þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
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o
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________TO __________
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Texas
(State of incorporation)
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74-1492779
(I.R.S. Employer Identification No.)
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12377 Merit Drive, Suite 1700, Dallas, Texas
(Address of principal executive offices)
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75251
(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
þ
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Emerging growth company
o
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Name
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Age
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Position
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Harold L. Hickey
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62
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Chief Executive Officer and President
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Harold H. Jameson
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50
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Vice President and Chief Operating Officer
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Tyler S. Farquharson
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35
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Vice President, Chief Financial Officer and Treasurer
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Anthony R. Horton (1)(2)(3)
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57
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Director
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Randall E. King (1)(2)(4)
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63
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Director
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Robert L. Stillwell (1)(2)(3)
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81
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Director
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(1)
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Member of the audit committee.
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(2)
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Member of the compensation committee.
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(3)
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Member of the nominating and corporate governance committee.
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(4)
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Member of the technical committee.
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•
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Harold L. Hickey, our Chief Executive Officer and President and principal executive officer;
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•
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Harold H. Jameson, our Vice President and Chief Operating Officer; and
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•
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Tyler S. Farquharson, Vice President, Chief Financial Officer and Treasurer and principal financial officer.
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Name and Principal Position
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Year
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Salary
($)
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Bonus
($)(1)
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Share Awards
($)(2)
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Option Awards
($)
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Non-Equity Incentive Plan Compensation
($) (3)
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Nonqualified Deferred Compensation Earnings
($)
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All Other Compensation
($)(4)
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Total
($)
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||||||||||||||||
Harold L. Hickey
Chief Executive Officer and President
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2017
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$
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750,000
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$
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2,258,044
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$
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177,777
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$
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—
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$
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1,313,248
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$
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—
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$
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8,100
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$
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4,507,169
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2016
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750,000
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533,321
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3,779,670
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—
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—
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—
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—
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5,062,991
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|||||||||
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Harold H. Jameson
Vice President and Chief Operating Officer
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2017
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425,000
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1,279,558
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96,284
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—
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650,975
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—
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8,100
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2,459,917
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||||||||
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2016
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425,000
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288,827
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1,804,567
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—
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—
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—
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—
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2,518,394
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|||||||||
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||||||||||||||||
Tyler S. Farquharson (5)
Vice President, Chief Financial Officer and Treasurer
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2017
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375,833
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1,154,447
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30,004
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—
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588,137
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—
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8,100
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2,156,521
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||||||||
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2016
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228,333
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90,000
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131,676
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—
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—
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—
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—
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450,009
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(1)
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Bonus column for 2016 includes the cash amount paid in March 2017 pursuant to the 2016 Management Incentive Plan and excludes the amount paid in EXCO shares in March 2017 pursuant to the 2016 Management Incentive Plan to each of Messrs. Hickey (18,172 fully vested shares of EXCO stock), Jameson (9,842 fully vested shares of EXCO stock) and Farquharson (3,067 fully vested shares of EXCO stock). Bonus column for 2017 includes each Named Executive Officer’s Retention Bonus and each Named Executive Officer’s Incentive Payment (each term as defined below). The Retention Bonus included is the aggregate amount paid on September 29, 2017; however, the Retention Bonus would be required to be repaid to the Company if the Named Executive Officer voluntarily terminates their employment or is terminated for Cause prior to March 31, 2019, subject to certain exceptions.
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(2)
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This column represents the aggregate grant date fair value of restricted shares, RSUs and/or PSUs issued to each Named Executive Officer in 2017 and 2016 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718-Compensation-Stock Compensation (“ASC 718”), with the exception that the amount shown assumes no forfeitures. Assumptions used in the calculation of these amounts are included in “Note 2. Summary of significant accounting policies - Equity-based compensation” and “Note 11. Equity-based and other incentive-based compensation” to our audited financial statements for the fiscal year ended December 31, 2017 included in the Form 10-K.
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(3)
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Non-Equity Incentive Plan Compensation column for 2017 includes payments made pursuant to the KEIP (as defined below).
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(4)
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The amounts shown in this column reflect, for each Named Executive Officer, matching contributions allocated by us to each of the Named Executive Officers pursuant to the EXCO Resources, Inc. 401(k) Plan as follows: Mr. Hickey-$8,100; Mr. Jameson-$8,100; and Mr. Farquharson-$8,100 for 2017. As further described below in “Retirement and Other Benefit Plans - 401(k),” we suspended our matching contributions under the 401(k) plan during 2016 and resumed 3% and 4% matching contributions in 2017 and 2018, respectively.
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(5)
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Mr. Farquharson became our Vice President, Chief Financial Officer and Treasurer on February 1, 2017. On April 1, 2016, we increased Mr. Farquharson’s base salary to $215,000. Effective September 1, 2016, Mr. Farquharson’s base salary increased to $257,000 in connection with his appointment as our Vice President of Strategic Planning. On November 1, 2016, Mr. Farquharson’s base salary was increased to $275,000 in connection with his appointment as our acting Chief Financial Officer and Treasurer. On February 1, 2017, Mr. Farquharson’s base salary was increased to $385,000 in connection with his appointment as our Vice President, Chief Financial Officer and Treasurer.
