<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
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))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
EOG Resources, Inc.
____________________________________________________________
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
[EOG RESOURCES LOGO]
EOG RESOURCES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 9, 2000
TO THE SHAREHOLDERS:
Notice is hereby given that the annual meeting of shareholders of EOG
Resources, Inc. (the "Company") will be held in the La Salle "A" Ballroom of the
Doubletree Hotel at Allen Center, 400 Dallas Street, Houston, Texas, at 2:00
p.m. Houston time on Tuesday, May 9, 2000, for the following purposes:
1. To elect five directors of the Company to hold office until the next
annual meeting of shareholders and until their respective successors are
duly elected and qualified;
2. To ratify the Board of Directors' appointment of Arthur Andersen LLP,
independent public accountants, as auditors for the Company for the year
ending December 31, 2000; and
3. To transact such other business as may properly be brought before the
meeting or any adjournments thereof.
Holders of record of Common Stock of the Company at the close of business
on March 13, 2000, will be entitled to notice of and to vote at the meeting or
any adjournments thereof.
Shareholders who do not expect to attend the meeting are encouraged to vote
by phone, vote via the Internet or vote by returning a signed proxy card in the
enclosed postage-paid envelope.
By Order of the Board of Directors,
PATRICIA L. EDWARDS
Vice President, Human Resources,
Administration
& Corporate Secretary
Houston, Texas
March 30, 2000
<PAGE> 3
[EOG RESOURCES LOGO]
EOG RESOURCES, INC.
PROXY STATEMENT
The enclosed form of proxy is solicited by the Board of Directors of EOG
Resources, Inc. (the "Company" or "EOG") to be used at the annual meeting of
shareholders to be held in the La Salle "A" Ballroom of the Doubletree Hotel at
Allen Center, 400 Dallas Street, Houston, Texas, at 2:00 p.m. Houston time on
Tuesday, May 9, 2000 (the "Annual Meeting"). The mailing address of the
principal executive offices of the Company is 1200 Smith Street, Suite 300,
Houston, Texas 77002. This proxy statement and the related proxy are to be first
sent or given to the shareholders of the Company on approximately March 30,
2000. Any shareholder giving a proxy may revoke it at any time provided written
notice of such revocation is received by the Vice President, Human Resources,
Administration & Corporate Secretary of the Company before such proxy is voted;
otherwise, if received in time, properly completed proxies will be voted at the
Annual Meeting in accordance with the instructions specified thereon.
Shareholders attending the Annual Meeting may revoke their proxies and vote in
person.
Holders of record at the close of business on March 13, 2000, of Common
Stock of the Company, par value $.01 per share (the "Common Stock"), will be
entitled to one vote per share on all matters submitted to the meeting. On March
13, 2000, the record date, there were outstanding 117,181,813 shares of Common
Stock. There are no other voting securities outstanding.
The Company's annual report for the year ended December 31, 1999, is being
mailed herewith to all shareholders entitled to vote at the Annual Meeting.
However, the annual report does not constitute a part of the proxy soliciting
materials.
ITEM 1.
ELECTION OF DIRECTORS
At the Annual Meeting, five directors are to be elected to hold office
until the next succeeding annual meeting of the shareholders and until their
respective successors have been elected and qualified. All of the nominees are
currently directors of the Company. Proxies cannot be voted for a greater number
of persons than the number of nominees named on the enclosed form of proxy. A
plurality of the votes cast in person or by proxy by the holders of Common Stock
is required to elect a director. Accordingly, under Delaware law, abstentions
and broker non-votes (which occur if a broker or other nominee does not have
discretionary authority and has not received instructions with respect to a
particular item) would not have the same effect as a vote withheld with respect
to a particular director. Shareholders may not cumulate their votes in the
election of directors.
It is the intention of the persons named in the enclosed proxy to vote such
proxy "FOR" the election of the nominees named herein. Should any nominee become
unavailable for election, discretionary authority is
<PAGE> 4
conferred to vote for a substitute. The following information regarding the
nominees, their principal occupations, employment history and directorships in
certain companies is as reported by the respective nominees.
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------
[PHOTO] FRED C. ACKMAN, 69
Director since 1989
Mr. Ackman has been a consultant to the oil and gas industry
for over six years and has interests in ranching and
investments.
- -------------------------------------------------------------------------------------
[PHOTO] MARK G. PAPA, 53
Director since 1998
Mr. Papa was elected Chairman of the Board and Chief
Executive Officer in August 1999, President and CEO and
Director of the Company in September 1998, President and
Chief Operating Officer in September 1997, President in
December 1996 and was President North America Operations
from February 1994 to September 1999. From May 1986 through
January 1994, Mr. Papa served as Senior Vice President --
Operations. Mr. Papa joined Belco Petroleum Corporation, a
predecessor of the Company, in 1981.
