures
and the letter received from the independent auditors required
by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent auditors
communications with the Audit Committee concerning independence;
|
|
|
|
discussed with the independent auditors the overall scope and
plans for their audit; and
|
|
|
|
met with the independent auditors, with and without management
present, to discuss the results of their audit and the overall
quality of the Companys financial reporting.
|
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors, and
the Board has approved, that the audited financial statements be
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 that has been filed
with the SEC. The Audit Committee has approved KPMG LLP as the
Companys independent auditors for the year ending
December 31, 2010.
Thomas F. Ferguson, Chairman
Michael M. Kanovsky
J. Todd Mitchell
Mary P. Ricciardello
18
Commitment Runs Deep
Independent
Auditors Fees
Under the terms of its Charter, the Audit Committee approves the
fees we pay our independent auditors. For the years ended
December 31, 2009 and December 31, 2008, we paid the
following fees to KPMG LLP:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Audit fees
|
|
$
|
3,258,000
|
|
|
$
|
3,419,000
|
|
Audit related fees
|
|
|
115,000
|
|
|
|
371,000
|
|
Tax fees
|
|
|
271,000
|
|
|
|
386,000
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,644,000
|
|
|
$
|
4,176,000
|
|
|
|
|
|
|
|
|
|
|
Audit fees include services for the audits of the financial
statements and the effective operation of our internal controls
over financial reporting. Audit related fees consisted
principally of audits of financial statements of certain
affiliates and subsidiaries and certain accounting consultation.
Tax fees consisted of tax compliance and tax consulting fees.
The Audit Committee has considered whether the provisions of
audit related services and tax services are compatible with
maintaining KPMG LLPs independence and has determined the
auditors independence is not impaired.
Audit Committee
Pre-Approval Policies and Procedures
All of the 2009 and 2008 audit and non-audit services provided
by KPMG LLP were approved by the Audit Committee. The non-audit
services which were approved by the Audit Committee were also
reviewed to ensure compatibility with maintaining the
auditors independence.
The Audit Committee has pre-approval policies and procedures
related to the provision of audit and non-audit services. Under
these procedures, the Audit Committee pre-approves both the type
of services to be provided by KPMG LLP and the estimated fees
related to these services. During the approval process, the
Audit Committee considers the impact of the types of services
and the related fees on the independence of the auditors. The
services and fees must be deemed compatible with the maintenance
of the auditors independence, including compliance with
SEC rules and regulations.
19
Commitment Runs Deep
RESERVES
COMMITTEE REPORT
In 2004, the Board of Directors established a Reserves Committee
which is currently comprised of three independent Directors. The
Reserves Committee operates under a charter approved by the
Board of Directors which is available at
www.devonenergy.com. The Reserves Committee oversees, on
behalf of the Board, the evaluation and reporting process of the
Companys oil, natural gas and natural gas liquids reserves
data. Management and our independent engineering consultants
have the primary responsibility for the preparation of the
reserves reports. In fulfilling its oversight responsibilities,
the Reserves Committee reviewed with management the internal
procedures relating to the disclosure of reserves in the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2009, having regard to
industry practices and all applicable laws and regulations. In
fulfilling its duties during 2009, the Reserves Committee has:
|
|
|
|
|
approved AJM Petroleum Consultants, LaRoche Petroleum
Consultants, Ltd. and Ryder Scott Company L.P., as the
Companys independent engineering consultants for the year
ended December 31, 2009;
|
|
|
|
reviewed with the independent engineering consultants the scope
of the annual review of the Companys reserves;
|
|
|
|
met with the independent engineering consultants, with and
without management, to review and consider the evaluation of the
reserves and any other matters of concern in respect to the
evaluation of the reserves;
|
|
|
|
reviewed and approved any statement of reserves data or similar
reserves information, and any report of the independent
engineering consultants regarding such reserves to be filed with
any securities regulatory authorities or to be disseminated to
the public;
|
|
|
|
reviewed the internal procedures relating to the disclosure of
reserves; and
|
|
|
|
ensured that the independent engineering consultants were
independent prior to their appointment and throughout their
engagement.
|
In reliance on the reviews and discussions referred to above,
the Reserves Committee recommended to the Board of Directors,
and the Board has approved, that the reserves information be
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 that has been filed
with the SEC.
J. Todd Mitchell, Chairman
Robert L. Howard
Michael M. Kanovsky
20
Commitment Runs Deep
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
We depend on the performance of highly trained, experienced and
committed executive officers who have the skills, education,
background and personal qualities necessary to lead an oil and
gas business. This requires that our executive compensation
programs attract and retain effective leaders in a competitive
market for personnel with proven track records in the oil and
gas industry.
The past year witnessed continued volatility in oil and gas
prices. However, the Company delivered solid financial and
operating results and took strategic action to improve the
Companys cash flow and growth prospects. We believe our
compensation programs have served the Company and its
stockholders well during a challenging and transformative year
for the Company and the industry.
This Compensation Discussion and Analysis (CD&A) describes
the overall executive compensation approach at the Company and
specifically discusses total compensation for the following
named executive officers:
|
|
|
|
|
J. Larry Nichols, Chairman of the Board and Chief Executive
Officer
|
|
|
|
John Richels, President
|
|
|
|
Danny J. Heatly, Senior Vice President Accounting
and Chief Accounting Officer (principal financial officer)
|
|
|
|
David A. Hager, Executive Vice President Exploration
and Production
|
|
|
|
Darryl G. Smette, Executive Vice President Marketing
and Midstream
|
|
|
|
Steven J. Hadden, former Executive Vice President
Exploration and Production
|
In addition to the term named executive officers, we
use one other term in this CD&A to identify a group of our
executives. The term executive officers refers to
Messrs. Nichols and Richels as well as our executive vice
presidents. Six employees, including Messrs. Smette and
Hager, were executive vice presidents at the end of 2009.
This CD&A includes Mr. Heatly as a named executive
officer because the SEC requires us to provide information about
the compensation of the Companys principal financial
officer. Mr. Heatly was not an executive officer in 2009.
Processes and decisions related to Mr. Heatlys
compensation were more in line with other non-executive officers.
Although Mr. Hadden left the Company prior to the end of
the year, this CD&A includes him as a named executive
officer because his compensation in 2009, as a result of
severance payments, requires his inclusion.
Compensation
Philosophy and Objectives
Overview
The Company strives to optimize value for its stockholders by
growing reserves, production, earnings and cash flows. This
demands that the Company, among other things, exercise capital
discipline, invest in oil and gas properties with high operating
margins, balance its reserves and production mix between natural
gas and liquids and maintain a low overall cost structure.
We believe that this operating strategy requires a compensation
philosophy that recognizes near-term operational and financial
success as well as decision making that supports long-term value
creation. For these reasons, our executive compensation program
is designed to strike the appropriate balance between the
near-term and the long-term.
21
Commitment Runs Deep
The goals of our compensation program are to:
|
|
|
|
|
motivate, reward, develop and retain management talent to
support our goal of increasing stockholder value;
|
|
|
|
effectively compete against other oil and gas companies for
executive talent;
|
|
|
|
consider and respond to developments within the oil and gas
industry;
|
|
|
|
provide balanced incentives for the achievement of near-term and
long-term objectives, without motivating executives to take
excessive risk; and
|
|
|
|
emphasize direct compensation over indirect compensation, such
as benefits and perquisites.
|
The following table gives a broad overview of the elements of
our executive compensation program, including the description
and purpose of each element and the market guidelines we target.
In each case, the market guidelines refer to an elements
relative value within a group of industry peer companies for
comparable executive roles (see further discussion below under
Benchmarking).
|
|
|
|
|
|
|
Compensation Element
|
|
|
Description and
Purpose
|
|
|
Market Guidelines
|
Base Salary
|
|
|
Provides fixed compensation to pay for experience, expertise and knowledge
|
|
|
At or slightly above the 50th percentile
|
Annual Cash Bonus
|
|
|
Emphasizes near-term performance results and current decision-making that affects long-term value creation
|
|
|
From the 50th to 75th percentiles based on performance
|
Long-Term Incentive Awards
|
|
|
Aligns executives long-term interests with those of our stockholders
Promotes retention of executives through vesting of awards over time
Provides for meaningful share ownership opportunities
Emphasizes long-term performance results
|
|
|
From the 50th to 75th percentiles based on performance
|
Retirement and Other Benefits
|
|
|
Retirement benefits provide long-term financial security
Other benefits include basic health and welfare programs that are made available to all employees
Severance benefits allow for short-term financial security in certain cases of termination
|
|
|
Provide program features competitive with the peer group
|
|
|
|
|
|
|
|
For executive officers, we generally target total direct
compensation, which we define as the aggregate of base salary,
annual cash bonus and long-term incentive awards, between the
50thand
75th
percentiles
22
Commitment Runs Deep
of the peer group. The most recent data available to the Company
in 2009 indicated that its total direct compensation for named
executive officers ranged from the
50th to
approximately the
75th
percentile at that time.
Balancing
Compensation for Near-Term and Long-Term Performance
To reinforce the goals of achieving both near-term results and
long-term stockholder value, the Company provides executive
officers both annual cash bonuses and long-term incentive
awards. We believe that properly allocating these compensation
elements is critical in motivating executive officers to carry
out our operating strategy. Overall, the value of an executive
officers total compensation is weighted in favor of
long-term incentives.
Compensation
Weighted Toward Performance-Based Compensation
We believe that the proportion of any employees total
direct compensation that varies based on performance should
increase as the scope of an employees ability to influence
our results increases. Since executive officers have the
greatest influence over our results, a significant portion of
their overall compensation consists of cash bonuses and
long-term incentive awards that vary based on performance. In
2009, for example, approximately 90% of the estimated value of
the total direct compensation of our Chief Executive Officer was
variable. For all other named executive officers, the estimated
value of the variable portion of their total direct compensation
in 2009 ranged from approximately 80% to 85% of their total
direct compensation.
Compensation
Process
Our process for reviewing and determining the compensation for
named executive officers involves the Compensation Committee of
the Board of Directors (the Committee), executive
officers of the Company and an external compensation consultant.
The roles of these individual parties are described further in
the following sections.
Role of the
Committee and Executive Officers
The Committee establishes our executive compensation philosophy
and administers the overall executive compensation program. The
Committee operates under a written charter approved by the Board
of Directors, a copy of which is available at
www.devonenergy.com.
Each year, the Committee conducts an individual, in-depth
interview of each executive officer to discuss the
officers analysis of the Companys overall
performance for the year and performance within his area of
responsibility. We believe this is a unique practice among
compensation committees and a highly effective tool in the
Committees oversight of the executive compensation
process. In addition, the CEO and the President discuss with the
Committee their evaluation of each executive officers
performance, role, development and potential to take on greater
or different responsibilities. The CEO and President then
recommend to the Committee compensation changes for executive
officers. Neither the CEO nor the President makes any
recommendation to the Committee regarding his own compensation.
The Committee considers the compensation philosophy, the
Companys recent performance, each executive officers
individual performance during the year, the Committees
interviews with executive officers, the CEOs and the
Presidents recommendations, the external compensation
consultants input and the Committees own review of
competitive market data. The Committee then determines whether
to accept the CEOs and the Presidents
recommendations of compensation for executive officers, and in a
closed session without any executive officer present, sets the
CEOs and the Presidents compensation.
Compensation decisions are further discussed in the
Compensation Decisions in 2009 section that follows.
23
Commitment Runs Deep
Role of the
Compensation Consultant
For the 2009 compensation process, the Committee retained as its
external compensation consultant (the Compensation
Consultant) representatives from the Talent &
Organizational Consulting business of Hewitt Associates LLC. The
Compensation Consultant evaluated the competitiveness of our
programs and assisted with executive compensation program
design. The Committee did not direct the particular manner or
method in which the Compensation Consultant performed these
services. The Committee has the final authority to hire and
terminate the Compensation Consultant, and the Committee
evaluates the performance of the Compensation Consultant
annually. See page 13 for further information about
services provided by Hewitt Associates LLC.
Benchmarking
To successfully compete for executive talent, the Committee,
working with the Compensation Consultant, annually compares the
compensation of our executives against the compensation of
similarly-situated executives at peer companies. The Company
establishes a peer group consisting of oil and gas companies and
energy services companies with revenue levels and asset and
market values similar to the Company. The Company also considers
the enterprise value of the companies calculated as
the market value of a company plus (i) long-term
debt and preferred stock, minus (ii) cash and cash
equivalents in establishing a peer group. The
Committee believes these metrics are appropriate for determining
peers because they provide a reasonable point of reference for
comparing executives with similar positions and responsibilities.