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Option Awards (1)
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Share Awards
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Name
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Grant Date
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Number of Securities Underlying Unexercised Options
(#) Exercisable
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Number of Securities Underlying Unexercised Options
(#) Unexercisable
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Equity Incentive Plan Awards:
Number of Securities Underlying Unexercised Unearned Options
(#)
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Option Exercise Price
($)
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Option Expiration Date
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Number of Shares or Units of Shares That Have Not Vested
(#)
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Market Value of Shares or Units of Shares That Have Not Vested
($)(2)
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Equity Incentive Plan Awards:
Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
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Equity Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(2)
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|||||||||||
Harold L. Hickey
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12/11/2008
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2,332
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—
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—
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118.20
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12/10/2018
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—
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—
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—
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—
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||
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12/1/2009
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2,333
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—
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—
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264.00
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11/30/2019
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—
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—
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—
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—
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|||
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12/7/2010
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2,919
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—
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|
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—
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277.50
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12/6/2020
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—
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—
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—
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—
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|||
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8/13/2013
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13,660
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—
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—
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115.20
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8/12/2023
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—
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—
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—
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—
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|||
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8/13/2013
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|
—
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|
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—
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|
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—
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|
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—
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|
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—
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—
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—
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6,508
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(3
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)
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1,367
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||
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7/1/2015
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—
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—
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—
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—
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—
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13,333
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(4
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)
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2,800
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—
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—
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||
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7/1/2015
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—
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—
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—
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—
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—
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—
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—
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20,000
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(5
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)
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4,200
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||
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7/1/2016
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—
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—
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—
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—
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—
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—
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—
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44,445
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(6
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)
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9,333
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||
Harold H. Jameson
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12/11/2008
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1,566
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—
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—
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118.20
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12/10/2018
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—
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—
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—
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—
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||
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12/1/2009
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2,666
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|
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—
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—
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264.00
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11/30/2019
|
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|
—
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|
—
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|
—
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—
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|||
|
12/7/2010
|
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2,046
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|
|
—
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|
|
—
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|
|
277.50
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|
|
12/6/2020
|
|
|
—
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—
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|
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—
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|
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—
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|
|||
|
8/13/2013
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4,986
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|
|
—
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|
|
—
|
|
|
115.20
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|
|
8/12/2023
|
|
|
—
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|
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—
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|
|
—
|
|
|
—
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|
|||
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8/13/2013
|
|
—
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|
|
—
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|
|
—
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|
|
—
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|
|
—
|
|
|
—
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|
|
—
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|
|
2,374
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|
(3
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)
|
499
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|
||
|
5/14/2015
|
|
—
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|
|
—
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|
|
—
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|
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—
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|
|
—
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|
|
1,112
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|
(4
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)
|
234
|
|
|
—
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|
|
—
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||
|
7/1/2015
|
|
—
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|
|
—
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|
|
—
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|
|
—
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|
|
—
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|
|
5,667
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|
(4
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)
|
1,190
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|
|
—
|
|
|
—
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||
|
7/1/2015
|
|
—
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|
|
—
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|
8,500
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|
(5
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)
|
1,785
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||
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7/1/2016
|
|
—
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|
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—
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|
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—
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|
|
—
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|
|
—
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|
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—
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|
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—
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|
21,112
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(6
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)
|
4,434
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||
Tyler S. Farquharson
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12/11/2008
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|
566
|
|
|
—
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|
—
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|
118.20
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|
|
12/10/2018
|
|
|
—
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|
|
—
|
|
|
—
|
|
|
—
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|
||
|
12/1/2009
|
|
578
|
|
|
—
|
|
|
—
|
|
|
264.00
|
|
|
11/30/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|||
|
12/1/2009
|
|
7
|
|
|
—
|
|
|
—
|
|
|
264.00
|
|
|
11/30/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
12/7/2010
|
|
186
|
|
|
—
|
|
|
—
|
|
|
277.50
|
|
|
12/6/2020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|||
|
11/21/2011
|
|
340
|
|
|
—
|
|
|
—
|
|
|
159.45
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|
|
11/20/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
8/13/2013
|
|
693
|
|
|
—
|
|
|
—
|
|
|
115.20
|
|
|
8/12/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|||
|
7/1/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
(4
|
)
|
233
|
|
|
—
|
|
|
—
|
|
||
|
7/1/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|
1,500
|
|
(6
|
)
|
315
|
|
(1)
|
Pursuant to the terms of the stock option agreements that we entered into with the Named Executive Officer, these options are vested as to 25% of the shares subject to the option on the date of grant and vest an additional 25% on each of the next three anniversaries of the date of grant provided that the holder of the option remains employed with us on that date. These options become fully vested and exercisable, subject to their early termination as provided in the option agreements, immediately prior to a change of control.
|
(2)
|
Market value is based on a per share closing price of our common shares of $0.21 as reported by the OTC Markets as of December 29, 2017, the last business day prior to December 31, 2017.
