UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x | |
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)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to Rule 14a-12 |
Payment of Filing Fee (Check the appropriate box):
x | 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: | |
|
||
5. | Total fee paid: | |
|
||
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.: | |
3. | Filing Party: | |
4. | Date Filed: | |
EOG RESOURCES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 4, 2004
TO THE SHAREHOLDERS:
1.
| To elect six directors of the Company to hold office until the next annual meeting of shareholders and until their respective successors are duly elected and qualified; |
2.
| To ratify the appointment by the Audit Committee of the Board of Directors of Deloitte & Touche LLP, independent public accountants, as auditors for the Company for the year ending December 31, 2004; |
3.
| To approve the Amended and Restated EOG Resources, Inc. 1992 Stock Plan; and |
4.
| To transact such other business as may properly be brought before the meeting or any adjournments thereof. |
Houston, Texas
March 29, 2004
EOG RESOURCES, INC.
PROXY STATEMENT
ITEM 1.
ELECTION OF DIRECTORS
GEORGE A. ALCORN, 71
Director since 2000 Mr. Alcorn has served as President of Alcorn Exploration, Inc. for more than the past five years. He is a past chairman of the Independent Petroleum Association of America and a founding member and past chairman of the Natural Gas Council. | ||||||
CHARLES R. CRISP, 56
Director since 2002 Mr. Crisps principal occupation is investments. Mr. Crisp was President and Chief Executive Officer and a Director of Coral Energy, LLC, a subsidiary of Shell Oil Company from 1999 until his retirement in November 2000, and President and Chief Operating Officer and a Director from January 1998 through February 1999. Mr. Crisp joined Houston Industries in 1996 and became President of their domestic power generation group in 1997. Mr. Crisp is also a director of AGL Resources, an energy services holding company. | ||||||
MARK G. PAPA, 57
Director since 1998 Mr. Papa was elected Chairman of the Board and Chief Executive Officer (CEO) of the Company in August 1999, President and CEO and Director in September 1998, President and Chief Operating Officer in September 1997, President in December 1996 and was President-North America Operations from February 1994 to September 1998. Mr. Papa joined Belco Petroleum Corporation, a predecessor of the Company, in 1981. Mr. Papa is also a director of Oil States International, Inc., an oilfield services company, a director of Magellan Midstream Partners LP, a midstream MLP, and the Chairman of the U.S. Oil and Gas Association. | ||||||
EDMUND P. SEGNER, III, 50
Director since 1999 Mr. Segner became President and Chief of Staff and Director of the Company in August 1999. He became Vice Chairman and Chief of Staff in September 1997. He was also a Director of the Company from January 1997 to October 1997. Mr. Segner is the Companys principal financial officer. |
2
DONALD F. TEXTOR, 57
Director since 2001 Mr. Textors principal occupation is investments. Mr. Textor was a partner and managing director at Goldman Sachs until his retirement in March 2001. For 22 years he was the firms senior security analyst for domestic integrated oils and exploration and production companies. | ||||||
FRANK G. WISNER, 65
Director since 1997 Mr. Wisner has served as Vice Chairman External Affairs and Director of American International Group Inc. since 1997, following his retirement as U.S. Ambassador to India. American International Group Inc. is an insurance company, which provides risk insurance to companies investing in foreign operations. Mr. Wisners more than 35-year career with the U.S. State Department, primarily in Africa, Asia and Washington, D.C., included serving as U.S. Ambassador to the Philippines, Egypt and Zambia. Mr. Wisner is also a director of Ethan Allen Interiors Inc. |
Security Ownership of Certain Beneficial Owners on December 31, 2003
Name and Address of Beneficial Owner |
Number of Shares |
Percent of Class |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Davis Selected