- -------------------------------------------------------------------------------------
[PHOTO] EDWARD RANDALL, III, 73
Director since 1990
Mr. Randall's principal occupation is investments. Mr.
Randall is also a director of Kinder-Morgan Energy Partners
LP, and PaineWebber Group Inc.
- -------------------------------------------------------------------------------------
[PHOTO] EDMUND P. SEGNER, III, 46
Director since 1999
Mr. Segner became President and Chief of Staff and Director
of the Company in August 1999. He became Vice Chairman and
Chief of Staff in September 1997. He was also a Director of
the Company from January 1997 to October 1997. Mr. Segner
joined Enron Corp. in 1988 and was Executive Vice President
and Chief of Staff.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------------------
[PHOTO] FRANK G. WISNER, 61
Director since 1997
Mr. Wisner has served as Vice Chairman of American International Group Inc. since 1997,
following his retirement as U.S. Ambassador to India. American International Group Inc. is
an insurance company, which provides risk insurance to companies investing in foreign
operations. Mr. Wisner's more than 35-year career with the U.S. State Department,
primarily in Africa, Asia and Washington, D.C., included serving as U.S. Ambassador to the
Philippines, Egypt and Zambia.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ON FEBRUARY 15, 2000
The Company knows of no one who beneficially owns in excess of 5% of the
Common Stock of the Company except as set forth in the table below:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
-----------------------------
NAME AND ADDRESS SOLE VOTING AND INVESTMENT PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER INVESTMENT POWER POWER ONLY OF CLASS
- -------------- ------------------- ---------------- ---------- --------
<S> <C> <C> <C> <C>
Common Enron Corp. 11,500,000(1) 9.7%
1400 Smith Street
Houston, TX 77002
Massachusetts Financial 6,574,380 243,100 5.7%
Services Company
500 Boylston Street
Boston, MA 02116
</TABLE>
- ---------------
(1) Until the later of August 16, 2001 or the date Enron Corp. ceases to
beneficially own more than 5% of the issued and outstanding shares of the
Common Stock of the Company, shares must be voted in the manner, if any,
recommended by the Board of Directors of the Company.
SECURITY OWNERSHIP OF THE BOARD OF DIRECTORS AND MANAGEMENT ON FEBRUARY 15, 2000
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-------------------------------------------
SOLE VOTING
SOLE VOTING SHARED VOTING AND LIMITED
AND AND OR NO
INVESTMENT INVESTMENT INVESTMENT PERCENT
TITLE OF CLASS NAME POWER(1) POWER POWER(2) OF CLASS
-------------- ---- ----------- ------------- ----------- --------
<S> <C> <C> <C> <C> <C>
EOG Resources, Inc. Fred C. Ackman........................... 52,000 *
Common Stock Barry Hunsaker, Jr....................... 73,905 7,216 *
Loren M. Leiker.......................... 187,805 13,021 *
Mark G. Papa............................. 603,910 24,000 5,142 *
Edward Randall, III...................... 56,000 *
Edmund P. Segner, III.................... 175,707 3,384 *
Gary L. Thomas........................... 383,026 560 *
Frank G. Wisner.......................... 28,000 *
All directors and executive officers as a
Group (10 in number)................... 1,846,618 24,000 34,574 1.60
</TABLE>
- ---------------
* Less than 1%.
(Notes continued on following page)
3
<PAGE> 6
(1) The number of shares of Common Stock of the Company subject to stock options
exercisable within 60 days after February 15, 2000 is as follows: Mr. Ackman
52,000 shares; Mr. Hunsaker 73,605 shares; Mr. Leiker 173,265 shares; Mr.
Papa 578,910 shares; Mr. Randall 52,000 shares; Mr. Segner 150,000 shares;
Mr. Thomas 339,990 shares; Mr. Wisner 28,000 shares; and all directors and
executive officers as a group, 1,728,835 shares.
(2) Includes shares held under the Company's Savings Plan (the "Savings Plan").
Participants in the Savings Plan have sole voting power and limited
investment power with respect to shares of Common Stock of the Company in
the Savings Plan. Also includes restricted shares of Common Stock of the
Company held under the Company's 1992 Stock Plan for which participants have
sole voting power and no investment power until such shares vest in
accordance with plan provisions. After vesting, the participant has sole
voting and investment powers. Does not include 3,344 phantom stock units
held by Mr. Papa or 4,864 phantom stock units held by Mr. Leiker under the
Company's 1992 Stock Plan for which participants have no voting or
investment powers until such shares vest in accordance with plan provisions.
After vesting, the participant has sole voting and investment powers.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors uses working committees with functional
responsibility in the more complex recurring areas where disinterested oversight
is required. The Audit Committee is the communication link between the Board of
Directors and independent auditors of the Company. The Audit Committee
recommends to the Board of Directors the appointment of independent public
accountants as auditors for the Company and reviews as deemed appropriate the
scope of the audit, the accounting policies and reporting practices, the system
of internal controls, compliance with policies regarding business conduct and
other matters. The Audit Committee met three times during the year ended
December 31, 1999, and is currently composed of Messrs. Ackman (Chairman),
Randall and Wisner.
