upl-def14a_20190522.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

 

Filed by the Registrant

Filed by a Party other than the Registrant

 

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

ULTRA PETROLEUM CORP.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

(5)

Total fee paid:

 

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

(3)

Filing Party:

 

 

(4)

Date Filed:

 

 


 

 

 

 

Notice of

2019 and 2018

Annual and Special Meeting

of Shareholders

and Proxy Statement

 

May 22, 2019

ULTRA PETROLEUM CORP.

116 East Inverness Drive, Suite 400  |  Englewood, CO 80112

 

 

 

 


 

 

 

NOTICE OF

ANNUAL AND
SPECIAL MEETING

OF SHAREHOLDERS
AND PROXY
STATEMENT

 

2019

 

2018

 

 

 

 

 


 

 

 

 

Notice of Annual and Special Meeting Of Shareholders

 

 

To the Shareholders of Ultra Petroleum Corp.:

Our combined 2019 and 2018 Annual and Special Meeting of Shareholders will be held as follows:

 

 

 

 

When:

 

Wednesday, May 22, 2019,

11:00 a.m. (MT)

        

Where:

 

116 East Inverness Drive

Englewood, Colorado 80112

 

You are cordially invited to attend the Annual and Special Meeting of Shareholders (the “Annual Meeting”) of Ultra Petroleum Corp. (the “Company”) for the following purposes:

 

To approve the amendment to the Articles of the Company to increase the minimum number of directors to three and the maximum number of directors to nine;

 

To elect Sylvia K. Barnes, Neal P. Goldman, Brad Johnson, Michael J. Keeffe, Evan S. Lederman, Stephen J. McDaniel, Alan J. Mintz and Edward A. Scoggins, Jr. as directors (or, if the above proposal is not approved, to elect Sylvia K. Barnes, Neal P. Goldman, Brad Johnson, Evan S. Lederman, Stephen J. McDaniel, Alan J. Mintz and Edward A. Scoggins, Jr. as directors), to serve on our Board of Directors until our next annual meeting of shareholders;

 

To appoint Ernst & Young LLP as our independent registered public accounting firm until the close of our next annual meeting of shareholders and authorize the directors to fix their remuneration;

 

To approve and ratify the Ultra Petroleum Corp. 2017 Stock Incentive Plan, as amended and restated June 8, 2018;

 

To hold an advisory vote on executive compensation as set forth in these materials;

 

To hold an advisory vote on the frequency of future advisory votes on executive compensation;

 

To receive our financial statements for our fiscal year ended December 31, 2018 together with the auditor’s report thereon;

 

To receive our financial statements for our fiscal year ended December 31, 2017 together with the auditor’s report thereon;

 

To approve the amendment to the Articles of the Company to remove the limitation on the number of authorized common shares;

 

To approve the amendment to the Articles of the Company to remove provisions related to the Company’s emergence from bankruptcy that, as of the date of the Annual Meeting, no longer apply to the Company;

 

To confirm the Second Amended and Restated Bylaw No. 1 of the Company to permit the separation of the roles of Chairman of the Board and Chief Executive Officer; and

 

To transact such other business as may properly be brought before the Annual Meeting or any adjournments or postponements thereof.

The specific details of the matters proposed to be put before the Annual Meeting are set forth in the proxy statement accompanying and forming part of this notice.

 


 

If you are a record holder of our common shares at the close of business on March 25, 2019, then you are entitled to notice of and to vote at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we encourage you to vote. As described in the accompanying proxy statement, you may vote by internet, by telephone or, if you receive a paper copy of the proxy card, by completing and mailing the proxy card in the postage-prepaid envelope provided with the card.

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the

Annual and Special Meeting of Shareholders of Ultra Petroleum Corp.

to be held on Wednesday, May 22, 2019.

Our Proxy Statement, 2018 Annual Report and 2017 Annual Report are available free of charge at:

http://materials.proxyvote.com/903914

 

Sincerely,

/s/ Brad Johnson

BRAD JOHNSON

President and Chief Executive Officer

April 12, 2019

Englewood, Colorado

 

 

 


 

 

 

 

PROXY STATEMENT

Table of Contents

 

Notice of Annual and Special Meeting of Shareholders

 

 

 

Proxy Materials for the Annual Meeting

3

Questions and Answers About the Annual Meeting

3

Beneficial Ownership of Securities

8

 

 

Executive Compensation — Compensation Discussion and Analysis

10

Our Named Executive Officers

10

Executive Summary

10

Compensation Program

11

Advisory Vote on Executive Compensation and Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation

12

Process for Determining Executive Compensation

12

2018 Compensation Program

13

Changes to Our Program in 2019

23

Chief Executive Officer to Median Employee Pay Ratio

24

How Elements of Our Compensation Program are Related to Each Other

24

Impact of Section 162(m) on Compensation

24

Stock Ownership Policy

25

Compensation Committee Report

26

Summary Compensation Table

27

Grants of Plan-Based Awards

29

Outstanding Equity Awards at Fiscal Year-End

30

Stock Vested

31

Potential Payouts Upon Termination

32

Director Compensation

34

 

 

Corporate Governance

36

Statement of Corporate Governance Practices

36

Mandate of the Board and Role in Risk Oversight

36

Board of Directors’ Leadership Structure

37

Board Composition and Independence from Management

37

Communication with the Board of Directors

38

Board Committees

38

Identifying and Evaluating Director Nominees

40

Compensation Committee Interlocks and Insider Participation

40

Certain Transactions

41

Amendments to the Yukon Business Corporations Act

41

 

 

Board Expansion Proposal (Proposal 1)

43

 

 

Election of Directors (Proposal 2)

45

Directors, Director Nominees and Executive Officers

45

 

 

Appointment of Independent Registered Public Accounting Firm (Proposal 3)

52

Principal Accountants Fees and Services

52

Audit Committee Report

53

 

 

Approval of A&R Stock Incentive Plan (Proposal 4)

54

General

54

Description of Stock Incentive Plan

55

ERISA

59

Federal Income Tax Consequences

59

New Plan Benefits

62

Securities Authorized for Issuance Under Equity Compensation Plans

63

 

 

Advisory Vote on Executive Compensation (Proposal 5)

64

 

 

1


 

 

Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation (Proposal 6)

65

 

 

Amendment to the Articles of the Company to Remove the Limitation on the Number of Authorized Common Shares (Proposal 7)

67

 

 

Amendment to the Articles of the Company to Remove Inapplicable Provisions (Proposal 8)

68

 

 

Confirmation of the Second Amended and Restated Bylaw No. 1 of the Company to Permit the Separation of the Roles of Chairman of the Board and Chief Executive Officer (Proposal 9)

70

 

 

Shareholder Proposals for 2020 Annual Meeting

71

 

 

Delivery of Documents to Shareholders Sharing an Address

72

 

 

Other Matters

73

 

 

Schedule A: Ultra Petroleum Corp. 2017 Stock Incentive Plan, as Amended and Restated June 8, 2018

A-1

 

 

Schedule B: Restated Articles of Incorporation

B-1

 

2


 

 

PROXY MATERIALS

FOR THE ANNUAL MEETING

We are furnishing you this proxy statement in connection with the solicitation of proxies by our Board of Directors (the “Board”) for our 2019 and 2018 Annual and Special Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held on May 22, 2019, at 11:00 a.m. Mountain Time (MT). The proxy materials, including this proxy statement, the proxy card or voting instruction form, our 2018 annual report and our 2017 annual report, are being distributed and made available to our shareholders on or about April 12, 2019.

This year, in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), the Alberta Securities Commission and the Office of the Yukon Superintendent of Securities, we are furnishing our proxy materials to most of our shareholders over the internet, unless we are otherwise instructed by the shareholder. Accordingly, we plan to mail a Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our shareholders on or about April 12, 2019. Shareholders who receive a Notice may access and review all of the information contained in our proxy materials on the website referred to in the Notice. Shareholders who receive a Notice may also request delivery of a printed set of the proxy materials by following the instructions in the Notice. We plan to mail printed copies of our proxy materials to some of our shareholders on or about April 12, 2019.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 

Who is entitled to vote at the Annual Meeting?

Shareholders who own common shares as of March 25, 2019 (the “Record Date”) may vote at the meeting. In addition, as provided in the Yukon Business Corporations Act (the “YBCA”), if one of our shareholders of record transfers ownership of shares after the Record Date, the transferee thereof may be entitled to vote those shares at the Annual Meeting. In order to be entitled to vote those shares, the transferee must demand in writing, at least ten days before the Annual Meeting, that the transferee’s name be included in the list of shareholders, and the transferee must also establish that the transferee is the owner of the transferred shares. There are no cumulative voting rights associated with our common shares. Each of our common shares is entitled to one vote.

Why did I receive a notice in the mail regarding internet availability of the Company’s proxy materials instead of printed copies of the proxy materials?

We are providing access to our proxy materials over the internet. As a result, we mailed most of our shareholders a Notice instead of a paper copy of the proxy materials. The Notice contains instructions on how to access our proxy materials over the internet and how to request a paper copy of our proxy materials.

Why didn’t I receive a notice in the mail regarding internet availability of the Company’s proxy materials?

We are sending paper copies of our proxy materials to some of our shareholders, including some of our registered shareholders and any of our shareholders who have previously requested paper copies of our proxy materials. Shareholders who receive paper copies of our proxy materials will not receive a Notice.

Can I vote my shares by filling out and returning the Notice?

No. The Notice is not a proxy card or voting form. The Notice does, however, provide instructions on how to vote by the internet or by telephone. The Notice also describes how you can request a paper proxy card and how you can submit a ballot in person at the Annual Meeting.

3


 

What am I voting on, and what are the Board’s recommendations?

You are voting on the following:

1.

Approving the amendment to the Articles of the Company to increase the minimum number of directors to three and the maximum number of directors to nine (the “Board Expansion Proposal”);

2.

Electing Sylvia K. Barnes, Neal P. Goldman, Brad Johnson, Michael J. Keeffe, Evan S. Lederman, Stephen J. McDaniel, Alan J. Mintz and Edward A. Scoggins, Jr. as directors (or, if the Board Expansion Proposal is not approved, electing Sylvia K. Barnes, Neal P. Goldman, Brad Johnson, Evan S. Lederman, Stephen J. McDaniel, Alan J. Mintz and Edward A. Scoggins, Jr. as directors), to serve until our next annual meeting of shareholders;

3.

Appointing Ernst & Young LLP as our independent registered public accounting firm until the close of our next annual meeting of shareholders and authorizing the directors to fix their remuneration;

4.

Approving and ratifying the Ultra Petroleum Corp. 2017 Stock Incentive Plan, as amended and restated June 8, 2018 (as amended and restated, the “A&R Stock Incentive Plan”);

5.

An advisory vote on executive compensation as set forth in these materials;

6.

An advisory vote on the frequency of future advisory votes on executive compensation;

7.

Approving the amendment to the Articles of the Company to remove the limitation on the number of authorized common shares;

8.

Approving the amendment to the Articles of the Company to remove provisions related to the Company’s emergence from bankruptcy that, as of the date of the Annual Meeting, no longer apply to the Company;

9.

Confirming the Second Amended and Restated Bylaw No. 1 of the Company to permit the separation of the roles of Chairman of the Board and Chief Executive Officer; and

10.

Such other business as may properly be brought before the Annual Meeting or any adjournments or postponements thereof.

The Board unanimously recommends that shareholders vote:

1.

“FOR” the Board Expansion Proposal (Proposal 1);

2.

“FOR” the election of each of the directors (provided that Mr. Keeffe’s nomination pursuant to this proposal will be contingent upon the approval by the shareholders of the Board Expansion Proposal) (Proposal 2);

3.

“FOR” the appointment of Ernst & Young LLP as our independent registered public accounting firm (Proposal 3);

4.

“FOR” the approval and ratification of the A&R Stock Incentive Plan (Proposal 4);

5.

“FOR” the approval of the advisory vote on executive compensation (Proposal 5);

6.

“ONE YEAR” for the advisory vote on the frequency of future advisory votes on executive compensation (Proposal 6);

7.

