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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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1.
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To elect the nominees named in the accompanying proxy statement as members of the Company’s Board of Directors;
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2.
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To approve a non-binding, advisory vote on executive compensation;
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3.
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To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered accounting firm for the fiscal year ending December 31, 2019; and
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To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
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/s/ Lynn A. Peterson
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Lynn A. Peterson
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Chief Executive Officer
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1
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6
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8
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11
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14
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15
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17
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18
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19
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38
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49
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52
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54
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55
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56
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57
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A-1
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1.
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To elect the nominees named herein as members of the Company’s Board;
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2.
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To approve a non-binding, advisory vote on executive compensation;
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3.
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To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered accounting firm for the fiscal year ending December 31, 2019; and
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To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
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By Telephone or Via the Internet: Shareholders of record can vote their shares by telephone at (800) 690-6903 or via the Internet at www.proxyvote.com by following the instructions provided in the enclosed proxy card. Shareholders of record who vote by telephone or via the Internet need not return a proxy card by mail.
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By Written Proxy: Shareholders of record can vote their shares by marking, signing and timely returning the enclosed proxy card.
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In Person: All shareholders of record may vote in person at the Annual Meeting. For those planning to attend in person, we also recommend submitting a proxy card or voting by telephone or via the Internet to ensure that your vote will be counted if you later decide not to attend the Annual Meeting.
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“FOR” the election of the director nominees named herein (Proposal No. 1),
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“FOR” the non-binding, advisory vote on executive compensation (Proposal No. 2), and
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“FOR” the ratification of Deloitte & Touche LLP as the Company’s independent registered accounting firm for the fiscal year ending December 31, 2019 (Proposal No. 3).
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Key strategic initiatives
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We integrated and continued development of the 2017 acquisition of Greeley Crescent II acreage (the “GCII Acquisition”) which added approximately 30,200 net acres and over 600 gross drilling locations to our existing leasehold.
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We closed on the final component of the GCII Acquisition which consisted of operated wells and related production.
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We executed on transactions to further consolidate our leasehold and increase our working interest ownership in existing and future operations.
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We maintained a strong capital structure by financing our capital needs largely through internally generated cash flows. Our total debt, net of cash, at the end of 2018 was approximately $695.4 million while our 2018 net income and EBITDA were $260.0 million and $487.9 million, respectively. This resulted in a ratio of net debt to EBITDA of 1.4X as compared to 1.8X at the end of 2017.*
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We continued to ensure our ability to fund our capital investment program by maintaining ample financial liquidity. We ended 2018 with $49.6 million in cash and $305 million available on our revolving credit facility, which has a borrowing base of $650 million and aggregate elected commitments of $500 million.
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Operational results
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Our 2018 capital program resulted in the investment of approximately $584 million in a high-return drilling and completion program that resulted in an increase in the Company’s oil and gas production to 50.5 MBOE per day, a year over year increase of 48% from 2017.
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During 2018, we continued to operate two drilling rigs along with the related completion crews. This effort resulted in 95 operated wells turned to sales during the year.
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On a debt-adjusted per-share basis, our production increased 12.6% from 2017, further illustrating the addition of value for the Company’s shareholders.
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Economic returns on capital and development costs
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The Company’s investments resulted in a 23.8% cash return on average capital employed for 2018, and 18.0% for the cumulative three-year period ending December 31, 2018, which was accomplished while growing the Company’s assets to $2.8 billion as of December 31, 2018, from $672.6 million as of the end of 2015. *
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The Company’s properties have continued to demonstrate well-level returns substantially in excess of the cost of capital.
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Proved oil and gas reserves grew to 305.7 MMBOE at year-end 2018 from 226.7 MMBOE at year-end 2017, a 35% increase.
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Total shareholder return (“TSR”)
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TSR has been favorable relative to our compensation peer group despite the impacts of regulatory uncertainty in Colorado and in a period where much of the industry has seen a significant loss in shareholder value due to the impacts of external market factors, including volatile commodity prices.
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We ranked at the median among the twenty-three companies in our 2018 compensation peer group, and similar to the S&P SmallCap 600 Energy Index, for one-year TSR.
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We ranked sixth among the nineteen companies in our 2018 compensation peer group for which there was sufficient data, and better than the S&P SmallCap 600 Energy Index, for five-year TSR.
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SRC’s TSR results for these periods have been achieved despite large scale asset and operational expansion and the related capital markets transactions necessary to fund this repositioning.
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Safety, Environmental and Community Stewardship
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During 2018, we had two recordable safety incidents related to our employees on our locations.
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Our safety and environmental efforts also involve collaboration with our contractors to help ensure a safe workplace while minimizing our impact on our neighbors.
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We have continued to add professional staff focused on safety and environmental matters with a strong emphasis on prevention, accountability and timely, accurate reporting.
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We value our position in the communities in which we operate. In 2018, we continued to focus on local needs through charitable giving campaigns and volunteer opportunities for our employees.
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Management, personnel and compensation practices
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In 2018, we continued to focus on further enhancing the Company’s capabilities through additions to our technical, operational and safety teams commensurate with our increase in operational scale.
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We refined our compensation structures further in 2018 to better align with our pay for performance philosophy, while emphasizing the Company’s key strategic goals, value creation, and rewarding economic decision-making. Towards that goal,
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More than three-quarters of total direct compensation paid to the Company’s named executive officers is performance-based;
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We have utilized performance goals to link executive compensation to achievement of corporate goals; and
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Our long-term compensation is structured to align with shareholder value creation by subjecting significant portions of the long-term equity incentive awards to performance-based vesting.
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Enhanced Corporate Governance Practices
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In 2018, we enhanced our corporate governance practices by adopting Corporate Governance Guidelines.
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The independent members of our Board elected a lead independent director, and we formalized the role of lead independent director in our Corporate Governance Guidelines.
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Name
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Age
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Position
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Lynn A. Peterson
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65
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Chief Executive Officer, President and Chairman
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James P. Henderson
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53
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Executive Vice President and Chief Financial Officer
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Cathleen M. Osborn
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66
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Executive Vice President, General Counsel and Secretary
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Michael J. Eberhard
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61
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Executive Vice President and Chief Operations Officer
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Nicholas A. Spence
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60
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Executive Vice President and Chief Development Officer
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Raymond E. McElhaney
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62
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Director
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Jack N. Aydin
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78
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Director
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Daniel E. Kelly
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60
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Director
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Paul J. Korus
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62
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Director
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Jennifer S. Zucker
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48
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Director
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Name
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Annual Retainer($)
(1)
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Stock Awards($)
(2)
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Committee Member Retainers($)
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Committee Chairman Retainer($)
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Lead Independent Director
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85,000
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160,000
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Independent Director
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70,000
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160,000
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Audit Committee
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15,000
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20,000
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Compensation Committee
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12,500
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17,500
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Nominating and Governance Committee
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7,500
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12,500
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(1)
Each non-employee director’s annual retainer is paid in equal quarterly increments.
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(2)
The shares issued pursuant to the annual stock grant vest in four equal quarterly installments, with the first tranche vesting upon the grant date.