The Compensation Committee is responsible for administration of the Company
stock plans and approval of compensation arrangements of senior management. The
Compensation Committee met six times during the year ended December 31, 1999,
and is currently composed of Messrs. Randall (Chairman), Ackman and Wisner.
The International Strategy Committee provides a forum for the consideration
of international business opportunities and for the discussion of international
business and political developments that could affect project operations and
development. The International Strategy Committee met once during the year ended
December 31, 1999, and is currently composed of Messrs. Wisner (Chairman),
Ackman and Randall.
The Company does not have a standing nominating committee.
The Board of Directors held three regularly scheduled meetings and five
special meetings during the year ended December 31, 1999. Each director attended
at least 75% of the total number of meetings of the Board of Directors and the
committees on which the director served.
4
<PAGE> 7
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
During 1999, each director who was not an employee of the Company or its
affiliates ("nonemployee director"), received annual fees of $35,000 for serving
as a director and $10,000 for each committee of which such director served as a
Chairman. In addition, Mr. Randall and Mr. Ackman were each paid a fee of
$135,000 for their service on the special committee that was formed in 1999 to
evaluate both the possible sale of the Company's Common Stock to a third party
and the Share Exchange (see Certain Transactions on page 14). Total directors
fees earned in 1999 were $426,875.
The Company maintains the EOG Resources, Inc. 1996 Deferral Plan (the "1996
Deferral Plan") under which nonemployee directors can defer fees to a later
specified date. The 1996 Deferral Plan credits interest based on fund elections
chosen by participants. In 1999, one nonemployee director participated in the
1996 Deferral Plan.
Nonemployee directors also participate in the EOG Resources, Inc. 1993
Nonemployee Director Stock Option Plan (the "Director Stock Option Plan"), which
was approved by Company shareholders at the 1993 annual meeting. Under the terms
of the Director Stock Option Plan, each nonemployee director receives on the
date of each annual meeting an option to purchase 7,000 shares of 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, an option to purchase
7,000 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 Director
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. During 1999, Messrs. Ackman, Randall and Wisner were each granted
7,000 options at an exercise price of $20.00.
REPORT FROM THE COMPENSATION COMMITTEE REGARDING
EXECUTIVE COMPENSATION
Compensation for Company officers is administered by the Compensation
Committee of the Board of Directors (the "Committee"), which is composed
exclusively of outside directors. It is the responsibility of the Committee to
develop compensation philosophy, authorize salary increases, annual bonuses and
long-term incentive grants for executive officers, and approve other incentive
programs, including stock-based programs, consistent with the stated philosophy.
The Committee believes that appropriately balanced compensation components
contribute to the success of the Company. Hay Management Consultants provides an
annual analysis of executive base salaries, annual bonuses and long-term
incentives paid by the Company as compared to those paid by a number of the
industry peer companies included in the "Comparative Stock Performance" section.
The Committee believes that the best compensation philosophy is to put a
substantial portion of the total compensation package at risk, tied to both the
financial results achieved by the Company and the performance of the Common
Stock of the Company. The current challenge facing the oil and gas industry is
attraction and retention of high quality technical talent. The Committee
continues to support the practice of paying base salaries that are above the
average of the competitive market, and bonuses and long term incentives which
deliver above average compensation if financial results and/or shareholder
return exceed the average achieved by peer companies.
5
<PAGE> 8
Annual Bonus Program. All employees are eligible to receive annual bonuses
under the Company's Annual Bonus Program (the "Program"). Each year, a target
bonus pool is established using an approach whereby each position in the Company
is assigned a market competitive target bonus, expressed as a percentage of
salary. The individual bonus targets are then added together to create the
target bonus pool. At the end of each year, the Committee approves the actual
funding relative to the target based on management's report of the actual
performance of the Company relative to pre-established goals. The goals
established for the Company cover factors such as rate of return on exploration
and development expenditures, finding costs, production and reserve volume
growth and net income. These goals are designed to address both current
financial performance and the long-term development of the Company (no specific
formula is used for weighting the individual performance factors). The target
pool allocated to each division or department may then be adjusted up or down,
based on the individual division/department's results. Individual employee
bonuses are further determined based on individual performance. For bonuses paid
in 2000 for 1999 performance, the Committee approved delivery of 20% of any
bonus of $5,000 or greater in phantom stock units that vest after five years,
instead of cash. In addition, employees can choose to receive the cash portion
of their annual bonus in a combination of cash, stock options and/or phantom
stock units.