“FOR” the amendment to the Articles of the Company to remove the limitation on the number of authorized common shares (Proposal 7);

8.

“FOR” the amendment to the Articles of the Company to remove provisions related to the Company’s emergence from bankruptcy that, as of the date of the Annual Meeting, no longer apply to the Company (Proposal 8); and

9.

“FOR” the confirmation of the Second Amended and Restated Bylaw No. 1 of the Company to permit the separation of the roles of Chairman of the Board and Chief Executive Officer (Proposal 9).

What constitutes a quorum of shareholders, and why is it important?

A quorum is the presence at the Annual Meeting in person or by proxy of one or more shareholders holding one-third (1/3) of the total common shares issued and outstanding on the Record Date. Under Yukon law, broker non-votes and abstentions count towards the establishment of a quorum. A quorum must be present for us to conduct the meeting.

4


 

How do I vote?

You may vote by any of the following four methods:

Internet. Vote on the internet at http://www.proxyvote.com. Follow the instructions on the Notice, or if you received a proxy card by mail, follow the instructions on the proxy card and you can confirm that your vote has been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials. Internet voting facilities for shareholders of record will be available 24 hours a day and will close at 11:00 a.m., MT, on Monday, May 19, 2019.

Telephone. Vote by telephone by following the instructions on the Notice or, if you received a proxy card, by following the instructions on the proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been properly recorded. Telephone voting facilities for shareholders of record will be available 24 hours a day and will close at 11:00 a.m., MT, on Monday, May 19, 2019.

Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board. If mailed, your completed and signed proxy card must be received by 11:00 a.m., MT, on Monday, May 19, 2019.

Meeting. You may attend and vote at the Annual Meeting. If your shares are held in “street name” (for example, in the name of a bank, broker or other holder of record), and you plan to attend and vote at the meeting, then you must obtain a proxy executed in your favor by your holder of record to attend and vote at the meeting.

If my shares are held in “street name” by my broker, will my broker vote for me?

If your shares are held by your broker in “street name” and you do not vote your shares by following the instructions provided by your broker, your broker can vote your shares with respect to the resolution in Proposal 3 regarding the appointment of Ernst & Young LLP as our independent registered public accounting firm. However, your broker cannot vote your shares with respect to any of the other proposals. If you do not instruct your broker how to vote your shares, and if your broker is not permitted to vote on the proposals without instructions from you, then your shares will be counted as “broker non-votes” for those proposals.

What vote is required to approve each of the proposals?

Proposal 1, Board Expansion Proposal. Approval of this proposal requires the affirmative vote of at least 66 2/3% of the shares that cast a vote with respect to this proposal. For this proposal, abstentions are counted as shares entitled to vote for the proposal, but broker non-votes are not counted as shares entitled to vote for the proposal.

Proposal 2, Election of Directors. In an uncontested election, nominees are elected as directors if they receive more “for” votes than “withhold” votes. For this proposal, abstentions and broker non-votes as to a nominee are not counted as a vote for or a vote withheld from the nominee, and abstentions and broker non-votes are also not counted as shares entitled to vote for the proposal. If a nominee who is a current member of our Board receives more “withhold” votes than the number of votes “for” his election, then promptly after the election results are certified, our corporate governance guidelines provide that he or she must tender his or her resignation to the Board, and our Nominating and Corporate Governance Committee and our Board will address the proposed resignation according to the procedures set forth in our corporate governance guidelines.

Proposal 3, Appointment of Independent Registered Public Accounting Firm. Approval of this proposal requires the affirmative vote of a majority of the shares that cast a vote with respect to this proposal. For this proposal, abstentions and any broker non-votes are not counted as a vote for or a vote withheld from the proposal, and abstentions and any broker non-votes are also not counted as shares entitled to vote for the proposal.

Proposal 4, Approval of A&R Stock Incentive Plan. The A&R Stock Incentive Plan will be deemed approved and ratified if a majority of the shares present and entitled to vote with respect to this proposal vote in favor of it. For this proposal, abstentions are counted as shares entitled to vote for the proposal, but broker non-votes are not counted as shares entitled to vote for the proposal.

Proposal 5, Advisory Vote on Executive Compensation. The advisory vote will be deemed approved if a majority of the shares that cast a vote with respect to this proposal vote in favor of it. For this proposal, consistent with Yukon law and our bylaws, abstentions and any broker non-votes are not counted as a vote for or against the proposal, and abstentions and any broker non-votes are also not counted as shares entitled to vote for the proposal.

5


 

Proposal 6, Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation. To vote, on an advisory basis, on the frequency of future advisory votes on the compensation of our named executive officers, check one of the three boxes (every year, two years or three years) or, to abstain from voting on this item, check the box marked “ABSTAIN”. For this proposal, consistent with Yukon law and our bylaws, abstentions and any broker non-votes are not counted as a vote for or against the proposal, and abstentions and any broker non-votes are also not counted as shares entitled to vote for the proposal.

Proposal 7, Amendment to the Articles of the Company to Remove the Limitation on the Number of Authorized Common Shares. Approval of this proposal requires the affirmative vote of at least 66 2/3% of the shares that cast a vote with respect to this proposal. For this proposal, abstentions are counted as shares entitled to vote for the proposal, but broker non-votes are not counted as shares entitled to vote for the proposal.

Proposal 8, Amendment to the Articles of the Company to Remove Inapplicable Provisions. Approval of this proposal requires the affirmative vote of at least 66 2/3% of the shares that cast a vote with respect to this proposal. For this proposal, abstentions are counted as shares entitled to vote for the proposal, but broker non-votes are not counted as shares entitled to vote for the proposal.

Proposal 9, Confirmation of the Second Amended and Restated Bylaw No. 1 of the Company to Permit the Separation of the Roles of Chairman of the Board and Chief Executive Officer. Approval of this proposal requires the affirmative vote of a majority of the shares that cast a vote with respect to this proposal. For this proposal, abstentions are counted as shares entitled to vote for the proposal, but broker non-votes are not counted as shares entitled to vote for the proposal.

How will my proxy vote my shares?

Your proxies will vote in accordance with your instructions if duly completed and deposited. If you complete and return your signed proxy card but do not provide instructions on how to vote, your proxies will vote “FOR” the Board Expansion Proposal, “FOR” each of the director nominees (provided that Mr. Keeffe’s nomination pursuant to this proposal will be contingent upon the approval by the shareholders of the Board Expansion Proposal), “FOR” the appointment of Ernst & Young LLP as independent registered public accounting firm of the Company, “FOR” the approval of the A&R Stock Incentive Plan, “FOR” the approval of the advisory vote on executive compensation, “ONE YEAR” for the frequency of an advisory vote on executive compensation, “FOR” the amendment to the Articles of the Company to remove the limitation on the number of authorized common shares, “FOR” the amendment to the Articles of the Company to remove provisions related to the Company’s emergence from bankruptcy that, as of the date of the Annual Meeting, no longer apply to the Company, and “FOR” the confirmation of the Second Amended and Restated Bylaw No. 1 of the Company to permit the separation of the roles of Chairman of the Board and Chief Executive Officer.

The accompanying form of proxy or your vote by phone or internet also confers discretionary authority on the persons named therein to vote shares and otherwise act in the proxy holder’s discretion with respect to any amendments or variations to matters identified in the Notice of Meeting and with respect to any other matters that may properly come before the Annual Meeting or any adjournment thereof.

Can I change my vote?

Yes. You may change your vote in any manner permitted by applicable law. In addition, subject to the deadlines listed below, if you are a shareholder of record, you may revoke your proxy by the following methods:

If you voted on the internet or by telephone, you may change your vote and vote again at a later time by internet or telephone, until 11:00 a.m., MT, on Monday, May 19, 2019, or you may attend the Annual Meeting and vote your shares in person;

If you voted by sending in a paper proxy card, you may change your vote by delivering a written revocation of your most recent proxy card to our Corporate Secretary along with a new paper proxy card setting out your changed votes, provided your new paper proxy card is received no later than 11:00 a.m., MT, on Monday, May 19, 2019, or you may attend the Annual Meeting and vote your shares in person;

If you are a street name shareholder (for example, if your shares are held in the name of a bank, broker, or other holder of record) and you vote by proxy, you may change your vote by informing your nominee that you wish to change your vote in accordance with your nominee’s procedures. Changed votes by street name shareholders must be received no later than 11:00 a.m., MT, on Monday, May 19, 2019.

6


 

Who will tabulate the vote?

Mediant Inc. (“Mediant”) will serve as inspector of election and will tabulate and certify the vote at the Annual Meeting.

Who is soliciting my proxy, how is it being solicited, and who pays the costs?

Your proxy is being solicited by Ultra Petroleum Corp., on behalf of our Board, through our officers and our proxy solicitors. Solicitations may be supplemented by telephone or other personal contact without special compensation by our regular officers and employees.

We have hired Mediant to assist us in the distribution of our proxy materials, and we have hired Alliance Advisors, LLC (“Alliance”) to assist us in the solicitation of proxy votes. All the expenses of soliciting proxies, including preparing, assembling, printing, and mailing the materials used in the solicitation of proxies, will be borne by us, and we will pay Mediant and Alliance customary fees and expenses for these services.

We will also reimburse costs incurred by our shareholders of record who incur costs distributing our proxy materials to our beneficial owners.

Voting results

The report of the inspector of elections will be included in a Current Report on Form 8-K and published on our website (www.ultrapetroleum.com) within four business days following the Annual Meeting. Copies of the report of the inspector of elections and the Current Report on Form 8-K with respect thereto may be accessed through www.ultrapetroleum.com or obtained by writing to us, c/o Corporate Secretary, Ultra Petroleum Corp., 116 East Inverness Drive, Suite 400, Englewood, CO 80112.


7


 

BENEFICIAL OWNERSHIP OF SECURITIES

 

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of April 1, 2019, certain information with respect to ownership of our common shares by (a) all persons known by us to be the beneficial owners of more than 5% of our outstanding common shares, (b) each of our directors and director nominees, (c) each of our current and former executive officers named in the Summary Compensation Table (our “named executive officers”), and (d) all such named executive officers, directors and director nominees as a group. Unless otherwise indicated, all common shares are owned directly and each owner has sole voting and investment power with respect to such shares listed next to their names in the following table.

The information as to shares beneficially owned has been obtained from filings made by the named beneficial owners with the SEC and Canadian regulatory authorities as of April 1, 2019, or, in the case of our directors, director nominees and current executive officers, information that has been furnished by such individuals. Except as otherwise described below, the business address of each of the following beneficial owners is 116 East Inverness Drive, Suite 400, Englewood, CO 80112, (303) 708-9740.

 

Name of Beneficial Owner

 

Number of

Common

Shares (a)

 

 

Percent

of

Class (a)

 

Named Executive Officers, Directors and Director Nominees:

 

 

 

 

 

 

 

 

Brad Johnson (b)

 

 

298,963

 

 

*

 

Jerald J. Stratton, Jr. (c)

 

 

72,376

 

 

*

 

David W. Honeyfield

 

 

60,000

 

 

 

*

 

Maree K. Delgado (d)

 

 

24,042

 

 

*

 

Kent Rogers (e)

 

 

116,906

 

 

*

 

Michael D. Watford (f)

 

 

2,385,797

 

 

 

1.2

%

Garland R. Shaw (g)

 

 

 

 

 

 

Garrett B. Smith (h)

 

 

 

 

 

 

Evan S. Lederman

 

 

 

 

 

 

Sylvia K. Barnes

 

 

 

 

 

 

Neal P. Goldman (i)

 

 

100,260

 

 

*

 

Michael J. Keeffe (j)

 

 

106,964

 

 

*

 

Stephen J. McDaniel (k)

 

 

110,639

 

 

*

 

Alan J. Mintz (l)

 

 

126,338

 

 

*

 

Edward A. Scoggins, Jr. (m)

 

 

66,288

 

 

*

 

Common shares all named executive officers, directors and director nominees officers own as a group (15 persons)

 

 

3,468,573

 

 

 

1.8

%

Greater than 5% Shareholders:

 

 

 

 

 

 

 

 

Fir Tree Capital Management LP (n)

 

 

36,379,590

 

 

 

18.4

%

Credit Suisse AG (o)

 

 

16,685,671

 

 

 

8.5

%

Avenue Capital Management II, L.P. (p)

 

 

14,318,555

 

 

 

7.3

%

BlackRock, Inc. (q)

 

 

12,266,878

 

 

 

6.2

%

Disciplined Growth Investors, Inc. (r)

 

 

10,747,168

 

 

 

5.4

%

 

*

Less than 1%

(a)

As of April 1, 2019, there were 197,383,295 common shares outstanding. Common shares issuable upon the vesting of time-based restricted stock units (“TSUs”) within 60 days of the date of this proxy statement are deemed to be outstanding for the purpose of computing the percentage ownership of the person holding those restricted stock units, but are not treated as outstanding for the purpose of computing the percentage ownership (x) of any other person or (y) of the aggregate held by all named executive officers and directors as a group. This table does not reflect any common shares issuable upon the vesting of performance-based restricted stock units.

