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This excerpt taken from the EOG DEF 14A filed Mar 30, 2006. Severance Plans/Change of Control Provisions The Company maintains a Severance Plan that provides benefits to employees who are terminated for failing to meet performance objectives or standards, or who are terminated due to reorganization or economic factors. The amount of benefits payable for performance related terminations is based on length of service and may not exceed six weeks of pay. For those terminated as the result of reorganization or economic circumstances, the benefit is based on length of service and amount of pay up to a maximum payment of 26 weeks of base pay. In each case, if the employee signs a Waiver and Release of Claims Agreement, the severance pay benefits are doubled. Under no circumstances will the total severance pay benefit from the plan exceed 52 weeks of pay. Under the Company’s Amended and Restated Change of Control Severance Plan (“COC Severance Plan”), in the event of a change of control (as defined in the COC Severance Plan) of the Company, any eligible employee who is involuntarily terminated or terminates for good reason, both as defined in the COC Severance Plan, within two years following the change of control will receive severance benefits equal to two weeks of base pay multiplied by the number of full or partial years of service, plus one month of base pay for each $10,000 (or portion of $10,000) included in the employee’s annual base pay, plus one month of base pay for each 5% of annual incentive award opportunity under any approved plan. The minimum an employee can receive is six months of base pay. The maximum an employee can receive is the lesser of 2.99 times the employee’s average W-2 earnings over the past five years or three times the sum of the employee’s annual base pay and 100% of the employee’s annual incentive award opportunity under any approved plan. Inaddition, the COC Severance Plan provides 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 Internal Revenue Code. Officers of the Company have the same change of control severance benefits. However, on June 15, 2005, the Named Officers entered into Amended and Restated Change of Control Agreements, which supersede their Employment Agreements upon a change of control of the Company (as defined in the Amended and Restated Change of Control Agreements). In the event a Named Officer is involuntarily terminated or terminates for good reason within two years of a change of control of the Company, or voluntarily terminates for any reason during a 30-day window beginning six months after a change of control of the Company, the Amended and Restated Change of Control Agreement provides a) a minimum severance benefit of 2.99 times annual base salary plus two times target annual bonus, each as in effect prior to the change of control or if increased, on the date of termination, b) the 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, c) three years of medical and dental coverage, d) three years age and service credit for eligibility for the Company’s retiree medical coverage, and e) outplacement services not to exceed $50,000. In addition, the Amended and Restated Change of Control Agreements provide 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 Internal Revenue Code. In order to ensure continuity of operations in the event of a change of control of the Company, as defined in the COC Severance Plan, a retention bonus plan would become effective. To be eligible to receive the retention bonus, an employee must stay with the Company through the effective date of the change of control and be 15 employed by the acquiring company 180 days after the effective date, or be involuntarily terminated, as defined in the COC Severance Plan, by the acquiring company on or within 180 days after the effective date. Eligible employees would receive a bonus equal to the most recent bonus they had received under the Company’s Annual Bonus Program, payable upon the earlier of 180 days after the effective date of the change of control or upon severance. In addition, the Board of Directors determined that in the event of a change of control of the Company, as defined in the COC Severance Plan, holders of certain outstanding stock options granted under the Directors Stock Option Plan or the Company’s 1992 Stock Plan or 1994 Stock Plan, as part of either the Company’s bonus stock option program or the annual grants made to all employees of the Company, would be offered the opportunity to request that their rights under such grants be waived in return for a cash payment equal to 75 percent of the theoretical Black-Scholes value for each grant, as determined on the date a press release is issued announcing an event which, if approved or consummated, would constitute a change of control of the Company as defined in the COC Severance Plan. Holders of certain other outstanding stock options granted outside of the programs described above, would be offered the opportunity to request that their rights under such grants be waived in return for shares of Common Stock only upon an involuntary termination of employment, as defined in the COC Severance Plan. In all other cases involving a change of control of the Company, the terms of the applicable plan govern the treatment of stock options, restricted stock, stock appreciation rights and any other grants under that plan. This excerpt taken from the EOG DEF 14A filed Mar 30, 2005. Severance Plans/Change of Control Provisions The Company maintains a Severance Plan that provides benefits to employees who are terminated for failing to meet performance objectives or standards, or who are terminated due to reorganization or economic factors. The amount of benefits payable for performance related terminations is based on length of service and may not exceed six weeks of pay. For those terminated as the result of reorganization or economic circumstances, the benefit is based on length of service and amount of pay up to a maximum payment of 26 weeks of base pay. In each case, if the employee signs a Waiver and Release of Claims Agreement, the severance pay benefits are doubled. Under no circumstances will the total severance pay benefit from the plan exceed 52 weeks of pay.