|
(3)
|
Represents restricted shares issued to the Named Executive Officer in two separate restricted share award agreements, each of which is dated as of August 13, 2013 and is subject to a performance vesting schedule based upon the Attainment Date. The “Attainment Date” means the first trading day immediately following the date that the fair market value of our common shares equals or exceeds $10.00 for one award and $15.00 for the other award during any thirty (30) consecutive trading day period. The restricted shares vest as follows: (i) if the Attainment Date occurs on or before the first anniversary of the grant date, 50% of the shares vest on the first anniversary of the grant date and the remaining 50% vest on the second anniversary of the grant date; (ii) if the Attainment Date occurs after the first anniversary of the grant date but before the second anniversary of the grant date, 50% of the shares vest on the Attainment Date and the remaining 50% vest on the second anniversary of the grant date; (iii) if the Attainment Date occurs after the second anniversary of the grant date but before the fifth anniversary of the grant date, 100% of the shares vest on the Attainment Date, in each case, provided the Named Executive Officer is employed by or providing services to the Company or a subsidiary on such date. These restricted shares are subject to forfeiture and other restrictions as more fully set forth in the EXCO Resources, Inc. Amended and
|
(4)
|
Pursuant to the terms of the restricted share award agreement that we entered into with the Named Executive Officers, the restricted shares vest over a three-year period in equal portions beginning on the first anniversary of the grant date, such that 1/3 of the shares vest on the first anniversary of the grant date, 1/3 of the shares vest on the second anniversary of the grant date and 1/3 of the shares vest on the third anniversary of the grant date, provided that the holder of the restricted shares remains employed with us on that date. These restricted shares are subject to forfeiture and other restrictions as more fully set forth in the Incentive Plan and the restricted share award agreement and are subject to accelerated vesting upon a change in control, death or permanent disability.
|
(5)
|
Unit amounts represent the threshold level achievement for performance-based PSUs, which equals 50% of the target number of PSUs granted on July 1, 2015 and is the most probable level of payout other than no award. Upon vesting, each unit will automatically convert into a cash payment in an aggregate amount equal to the number of vested PSUs multiplied by the fair market value of a Common Share on the date of vesting. The actual number of units that will vest is between 0% and 200% of the target number of PSUs on July 1, 2018 based on the Company’s achievement of TSR relative to the TSR achieved by a peer group established by the compensation committee. These PSUs were issued to the Named Executive Officer pursuant to the Incentive Plan and a PSU award agreement dated as of July 1, 2015 and are subject to forfeiture, accelerated vesting and other restrictions as more fully set forth in the Incentive Plan and the PSU award agreement.
|
(6)
|
Unit amounts represent the threshold level achievement for performance-based PSUs, which equals 40% of the target number of PSUs granted on July 1, 2016 and is the most probable level of payout other than no award. Upon vesting, each unit will convert, at the sole election of the Company, into (i) a cash payment in an aggregate amount equal to the number of vested PSUs multiplied by the fair market value of a Common Share as of the vesting date, (ii) the number of whole common shares equal to the number of vested PSUs (up to a maximum of 133,334 shares), or (iii) a combination thereof. The actual number of units that will vest is between 0% and 150% of the target number of PSUs, with 25% of the PSUs vesting on July 1, 2017 and 75% of the PSUs vesting on July 1, 2019, in each case based on the Company’s achievement of TSR relative to the TSR achieved by a peer group established by the compensation committee. These PSUs were issued to the Named Executive Officer pursuant to the Incentive Plan and a PSU award agreement dated as of July 1, 2016 and are subject to forfeiture, accelerated vesting and other restrictions as more fully set forth in the Incentive Plan and the PSU award agreement.
