EOG Resources (EOG)

Nonemployee directors can defer fees to a later specified date by participating in the 1996 Deferral Plan. Under the 1996 Deferral Plan, deferrals are invested into either a Flexible Deferral Account in which deferrals are treated as if they had been invested into various investment funds or into a Phantom Stock Account in which deferrals are treated as if they had purchased our Common Stock including reinvestment of dividends. In 2006, five of the nonemployee directors participated in the 1996 Deferral Plan.

Nonemployee directors participate in the Amended and Restated EOG Resources, Inc. 1993 Nonemployee Directors Stock Option Plan (the Directors Stock Option Plan), which was approved by our shareholders at the 2002 annual meeting. Under the terms of the Directors Stock Option Plan, each nonemployee director receives on the date of each annual meeting options to purchase 14,000 shares of our common stock at an exercise price equal to the fair market value of the common stock on the date of grant. In addition, each nonemployee director who is elected or appointed to the Board of Directors for the first time after an annual meeting is granted, on the date of such election or appointment, options to purchase 14,000 shares of common stock at an exercise price equal to the fair market value of the Common Stock on the date of grant. Options granted under the Directors Stock Option Plan vest 50% after one year and 100% after two years of service as a director following the date of grant. All options expire ten years from the date of grant. The grant date present value of each option grant is estimated using a Hull-White II Simulation Model assuming a dividend yield of 0.3%, expected volatility of 34.9%, risk-free interest rate of 5.1% and a weighted average expected life of 3.5 years. Based on the Hull-White II Simulation Model, using the above assumptions, the value of the options granted on May 2, 2006 is $23.48 per share. The value of the options granted on May 3, 2005 is $14.61 per share. The value of the options granted on July 2, 2004 is $9.15 per share. The value of the options granted on May 4, 2004 is $9.08 per share. Following is the aggregate number of options outstanding as of December 31, 2006 for each nonemployee director: Mr. Alcorn, 49,000 options; Mr. Crisp, Mr. Stevens and Mr. Steward, 42,000 options each; Mr. Textor, 21,000 options; and Mr. Wisner, 112,000 options.

All Other Compensation for Mr. Alcorn, Mr. Crisp and Mr. Steward consists solely of reimbursement for EOG requested spouse travel. All Other Compensation for Mr. Textor consists solely of charitable matching contributions made by us.