Under the Company’s Change of Control Severance Plan, in the event of a change of control (as defined in the Change of Control Severance Plan) of the Company, any eligible employee who is involuntarily terminated or terminates for good reason, both as defined in the Change of Control Severance Plan, within two years following the change of control will receive severance benefits equal to two weeks of base pay multiplied by the number of full or partial years of service, plus one month of base pay for each $10,000 (or portion of $10,000) included in the employee’s annual base pay, plus one month of base pay for each 5% of annual incentive award opportunity under any approved plan. The minimum an employee can receive is six months of base pay. The maximum an employee can receive is the lesser of 2.99 times the employee’s average W-2 earnings over the past five years or three times the sum of the em
ployee’s annual base pay and 100% of the employee’s annual incentive award opportunity under any approved plan. In addition, the Change
13 of Control Severance Plan provides 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 Internal Revenue Code. Officers of the Company have the same change of control severance benefits. However, in 2001, the Named Officers entered into Change of Control Agreements, which supersede their Employment Agreements upon a change of control of the Company (as defined in the Change of Control Agreements). In the event a Named Officer is involuntarily terminated or terminates for good reason within two years of a change of control of the Company, or voluntarily terminates for any reason during a 30-day window beginning six months after a change of control of the Company, the Change of Control Agreement provides a) a minimum severance benefit of 2.99 times annual base salary plus two times annual bonus award opportunity, b) the 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, c) three years of medical and dental
coverage, d) three years age and service credit for eligibility for the Company’s retiree medical coverage, and e) outplacement services not to exceed $50,000. In addition, the Change of Control Agreements provide 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 Internal Revenue Code.
In order to ensure continuity of operations in the event of a change of control of the Company, as defined in the Company’s Change of Control Severance Plan, a retention bonus plan would become effective. To be eligible to receive the retention bonus, an employee must stay with the Company through the effective date of the change of control and be employed by the acquiring company 180 days after the effective date, or be involuntarily terminated, as defined in the Company’s Change of Control Severance Plan, by the acquiring company on or within 180 days after the effective date. Eligible employees would receive a bonus equal to the most recent bonus they had received under the Company’s Annual Bonus Program, payable upon the earlier of 180 days after the effective date of the change of control or upon severance.
In addition, in the event of a change of control of the Company, as defined in the Company’s Change of Control Severance Plan, holders of certain outstanding stock options granted under the Company’s Bonus Stock Option Program, the All-Employee Stock Option Program and the Directors Stock Option Plan would be offered the opportunity to request that their rights under such grants be waived in return for a cash payment equal to 75 percent of the theoretical Black-Scholes value for each grant, as determined on the date a press release is issued announcing a pending shareholder vote, tender offer, or other transaction which, if approved or consummated, would constitute a change of control of the Company as defined in the Company’s Change of Control Severance Plan. Holders of certain outstanding stock options granted outside of the programs described above, would be offered the opportunity to request
that their rights under such grants be waived in return for a cash payment only upon an involuntary termination of employment, as defined in the Company’s Change of Control Severance Plan.
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