|
Named Executive Officer
|
|
Target Quarterly Performance Incentive
|
Harold L. Hickey
|
|
$581,250
|
Harold H. Jameson
|
|
$288,125
|
Tyler S. Farquharson
|
|
$260,313
|
Performance Measure
|
|
Weight
|
Production
|
|
30%
|
General and administrative costs (gross)
|
|
30%
|
Lease operating expenses
|
|
30%
|
EBITDA
|
|
10%
|
Portion of Applicable Portion Payable if Quarterly and/or Cumulative Threshold Performance Goal Achieved:
|
|
75%
|
Portion of Applicable Portion Payable if Quarterly and/or Cumulative Target Performance Goal Achieved:
|
|
100%
|
Portion of Applicable Portion Payable if Cumulative Maximum Performance Goal Achieved:
|
|
125%
|
Portion of Applicable Portion Payable if Achievement is Between Quarterly and/or Cumulative Threshold and Maximum Performance Goals:
|
|
Linear interpolation between 75% and 125%
|
Performance Measure
|
|
Weight
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual Performance
|
Performance Period Beginning July 1 through September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Production (Mmcfe) (1)
|
|
30%
|
|
19,500
|
|
21,000
|
|
22,500
|
|
21,190
|
General and administrative costs (gross) (dollars in millions) (2)
|
|
30%
|
|
$11.5
|
|
$10.0
|
|
$8.5
|
|
$10.2
|
Lease operating expenses (dollars per Mcfe) (3)
|
|
30%
|
|
$0.38
|
|
$0.35
|
|
$0.32
|
|
$0.30
|
EBITDA (dollars in millions) (4)
|
|
10%
|
|
$11.5
|
|
$13.5
|
|
$15.5
|
|
$14.1
|
|
|
|
|
|
|
|
|
|
|
|
Performance Period Beginning October 1 through December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
Production (Mmcfe) (1)
|
|
30%
|
|
20,500
|
|
22,000
|
|
23,500
|
|
22,747
|
General and administrative costs (gross) (dollars in millions) (2)
|
|
30%
|
|
$13.0
|
|
$11.5
|
|
$10.0
|
|
$10.7
|
Lease operating expenses (dollars per Mcfe) (3)
|
|
30%
|
|
$0.40
|
|
$0.37
|
|
$0.34
|
|
$0.36
|
EBITDA (dollars in millions) (4)
|
|
10%
|
|
$16.5
|
|
$18.5
|
|
$20.5
|
|
$18.8
|
(1)
|
Production represents net interest volumes of oil, natural gas and natural gas liquids stated on a Mcfe basis, as determined under the Company’s standard accounting procedures and reported in its financial statements, adjusted upward to include volumes that have been shut-in for economic reasons, acts of God, extreme weather conditions, disruptions of service by third-parties, and volumes that have been deferred under the Company’s drilling program.
|
(2)
|
General and administrative costs represents expenses relating to the payment of employee compensation and benefits, rents for office space, audit, legal, consulting and other professional fees, systems and overhead costs, and such other “general and administrative costs,” as determined under the Company’s standard accounting procedures and reported in its financial statements, but excluding (i) such expenses associated with the acquisition, divestiture, exploration, exploitation, development, production or operation of the Company’s oil and natural gas properties; (ii) such amounts that are capitalized; (iii) employee bonuses, long-term incentive and equity-based compensation; (iv) such amounts that are paid or payable as incentive payments to Energy Strategic Advisory Services LLC (“ESAS”) pursuant to that certain Services and Investment Agreement, by and among the Company and ESAS, dated as of March 31, 2015, as amended from time to time; (v) restructuring costs and expenses, including, but not limited to, financial advisors, restructuring advisors, and legal advisors hired by the Company and its creditors; (vi) non-recurring legal and consulting fees incurred in connection with litigation matters; (vii) expenses associated with long-term equity-based incentive compensation (including awards granted pursuant to the Incentive Plan) that the Company may or is required to pay in cash; (viii) severance payments; and (ix) overhead recoveries and billings to joint venture partners.
|
(3)
|
Lease operating expenses represents expenses, calculated on a per Mcfe basis, relating to the costs of maintaining and operating property and equipment on a producing oil and natural gas lease, as determined under the Company’s standard accounting procedures and reported in its audited financial statements, and as adjusted to exclude workovers. The positive excess of the Actual Performance measure over the maximum target for the first Performance Period was factored into the determination of the award for the second Performance Period.
|
(4)
|
EBITDA represents net income (loss) adjusted to exclude interest expense, income, taxes, depreciation, depletion, amortization, accretion of discount on asset retirement obligations, non-cash changes in the fair value of derivatives, cash payments for the early termination of derivative contracts, non-cash impairments of assets, employee bonuses, long-term incentive and equity-based compensation, income or losses from equity method investments, gains or losses from sales or dispositions of assets, gains or losses from modifications or extinguishment of debt and non-recurring items, such as, but not limited to severance payments, litigation and legal settlements, restructuring costs and expenses, including, but not limited to, financial advisors, restructuring advisors, and legal advisors hired by the Company and its creditors.