For 2009, the Committee approved a peer group consisting of the
21 companies listed below:
Anadarko Petroleum Corporation*
Apache Corporation*
Baker Hughes Incorporated
Chesapeake Energy Corporation*
Chevron Corporation*
ConocoPhillips*
Dominion Resources, Inc.
El Paso Corporation
EnCana Corporation*
EOG Resources, Inc.*
Halliburton Company
Hess Corporation*
Marathon Oil Corporation*
Murphy Oil Corporation*
Nabors Industries Ltd.
Occidental Petroleum Corporation*
Schlumberger Limited
Tesoro Corporation
Transocean Inc.
Valero Energy Corporation
The Williams Companies, Inc.
The companies designated with an asterisk (*) are included in a
subset of peer companies focused on oil and gas exploration and
production (E&P). The Committee referred to compensation by
these peers in evaluating industry-specific executive roles.
The Committees benchmarking analysis consists of all
components of total direct compensation, including base salary,
annual bonus and long-term incentives. The Compensation
Consultant collected and summarized compensation data from the
proxy statements of the peer group and the Compensation
Consultants proprietary databases. The compensation data
are typically from the prior
24
Commitment Runs Deep
year. Thus, when setting current compensation, the Committee
works with the Compensation Consultant to adjust the data to
account for known or expected changes in the market between the
effective date of the data and the current date. Additionally,
the Committee typically excludes from its benchmarking analysis
those few companies whose compensation far exceeds the
compensation found at a majority of the peer group.
Tally Sheets and
Review of Personal Use of Corporate Aircraft
The Committee annually reviews tally sheets for named executive
officers, including potential payments under various termination
scenarios. Further detail can be found in the Potential
Payments Upon Termination or Change in Control section of
this Proxy Statement. The Committee also reviews both IRS and
SEC calculations in connection with the valuation of personal
use of the corporate aircraft.
The Committee has determined that the amounts reflected in these
reviews are reasonable and consistent with the Companys
compensation philosophy. The Committee has noted that in the
case of personal use of the corporate aircraft, the values for
named executive officers were significantly less than those
reported by our peer companies.
Succession
Planning
The Company has a robust succession planning process to ensure
the development of executive talent for the near and long term.
The process and progress are reviewed with the Committee and the
Board of Directors on an annual basis.
Overview of
Executive Compensation Elements Used in 2009
Overview
We use several different compensation elements in our executive
compensation program for the purpose of addressing both
near-term and long-term value creation for the Company. As
outlined earlier, the primary components of our executive
compensation program consist of:
|
|
|
|
|
base salary;
|
|
|
|
annual cash bonus;
|
|
|
|
long-term incentives; and
|
|
|
|
retirement and other benefits.
|
The sections that follow further describe the design of each
compensation element.
Base
Salary
The Committee reviews and approves, on an annual basis, the base
salaries of our named executive officers. We consider a
competitive base salary vital to ensuring the continuity of our
management. The following factors are considered when
establishing base salaries for the named executive officers:
|
|
|
|
|
external market forces and data, including the competitive
market information provided by the Compensation Consultant;
|
|
|
|
the scope of responsibility, experience and tenure of each
executive;
|
|
|
|
the development plans for the executive and his potential to
take on greater or different responsibilities; and
|
|
|
|
internal equity considerations.
|
We believe that our ability to achieve our objectives depends in
large part on employing an executive leadership team that has a
combination of significant industry experience and longevity
with the Company.
25
Commitment Runs Deep
In order to attract and retain such executives, their base
salaries must be competitive with the base salaries of executive
officers of peer companies with whom we compete for executive
personnel. We believe that targeting base salaries at or
slightly above the market median enables us to compete
successfully and allows us to heavily weight our overall
compensation package toward pay that varies based on performance.
Annual Cash
Bonus
The Committee annually considers cash bonus awards for our named
executive officers. The Committee believes that the
executives cash bonuses should reflect the near-term
operating, strategic, and financial performance and current
decision-making that affects long-term stockholder value. In
that regard, bonuses awarded by the Committee are intended to be
competitive with the market while rewarding named executive
officers for:
|
|
|
|
|
delivering near-term financial and operating results;
|
|
|
|
developing long-term growth prospects;
|
|
|
|
cultivating internal talent;
|
|
|
|
building on our positive relationships with regulators,
landowners and other stakeholders;
|
|
|
|
improving the efficiency and effectiveness of business processes
on a continuous basis; and
|
|
|
|
building a culture of mutual respect and teamwork focused on
creating long-term stockholder value.
|
To that end, in determining the appropriate bonus amounts, the
Committee considers our compensation philosophy, recent Company
performance, each named executive officers individual
performance during the year, competitive market conditions,
historical practices and incentive awards for others in the
Company. The Committee does not assign specific target or
maximum cash bonus award levels to the named executive officers.
When evaluating recent Company performance, the Committee
considers, among other things, our performance in relation to
goals approved by the Board of Directors at the beginning of the
year. These goals cover a number of both quantitative and
qualitative areas, such as growing our oil and gas production
and reserves, adhering to capital and operating budgets,
delivering stockholder returns, improving environmental, health
and safety performance, and enhancing our workforce planning.
The Committee does not assign a specific weight to any
particular performance goal nor is a specific weight assigned to
the performance goals in the aggregate.
In addition to considering the Companys quantitative and
qualitative performance goals set at the beginning of the year,
the Committee also takes into account market and economic trends
and forces, extraordinary internal and market-driven events,
unanticipated developments, and other extenuating circumstances.
In short, the Committee exercises a comprehensive approach in
determining the amount of annual cash bonuses for named
executive officers.
While our approach to annual bonuses is not formulaic, it is
methodical and purposeful. We have considered the relative
merits of a non-formulaic approach to paying annual bonuses
versus a formulaic approach. We have concluded that the present
non-formulaic approach leads to the creation of a highly
effective, nimble management team that is evaluated on its
ability to be flexible in addressing changing market and
industry conditions while executing the Companys overall
business strategy. We believe the Companys recent and
long-term performance demonstrate that this flexible approach
works well.
Long-Term
Incentives
A key element of our compensation program is to reward named
executive officers for long-term strategic accomplishments and
enhancement of long-term stockholder value through equity based
incentives that vest over an extended period of time. We believe
that long-term incentive compensation
26
Commitment Runs Deep
plays an essential role in attracting and retaining executive
officers and aligns their interests with the long-term interests
of our stockholders.
The Committee approves long-term incentive awards to named
executive officers at the year-end Committee meeting in
December. The Committee does not backdate stock option grants
and does not time the grant of awards in coordination with the
release of material nonpublic information.
We establish long-term incentive target values for each level of
responsibility within the Company, including the named executive
officers. In analyzing the value of long-term incentives awarded
to our executives, the Committee takes into account:
|
|
|
|
|
our compensation philosophy;
|
|
|
|
recent Company performance with a focus on how such performance
creates value for our stockholders over the long term;
|
|
|
|
each executive officers individual performance during the
year;
|
|
|
|
competitive market conditions;
|
|
|
|
historical practices;
|
|
|
|
incentive awards for others in the organization; and
|
|
|
|
the overall impact of awards on the Companys share
dilution levels.
|
Our long-term incentive awards consist of stock options and
restricted stock. Stock option awards give executive officers
the right to purchase common stock of the Company at a specified
price within a specified period of time. Restricted stock awards
consist of grants of our common stock that will only be earned
by an executive officer when the restrictions lapse. For the
stock options awarded in 2009, 20% of the stock options
immediately vested and became exercisable on the grant date. An
additional 20% of each grant vests and becomes exercisable on
each of the first four anniversaries of the original grant. With
respect to restricted stock awards made in 2009, 25% of each
award vests on each of the first four anniversary dates of the
original grant. Executive officers generally forfeit the
remaining portion of any award if they are not employed by the
Company at the time the remaining portion of the award is
otherwise scheduled to vest. Upon retirement from the Company,
executive officers who meet certain years of service and age
criteria may continue to vest in outstanding equity based grants
in accordance with the vesting dates established in the original
grants so long as they agree to certain covenants to protect the
Companys business.
The vesting schedule of our awards provides a strong incentive
for our executive officers to continue service with the Company
for an extended period. Moreover, the long-term interests of our
executive officers and our stockholders align in that both
groups are rewarded when our common stock appreciates in value
over time. This is particularly true with respect to stock
options because executive officers only stand to gain from their
receipt of stock options if our common stock appreciates in
value.
Stock Ownership
Guidelines
Historically, we have encouraged our executives to own our stock
and have monitored ownership levels. At its meeting in March
2010, the Board of Directors adopted stock ownership guidelines
that formalize expectations as to the ownership levels of our
executive officers. The Board expects each executive officer who
has served in such capacity for at least five years to own
shares of common stock equal in value to a multiple of his base
salary. The guidelines establish the following minimum ownership
levels:
|
|
|
Officer Title
|
|
Share Ownership Expectation as Multiple of Base Salary
|
|
Chief Executive Officer
|
|
Five times base salary
|
President
|
|
Four times base salary
|
Executive Vice Presidents
|
|
Three times base salary
|
27
Commitment Runs Deep
As of March 31, 2010, each executive officer held stock in
excess of the levels required in the guidelines. For purposes of
calculating share ownership levels, the Board includes
(i) shares owned directly by the officer and his immediate
family members who share the same household, (ii) shares
owned beneficially by the officer and his immediate family
members residing in the same household, and (iii) unvested
restricted stock for which the restrictions have not lapsed.
The Company also has a policy that prohibits our personnel from
engaging in short-term or speculative transactions involving our
common stock. This policy prohibits trading in our stock on a
short-term basis, engaging in short sales, buying and selling
puts and calls, and discourages the practice of purchasing Devon
stock on margin.
For additional detail on the stock owned by our named executive
officers, please refer to the Security Ownership of Management
table on page 53.
Retirement
Benefits
Our named executive officers are entitled to participate in the
following retirement benefits:
|
|
|
|
|
a qualified 401(k) Plan with a Company match of up to 6%;
|
|
|
|
a nonqualified Deferred Compensation Plan that allows executives
to defer compensation beyond the limits placed on the 401(k)
Plan and permits the Company to contribute a match to the extent
that the match available under the qualified 401(k) Plan is
limited;
|
|
|
|
a qualified Defined Benefit Plan that provides annual retirement
income of 60% of final average compensation (i.e., the average
of the highest three consecutive years compensation out of
the last 10 years), less any benefits due to the
participant under Social Security, times a fraction, the
numerator of which is credited years of service up to a maximum
of 25 and the denominator of which is the greater of 25 or
service projected to age 65 (where the fraction is no
greater than one); and
|
|
|
|
a nonqualified defined benefit plan (the Supplemental Retirement
Income Plan or SRIP) that, among other things,
provides retirement benefits calculated without certain
limitations applicable to the Defined Benefit Plan, accrues over
20 years of service (rather than the 25 years
applicable to the Defined Benefit Plan), includes a five-year
vesting schedule, and allows for payments in a lump sum upon a
change in control of the Company.
|
Mr. Hager joined the Company after our Defined Benefit Plan
was closed to new participants. In lieu of participating in the
Defined Benefit Plan, Mr. Hager is eligible to participate
in the enhanced defined contribution structure of the 401(k)
plan and receive a Company contribution to his 401(k) account of
8% to 16% of his compensation. He is also eligible to
participate in additional nonqualified defined contribution
plans in lieu of participating in the SRIP.
For additional information on the Defined Benefit Plan, the SRIP
and the defined contribution plans and the present values of the
accumulated benefits of our named executive officers under each
plan, please refer to the Pension Benefits for the Year Ended
December 31, 2009 section on page 40 and the
Nonqualified Deferred Compensation in 2009 section on page 44.
Other
Benefits
We provide executive officers with perquisites on a limited
basis. For example, Messrs. Nichols and Richels may make
personal use of our aircraft on a limited basis; however, their
use of our aircraft has been infrequent. Additionally, personal
use of our aircraft by other officers may be appropriate if
there is a health related or other emergency reason, the flight
coincides with a business related flight or there is some other
urgent matter that requires the executives attendance.
28
Commitment Runs Deep
Post-Termination
or Change in Control Benefits
We maintain employment agreements with each of our named
executive officers except for Mr. Heatly, with whom we have
a severance agreement. These agreements give each named
executive officer certain additional compensation if his
employment is involuntarily terminated other than for cause or
if the executive voluntarily terminates his employment for good
reason, as those terms are defined in the relevant agreements.