Advisors, L.P. (1)
609 Fifth Ave New York, NY 10017 | 10,479,749 | 9.0 | % | |||||||
Capital Research
& Management Co. (2)
333 South Hope Street Los Angeles, CA 90071 | 7,835,000 | 6.8 | % | |||||||
Neuberger
Berman, LLC (3)
605 Third Avenue New York, NY 10158 | 6,149,691 | 5.3 | % |
(1)
| In its Schedule 13G filed February 11, 2004 with respect to its securities as of December 31, 2003, Davis Selected Advisors, L.P. states that it has sole voting power as to 10,479,749 shares, shared voting power as to no shares, sole dispositive power with respect to 10,479,749 shares and shared dispositive power with respect to no shares. |
(2)
| In its Schedule 13G filed February 13, 2004 with respect to its securities as of December 31, 2003, Capital Research & Management Co. states that it has sole voting power as to no shares, shared voting power as to no shares, sole dispositive power with respect to 7,835,000 shares and shared dispositive power with respect to no shares. |
(3)
| In its Schedule 13G filed February 13, 2004 with respect to its securities as of December 31, 2003, Neuberger Berman, LLC states that it has sole voting power as to 2,866,753 shares, shared voting power as to 2,350,700 shares, sole dispositive power with respect to no shares and shared dispositive power with respect to 6,149,691 shares. |
3
Security Ownership of the Board of Directors and Management on February 13, 2004
Title of Class |
Name |
Shares Beneficially Owned (1) |
Options Exercisable by 4-13-04 |
Phantom Shares (2) |
Total Ownership (3) |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
EOG Resources,
Inc.
| George A. Alcorn
| 2,650 | 17,500
| 0
| 20,150
| |||||||||||||||||
Common Stock
| Charles R. Crisp
| 3,000 | 3,500
| 138
| 6,638
| |||||||||||||||||
Barry Hunsaker, Jr.
| 23,934 | 95,720
| 9,411
| 129,065
| ||||||||||||||||||
Loren M. Leiker
| 57,967 | 131,500
| 13,157
| 202,624
| ||||||||||||||||||
Mark G. Papa
| 250,991 | 729,065
| 102,843
| 1,082,899
| ||||||||||||||||||
Edward Randall, III
| 75,000 | 14,000
| 18,393
| 107,393
| ||||||||||||||||||
Edmund P. Segner, III
| 105,816 | 171,462
| 25,084
| 302,362
| ||||||||||||||||||
Donald F. Textor
| 10,000 | 17,500
| 3,900
| 31,400
| ||||||||||||||||||
Gary L. Thomas
| 105,474 | 296,000
| 13,157
| 414,631
| ||||||||||||||||||
Frank G. Wisner
| 0 | 41,000
| 3,949
| 44,949
| ||||||||||||||||||
All directors and executive officers as a Group
(11 in number) | 641,129 | 1,535,047
| 193,065
| 2,369,241
|
(1)
| Includes shares for which the person directly or indirectly has sole or shared voting and investment power, shares held under the EOG Resources, Inc. Savings Plan (the Savings Plan) for which the participant has sole voting and investment power, and restricted shares held under the EOG Resources, Inc. 1992 Stock Plan (the 1992 Stock Plan) for which the participant has sole voting power and no investment power until such shares vest in accordance with plan provisions. |
(2)
| Includes restricted stock units held under the 1992 Stock Plan for which the participant has no voting or investment power until such units vest and are released as shares in accordance with plan provisions. Also includes shares held in the Phantom Stock Account of the EOG Resources, Inc. 1996 Deferral Plan (the 1996 Deferral Plan) for which the participant has a vested right, but has no voting or investment power until such shares are released in accordance with plan provisions and the participants deferral election. |
(3)
| No director or officer of the Company owns or has the right to acquire more than 1% of the outstanding Common Stock. |
Board of Directors and Committees
4
make a copy of it for the Companys files, and promptly forward the communication to the directors to whom it is directed. Upon receipt of any communication that is clearly marked Confidential, the Secretary of the Company will not open the communication, but will note the date the communication was received in a log established for that purpose, and promptly forward the communication to the directors to whom it is addressed. Information regarding this process can be found on the Companys website at the link noted above.