|
Name
|
|
July 1, 2017 through September 30, 2017
|
|
October 1, 2017 through December 31, 2017
|
||||
Harold L. Hickey
|
|
$
|
628,913
|
|
|
$
|
684,335
|
|
Harold H. Jameson
|
|
311,751
|
|
|
339,224
|
|
||
Tyler S. Farquharson
|
|
281,658
|
|
|
306,479
|
|
Named Executive Officer
|
|
Annual Base Salary
|
|
Retention Bonus Amount
|
Harold L. Hickey
|
|
$750,000
|
|
$1,875,000
|
Harold H. Jameson
|
|
$425,000
|
|
$1,062,500
|
Tyler S. Farquharson
|
|
$385,000
|
|
$962,500
|
|
|
|
|
Performance Goals
|
|
|
||||
Performance Measure
|
|
Weight
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual Performance
|
Production (Mmcfe)
|
|
26%
|
|
39,572
|
|
42,000
|
|
44,428
|
|
42,083
|
General and administrative costs (gross) (dollars in millions)
|
|
26%
|
|
$27.5
|
|
$25.0
|
|
$22.5
|
|
$21.8
|
Finding and development costs (dollars per Mcfe)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
EBITDA (dollars in millions)
|
|
13%
|
|
$26.1
|
|
$30.5
|
|
$34.9
|
|
$35.3
|
Lease operating expenses (dollars per Mcfe)
|
|
26%
|
|
$0.39
|
|
$0.35
|
|
$0.32
|
|
$0.35
|
Discretion of the Committee
|
|
10%
|
|
|
|
|
|
|
|
5%
|
Safety Modifier - TRIR*
|
|
+/-5%
|
|
|
|
0.70
|
|
|
|
0.00
|
|
|
Performance Level Payout Schedule
|
||||||||||
Named Executive Officer
|
|
Percentage of
Base Salary
for Below
Threshold
Achievement
Level
|
|
Percentage of
Base Salary
for Threshold
Achievement
Level
|
|
Percentage of
Base Salary
for Target
Achievement
Level
|
|
Percentage
Base Salary
for Maximum
Achievement
Level
|
||||
Harold L. Hickey
|
|
—
|
%
|
|
35
|
%
|
|
70
|
%
|
|
140
|
%
|
Harold H. Jameson
|
|
—
|
%
|
|
35
|
%
|
|
70
|
%
|
|
140
|
%
|
Tyler S. Farquharson
|
|
—
|
%
|
|
35
|
%
|
|
70
|
%
|
|
140
|
%
|
Named Executive Officer
|
|
Annual Base Salary
|
|
Incentive Payment Amount
|
Harold L. Hickey
|
|
$750,000
|
|
$383,044
|
Harold H. Jameson
|
|
$425,000
|
|
$217,058
|
Tyler S. Farquharson
|
|
$385,000
|
|
$191,947
|
Name
|
|
Fees Earned or Paid in Cash
($)
|
|
Share
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Nonqualified Deferred Compensation Earnings
($)
|
|
All Other Compensation
($) (9)
|
|
Total
($)
|
||||||||||||||
B. James Ford (1)
|
|
$
|
63,913
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,913
|
|
Anthony R. Horton (2)
|
|
364,736
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,304
|
|
|
369,040
|
|
|||||||
Randall E. King (3)
|
|
280,417
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
280,417
|
|
|||||||
Samuel A. Mitchell (4)
|
|
38,913
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,913
|
|
|||||||
Wilbur L. Ross, Jr. (5)
|
|
22,764
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,764
|
|
|||||||
Robert L. Stillwell (6)
|
|
547,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,652
|
|
|
549,152
|
|
|||||||
Stephen J. Toy (7)
|
|
55,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,089
|
|
|||||||
C. John Wilder (8)
|
|
42,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,500
|
|
(1)
|
Mr. Ford resigned from the Board of Directors on September 20, 2017. As of December 31, 2017, Mr. Ford did not hold any outstanding stock options or share awards.
|
(2)
|
Includes fees for services on our audit committee, compensation committee and nominating and corporate governance committee beginning March 1, 2017. As of December 31, 2017, Mr. Horton did not hold any outstanding stock options or share awards.
|
(3)
|
Includes fees for services on our audit committee, compensation committee and technical committee. Mr. King was appointed to the Board of Directors on March 29, 2017 and became entitled to receive additional fees as a member of the technical committee beginning on April 1, 2018. As of December 31, 2017, Mr. King did not hold any outstanding stock options or share awards.
|
(4)
|
Mr. Mitchell resigned from the Board of Directors on September 20, 2017. As of December 31, 2017, Mr. Mitchell did not hold any outstanding stock options or share awards.
|
(5)
|
Mr. Ross resigned from the Board of Directors on February 28, 2017. As of December 31, 2017, Mr. Ross did not hold any outstanding stock options or share awards.
|
(6)
|
Includes fees for services on our audit committee, compensation committee, nominating and corporate governance committee and a special committee of the Board of Directors. The special committee was dissolved on March 30, 2017. As of December 31, 2017, Mr. Stillwell held (i) an option to purchase 1,000 common shares granted on December 1, 2009, all of which have vested, (ii) an option to purchase 333 common shares granted on November 5, 2010, all of which have vested, (iii) an option to purchase 333 common shares granted on November 4, 2011, all of which have vested, (iv) an option to purchase 333 common shares granted on November 1, 2013, all of which have vested. Mr. Stillwell also has the right to acquire 360 common shares granted pursuant to the Director Plan (as defined herein) as deferred compensation in lieu of cash for Mr. Stillwell’s service on our Board of Directors and committees that will be settled upon the satisfaction of certain criteria specified in the Director Plan. Mr. Stillwell did not hold any other outstanding stock options or share awards as of December 31, 2017.
|
(7)
|
Includes fees for services on our audit committee, compensation committee and nominating and corporate governance committee. Mr. Toy was appointed to the Board of Directors on March 1, 2017 and resigned from the Board of Directors on October 6, 2017. As of December 31, 2017, Mr. Toy did not hold any outstanding stock options or share awards.
|
(8)
|
Includes fees for services on our technical committee. Mr. Wilder resigned from the Board of Directors on November 9, 2017. As of December 31, 2017, Mr. Wilder did not hold any outstanding stock options or share awards.
|
(9)
|
Includes amounts reimbursed for expenses.