Stock Plans. The Company's 1992 and 1994 Stock Plans (the "Stock Plans")
comprise the long-term incentive component for executive officers and other
selected employees of the Company. The purposes of the Stock Plans are to
encourage employees who receive grants to develop a proprietary interest in the
performance of the Company, to generate an increased incentive to contribute to
the future success of the Company, thus enhancing the value of the Company for
the benefit of shareholders and to enhance the ability of the Company and its
subsidiaries to attract and retain individuals with qualifications essential to
the progress, growth and profitability of the Company. Under the Stock Plans,
the Committee is authorized to grant awards of stock options, restricted stock
and phantom stock units. Stock options are normally granted to executive
officers and other selected employees on an annual basis. Stock options normally
vest over four years, are exercisable for ten years and are granted at an option
price equal to the fair market value of Common Stock on the date of grant. Stock
options granted in lieu of bonus cash vest immediately and are exercisable for
seven years. The awards under the Stock Plans are made at levels that are not
anticipated to generate significant benefits relative to the industry peer group
unless the Common Stock performs correspondingly well during the life of the
grant. With the success of the Company (and the resulting benefits to its
shareholders), this component becomes a larger part of the total compensation
package. Occasionally, the Committee grants restricted stock or phantom stock
units for specific reasons such as retention or to address external market
pressures or in lieu of cash bonuses, as discussed previously.
Chief Executive Officer Compensation. Under the provisions of Mr. Papa's
employment agreement with the Company, which he entered into on November 7,
1997, Mr. Papa's annual salary will be no less than $400,000. In July 1999, Mr.
Papa was granted 250,000 EOG stock options that were priced at the fair market
value of Common Stock on the date of grant, consistent with the stated long-term
incentive objectives. The options vest over four years, and are exercisable for
ten years. In August 1999, Mr. Papa was elected Chairman and Chief Executive
Officer and his salary was increased to $550,020. In February 2000, Mr. Papa was
paid a bonus for 1999 performance consisting of $484,000 (of which he chose to
receive 90% in cash and 10% in phantom stock units) and 11,710 phantom stock
units that vest after five years. In determining the level of Mr. Papa's
compensation, the Committee applies the factors discussed above.
6
<PAGE> 9
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code, as amended, generally disallows a tax deduction to public
companies for compensation over $1 million paid to the Chief Executive Officer
and the four other most highly compensated executive officers of a company, as
reported in that company's proxy statement. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. The Company has structured the key component of its long-term incentives in
the form of stock option grants that comply with the statute. As discussed
previously, restricted stock and phantom stock units are granted occasionally,
which would not qualify as performance-based compensation under the statute.
Compensation Committee
Edward Randall, III (Chairman)
Fred C. Ackman
Frank G. Wisner
7
<PAGE> 10
COMPARATIVE STOCK PERFORMANCE
The performance graph shown below was prepared by Value Line, Inc., for use
in this proxy statement. As required by applicable rules of the Securities and
Exchange Commission (the "SEC"), the graph was prepared based upon the following
assumptions:
1. $100 was invested on December 31, 1994 in Common Stock of EOG, the
Standard & Poors 500 (the "S&P 500") and a peer group of independent
exploration and production companies (the "Peer Group").
2. The investments in the Peer Group are weighted based on the market
capitalization of each individual company within the Peer Group at the
beginning of each year.
3. Dividends are reinvested on the ex-dividend dates.
The companies that comprise the Peer Group are as follows: Anadarko
Petroleum Corporation, Apache Corporation, Burlington Resources Inc., Noble
Affiliates, Inc., Oryx Energy Company (acquired by Kerr-McGee in February 1999),
Pioneer Natural Resources Company, Santa Fe Snyder Corp., Ocean Energy, Inc.
(formerly Seagull Energy Corporation), Union Pacific Resources Company, Union
Texas Petroleum Holdings Inc. (acquired by Atlantic Richfield Company in June
1998) and Vastar Resources, Inc.