5
REPORT OF THE AUDIT COMMITTEE
AUDIT COMMITTEE
Donald F. Textor, Chairman
George A. Alcorn
Charles R. Crisp
Edward Randall, III
Frank G. Wisner
REPORT FROM THE COMPENSATION COMMITTEE REGARDING
EXECUTIVE
COMPENSATION
6
companies and the level of cash flow and net income. These goals are designed to address both current financial performance and the long-term development of the Company. No specific formula is used for weighting these performance criteria. For bonuses paid in 2004 for 2003 performance, for retention purposes, the Committee approved delivery of 20% of any bonus of $5,000 or greater in restricted stock units at a 50% premium to cash, that vest after five years of additional service with the Company. In addition, executives can choose to receive up to half the cash portion of their annual bonus in restricted stock units with a premium to cash of between 5% and 25%, depending on the vesting schedule chosen.
COMPENSATION COMMITTEE
Edward Randall, III (Chairman)
George A. Alcorn
Charles R.
Crisp
Donald F. Textor
Frank G. Wisner
7
COMPARATIVE STOCK PERFORMANCE
1.
| $100 was invested on December 31, 1998 in Common Stock of EOG, the Standard & Poors 500 and a peer group of independent exploration and production companies (the Peer Group). |
2.
| The investments in the Peer Group are weighted based on the market capitalization of each individual company within the Peer Group at the beginning of each year. |
3.
| Dividends are reinvested on the ex-dividend dates. |
COMPARATIVE TOTAL RETURNS
Comparison of Five-Year Cumulative Total
Return
EOG Resources Inc., Standard & Poors 500 and Peer Group
(Performance Results Through December 31, 2003)
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
EOG Resources,
Inc.
| 100.00 | 102.47 | 325.77 | 234.20 | 240.10 | 278.97 | ||||||||||||||||||||
Standard &
Poors 500
| 100.00 | 119.62 | 107.49 | 93.47 | 71.63 | 90.53 | ||||||||||||||||||||
Peer
Group
| 100.00 | 116.24 | 147.03 | 119.74 | 122.80 | 155.26 |
8
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Compensation
9
Executive Compensation
SUMMARY COMPENSATION TABLE
Annual Compensation |
Long-Term Compensation |
|||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name & Principal Position |
Year |
Salary |
Bonus |
Other Annual Compensation (1) |
Restricted Stock Awards (2) |
Securities Underlying Options |
LTIP Payouts |
All Other Compensation (3) |
||||||||||||||||||||||||||
Mark G.
Papa
| 2003 | $ | 813,846 | $ | 550,000 | $ | 23,807 | $ | 5,443,038 | 150,000 | $ | 0 | $ | 203,077 | ||||||||||||||||||||
Chairman and
Chief
| 2002 | $ | 733,654 | $ | 0 | (4) | $ | 20,827 | $ | 883,678 | 257,065 | $ | 0 | $ | 204,106 | |||||||||||||||||||
Executive
Officer
| 2001 | $ | 664,808 | $ | 0 | (4) | $ | 37,227 | $ | 3,750,930 | 150,000 | $ | 0 | $ | 99,721 | |||||||||||||||||||
Edmund P.
Segner, III
| 2003 | $ | 468,854 | $ | 440,000 | $ | 13,406 | $ | 559,009 | 50,000 | $ | 0 | $ | 113,078 | ||||||||||||||||||||
President
and
| 2002 | $ | 459,239 | $ | 380,000 | $ | 12,986 | $ | 157,529 | 60,000 | $ | 0 | $ | 116,078 | ||||||||||||||||||||
Chief of
Staff
| 2001 | $ | 449,239 | $ | 420,000 | $ | 13,999 | $ | 1,343,105 | 75,000 | $ | 0 | $ | 71,686 | ||||||||||||||||||||
Loren M.
Leiker
| 2003 | $ | 382,692 | $ | 440,000 | $ | 11,955 | $ | 524,517 | 50,000 | $ | 0 | $ | 89,804 | ||||||||||||||||||||
Executive
Vice President,
| 2002 | $ | 340,385 | $ | 288,000 | $ | 9,542 | $ | 112,525 | 60,000 | $ | 0 | $ | 84,462 | ||||||||||||||||||||
Exploration
& Development
| 2001 | $ | 297,692 | $ | 300,000 | $ | 16,079 | $ | 1,165,822 | 50,000 | $ | 0 | $ | 38,700 | ||||||||||||||||||||
Gary L.