|
|
|
(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
|
|
108,578
|
|
$184.39
|
|
1,140,543
|
Equity compensation plans not approved by security holders
|
|
Not applicable
|
|
Not applicable
|
|
Not applicable
|
Total
|
|
108,578
|
|
$184.39
|
|
1,140,543
|
|
|
Common Share
Beneficial Ownership
|
||||
Beneficial owner
|
|
Shares
|
|
% of Class
|
||
Holders of more than 5%
|
|
|
|
|
||
WL Ross & Co. LLC (1)
1166 Avenue of the Americas
New York, New York 10036
|
|
2,701,035
|
|
|
12.5
|
%
|
Oaktree Capital Group Holdings GP, LLC (2)
333 S. Grand Avenue, 28
th
Floor
Los Angeles, CA 90071
|
|
4,889,121
|
|
|
20.0
|
%
|
Fairfax Financial Holdings Limited (3)
95 Wellington Street West
Suite 800 Toronto, Ontario M5J 2N7
|
|
3,525,303
|
|
|
16.3
|
%
|
Energy Strategic Advisory Services LLC (4)
200 Crescent Ct., Ste. 1900
Dallas, TX 75201
|
|
6,433,630
|
|
|
24.1
|
%
|
(1)
|
Based solely on the information contained in the Schedule 13D/A filed with the SEC on January 8, 2018.
|
(2)
|
Based on the information contained in the Schedule 13D/A filed with the SEC on March 17, 2017 and the Company’s records and includes 2,831,542 common shares underlying 2017 Warrants.
|
(3)
|
Based solely on the information contained in the Schedule 13G/A filed with the SEC on February 14, 2018.
|
(4)
|
Based solely on the information contained in the Schedule 13D/A filed with the SEC on November 13, 2017 and includes 5,017,922 common shares underlying 2017 Warrants.
|
Beneficial owner
|
|
Shares(1)
|
|
Options exercisable within 60 days
|
|
Percentage of shares outstanding
|
||
Named Executive Officers
|
|
|
|
|
|
|
||
Harold L. Hickey
|
|
98,014
|
|
(2)
|
21,244
|
|
|
*
|
Harold H. Jameson
|
|
40,452
|
|
(3)
|
11,264
|
|
|
*
|
Tyler S. Farquharson
|
|
5,433
|
|
(4)
|
2,370
|
|
|
*
|
Directors
|
|
|
|
|
|
|
||
Anthony R. Horton
|
|
—
|
|
|
—
|
|
|
*
|
Randall E. King
|
|
—
|
|
|
—
|
|
|
*
|
Robert L. Stillwell
|
|
22,237
|
|
(5)
|
1,999
|
|
|
*
|
All executive officers and directors as a group (6 persons)
|
|
166,136
|
|
|
36,877
|
|
|
*
|
(1)
|
Includes the options exercisable within 60 days of April 25, 2018 shown in the options column.
|
(2)
|
Includes (a) 1,387 common shares held in a 401(k) account, (b) 6,508 restricted shares issued on August 13, 2013 with performance-based vesting conditions based upon the first trading day immediately following the date that the fair market value of a share of our common shares equals or exceeds $10.00 in one grant and $15.00 in the other grant during any thirty (30) consecutive trading day period (the “Attainment Date”), with the restricted shares vesting as follows: (i) if the Attainment Date occurs on or before the first anniversary of the grant date, 50% of the shares vest on the first anniversary of the grant date and the remaining 50% vest on the second anniversary of the grant date; (ii) if the Attainment Date occurs after the first anniversary of the grant date but before the second anniversary of the grant date, 50% of the shares vest on the Attainment Date and the remaining 50% vest on the second anniversary of the grant date; (iii) if the Attainment Date occurs after the second anniversary of the grant date but before the fifth anniversary of the grant date, 100% of the shares vest on the Attainment Date, in each case, provided that the applicable executive officer is employed by or providing services to the Company or a subsidiary on such date (collectively, the “Performance-Based Vesting Conditions”), (c) 40,000 restricted shares issued on July 1, 2015 that vest in equal proportions over three years with one-third vesting on July 1, 2016, one-third vesting on July 1, 2017 and one-third vesting on July 1, 2018 and (d) the vested portion of (i) an option to purchase 2,332 common shares granted on December 11, 2008, all of which have vested, (ii) an option to purchase 2,333 common shares granted on December 1, 2009, all of which have vested, (iii) an option to purchase 2,919 common shares granted on December 7, 2010, all of which have vested, and (iv) an option to purchase 13,660 common shares granted on August 13, 2013, all of which have vested. Excludes restricted stock units with performance-based vesting criteria because the satisfaction of such vesting criteria is deemed to be outside of the holder’s control.