(b)

Includes 163,623 TSUs that vest on May 25, 2019.

(c)

Includes 68,176 TSUs that vest on May 25, 2019.

(d)

All such common shares are TSUs that vest on May 25, 2019.

(e)

Includes 54,541 TSUs that vest on May 25, 2019.

(f)

Information is based on holdings as of March 18, 2019, as reported by Mr. Watford.  The number of common shares included 1,702,075 shares owned by Watford Interests, Ltd. directly.  Watford Interests, Ltd. is a family partnership in which Mr. Watford has a beneficial interest.

8


 

(g)

Information is based on holdings as of February 28, 2019, as reported by Mr. Shaw.  

(h)

Information is based on holdings as of February 28, 2019, as reported by Mr. Smith.  

(i)

Includes 75,758 TSUs that vest on May 25, 2019.

(j)

Includes 66,288 TSUs that vest on May 25, 2019.

(k)

Includes 75,758 TSUs that vest on May 25, 2019.

(l)

Includes 75,758 TSUs that vest on May 25, 2019.

(m)

All such common shares are TSUs that vest on May 25, 2019.

(n)

Information is based on Schedule 13D/A filed with the SEC on February 5, 2018 by Fir Tree Capital Management LP (“FTCM”). The common shares are comprised of 4,354,512 common shares held by FT SOF VII Holdings, LLC, 1,621,686 common shares held directly by FT SOF IV Holdings, LLC, 5,524,467 common shares held directly by Fir Tree Capital Opportunity Master Fund, L.P., 1,803,908 common shares held directly by FT SOF V Holdings, LLC, 1,883,850 common shares held directly by Fir Tree Capital Opportunity Master Fund III, L.P., and 21,191,167 common shares held directly by Fir Tree Value Master Fund, L.P. (collectively, the “Fir Tree funds”). FTCM is the investment manager for the Fir Tree funds. Jeffrey Tannenbaum, David Sultan and Clinton Biondo control FTCM. Each of FTCM, Messrs. Tannenbaum, Sultan and Biondo has voting and investment power with respect to the shares of common stock owned by the Fir Tree funds and may be deemed to be the beneficial owner of such shares. Evan S. Lederman is the Chairman of the Board of Directors of the Company and a Partner of FTCM. Mr. Lederman does not have voting and investment power with respect to the shares of common stock owned by the Fir Tree funds in his capacity as a Partner of FTCM.  The business address of the Fir Tree funds and Messrs. Tannenbaum, Sultan, Biondo and Lederman is c/o Fir Tree Capital Management LP., 55 West 46th Street 29th Floor, New York, NY 10036.

(o)

Information is based on Schedule 13G filed with the SEC on February 13, 2019 representing that Credit Suisse AG has shared voting and shared dispositive power over 16,685,671 of our common shares. The business address of Credit Suisse AG is Uetlibergstrasse 231, P.O. Box 900, CH 8070, Zurich, Switzerland.

(p)

Information is based on Schedule 13D/A filed with the SEC on February 1, 2019 by Avenue Capital Management II, L.P., representing that Avenue Capital Management II, L.P., Avenue Capital Management II GenPar, LLC and Marc Lasry have shared voting and shared dispositive power over 14,318,555 of our common shares. Avenue Capital Management II, L.P. is an investment adviser.  Avenue Capital Management II GenPar, LLC is the general partner of Avenue Capital Management II, L.P.  Marc Lasry is the managing member of Avenue Capital Management II GenPar, LLC. The business address of the foregoing beneficial owners is 399 Park Avenue, 6th Floor, New York, NY 10022.

(q)

Information is based on Schedule 13G/A filed with the SEC on February 6, 2019, representing that BlackRock, Inc. has sole voting power over 11,774,318 of our common shares and sole dispositive power over 12,266,878 of our common shares. The business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

(r)

Information is based on Schedule 13G filed with the SEC on February 15, 2018, representing that Disciplined Growth Investors, Inc. (“DGI”) has sole voting and sole dispositive power over 10,747,168 of our common shares.  DGI may be deemed to be the beneficial owner of these common shares in its capacity as investment manager or advisor with the power to vote, or to direct the voting of, and dispose, or direct the disposition of such shares. The business address of DGI is 150 South Fifth Street, Suite 2550, Minneapolis, MN 55402.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC and any exchange or other system on which such securities are traded or quoted, initial reports of ownership and reports of changes in ownership of our common shares and other equity securities.

To our knowledge, based solely on a review of the copies of such Section 16(a) reports furnished to us and written representations that no other reports were required, we believe all reporting obligations of our officers, directors and greater-than-10% shareholders under Section 16(a) were satisfied during the year ended December 31, 2018, except that with respect to Mr. Stratton, a Form 3 was filed late and a Form 4 reporting two delinquent Form 4 filings involving two transactions for 2018 and 2019 was filed on March 12, 2019.

 

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses the compensation objectives of the Compensation Committee of the Board of Directors of Ultra Petroleum Corp. (the “Compensation Committee”) and outlines the deliberations and decisions regarding 2018 compensation for our named executive officers and the rationales behind those decisions.

OUR NAMED EXECUTIVE OFFICERS

 

 

Name

Title

Brad Johnson

President and Chief Executive Officer

Jerald J. Stratton, Jr.

Senior Vice President and Chief Operating Officer

David W. Honeyfield

Senior Vice President and Chief Financial Officer

Maree K. Delgado

Vice President and Chief Accounting Officer

Kent Rogers

Vice President, Drilling and Completions

Michael D. Watford

Former Chairman of the Board, Chief Executive Officer and President

Garland R. Shaw

Former Senior Vice President and Chief Financial Officer

Garrett B. Smith

Former Vice President, General Counsel and Corporate Secretary

 

EXECUTIVE SUMMARY

 

We are an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas. Our principal business activities are developing and producing our long-life natural gas reserves in the Pinedale and Jonah fields of the Green River Basin of southwest Wyoming.

We emerged from chapter 11 proceedings during the year ended December 31, 2017. In connection with our emergence from bankruptcy, we amended and restated the Ultra Petroleum Corp. 2017 Stock Incentive Plan and established new performance-based vesting conditions to align the return received by our shareholders with the compensation received by our executives.

Effective close of business on February 28, 2018, Michael D. Watford, our former President and Chief Executive Officer and Chairman of our Board, retired from his positions with the Company and resigned from our Board. Following Mr. Watford’s retirement, Evan S. Lederman, a Partner at Fir Tree Partners, which owns approximately 18.4% of our common shares, was selected as Chairman of the Board. In addition, we promoted Brad Johnson, our then-Senior Vice President of Operations since 2014, to the position of Interim Chief Executive Officer effective close of business on February 28, 2018. Mr. Johnson also was appointed as a Board member at that time. In March 2019, we promoted Mr. Johnson to President and Chief Executive Officer, and he remains a member of the Board.

In June 2018, we entered into an employment agreement with Jerald J. Stratton, Jr. as Chief Operating Officer, and in August 2018, we entered into an employment agreement with Maree K. Delgado as Vice President and Chief Accounting Officer. In September 2018, we announced the closure of our office in Houston, Texas and the relocation of our corporate headquarters to Englewood, Colorado, where the majority of our office staff has resided for over 10 years. Two of our named executive officers, Garland R. Shaw and Garrett B. Smith, our former Senior Vice President and Chief Financial Officer and our former Vice President, General Counsel and Corporate Secretary, respectively, did not relocate to our Englewood, Colorado office and, accordingly, transitioned out of their roles in November 2018. Following such transition, in November 2018, we announced the appointment of, and entered into an employment agreement with, David W. Honeyfield as Chief Financial Officer. In February 2019, Messrs. Stratton and Honeyfield were also named Senior Vice Presidents of the Company.

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All employment agreements with each of our named executive officers are further described below in the section entitled “Executive Employment and Transition Agreements” below.

COMPENSATION PROGRAM

 

Our compensation program is designed to attract, retain, and motivate our employees in order to effectively execute our business strategy.

 

    What We Do

      

    What We Don’t Do

 

   Pay for performance — We link pay to performance. We set clear financial and operational goals for corporate performance, and we differentiate based on individual achievements so that a substantial component of our executive compensation is not guaranteed.

 

   Mitigate incentives to take undue risk — We mitigate the chance that our named executive officers may have incentive to take undue risk by using multiple performance measures and targets, different performance measures in our short-term and long-term incentive programs, and by engaging both the Board and management in our internal processes to identify circumstances that may create unnecessary risk.

 

   Share ownership guidelines — We have adopted share ownership guidelines for our executive officers and directors, which we believe serve to align the interests of our executive officers and directors with those of our shareholders by requiring them to acquire and maintain a meaningful equity position in the Company, which further encourages our executives to support our objective of building long-term shareholder value.

 

   Reasonable post-employment/change in control provisions — We believe we have reasonable postemployment and change in control provisions that generally apply to our named executive officers in the same manner as the applicable broader employee population.

 

   Independent compensation firm — Our Compensation Committee regularly solicits the guidance of an independent compensation consulting firm which provides no other services to us or our named executive officers.

 

 

 

   No excise tax gross-ups

 

   No repricing of underwater stock options without shareholder approval

 

   No cash buyout of underwater options without shareholder approval

 

   Prohibition permitting named executive officers or directors from entering into short sales, puts or calls

 

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ADVISORY VOTE ON EXECUTIVE COMPENSATION AND ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION

 

From 2012 to 2016, we held an advisory vote on the compensation of our named executive officers (sometimes referred to as the “Say-on-Pay” vote) every year based on our shareholders’ advisory vote on the frequency of future Say-on-Pay votes (sometimes referred to as the “Say-on-Frequency” vote) at our 2011 annual meeting. Generally, the Say-on-Frequency vote is required to be submitted to stockholders at least once every six years; however, we did not hold annual meetings in 2017 due to our restructuring, nor in 2018 because, pursuant to the Company’s restructuring plan, the Company’s directors were elected for a two-year term ending no earlier than April 12, 2019. As a result, the Company has not held an advisory vote on named executive officer compensation since 2016. At our 2016 annual meeting, approximately 39% of the advisory votes cast voted to approve the compensation for our named executive officers.

In reaction to this, among other factors, our Compensation Committee in conjunction with our independent compensation consultant undertook an analysis of our named executive officer compensation for 2018 and beyond, described further in the section entitled “2018 Compensation Program” below. 

We will continue to consider the outcome for our “Say-on-Pay” votes and shareholder views annually when making future compensation decisions for our executive officers.

PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

 

Participants in the Decision-Making Process

 

Participant

Role

 

Compensation Committee

 

•   Composed entirely of independent (non-executive) members of our Board;

•   Oversees executive compensation programs, policies and practices;

•   Reviews and approves the corporate goals and objectives for the Chief Executive Officer;

•   Evaluates the Chief Executive Officer’s performance based on the approved goals and objectives;

•   Determines competitive compensation of our named executive officers, including base salary, performance targets for incentive compensation, and any resulting awards predicated on performance achievement; and

•   Maintains exclusive authority to retain an independent compensation consultant.