Also, in these situations, the applicable named executive
officer fully vests in any unvested long-term incentive awards.
If a named executive officer other than Mr. Heatly is
terminated within two years of a change in control, the
executive is also entitled to an additional three years of
service credit and age in determining entitlement to retiree
medical benefits and SRIP benefits (or with respect to
Mr. Hagers nonqualified defined contribution plan, an
additional three years of contributions by the Company). If
Mr. Heatly is terminated within two years of a change in
control, he is entitled to an additional two years of service
credit and age in determining his entitlement to retiree medical
benefits.
As noted above, Mr. Heatly was not an executive officer in
2009. Accordingly, his post-termination arrangements are more in
line with other non-executive officers.
Post-termination and change in control benefits are typical in
the oil and gas industry and necessary in order to compete for
executive talent. Please refer to the Potential Payments Upon
Termination or Change in Control section on page 45 for
more information.
Compensation
Decisions in 2009
As discussed in the Compensation Process section of
this CD&A, the Committee considers the following factors in
making annual compensation decisions for the named executive
officers:
|
|
|
|
|
our compensation philosophy;
|
|
|
|
recent Company performance;
|
|
|
|
each named executive officers individual performance
during the year;
|
|
|
|
interviews with the executive officers;
|
|
|
|
the Compensation Consultants input;
|
|
|
|
the Committees own review of competitive market
data; and
|
|
|
|
the CEOs and the Presidents recommendations (as
applicable).
|
In 2009, the Committee also considered the current economic
environment and the unique dynamics of the oil and gas industry.
Base
Salary
A November 2009 review of the benchmarking data indicated that
base salaries for the named executive officers would generally
meet the Companys market objective on an overall basis.
The Committee also determined that in the current economic
environment the Company should continue to take a conservative
approach to fixed costs. Therefore, the Committee continued into
2010 a salary freeze instituted in 2009 for named executive
officers.
As previously noted, the Committee does not determine
Mr. Heatlys compensation.
Please refer to the Summary Compensation Table for further
information on the base salaries of named executive officers.
29
Commitment Runs Deep
Annual Cash
Bonus
Overall in 2009, the Committee concluded that the Company
achieved key operational and other successes in a challenging
economic environment. Additionally, the Committee believes that
the Company strengthened its strategic positioning for the
future. In its evaluation, the Committee noted the following
metrics related to Company performance:
|
|
|
|
|
achieved an oil and gas reserve replacement rate of 200% related
to continuing operations (excluding reserve revisions due to
price);
|
|
|
|
increased oil and gas production by 4% to 233 million
barrels of oil equivalent (BOE) related to continuing operations;
|
|
|
|
lowered lease operating expense per BOE from $8.29 in 2008 to
$7.16 in 2009 related to continuing operations;
|
|
|
|
recorded pre-income tax cash costs per BOE in the lower half of
our E&P peers;
|
|
|
|
exercised significant financial discipline in relation to
capital expenditure and operating budgets;
|
|
|
|
secured future cash flow through increased use of oil and gas
hedging contracts; and
|
|
|
|
strengthened Company growth and return prospects by
repositioning the Company through the proposed divestiture of
offshore assets to focus on higher return North American onshore
assets.
|
Although the Company delivered positive stockholder returns for
2009, the Committee noted that stockholder returns
underperformed relative to our E&P peers. The
Companys earnings were also in the lower half of the
earnings reported by the same peers. Stock performance and
earnings were impacted by significant expenditures made on
long-term projects, the underfunding of onshore growth projects
and the lack of natural gas price hedging.
In its evaluation of the Companys performance relating to
stakeholders, business processes and learning and people, the
Committee noted that the Company met the following goals:
|
|
|
|
|
continued to build the Companys positive reputation with
stakeholder groups;
|
|
|
|
maintained high levels of environmental health and safety
performance in our operations;
|
|
|
|
improved the workforce planning process to align with corporate
strategy and budgeting process;
|
|
|
|
enhanced strategies for cultivating leadership talent, including
succession management; and
|
|
|
|
continued to build on the Companys reputation as a
desirable employer.
|
The Committee conducted a thorough evaluation of each named
executive officers performance, including the individual
interviews described above. Among the named executive officers
for whom it made bonus determinations, the Committee determined
that each had made significant contributions to the
Companys overall results. As previously noted, the
Committee does not determine the bonus for Mr. Heatly.
The 2009 benchmarking indicated that bonuses paid to the named
executive officers for 2008 performance generally met the
Companys market objective on an overall basis.
Based on the Committees evaluation of the Companys
performance in 2009 and other factors that it considers when
making annual cash bonus decisions (described in Annual
Cash Bonus under the Overview of Executive
Compensation Elements in 2009 section of the CD&A),
the Committee determined that cash bonuses should be
significantly lower than those for 2008. In the case of the
30
Commitment Runs Deep
Companys executive officers, bonuses were 30% less than
those paid for the prior year. The following cash bonuses were
awarded to the named executive officers:
|
|
|
|
|
|
|
|
|
2009
|
Name
|
|
|
Cash Bonuses
|
J. Larry Nichols
|
|
|
$
|
2,100,600
|
|
John Richels
|
|
|
$
|
1,400,600
|
|
Danny J. Heatly
|
|
|
$
|
275,600
|
|
David A. Hager
|
|
|
$
|
680,500
|
|
Darryl G. Smette
|
|
|
$
|
630,600
|
|
Stephen J. Hadden
|
|
|
|
|
|
|
|
|
|
|
|
Please refer to the Summary Compensation Table for further
information on the annual cash bonuses of named executive
officers.
Long-Term
Incentives
For 2009, the Committee made grants of long-term incentive
awards to named executive officers in the form of stock options
and restricted stock that vest as described in the CD&A
section titled Overview of Executive Compensation Elements
Used in 2009. As was the case in 2008, approximately
one-half of the total award value was granted in options, and
one-half of the award value was granted in restricted stock. We
continue to believe this combination promotes stockholder value
creation as well as executive stock ownership and retention.
Benchmarking conducted in 2009 indicated that the value of
long-term incentives awarded to the named executive officers in
2008 generally fell within the Companys market objective
of the
50th to
75th
percentile of peers.
During its year-end meeting, the Committee approved the grants
set forth in the table below, which approximate the value of
incentives granted in the prior year. In making these grants,
the Committee considered the 2009 benchmarking results and other
factors that it considers when making long-term incentive grant
decisions (described in Long-Term Incentives under
the Overview of Executive Compensation Elements in
2009 section of this CD&A). In particular, the
Committee cited its confidence in the strategic direction set
forth by the Companys executive officers and its belief
that the implementation of that strategy would have a positive
impact on the long-term growth and return prospects for the
Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2009
|
Name
|
|
|
Stock Awards
|
|
|
Option Awards
|
J. Larry Nichols
|
|
|
|
87,500
|
|
|
|
|
208,400
|
|
John Richels
|
|
|
|
43,000
|
|
|
|
|
119,600
|
|
Danny J. Heatly
|
|
|
|
9,800
|
|
|
|
|
27,300
|
|
David A.
Hager(1)
|
|
|
|
40,400
|
|
|
|
|
101,800
|
|
Darryl G. Smette
|
|
|
|
14,700
|
|
|
|
|
41,000
|
|
Stephen J. Hadden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts shown represent 20,000 shares of restricted
stock and 45,000 stock options which were awarded upon
Mr. Hagers employment in March 2009. It also includes
20,400 shares of restricted stock and 56,800 stock options
which were awarded upon the annual grant in December 2009. |
For additional detail on the Companys long-term incentive
awards granted in 2009, please refer to the Summary Compensation
Table and Grants of Plan-Based Awards During 2009.
31
Commitment Runs Deep
Material
Differences in Compensation Decisions for Named Executive
Officers
Mr. Nichols total compensation for 2009 was higher
than that of other named executive officers primarily because of
his position, his long tenure with the Company, his status as a
founder of the Company, the compensation levels of comparable
executives of other companies against whom his compensation is
benchmarked and his greater influence over and responsibility
for the entire Company (as opposed to a distinct division or
function). In addition, Mr. Nichols compensation
recognized his leadership role with respect to matters affecting
the oil and gas industry generally.
Mr. Richels total compensation was higher than that
of other named executive officers, except for Mr. Nichols,
primarily because of his position, his experience and stature in
the industry, his reporting relationship to the CEO, the
compensation levels of comparable executives of other companies
against whom his compensation is benchmarked and his greater
influence over and responsibility for the entire Company (as
opposed to a distinct division or function). In addition,
Mr. Richels compensation recognized the leadership
role he is exercising with respect to the
day-to-day
operations of the Company.
Mr. Hagers and Mr. Smettes total
compensation levels reflected their roles and responsibilities
as the respective heads of the Companys exploration and
production and midstream and marketing divisions, their
individual contributions to the Company and the officer team,
and compensation levels for similar positions at our peer
companies.
As noted above, Mr. Heatly was not a executive officer in
2009, so his compensation was similar to other non-executive
officers with significant responsibilities at the Company.
Conclusion
In summary, after evaluating all of the considerations reviewed
by the Committee, including the current economic climate, the
Committee believes the compensation delivered to the named
executive officers for 2009 is reasonable and appropriate.
Further, the Committee believes the total executive compensation
program does not encourage executives to take unnecessary or
excessive risk.
Considerations of
Tax Implications
Section 162(m) of the Internal Revenue Code (the
Code) disallows, with certain exceptions, a federal
income tax deduction for compensation over $1,000,000 paid to
the Chief Executive Officer or any other named executive officer
except the Chief Financial Officer. One exception applies to
performance-based compensation paid pursuant to
stockholder approved employee benefit plans (essentially,
compensation that is paid only if the individuals
performance meets pre-established objective performance goals
using performance measures approved by our stockholders).
Although we have generally attempted to structure executive
compensation so as to preserve deductibility, we also believe
that there are circumstances in which 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 Code. A portion of the payments made
under our current annual cash compensation program are not
deductible in accordance with the provisions of
Section 162(m). However, the Committee has determined that
the benefit of enhanced flexibility in program design outweighs
the value of the lost deduction.
A minor portion of the stock options we granted to our
executives are incentive stock options, which allow the
executives to defer the payment of certain taxes upon exercise
of the options and provide for the characterization of certain
gains as long-term capital gains.
Section 422 of the Code limits the amount of incentive
stock options that may vest for any one employee each year.
Section 422 provides that, to the extent the aggregate fair
market value of stock with respect to which incentive stock
options become exercisable each year exceeds $100,000, such
stock options will be treated as nonqualified stock options. We
take this $100,000 limit into consideration when granting
incentive stock options to our executives, so that their
incentive stock options will not be recharacterized as
nonqualified stock options.
32
Commitment Runs Deep
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Company has reviewed and
discussed the preceding Compensation Discussion and Analysis
section with management and, based on such review and
discussions, the Compensation Committee recommended to the Board
that the Compensation Discussion and Analysis be included in the
Proxy Statement.
Robert L. Howard, Chairman
John A. Hill
Robert A. Mosbacher, Jr.