COMPARATIVE TOTAL RETURNS
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
EOG Resources Inc., Standard & Poors 500 and Peer Group
(Performance Results Through December 31, 1999)
[GRAPH]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EOG RESOURCES INC. 128.76 136.11 114.88 94.12 96.45
STANDARD & POORS 500 137.50 169.47 226.03 290.22 349.08
PEER GROUP 117.88 149.32 137.98 99.49 115.65
</TABLE>
8
<PAGE> 11
EXECUTIVE COMPENSATION
The following table summarizes certain information regarding compensation
paid or accrued during each of the last three fiscal years to the Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ALL OTHER
ANNUAL COMPENSATION LONG-TERM COMPENSATION COMPENSATION
------------------------------------ ----------------------------------- ------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP
SALARY BONUS COMPENSATION AWARDS OPTIONS/ PAYOUTS
NAME & PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2) SARS(#) ($) ($)(3)
------------------------- ---- -------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mark G. Papa 1999 $462,520 $435,600 $12,000 $ 0 250,000 $ 0 $21,346
Chairman and Chief 1998 $400,020 $400,000 $11,500 $ 68,761 367,500 $ 0 $ 3,260
Executive Officer 1997 $364,592 $ 55,000 $ 8,660 $ 0 45,130 $ 0 $ 1,063
Edmund P. Segner, III(4) 1999 $381,252 $372,000 $10,500 $ 0 150,000 $ 0 $14,229
President and Chief of 1998 $320,833 $350,000 $ 9,850 $ 0 175,000 $ 0 $ 2,860
Staff 1997 $238,125 100,000
Loren M. Leiker 1999 $255,418 $184,000 $ 7,232 $ 0 30,000 $ 0 $10,982
Executive Vice President, 1998 $241,333 $195,000 $ 6,300 $305,641 65,000 $ 0 $ 3,257
Exploration & Development 1997 $195,833 $160,000 $ 1,625 $ 0 27,655 $ 0 $ 1,063
Gary L. Thomas 1999 $255,430 $184,000 $ 6,890 $ 0 30,000 $ 0 $12,202
Executive Vice President 1998 $237,638 $180,000 $54,816 $ 0 157,500 $ 0 $ 2,994
North America Operations 1997 $205,000 $100,000 $ 2,570 $ 0 28,560 $ 0 $ 1,063
Barry Hunsaker, Jr. 1999 $258,335 $168,000 $ 6,200 $ 0 15,000 $ 0 $ 8,803
Senior Vice President and 1998 $252,500 $150,000 $ 6,300 $143,938 85,000 $ 0 $ 1,333
General Counsel 1997 $237,500 $100,000 $ 6,525 $ 0 13,065 $ 0 $ 0
</TABLE>
- ---------------
(1) No Named Officer had "Perquisites and Other Personal Benefits" with a value
greater than the lesser of $50,000 or 10% of reported salary and bonus. The
Company maintains the 1996 Deferral Plan under which payment of base salary
and annual bonus may be deferred to a later specified date. The 1996
Deferral Plan credits interest based on fund elections chosen by
participants. Since earnings on deferred compensation invested in
third-party investment vehicles, comparable to mutual funds, need not be
reported, no interest has been reported as Other Annual Compensation under
the 1996 Deferral Plan during 1997, 1998 and 1999. Includes reimbursement of
relocation expenses in 1998 for Mr. Thomas. Other Annual Compensation also
includes cash perquisite allowances.
(2) Following is the aggregate number of shares of unreleased restricted stock
and phantom stock units and its value as of December 31, 1999, for each of
the Named Officers: Mr. Papa, 28,344 shares valued at $497,792; Mr. Segner,
3,334 shares valued at $58,553; Mr. Leiker, 34,864 shares valued at
$612,299; Mr. Thomas, 20,000 shares valued at $351,250; and Mr. Hunsaker,
7,000 shares valued at $122,938. Dividend equivalents accrue from the date
of grant and become payable effective with the vesting date of the shares.
Restricted stock granted to Mr. Segner on September 9, 1997, vests 33% per
year, commencing on the first anniversary of the date of grant. Restricted
stock granted to Messrs. Leiker and Hunsaker and phantom stock units granted
to Messrs. Papa and Leiker on February 11, 1998, vest five years from date
of grant. Upon 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, all restrictions placed
on each share of non-vested restricted stock or phantom stock units shall
lapse and such shares will become fully vested released securities.
(3) Includes the value as of each year-end of Enron Corp. Common Stock allocated
during that year to employees' special subaccounts under the Enron Corp.
Employee Stock Ownership Plan. Included in 1998 and 1999 are matching
contributions to employees' Company Savings Plan accounts. Included in 1999
is the Company's contribution on behalf of each employee to the Money
Purchase Pension Plan.
(4) Mr. Segner received grants of stock options and restricted stock when he
became Vice Chairman and Chief of Staff of the Company in September 1997.
However, Mr. Segner did not become an employee and did not begin receiving
compensation from the Company until February 1998.
9
<PAGE> 12
STOCK OPTION GRANTS DURING 1999
The following table sets forth information with respect to grants of stock
options to the Named Officers reflected in the Summary Compensation Table and
all employee optionees as a group. No stock appreciation rights ("SARs") units
were granted during 1999, and none are outstanding.