Thomas
| 2003 | $ | 382,692 | $ | 440,000 | $ | 10,973 | $ | 524,517 | 50,000 | $ | 0 | $ | 89,804 | ||||||||||||||||||||
Executive
Vice President,
| 2002 | $ | 340,385 | $ | 288,000 | $ | 9,812 | $ | 112,525 | 60,000 | $ | 0 | $ | 84,462 | ||||||||||||||||||||
Operations
| 2001 | $ | 297,692 | $ | 300,000 | $ | 23,567 | $ | 1,165,822 | 50,000 | $ | 0 | $ | 44,618 | ||||||||||||||||||||
Barry
Hunsaker, Jr.
| 2003 | $ | 326,154 | $ | 220,000 | $ | 10,847 | $ | 277,273 | 25,000 | $ | 0 | $ | 58,500 | ||||||||||||||||||||
Senior Vice
President
| 2002 | $ | 305,577 | $ | 184,000 | $ | 9,059 | $ | 66,031 | 25,000 | $ | 0 | $ | 47,537 | ||||||||||||||||||||
and General
Counsel
| 2001 | $ | 284,039 | $ | 176,000 | $ | 9,830 | $ | 608,282 | 20,000 | $ | 0 | $ | 36,925 |
(1)
| Other Annual Compensation includes cash perquisite allowances and reimbursement for payment of taxes resulting from Company requested spouse travel. Also includes payment for vacation not taken for year 2001 only. No Named Officer had Perquisites and Other Personal Benefits with a value greater than the lesser of $50,000 or 10% of reported salary and bonus. The Company maintains the 1996 Deferral Plan under which payment of base salary and annual bonus may be deferred to a later specified date. Since the 1996 Deferral Plan does not credit above-market or preferential earnings, no earnings have been reported as Other Annual Compensation. |
(2)
| Following is the aggregate number of shares of unreleased restricted stock and restricted stock units and their value as of December 31, 2003, for each of the Named Officers: Mr. Papa, 258,208 shares/units valued at $11,921,463; Mr. Segner, 61,701 shares/units valued at $2,848,735; Mr. Leiker, 53,157 shares/units valued at $2,454,259; Mr. Thomas, 53,157 shares/units valued at $2,454,259; and Mr. Hunsaker, 29,411 shares/units valued at $1,357,906. Dividend equivalents accrue from the date of grant and become payable effective with the vesting date of the shares. All restricted stock and restricted stock units granted to the other Named Officers vest five years from date of grant. Of Mr. Papas restricted stock and restricted stock units, 55,335 vest in one-third increments after three, four and five years, and the remainder vest five years from date of grant. Upon the date a press release is issued announcing a pending Shareholder vote, tender offer, or other transaction which, if approved or consummated, would constitute a change of control of the Company as defined in the Companys Change of Control Severance Plan, all restrictions placed on each share of non-vested restricted stock or restricted stock unit shall lapse and such shares will become fully vested released securities. |
(3)
| Includes matching contributions under the Savings Plan, Company contributions on behalf of each employee to the Money Purchase Pension Plan and Company contributions on behalf of each employee to the 1996 Deferral Plan. |
(4)
| Mr. Papas 2001 and 2002 bonus did not have a cash component. |
10
Stock Option Grants During 2003
2003 Grants |
|||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation For Option Term (1) |
|||||||||||||||||||||||||||||||
Name/Group |
Options/ SARs Granted (#)(2) |
Percent of Total Options Granted to Employees in Fiscal Year |
Average Option Price Per Share |
Expiration Date |
0%(3) |
5% |
10% |
||||||||||||||||||||||||
Named Officers |
|||||||||||||||||||||||||||||||
Mark G.
Papa
| 150,000 | (4) | 10.1 | % | $ | 39.00 | 08/06/13 | $ | 0 | $ | 3,679,034 | $ | 9,323,393 | ||||||||||||||||||
Edmund P.