33
Commitment Runs Deep
SUMMARY
COMPENSATION TABLE
The following table and accompanying footnotes summarize the
compensation earned, awarded or paid to our named executive
officers for the years indicated below. The named executive
officers are our Chief Executive Officer, our principal
financial officer, our three other most highly compensated
executive officers (other than our CEO and principal financial
officer) for the year ended December 31, 2009 and one
additional individual whose compensation in 2009, as a result of
severance payments, exceeded that of certain of our other named
executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
Name and Principal Position
|
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
J. Larry Nichols
|
|
|
|
2009
|
|
|
|
|
1,400,000
|
|
|
|
|
2,100,600
|
|
|
|
|
5,582,500
|
|
|
|
|
5,761,447
|
|
|
|
|
1,034,772
|
|
|
|
|
323,241
|
|
|
|
|
16,202,560
|
|
Chairman of the Board and
|
|
|
|
2008
|
|
|
|
|
1,400,000
|
|
|
|
|
3,000,600
|
|
|
|
|
6,015,972
|
|
|
|
|
5,960,352
|
|
|
|
|
3,219,047
|
|
|
|
|
339,556
|
|
|
|
|
19,935,527
|
|
Chief Executive Officer
|
|
|
|
2007
|
|
|
|
|
1,200,000
|
|
|
|
|
2,600,600
|
|
|
|
|
5,215,275
|
|
|
|
|
6,519,791
|
|
|
|
|
2,425,191
|
|
|
|
|
247,063
|
|
|
|
|
18,207,920
|
|
|
John Richels
|
|
|
|
2009
|
|
|
|
|
1,150,000
|
|
|
|
|
1,400,600
|
|
|
|
|
2,743,400
|
|
|
|
|
3,017,759
|
|
|
|
|
2,080,364
|
|
|
|
|
195,647
|
|
|
|
|
10,587,770
|
|
President
|
|
|
|
2008
|
|
|
|
|
1,150,000
|
|
|
|
|
2,000,600
|
|
|
|
|
3,168,020
|
|
|
|
|
2,735,535
|
|
|
|
|
2,241,909
|
|
|
|
|
186,104
|
|
|
|
|
11,482,168
|
|
|
|
|
|
2007
|
|
|
|
|
950,000
|
|
|
|
|
1,750,600
|
|
|
|
|
2,603,180
|
|
|
|
|
2,265,446
|
|
|
|
|
577,484
|
|
|
|
|
126,183
|
|
|
|
|
8,272,893
|
|
|
Danny J. Heatly
|
|
|
|
2009
|
|
|
|
|
339,900
|
|
|
|
|
275,600
|
|
|
|
|
625,240
|
|
|
|
|
638,776
|
|
|
|
|
408,005
|
|
|
|
|
40,622
|
|
|
|
|
2,328,143
|
|
Senior Vice President Accounting
|
|
|
|
2008
|
|
|
|
|
333,046
|
|
|
|
|
350,600
|
|
|
|
|
674,886
|
|
|
|
|
669,839
|
|
|
|
|
435,865
|
|
|
|
|
35,001
|
|
|
|
|
2,499,237
|
|
(principal financial officer)
|
|
|
|
2007
|
|
|
|
|
300,000
|
|
|
|
|
320,600
|
|
|
|
|
618,334
|
|
|
|
|
530,964
|
|
|
|
|
157,740
|
|
|
|
|
29,418
|
|
|
|
|
1,957,056
|
|
|
David A. Hager
|
|
|
|
2009
|
|
|
|
|
504,952
|
|
|
|
|
680,500
|
|
|
|
|
2,195,320
|
(4)
|
|
|
|
2,110,437
|
(4)
|
|
|
|
|
|
|
|
|
9,302
|
|
|
|
|
5,500,511
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darryl G. Smette
|
|
|
|
2009
|
|
|
|
|
610,000
|
|
|
|
|
630,600
|
|
|
|
|
937,860
|
|
|
|
|
1,034,516
|
|
|
|
|
834,994
|
|
|
|
|
116,972
|
|
|
|
|
4,164,942
|
|
Executive Vice President
|
|
|
|
2008
|
|
|
|
|
610,000
|
|
|
|
|
900,600
|
|
|
|
|
1,045,120
|
|
|
|
|
972,347
|
|
|
|
|
1,406,109
|
|
|
|
|
124,603
|
|
|
|
|
5,058,779
|
|
|
|
|
|
2007
|
|
|
|
|
575,000
|
|
|
|
|
875,600
|
|
|
|
|
1,025,225
|
|
|
|
|
890,840
|
|
|
|
|
758,532
|
|
|
|
|
93,128
|
|
|
|
|
4,218,325
|
|
|
Stephen J.
Hadden(5)
|
|
|
|
2009
|
|
|
|
|
160,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275,258
|
|
|
|
|
5,275,162
|
|
|
|
|
5,711,057
|
|
former Executive Vice President
|
|
|
|
2008
|
|
|
|
|
675,000
|
|
|
|
|
975,600
|
|
|
|
|
1,456,636
|
|
|
|
|
1,361,285
|
|
|
|
|
493,073
|
|
|
|
|
53,922
|
|
|
|
|
5,015,516
|
|
|
|
|
|
2007
|
|
|
|
|
625,000
|
|
|
|
|
950,600
|
|
|
|
|
1,560,125
|
|
|
|
|
1,359,858
|
|
|
|
|
283,730
|
|
|
|
|
48,235
|
|
|
|
|
4,827,548
|
|
|
|
|
|
(1) |
|
The dollar amounts reported in these columns represent the
aggregate grant date fair values of the stock and option awards.
The assumptions used to value stock and option awards are
discussed in Note 12 Share-Based
Compensation of the Notes to Consolidated Financial
Statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009. |
|
(2) |
|
The dollar amounts reported in this column reflect the aggregate
change in the actuarial present value of each executive
officers accumulated benefits under our Defined Benefit
Plan and the SRIP during the applicable year. The amounts shown
were not paid to the executives. None of our named executive
officers received above market or preferential earnings on
deferred compensation in any of the reported years.
Mr. Hager joined the Company after our Defined Benefit Plan
was closed to new participants. |
|
(3) |
|
Details of the dollar amounts in this column are shown in the
table that follows. |
|
(4) |
|
The dollar amounts reported in this column reflect $893,800 of
restricted stock and $677,254 of stock options which were
awarded upon Mr. Hagers employment in March 2009. It
also includes $1,301,520 of restricted stock and $1,433,183 of
stock options which were awarded upon the annual grant in
December 2009. |
|
(5) |
|
Mr. Hadden was not employed by us on December 31,
2009; however, as a result of severance payments made in 2009,
his compensation exceeded that of certain of our other named
executive officers. |
34
Commitment Runs Deep
The following table shows the components of All Other
Compensation in the previous table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Term
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
401(k) Plan
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
Employer
|
|
|
Plan Employer
|
|
|
Severance
|
|
|
Personal
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
|
Match
|
|
|
Match
|
|
|
Payments
|
|
|
Air Travel
|
|
|
Total
|
Name
|
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
J. Larry Nichols
|
|
|
|
2009
|
|
|
|
|
14,478
|
|
|
|
|
14,700
|
|
|
|
|
226,200
|
|
|
|
|
|
|
|
|
|
67,863
|
|
|
|
|
323,241
|
|
|
|
|
|
2008
|
|
|
|
|
14,478
|
|
|
|
|
13,800
|
|
|
|
|
214,500
|
|
|
|
|
|
|
|
|
|
96,778
|
|
|
|
|
339,556
|
|
|
|
|
|
2007
|
|
|
|
|
14,478
|
|
|
|
|
13,500
|
|
|
|
|
190,800
|
|
|
|
|
|
|
|
|
|
28,285
|
|
|
|
|
247,063
|
|
|
John Richels
|
|
|
|
2009
|
|
|
|
|
4,902
|
|
|
|
|
14,700
|
|
|
|
|
160,200
|
|
|
|
|
|
|
|
|
|
15,845
|
|
|
|
|
195,647
|
|
|
|
|
|
2008
|
|
|
|
|
4,902
|
|
|
|
|
13,800
|
|
|
|
|
133,500
|
|
|
|
|
|
|
|
|
|
33,902
|
|
|
|
|
186,104
|
|
|
|
|
|
2007
|
|
|
|
|
4,902
|
|
|
|
|
13,500
|
|
|
|
|
103,800
|
|
|
|
|
|
|
|
|
|
3,981
|
|
|
|
|
126,183
|
|
|
Danny J. Heatly
|
|
|
|
2009
|
|
|
|
|
1,739
|
|
|
|
|
14,700
|
|
|
|
|
24,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,622
|
|
|
|
|
|
2008
|
|
|
|
|
1,701
|
|
|
|
|
13,800
|
|
|
|
|
19,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,001
|
|
|
|
|
|
2007
|
|
|
|
|
1,518
|
|
|
|
|
13,500
|
|
|
|
|
14,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,418
|
|
|
David A. Hager
|
|
|
|
2009
|
|
|
|
|
1,952
|
|
|
|
|
7,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,302
|
|
|
Darryl G. Smette
|
|
|
|
2009
|
|
|
|
|
7,524
|
|
|
|
|
14,700
|
|
|
|
|
75,300
|
|
|
|
|
|
|
|
|
|
19,448
|
|
|
|
|
116,972
|
|
|
|
|
|
2008
|
|
|
|
|
7,524
|
|
|
|
|
13,800
|
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
31,279
|
|
|
|
|
124,603
|
|
|
|
|
|
2007
|
|
|
|
|
7,524
|
|
|
|
|
13,500
|
|
|
|
|
67,800
|
|
|
|
|
|
|
|
|
|
4,304
|
|
|
|
|
93,128
|
|
|
Stephen J. Hadden
|
|
|
|
2009
|
|
|
|
|
605
|
|
|
|
|
14,700
|
|
|
|
|
83,700
|
|
|
|
|
5,176,157
|
|
|
|
|
|
|
|
|
|
5,275,162
|
|
|
|
|
|
2008
|
|
|
|
|
2,622
|
|
|
|
|
13,800
|
|
|
|
|
37,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,922
|
|
|
|
|
|
2007
|
|
|
|
|
2,622
|
|
|
|
|
13,500
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
2,113
|
|
|
|
|
48,235
|
|
|
|
|
|
(1) |
|
The incremental cost of personal use of our aircraft is
calculated based on our average variable operating costs.
Variable operating costs include fuel, engine reserves,
maintenance, weather-monitoring, on-board catering, landing/ramp
fees and other miscellaneous variable costs. The total annual
variable costs are divided by the annual number of hours our
aircraft flew to determine an average variable cost per hour.
This average variable cost per hour is then multiplied by the
hours flown for personal use to determine the incremental cost.
The methodology excludes fixed costs that do not change based on
usage, such as pilots and other employees salaries,
purchase costs of the aircraft and non-trip related hangar
expenses. |
35
Commitment Runs Deep
GRANTS OF
PLAN-BASED AWARDS DURING 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date Fair
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
Shares of
|
|
|
Securities
|
|
|
Exercise or
|
|
|
Stock and
|
|
|
|
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Base Price of
|
|
|
Option
|
|
|
|
|
|
|
Units
|
|
|
Options
|
|
|
Option Awards
|
|
|
Awards
|
Name
|
|
|
Grant Date
|
|
|
(#)(1)
|
|
|
(#)(2)
|
|
|
($/Sh)(3)
|
|
|
($)(4)
|
|
|
|
|
12/08/09
|
|
|
|
|
87,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,582,500
|
J. Larry Nichols
|
|
|
|
12/08/09
|
|
|
|
|
|
|
|
|
|
208,400
|
|
|
|
|
63.80
|
|
|
|
5,761,447
|
|
|
|
|
|
12/08/09
|
|
|
|
|
43,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,743,400
|
John Richels
|
|
|
|
12/08/09
|
|
|
|
|
|
|
|
|
|
119,600
|
|
|
|
|
63.80
|
|
|
|
3,017,759
|
|
|
|
|
|
12/08/09
|
|
|
|
|
9,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
625,240
|
Danny J. Heatly
|
|
|
|
12/08/09
|
|
|
|
|
|
|
|
|
|
27,300
|
|
|
|
|
63.80
|
|
|
|
638,776
|
|
|
|
|
|
03/31/09
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
893,800
|
|
|
|
|
03/31/09
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
|
|
44.69
|
|
|
|
677,254
|
|
|
|
|
12/08/09
|
|
|
|
|
20,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,301,520
|
David A. Hager
|
|
|
|
12/08/09
|
|
|
|
|
|
|
|
|
|
56,800
|
|
|
|
|
63.80
|
|
|
|
1,433,183
|
|
|
|
|
|
12/08/09
|
|
|
|
|
14,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
937,860
|
Darryl G. Smette
|
|
|
|
12/08/09
|
|
|
|
|
|
|
|
|
|
41,000
|
|
|
|
|
63.80
|
|
|
|
1,034,516
|
|
Stephen J. Hadden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Restricted stock vests at the rate of 25% on each of the first
four anniversary dates of the original grant. Restricted stock
award recipients are entitled to receive dividends on their
unvested shares of restricted stock. |
|
(2) |
|
Stock options vest at the rate of 20% on the date of grant and
20% on each of the first four anniversary dates of the grant
date. |
|
(3) |
|
The exercise price for stock options is equal to the closing
price of our common stock on the date of grant. |
|
(4) |
|
The dollar amounts reported in this column represent the
aggregate grant date fair values of the stock and option awards.