<TABLE>
<CAPTION>
1999 GRANTS
--------------------------------------------------------
PERCENT OF
OPTIONS/ TOTAL OPTIONS
SARS GRANTED TO AVERAGE
GRANTED EMPLOYEES IN OPTION PRICE EXPIRATION
NAME/GROUP (#)(2) FISCAL YEAR PER SHARE DATE
- ---------- --------- -------------- ------------ ----------
NAMED OFFICERS
- --------------
<S> <C> <C> <C> <C>
Mark G. Papa 250,000(4) 20.1 19.75 7/19/09
Edmund P. Segner, III 150,000(4) 12.1 19.75 7/19/09
Loren M. Leiker 30,000(5) 2.4 20.00 6/28/09
Gary L. Thomas 30,000(5) 2.4 20.00 6/28/09
Barry Hunsaker, Jr. 15,000(5) 1.2 20.00 6/28/09
All Optionees 1,244,135 100.0 19.8768(6) 2007-2009
All Shareholders N/A N/A N/A N/A
Optionees' gain as % of all
shareholders' gain N/A N/A N/A
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM(1)
-----------------------------------------
NAME/GROUP 0%(3) 5% 10%
- ---------- ----- -------------- --------------
NAMED OFFICERS
- --------------
<S> <C> <C> <C>
Mark G. Papa $ 0 $ 3,105,167 $ 7,869,103
Edmund P. Segner, III 0 1,863,100 4,721,462
Loren M. Leiker 0 377,337 956,245
Gary L. Thomas 0 377,337 956,245
Barry Hunsaker, Jr. 0 188,668 478,123
All Optionees 0 15,552,201 39,412,331
All Shareholders 0 1,488,856,082 3,773,053,629
Optionees' gain as % of all
shareholders' gain N/A 1.04% 1.04%
</TABLE>
- ---------------
(1) The dollar amounts under these columns represent the potential realizable
value of each grant of options assuming that the market price of the
underlying security appreciates in value from the date of grant at the 5%
and 10% annual rates prescribed by the SEC. These calculations are not
intended to forecast possible future appreciation, if any, of the price of
Company Common Stock.
(2) Upon 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, stock options shall vest and be
fully exercisable.
(3) An appreciation in stock price, which will benefit all shareholders, is
required for optionees to receive any gain. A stock price appreciation of
zero percent would render the option without value to the optionees.
(4) Stock options awarded on July 19, 1999 that vest at the cumulative rate of
20% per year, commencing on the date of grant.
(5) Stock options awarded on June 28, 1999 that vest at the cumulative rate of
20% per year, commencing on the date of grant.
(6) Weighted average grant price for all stock options for the purchase of
Company Common Stock granted to employees in 1999.
(7) Appreciation for all optionees is calculated using the maximum allowable
option term of ten years, even though in some cases the actual option term
is less than ten years. Appreciation for all shareholders is calculated
using an assumed ten-year term, the weighted average exercise price for all
optionees ($19.8768) and the number of shares of Company Common Stock
outstanding on December 31, 1999 (119,104,554).
10
<PAGE> 13
AGGREGATED STOCK OPTION/SARS EXERCISES DURING 1999 AND STOCK OPTION/SARS VALUES
AS OF
DECEMBER 31, 1999
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during the last fiscal year and
unexercised options and SARs held as of the end of the fiscal year:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS OPTIONS/SARS
SHARES AT DECEMBER 31, 1999(1) AT DECEMBER 31, 1999
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark G. Papa.......................... 0 $0 557,035 435,000 $1,106,563 $607,500
Edmund P. Segner, III................. 0 $0 150,000 275,000 $ 236,250 $354,375
Loren M. Leiker....................... 0 $0 157,015 81,750 $ 54,250 $ 81,000
Gary L. Thomas........................ 0 $0 335,615 127,750 $ 555,500 $253,125
Barry Hunsaker, Jr. .................. 0 $0 68,605 71,180 $ 101,250 $151,875
</TABLE>
- ---------------
(1) There are no SARs applicable to the Named Officers.
RETIREMENT AND SUPPLEMENTAL BENEFIT PLANS
The Company maintains a Savings Plan, that qualifies under Section 401(k)
of the Internal Revenue Code, as amended, under which the Company currently
matches 100% of employees' pre-tax contributions up to 6% of annual base salary.
The Company also maintains a Money Purchase Pension Plan, under which the
Company contributes from 3% to 9% of an employee's annual base salary, depending
on the employee's age and years of service with the Company. Following are the
current contribution percentages for the Named Officers: Mr. Papa, 9%; Mr.
Segner, 7%; Mr. Leiker, 7%; Mr. Thomas, 9%; and Mr. Hunsaker, 7%. In addition,
the Company may make contributions into the 1996 Deferral Plan in the event of a
reduction in an employee's benefits under the Savings Plan or Money Purchase
Pension Plan due to either statutory and/or plan earnings limits or the
employee's deferral of salary into the 1996 Deferral Plan.
Under the terms of the Share Exchange, participation in the Enron Corp.
Executive Supplemental Survivor Benefits Plan (the "Survivor Benefit Plan") was
grandfathered for Messrs. Papa and Segner. In the event of death after
retirement, the Survivor Benefit Plan provides an annual benefit to the
participant's spouse equal to 50% of the participant's annual base salary at
retirement, paid for ten years. The Survivor Benefit Plan also provides that in
the event of death before retirement, the participant's spouse receives an
annual benefit equal to 30% of the participant's annual base salary at death,
paid for the life of the participant's spouse.