|
(3)
|
Includes (a) 908 common shares held in a 401(k) account, (b) 2,374 restricted shares issued on August 13, 2013 that vest in accordance with the Performance-Based Vesting Conditions, (c) 3,334 restricted shares issued on May 14, 2015 that vest over three years with one-third vesting on May 14, 2016, one-third vesting on May 14, 2017 and one-third vesting on May 14, 2018, (d) 17,000 restricted shares issued on July 1, 2015 that vest over three years with one-third vesting on July 1, 2016, one-third vesting on July 1, 2017 and one-third vesting on July 1, 2018 and (e) the vested portion of (i) an option to purchase 1,566 common shares granted on December 11, 2008, all of which have vested, (ii) an option to purchase 2,666 common shares granted on December 1, 2009, all of which have vested, (iii) an option to purchase 2,046 common shares granted on December 7, 2010, all of which have vested, and (iv) an option to purchase 4,986 common shares granted on August 13, 2013, all of which have
|
(4)
|
Includes (a) 529 common shares held in a 401(k) account, (b) 3,334 restricted shares issued on July 1, 2015 that vest over three years with one-third vesting on July 1, 2016, one-third vesting on July 1, 2017 and one-third vesting on July 1, 2018 and (c) the vested portion of (i) an option to purchase 566 common shares granted on December 11, 2008, all of which have vested, (ii) an option to purchase 578 common shares granted on December 1, 2009, all of which have vested, (iii) an option to purchase 7 common shares granted on December 1, 2009, all of which have vested, (iv) an option to purchase 186 common shares granted on December 7, 2010, all of which have vested, (v) an option to purchase 340 common shares granted on November 21, 2011, all of which have vested, and (vi) an option to purchase 693 common shares granted on August 13, 2013, all of which have vested. Excludes restricted stock units with performance-based vesting criteria because the satisfaction of such vesting criteria is deemed to be outside of the holder’s control.
|
(5)
|
Includes the right to acquire 360 common shares granted pursuant to the Director Plan as deferred compensation in lieu of cash for Mr. Stillwell’s service on our Board of Directors and committees. These shares vested immediately and are to be settled in our common shares upon the earlier to occur of (i) as soon as administratively feasible after the date on which Mr. Stillwell incurs a “Termination of Service” under the Director Plan and (ii) a “Change in Control” under the Director Plan. Also includes the vested portion of (i) an option to purchase 1,000 common shares granted on December 1, 2009, all of which have vested, (ii) an option to purchase 333 common shares granted on November 5, 2010, all of which have vested, (iii) an option to purchase 333 common shares granted on November 4, 2011, all of which have vested, (iv) an option to purchase 333 common shares granted on November 1, 2013, all of which have vested.
|
•
|
Samuel Mitchell, a former member of our Board of Directors, serves as a Managing Director of Hamblin Watsa Investment Counsel Ltd. (“Hamblin Watsa”), the investment manager of Fairfax and certain affiliates thereof. Samuel Mitchell was a member of our Board of Directors until his resignation on September 20, 2017. On September 20, 2017, certain affiliates of Fairfax received $8.5 million and $15.8 million of PIK Payments in the form of additional 1.5 Lien Notes and 1.75 Lien Term Loans, respectively, resulting in Fairfax holding, directly or indirectly, $159.5 million in aggregate principal amount of 1.5 Lien Notes and $427.9 million in aggregate principal amount of 1.75 Lien Term Loans as of December 31, 2017. During the year ended December 31, 2017, Fairfax also received $10.6 million of cash interest payments on the Fairfax Term Loan and the Exchange Term Loan and 1,657,330 PIK Shares under the 1.75 Lien Term Loans. Fairfax was also granted with the right, so long as they remain the holder any Financing Warrants or Commitment Fee Warrants, to purchase all or any portion of any common shares that the Company propose to issue in an offering for cash (other than shares to be issued to directors, officers, employees and consultants in connection with their service as such), pro rata in proportion to their ownership stake in the Company, based on the amount of common shares they would own as if their respective warrants had been exercised immediately prior to such offering (such rights, the “Preemptive Rights”). In addition, Fairfax held Financing Warrants representing the right to purchase an aggregate of 10,824,377 common shares at an exercise price equal to $13.95 per share, Commitment Fee Warrants representing the right to purchase an aggregate of 431,433 common shares at an exercise price equal to $0.01 per share and Amendment Fee Warrants representing the right to purchase an aggregate of 1,294,143 common shares at an exercise price equal to $0.01 per share. On January 16, 2018, affiliates of Fairfax surrendered all of their rights in the 2017 Warrants.
|
•
|
John Wilder, a former member of our Board of Directors, serves as the sole manager and has the power to direct the affairs of Bluescape Resources Company LLC (“Bluescape”), which serves as the general partner of and directs Bluescape Fund, the owner of ESAS. On September 20, 2017, ESAS received $4.0 million and $1.8 million of PIK Payments in the form of additional 1.5 Lien Notes and 1.75 Lien Term Loans, respectively, resulting in ESAS holding $74.0 million in aggregate principal amount of 1.5 Lien Notes and $49.7 million in aggregate principal amount of 1.75 Lien Term Loans as of December 31, 2017. During the year ended December 31, 2017, ESAS also
|
•
|
B. James Ford, a former member of our Board of Directors, serves as a Senior Advisor of Oaktree Capital Management, LP (“Oaktree”). On September 20, 2017, Oaktree received $2.2 million of PIK Payments in the form of additional 1.5 Lien Notes resulting in certain affiliates of Oaktree holding, directly or indirectly, $41.7 million in aggregate principal amount of 1.5 Lien Notes as of December 31, 2017. In addition, certain affiliates of Oaktree hold Financing Warrants representing the right to purchase an aggregate of 2,831,542 common shares at an exercise price equal to $13.95 per share. Oaktree also received a commitment fee of $1.2 million in cash in connection with the issuance of the 1.5 Lien Notes. Oaktree affiliates were also granted the Preemptive Rights in connection with the issuance of the 1.5 Lien Notes.