Segner, III
| 50,000 | (4) | 3.4 | % | $ | 39.00 | 08/06/13 | $ | 0 | $ | 1,226,345 | $ | 3,107,798 | ||||||||||||||||||
Loren M.
Leiker
| 50,000 | (4) | 3.4 | % | $ | 39.00 | 08/06/13 | $ | 0 | $ | 1,226,345 | $ | 3,107,798 | ||||||||||||||||||
Gary L.
Thomas
| 50,000 | (4) | 3.4 | % | $ | 39.00 | 08/06/13 | $ | 0 | $ | 1,226,345 | $ | 3,107,798 | ||||||||||||||||||
Barry Hunsaker,
Jr.
| 25,000 | (4) | 1.7 | % | $ | 39.00 | 08/06/13 | $ | 0 | $ | 613,172 | $ | 1,553,899 | ||||||||||||||||||
All
Optionees
| 1,479,485 | 100.0 | % | $ | 39.18 | (5) | 20102013 | $ | 0 | $ | 35,533,510 | (6) | $ | 90,048,891 | (6) | ||||||||||||||||
All
Shareholders
| N/A | N/A | N/A | N/A | $ | 0 | $ | 2,783,876,386 | (6) | $ | 7,054,889,342 | (6) | |||||||||||||||||||
Optionees
gain as % of all shareholders gain
| N/A | N/A | N/A | N/A | N/A | 1.28 | % | 1.28 | % |
(1)
| The dollar amounts under these columns represent the potential realizable value of each grant of options assuming that the market price of the underlying security appreciates in value from the date of grant at the 5% and 10% annual rates prescribed by the SEC. These calculations are not intended to forecast possible future appreciation, if any, of the price of Company Common Stock. |
(2)
| Upon the date a press release is issued announcing a pending shareholder vote, tender offer, or other transaction which, if approved or consummated, would constitute a change of control of the Company as defined in the Companys Change of Control Severance Plan, stock options shall vest and be fully exercisable. |
(3)
| An appreciation in stock price, which will benefit all shareholders, is required for optionees to receive any gain. A stock price appreciation of zero percent would render the option without value to the optionees. |
(4)
| Stock options awarded on August 6, 2003 vest at the cumulative rate of 20% per year, commencing on the date of grant. |
(5)
| Weighted average grant price for all stock options for the purchase of Company Common Stock granted to employees in 2003. |
(6)
| Appreciation for all optionees is calculated using the maximum allowable option term of ten years, even though in some cases the actual option term is less than ten years. Appreciation for all shareholders is calculated using an assumed ten-year term, the weighted-average grant price for all optionees ($38.19) and the number of shares of Company Common Stock outstanding on December 31, 2003 (115,910,400). |
11
Aggregated Stock Option/SAR Exercises During 2003 and Stock Option/SAR Values as of December 31, 2003
Number of Securities Underlying Unexercised Options/SARs at December 31, 2003 (1) |
Value of Unexercised In-the-Money Options/SARs at December 31, 2003 (1) |
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Shares Acquired on Exercise |
Value Realized |
Exercisable |
Unexercisable |
Exercisable |
Unexercisable |
|||||||||||||||||||||
Mark G.
Papa
| 32,500 | $ | 838,663 | 729,065 | 313,000 | $ | 14,632,755 | $ | 3,194,618 | ||||||||||||||||||
Edmund P.
Segner, III
| 107,538 | $ | 2,643,172 | 171,462 | 121,000 | $ | 2,713,874 | $ | 1,262,123 | ||||||||||||||||||
Loren M.
Leiker
| 28,000 | $ | 786,870 | 131,500 | 104,000 | $ | 2,040,359 | $ | 1,060,420 | ||||||||||||||||||
Gary L.