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Name
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Stock Awards($)
(1)
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Annual Retainer($)
(2)
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Committee Retainers($)
(3)
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Committee Chairman Retainer($)
(4)
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Total($)
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Raymond McElhaney
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164,220
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72,500
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15,000
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5,000
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256,720
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Jack Aydin
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164,220
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65,000
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21,250
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7,500
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257,970
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Daniel E. Kelly
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164,220
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65,000
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11,250
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6,250
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246,720
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Paul Korus
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164,220
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65,000
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3,750
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18,500
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251,470
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Jennifer S. Zucker
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255,335
(5)
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60,333
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3,750
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8,750
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328,168
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Total
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912,215
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327,833
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55,000
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46,000
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1,341,048
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2018 Executive Summary
The short version of our executive compensation program and key 2018 actions
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20
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Named Executive Officers
The individuals whose compensation is disclosed in this proxy
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22
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Introduction
A brief introduction to our executive compensation program
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22
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Compensation Objectives
What we aim to achieve through our executive compensation programs
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22
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Compensation Philosophy
How we view compensation
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23
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Components of Compensation
The compensation vehicles we use; 2018 compensation decisions
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28
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Compensation Risks
Compensation and appropriate risk-taking
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36
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2018 Shareholder Say-on-Pay Vote
We care deeply about what our stockholders think
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37
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Changes for 2019 Compensation
What’s to come in 2019
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37
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Executive Compensation Tables
Tabular compensation disclosure per SEC rules
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38
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•
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Our executive compensation program is designed to pay for performance and link incentives to current and long-term sustained achievement of Company strategic goals and to shareholder returns. It encourages our executive officers to think and act like owners, because they are owners and as such are compensated in significant part based on the performance of the Company.
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Our executive compensation program is comprised of three primary elements: base salaries, annual cash incentives, and long-term incentives that include both time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) that are subject to a three-year performance period. Financial metrics used for the annual performance-based bonus are linked to the Company’s strategic business plans. For 2018, there are two types of PSUs, one based on the Company’s relative TSR as compared to its peer companies and one based on corporate performance goals and objectives of the Company to be determined in the discretion of the Compensation Committee over the course of the performance period.
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In 2018, 87% of our CEO’s compensation was made up of either annual cash incentives or long-term incentives and on average 77% of the other NEOs’ compensation was made up of either annual cash incentives or long-term incentives.
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Executive compensation decisions are made by our independent Compensation Committee.
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When making compensation decisions, the Compensation Committee receives input from its independent compensation consultant, Longnecker & Associates, and our CEO. Our Compensation Committee also reviews the compensation paid by a peer group of companies that reflects the nature of the Company’s operations and competition for executive talent.
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We ranked at the median among our 2018 compensation peer group for 2018 TSR despite volatile commodity prices and regulatory uncertainty in Colorado, and sixth among our 2018 compensation peer group for five-year TSR in a period where much of the industry has seen a significant loss in shareholder value.
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We continued to advance our corporate development in 2018 and created significant value through operational results and economic returns on capital. Please see the discussion under the heading “2018 Performance Summary” for additional details.
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Our stockholders approved our 2018 “say-on-pay” advisory vote on executive compensation, with 71% voting in favor, 28% voting against and 1% abstaining.
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After assessing our total compensation and peer compensation levels, the Compensation Committee chose to award market-based increases to the base salary levels of our NEOs in 2018.
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We amended our CEO’s employment agreement to eliminate “single-trigger” cash severance payable upon a change in control by amending the definition of “constructive termination,” so that cash severance is payable following a change in control only upon a “double-trigger.”
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To better align our executive compensation with shareholder returns, the Compensation Committee established new performance metrics and weightings for our annual performance-based incentive program in 2018 to emphasize value creation. 2018 performance metrics include Oil & Gas Sales Volume (MBOE) Growth per Debt-Adjusted Share, EBITDA, Drilling Rate of Return, Individual Objectives, and Safety.
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For the 2018 STI performance metrics, the Compensation Committee determined that the Company achieved the following level of performance:
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In addition, the Company modified its long-term incentive program for 2018 to provide that 35% of the target annual award value for NEOs will be granted in the form of time-based RSUs, and the remaining 65% of the target annual equity award value will be comprised of two types of performance-based PSUs, one measured by relative TSR to our peer companies and the other comprised of performance goals, with both subject to a three-year performance period.
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After assessing compensation programs for boards of various peers of the Company and the most recent information on compensation for members of boards of directors provided by the Company’s compensation consultant, the Compensation Committee approved an increase in the overall level of compensation for the Company’s non-employee directors effective July 1, 2018.
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The Compensation Committee engaged Longnecker & Associates as its new compensation consultant in the fall of 2018.
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The Company modified its long-term incentive program for 2019 to provide that 50% of the target annual award value for NEOs will be granted in the form of time-based RSUs, and the remaining 50% of the target annual equity award value will be comprised of two types of performance-based PSUs, one measured by relative TSR to our peer companies and the other measured by the absolute TSR performance of the Company.
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Significant portion of CEO and other NEO pay is performance-based and at-risk.
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100% of the Compensation Committee members are independent.
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Direct retention by the Compensation Committee of its independent compensation consultant.
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Stock ownership guidelines for our officers and directors.
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Formal policy prohibiting hedging and pledging of Company securities by officers and directors.
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No excise tax gross ups.
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Relatively modest executive perquisites.
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No executive-only retirement plans.
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Lynn A. Peterson, Chairman, President and Chief Executive Officer;
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James P. Henderson, Executive Vice President and Chief Financial Officer;
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Cathleen M. Osborn, Executive Vice President, General Counsel and Secretary;
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Michael J. Eberhard, Executive Vice President and Chief Operating Officer; and
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Nicholas A. Spence, Executive Vice President and Chief Development Officer.
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The executive compensation program should provide fair and market-competitive compensation based upon the employee’s position, experience, and individual performance while maintaining fiscal responsibility for shareholders;
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A significant portion of the CEO’s and other NEOs’ total compensation should be variable performance-based and at risk and should take into consideration the growth and profitability of the Company; and
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The executive compensation program should seek to reward executive officers for increasing the Company’s stock price over the long-term by providing compensation opportunities for NEOs in the form of long-term equity awards, the amounts of which are subject to performance modifications in the event of inferior or superior performance by the Company (including a limitation whereby awards cannot vest above target levels in the event that TSR for the performance period is negative, regardless of relative performance compared to the applicable compensation peer group).
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Responsible Party
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Roles and Responsibilities
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Compensation Committee of the Board of Directors
The Committee is comprised of Independent Directors and reports to the Board.
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Oversees all executive officer compensation levels, including benefits, having a goal of maintaining compensation levels that are comparable to the marketplace and in conformity with shareholder interests.
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Administers the Company’s equity and other compensation plans.
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Reviews and approves corporate goals and objectives relevant to CEO compensation.
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Evaluates the CEO’s performance in light of set goals and objectives and determines and approves the CEO’s compensation level based on this evaluation.
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Has authority to determine and approve NEO compensation.
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Makes recommendations to the Board with respect to incentive compensation plans and equity-based plans.