 

 

Chief Executive Officer

 

•   Provides the Compensation Committee preliminary recommendations for executive compensation decisions related to our named executive officers (other than for the Chief Executive Officer);

•   Provides the Compensation Committee performance assessments on each named executive officer (other than the Chief Executive Officer); and

•   Provides the Compensation Committee information on short and long-term business strategy for consideration in establishing appropriate metrics and goals for the short-term and long-term incentive plans.

 

 

Independent Compensation Consultant

 

•   Retained by, and performs work at the direction of, the Compensation Committee; and

•   Provides research and analytical services on subjects such as trends in executive compensation, director compensation and corporate governance, peer and industry data, including data on short-term and long-term performance measures, and executive officer compensation levels.

 

 


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Compensation Philosophy and Considerations

Our executive compensation programs are designed to attract, retain, and motivate the technical, operational, and executive talent needed to efficiently and effectively execute our business strategy. Our programs are designed to align executive compensation with the long-term interests of our shareholders in the following ways:

Our compensation is directly linked to our operational and financial performance and the performance of each named executive officer;

Our compensation program is designed to retain and motivate our named executive officers in the current industry environment, as well as to reward them for contributing to the achievement of our performance objectives;  and

Our compensation program provides competitive pay levels commensurate with our named executive officers’ qualifications, skills, experience and responsibilities.

Compensation Practices and Enterprise Risk

We do not believe our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company or our business. In addition, we believe that the mix and design of the elements of compensation do not encourage our named executive officers to assume excessive risks.

2018 COMPENSATION PROGRAM

 

Benchmarking Process and Competitive Positioning

In 2018, our Compensation Committee retained Lyons, Benenson & Company Inc. (“LB&C”) to advise the Compensation Committee with respect to executive officer compensation. Specifically, LB&C is engaged to review the current Peer Group and compensation structure for our executive officers, develop a benchmark for executive compensation by analyzing the executive compensation structure of our current Peer Group and current market trends, and provide advice to the Compensation Committee on the 2018 executive compensation structure and program based on their analysis. LB&C is also engaged to review the compensation arrangements applicable to the non-employee, independent directors of the Board.

Peer Group for 2018 Compensation Program

The Compensation Committee, in consultation with LB&C, considered several factors in selecting an industry-specific peer group for external benchmarking. Considerations included the following:

Market capitalization between one-half and two times the size of the Company;

Revenue between one-half and two times the size of the Company;

Assets between approximately one-third and three times the size of the Company; and

Companies with substantial gas production (greater than 50% of production).

Our compensation peer group for 2018 included the following companies:

 

Cabot Oil & Gas Corp.

Extraction Oil & Gas Inc.

PDC Energy, Inc.

Carrizo Oil & Gas Inc.

Gulfport Energy Corp.

QEP Resources, Inc.

Cimarex Energy Co.

Laredo Petroleum, Inc.

Range Resources Corp.

Eclipse Resources Corp.

Matador Resources Co.

Southwestern Energy Co.

Energen Corp.

Newfield Exploration Co.

WildHorse Resource Development Corp.

EP Energy Corp.

Oasis Petroleum, Inc.

 

 

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Elements of the 2018 Compensation Program

The compensation program for our named executive officers is comprised of base salary, cash-based annual incentive compensation, long-term equity-based incentive compensation and benefits. Our program is designed to deliver the majority of an executive’s compensation in performance-based awards dependent on both the Company’s and such individual’s performance.

 

 

Components of Compensation

Purpose

Competitive Positioning

 

 

 

Base Salary

•     Recognize responsibilities, experience and contributions

•     Provide competitive, regular-paid income

•     Competitive with peers

 

 

 

 

 

 

Annual Incentive Plan Grants (Cash-Based Award)

•     Reward the achievement of key shorter-term corporate objectives

•     Align our named executive executives’ interests with shareholder interests

•     Target opportunity set at competitive levels relative to peers, subject to Compensation Committee discretion

•     Actual payouts determined based on annual performance relative to annual goals

 

 

 

 

 

 

Stock Incentive Plan Grants  (Equity-Based Award)

•     Align executives’ interests with the interests of shareholders over the long term

•     Motivate superior performance by means of long-term performance-related incentives

•     Encourage retention through time-based requirements

•     Enable our executives to share in the long-term growth and success of the Company

•     Actual value earned dependent on performance relative to specific stock price appreciation performance goals

 

 

 

 

 

 

Benefits

•     Provide savings and security through matching 401(k) contributions, discretionary supplemental contributions to the Company’s 401(k) plan, medical, dental, life, and long-term disability insurance

 

•     Competitive with market practice

 

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Base Salary

The base salary for our named executive officers is based on the responsibilities, experience and contributions of each such executive. We consider how the current base salary for each of our named executive officers aligns with market trends and conditions and the median of our Peer Group.

We believe the base salaries for our named executive officers are generally competitive within the market but are moderate relative to base salaries paid by companies with which we compete for similar executive talent across the broad spectrum of the energy industry.

We review the base salaries on an annual basis and may make adjustments as necessary to maintain a competitive executive compensation structure. As part of our review, we may examine the compensation of executive officers in similar positions with similar responsibilities at peer companies identified by our Board or Compensation Committee or at companies within the oil and gas industry with which we generally compete for executive talent.

Our Compensation Committee determines base salaries for our named executive officers based on individual performance and the peer group and market condition factors referenced above.

Executive Employment and Transition Agreements

Executive Employment Agreements: Brad Johnson

As previously disclosed, following the retirement of Michael D. Watford, our former President and Chief Executive Officer, Brad Johnson, our then-Senior Vice President of Operations since 2014, was promoted to Interim Chief Executive Officer and appointed to our Board as of February 28, 2018. During Mr. Johnson’s services as our Interim Chief Executive Officer, we maintained our employment agreement with Mr. Johnson as Senior Vice President of Operations effective November 6, 2017 (the “Old Johnson Employment Agreement”), which would have concluded on April 30, 2020 unless amended or extended. Also as previously disclosed, Mr. Johnson was appointed President and Chief Executive Officer effective March 1, 2019.

On March 11, 2019, we entered into a new employment agreement with Mr. Johnson, as President and Chief Executive Officer and a member of the Board, effective as of March 1, 2019 (the “New Johnson Employment Agreement”), which supersedes the Old Johnson Employment Agreement. The New Johnson Employment Agreement provides Mr. Johnson with an initial base salary of $650,000 per year, which base salary is the same as he received immediately prior to the parties’ entrance into the New Johnson Employment Agreement. The New Johnson Employment Agreement also provides Mr. Johnson with eligibility to receive cash-based incentive compensation pursuant to the Company’s Annual Incentive Plan (as defined below) with a target amount equal to 100% of his annual base salary, and eligibility to receive grants of equity-based incentive compensation in the form of time-based and performance-based restricted stock units (“RSUs”). The New Johnson Employment Agreement also provides Mr. Johnson with other benefits, including health insurance and the opportunity to participate in a 401(k) plan, to the same extent as such benefits are available to the Company’s other salaried employees.

The New Johnson Employment Agreement provides that either the Company or Mr. Johnson can terminate his employment relationship. The Company’s right to terminate the employment relationship is subject to its obligation to make certain severance payments and provide certain other benefits to Mr. Johnson, depending upon the circumstances under which the employment relationship is terminated. The Company is generally not obligated, under the New Johnson Employment Agreement, to provide any severance payments or benefits if Mr. Johnson is terminated for cause or if Mr. Johnson resigns without good reason. The Company is generally obligated, under the New Johnson Employment Agreement, to provide the severance payments and benefits as set forth in the New Johnson Employment Agreement if the Company terminates him without cause, or if he resigns with good reason (each, as defined in the New Johnson Employment Agreement).  In the event Mr. Johnson’s employment is terminated by the Company without cause, or in the event Mr. Johnson resigns for good reason, the Company will be obligated (subject to Mr. Johnson’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) payment of any accrued but unpaid compensation as of the termination date, (ii) payment of a portion of his annual cash incentive compensation based on his target under the Annual Incentive Plan and the Company’s actual performance at the conclusion of the performance period without pro-ration, (iii) a lump-sum payment equal to 150% of his then-current annual base salary, and (iv) continued coverage under the Company’s health and welfare benefits programs for the shorter of (x) 12 months following his termination and (y) the date on which he obtains comparable coverage under a subsequent employer.  

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The New Johnson Employment Agreement also contains various other ordinary and customary covenants for the Company’s benefit by Mr. Johnson with respect to inventions, non-competition, non-solicitation, non-disparagement, confidentiality, and cooperation and assistance with respect to litigation or other adjudicatory proceedings.

The Old Johnson Employment Agreement provided Mr. Johnson with an initial base salary of $400,000, eligibility to receive cash-based incentive compensation pursuant to short-term incentive programs as in effect from time to time with a target amount equal to 90% of his annual base salary, and eligibility to receive grants of equity-based incentive compensation pursuant to long-term incentive programs as in effect from time to time with a target amount equal to 290% of his annual base salary. Pursuant to the Old Johnson Employment Agreement, Mr. Johnson’s base salary was reviewed by our Compensation Committee at least annually for possible increases based on his performance and the then-current market conditions for comparable positions. On May 9, 2018, our Compensation Committee approved an adjusted annual base salary of $650,000 for Mr. Johnson effective May 1, 2018, to recognize his additional responsibilities as Interim Chief Executive Officer, ongoing contributions to the Company and performance. Under the Old Johnson Employment Agreement, we could terminate Mr. Johnson at any time, for any reason or for cause (as defined in the Old Johnson Employment Agreement and described below). Under the Old Johnson Employment Agreement, upon a termination without cause, or in the event of a resignation for good reason (as defined in the Old Johnson Employment Agreement and described below), we would have been obligated (subject to Mr. Johnson’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) any accrued but unpaid compensation as of the termination date; (ii) a lump-sum cash payment equal to base salary earned during the preceding 18-month period plus 50% of the aggregate cash bonuses paid during the preceding two calendar years; (iii) vesting in full of all unvested time-based equity awards and vesting of performance-based equity awards based on actual performance (except the Initial MIP Grants, which were recently exchanged in March 2019 and are no longer outstanding, would have accelerated and vested); and (iv) continued coverage under the Company’s health and welfare benefits programs for 18 months or, if earlier occurring, when Mr. Johnson obtained other employment that provided him with benefits at least as favorable. If Mr. Johnson were terminated by the Company in anticipation of, upon, on, or within 24 months following, a “Change in Control” (as defined in the Old Johnson Employment Agreement), (i) his cash severance payment would have equaled 2.5x the sum of base salary earned during the preceding 12-month period plus 50% of the aggregate cash bonuses paid during the preceding two calendar years and (ii) if in anticipation of a Change in Control, the vesting and payment of equity-based awards to the extent such equity-based awards would have vested and been payable upon a Change in Control under the Prior Plan. Further, under the Old Johnson Employment Agreement, Mr. Johnson was subject to a one-year post-employment non-solicitation of employees and consultants restriction, as well as standard, perpetual confidentiality and non-disparagement covenants.

Executive Employment Agreement: Jerald J. Stratton, Jr.

In May 2018, we entered into an employment agreement with Jerald J. Stratton, Jr. effective June 4, 2018 as Chief Operating Officer (the “Stratton Employment Agreement”). Mr. Stratton was subsequently named Senior Vice President and Chief Operating Officer. The Stratton Employment Agreement provides Mr. Stratton with an initial annual base salary of $500,000; an aggregate sign-on bonus of $100,000 payable in two equal installments; eligibility to receive cash-based incentive compensation pursuant to the Company’s Annual Incentive Plan with a target amount equal to 90% of his annual base salary; and eligibility to receive grants of equity-based incentive compensation in the form of time-based and performance-based RSUs. The Stratton Employment Agreement also provides Mr. Stratton with other benefits, including health insurance and the opportunity to participate in a 401(k) plan, to the same extent as such benefits are available to the Company’s other salaried employees.