Thomas
| 114,990 | $ | 2,738,433 | 296,000 | 104,000 | $ | 6,831,261 | $ | 1,060,420 | ||||||||||||||||||
Barry Hunsaker,
Jr.
| 30,000 | $ | 892,138 | 95,720 | 46,000 | $ | 1,761,100 | $ | 457,683 |
(1)
| There are no SARs applicable to the Named Officers. |
Equity Compensation Plan Information
(a) |
(b) |
(c) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
|||||||||||
Equity
Compensation Plans Approved by Security Holders
| 2,789,582 | $ | 32.60 | 1,424,212 | (1) (2) | |||||||||
Equity
Compensation Plans Not Approved by Security Holders
| 6,027,070 | $ | 30.23 | (3) | 89,979 | (4) (5) | ||||||||
Total
| 8,816,652 | $ | 30.99 | (3) | 1,514,191 |
(1)
| Of these securities, 324,362 shares remain available for purchase under the Employee Stock Purchase Plan. |
(2)
| Of these securities, 912,850 could be issued as restricted stock or restricted stock units under the 1992 Stock Plan. |
(3)
| Weighted-average exercise price does not include 39,317 phantom stock units in the 1996 Deferral Plan which are included in column (a). |
(4)
| Of these securities, 15,601 phantom stock units remain available for issuance under the 1996 Deferral Plan. |
(5)
| Of these securities, 74,378 could be issued as restricted stock or restricted stock units under the 1994 Stock Plan. |
12
Retirement and Supplemental Benefit Plans
Severance Plans/Change of Control Provisions
13
14
Employment Contracts
15
Section 16(a) Beneficial Ownership Reporting Compliance
16
ITEM 2.
RATIFICATION OF APPOINTMENT OF AUDITORS
General
Change of Auditors
17
Ratification of Appointment for 2004
The Board of Directors recommends voting FOR this proposal.
18
ITEM 3.
APPROVAL OF THE AMENDED AND RESTATED 1992 STOCK PLAN
General
Changes to the 1992 Stock Plan
19
to treatment in the event of a change of control of the Company, which did not require shareholder approval. If approved by shareholders as provided below the amended and restated 1992 Stock Plan will be effective May 4, 2004. The term of the amended and restated 1992 Stock Plan will be ten years. See Exhibit B for a full text of the amended and restated 1992 Stock Plan.
Awards under the Proposed Amendment
United States Federal Income Tax Aspects of the 1992 Stock Plan
20
income tax purposes. Upon expiration of the forfeiture restrictions (i.e., as shares become vested), the holder will realize ordinary income in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares, and, subject to the application of Section 162(m) of the Internal Revenue Code, as amended, as discussed below, the Company will be entitled to a corresponding deduction. Dividend equivalents accrued and paid to the holder during the period that the forfeiture restrictions apply will also be treated as compensation income to the holder and deductible as such by the Company.
Required Vote and Recommendation
The Board of Directors recommends voting FOR this proposal.
21
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Proposals for 2005 Annual Meeting
Nominations for 2005 Annual Meeting and for Any Special Meetings
22
director, all information relating to the person that is required to be disclosed in solicitations for proxies for election of directors, or is otherwise required, pursuant to Regulation 14A under the Exchange Act (including the written consent of such person to be named in the proxy statement as a nominee and to serve as a director if elected); and (b) as to the shareholder giving the notice (i) the name and address, as they appear of record on the Companys books, of such shareholder, and (ii) the class and number of shares of capital stock of the Company which are beneficially owned by the shareholder. In the event a person is validly designated as a nominee to the Board of Directors and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors or the shareholder who proposed such nominee, as the case may be, may designate a substitute nominee. Notwithstanding the foregoing bylaw provisions, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in the foregoing bylaw provisions.
GENERAL
Houston, Texas
March 29, 2004
23
EXHIBIT A
EOG RESOURCES, INC.
AUDIT COMMITTEE CHARTER
Purpose
Committee Membership
Committee Authority and Responsibilities
A-1
advisors employed by the Audit Committee, and ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.