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Develops a compensation committee report on executive compensation as required by the SEC to be included in the Company’s annual proxy statement or annual report on Form 10-K filed with the SEC.
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Compensation Consultant
Longnecker & Associates, as an independent consultant retained directly by the Compensation Committee, provides consulting advice on matters of governance and executive compensation.
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Provides advice and guidance on the appropriateness and competitiveness of our compensation programs relative to Company performance and market practice.
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Performs all functions at the direction of the Compensation Committee.
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Attends Compensation Committee informal discussions and meetings, as requested.
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Provides advice and guidance regarding governance issues bearing on the executive compensation determinations.
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Provides market data, as requested.
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Consults on various compensation matters and compensation program designs and practices.
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Conducts an assessment of the risks arising from our compensation programs.
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Confers with the CEO on behalf of the Compensation Committee concerning compensation, incentives and goals for other NEOs.
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Assists in selection of the Company’s peers.
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Chairman and CEO
With the support of other members of the management team.
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Reviews performance of the other executive officers and makes recommendations to the Compensation Committee with respect to their compensation.
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Confers with the Compensation Committee concerning design and development of compensation and benefit plans for Company employees.
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Compensation Component
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Description
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Purpose
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Key Characteristic
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Base Salary
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Cash compensation based on the executive officer’s role and employment agreement, if any. Salary levels are evaluated annually and may be adjusted for length of service, competitive considerations or recognition of a change in responsibilities.
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Provide financial certainty and stability
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Attract and retain executive talent
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Recognize experience, length of service, competitive market conditions and individual performance
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Fixed
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Annual Incentive Award
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Each year the Compensation Committee approves awards for the NEOs and establishes performance metrics and target awards for the upcoming year. The Compensation Committee determines the extent to which an award is earned, and the amount of such award based on individual and Company performance against pre-established goals.
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Motivate executive officers to achieve key annual goals and position the Company for long-term success
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Reward executive officers for overall Company performance and individual performance
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Variable/At-Risk
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Long-Term Incentive Award
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Each executive officer is eligible to receive an award at the discretion of the Compensation Committee based upon long-term performance potential. Awards are generally made annually and are comprised of a mix of time-based vesting and performance-based vesting requirements.
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Provide an incentive for executive officers to achieve long-term sustainable success for the Company and to promote shareholder value
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Attract, motivate, reward and retain executive talent
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Link realized value directly to shareholder return by applying a three-year performance period measuring relative TSR and performance goals for performance-based awards
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Variable/At-Risk
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Name
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2017 Base Salary
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2018 Base Salary
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Lynn A. Peterson, Chief Executive Officer and President
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$650,000
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$730,000
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James P. Henderson, Executive Vice President and Chief Financial Officer
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$399,000
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$440,000
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Cathleen M. Osborn, Executive Vice President, General Counsel and Secretary
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$336,000
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$370,000
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Michael J. Eberhard, Executive Vice President and Chief Operations Officer
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$336,000
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$370,000
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Nicholas A. Spence, Executive Vice President and Chief Development Officer
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$336,000
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$370,000
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In January 2018, we set target STI awards for the NEOs as follows:
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Named Executive Officer
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Title
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Base Salary
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Threshold
(% of Base Salary)
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Target
(% of Base Salary)
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Maximum
(% of Base Salary)
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Threshold
($)
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Target
($)
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Maximum
($)
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Lynn Peterson
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CEO & President
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$730,000
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62.5%
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125%
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250%
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$456,250
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$912,500
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$1,825,000
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James Henderson
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CFO
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$440,000
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50%
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100%
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200%
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$220,000
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$440,000
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$880,000
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Cathleen Osborn
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General Counsel
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$370,000
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37.5%
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75%
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150%
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$138,750
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$277,500
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$555,000
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Mike Eberhard
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COO
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$370,000
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37.5%
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75%
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150%
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$138,750
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$277,500
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$555,000
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Nicholas Spence
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CDO
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$370,000
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37.5%
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75%
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150%
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$138,750
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$277,500
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$555,000
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Performance Metrics
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Metric Weight %
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Description of Metric
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Why Metric Was Chosen
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Oil & Gas Sales Volume (MBOE) Growth per Debt-Adjusted Share
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20%
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Change in annual production expressed on a debt- adjusted per-share basis
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The measure combines the Company’s ability to grow cash flow through production with capital efficiency using a per-share basis
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Adjusted EBITDA
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20%
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The Company’s EBITDA as compared to its Board-approved plan
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Demonstrates the ability to meet planned objectives including revenues and operating and corporate expenses
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Drilling Rate of Return
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20%
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Aggregate internal rate of return of one-year drilling and completions program inclusive of lease acquisition and corporate costs
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Incorporates actual capital costs with achieved and expected cash flows resulting in measure of burdened asset level returns on invested capital
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Safety
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20%
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Assessment of Company’s performance in meeting safety goals
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Stresses ongoing focus on safety as primary goal of Company
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Individual Objectives
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20%
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Evaluation of each individual’s performance and contribution
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Allows individual-level performance feedback
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Performance Metrics
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Weighting of Performance Metrics
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Performance
Threshold
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Performance
Target
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Performance
Maximum
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2018 Actual Performance
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Oil & Gas Sales Volume (MBOE) Growth per Debt-Adjusted Share
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20%
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10%
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15%
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20%
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Between range of threshold and target
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Adjusted EBITDA ($MM)
(1)
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20%
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$400
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$430
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$450
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Exceeded maximum but reduced for capital expenditures in excess of budget
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Drilling Rate of Return
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20%
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Based on Committee’s assessment
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Target
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Safety
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20%
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Based on Committee’s assessment
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Target
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Individual objectives
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20%
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Based on Committee’s assessment
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Varies by NEO
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(1)
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See Appendix A, Reconciliation of Non-GAAP Financial Measures for a reconciliation of these measures to the most comparable GAAP measure.