In the event Mr. Stratton’s employment is terminated without cause, or in the event of a resignation for good reason, we will be obligated (subject to Mr. Stratton’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) payment of any accrued but unpaid compensation as of the termination date, (ii) payment of a pro-rated portion of the annual cash incentive compensation he would have received based on his target under the Annual Incentive Plan and the Company’s actual performance at the conclusion of the performance period for the calendar year in which the termination of employment occurred, (iii) a lump-sum payment equal to 100% of his then-current annual base salary, and (iv) continued coverage under the Company’s health and welfare benefits programs for the shorter of (x) 12 months following his termination and (y) the date on which he obtains comparable coverage. In addition, Mr. Stratton must repay to the Company (i) the full amount of the sign-on bonus previously paid, if his employment is terminated by the Company for cause, or if he resigns other than for good reason, or (ii) a $50,000 portion of the sign-on bonus previously paid, if his employment is terminated due to death or disability, in each case, for clauses (i) and (ii), if such termination occurs prior to June 4, 2019.

The Stratton Employment Agreement also contains various other ordinary and customary covenants for the Company’s benefit by Mr. Stratton with respect to inventions, non-competition, non-solicitation, non-disparagement, confidentiality, and cooperation and assistance with respect to litigation or other adjudicatory proceedings.

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Executive Employment Agreement: David W. Honeyfield

In November 2018, we entered into an employment agreement with David W. Honeyfield effective November 9, 2018 (the “Honeyfield Employment Agreement”). Mr. Honeyfield was subsequently named Senior Vice President and Chief Financial Officer. The Honeyfield Employment Agreement provides Mr. Honeyfield with an initial base salary of $500,000 per year; an aggregate sign-on bonus of $100,000 payable in two equal installments in 2019; eligibility to receive cash-based incentive compensation pursuant to the Company’s Annual Incentive Plan with a target amount equal to 90% of his annual base salary; and eligibility to receive grants of equity-based incentive compensation in the form of time-based and performance-based RSUs. The Honeyfield Employment Agreement also provides Mr. Honeyfield with other benefits, including health insurance and the opportunity to participate in a 401(k) plan, to the same extent as such benefits are available to our other salaried employees.

In the event Mr. Honeyfield’s employment is terminated without cause, or in the event of a resignation for good reason, we will be obligated (subject to Mr. Honeyfield’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) payment of any accrued but unpaid compensation as of the termination date, (ii) payment of a pro-rated portion of the annual cash incentive compensation he would have received based on his target under the Annual Incentive Plan and the Company’s actual performance at the conclusion of the performance period for the calendar year in which the termination of employment occurred, (iii) a lump-sum payment equal to 100% of his then-current annual base salary, and (iv) continued coverage under the Company’s health and welfare benefits programs for the shorter of (x) 12 months following his termination and (y) the date on which he obtains comparable coverage. In addition, Mr. Honeyfield must repay to the Company (i) the full amount of the sign-on bonus, if his employment is terminated by the Company for cause, or if he resigns other than for good reason, or (ii) a $25,000 portion of the sign-on bonus, if his employment is terminated due to death or disability, in each case, for clauses (i) and (ii), if such termination occurs prior to November 9, 2019.

The Honeyfield Employment Agreement also contains various other ordinary and customary covenants for the Company’s benefit by Mr. Honeyfield with respect to inventions, non-competition, non-solicitation, non-disparagement, confidentiality, and cooperation and assistance with respect to litigation or other adjudicatory proceedings.

Executive Employment Agreement: Maree K. Delgado

In August 2018, we entered into an employment agreement with Maree K. Delgado effective August 15, 2018, as Vice President and Chief Accounting Officer (the “Delgado Employment Agreement”). The Delgado Employment Agreement provides Ms. Delgado with an initial annual base salary of $310,000; eligibility to receive cash-based incentive compensation pursuant to the Company’s Annual Incentive Plan with a target amount equal to 75% of her annual base salary and eligibility to receive grants of equity-based incentive compensation in the form of time-based and performance-based RSUs. The Delgado Employment Agreement also provides Ms. Delgado with other benefits, including health insurance and the opportunity to participate in a 401(k) plan, to the same extent as such benefits are available to the Company’s other salaried employees.

In the event Ms. Delgado’s employment is terminated without cause, or in the event of a resignation for good reason, we will be obligated (subject to Ms. Delgado’s timely execution and non-revocation of a release of claims) to provide her with the following severance benefits: (i) payment of any accrued but unpaid compensation as of the termination date, (ii) payment of a pro-rated portion of the annual cash incentive compensation she would have received based on her target under the Annual Incentive Plan and the Company’s actual performance at the conclusion of the performance period for the calendar year in which the termination of employment occurred, (iii) a lump-sum payment equal to 100% of her then-current annual base salary, and (iv) continued coverage under the Company’s health and welfare benefits programs for the shorter of (x) 12 months following her termination and (y) the date on which she obtains comparable coverage.

The Delgado Employment Agreement also contains various other ordinary and customary covenants for the Company’s benefit by Ms. Delgado with respect to inventions, non-competition, non-solicitation, non-disparagement, confidentiality, and cooperation and assistance with respect to litigation or other adjudicatory proceedings.


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Executive Employment Agreements: Kent Rogers

On March 11, 2019, we entered into a new employment agreement with Kent Rogers as Vice President, Drilling and Completions, effective as of March 1, 2019 (the “New Rogers Employment Agreement”), which supersedes the Old Rogers Employment Agreement (described below). The New Rogers Employment Agreement provides Mr. Rogers with an initial base salary of $385,000 per year, which base salary reflects an increase of $35,000 from the amount he received immediately prior to the parties’ entrance into the New Rogers Employment Agreement. The New Rogers Employment Agreement also provides Mr. Rogers with eligibility to receive cash-based incentive compensation pursuant to the Company’s Annual Incentive Plan with a target amount equal to 75% of his annual base salary, and eligibility to receive grants of equity-based incentive compensation in the form of time-based and performance-based RSUs. The New Rogers Employment Agreement also provides Mr. Rogers with other benefits, including health insurance and the opportunity to participate in a 401(k) plan, to the same extent as such benefits are available to the Company’s other salaried employees.

The New Rogers Employment Agreement provides that either the Company or Mr. Rogers can terminate his employment relationship. The Company’s right to terminate the employment relationship is subject to its obligation to make certain severance payments and provide certain other benefits to Mr. Rogers, depending upon the circumstances under which the employment relationship is terminated. The Company is generally not obligated, under the New Rogers Employment Agreement, to provide any severance payments or benefits if Mr. Rogers is terminated for cause or if Mr. Rogers resigns without good reason, and the Company is generally obligated, under the New Rogers Employment Agreement, to provide the severance payments and benefits as set forth in the New Rogers Employment Agreement if the Company terminates him without cause, or if he resigns with good reason (each, as defined in the New Rogers Employment Agreement). In the event Mr. Rogers’s employment is terminated by the Company without cause, or in the event Mr. Rogers resigns for good reason, the Company will be obligated (subject to Mr. Rogers’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) payment of any accrued but unpaid compensation as of the termination date, (ii) payment of a portion of his annual cash incentive compensation based on his target under the Annual Incentive Plan and the Company’s actual performance at the conclusion of the performance period without pro-ration, (iii) a lump-sum payment equal to 100% of his then-current annual base salary, and (iv) continued coverage under the Company’s health and welfare benefits programs for the shorter of (x) 12 months following his termination and (y) the date on which he obtains comparable coverage under a subsequent employer.

The New Rogers Employment Agreement also contains various other ordinary and customary covenants for the Company’s benefit by Mr. Rogers with respect to inventions, non-competition, non-solicitation, non-disparagement, confidentiality, and cooperation and assistance with respect to litigation or other adjudicatory proceedings.

During fiscal year 2018, the Company’s employment agreement with Mr. Rogers as Vice President, Drilling and Completions effective as of November 6, 2017 (the “Old Rogers Employment Agreement”), provided Mr. Rogers with an initial base salary of $302,000 per year; eligibility to receive cash-based incentive compensation pursuant to short-term incentive programs as in effect from time to time with a target amount equal to 60% of his annual base salary; and eligibility to receive grants of long-term equity-based incentive compensation pursuant to long-term incentive programs as in effect from time to time with a target amount equal to 150% of his annual base salary. Under the Old Rogers Employment Agreement, upon a termination without cause or in the event of a resignation for good reason (as defined in the Old Rogers Employment Agreement and described below), we would have been obligated (subject to Mr. Rogers’s timely execution and non-revocation of a release of claims) to provide him with the following severance benefits: (i) any accrued but unpaid compensation as of the termination date; (ii) a lump-sum cash payment equal to base salary earned during the preceding 12-month period, plus 50% of the aggregate cash bonuses paid during the preceding two calendar years; (iii) vesting in full of all unvested time-based equity awards and vesting of performance-based equity awards based on actual performance (except the Initial MIP Grants, which were recently exchanged in March 2019 and are no longer outstanding, would have accelerated and vested); and (iv) continued coverage under the Company’s health and welfare benefits programs for 12 months or, if earlier occurring, when Mr. Rogers obtained other employment that provided him with benefits at least as favorable. If Mr. Rogers were terminated by the Company in anticipation of, upon, on, or within 24 months following, a “Change in Control” (as defined in the Old Rogers Employment Agreement), (i) his cash severance payment would have equaled 2.0x the sum of base salary earned during the preceding 12-month period plus 50% of the aggregate cash bonuses paid during the preceding two calendar years and (ii) if in anticipation of a Change in Control, the vesting and payment of equity-based awards to the extent such equity-based awards would have vested and been payable upon a Change in Control under the Prior Plan. Further, under the Old Rogers Employment Agreement, Mr. Rogers was subject to a one-year post-employment non-solicitation of employees and consultants restriction, as well as standard, perpetual confidentiality and non-disparagement covenants. Effective January 1, 2018, we adjusted Mr. Roger’s base salary to $350,000 per year and his target amount under the Annual Incentive Plan to 75% of his base salary.

18


 

Transition Agreements: Garland R. Shaw and Garrett B. Smith

In conjunction with the closure of our Houston, Texas office in September 2018, we entered into transition agreements with two of our named executive officers who did not transfer to our new corporate headquarters in Englewood, Colorado. The transition agreements, each dated September 5, 2018, with Garland R. Shaw and Garrett B. Smith, our former Senior Vice President and Chief Financial Officer and our former Vice President, General Counsel and Corporate Secretary, respectively, set forth the terms of the applicable executive’s employment, and potential severance benefits upon qualifying terminations of employment following the conclusion of a transition period. Pursuant to each transition agreement, we continued to employ Messrs. Shaw and Smith in their respective roles through November 16, 2018, to facilitate a smooth transition of such executive’s job responsibilities through such date. During the transition period, Messrs. Shaw and Smith were each entitled to continued payment of base salary of $425,000 and $325,000 per year, respectively, and remained eligible to earn cash-based incentive compensation pursuant to the Annual Incentive Plan with target bonus amounts equal to 90% and 70% of base salary, respectively. Upon a termination of employment for any reason following September 30, 2018, each of Messrs. Shaw and Smith were entitled to a separation payment, subject to execution and non-revocation of a release of claims, in an amount equal to: (i) any accrued and unpaid base salary through the date of separation and unreimbursed expenses properly incurred and a cash payment of $128,853 and $51,541, respectively, in lieu of receiving equity-based incentive compensation pursuant to the long-term incentive program; (ii) cash severance in the amount of $1,625,210 and $885,752, respectively, upon a separation; (iii) continued participation in the Company’s benefit plans for at least 18 and 12 months, respectively, or if earlier occurring, such time the individual obtains at least as favorable benefits; and (iv) accelerated vesting of 392,172 and 151,459 outstanding shares subject to restricted stock units, respectively.

Annual Incentive Plan

In July 2018, the Compensation Committee approved the adoption of an annual incentive compensation plan (the “Annual Incentive Plan”), which provides for the payment of short-term, cash-based incentive compensation to certain employees, including the Company’s named executive officers. Pursuant to the Annual Incentive Plan, the Compensation Committee, in its sole discretion, (i) established written corporate performance goals (“Performance Goals”), which were comprised of multiple elements of Company performance, called “key performance indicators” (“KPIs”); (ii) established target awards for each employee, the payment of which were be contingent on achievement of the Performance Goals for the applicable period; and (iii) prescribed a formula for determining the percentage of such target awards that were payable based upon the level of attainment of the Performance Goals for the applicable period.