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 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. 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.
11
<PAGE> 14
Under the Company's Change of Control Severance Plan, in the event of a
change of control of the Company, any eligible employee who is involuntarily
terminated 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. Officers of the Company have the same
change of control severance benefits. However, some have higher minimum benefits
under contractual arrangements. For a further description of severance
arrangements under employment agreements, see "Employment Contracts" below.
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.
EMPLOYMENT CONTRACTS
Mr. Papa entered into an employment agreement with the Company on November
1, 1997 as President and Chief Operating Officer of the Company at a minimum
annual salary of $400,000. Pursuant to the employment agreement, as amended, Mr.
Papa currently serves as Chairman of the Board and Chief Executive Officer. In
the event of his involuntary termination, Mr. Papa will receive two times his
then current annual base salary, plus two times his annual bonus award
opportunity, plus the value of unvested stock options based on the difference
between the Company's stock price at termination and the grant price of such
options. The employment agreement, as amended, also provides that if Mr. Papa is
involuntarily terminated within two years of a change of control of the Company,
as defined in the Company's Change of Control Severance Plan, he will be
entitled to minimum severance pay equal to 2.99 times his annual base salary,
plus two times his annual bonus award opportunity. In addition, Mr. Papa will be
entitled to be reimbursed for any excise taxes, interest and penalties which may
be payable if payments or benefits he receives due to a change of control create
an excise tax liability under Section 280G of the Internal Revenue Code. The
employment
12
<PAGE> 15
agreement contains a noncompete provision applicable in the event of Mr. Papa's
termination of employment. However, in the event of involuntary termination due
to change of control, the noncompete provision in Mr. Papa's employment
agreement will be waived. The employment agreement, as amended, expires on
October 31, 2001.
Mr. Segner entered into an employment agreement with the Company on
September 1, 1998 as Vice Chairman and Chief of Staff with a minimum annual
salary of $350,000. Pursuant to the employment agreement, as amended, Mr. Segner
currently serves as President and Chief of Staff. In the event of his
involuntary termination, Mr. Segner will receive two times his then current
annual base salary, plus two times his annual bonus award opportunity, plus the
value of unvested stock options based on the difference between the Company's
stock price at termination and the grant price of such options. The employment
agreement, as amended, also provides that if Mr. Segner is involuntarily
terminated within two years of a change of control of the Company, as defined in
the Company's Change of Control Severance Plan, Mr. Segner will be entitled to
minimum severance equal to 2.99 times his then current annual base salary, plus
two times his annual bonus award opportunity. In addition, Mr. Segner will be
entitled to reimbursement for any excise taxes, interest and penalties which may
be payable if payments or benefits he receives due to a change of control create
an excise tax liability under Section 280G of the Internal Revenue Code. The
employment agreement contains a noncompete provision applicable in the event of
Mr. Segner's termination of employment. However, in the event of involuntary
termination due to change of control, the noncompete provision in Mr. Segner's
employment agreement will be waived. The employment agreement, as amended,
expires on August 31, 2001.
Mr. Leiker entered into an employment agreement with the Company on March
1, 1998 as Senior Vice President, Exploration, with a minimum annual salary of
$250,000. Pursuant to the employment agreement, as amended, Mr. Leiker currently
serves as Executive Vice President, Exploration and Development. In the event of
his involuntary termination, Mr. Leiker will receive 125% of his then current
monthly base salary as if his employment had continued for the remaining term of
the agreement, which expires on February 28, 2003. If Mr. Leiker is
involuntarily terminated within two years of a change of control of the Company,
as defined in the Company's Change of Control Severance Plan, he will be
entitled to minimum severance pay equal to the greater of 125% of his then
current monthly base salary as if his employment had continued for the remaining
term of the agreement or the sum of 2.99 times his then current annual base
salary plus two times his annual bonus award opportunity. In addition, Mr.
Leiker will be entitled to reimbursement for any excise taxes, interest and
penalties which may be payable if payments or benefits he receives due to a
change of control create an excise tax liability under Section 280G of the
Internal Revenue Code. The employment agreement contains a noncompete provision
applicable in the event of Mr. Leiker's termination of employment. However, in
the event of involuntary termination due to change of control, the noncompete
provision in Mr. Leiker's employment agreement will be waived.
Mr. Thomas entered into an employment agreement with the Company on
September 1, 1998 under which he has agreed to serve as Executive Vice
President, North America Operations, with a minimum annual salary of $250,000.