Financial Statement and Disclosure Matters
1. | Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in managements discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Companys Form 10-K. |
2. | Review and discuss with management and the independent auditor the Companys quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditors reviews of the quarterly financial statements. |
3. | Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Companys financial statements, including any significant changes in the Companys selection or application of accounting principles, any major issues as to the adequacy of the Companys internal controls and any special audit steps adopted in light of material control deficiencies, the development, selection and disclosure of critical accounting estimates, and analyses of the effect of alternative assumptions, estimates or GAAP methods on the Companys financial statements. |
4. | Discuss with management the types of information to be disclosed and the type of presentation to be made in the Companys earnings press releases, including the use of pro forma or adjusted non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. The Audit Committee need not discuss in advance each earnings release or each instance in which the Company may provide earnings guidance. |
5. | Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Companys financial statements. |
6. | Discuss with management the Companys major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Companys risk assessment and risk management policies. |
7. | Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit. In particular, discuss: |
(a) |
The adoption of, or changes to, the Companys significant auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management. |
(b) |
The management letter provided by the independent auditor and the Companys response to that letter. |
(c) |
Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to requested information, and any significant disagreements with management |
Oversight of the Companys Relationship with the Independent Auditor
8. | Review the experience and qualifications of the senior members of the independent auditor team. |
9. | Obtain and review a report from the independent auditor at least annually regarding (a) the auditors internal quality-control procedures, (b) any material issues raised by the most recent quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or |
A-2
professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, (d) all relationships between the independent auditor and the Company, and (e) registration of the independent auditor with the Public Company Accounting Oversight Board. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the provision of non-audit services is compatible with maintaining the auditors independence, and taking into account the opinions of management and the internal auditor. The Audit Committee shall present its conclusions to the Board and, if so determined by the Audit Committee, recommend that the Board take additional action to satisfy itself of the qualifications, performance and independence of the auditor. |
10. | Assure the regular rotation of the lead audit partner of the independent auditing firm as required by law, and consider whether, in order to assure continuing auditor independence, there should be regular rotation of the independent auditing firm itself. |
11. | Set clear hiring policies for employees or former employees of the independent auditor. |
12. | Receive a letter from the Companys independent audit team detailing any issues regarding the audit of the Company on which they consulted the national office of the independent auditor and confirming that it is the policy of the independent auditor that decisions of the national office cannot be overruled by the local office. If there were any such issues, the Audit Committee may, if it deems it appropriate, discuss such issues with the national office of the independent auditor, or receive a letter from the national office discussing such issues. |
13. | Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit. |
14. | Resolve any disagreements between Company management and the independent auditor that are brought to the attention of the Audit Committee. |
Oversight of the Companys Internal Audit Function
15. | Review the appointment and replacement of the senior internal auditing executive. |
16. | Discuss with the independent auditor the significant reports to management prepared by the internal auditing department and managements responses. |
17. | Discuss with the independent auditor the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit. |
Compliance Oversight Responsibilities
18. | Obtain from the independent auditor assurance that it has complied with the requirements applicable to it under Section 10A of the Securities Exchange Act of 1934. |
19. | Obtain reports from management, the Companys senior internal auditing executive and/or the independent auditor regarding whether the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Companys Code of Business Conduct and Ethics. Review reports and disclosures of insider and affiliated party transactions. Advise the Board with respect to the Companys policies and procedures regarding compliance with applicable laws and regulations and with the Companys Code of Business Conduct and Ethics. |
20. | Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Companys financial statements or accounting policies. |
21. | Discuss with the Companys General Counsel legal matters that may have a material impact on the financial statements or the Companys compliance policies. |
22. | Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, as well as for confidential, |
A-3
anonymous submissions by Company employees of concerns regarding questionable accounting or auditing matters. |
Limitation of Audit Committees Role
A-4
EOG RESOURCES, INC. 1992 STOCK PLAN
(As Amended and Restated Effective May
4, 2004)
SECTION 1. Purpose
The purposes of this EOG Resources, Inc. 1992 Stock Plan (the Plan) are to encourage selected persons employed by EOG Resources, Inc. together with any successor thereto (the Company) and its subsidiaries and other eligible Persons to develop a proprietary interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Companys future success and prosperity, thus enhancing the value of the Company for the benefit of its stockholders, and to enhance the ability of the Company and its subsidiaries to attract and retain key individuals who are essential to the progress, growth and profitability of the Company.