Also in July 2018, the Compensation Committee approved, pursuant to the Annual Incentive Plan, KPIs for fiscal year 2018, as well as the Performance Goals applicable to, the relative weighting of, and the funding formula for each KPI. The KPIs for fiscal year 2018, each of which are weighted equally in the formula, were: (i) annual production, (ii) EBITDA, (iii) controllable cash costs (consisting of lease operating expenses plus cash general and administrative expenses), and (iv) well performance drill bit finding and development (“F&D”) cost. The Compensation Committee also established target values under our Annual Incentive Plan for the Company’s executive officers, pursuant to which each executive officer was eligible to earn a bonus under our Annual Incentive Plan in respect of fiscal year 2018 with a target amount equal to a percentage of his or her annual base salary.

Under our Annual Incentive Plan, the Compensation Committee establishes performance metrics and goals each year, which are designed to measure key deliverables critical to our sustained short and longer-term success. The Compensation Committee, in its discretion, may consider additional factors such as commodity prices and significant corporate transactions in determining the actual amount of any annual incentive award.

Our executive officers have the potential to receive meaningful annual cash incentive compensation under our Annual Incentive Plan. Each Annual Incentive Plan opportunity ranges from 0% to 200% of target with payouts based on actual level of performance achieved and the Compensation Committee’s discretion on overall performance. The threshold is 50% of target and the actual payout can exceed 200% of target based on the Compensation Committee’s discretion on overall performance; however, the total of all individual incentive awards may not exceed the funded and approved incentive pool.


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The table below describes the targets established by the Compensation Committee and the actual performance level achieved during 2018.

 

Performance Metric & Unit

 

Weight

 

 

Threshold

(50% payout)

 

 

Target

(100% payout)

 

 

Maximum

(200% payout)

 

 

Actual

Performance

 

Production (Bcfe)

 

 

25

%

 

 

285

 

 

 

295

 

 

 

325

 

 

 

275.1

 

EBITDA ($MM)

 

 

25

%

 

$

540

 

 

$

560

 

 

$

610

 

 

$

504.0

 

Controllable Cash Costs ($/Mcfe)

 

 

25

%

 

$

0.33

 

 

$

0.31

 

 

$

0.25

 

 

$

0.35

 

Well Performance Drill Bit F&D ($/Mcfe)

 

 

25

%

 

$

1.00

 

 

$

0.90

 

 

$

0.60

 

 

$

1.28

 

 

For 2018, the Company’s actual performance results did not meet the threshold levels for any of the four measures, without adjustment. The Company established performance targets and payout levels based on its budget, plans and goals for the year. Among several considerations in those plans were the anticipated closing of the Utah asset sale in April, an increasing level of capital allocated to horizontal wells in Pinedale, and an EBITDA forecast that did not project gains or losses for derivative settlements. Following the end of fiscal year 2018, the Compensation Committee reviewed the Annual Incentive Plan actual performance results against the pre-established performance targets for the year and considered the following in making adjustments: (a) the delayed closing of Utah asset sale from April until September resulted in more favorable proceeds but higher lease operating expenses and (b) the strategic decision by the Board to reward efforts and retain key employees notwithstanding challenging market conditions. An adjustment for the delayed closing and sale of the Utah assets resulted in the Controllable Cash Costs performance metric calculated at $0.32 resulting in performance for this metric to score at the 75% payout level. The Compensation Committee elected not to make any adjustments related to the horizontal well performance results and the mid-year strategic shift back to vertical development. Adjustments were not applied to the performance results for Production, EBITDA and Well Performance Drill Bit F&D.  As a result, the calculated 2018 Annual Incentive Plan payout percentage was approximately 19%.

In February 2019, the Compensation Committee reviewed and discussed the Company’s efforts and results for 2018 and concluded that while the performance targets were largely missed, the efforts of the entire Company throughout a difficult transitional year were worthy of note and some level of reward.  Accordingly, following discussions with LB&C, the Committee approved funding the Annual Incentive Plan compensation, including a discretionary component, for fiscal year 2018 at a specified payout amount equal to approximately 42% of target. In March 2019, the Compensation Committee approved the individual Annual Incentive Plan allocations for our employees in accordance with the recommendations provided by LB&C, following discussions with the Committee, including the individual Annual Incentive Plan allocations for our named executive officers set forth below.

Individual Annual Incentive Plan Opportunity and Actual Payout

 

Name

 

Target

(% of Salary)

 

 

Actual Earned

($)

 

Brad Johnson

 

 

90

%

 

$

111,000

 

Jerald J. Stratton, Jr.

 

 

90

%

 

$

262,000

 

David W. Honeyfield

 

 

90

%

 

$

65,400

 

Maree K. Delgado*

 

 

53

%

 

$

160,000

 

Kent Rogers

 

 

75

%

 

$

189,000

 

Michael D. Watford**

 

 

100

%

 

$

 

Garland R. Shaw**

 

 

90

%

 

$

 

Garrett B. Smith**

 

 

75

%

 

$

 

 

*

Reflects pro rata target percentage based on (i) Ms. Delgado’s bonus target of 35% prior to entering into the Delgado Employment Agreement in August 2018, and (ii) her bonus target of 75% under the Delgado Employment Agreement.

**

Represents a former executive.


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Mr. Johnson received a performance payout under the Annual Incentive Plan for 2018 at 19%, utilizing his salary in effect for the majority of fiscal 2018 and his target Annual Incentive Plan percentage. Messrs. Stratton and Honeyfield, who were both hired in 2018, each received a performance payout approximating target after pro-rating for partial year service. Ms. Delgado received a performance payout at 113% of her target bonus amount, utilizing a prorated portion of her salary and her target Annual Incentive Plan percentage in effect prior to and subsequent to the Delgado Employment Agreement, related to the absorption of additional workload and the relocation of our corporate headquarters to Englewood, Colorado. Mr. Rogers received a performance payout at 72% of his target payout reflecting the field and technical performance in the execution of the Company’s drilling and completions activities. No Annual Incentive Plan payouts were awarded to former executives Messrs. Watford, Shaw and Smith, whose employment with the Company terminated during 2018.

Amended and Restated Stock Incentive Plan

As previously disclosed, in April 2017 our Board established the Ultra Petroleum Corp. 2017 Stock Incentive Plan (as originally adopted, the “Prior Plan”) pursuant to which 7.5% of the equity in the Company (on a fully-diluted and fully-distributed basis) is reserved for grants to be made from time-to-time to directors, officers, and other employees of the Company (the “Reserve”). The balance of the Reserve is available to be granted by the Board from time to time.

During 2017, management incentive plan grants (the “Initial MIP Grants”) were made to members of the Board, officers (including named executive officers), and other employees of the Company subject to the conditions and performance requirements provided in the grants. One third of the Initial MIP Grants vested in May 2017, one-third of the Initial MIP Grants would vest, if at all, at such time when the total enterprise value of the Company equals or exceeds $6.0 billion based upon the volume weighted average price of the common stock during a consecutive 30-day period, and one-third of the Initial MIP Grants would vest, if at all, at such time when the total enterprise value of the Company equals or exceeds 110% of $6.0 billion based upon the volume weighted average price of the common stock during a consecutive 30-day period. In addition, upon a Change in Control (as defined in the Prior Plan prior to the amendments described below), the Initial MIP Grants automatically vest, and if any Initial MIP Grants do not vest before April 12, 2023, such Initial MIP Grants shall automatically expire.

Under the terms of the Prior Plan, in the event an executive’s employment is terminated due to death, disability, or without cause (as defined in each respective employment agreement), any non-vested Initial MIP Grants automatically terminate, and no further vesting occurs. Unless otherwise provided in an award agreement, if a participant’s employment is terminated for cause, all vested and non-vested Initial MIP Grants immediately expire. For Messrs. Johnson and Rogers, their Initial MIP Grants would have accelerated and vested upon a termination without cause or for good reason under the Old Johnson Employment Agreement and the Old Rogers Employment Agreement. As noted below, their Initial MIP Grants were recently exchanged in March 2019 and are no longer outstanding.

In 2018, following our bankruptcy emergence in 2017, we retained LB&C to review our executive compensation arrangements and to provide recommendations on our post-emergence compensation philosophy and program. The Compensation Committee determined that the Initial MIP Grants likely would not vest (other than those Initial MIP Grants that vested in May 2017). Thus, our Compensation Committee approved the new program to provide an appropriate and attainable incentive.

On June 8, 2018, each of the Board and the Compensation Committee approved an amendment and restatement of the Ultra Petroleum Corp. 2017 Stock Incentive Plan (as amended and restated, the “A&R Stock Incentive Plan”). The A&R Stock Incentive Plan amends and restates the Prior Plan to, among other things:

provide that consultants, independent contractors and advisors are eligible to participate and receive equity awards in the A&R Stock Incentive Plan;

limit the aggregate incentive awards available to be granted to any outside director during a single calendar year to a maximum of $750,000;

revise the definition of a Change in Control to exclude a change in a majority of the members on the Board;

provide that, with respect to awards granted on or after June 8, 2018, no awards will vest solely as a result of a Change in Control (as defined in the A&R Stock Incentive Plan) unless expressly provided otherwise in the applicable grant agreement or unless otherwise determined by the Compensation Committee; and

make certain other changes related to revisions to the U.S. Internal Revenue Code.

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In July 2018, following the modification of our Prior Plan, recipients of the Initial MIP Grants (other than the individuals who were named executive officers at such time) were offered an opportunity to exchange, on a one-for-one basis, the unvested portion of their Initial MIP Grants for new equity awards of RSUs (the “Exchange RSUs”). Effective July 31, 2018, such Exchange RSUs were time-based vesting awards that vest in equal tranches on May 25, 2019, May 25, 2020 and May 25, 2021.

As of March 12, 2019, all of the Initial MIP Grants to named executive officers have been exchanged for Exchange RSUs; as a result, the associated performance conditions related to the $6.0 billion and $6.6 billion total enterprise valuation are no longer in effect with respect to any named executive officer.

On July 6, 2018, the Compensation Committee approved a form of restricted stock unit grant agreement (the “RSU Grant Agreement”) under the A&R Stock Incentive Plan, pursuant to which employees of the Company may receive time-based and performance-based RSUs. The RSU Grant Agreement generally provides for the following terms: (i) one-third of the RSUs granted vest in equal installments on each of the first, second and third anniversaries of the grant date, subject to continued employment on each applicable vesting date and (ii) two-thirds of the RSUs granted vest based on the extent to which both time-based and performance-based vesting conditions are achieved. The performance-based vesting conditions are assessed based on the volume-weighted average price of our shares as measured over 60 consecutive trading dates relative to pre-established price goals. Once a performance-based vesting condition is achieved, the RSUs that have become performance vested will time-vest over the two- or three-year period following the date on which they became performance vested.

On July 16, 2018, we granted Mr. Stratton an aggregate of 613,584 time-based and performance-based vesting RSUs, pursuant to an RSU Grant Agreement described above, in connection with his appointment as Chief Operating Officer. The time-vesting portion of such grant vests on each of May 25, 2019, May 25, 2020, and May 25, 2021.

On July 31, 2018, Ms. Delgado exchanged 72,124 unvested Initial MIP Grants for time-based vesting Exchange RSUs on a one-for-one basis. On August 22, 2018, we granted Ms. Delgado an aggregate of 144,248 time-based and performance-based vesting RSUs, pursuant to an RSU Grant Agreement described above, in connection with her promotion to Vice President and Chief Accounting Officer.

On November 9, 2018, we granted Mr. Honeyfield an aggregate of 613,584 time-based and performance-based vesting RSUs, pursuant to an RSU Grant Agreement described above, in connection with his appointment as Chief Financial Officer. The time-vesting portion of such grant vests on each of November 9, 2019, November 9, 2020, and November 9, 2021.