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Performance Metrics
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Weighting of Performance Metrics
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Lynn Peterson,
CEO & Chairman
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James Henderson,
CFO
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Mike Eberhard,
COO
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Nicholas Spence,
CDO
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Cathleen Osborn,
General Counsel
|
|||||||||||||||||||||||
Oil & Gas Sales Volume (MBOE) Growth per Debt-Adjusted Share
|
20
|
%
|
|
|
|
$129,575
|
|
|
|
|
$62,480
|
|
|
|
|
|
$39,405
|
|
|
|
|
$39,405
|
|
|
|
|
$39,405
|
|
||
Adjusted EBITDA
|
20
|
%
|
|
|
|
$319,375
|
|
|
|
|
$154,000
|
|
|
|
|
|
$97,125
|
|
|
|
|
$97,125
|
|
|
|
|
$97,125
|
|
||
Drilling Rate of Return
|
20
|
%
|
|
|
|
$182,500
|
|
|
|
|
$88,000
|
|
|
|
|
|
$55,500
|
|
|
|
|
$55,500
|
|
|
|
|
$55,500
|
|
||
Safety
|
20
|
%
|
|
|
|
$182,500
|
|
|
|
|
$88,000
|
|
|
|
|
|
$55,500
|
|
|
|
|
$55,500
|
|
|
|
|
$55,500
|
|
||
Individual objectives
|
20
|
%
|
|
|
|
$273,750
|
|
|
|
|
$132,000
|
|
|
|
|
|
$97,125
|
|
|
|
|
$97,125
|
|
|
|
|
$83,250
|
|
||
TOTAL
|
100
|
%
|
|
|
|
$1,087,700
|
|
|
|
|
$524,480
|
|
|
|
|
|
$344,655
|
|
|
|
|
$344,655
|
|
|
|
|
$330,780
|
|
In January 2018, we set target LTI awards for the NEOs and made LTI compensation grants as follows:
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
Named Executive Officer
|
Title
|
Base Salary
|
Total LTI Percentage of Salary
|
RSU% of Total LTI Award
|
2018 LTI RSU Award
($ Value)
|
2018 LTI RSU Award
(#)
|
Performance Stock Unit % of Total LTI Award
(1)
|
2018 LTI Target Performance-Vested Stock Unit Award ($ Value)
|
2018 LTI Target Performance-Vested Stock Unit Award (#)
|
||||
Lynn Peterson
|
CEO & President
|
$730,000
|
450%
|
35%
|
$1,149,750
|
139,205
|
65%
|
|
|
$2,135,250
|
|
|
258,523
|
James Henderson
|
CFO
|
$440,000
|
300%
|
35%
|
$462,000
|
55,936
|
65%
|
|
|
$858,000
|
|
|
103,881
|
Cathleen Osborn
|
General Counsel
|
$370,000
|
175%
|
35%
|
$226,625
|
27,438
|
65%
|
|
|
$420,875
|
|
|
50,957
|
Nicholas Spence
|
CDO
|
$370,000
|
175%
|
35%
|
$226,625
|
27,438
|
65%
|
|
|
$420,875
|
|
|
50,957
|
Mike Eberhard
|
COO
|
$370,000
|
175%
|
35%
|
$226,625
|
27,438
|
65%
|
|
|
$420,875
|
|
|
50,957
|
•
|
HighPoint Resources Corp (f/k/a Bill Barrett Corporation)
|
•
|
Matador Resources Company
|
•
|
Callon Petroleum Company
|
•
|
Oasis Petroleum Inc.
|
•
|
Carrizo Oil & Gas Inc.
|
•
|
PDC Energy, Inc.
|
•
|
Extraction Oil & Gas, Inc.
|
•
|
QEP Resources, Inc.
|
•
|
Gulfport Energy Corporation
|
•
|
SM Energy Company
|
•
|
Jagged Peak Energy Inc.
|
•
|
Whiting Petroleum Corporation
|
•
|
Laredo Petroleum, Inc.
|
|
|
•
|
Significant weighting toward incentive compensation provides a strong incentive for the executive officers to produce value for shareholders. At the same time, providing sizable market-based cash base salaries for the executive officers helps avoid unreasonable risk-taking by the executive team by ensuring that they are not entirely dependent on achieving incentive compensation in order to attain a significant, but market-based, cash compensation level;
|
•
|
Goals are appropriately set to avoid targets that, if not achieved, result in an unreasonably large percentage loss of compensation;
|
•
|
Incorporating a time-based vesting component for a portion of the annual long-term equity incentive awards provides the NEOs with a measure of security to avoid incentivizing excessive risk-taking solely in order to drive the value of their incentive award payouts; and
|
•
|
The Compensation Committee should retain negative discretion for both STI and LTI awards in order to align payouts with actual Company and individual performance.
|
|
|
|
|
Position
|
Required Ownership as a Multiple of Base Salary
|
CEO
|
6x
|
Other NEOs
|
3x
|
Vice Presidents
|
1x
|
Name and Principal Position
|
Fiscal Year
|
Salary
($)
|
Bonus
($)
|
Non-Equity Incentive Plan Compensation ($)
(6)
|
Stock Awards
($)
(7)
|
Option Awards
($)
|
All Other Compensation
($)
(8)
|
Total
($)
|
Lynn A. Peterson
(1)
Chairman, Chief Executive Officer and President
|
2018
|
730,000
|
—
|
1,087,700
|
4,247,338
|
—
|
23,877
|
6,088,916
|
2017
|
643,333
|
—
|
1,625,000
|
3,006,586
|
—
|
23,780
|
5,298,699
|
|
2016
|
607,500
|
—
|
1,172,420
|
2,422,636
|
—
|
10,727
|
4,213,283
|
|
James P. Henderson
(2)
Executive Vice President and Chief Financial Officer
|
2018
|
440,000
|
—
|
524,480
|
1,706,686
|
—
|
21,179
|
2,692,345
|
2017
|
395,000
|
—
|
718,200
|
1,153,478
|
—
|
23,780
|
2,290,458
|
|
2016
|
375,000
|
—
|
612,638
|
794,299
|
—
|
10,727
|
1,792,664
|
|
Cathleen M. Osborn
(3)
Executive Vice President, General Counsel and Secretary
|
2018
|
370,000
|
—
|
330,780
|
837,179
|
—
|
21,179
|
1,559,139
|
2017
|
327,500
|
—
|
403,200
|
582,804
|
—
|
23,564
|
1,337,068
|
|
2016
|
282,500
|
—
|
273,885
|
603,675
|
—
|
10,727
|
1,170,787
|
|
Michael J. Eberhard
(4)
Executive Vice President and Chief Operating Officer
|
2018
|
370,000
|
—
|
344,655
|
837,179
|
—
|
21,179
|
1,573,013
|
2017
|
331,667
|
—
|
403,200
|
582,804
|
—
|
24,200
|
1,341,871
|
|
2016
|
287,500
|
—
|
278,690
|
327,429
|
—
|
10,727
|
904,436
|
|
Nicholas A. Spence
(5)
Executive Vice President and Chief Development Officer
|
2018
|
370,000
|
—
|
344,655
|
837,179
|
—
|
21,179
|
1,573,013
|
2017
|
331,667
|
—
|
403,200
|
582,804
|
—
|
24,200
|
1,341,871
|
|
2016
|
287,500
|
—
|
224,315
|
327,429
|
—
|
10,727
|
849,971
|
(1)
|
Mr. Peterson was appointed as President on May 27, 2015, and Chairman and Chief Executive Officer effective January 1, 2016.
|
(2)
|
Mr. Henderson was appointed as Executive Vice President and Chief Financial Officer on August 24, 2015.
|
(3)
|
Ms. Osborn was appointed as Vice President and General Counsel on August 31, 2015. Ms. Osborn first became a named executive officer during the year ended December 31, 2016. Ms. Osborn’s title was changed to Executive Vice President, General Counsel and Secretary on May 18, 2018.
|
(4)
|
Mr. Eberhard was appointed as Vice President and Chief Operating Officer – Operations on June 22, 2016. Mr. Eberhard first became a named executive officer during the year ended December 31, 2016. Mr. Eberhard’s title was changed to Executive Vice President and Chief Operations officer on May 18, 2018.
|
(5)
|
Mr. Spence was appointed as Vice President and Chief Operating Officer – Development on June 22, 2016. Mr. Spence first became a named executive officer during the year ended December 31, 2016. Mr. Spence’s title was changed to Executive Vice President and Chief Development Officer on May 18, 2018.
|
(6)
|
“Non-Equity Incentive Plan Compensation” includes amounts paid under the Company’s annual cash-based short-term incentive program. For a description of the 2018 awards, see “Components of Compensation—2018 Short-Term Incentive Compensation and 2018 STI Performance Results”.
|
(7)
|
Represents the grant date fair value of stock-based compensation awards, which, for 2016, 2017 and 2018, include RSUs and PSUs.