The assumptions used to value stock and option awards are
discussed in Note 12 Share-Based
Compensation of the Notes to Consolidated Financial
Statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009. |
36
Commitment Runs Deep
OUTSTANDING
EQUITY AWARDS AT DECEMBER 31, 2009
The following table shows the number of shares covered by
exercisable and unexercisable options and unvested restricted
stock awards owned by our named executive officers on
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
or Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
of Stock
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Not Vested
|
Name
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(2)
|
J. Larry Nichols
|
|
|
|
140,000
|
(3)
|
|
|
|
|
|
|
|
|
25.85
|
|
|
|
|
11/29/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
(4)
|
|
|
|
|
|
|
|
|
26.43
|
|
|
|
|
12/03/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,000
|
(4)
|
|
|
|
|
|
|
|
|
17.43
|
|
|
|
|
12/04/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(5)
|
|
|
|
|
|
|
|
|
34.27
|
|
|
|
|
09/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,000
|
(4)
|
|
|
|
|
|
|
|
|
23.05
|
|
|
|
|
12/02/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
(4)
|
|
|
|
|
|
|
|
|
38.45
|
|
|
|
|
12/08/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,100
|
(4)
|
|
|
|
|
|
|
|
|
66.39
|
|
|
|
|
12/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,990
|
(4)
|
|
|
|
28,720
|
|
|
|
|
71.01
|
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,040
|
(4)
|
|
|
|
61,360
|
|
|
|
|
89.15
|
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
(4)
|
|
|
|
144,000
|
|
|
|
|
65.32
|
|
|
|
|
12/07/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,680
|
(4)
|
|
|
|
166,720
|
|
|
|
|
63.80
|
|
|
|
|
12/07/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,850
|
|
|
|
|
1,017,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,250
|
|
|
|
|
2,149,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,075
|
|
|
|
|
5,077,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,500
|
|
|
|
|
6,431,250
|
|
|
John Richels
|
|
|
|
40,000
|
(3)
|
|
|
|
|
|
|
|
|
25.85
|
|
|
|
|
11/29/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,000
|
(4)
|
|
|
|
|
|
|
|
|
26.43
|
|
|
|
|
12/03/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
(4)
|
|
|
|
|
|
|
|
|
17.43
|
|
|
|
|
12/04/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(5)
|
|
|
|
|
|
|
|
|
34.27
|
|
|
|
|
09/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,000
|
(4)
|
|
|
|
|
|
|
|
|
23.05
|
|
|
|
|
12/02/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
(4)
|
|
|
|
|
|
|
|
|
38.45
|
|
|
|
|
12/08/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,400
|
(4)
|
|
|
|
|
|
|
|
|
66.39
|
|
|
|
|
12/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,880
|
(4)
|
|
|
|
12,720
|
|
|
|
|
71.01
|
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,080
|
(4)
|
|
|
|
30,720
|
|
|
|
|
89.15
|
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,640
|
(4)
|
|
|
|
75,960
|
|
|
|
|
65.32
|
|
|
|
|
12/07/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,920
|
(4)
|
|
|
|
95,680
|
|
|
|
|
63.80
|
|
|
|
|
12/07/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,150
|
|
|
|
|
452,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,600
|
|
|
|
|
1,073,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,375
|
|
|
|
|
2,673,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,000
|
|
|
|
|
3,160,500
|
|
|
37
Commitment Runs Deep
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
or Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
of Stock
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Not Vested
|
Name
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(2)
|
Danny J. Heatly
|
|
|
|
26,138
|
(4)
|
|
|
|
|
|
|
|
|
26.43
|
|
|
|
|
12/03/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162
|
(4)
|
|
|
|
|
|
|
|
|
23.05
|
|
|
|
|
12/02/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)
|
|
|
|
|
|
|
|
|
38.45
|
|
|
|
|
12/08/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,800
|
(4)
|
|
|
|
|
|
|
|
|
66.39
|
|
|
|
|
12/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,680
|
(4)
|
|
|
|
3,420
|
|
|
|
|
71.01
|
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,800
|
(4)
|
|
|
|
7,200
|
|
|
|
|
89.15
|
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,400
|
(4)
|
|
|
|
18,600
|
|
|
|
|
65.32
|
|
|
|
|
12/07/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,460
|
(4)
|
|
|
|
21,840
|
|
|
|
|
63.80
|
|
|
|
|
12/07/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,794
|
|
|
|
|
131,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,468
|
|
|
|
|
254,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,749
|
|
|
|
|
569,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,800
|
|
|
|
|
720,300
|
|
|
David A. Hager
|
|
|
|
3,000
|
(7)
|
|
|
|
|
|
|
|
|
75.31
|
|
|
|
|
08/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
(8)
|
|
|
|
|
|
|
|
|
112.59
|
|
|
|
|
06/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
(4)
|
|
|
|
36,000
|
|
|
|
|
44.69
|
|
|
|
|
03/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,360
|
(4)
|
|
|
|
45,440
|
|
|
|
|
63.80
|
|
|
|
|
12/07/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
1,470,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,400
|
|
|
|
|
1,499,400
|
|
|
Darryl G. Smette
|
|
|
|
56,000
|
(4)
|
|
|
|
|
|
|
|
|
26.43
|
|
|
|
|
12/03/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,000
|
(4)
|
|
|
|
|
|
|
|
|
17.43
|
|
|
|
|
12/04/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,000
|
(4)
|
|
|
|
|
|
|
|
|
23.05
|
|
|
|
|
12/02/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(4)
|
|
|
|
|
|
|
|
|
38.45
|
|
|
|
|
12/08/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,400
|
(4)
|
|
|
|
|
|
|
|
|
66.39
|
|
|
|
|
12/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,440
|
(4)
|
|
|
|
6,360
|
|
|
|
|
71.01
|
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,120
|
(4)
|
|
|
|
12,080
|
|
|
|
|
89.15
|
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,000
|
(4)
|
|
|
|
27,000
|
|
|
|
|
65.32
|
|
|
|
|
12/07/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,200
|
(4)
|
|
|
|
32,800
|
|
|
|
|
63.80
|
|
|
|
|
12/07/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,075
|
|
|
|
|
226,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,750
|
|
|
|
|
422,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
882,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
|
|
1,080,450
|
|
|
Stephen J. Hadden
|
|
|
|
11,512
|
(6)
|
|
|
|
|
|
|
|
|
34.75
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(4)
|
|
|
|
|
|
|
|
|
38.45
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,600
|
(4)
|
|
|
|
|
|
|
|
|
66.39
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,400
|
(4)
|
|
|
|
|
|
|
|
|
71.01
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,100
|
(4)
|
|
|
|
|
|
|
|
|
89.15
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,000
|
(4)
|
|
|
|
|
|
|
|
|
65.32
|
|
|
|
|
03/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Restricted stock awards granted December 12, 2006,
August 31, 2007, December 10, 2007, June 4, 2008,
December 8, 2008, March 31, 2009 and December 8,
2009 vest 25% on each anniversary of the grant date. |
|
(2) |
|
Based on a stock price of $73.50, the closing price of our
common stock on December 31, 2009. |
|
(3) |
|
Options granted November 29, 2000 vested on
November 29, 2000. |
|
(4) |
|
Options granted December 4, 2001, December 2, 2002,
December 4, 2003, December 9, 2004, December 12,
2005, December 12, 2006, December 10, 2007,
December 8, 2008, March 31, 2009 and December 8,
2009 vested 20% on the date of grant and an additional 20% on
each anniversary of the grant date. |
38
Commitment Runs Deep
|
|
|
(5) |
|
Options granted September 15, 2004 vested 20% on
September 15, 2004, December 4, 2004, December 4,
2005, December 4, 2006, and December 4, 2007. |
|
(6) |
|
Options granted July 30, 2004 vested 20% on July 30,
2004, December 4, 2004, December 4, 2005,
December 4, 2006, and December 4, 2007. |
|
(7) |
|
Options granted August 31, 2007 vested on August 31,
2007. |
|
(8) |
|
Options granted June 4, 2008 vested on June 4, 2008. |
OPTION EXERCISES
AND STOCK VESTED DURING THE YEAR ENDED
DECEMBER 31, 2009
The table below shows the number of shares of our common stock
acquired during 2009 upon the exercise of options. This table
also includes information regarding the vesting during 2009 of
stock awards previously granted to the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
Number of Shares
|
|
|
Value Realized on
|
Name
|
|
|
Acquired on Exercise (#)
|
|
|
Exercise
($)(1)
|
|
|
Acquired on Vesting (#)
|
|
|
Vesting
($)(2)
|
J. Larry Nichols
|
|
|
|
140,000
|
|
|
|
|
6,766,375
|
|
|
|
|
65,050
|
|
|
|
|
4,156,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Richels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,750
|
|
|
|
|
1,900,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Danny J. Heatly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,861
|
|
|
|
|
502,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Hager
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darryl G. Smette
|
|
|
|
1,772
|
|
|
|
|
95,035
|
|
|
|
|
12,775
|
|
|
|
|
816,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Hadden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,600
|
|
|
|
|
2,373,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The dollar amounts shown in this column are determined by
multiplying the number of options exercised by the difference
between the per share exercise price of the options and the per
share closing price of our common stock on the exercise date. |
|
(2) |
|
The dollar amounts shown in this column are determined by
multiplying the number of stock awards that vested by the per
share closing price of our common stock on the vesting date. |
39
Commitment Runs Deep
PENSION BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2009
We maintain three defined benefit retirement plans in which our
named executive officers, except Mr. Hager, may participate:
|
|
|
|
|
A tax qualified defined benefit retirement plan and related
trust for certain employees (the Defined Benefit
Plan);
|
|
|
|
A nonqualified Benefit Restoration Plan (the BRP)
that provides benefits that would be provided under the Defined
Benefit Plan except for:
|
|
|
|
|
|
limitations imposed by the Code;
|
|
|
|
limitations imposed for those who earned greater than
$220,000; and
|
|
|
|
the inclusion of nonqualified deferred compensation in the
definition of compensation.
|
|
|
|
|
|
A nonqualified Supplemental Retirement Income Plan (the
SRIP) for a small group of executives that provides
benefits similar to those provided by the BRP plus certain
additional benefits.
|
The following table shows the estimated present value of
accumulated retirement benefits as provided under the Defined
Benefit Plan and the SRIP to the named executive officers.
Mr. Hager does not participate in the Defined Benefit Plan,
the BRP or the SRIP. All other named executive officers are
participants in the SRIP, therefore BRP benefits are not
included in the table below. SRIP benefits vest after five years
of service. Participants who are terminated for cause lose their
SRIP benefits and are instead paid under the BRP. Amounts
payable under the SRIP or the BRP are reduced by the amounts
payable under the Defined Benefit Plan so there is no
duplication of benefits. Retirement benefits are calculated
based upon years of service and final average
compensation. Final average compensation consists of the
average of the highest three consecutive years
compensation out of the last 10 years. The definition of
compensation under the Defined Benefit Plan is the same as the
definition under the SRIP and BRP except that under the Defined
Benefit Plan, nonqualified deferred compensation is excluded and
compensation is limited by Code compensation limits.
40
Commitment Runs Deep
Pension Benefits
Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
Present Value of
|
|
|
Payments During Last
|
|
|
|
|
|
|
Credited Service
|
|
|
Accumulated Benefit
|
|
|
Fiscal Year
|
Name
|
|
|
Plan Name
|
|
|
(#)
|
|
|
($)(1)
|
|
|
($)
|
J. Larry Nichols
|
|
|
Defined Benefit Plan
|
|
|
|
40
|
|
|
|
|
1,260,660
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
40
|
|
|
|
|
23,846,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Richels(2)(3)(4)
|
|
|
Defined Benefit Plan
|
|
|
|
6
|
|
|
|
|
197,750
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
14
|
|
|
|
|
8,068,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Danny J.
Heatly(2)
|
|
|
Defined Benefit Plan
|
|
|
|
21
|
|
|
|
|
409,772
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
21
|
|
|
|
|
1,522,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A.
Hager(5)
|
|
|
Defined Benefit Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darryl G.
Smette(2)
|
|
|
Defined Benefit Plan
|
|
|
|
23
|
|
|
|
|
903,170
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
23
|
|
|
|
|
7,605,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Hadden
|
|
|
Defined Benefit Plan
|
|
|
|
6
|
|
|
|
|
127,326
|
|
|
|
|
|
|
|
|
|
SRIP
|
|
|
|
6
|
|
|
|
|
1,279,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We calculated the present value of each named executive
officers accumulated benefits as of December 31, 2009
under our pension plans assuming 25% of participants would elect
a single life annuity, 15% of participants would elect a 50%
joint and survivor annuity and 60% would elect a 100% joint and
survivor annuity. We assumed that each named executive officer
began receiving payments at normal retirement age
(age 65) and were vested in those payments. The
present value is calculated using the 2010 PPA Static mortality
table and a discount rate of 6%. No pre-retirement decrements
were used in this calculation. |
|
(2) |
|
Messrs. Smette and Richels are eligible for early
retirement under the Defined Benefit Plan and the SRIP.
