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EOG » Topics » Change of Control Agreements

This excerpt taken from the EOG DEF 14A filed Mar 25, 2009.
Change of Control Agreements
 
Effective June 2005, each Named Officer, other than Mr. Garrison, entered into an Amended and Restated Change of Control Agreement. Under the Amended and Restated Change of Control Agreements, “change of control” is defined as:
 
  •  the acquisition by any person of beneficial ownership of 20% or more of either (A) the then-outstanding shares of our Common Stock or (B) the combined voting power of our then-outstanding voting securities (“Voting Securities”) entitled to vote generally in the election of directors; provided, however, that the following acquisitions will not constitute a change of control: (1) any acquisition directly from us, (2) any acquisition by us, (3) any acquisition by any employee benefit plan sponsored by us or our affiliates, (4) any acquisition by any corporation that complies with subclauses (A), (B) and (C) of the third bullet point below or (5) an acquisition by a Qualified Institutional Investor (as defined in the Amended and Restated Change of Control Agreement);
 
  •  individuals who constituted the Board as of May 3, 2005 (“Incumbent Director”) ceasing for any reason to constitute at least a majority of the Board, provided that any individual who becomes a director after May 3, 2005 shall be deemed to be an Incumbent Director if their election, or nomination for election by our stockholders, was approved by a vote of at least a majority of the then-Incumbent Directors (except in certain circumstances);
 
  •  consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of our assets or the acquisition of the assets or stock of another entity (“Business Combination”), other than a Business Combination (A) which would result in all or substantially all of the persons that were beneficial owners of our Common Stock and Voting Securities outstanding immediately prior to the Business Combination continuing to beneficially own more than 60% of the then-outstanding shares of Common Stock and the combined voting power of the then-outstanding Voting Securities, as the case may be, of the corporation resulting from such Business Combination, in substantially the same proportions as their ownership immediately prior to the Business Combination, (B) in which no person is or becomes the beneficial owner of 20% or more of the then-outstanding shares of our Common Stock or the combined voting power of our then-outstanding Voting Securities, except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of our Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
 
  •  approval by our stockholders of a complete liquidation or dissolution of EOG.
 
Under the Amended and Restated Change of Control Agreements, if a Named Officer’s employment is terminated within two years after a change of control:
 
  •  by us for any reason (other than for cause or by reason of death, disability or retirement);
 
  •  by the Named Officer under circumstances defined in the agreement as “good reason”; or
 
  •  by the Named Officer for any reason during the 30-day period beginning six months after a change of control;
 
then, the Named Officer will receive:
 
  •  the Named Officer’s base salary and compensation for earned but unused vacation time accrued through the termination date but not previously paid to the Named Officer;
 
  •  a severance benefit of 2.99 times his annual base salary plus two times his target annual bonus, each as in effect immediately prior to the change of control or, if increased, immediately prior to the termination date, whichever is greater;


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  •  Money Purchase Pension Plan contributions and Savings Plan matching amounts that would have been made if the Named Officer had continued to be employed for three years following the date of termination and, in the case of the Savings Plan matching amounts, assuming that the Named Officer had continued to contribute to the Savings Plan during such three-year period at their then-current contribution level;
 
  •  up to three years of uninterrupted participation in our medical and dental plans from time to time then in effect;
 
  •  an additional three years of age and service credits for eligibility in our retiree medical coverage;
 
  •  outplacement services, not to exceed $50,000; and
 
  •  reimbursement for any excise tax, interest and penalties incurred if payments or benefits received due to a change of control would be subject to an excise tax under Section 4999 of the Code.
 
If a Named Officer’s employment is terminated within two years of a change of control for cause or as a result of death, disability or retirement, the Named Officer will be entitled only to base salary and any other compensation and benefits earned and payable through the termination date.
 
This excerpt taken from the EOG DEF 14A filed Apr 4, 2008.
Change of Control Agreements
 
Effective June 2005, each Named Officer, other than Mr. Garrison, entered into an Amended and Restated Change of Control Agreement, which supersedes his employment agreement, to the extent an employment agreement was in effect, upon a change of control. Under the Amended and Restated Change of Control Agreements, “change of control” is defined as:
 
  •  the acquisition by any person of 20% or more of either (A) the then-outstanding shares of our Common Stock or (B) the combined voting power of our then-outstanding voting securities entitled to vote generally in the election of directors; provided, however, that the following acquisitions will not constitute a change of control: (i) any acquisition directly from us, (ii) any acquisition by us, (iii) any acquisition by any employee benefit plan sponsored by us or our affiliate, (iv) any acquisition by any corporation that complies with subclauses (A), (B) and (C) of clause (3) below or (v) an acquisition by a Qualified Institutional Investor (as defined in the Amended and Restated Change of Control Agreement);
 
  •  individuals who constituted the Board as of May 3, 2005 ceasing for any reason to constitute at least a majority of the Board (except in certain circumstances);
 
  •  consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of our assets or the acquisition of the assets or stock of another entity (“Business Combination”), other than a Business Combination (A) which would result in our voting securities outstanding immediately prior to the merger continuing to represent at least 60% of the voting power of our securities outstanding immediately after the Business Combination, (B) in which no person is or becomes the beneficial owner of 20% or more of the combined voting power of our then-outstanding voting securities, except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of our Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
 
  •  approval by our stockholders of a complete liquidation or dissolution of EOG.
 
Under the Amended and Restated Change of Control Agreements, if a Named Officer’s employment is terminated:
 
  •  by the acquiring company for any reason following a change of control (other than for cause or by reason of death or disability);
 
  •  by the Named Officer under circumstances defined in the agreement as “good reason;” or
 
  •  by the Named Officer for any reason during the 30 day period beginning six months after a change of control; then, the Named Officer will receive:
 
  •  the Named Officer’s base salary and compensation for earned but unused vacation time accrued through the termination date but not previously paid to the Named Officer;
 
  •  a severance benefit of 2.99 times his annual base salary plus two times his target annual bonus, each as in effect prior to the change of control or, if increased, on the date of termination, whichever is greater;
 
  •  Money Purchase Pension Plan contributions and Savings Plan matching amounts that would have been made if the Named Officer had continued to be employed for three years;
 
  •  three years of uninterrupted participation in our medical and dental plans;
 
  •  an additional three years of age and service credits for eligibility in our retiree medical coverage;
 
  •  outplacement services, not to exceed $50,000; and
 
  •  reimbursement for any excise tax, interest and penalties incurred if payments or benefits received due to a change of control would be subject to an excise tax under Section 4999 of the Code.


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If a Named Officer is terminated, following a change of control, for cause or as a result of death, disability or retirement, the Named Officer will be entitled only to salary and any other compensation and benefits earned and payable through the termination date.
 

EXCERPTS ON THIS PAGE:

DEF 14A
Mar 25, 2009
DEF 14A
Apr 4, 2008

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