The 2018 grants are described in “—Components of Compensation—2018 Long-Term Incentive Compensation” and detailed in the “2018 Grants of Plan-Based Awards” table below. The amounts represent the grant date fair value of stock issued for services computed in accordance with ASC 718 on the date of grant. Pursuant to ASC 718, the aggregate grant date fair value of TSR based PSUs is determined by multiplying the target number of shares by a Monte Carlo calculation model. Please see Note 11 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for information regarding the principles used to calculate the grant date fair values set forth above. For the goal based PSUs, the grant date fair value is determined by the Company’s closing stock price on the date granted. As the specific terms regarding the vesting of these units is not determined, they are not expensed under ASC 718 until ultimately vested. Assuming that the highest level of performance conditions will be achieved, the grant date fair value of the stock-based compensation awards would be (i) $6,109,697, $5,273,705 and $3,914,321 for Mr. Peterson’s 2018, 2017 and 2016 awards, respectively; (ii) $2,455,028, $1,607,313 and $1,283,372 for Mr. Henderson’s 2018, 2017 and 2016 awards, respectively; (iii) $1,204,267, $812,109 and $975,375 for Ms. Osborn’s 2018, 2017 and 2016 awards, respectively; (iv) $1,204,267, $812,109 and $518,354 for Mr. Eberhard’s 2018, 2017 and 2016 awards, respectively; and (v) $1,204,267, $812,109 and $518,354 for Mr. Spence’s 2018, 2017 and 2016 awards, respectively.
|
(8)
|
“All Other Compensation” includes compensation received that we could not properly report in any other column of the table. These amounts represent the Company matching contribution to the Company’s 401(k) Plan, disability insurance premiums, cell phone allowance, parking allowance, and executive physicals.
|
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
(1)
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(2)
|
All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#)
(3)
|
Grant Date Fair Value of Stock and Option Awards
($)
(4)
|
|||||||||||||
Name
|
Grant Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|||||||||||
Mr. Peterson
|
1/29/2018
|
456,250
|
|
912,500
|
|
1,825,000
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
129,262
|
|
258,523
|
|
517,046
|
|
—
|
|
2,951,339
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
139,205
|
|
1,295,999
|
|
||
Mr. Henderson
|
1/29/2018
|
220,000
|
|
440,000
|
|
880,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1/29/2018
|
—
|
|
—
|
|
—
|
|
51,941
|
|
103,881
|
|
207,762
|
|
—
|
|
1,185,922
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
—
|
|
55,936
|
|
520,764
|
|
|||
Ms. Osborn
|
1/29/2018
|
138,750
|
|
277,500
|
|
555,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1/29/2018
|
—
|
|
—
|
|
—
|
|
25,479
|
|
50,957
|
|
101,914
|
|
—
|
|
581,732
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,438
|
|
255,448
|
|
||
Mr. Eberhard
|
1/29/2018
|
138,750
|
|
277,500
|
|
555,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1/29/2018
|
—
|
|
—
|
|
—
|
|
25,479
|
|
50,957
|
|
101,914
|
|
—
|
|
581,732
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,438
|
|
255,448
|
|
||
Mr. Spence
|
1/29/2018
|
138,750
|
|
277,500
|
|
555,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1/29/2018
|
—
|
|
—
|
|
—
|
|
25,479
|
|
50,957
|
|
101,914
|
|
—
|
|
581,732
|
|
||
1/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,438
|
|
255,448
|
|
(1)
|
Represents threshold, target and maximum cash awards made to each of the NEOs in January 2018 and payable under the Company’s annual cash-based STI program. For a description of the 2018 awards, see “—Components of Compensation—2018 Short-Term Incentive Compensation.”
|
(2)
|
The amounts in this column represent PSU grants made to each of the NEOs that would vest upon the achievement of a threshold, target, and maximum level of performance. The actual number of PSUs that will vest will not be determinable until the close of the applicable three-year vesting period and will depend on our relative TSR performance and achievement of certain other performance goals over that period. See “—Components of Compensation—2018 Long-Term Incentive Compensation” above for additional information about these equity awards.
|
(3)
|
The amounts shown reflect RSU grants made to each of the NEOs in January 2018. See “—Components of Compensation—2018 Long-Term Incentive Compensation” above for additional information about these equity awards.
|
(4)
|
Represents the grant date fair value of stock issued for services computed in accordance with ASC 718 on the date of grant. Pursuant to ASC 718, the aggregate grant date fair value of TSR based PSUs is determined by multiplying the target number of shares by a Monte Carlo calculation model. Please see Note 11 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for information regarding the principles used to calculate the grant date fair values set forth above. For the goal based PSUs, the grant date fair value is determined by the Company’s closing stock price on the date granted. As the specific terms regarding the vesting of these units is not determined, they are not expensed under ASC 718 until ultimately vested.