Mr. Heatly is eligible for early retirement under the SRIP.
See the following Defined Benefit Plan Early
Retirement for a description of the eligibility
requirements and benefits payable under our Defined Benefit Plan. |
|
(3) |
|
Years of credited service for Mr. Richels for the Defined
Benefit Plan are determined based on time worked in the U.S. For
the SRIP, Mr. Richels service is based on time worked
in the U.S. and Canada while with the Company.
Mr. Richels Canadian service is included for benefit
eligibility purposes (vesting and early retirement) in both
plans. |
|
(4) |
|
Benefits payable to Mr. Richels under the SRIP are reduced
under our Pension Plan for Employees of Devon Canada
Corporation, a subsidiary of Devon. Mr. Richels
benefit under the Pension Plan for Employees of Devon Canada
Corporation is frozen and Mr. Richels future pension
benefits are accruing under the Defined Benefit Plan and the
SRIP. |
|
(5) |
|
Mr. Hager joined the Company after our Defined Benefit Plan
was closed to new participants. As a result, he will not receive
a benefit under the plans described in this table. |
41
Commitment Runs Deep
Defined Benefit
Plan
The Defined Benefit Plan is a qualified defined benefit
retirement plan which provides benefits based upon employment
service with us. Employees hired before October 1, 2007,
became eligible to participate in the Defined Benefit Plan when
they earned one year of service and attained the age of
21 years. Employees who were hired after September 30,
2007, are not eligible to participate in the Defined Benefit
Plan. Each eligible employee who retires is entitled to receive
monthly retirement income, based upon their final average
compensation, years of credited service and reduced by Social
Security benefits payable to the employee. Contributions by
employees are neither required nor permitted under the Defined
Benefit Plan. Benefits are computed based on straight-life
annuity amounts. Benefits under the Defined Benefit Plan are
limited for certain highly compensated employees, including our
named executive officers, in order to comply with certain
requirements of ERISA and the Code.
Normal
Retirement
Employees, including the named executive officers, are eligible
for normal retirement benefits under the Defined Benefit Plan
upon reaching age 65. Normal retirement benefits for the
employees participating in the Defined Benefit Plan are equal to
65% of the participants final average compensation less
any benefits due to the participant under Social Security,
multiplied by a fraction, the numerator of which is his or her
credited years of service and the denominator of which is his or
her estimated years of service at normal retirement age (not
less than 25 years). The Defined Benefit Plan contains a
provision which reduces the percentage for participants earning
more than $220,000 to 60%. As a result, the named executive
officers percentage is 60% rather than 65%.
Early
Retirement
Employees, including the named executive officers, are eligible
for early retirement benefits under the Defined Benefit Plan
after (i) attaining age 55, and (ii) earning at
least 10 years of credited service. Early retirement
benefits are equal to a percentage of the normal retirement
income the participant would otherwise be entitled to if he or
she had commenced benefits at age 65 depending on the
participants age when he or she elects to begin receiving
benefits:
|
|
|
|
|
|
|
|
|
Percentage of
|
Age When
|
|
|
Normal Retirement
|
Benefits Begin
|
|
|
Income
|
65
|
|
|
|
100
|
%
|
64
|
|
|
|
97
|
%
|
63
|
|
|
|
94
|
%
|
62
|
|
|
|
91
|
%
|
61
|
|
|
|
88
|
%
|
60
|
|
|
|
85
|
%
|
59
|
|
|
|
80
|
%
|
58
|
|
|
|
75
|
%
|
57
|
|
|
|
70
|
%
|
56
|
|
|
|
65
|
%
|
55
|
|
|
|
60
|
%
|
|
|
|
|
|
|
Deferred Vested
Pension
Participants in the Defined Benefit Plan are fully vested in
their accrued benefits after five years of service. If the
participants employment is terminated after attaining five
years of service but before
42
Commitment Runs Deep
eligibility for early retirement, the participant is entitled to
a deferred vested pension based on his or her accrued benefit on
the date of termination. An unreduced deferred vested pension is
payable at age 65. Alternatively, the participant may elect
to receive a reduced benefit as early as age 55. The
benefit payable prior to age 65 is a percentage of his or
her normal retirement benefit based on his or her age at the
time the benefit begins, as shown in the table below:
|
|
|
|
|
|
Age at Election to
|
|
|
Percentage of
|
Receive Deferred
|
|
|
Normal Retirement
|
Vested Pension
|
|
|
Income
|
65
|
|
|
|
100.00
|
%
|
64
|
|
|
|
90.35
|
%
|
63
|
|
|
|
81.88
|
%
|
62
|
|
|
|
74.40
|
%
|
61
|
|
|
|
67.79
|
%
|
60
|
|
|
|
61.91
|
%
|
59
|
|
|
|
56.68
|
%
|
58
|
|
|
|
52.00
|
%
|
57
|
|
|
|
47.80
|
%
|
56
|
|
|
|
44.03
|
%
|
55
|
|
|
|
40.63
|
%
|
|
|
|
|
|
|
If a participant is:
|
|
|
|
|
involuntarily terminated for any reason other than death or
cause, is between the ages of 50 and 55 and has at
least 10 years of credited service, or
|
|
|
|
involuntarily terminated for any reason other than
cause within two years following a change in control
and has at least 10 years of credited service regardless of
the participants age,
|
then the participant may elect to have his or her benefits under
the Defined Benefit Plan paid at any time on or after the age of
55 subject to the same percentage reduction in benefits as set
forth under Early Retirement applicable to the
participant.
Benefit
Restoration Plan
The BRP is a nonqualified defined benefit retirement plan, the
purpose of which is to restore retirement benefits for certain
selected key management and highly compensated employees because
their benefits under the Defined Benefit Plan are limited in
order to comply with certain requirements of ERISA and the Code
or because their final average compensation is reduced as a
result of contributions into our Deferred Compensation Plan.
Benefits under the BRP are equal to 65% of the executives
final average compensation less any benefits due to the
executive under Social Security, multiplied by a fraction, the
numerator of which is his or her years of credited service (not
to exceed 25) and the denominator of which is 25. The BRP
benefit is reduced by the benefit that is otherwise payable
under the Defined Benefit Plan. An employee must be selected by
the Compensation Committee in order to be eligible for
participation in the BRP. The same early retirement reduction
factors that apply under the Defined Benefit Plan are applicable
under the BRP. Participants become vested in retirement benefits
under the BRP at the same time as the participant becomes vested
for retirement benefits under the Defined Benefit Plan.
Supplemental
Retirement Income Plan
The SRIP is another nonqualified defined benefit retirement plan
for a small group of our key executives, the purpose of which is
to provide additional retirement benefits for these executives.
An employee
43
Commitment Runs Deep
must be selected by the Compensation Committee in order to be
eligible for participation in the SRIP. Participants in the SRIP
become vested in the SRIP benefits after five years of service.
If the executive is terminated for cause as that
term is defined in the executives employment agreement,
then all benefits under the SRIP are forfeited and the executive
would receive benefits under the BRP. If the executive is
receiving benefits under the SRIP, he is not eligible for
benefits under the BRP.
The SRIP provides for retirement income equal to 65% of the
executives final average compensation less any benefits
due to the participant under Social Security, multiplied by a
fraction, the numerator of which is his credited years of
service (not to exceed 20) and the denominator of which is
20. For those participating in the plan as of January 24,
2002 (Grandfathered Participants), the SRIP benefit
is reduced by a fraction of the benefits otherwise accrued under
the Defined Benefit Plan, the numerator of which is years of
credited service (not greater than 20) and the denominator
of which is 20. For those who become participants after
January 24, 2002, the SRIP benefit is reduced by the full
benefits otherwise accrued under the Defined Benefit Plan. Of
the named executive officers, Mr. Hadden is not a
Grandfathered Participant. In the case of Mr. Richels, his
SRIP benefit is also reduced by amounts payable to him under the
defined contribution provisions of our Canadian Pension Plan.
The same early retirement reduction factors that apply under the
Defined Benefit Plan are applicable under the SRIP. Early
retirement benefits are payable under the SRIP after attaining
age 55 and earning at least 10 years of service or, if
earlier, 20 years of service regardless of age. The early
retirement benefit prior to age 55 is the actuarial
equivalent to the age 55 early retirement benefit. In the
event that a named executive officer is terminated without
cause or terminates his or her employment for good
reason as those terms are defined in our employment
agreements with our named executive officers, then the executive
will be 100% vested in his accrued SRIP benefit. If a change in
control event occurs, the executive will be 100% vested and his
benefit will be an amount equal to the normal retirement annuity
payable immediately, unreduced for early commencement, paid in a
lump sum. Otherwise, the benefit will be paid monthly pursuant
to the annuity option selected by the executive. The SRIP may be
informally funded through a rabbi trust arrangement.
NONQUALIFIED
DEFERRED COMPENSATION IN 2009
The table below shows information about our Deferred
Compensation Plan. The Deferred Compensation Plan is designed to
allow each executive to contribute up to 50% of his or her base
salary and up to 100% of his or her bonus, and receive a Company
match beyond the contribution limits prescribed by the IRS with
regard to our 401(k) Plan. The Deferred Compensation Plan allows
executives to defer a portion of their cash compensation in a
tax effective way at a minimal cost to us.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions in
|
|
|
In Last Fiscal
|
|
|
Last Fiscal
|
|
|
Distributions in
|
|
|
Balance at Last
|
|
|
|
Last Fiscal Year
|
|
|
Year
|
|
|
Year
|
|
|
Last Fiscal Year
|
|
|
Fiscal Year End
|
Name
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
J. Larry Nichols
|
|
|
|
264,000
|
|
|
|
|
226,200
|
|
|
|
|
391,774
|
|
|
|
|
152,836
|
|
|
|
|
1,620,559
|
|
John Richels
|
|
|
|
189,000
|
|
|
|
|
160,200
|
|
|
|
|
213,538
|
|
|
|
|
107,197
|
|
|
|
|
960,172
|
|
Danny J. Heatly
|
|
|
|
195,394
|
|
|
|
|
24,183
|
|
|
|
|
129,467
|
|
|
|
|
|
|
|
|
|
951,547
|
|
David A. Hager
|
|
|
|
14,019
|
|
|
|
|
|
|
|
|
|
1,698
|
|
|
|
|
|
|
|
|
|
15,717
|
|
Darryl G. Smette
|
|
|
|
90,600
|
|
|
|
|
75,300
|
|
|
|
|
190,609
|
|
|
|
|
74,868
|
|
|
|
|
1,125,961
|
|
Stephen J. Hadden
|
|
|
|
67,612
|
|
|
|
|
83,700
|
|
|
|
|
4,381
|
|
|
|
|
471,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts in this column are also included in the Summary
Compensation Table on page 34, in the salary column or the
bonus column. |
|
(2) |
|
The amounts in this column are also included in the Summary
Compensation Table on page 34, in the All Other
Compensation column as the Deferred Compensation Plan
employer match. |
44
Commitment Runs Deep
401(k)
Plan
The 401(k) Plan is a qualified defined contribution plan that
provides for a Company matching contribution of up to 6% of
compensation. The Defined Benefit Plan was closed to new
entrants on October 1, 2007. Supplemental contributions of
8% to 16% of compensation that are determined based on years of
benefit service were added to the 401(k) Plan for employees who
are not accruing benefits in the Defined Benefit Plan.
Supplemental
Contribution Restoration Plans
The Supplemental Contribution Restoration Plans (the
SCRPs) are two nonqualified supplemental defined
contribution plans. The purpose of the SCRPs is to ensure that
participants in the 401(k) Plan who are eligible to receive the
supplemental contribution, receive the full supplemental
contribution despite the limitations imposed by the Code. A
contribution will be made by the Company in an amount equal to
the difference between the supplemental contribution that the
Company would have contributed under the 401(k) Plan in the
absence of the Code limitations, and the actual amount
contributed.
Defined
Contribution Supplemental Executive Retirement Plan
The Defined Contribution Supplemental Executive Retirement Plan
(the DC SERP) is a nonqualified supplemental
executive retirement plan that provides benefits in lieu of the
SRIP to a small group of key executives who are not eligible to
participate in the Defined Benefit Plan and the SRIP. Under the
DC SERP, an executive is eligible to receive a contribution of a
specified percentage of compensation annually. This contribution
will be offset by supplemental contributions to the 401(k) Plan
and contributions to the SCRPs. An employee must be selected by
the Compensation Committee in order to be eligible for
participation in the DC SERP. Participants in the DC SERP become
50% vested after five years of service and vest at the rate of
10% for another five years. At age 62, a participant will
be 100% vested with five years of service. In the event of a
change in control or a named executive officer is terminated
without cause or terminates employment for
good reason, as those terms are defined in our
employment agreements with our named executive officers, then
the executive will be 100% vested in his or her DC SERP account.