On March 11, 2019, we granted Mr. Johnson an aggregate of 1,472,601 Exchange RSUs that are subject to performance-based vesting in addition to time-based vesting conditions, effective March 1, 2019, in exchange for an aggregate of 418,317 Initial MIP Grants, pursuant to an exchange agreement (the “RSU Exchange Agreement”). The RSU Exchange Agreement generally provides for the following terms: (i) one-third of the RSUs granted vest in equal installments on each of May 25, 2019, May 25, 2020, and May 25, 2021, subject to continued employment on each applicable vesting date and (ii) two-thirds of the RSUs granted vest based on the extent to which both performance-based and time-based vesting conditions are achieved. The performance-based vesting conditions are assessed based on the volume-weighted average price of our shares as measured over 60 consecutive trading dates relative to pre-established price goals. Once a performance-based vesting condition is achieved, the RSUs that have become performance vested will time-vest over the two- or three-year period following the date on which they became performance vested.

On March 12, 2019, we granted Mr. Rogers an aggregate of 490,866 Exchange RSUs that are subject to performance-based vesting in addition to time-based vesting conditions, effective March 1, 2019, in exchange for an aggregate of 163,360 Initial MIP Grants, pursuant to an RSU Exchange Agreement.


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Unless otherwise provided in an award agreement, awards granted under the A&R Stock Incentive Plan that are unvested will generally expire and terminate upon a termination of employment, and in the event of a termination for cause, all vested and unvested awards will immediately expire.  For Ms. Delgado, in the event her employment is terminated due to death, disability, or without cause, as defined in the A&R Stock Incentive Plan, subject to her execution and non-revocation of a customary release of claims provided by the Company, (i) any portion of Ms. Delgado’s RSU award subject to both time-based and performance-based vesting conditions that have previously performance vested will accelerate and vest, and (ii) Ms. Delgado’s time-based vesting RSU award pro-rata vests based upon such termination date.  For the RSU awards held by Messrs. Stratton and Honeyfield that are subject to both time-based and performance-based vesting conditions, (i) upon a termination without cause or for good reason or due to death or disability, the time-based vesting portion of the RSU award (one-third of the award) will pro-rata vest based on the termination date, and (ii) for the remaining two-thirds of the RSU awards subject to time-based and performance-based vesting, upon a termination without cause or due to death or disability, any portion of the award that has previously performance vested will accelerate and vest upon the termination date.  For Messrs. Stratton and Honeyfield, of the two-thirds of their RSU awards that are subject to time-based and performance-based vesting, any portion that has not previously performance vested would be forfeited upon such termination event, and for Ms. Delgado’s time-based and performance-based RSU award, upon a termination without cause or due to death or disability, any portion of the award that has not previously performance vested would be forfeited upon such termination.  Under the A&R Stock Incentive Plan, the Compensation Committee generally has discretion to cancel and cash out outstanding incentive awards upon certain corporate events.

Further, our named executive officers hold outstanding equity awards pursuant to which each applicable award agreement permits payment of dividends when the underlying RSUs are delivered; however, the Company has not declared or paid and does not anticipate declaring or paying any dividends on its common shares in the near future. Moreover, certain of the Company’s debt instruments place restrictions on our ability to pay cash dividends.

Benefits

We provide benefits to our permanent, full-time employees, including our named executive officers. These benefits, which are ordinary and customary in our industry, consist of a group medical and dental insurance program for employees and their qualified dependents, accidental death and dismemberment and long-term disability coverage for employees, a cafeteria plan and a 401(k) plan. The costs of these benefits are paid for largely by the Company. We also match employee 401(k) deferral amounts up to a total of 5% of eligible compensation. Our discretionary 401(k) contribution to each qualified participant was calculated based on 8% of the employee’s eligible compensation during 2018. We do not provide a pension or other non-qualified retirement plans, and we do not gross up excise tax on severance payments.

CHANGES TO OUR PROGRAM IN 2019

 

The Compensation Committee continues to review our executive compensation program to ensure it meets the twin goals of attracting, retaining, and motivating valuable executives and aligning their financial interests with the success of the Company. In 2019, the Compensation Committee decided that our executive compensation program in its current form should be modified prospectively to better meet these objectives. Accordingly, the Compensation Committee has modified our executive compensation program for 2019 in several important respects, including, with regards to our named executive officers:

Enhancing the retentive and incentive nature of our long-term incentive awards under new grant agreements providing for performance vesting tied to our stock price.

Modifying the key performance metrics under our short-term cash bonus program, the Annual Incentive Plan, to include as a key performance indicator execution of our specific business plan.

Providing Messrs. Johnson and Rogers, each of whom held Initial MIP Grants as of December 31, 2018, with the opportunity to exchange the unvested portion of their Initial MIP Grants for replacement equity awards.

Entering into new employment agreements with Messrs. Johnson, in connection with his promotion and appointment as President and Chief Executive Officer, and Rogers, which new agreements are described in the section entitled “Executive Employment and Transition Agreements”.

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CHIEF EXECUTIVE OFFICER TO MEDIAN EMPLOYEE PAY RATIO

 

For 2018, the ratio of the annual total compensation of our Chief Executive Officer to our median employee is 5.47 to 1. As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and Item 402(u) of Regulation S-K promulgated under the Exchange Act, we are providing the following information about the ratio of the median annual total compensation of our employees and the annual total compensation of Mr. Johnson, who was our Interim Chief Executive Officer for the year ended December 31, 2018 and was appointed President and Chief Executive Officer as of March 1, 2019. For the year ended December 31, 2018:

The ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees is 5.47 to 1.

The median of the annual total compensation of all employees of the Company (other than our Interim Chief Executive Officer) was reasonably estimated to be $134,599.

The annual total compensation of our Chief Executive Officer for 2018 was $736,419.

We identified our median employee by examining the base salaries and wages (excluding overtime), cash bonus, and stock compensation paid to all individuals employed by us on December 31, 2018 (other than Mr. Johnson). We annualized salaries and wages for all permanent employees who were hired after January 1, 2018, as permitted by SEC rules. Once we identified our median employee, we calculated his or her total compensation during the year ended December 31, 2018, comprised of base salary, cash bonuses (reflecting Annual Incentive Plan cash bonuses for salaried employees and hourly bonuses for hourly wage employees), and equity-based compensation, in a manner consistent with the total compensation presented for each of our named executive officers in the “Summary Compensation Table.” The benefits portion of our median employee’s compensation includes matching contributions provided to the employee’s account under our 401(k) plan and the value of health and life insurance premiums.  

HOW ELEMENTS OF OUR COMPENSATION PROGRAM ARE RELATED TO EACH OTHER

 

The various components of our compensation program are related but distinct and are designed to emphasize “pay for performance” with a significant portion of total compensation reflecting a risk aspect tied to our long- and short-term financial and strategic goals. Our compensation philosophy is designed to foster entrepreneurship at all levels of the organization and is focused on employee value and retention by making long-term, equity-based incentive opportunities a substantial component of our executive compensation. The appropriate level for each compensation component is based in part, but not exclusively, on internal equity and consistency, experience and responsibilities, and other relevant considerations such as rewarding extraordinary performance. Our Compensation Committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of non-cash compensation.

IMPACT OF SECTION 162(M) ON COMPENSATION

 

Prior to the Tax Cuts and Jobs Act (“Tax Act”) that was signed into law December 22, 2017, Section 162(m) of the Internal Revenue Code (the “Code”) generally limited to $1 million the U.S. federal income tax deductibility of compensation paid in one year to a company’s chief executive officer and each of the next three highest-paid executive officers (excluding its chief financial officer). Compensation that qualified as “performance-based compensation” under Section 162(m) of the Code was exempt from this $1 million limitation. As part of the Tax Act, the ability to rely on this qualified performance-based compensation exception was eliminated, and the limitation on deductibility was generally expanded, including an expanded definition of “covered employees” to include all named executive officers under Rule 402 of Regulation S-K (which includes the chief financial officer).


24


 

Although certain of our compensation arrangements were intended to qualify as performance-based compensation under Section 162(m) of the Code prior to the Tax Act, subject to certain transition relief rules, we may no longer take a deduction for any compensation paid to our covered employees in excess of $1 million. Furthermore, although the Compensation Committee may have taken action intended to limit the impact of Section 162(m) of the Code, it also believes that the tax deduction is only one of several relevant considerations in setting compensation. The Compensation Committee believes that shareholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in structuring compensation programs, even though such programs may result in non-deductible compensation expenses. Accordingly, achieving the desired flexibility in the design and delivery of compensation may have resulted (and may continue to result, in light of the recent changes in law) in compensation that in certain cases is not deductible for federal income tax purposes.

STOCK OWNERSHIP POLICY

 

Due to the changes in the composition of the Board during 2018, LB&C reviewed and recommended the below minimum stock ownership guidelines to the Board for consideration. In April 2018, our Board approved and adopted the following stock ownership policy.

In 2018, our stock ownership policy required: our Chief Executive Officer to own our common shares having a value equal to at least six times his base salary; our Senior Vice Presidents to own our common shares having a value at least three times their base salaries; our Vice Presidents to own our common shares having a value at least two times their base salaries; and each of our non-employee directors to own our common shares having a value at least three times the value of their annual cash retainer. Newly-appointed named executive officers and directors have five years to come into compliance with the policy’s guidelines. Until compliance with the stock ownership guidelines is achieved, each of our officers or directors is expected to retain 100% of the “net shares” (net of any applicable taxes) received as a result of meeting vesting and performance conditions of equity-based awards granted under our long-term incentive compensation plan.  

Our Compensation Committee assesses whether these guidelines are met based on the average closing price of our stock for the 30 preceding calendar dates as compared to the executive’s base salary or the non-employee director’s annual cash retainer on December 31 of each calendar year. Shares of Company stock that count toward satisfaction of the policy guidelines include (i) shares owned outright by the executive or non-employee director, (ii) shares held in trust for the benefit of the executive or non-employee director and (iii) shares of vested and unvested equity-based awards held by granted to the executive or non-employee director. For purposes of counting the number of shares subject to vested and unvested equity-based awards under these guidelines, the Compensation Committee counts (x) each share subject to RSUs (assuming target performance for any RSUs subject to open performance-based vesting conditions), (y) each share subject to phantom stock units; provided that such phantom stock units settle into shares of Company stock (and not cash), and (z) the number of shares of Company stock that would be issued upon the exercise of outstanding stock options, assuming sufficient stock options were forfeited to pay the exercise price associated with any option.


25


 

COMPENSATION COMMITTEE REPORT

 

Our senior management and our Compensation Committee have reviewed the “Compensation Discussion and Analysis” provisions set forth in this year-end 2018 proxy statement filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and recommend to our Board that the foregoing provisions be included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018 and this year-end 2018 proxy statement.

Compensation Committee:

Mr. Neal P. Goldman (Chairman)

Mr. Michael J. Keeffe

Mr. Evan S. Lederman

Mr. Edward A. Scoggins, Jr.

26


 

Summary Compensation Table

The following table shows compensation information for our fiscal years ended December 31, 2018, 2017 and 2016, for our principal executive officer (“PEO”), our principal financial officer (“PFO”), three additional executive officers who held their positions as of the end of 2018, our former PEO, our former PFO, and an additional former officer who would have been included as an additional executive officer other than our PEO and our PFO. We refer to these individuals as our “named executive officers”.

As previously disclosed above, effective close of business on February 28, 2018, our former PEO retired and our then-Senior Vice President of Operations was promoted to interim PEO.  

The respective officers are presented in the table below based on their positions as of December 31, 2018.

 

Name and Principal

Position

 

Year

 

Salary

($) (1)(2)(3)

 

 

Bonus

($) (4)

 

 

Stock Awards

($) (5)

 

 

Non-Equity

Incentive Plan

Compensation

($) (6)

 

 

All Other

Compensation

($) (7)(8)

 

 

Total

($)

 

Brad Johnson

 

2018

 

$

575,000

 

 

$

 

 

$

 

 

$

111,000

 

 

$

50,419

 

 

$

736,419

 

   President and Chief

 

2017

 

$

400,000

 

 

$

 

 

$

7,349,824

 

 

$

503,800

 

 

$

49,493

 

 

$

8,303,117

 

   Executive Officer*

 

2016

 

$

400,000

 

 

$

 

 

$

 

 

$

1,149,640

 

 

$

48,733

 

 

$

1,598,373

 

Jerald J. Stratton, Jr.