|
|
Option Awards
|
Stock Awards
|
||||||||||
Name
|
Grant Date
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(1)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
(2)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Unit or Other Rights That Have Not Vested
($)
(1)
|
|
||
Mr. Peterson
|
5/27/2015
(3)
|
1,400,000
|
350,000
|
11.46
|
5/27/2025
|
—
|
|
|
|
|
|
|
5/27/2015
(4)
|
|
|
|
|
50,000
|
|
235,000
|
|
|
|
||
3/30/2016
(6)
|
|
|
|
|
30,099
|
|
141,465
|
|
|
|
||
2/24/2017
(5)
|
|
|
|
|
60,046
|
|
282,216
|
|
|
|
||
2/24/2017
|
|
|
|
|
|
|
210,113
|
987,531
|
|
|||
1/29/2018
|
|
|
|
|
|
|
258,523
|
1,215,058
|
|
|||
1/29/2018
(14)
|
|
|
|
|
139,205
|
654,264
|
|
|
|
|||
Mr. Henderson
|
8/24/2015
(7)
|
|
|
|
|
15,000
|
|
70,500
|
|
|
|
|
12/15/2015
(8)
|
120,000
|
30,000
|
10.01
|
12/15/2025
|
|
|
|
|
|
|||
3/30/2016
(6)
|
|
|
|
|
9,868
|
|
46,384
|
|
|
|
||
2/24/2017
(5)
|
|
|
|
|
23,037
|
|
108,274
|
|
|
|
||
2/24/2017
|
|
|
|
|
|
|
80,610
|
378,867
|
|
|||
1/29/2018
|
|
|
|
|
|
|
103,881
|
488,241
|
|
|||
1/29/2018
(14)
|
|
|
|
|
55,936
|
|
262,899
|
|
|
|
||
Ms. Osborn
|
9/1/2015
(9)
|
60,000
|
40,000
|
10.34
|
9/1/2025
|
|
|
|
|
|
||
9/1/2015
(10)
|
|
|
|
|
20,000
|
|
94,000
|
|
|
|
||
3/30/2016
(6)
|
|
|
|
|
7,500
|
|
35,250
|
|
|
|
||
2/24/2017
(5)
|
|
|
|
|
11,640
|
|
54,708
|
|
|
|
||
2/24/2017
|
|
|
|
|
|
|
40,729
|
191,426
|
|
|||
1/29/2018
|
|
|
|
|
|
|
50,957
|
239,498
|
|
|||
1/29/2018
(14)
|
|
|
|
|
27,438
|
128,959
|
|
|
|
|||
Mr. Eberhard
|
8/12/2015
(10)
|
|
|
|
|
20,000
|
|
94,000
|
|
|
|
|
9/1/2015
(11)
|
60,000
|
40,000
|
10.34
|
9/1/2025
|
|
|
|
|
|
|||
3/30/2016
(6)
|
|
|
|
|
5,921
|
|
27,829
|
|
|
|
||
2/24/2017
(5)
|
|
|
|
|
11,640
|
|
54,708
|
|
|
|
||
2/24/2017
|
|
|
|
|
|
|
40,729
|
191,426
|
|
|||
1/29/2018
|
|
|
|
|
|
|
50,957
|
239,498
|
|
|||
1/29/2018
(14)
|
|
|
|
|
27,438
|
128,959
|
|
|
|
|||
Mr. Spence
|
10/5/2015
(12)
|
60,000
|
40,000
|
11.35
|
10/5/2025
|
|
|
|
|
|
||
10/5/2015
(13)
|
|
|
|
|
20,000
|
|
94,000
|
|
|
|
||
3/30/2016
(6)
|
|
|
|
|
5,921
|
|
27,829
|
|
|
|
||
2/24/2017
(5)
|
|
|
|
|
11,640
|
|
54,708
|
|
|
|
||
2/24/2017
|
|
|
|
|
|
|
40,729
|
191,426
|
|
|||
1/29/2018
|
|
|
|
|
|
|
50,957
|
239,498
|
|
|||
1/29/2018
(14)
|
|
|
|
|
27,438
|
128,959
|
|
|
|
(1)
|
These amounts were calculated based on $4.70 per share, which was the closing price of the Company’s common stock on December 31, 2018, the last trading day of 2018.
|
(2)
|
The amounts in this column represent PSU grants made to each of the NEOs that would vest upon the achievement of a target level of performance. The actual number of PSUs that will vest will not be determinable until the close of the applicable three-year vesting period and will depend on our relative TSR performance and achievement of certain other performance goals over that period. See “—Components of Compensation—2018 Long-Term Incentive Compensation” above for additional information about these equity awards.
|
(3)
|
These nonqualified stock options vest in five equal installments beginning on May 27, 2015.
|
(4)
|
These stock bonus shares vest in five equal installments beginning on May 27, 2015.
|
(5)
|
These RSUs vest in three equal installments beginning on January 1, 2018.
|
(6)
.
|
These RSUs vest in three equal installments beginning on March 30, 2017
|
(7)
|
These stock bonus shares vest in five equal installments beginning on August 24, 2015.
|
(8)
|
These nonqualified stock options vest in five equal installments beginning on December 15, 2015.
|
(9)
|
These nonqualified stock options vest in five equal installments beginning on September 1, 2016.
|
(10)
|
These stock bonus shares vest in five equal installments beginning on September 1, 2016.
|
(11)
|
These incentive stock options vest in five equal installments beginning on September 1, 2016.
|
(12)
|
These incentive stock options vest in five equal installments beginning on October 5, 2016.
|
(13)
|
These stock bonus shares vest in five equal installments beginning on October 5, 2016.
|
(14)
|
These RSUs vest in thee equal installments beginning on January 1, 2019.
|
|
Option Awards
|
Stock Awards
|
|||||
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($)
(1)
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting ($)
(1)
|
|||
Mr. Peterson
|
—
|
—
|
320,812
|
2,155,787
|
|||
Mr. Henderson
|
—
|
—
|
105,464
|
668,612
|
|||
Ms. Osborn
|
—
|
—
|
75,819
|
463,819
|
|||
Mr. Eberhard
|
—
|
—
|
47,233
|
329,496
|
|||
Mr. Spence
|
—
|
—
|
47,233
|
317,096
|
(1)
|
For option awards, the value realized is the difference between the fair market value of our common stock at the time of exercise and the exercise price. For stock awards, the value realized is based on the closing price of our common stock on the vesting date.
|
|
Termination due to Death or Disability
|
Termination for Cause
|
Qualifying Termination
(1)
|
Termination due to Change in Control
(2)
|
Cash Severance
|
All compensation otherwise payable through the end of the month in which termination occurs
|
—
|
2 times base salary and 1.5 times most recent annual cash bonus amount, payable in lump sum
|
3 times base salary and 2 times most recent annual cash bonus amount, payable in lump sum
|
COBRA Benefits
|
—
|
—
|
Cash payment equal to 18 months of COBRA premiums
|
Cash payment equal to 24 months of COBRA premiums
|
Accelerated Vesting
|
Full vesting of time-based equity awards
(3)
|
—
|
Full vesting of time-based equity awards
|
Full vesting of time-based equity awards upon Change in Control, regardless of termination
(4)
|
(1)
|
“Qualifying Termination” means a termination of Mr. Peterson’s employment by the Company other than for cause or due to his death or disability, or by Mr. Peterson in the event of a “constructive termination,” in each case not in connection with or within 12 months following a change in control (as defined in the employment agreement). Mr. Peterson may terminate his employment in the event of a “constructive termination” upon not less than 30 days’ notice.
|
(2)
|
Means a Qualifying Termination on or within 12 months following a change in control.
|
(3)
|
Mr. Peterson (or his legal representative) will have the right to exercise any outstanding options for the first to occur of a period of one year or the expiration date of the original term of such grant.
|
(4)
|
The expiration date of any options which would expire within 6 months after the constructive termination will be extended to the date that is the earlier to occur of 12 months after the date of the constructive termination or the expiration date of the original term of such grant.
|
|
Termination due to Death or Disability
|
Termination for Cause
|
Qualifying Termination
(1)
|
Termination due to Change in Control
(2)
|
Cash Severance
|
—
|
—
|
Sum of base salary and annual bonus amount for the past year, payable in lump sum
|
2 times base salary and 1.5 times average annual bonus amount for the past 2 years, payable in lump sum
|
COBRA Benefits
|
—
|
—
|
12 months of COBRA premiums
|
18 months of COBRA premiums
|
Accelerated Vesting
|
—
|
—
|
—
|
Full vesting of time-based equity awards upon Change in Control, regardless of termination
|
(1)
|
“Qualifying Termination” means a termination of an NEO’s employment by the Company other than for cause or due to the NEO’s death or disability, or by the NEO for “good reason” within 90 days following the expiration of the cure period afforded the Company to rectify the condition giving rise to “good reason,” in each case other than in connection with a change in control.