A participant will be 100% vested in the event of death or
disability. Payments of DC SERP accounts will be in the form of
installments over a five-year period except in the case of
change in control or death where payment will be in the form of
a lump sum. The DC SERP may be informally funded through a rabbi
trust arrangement.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We will be obligated to make certain payments to our named
executive officers or potentially accelerate the vesting of
their equity awards and retirement benefits upon termination of
their employment or upon a change in control pursuant to the
following plans or agreements:
|
|
|
|
|
employment agreements entered into with each of our named
executive officers (a severance agreement in the case of
Mr. Heatly);
|
|
|
|
the Defined Benefit Plan;
|
|
|
|
the 401(k) Plan;
|
|
|
|
the BRP, the SRIP, the SCRPs or the DC SERP, depending on the
circumstances of the executive officers termination;
|
|
|
|
the 2005 Long-Term Incentive Plan; and
|
|
|
|
the 2009 Long-Term Incentive Plan.
|
45
Commitment Runs Deep
The following tables provide the estimated compensation and
present value of benefits potentially payable to each named
executive officer upon a change in control of the Company or a
termination of employment of the named executive officer. The
benefit values shown do not include benefits that are broadly
available to substantially all salaried employees. The amounts
shown assume that the termination or change in control occurred
on December 31, 2009. The actual amounts to be paid can
only be determined at the time of such executives actual
separation from the Company.
Please see the narrative for the following tables for a
discussion of the methods of calculating the payments required
upon termination of our named executive officers in the manners
set forth in each column. The footnotes to the following tables
apply to all of our named executive officers and are presented
after the table for the last named executive officer.
J. Larry
Nichols
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
|
Voluntary
|
|
|
Termination
|
|
|
Termination
|
|
|
Change in
|
|
|
|
|
|
(payable to
|
Benefits and Payments
|
|
|
Termination
|
|
|
Without Cause
|
|
|
With Cause
|
|
|
Control
|
|
|
Disability
|
|
|
Spouse)
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Base
Salary/Bonus(1)
|
|
|
|
|
|
13,200,000
|
|
|
|
|
|
|
13,200,000
|
|
|
|
|
|
|
|
|
|
SRIP(2)(3)
|
|
|
23,847,000
|
|
|
23,847,000
|
|
|
|
|
|
|
30,757,000
|
(4)
|
|
|
23,847,000
|
|
|
|
21,313,000
|
(5)
|
BRP(2)(3)
|
|
|
|
|
|
|
|
|
23,847,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Stock
Options(6)
|
|
|
|
|
|
2,866,617
|
|
|
|
|
|
|
2,866,617
|
|
|
|
|
|
|
|
2,866,617
|
|
Accelerated Vesting of Restricted
Stock(7)
|
|
|
|
|
|
14,676,112
|
|
|
|
|
|
|
14,676,112
|
|
|
|
|
|
|
|
14,676,112
|
|
Health Care
Benefits(8)
|
|
|
|
|
|
35,209
|
|
|
|
|
|
|
35,209
|
|
|
|
|
|
|
|
|
|
Post-Retirement Health
Care(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outplacement
Services(10)
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(11)
|
|
|
23,847,000
|
|
|
54,659,938
|
|
|
23,847,000
|
|
|
|
61,569,938
|
|
|
|
23,847,000
|
|
|
|
38,855,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46
Commitment Runs Deep
John
Richels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
|
Voluntary
|
|
|
Termination
|
|
|
Termination
|
|
|
Change in
|
|
|
|
|
|
(payable to
|
Benefits and Payments
|
|
|
Termination
|
|
|
Without Cause
|
|
|
With Cause
|
|
|
Control
|
|
|
Disability
|
|
|
Spouse)
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Base
Salary/Bonus(1)
|
|
|
|
|
|
9,450,000
|
|
|
|
|
|
|
9,450,000
|
|
|
|
|
|
|
|
|
|
SRIP(2)(3)
|
|
|
10,419,000
|
|
|
10,419,000
|
|
|
|
|
|
|
23,047,000
|
(4)
|
|
|
10,419,000
|
|
|
|
9,712,000(5
|
)
|
BRP(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Stock
Options(6)
|
|
|
|
|
|
1,581,122
|
|
|
|
|
|
|
1,581,122
|
|
|
|
|
|
|
|
1,581,122
|
|
Accelerated Vesting of Restricted
Stock(7)
|
|
|
|
|
|
7,359,188
|
|
|
|
|
|
|
7,359,188
|
|
|
|
|
|
|
|
7,359,188
|
|
Health Care
Benefits(8)
|
|
|
|
|
|
35,209
|
|
|
|
|
|
|
35,209
|
|
|
|
|
|
|
|
|
|
Post-Retirement Health
Care(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
995
|
|
|
|
|
|
|
|
|
|
Outplacement
Services(10)
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
11,288,626
|
|
|
|
|
|
|
|
|
|
Total(11)
|
|
|
10,419,000
|
|
|
28,879,519
|
|
|
|
|
|
|
52,797,140
|
|
|
|
10,419,000
|
|
|
|
18,652,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Danny J.
Heatly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
|
Voluntary
|
|
|
Termination
|
|
|
Termination
|
|
|
Change in
|
|
|
|
|
|
(payable to
|
Benefits and Payments
|
|
|
Termination
|
|
|
Without Cause
|
|
|
With Cause
|
|
|
Control
|
|
|
Disability
|
|
|
Spouse)
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Base
Salary/Bonus(1)
|
|
|
|
|
|
1,379,800
|
|
|
|
|
|
|
1,379,800
|
|
|
|
|
|
|
|
|
|
SRIP(2)(3)
|
|
|
2,144,000
|
|
|
2,144,000
|
|
|
|
|
|
|
3,902,000
|
(4)
|
|
|
2,110,000
|
|
|
|
1,856,000
|
(5)
|
BRP(2)(3)
|
|
|
|
|
|
|
|
|
1,744,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Stock
Options(6)
|
|
|
|
|
|
372,512
|
|
|
|
|
|
|
372,512
|
|
|
|
|
|
|
|
372,512
|
|
Accelerated Vesting of Restricted
Stock(7)
|
|
|
|
|
|
1,676,609
|
|
|
|
|
|
|
1,676,609
|
|
|
|
|
|
|
|
1,676,609
|
|
Health Care
Benefits(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
34,850
|
|
|
|
|
|
|
|
|
|
Post-Retirement Health
Care(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
3,150
|
|
|
|
|
|
|
|
|
|
Outplacement
Services(10)
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(11)
|
|
|
2,144,000
|
|
|
5,607,921
|
|
|
1,744,000
|
|
|
|
7,403,921
|
|
|
|
2,110,000
|
|
|
|
3,905,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
Commitment Runs Deep
David A.
Hager
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
|
Voluntary
|
|
|
Termination
|
|
|
Termination
|
|
|
Change in
|
|
|
|
|
|
(payable to
|
Benefits and Payments
|
|
|
Termination
|
|
|
Without Cause
|
|
|
With Cause
|
|
|
Control
|
|
|
Disability
|
|
|
Spouse)
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Base
Salary/Bonus(1)
|
|
|
|
|
|
4,065,000
|
|
|
|
|
|
|
4,065,000
|
|
|
|
|
|
|
|
|
|
DC
SERP(12)
|
|
|
95,941
|
|
|
95,941
|
|
|
|
|
|
|
788,491
|
|
|
|
95,941
|
|
|
|
95,941
|
|
SCRPs(13)
|
|
|
20,796
|
|
|
20,796
|
|
|
|
|
|
|
20,796
|
|
|
|
20,796
|
|
|
|
20,796
|
|
Accelerated Vesting of Stock
Options(6)
|
|
|
|
|
|
1,477,928
|
|
|
|
|
|
|
1,477,928
|
|
|
|
|
|
|
|
1,477,928
|
|
Accelerated Vesting of Restricted
Stock(7)
|
|
|
|
|
|
2,969,400
|
|
|
|
|
|
|
2,969,400
|
|
|
|
|
|
|
|
2,969,400
|
|
Health Care
Benefits(8)
|
|
|
|
|
|
52,276
|
|
|
|
|
|
|
52,276
|
|
|
|
|
|
|
|
|
|
Post-Retirement Health
Care(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outplacement
Services(10)
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
3,380,310
|
|
|
|
|
|
|
|
|
|
Total(11)
|
|
|
116,737
|
|
|
8,716,341
|
|
|
|
|
|
|
12,789,201
|
|
|
|
116,737
|
|
|
|
4,564,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darryl G.
Smette
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
|
Voluntary
|
|
|
Termination
|
|
|
Termination
|
|
|
Change in
|
|
|
|
|
|
(payable to
|
Benefits and Payments
|
|
|
Termination
|
|
|
Without Cause
|
|
|
With Cause
|
|
|
Control
|
|
|
Disability
|
|
|
Spouse)
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Base
Salary/Bonus(1)
|
|
|
|
|
|
4,530,000
|
|
|
|
|
|
|
4,530,000
|
|
|
|
|
|
|
|
|
|
SRIP(2)(3)
|
|
|
8,651,000
|
|
|
8,651,000
|
|
|
|
|
|
|
10,960,000
|
(4)
|
|
|
8,651,000
|
|
|
|
7,739,000
|
(5)
|
BRP(2)(3)
|
|
|
|
|
|
|
|
|
7,993,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Stock
Options(6)
|
|
|
|
|
|
554,856
|
|
|
|
|
|
|
554,856
|
|
|
|
|
|
|
|
554,856
|
|
Accelerated Vesting of Restricted
Stock(7)
|
|
|
|
|
|
2,611,088
|
|
|
|
|
|
|
2,611,088
|
|
|
|
|
|
|
|
2,611,088
|
|
Health Care
Benefits(8)
|
|
|
|
|
|
52,276
|
|
|
|
|
|
|
52,276
|
|
|
|
|
|
|
|
|
|
Post-Retirement Health
Care(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outplacement
Services(10)
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(11)
|
|
|
8,651,000
|
|
|
16,434,220
|
|
|
7,993,000
|
|
|
|
18,743,220
|
|
|
|
8,651,000
|
|
|
|
10,904,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The employment agreements or severance agreement for our named
executive officers provide that each executive is entitled to
the payment of a pro rata share of any bonus for the performance
period in which the termination occurs based on the number of
days worked in the period. For purposes of quantifying the
potential payments for our named executive officers upon a
termination, we have assumed that the termination took place on
December 31, 2009. As a |
48
Commitment Runs Deep
|
|
|
|
|
result, each named executive officer would be entitled to all
the bonus they earned in 2009. Those bonus amounts are set forth
in the bonus column of the Summary Compensation Table on
page 34. |
|
(2) |
|
Participants are vested in their benefits under the SRIP after
five years of service. Benefits under the SRIP and the BRP are
mutually exclusive; therefore, participants will not receive a
benefit under the SRIP if they are receiving a benefit under the
BRP and vice versa. Participants forfeit their benefits under
the SRIP if they are terminated for cause and will
instead receive benefits under the BRP except for
Mr. Richels and Mr. Hager who are not participants in
the BRP. Benefits paid under the SRIP or the BRP are reduced by
any amounts payable under the Defined Benefit Plan so that there
is no duplication of benefits. |
|
(3) |
|
The values shown for the SRIP and the BRP benefits for each
named executive officer are the present values as of
December 31, 2009, of the benefits that would be payable
under the SRIP or BRP as of each executives earliest
possible commencement date. Except in the case of a change in
control where the benefit is paid as a lump sum and in the case
of benefits payable to a spouse upon death as a monthly single
life annuity, we have assumed that 25% of participants would
elect the SRIP and BRP benefits in the form of a single life
annuity, 15% would elect a 50% joint and survivor annuity and
60% of participants would elect a 100% joint and survivor
annuity. All other assumptions are the same as those used to
determine the present value of benefits disclosed in the Pension
Benefits Table. |
|
(4) |
|
Under the SRIP, all participating named executive officers,
except Mr. Heatly, will receive credit for an additional
three years of service and an additional three years of age,
when determining their SRIP benefit following a change in
control. All benefits under the SRIP, including
Mr. Heatlys, are payable as a lump sum payment,
within 90 days following a change in control where the lump
sum payment is the present value of the unreduced accrued
benefit payable immediately. The lump sum amount shown is based
on the lump sum rate in effect for payments beginning January
2010. |
|
(5) |
|
Participants are immediately vested in the SRIP accrued benefit
upon death. The benefit is payable to an eligible spouse at the
date the participant would have reached age 55 with
10 years of service, reduced by subsidized early retirement
factors and assuming that the participant had elected a 100%
joint and survivor pension. |
|
(6) |
|
Values displayed for acceleration of vesting of stock options
represent the number of options multiplied by the difference
between the market price of our common stock on
December 31, 2009, which was $73.50 per share, and the
exercise price of each option. |
|
(7) |
|
Values displayed for acceleration of vesting of restricted stock
represent the fair value of our common stock as of
December 31, 2009, which was $73.50 per share. |
|
(8) |
|
For all named executive officers except Mr. Heatly, health
care benefits are payable for 18 months following
termination without cause or following their termination in
connection with a change in control. Mr. Heatly is entitled
to 18 months of health care benefits following his
termination in connection with a change in control. All named
executive officers, except Mr. Heatly, are also entitled to
a payment in an amount equal to 18 times the monthly COBRA
premium following termination without cause or following their
termination in connection with a change in control.