 

2018

 

$

289,990

 

 

$

312,412

 

 

$

677,736

 

 

$

49,588

 

 

$

39,389

 

 

$

1,369,115

 

   Senior Vice President and

   Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David W. Honeyfield

 

2018

 

$

72,115

 

 

$

53,068

 

 

$

694,373

 

 

$

12,332

 

 

$

2,499

 

 

$

834,387

 

   Senior Vice President and

   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maree K. Delgado**

 

2018

 

$

269,625

 

 

$

133,102

 

 

$

194,734

 

 

$

26,898

 

 

$

50,920

 

 

$

675,279

 

   Vice President and Chief

   Accounting Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kent Rogers

 

2018

 

$

350,000

 

 

$

139,125

 

 

$

 

 

$

49,875

 

 

$

52,219

 

 

$

591,219

 

   Vice President, Drilling

   and Completions

 

2017

 

$

302,000

 

 

$

 

 

$

2,870,235

 

 

$

255,000

 

 

$

51,293

 

 

$

3,478,528

 

 

 

2016

 

$

302,000

 

 

$

 

 

$

 

 

$

636,844

 

 

$

50,533

 

 

$

989,377

 

Michael D. Watford***

 

2018

 

$

136,667

 

 

$

 

 

$

 

 

$

 

 

$

8,732,484

 

 

$

8,869,151

 

   Former Chairman of the

 

2017

 

$

800,000

 

 

$

 

 

$

21,542,600

 

 

$

1,064,000

 

 

$

51,293

 

 

$

23,457,893

 

   Board, Chief Executive

   Officer and President

 

2016

 

$

800,000

 

 

$

 

 

$

 

 

$

3,252,595

 

 

$

41,311

 

 

$

4,093,906

 

Garland R. Shaw***

 

2018

 

$

373,509

 

 

$

 

 

$

 

 

$

 

 

$

2,387,004

 

 

$

2,760,513

 

   Former Senior Vice President

 

2017

 

$

375,000

 

 

$

25,000

 

 

$

6,890,462

 

 

$

448,875

 

 

$

51,293

 

 

$

7,790,630

 

   and Chief Financial Officer

 

2016

 

$

375,000

 

 

$

 

 

$

 

 

$

1,559,877

 

 

$

50,533

 

 

$

1,985,410

 

Garrett B. Smith***

 

2018

 

$

285,625

 

 

$

 

 

$

 

 

$

 

 

$

1,213,429

 

 

$

1,499,054

 

   Former Vice President,

 

2017

 

$

280,000

 

 

$

25,000

 

 

$

2,661,140

 

 

$

223,440

 

 

$

50,693

 

 

$

3,240,273

 

   General Counsel and

   Corporate Secretary

 

2016

 

$

280,000

 

 

$

 

 

$

 

 

$

880,564

 

 

$

49,657

 

 

$

1,210,221

 

 

*

As previously disclosed, Mr. Johnson was our Senior Vice President of Operations through February 28, 2018, and was promoted to Interim Chief Executive Officer as of February 28, 2018. Subsequent to the fiscal year ended December 31, 2018, he was promoted to President and Chief Executive Officer effective as of March 1, 2019.

**

Ms. Delgado was our Corporate Controller, and was promoted to Vice President, Chief Accounting Officer as of August 15, 2018.

***

Represents a former executive.

(1)

Mr. Johnson’s 2018 base salary was increased to $425,000 as of January 1, 2018, and was increased as of May 1, 2018 to $650,000. This resulting base salary was used to determine Mr. Johnson’s Annual Incentive Plan award (reflected under the “Non-Equity Incentive Plan Compensation” column herein).

(2)

Amount represents the amount of base salary paid to Messrs. Stratton and Honeyfield and Ms. Delgado in 2018. Messrs. Stratton and Honeyfield commenced employment on June 4, 2018 and November 9, 2018, respectively, each with a base salary of $500,000. As of January 1, 2018, Ms. Delgado’s base salary was $245,000 and was increased as of August 15, 2018 to $310,000.

(3)

Mr. Rogers’s base salary was increased from $302,000 to $350,000 effective January 1, 2018.

(4)

Amounts include (i) Annual Incentive Plan payments to Messrs. Stratton, Honeyfield and Rogers of $212,412, $53,068 and $139,125, respectively, and to Ms. Delgado of $133,102, that were over and above amounts earned by meeting performance measures under the Annual Incentive Plan, as a result of a strategic decision by the Board to reward efforts and retain key employees notwithstanding challenging market conditions, and (ii) cash amounts in addition to the Annual Incentive Plan payouts awarded in the applicable plan years of 2018, 2017 and 2016. In 2018, Messrs. Stratton and Honeyfield were each awarded an aggregate sign-on bonus of $100,000, payable in two equal installments. Mr. Stratton’s award was fully paid in 2018 (and therefore is included in the table above); however, Mr. Honeyfield’s award will be paid in 2019 at prescribed times (and therefore is not included in the table above). As described in the section entitled “Executive Employment and Transition Agreements” above, Messrs. Stratton and Honeyfield must repay the full amount or a portion of their respective amount upon certain terminations prior to June 4, 2019 and November 9, 2019, respectively.


27


 

(5)

Amounts in this column relate to the time-based RSUs and time-based and performance-based RSUs granted during fiscal year 2018 pursuant to the A&R Stock Incentive Plan. Amounts in this column for the performance-based RSU awards were calculated based on the probable outcome of the performance conditions as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. These amounts do not reflect the actual economic value realized by the named executive officer. For additional information on how we account for equity-based compensation, see Note 7 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018. Amounts for the performance-based RSUs in the table above assume target achievement of performance conditions. The grant date fair value of the 2018 performance-based RSU awards assuming attainment of the maximum achievement of performance conditions (which is 200% of target) are: for Mr. Stratton, $838,903, for Mr. Honeyfield, $877,425 and for Ms. Delgado $97,007. Amounts in this column for 2018 for Ms. Delgado represent (i) 72,124 time-based RSUs ($127,659 included in the “Stock Awards” total in the table above for such award) granted in exchange for Ms. Delgado’s Initial MIP Grants, and (ii) 144,248 time-based and performance-based vesting RSUs ($67,075 included in the “Stock Awards” total in the table above for such award, assuming target achievement of performance conditions). Amounts in this column for 2017 relate to the Initial MIP Grants pursuant to the Prior Plan, prior to the amendment and restatement, and include the actual payout of the one-third of the RSUs in May 2017; however, no amounts were included for the remaining two-thirds of the RSUs (that would vest if the total enterprise value reached the respective targets) as there was no vesting beyond the RSUs that vested upon emergence, as described above. No stock awards were granted during the fiscal year ended December 31, 2016.  

(6)

Amounts in this column represent the remaining amounts of annual cash incentive compensation (in addition to those reflected in the “Bonus” column) received by the named executive officers in respect of the applicable performance periods under the Annual Incentive Plan. For more details regarding the Annual Incentive Plan, see the section entitled “Compensation Discussion and Analysis” above.  

(7)

Amounts in this column includes the following severance benefits received by Messrs. Watford, Shaw and Smith in connection with their departures from the Company: (i) lump sum cash payments in an amount equal to $3,762,950 (Mr. Watford), $1,625,210 (Mr. Shaw), and $885,752 (Mr. Smith), respectively; (ii) cash payments equal to $128,853 and $51,541 to Mr. Shaw and Mr. Smith, respectively, in lieu of receiving 2018 incentive compensation under a Company long-term incentive program, (iii) a COBRA subsidy payment, as provided in the table below for each former executive officer; and (iv) the value of their accelerated time-based and performance-based RSU awards in amounts equal to: $4,867,624 (Mr. Watford), $580,414 (Mr. Shaw), and $224,159 (Mr. Smith), respectively, as reflected in the “Stock Vested” table below. Additionally, during the 2018 fiscal year, this amount for Mr. Watford includes $59,396, a perquisite that represents the transfer of title ownership of the automobile provided to Mr. Watford under his employment agreement, and $5,187, a perquisite that represents the value of concert event tickets and associated taxes.

(8)

Amounts in this column consist of matching and discretionary contributions under our 401(k) plan, health and life insurance premiums, COBRA subsidy for our former named executive officers, and long-term disability benefits paid on behalf of the named executive officers as detailed in the table below:

 

 

 

 

 

For the year ended December 31, 2018

 

Name

 

Principal Position

 

401(k) Matching and

Discretionary

Contributions

($)

 

 

Health and Life

Insurance

($)

 

 

Long-Term

Disability

($)

 

 

COBRA

($)

 

 

Total

($)

 

Brad Johnson

 

President and Chief Executive

Officer

 

$

35,750

 

 

$

14,393

 

 

$

276

 

 

$

 

 

$

50,419

 

Jerald J. Stratton, Jr.

 

Senior Vice President and

Chief Operating Officer

 

$

30,551

 

 

$

8,746

 

 

$

92

 

 

$

 

 

$

39,389

 

David W. Honeyfield

 

Senior Vice President and

Chief Financial Officer

 

$

 

 

$

2,499

 

 

$

 

 

$

 

 

$

2,499

 

Maree K. Delgado

 

Vice President and Chief

Accounting Officer

 

$

35,051

 

 

$

15,593

 

 

$

276

 

 

$

 

 

$

50,920

 

Kent Rogers

 

Vice President, Drilling and

Completions

 

$

35,750

 

 

$

16,193

 

 

$

276

 

 

$

 

 

$

52,219

 

Michael D. Watford*

 

Former Chairman of the

Board, Chief Executive

Officer and President

 

$

17,767

 

 

$

2,699

 

 

$

46

 

 

$

16,815

 

 

$

37,327

 

Garland R. Shaw*

 

Former Senior Vice President

and Chief Financial Officer

 

$

35,750

 

 

$

14,843

 

 

$

253

 

 

$

1,681

 

 

$

52,527

 

Garrett B. Smith*

 

Former Vice President,

General Counsel and

Corporate Secretary

 

$

35,750

 

 

$

14,293

 

 

$

253

 

 

$

1,681

 

 

$

51,977

 

 

*

Represents a former executive.

 

28


 

Grants of Plan-Based Awards

The following table sets forth specific information with respect to each plan-based award made during 2018 under any of our compensation plans to a named executive officer who held his or her position at the end of the year.

 

 

 

 

 

 

 

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards

(1)

 

 

Estimated Future Payouts Under

Equity Incentive Plan Awards

 

 

Name

 

Grant Date

 

 

Threshold

($)

 

 

Target

($)

 

 

Maximum

($)

 

 

Threshold

(#)

 

 

Target

(#)

 

 

Maximum

(#)

 

 

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units

(#)

 

 

Grant Date

Fair Value

of Stock

Awards

($) (2)

 

Brad Johnson

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Annual Incentive Plan

 

 

 

 

$

292,500

 

 

$

585,000

 

 

$

1,170,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

   Stock Incentive Plan

 

 

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

Jerald J. Stratton, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Annual Incentive Plan

 

 

 

 

$

225,000

 

 

$

450,000

 

 

$

900,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

   Stock Incentive Plan (3)

 

July 16,

2018

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

613,584

 

 

 

1,022,640

 

 

 

 

 

$

677,736

 

David W. Honeyfield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Annual Incentive Plan

 

 

 

 

$

225,000

 

 

$

450,000

 

 

$

900,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

   Stock Incentive Plan (3)

 

November 9,

2018

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

613,584

 

 

 

1,022,640

 

 

 

 

 

$

694,373

 

Maree K. Delgado

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Annual Incentive Plan

 

 

 

 

$

70,784

 

 

$

141,568

 

 

$

283,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

   Stock Incentive Plan (4)

 

July 31,

2018

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

72,124

 

 

$

127,659