|
(2)
|
Means a Qualifying Termination on or within 18 months following a change in control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Payment Type
|
|
Termination Upon Death or Disability ($)
|
|
Termination for Cause ($)
|
|
Termination without Cause or for Good Reason
(1)
($)
|
|
Certain Terminations upon or after a Change of Control
(2)
($)
|
|
||||||
Mr. Peterson
|
|
Cash Payment
|
|
—
|
|
—
|
|
3,897,500
|
|
5,440,000
|
|||||||
|
Equity (3)
|
|
3,515,534
|
|
—
|
|
2,641,138
|
|
3,188,402
|
||||||||
|
COBRA
|
|
—
|
|
—
|
|
11,070
|
|
14,760
|
||||||||
|
TOTAL
|
|
3,515,534
|
|
—
|
|
6,549,708
|
|
8,643,162
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mr. Henderson
|
|
Cash Payment
|
|
—
|
|
—
|
|
1,158,200
|
|
1,957,300
|
|||||||
|
Equity (3)
|
|
1,355,165
|
|
—
|
|
1,009,793
|
|
1,223,716
|
||||||||
|
COBRA
|
|
—
|
|
—
|
|
13,873
|
|
20,810
|
||||||||
|
TOTAL
|
|
1,355,165
|
|
—
|
|
2,181,866
|
|
3,201,825
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ms. Osborn
|
|
Cash Payment
|
|
—
|
|
—
|
|
773,200
|
|
1,344,800
|
|||||||
|
Equity (3)
|
|
743,841
|
|
—
|
|
572,567
|
|
679,362
|
||||||||
|
COBRA
|
|
—
|
|
—
|
|
7,759
|
|
11,639
|
||||||||
|
TOTAL
|
|
743,841
|
|
—
|
|
1,353,526
|
|
2,035,801
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mr. Eberhard
|
|
Cash Payment
|
|
—
|
|
—
|
|
773,200
|
|
1,344,800
|
|
||||||
|
Equity (3)
|
|
736,420
|
|
—
|
|
565,145
|
|
671,940
|
|
|||||||
|
COBRA
|
|
—
|
|
—
|
|
6,934
|
|
10,401
|
|
|||||||
|
TOTAL
|
|
736,420
|
|
—
|
|
1,345,279
|
|
2,027,142
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mr. Spence
|
|
Cash Payment
|
|
—
|
|
—
|
|
773,200
|
|
1,344,800
|
|||||||
|
Equity (3)
|
|
736,420
|
|
—
|
|
565,145
|
|
671,940
|
||||||||
|
COBRA
|
|
—
|
|
—
|
|
18,325
|
|
27,488
|
||||||||
|
TOTAL
|
|
736,420
|
|
—
|
|
1,356,671
|
|
2,044,228
|
(1)
|
For Mr. Peterson, the cash amount in this column reflects severance payment pursuant to his employment agreement of two times Mr. Peterson’s annual salary plus one and a half times his most recent bonus (a) if the Company terminates Mr. Peterson’s employment other than for cause or due to his death or disability, or (b) in the event of a “constructive termination”, and in each case not in connection with or within 12 months following a change in control.
For Mr. Henderson, Ms. Osborn, Mr. Eberhard and Mr. Spence, the cash amount in this column reflects severance payment pursuant to their respective severance agreements equal to the executive’s annual salary plus the average annual bonus amount for the last two years (a) if the Company terminates the executive’s employment for any reason other than for cause, death, or disability, or (b) if separation from service is initiated by the executive for good reason within 90 days following the expiration of the cure period afforded the Company to rectify the condition giving rise to good reason, and in each case not in connection with or within 18 months following a change in control.
|
(2)
|
For Mr. Peterson, the cash amount in this column reflects a severance payment pursuant to his employment agreement of three times Mr. Peterson’s annual salary plus two times his most recent bonus (a) if the Company terminates Mr. Peterson’s employment other than for cause or due to his death or disability, or (b) in the event of a “constructive termination”, in each case upon or within 12 months following a change in control.
For Mr. Henderson, Ms. Osborn, Mr. Eberhard and Mr. Spence, the cash amount in this column reflects severance payment pursuant to their respective severance agreements of two times the executive’s annual salary plus one-and-a-half times the executive’s average annual bonus amount for the last two years (a) if the Company terminates the executive’s employment for any reason other than for cause, death, or disability, or (b) if separation from service is initiated by the executive for good reason within 90 days following the expiration of the cure period afforded the Company to rectify the condition giving rise to good reason, in each case upon or within 18 months following a change in control.
|
(3)
|
Equity amounts are based on the closing price of our common stock on the NYSE American on December 31, 2018 of $4.70, the last trading day during 2018. With respect to PSUs, pursuant to the PSU award agreements, the following vesting scenarios apply based on the various termination events:
|
|
a)
Upon death or disability, the performance period shall be deemed to have ended and the executive shall earn 100% of the target PSUs at such time.
|
|
b)
Upon termination of the executive’s continuous employment by the Company without “cause” or for good reason, (A) executive’s target PSUs will be reduced and upon termination shall be equal to the product of (i) the target PSUs,
multiplied by
(ii) a fraction, (x) the numerator of which is the number of days the executive remained in continuous employment from the start of the performance period through the date of termination, and (y) the total number of days in the performance period, and (B) the target PSUs shall remain outstanding and the executive shall be entitled to receive payment (if any) in respect of such reduced target PSUs at the end of the performance period or upon a change in control as if executive’s employment had not terminated.
|
|
c)
Upon a change in control, the performance period shall end as of the date of the change in control, and the executive will vest in the number of PSUs based on (i) the Company’s achievement of certain performance goals set forth by the Compensation Committee as of the date of the change in control, or (ii) the Company’s TSR relative to a selected peer group of companies based on the executive’s target PSUs and the Company’s relative TSR as of the date of the change in control, as applicable, as described in “—Components of Compensation—2018 Long-Term Incentive Compensation” above.
|
•
|
Each shareholder known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock;
|
•
|
Each member of the Board and each of our named executive officers; and
|
•
|
All members of the Board and our executive officers as a group.
|
Name of Beneficial Owner
(1)
|
|
Number of Common Shares
Beneficially Owned
|
|
Percentage of
Outstanding Common
Shares
Beneficially Owned
(2)
|
|
5% or Greater Owners:
|
|
|
|
|
|
BlackRock, Inc.
|
|
35,927,741
|
(3)
|
14.8
|
%
|
SailingStone Capital Partners LLC
|
|
25,710,046
|
(4)
|
10.6
|
%
|
The Vanguard Group, Inc.