Mr. Heatly is entitled to a payment in an amount equal to
six times the monthly COBRA premium following his termination in
connection with a change of control. The values in the tables
are estimated based on our current cost of these benefits. |
|
(9) |
|
Both Mr. Richels and Mr. Heatly will receive an
enhancement in their post-retirement medical benefit upon a
change in control. All other named executives either would not
be eligible for a post-retirement medical benefit or are fully
accrued in the benefit. We have not included the value of
benefits that would be available to substantially all employees,
and have instead only included the value of the enhancement that
is payable based on individual employment or severance
agreements. |
49
Commitment Runs Deep
|
|
|
(10) |
|
Outplacement services are provided following termination without
cause or following termination in connection with a change in
control. The value in the table is estimated based on our
current cost of this benefit. |
|
(11) |
|
We recognize that our nonqualified employee benefit plans
including the SRIP, the BRP, the Deferred Compensation Plan, the
DC SERP, the SCRPs, employment agreements and severance
agreements are subject, all or in part, to Section 409A of
the Code, which requires certain payments made under these plans
and agreements to be delayed for six months. |
|
(12) |
|
Mr. Hager participates in the DC SERP in lieu of
participating in the SRIP. Mr. Hager will receive an
additional three years of contributions by the Company under the
DC SERP in the event of a change in control. |
|
(13) |
|
Mr. Hagers benefit in the SCRPs will become 100%
vested upon a change in control. |
Employment and
Severance Agreements
Except for Mr. Heatly, all of the named executive officers
are parties to employment agreements that set out their rights
to compensation following their termination under various
circumstances. Mr. Heatly is a party to a severance
agreement which provides for similar rights as the employment
agreements. Differences between the employment agreements and
Mr. Heatlys severance agreement are noted throughout
the following discussion.
Rights Upon
Termination for Any Reason
Under the employment agreements and the severance agreement,
regardless of the manner in which a named executive
officers employment terminates, he is entitled to receive
amounts earned during his term of employment. Such amounts
include:
|
|
|
|
|
unpaid salary through the date of termination;
|
|
|
|
unused vacation pay;
|
|
|
|
bonuses that have already been earned;
|
|
|
|
amounts otherwise entitled to under our employee benefit
plans; and
|
|
|
|
a
gross-up
payment in an amount equal to any excise tax, or interest or
penalties related to any excise tax, assessed against the named
executive officer pursuant to Section 4999 of the Code based
upon the payments paid or payable pursuant to the employment
agreement.
|
Rights Upon
Termination for Death or Disability
The employment agreements provide that if the named executive
officers employment terminates by reason of death or
disability, then, in addition to the items set forth under
Rights Upon Termination for Any Reason, the named
executive officer is entitled to receive a pro rata share of any
bonus for the performance period in which the day of termination
occurs (based on the number of days worked in the performance
period), payable at the same time it is payable to other
participants in the bonus plan.
Rights Upon
Termination Without Cause and Constructive Discharge
If the named executive officers employment is
involuntarily terminated other than for cause or the
named executive officer terminates for good reason,
as those terms are defined in the employment
50
Commitment Runs Deep
agreements and severance agreement, then in addition to the
items set forth under Rights Upon Termination for Any
Reason, the named executive officer is entitled to the
following:
|
|
|
|
|
a lump sum cash payment equal to three times the aggregate
annual compensation of each named executive officer, with the
exception of Mr. Heatly who will receive two times his
aggregate annual compensation. Aggregate annual
compensation is equal to the sum of:
|
|
|
|
|
|
the executive officers annual base salary, and
|
|
|
|
an amount equal to the largest annual bonus paid or payable to
the named executive officer for the three consecutive calendar
years prior to the date the named executive officers
termination occurs;
|
|
|
|
|
|
payment of a pro rata share of any bonus for the performance
period in which the day of termination occurs (based on the
number of days worked in the performance period), payable at the
same time it is payable to other participants in the bonus plan;
|
|
|
|
the same basic health and welfare benefits that the executive
would otherwise be entitled to receive if the named executive
officer were our employee for 18 months following
termination. The severance agreement provides for similar
benefits to Mr. Heatly for the 18 months following his
date of termination but only in connection with a change in
control;
|
|
|
|
payment of an amount equal to 18 times the monthly COBRA
premium. The severance agreement provides for a payment to
Mr. Heatly in an amount equal to six times the monthly
COBRA premium following his date of termination in connection
with a change of control; and
|
|
|
|
payment of a reasonable amount for outplacement services
commensurate with the named executive officers title and
position with the Company and other executives similarly
situated in other companies in our peer group.
|
Termination
Following a Change in Control
Under the employment and severance agreements, if within
24 months following a change in control of the
Company, the named executive officer:
|
|
|
|
|
is terminated without cause by us; or
|
|
|
|
terminates his or her employment with us for good
reason, as each of those terms are defined in the
employment and severance agreements;
|
then, in addition to the items set forth under Rights Upon
Termination for Any Reason and Rights Upon
Termination Without Cause and Constructive Discharge,
three years of service and three years of age (two years of
service and two years of age in the case of Mr. Heatly)
shall be added to the named executive officers actual
years of service and actual age when determining the named
executive officers entitlement under our Retiree Medical
Benefit Coverage. In no event, however, should the additional
years of age be construed to reduce or eliminate the
executives right to coverage under the plan.
Change in control is defined as the date on which
one of the following occurs:
|
|
|
|
|
an entity or group acquires 30% or more of our outstanding
voting securities;
|
|
|
|
the incumbent Board ceases to constitute at least a majority of
our Board; or
|
|
|
|
a merger, reorganization or consolidation is consummated, after
stockholder approval, unless
|
|
|
|
|
|
substantially all of the stockholders prior to the transaction
continue to own more than 50% of the voting power after the
transaction;
|
|
|
|
no person owns 30% or more of the combined voting
securities; and
|
|
|
|
the incumbent Board constitutes at least a majority of the Board
after the transaction.
|
51
Commitment Runs Deep
Long-Term
Incentive Plan
The Compensation Committee is authorized to provide in the award
agreements for the acceleration of any unvested portions of any
outstanding awards under our 2005 Long-Term Incentive Plan and
2009 Long-Term Incentive Plan upon a change in control,
retirement, disability, death or termination for an approved
reason. Award agreements provide for automatic vesting upon a
change in control or the death of the executive.
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth information about our common
stock as of December 31, 2009, that may be issued under our
equity compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
|
|
|
Weighted-Average
|
|
|
For Future Issuance
|
|
|
|
Number of Securities
|
|
|
Exercise Price of
|
|
|
Under Equity
|
|
|
|
To be Issued Upon
|
|
|
Outstanding
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Options,
|
|
|
(Excluding
|
|
|
|
Outstanding Options,
|
|
|
Warrants and
|
|
|
Securities Reflected
|
|
|
|
Warrants and Rights
|
|
|
Rights
|
|
|
In Column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
12,160,456
|
|
|
|
59.07
|
|
|
|
15,060,320
|
(1)
|
Equity compensation plans not approved By security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(2)
|
|
|
12,160,456
|
|
|
|
59.07
|
|
|
|
15,060,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents shares available for issuance pursuant to awards
under the 2009 Long-Term Incentive Plan, which may be in the
form of stock options, restricted stock awards, restricted stock
units, Canadian restricted stock units, performance units, or
stock appreciation rights. |
|
(2) |
|
As of December 31, 2009, options to purchase an aggregate
of 345,238 shares of our common stock at a weighted average
exercise price of $21.92 were outstanding under the following
equity compensation plans, which options were assumed in
connection with merger and acquisition transactions: Mitchell
Energy & Development Corp. 1995 Stock Option Plan,
Mitchell Energy & Development Corp. 1999 Stock Option
Plan, Ocean Energy, Inc. Long Term Incentive Plan for
Non-Executive Employees, Ocean Energy, Inc. 2001 Long Term
Incentive Plan and Ocean Energy, Inc. 1999 Long Term Incentive
Plan. No further grants or awards will be made under the assumed
equity compensation plans. |
52
Commitment Runs Deep
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
To the best of our knowledge, no person beneficially owned more
than 5% of our common stock at the close of business on
December 31, 2009, except as set forth below:
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
Percent of
|
Name and Address of Beneficial
Owner
|
|
Beneficially Owned
|
|
Class
|
|
Davis Selected Advisors, L.P.
2949 East Elvira Road, Suite 101
Tucson, AZ 85756
|
|
|
29,682,144
|
(1)
|
|
|
6.64
|
%
|
George P. Mitchell
24 Waterway Avenue, Suite 300
The Woodlands, TX 77380
|
|
|
23,372,374
|
(2)
|
|
|
5.23
|
%
|
BlackRock Inc.
40 East 52nd Street
New York, NY 10022
|
|
|
23,008,948
|
(3)
|
|
|
5.15
|
%
|
|
|
|
(1) |
|
Based on a 13G/A filed February 12, 2010, Davis Selected
Advisors, L.P. states that it has sole voting power as to
24,217,606 shares and sole dispositive power as to
29,682,144 shares. |
|
(2) |
|
Based on an Amended Schedule 13D filed March 5, 2010,
Mr. Mitchell has sole voting and dispositive power as to
23,372,374 shares. |
|
(3) |
|
Based on a 13G filed January 20, 2010, BlackRock Inc.
states that it has sole voting and dispositive power as to
23,008,948 shares. |
Security
Ownership of Management
The following table sets forth as of March 31, 2010, the
number and percentage of outstanding voting shares beneficially
owned by our named executive officers, each of our Directors and
by all our executive officers and Directors as a group:
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Percent of
|
Name of Beneficial Owner
|
|
Beneficially
Owned(1)
|
|
Class
|
|
J. Larry Nichols*
|
|
|
3,192,847
|
(2
|
)
|
|
**
|
John Richels*
|
|
|
710,663
|
(3
|
)
|
|
**
|
Darryl G. Smette
|
|
|
452,430
|
(4
|
)
|
|
**
|
Stephen J. Hadden
|
|
|
300,170
|
(5
|
)
|
|
**
|
Danny J. Heatly
|
|
|
168,979
|
(6
|
)
|
|
**
|
John A. Hill*
|
|
|
153,360
|
(7
|
)
|
|
**
|
Michael M. Kanovsky*
|
|
|
133,052
|
(8
|
)
|
|
**
|
David A. Hager
|
|
|
92,659
|
(9
|
)
|
|
**
|
Robert L. Howard*
|
|
|
78,248
|
|
(10)
|
|
**
|
J. Todd Mitchell*
|
|
|
75,183
|
|
(11)
|
|
**
|
Thomas F. Ferguson*
|
|
|
46,000
|
|
(12)
|
|
**
|
Robert A. Mosbacher, Jr.*
|
|
|
20,071
|
|
(13)
|
|
**
|
Mary P. Ricciardello*
|
|
|
16,726
|
|
(14)
|
|
**
|
|
|
|
|
|
|
|
|
All of our Directors and executive officers as a group
|
|
|
5,702,874
|
|
(15)
|
|
1.28%
|
|
|
|
|
*
|
Director
|
|
|
**
|
Less than 1%
|
53
Commitment Runs Deep