|
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
Audit Fees (1)
|
|
$
|
1,177
|
|
|
$
|
875
|
|
Audit-Related Fees (2)
|
|
—
|
|
|
210
|
|
||
Tax Fees (3)
|
|
174
|
|
|
99
|
|
||
All Other Fees (4)
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
1,351
|
|
|
$
|
1,184
|
|
(1)
|
Fees for audit services include fees associated with the annual audit, the reviews of EXCO’s quarterly reports on Form 10-Q and Sarbanes-Oxley compliance test work.
|
(2)
|
Audit-related fees principally include costs incurred related to accounting consultations related to generally accepted accounting principles and the application of generally accepted accounting principles to proposed transactions.
|
(3)
|
Tax fees include tax compliance and tax planning.
|
(4)
|
Include fees for services provided in connection with our restructuring process.
|
•
|
the aggregate amount of all such non-audit services provided by the independent registered public accounting firm to us does not constitute more than 5% of the total amount of revenues paid by us to the independent auditor during that fiscal year;
|
•
|
such non-audit services were not recognized by us at the time of the independent registered public accounting firm’s engagement to be non-audit services; and
|
•
|
such non-audit services are promptly brought to the attention of the audit committee and approved by the audit committee prior to the completion of the audit.
|
(a)(1)
|
See Part II, Item 8. Financial Statements and Supplementary Data of the Form 10-K.
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Exhibit
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Number
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Description of Exhibits
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2.1#
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2.2#
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2.3#
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2.4#
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3.1
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3.2
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4.1
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4.2
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4.3
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4.4
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4.5
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4.6
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4.7
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4.8
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4.9
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4.10
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4.11
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4.12
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4.13
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4.14
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4.15
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4.16
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4.17
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4.18
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4.19
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4.20
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4.21
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4.22
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4.23
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10.1
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10.2
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10.3
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10.4
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10.5
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10.6
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10.7
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10.8
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10.9
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10.10
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10.11
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10.12
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10.13
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10.14
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10.15
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10.16
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10.17
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10.18
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10.19
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10.20
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10.21
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10.22
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10.23
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10.24
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10.25
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10.26
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10.27
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10.28
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10.29
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10.30
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10.31
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10.32
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10.33
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10.34
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10.35
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10.36
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10.37
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10.38
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10.39
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10.40
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10.41
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10.42
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10.43
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10.44
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10.45
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10.46
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10.47
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10.48
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10.49
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10.50
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10.51
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10.52
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10.53
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10.54
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10.55
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10.56
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10.57
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10.58
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10.59
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10.60
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10.61
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10.62
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10.63
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10.64
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10.65
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10.66
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10.67
|
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10.68
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10.69
|
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10.70
|
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10.71
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10.72
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10.73
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10.74
|
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10.75
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10.76
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10.77
|
|
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10.78
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10.79
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10.80
|
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10.81
|
|
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10.82
|
|
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10.83
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10.84
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|
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10.85
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10.86
|
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10.87
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21.1
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23.1
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23.2
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23.3
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23.4
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31.1
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31.2
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Date:
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April 30, 2018
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|
EXCO RESOURCES, INC.
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(Registrant)
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/s/ Brian N. Gaebe
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Brian N. Gaebe
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Chief Accounting Officer and Corporate Controller
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(Principal Accounting Officer)
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NOTE: The information provided in this Section III of the Plan does not provide substantive rights, but is solely a notification required by ERISA. This Plan is a Welfare Program under the EXCO Resources, Inc. Welfare Benefit Plan. As such, the information below reflects the information provided under the EXCO Resources, Inc. Welfare Benefit Plan.
|
▪
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Examine, without charge, at the Plan Administrator's office, all Plan documents, including the Plan instrument (which is this document) and copies of all documents filed by the Plan Administrator with the Department of Labor, if any.
|
▪
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Copies of all Plan documents and other Plan information which may be obtained upon written request to the Plan Administrator; provided, however, that a reasonable charge may be made for copies.
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1.
|
I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of EXCO Resources, Inc.; and
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
Date:
|
April 30, 2018
|
/s/ Harold L. Hickey
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|
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Harold L. Hickey
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|
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Chief Executive Officer and President
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1.
|
I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of EXCO Resources, Inc.; and
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
Date:
|
April 30, 2018
|
/s/ Tyler Farquharson
|
|
|
Tyler Farquharson
|
|
|
Vice President, Chief Financial Officer and Treasurer
|