|
|
25,150,155
|
(5)
|
10.3
|
%
|
Dimensional Fund Advisors LP
|
|
16,318,394
|
(6)
|
6.7
|
%
|
State Street Corporation
|
|
13,365,681
|
(7)
|
5.5
|
%
|
Wellington Management Group LLP
|
|
12,453,911
|
(8)
|
5.1
|
%
|
|
|
|
|
|
|
Named Executive Officers:
|
|
|
|
|
|
Lynn A. Peterson
|
|
1,982,522
|
(9)
|
*
|
|
James P. Henderson
|
|
341,320
|
(10)
|
*
|
|
Cathleen M. Osborn
|
|
155,669
|
(11)
|
*
|
|
Michael J. Eberhard
|
|
203,890
|
(12)
|
*
|
|
Nicholas A. Spence
|
|
206,219
|
(13)
|
*
|
|
|
|
|
|
|
|
Non-Employee Directors:
|
|
|
|
|
|
|
|
|
|
|
|
Raymond McElhaney
|
|
349,817
|
(14)
|
*
|
|
Jack Aydin
|
|
108,824
|
(14)
|
*
|
|
Daniel E. Kelly
|
|
86,615
|
(14)
|
*
|
|
Paul Korus
|
|
58,746
|
(14)
|
*
|
|
Jennifer Zucker
|
|
26,172
|
(14)
|
*
|
|
|
|
|
|
|
|
All directors and executive officers as a group (10 individuals)
|
|
3,519,794
|
(15)
|
1.4
|
%
|
(1
|
)
|
Unless otherwise noted, the address of these persons is c/o SRC Energy Inc., 1675 Broadway, Suite 2600, Denver, Colorado 80202.
|
(2
|
)
|
For each holder of stock awards or other securities that are currently vested or exercisable or that vest or become exercisable within 60 days of March 22, 2019, we treat the common stock underlying those securities as owned by that holder and as outstanding shares when we calculate that holder’s percentage ownership of our common stock. We do not treat that common stock as outstanding when we calculate the percentage ownership of any other holder.
|
(3
|
)
|
Based solely on a review of a Schedule 13G/A filed with the SEC on January 31, 2019, BlackRock, Inc. beneficially owned 35,927,741 shares of our common stock and has sole voting power with respect to 35,364,850 of such shares and sole dispositive power with respect to all of such shares. The address of BlackRock, Inc. is 55 East 52
nd
Street, New York, New York 10055.
|
(4
|
)
|
Based solely on a review of a Schedule 13G filed with the SEC on February 8, 2019, SailingStone Capital Partners LLC beneficially owned 25,710,046 shares of our common stock and has sole voting and sole dispositive power with respect to all such shares. Each of SailingStone Holdings LLC, MacKenzie B. Davis and Kenneth L. Settles Jr. share voting and dispositive power with respect to all such shares. The address of SailingStone Capital Partners LLC is One California Street, 30
th
Floor, San Francisco, California 94111.
|
(5
|
)
|
Based solely on a review of a Schedule 13G filed with the SEC on February 11, 2019, The Vanguard Group, Inc. beneficially owned 25,150,155 shares of our common stock and has sole voting power with respect to 504,058 of such shares and sole dispositive power with respect to 24,640,081 of such shares. The address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
|
(6
|
)
|
Based solely on a review of a Schedule 13G filed with the SEC on February 8, 2019, Dimensional Fund Advisors LP beneficially owned 16,318,394 shares of our common stock and has sole voting with respect to 15,940,209 of such shares and sole dispositive power with respect to all such shares. The address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746.
|
(7
|
)
|
Based solely on a review of a Schedule 13G filed with the SEC on February 11, 2019, State Street Corporation beneficially owned 13,365,681 shares of our common stock and has sole voting and sole dispositive power with respect to none of such shares. Each of SSGA Funds Management, Inc., State Street Global Advisors Limited (UK) and State Street Global Advisors Trust Company share voting power with respect to 12,571,643 such shares and share dispositive power with respect to 13,365,681 such shares. The address of State Street Corporation is State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111.
|
(8
|
)
|
Based solely on a review of a Schedule 13G filed with the SEC on February 14, 2019, Wellington Management Group LLP beneficially owned 12,453,911 shares of our common stock and has sole voting and sole dispositive power with respect to none of such shares. Each of Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP share voting power with respect to 3,671,532 such shares and share dispositive power with respect to 12,453,911 such shares. The address of Wellington Management Group LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210.
|
(9
|
)
|
Shares beneficially owned include 30,099 shares of common stock subject to RSUs vesting within 60 days of March 22, 2019.
|
(10
|
)
|
Shares beneficially owned include 9,869 shares of common stock subject to RSUs vesting within 60 days of March 22, 2019.
|
(11
|
)
|
Shares beneficially owned include 7,500 shares of common stock subject to RSUs vesting within 60 days of March 22, 2019.
|
(12
|
)
|
Shares beneficially owned include 5,921 shares of common stock subject to RSUs vesting within 60 days of March 22, 2019.
|
(13
|
)
|
Shares beneficially owned include 5,921 shares of common stock subject to RSUs vesting within 60 days of March 22, 2019. Shares beneficially owned does not include 2,100 shares of common stock owned by Mr. Spence’s spouse for which he disclaims beneficial ownership.
|
(14
|
)
|
Shares beneficially owned include 3,725 shares of common stock subject to RSUs vesting within 60 days of March 22, 2018.
|
(15
|
)
|
Shares beneficially owned include 77,935 shares of common stock subject to RSUs issued to executive officers and non-employee directors vesting within 60 days of March 22, 2019.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
||||
Audit Fees
|
$
|
502,500
|
|
|
$
|
572,438
|
|
Audit-Related Fees
|
40,000
|
|
|
0
|
|
||
Tax Fees
|
0
|
|
|
0
|
|
||
All Other Fees
|
1,964
|
|
|
0
|
|
||
Total Fees
|
$
|
544,464
|
|
|
$
|
572,438
|
|
|
|
|
|
|
/s/ Lynn A. Peterson
|
|
|
|
|
Lynn A. Peterson
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
March 29, 2019
|
|
|
|
|
|
At December 31, 2018
|
At December 31, 2017
|
At December 31, 2016
|
Total Shareholders’ Equity - (a)
|
$ 1,586,292
|
$ 1,308,434
|
840,739
|
Notes payable, gross of issuance costs and Revolving credit facility - (b)
|
745,000
|
550,000
|
80,000
|
Less: Cash and cash equivalents
|
(49,609)
|
(48,772)
|
(18,615)
|
Net Debt (Non-GAAP) - (c)
|
695,391
|
501,228
|
61,385
|
Total Capitalization (GAAP) - (a) + (b)
|
2,331,292
|
1,858,434
|
920,739
|
Total Capitalization (Non-GAAP) - (a) + (c)
|
2,281,683
|
1,809,662
|
902,124
|
Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]
|
32%
|
30%
|
9%
|
Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]
|
30%
|
28%
|
7%
|
Average Capitalization (Non-GAAP) - (year end + previous year end) / 2 - (d)
|
2,045,673
|
1,355,893
|
710,068
|
EBITDA (Non-GAAP) - (e)
|
487,889
|
282,564
|
65,241
|
Cash return on capital employed - (e) / (d)
|
23.8%
|
20.8%
|
9.2%
|
Average cash return on capital employed for three-year period
|
18.0%
|
15.6%
|
|
Total debt (GAAP) to EBITDA - (b) / (e)
|
1.5
|
1.9
|
1.2
|
Net debt (non-GAAP) to EBITDA - (c) / (e)
|
1.4
|
1.8
|
0.9
|