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This excerpt taken from the EOG DEF 14A filed Apr 4, 2008. Performance
Stock Awards and Performance Unit Awards
The Compensation Committee will determine the material terms of
performance awards, including the amount of the award, any
vesting or transferability restrictions, and the performance
period over which the performance goal of such award shall be
measured. Subject to the terms and conditions of the 2008 Plan,
each holder of a performance stock award will have all the
rights of a stockholder with respect to the shares of our Common
Stock issued to the holder pursuant to the award during any
period in which such issued shares are subject to forfeiture and
restrictions on transfer, including the right to vote such
shares. A holder of a performance unit award will not have the
rights of a stockholder of EOG.
All dividends and distributions (whether in cash, stock or
otherwise) on unvested performance stock or performance unit
awards will not be paid but will be credited for the future
benefit of the recipient. At such time as vested performance
stock or performance unit awards are paid, all accumulated
dividends and distributions attributable to the vested award
(without interest) will be paid in cash, shares of our Common
Stock or such other form as we determine. Any dividends and
distributions on non-vested awards will be forfeited in the same
manner and at the same time as the respective performance stock
or performance unit awards to which they are attributable are
forfeited.
Any performance goal for a particular performance stock award or
performance unit award must be established by the Compensation
Committee prior to the earlier of (i) 90 days after
the commencement of the period of service to which such
performance goal relates or (ii) the lapse of
25 percent of the period of service. In any event, the
performance goal must be established while the outcome is
substantially uncertain.
Performance goals for awards will be designed to support the
business strategy and align the interests of our executive
officers and non-employee directors with those of our
stockholders. For performance stock awards and performance unit
awards that are intended to qualify as performance-based
compensation under Section 162(m) of the Code, performance
goals will be based on one or more of the following business
criteria:
Achievement of such goals may be measured individually or in any
combination, at the discretion of the Compensation Committee; on
an absolute basis or relative to a target, to a designated
comparison group, to results in other periods or to other
external measures; and including or excluding items that could
affect the measurement, such as extraordinary, unusual
and/or
nonrecurring gains or losses, litigation or claim judgments or
settlements, material changes in tax laws, acquisitions,
divestitures, the cumulative effect of accounting changes, asset
write-downs, restructuring charges or the results of
discontinued operations.
Performance unit awards will be paid in shares of our Common
Stock or in cash, in accordance with procedures established by
the Compensation Committee. Any payment under a performance unit
award will be made either (i) by a date that is no later
than two and one-half months after the end of the fiscal year in
which the performance unit payment is no longer subject to a
“substantial risk of forfeiture” (as that term is
defined in the 2008 Plan) or (ii) at a time that is
permissible under Section 409A of the Code.
The award of performance stock or performance units under the
2008 Plan may also be in lieu of cash payments under our
Executive Officer Annual Bonus Plan, based upon achievement of
the performance criteria established under the terms of our
annual bonus program.
Other terms and conditions applicable to performance awards may
be determined by the Compensation Committee at the time of grant.
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