SECTION 2. Administration
SECTION 3. Shares Available for Awards
B-1
SECTION 4. Eligibility
B-2
B-3
B-4
B-5
B-6
SECTION 6. Amendment and Termination
B-7
SECTION 7. General Provisions
B-8
Company or any subsidiary pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any subsidiary.
SECTION 8. Effective Date of the Plan
SECTION 9. Term of the Plan
SECTION 10. Definitions
B-9
B-10
B-11
By:
|
|
Title:
|
|
ATTEST:
By:
Title:
B-12
|
VOTE
BY INTERNET - www.proxyvote.com VOTE
BY PHONE - 1-800-690-6903 VOTE
BY MAIL |
TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
EOGRS1 |
KEEP
THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
EOG
RESOURCES, INC. |
|||||||||||||
Directors Vote | |||||||||||||
1. | To
elect six directors of the Company to hold office until the next annual meeting of shareholders and until their respective successors are duly elected and qualified; |
For All |
Withhold All |
For
All Except |
To withhold
authority to vote, mark "For All Except" and write the nominee's number on the line below. |
||||||||
01)
George A. Alcorn 02) Charles R. Crisp 03) Mark G. Papa |
04)
Edmund P. Segner, III 05) Donald F. Textor 06) Frank G. Wisner |
o | o | o |
|
||||||||
Vote On Proposals | For | Against | Abstain | |||||
2. | To
ratify the appointment by the Audit Commitee of the Board of Directors
of Deloitte & Touche LLP, independent public accountants, as auditors for the Company for the year ending December 31, 2004; |
o | o | o | ||||
3. | To approve the Amended and Restated EOG Resources, Inc. 1992 Stock Plan; | o | o | o | ||||
4. | To transact such other business as may properly be brought before the meeting or any adjournments thereof. | o | o | o | ||||
Holders
of record of Common Stock of the Company at the close of business on March
8, 2004, will be entitled to notice of and to vote at the meeting or any adjournments thereof. |
||||||||
Shareholders
who do not expect to attend the meeting are encouraged to vote via the
Internet, vote by phone or vote by returning a signed proxy card. |
||||||||
By Order of the Board of Directors, |
||
Houston, Texas March 29, 2004 |
PATRICIA
L. EDWARDS |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
NOTICE
OF ANNUAL MEETING/PROXY STATEMENT The enclosed form of proxy is solicited by the Board of Directors of EOG Resources, Inc. (the Company or EOG) to be used at the annual meeting of shareholders to be held in the LaSalle A Ballroom of the Doubletree Hotel at Allen Center, 400 Dallas Street, Houston, Texas, at 2:00 p.m. Houston time on Tuesday, May 4, 2004 (the Annual Meeting). The mailing address of the principal executive offices of the Company is 333 Clay Street, Suite 4200, Houston, Texas 77002. This proxy statement and the related proxy are to be first sent or given to the shareholders of the Company on approximately March 29, 2004. Any shareholder giving a proxy may revoke it at any time provided written notice of such revocation is received by the Vice President, Human Resources, Administration & Corporate Secretary of the Company before such proxy is voted; otherwise, if received in time, properly completed proxies will be voted at the Annual Meeting in accordance with the instructions specified thereon. Shareholders attending the Annual Meeting may revoke their proxies and vote in person. Holders of record at the close of business on March 8, 2004, of Common Stock of the Company, par value $.01 per share (the Common Stock), will be entitled to one vote per share on all matters submitted to the meeting. On March 8, 2004, the record date, there were outstanding 116,252,752 shares of Common Stock. There are no other voting securities outstanding. The Companys annual report for the year ended December 31, 2003, is being mailed herewith to all shareholders entitled to vote at the Annual Meeting. However, the annual report does not constitute a part of the proxy soliciting materials. TO THE SHAREHOLDERS: Notice is hereby given that the annual meeting of shareholders of EOG Resources, Inc. (the Company) will be held in the LaSalle A Ballroom of the Doubletree Hotel at Allen Center, 400 Dallas Street, Houston, Texas, at 2:00 p.m. Houston time on Tuesday, May 4, 2004, for the purposes stated on the reverse. (continued
on other side) |