The employment agreement, as amended, provides that in the event of his
involuntary termination, Mr. Thomas will receive his then current monthly base
salary as if his employment had continued for the remaining term of the
agreement, which expires on August 31, 2001. The employment agreement, as
amended, also provides that if Mr. Thomas is involuntarily terminated within two
years of a change of control of the Company, as defined in the Company's Change
of Control Severance Plan, Mr. Thomas will be entitled to minimum severance
equal to 2.99 times his then current annual base salary, plus two times his
annual bonus award opportunity. In addition, Mr. Thomas will be entitled to
reimbursement for any excise taxes, interest and penalties which may be payable
if payments or benefits he receives due to a
13
<PAGE> 16
change of control create an excise tax liability under Section 280G of the
Internal Revenue Code. The employment agreement contains a noncompete provision
applicable in the event of Mr. Thomas's termination of employment. However, in
the event of involuntary termination due to change of control, the noncompete
provision in Mr. Thomas's employment agreement will be waived.
Mr. Hunsaker entered into an employment agreement with the Company on
September 1, 1998 under which he has agreed to serve as Senior Vice President
and General Counsel with a minimum annual salary of $255,000. The employment
agreement, as amended, provides that in the event of his involuntary
termination, Mr. Hunsaker will receive his then current monthly base salary as
if his employment had continued for the greater of 12 months or the remaining
term of the agreement, which expires on August 31, 2001, and reimbursement for
the difference between the cost of COBRA coverage and a private medical
insurance policy for a maximum of six months beyond the end of his eligibility
for COBRA coverage. The employment agreement, as amended, also provides that if
Mr. Hunsaker is involuntarily terminated within two years of a change of control
of the Company, as defined in the Company's Change of Control Severance Plan,
Mr. Hunsaker will be entitled to minimum severance equal to 2.99 times his then
current annual base salary, plus two times his annual bonus award opportunity,
plus the medical provision described above. In addition, Mr. Hunsaker will be
entitled to reimbursement for any excise taxes, interest and penalties which may
be payable if payments or benefits he receives due to a change of control create
an excise tax liability under Section 280G of the Internal Revenue Code. The
employment agreement contains a noncompete provision applicable in the event of
Mr. Hunsaker's termination of employment. However, in the event of involuntary
termination due to change of control, the noncompete provision in Mr. Hunsaker's
employment agreement will be waived.
CERTAIN TRANSACTIONS
On August 16, 1999, the Company and Enron Corp. completed a share exchange
(the "Share Exchange") in which the Company received 62,270,000 shares of its
Common Stock out of 82,270,000 shares owned by Enron Corp. in exchange for all
the stock of the Company's subsidiary, EOGI-India, Inc. Prior to the Share
Exchange, the Company made an indirect capital contribution of approximately
$600 million in cash, plus certain intercompany receivables, to EOGI-India, Inc.
At the time of completion of this transaction, this subsidiary owned, through
subsidiaries, all of the Company's assets and operations in India and China. The
Company recognized a $575 million tax-free gain on the Share Exchange based on
the fair value of the shares received, net of transaction fees of $14 million.
Immediately following the Share Exchange, the Company retired the 62,270,000
shares of Common Stock received in the transaction. On August 30, 1999, the
Company changed its corporate name to "EOG Resources, Inc." from "Enron Oil &
Gas Company" and has since made similar changes to its subsidiaries' names.
Immediately prior to the closing of the Share Exchange, Enron Corp. owned
82,270,000 shares of the Company's Common Stock, representing 53.5 percent of
all of the shares of the Company's Common Stock that were issued and
outstanding. As a result of the closing of the Share Exchange, the sale by Enron
Corp. of 8,500,000 shares of the Company's Common Stock as a selling stockholder
in a public offering, and the completion on August 17, 1999 and August 20, 1999
of the offering of Enron Corp. notes mandatorily exchangeable at maturity into
up to 11,500,000 shares of the Company's Common Stock, Enron Corp.'s maximum
remaining interest in the Company after the automatic conversion of its notes on
July 31, 2002, will be under two percent, assuming the notes are exchanged for
less than the 11,500,000 shares of the Company's Common Stock. Effective as of
August 16, 1999, the closing date of the Share Exchange, the members of the
14
<PAGE> 17
Company's board of directors who were officers or directors of Enron Corp.
resigned their positions as directors of the Company.
Incident to the Share Exchange, Enron Corp. terminated as of August 16,
1999, the Services Agreement (the "Services Agreement") effective January 1,
1997, pursuant to which Enron Corp. provided to the Company various services,
such as maintenance of certain employee benefit plans, provision of
telecommunications and computer services, lease of office space, the provision
of certain purchasing and operating services and certain other corporate staff
and support services. As permitted under the Services Agreement, the Company
elected to delay the termination of certain services for a period of up to one
year following the effective date of the termination by Enron Corp.
In 1997, the Company and Enron Corp. agreed to replace an existing tax
allocation agreement with a new tax allocation agreement. In the new agreement,
Enron Corp. agreed to refund a $13 million payment made by the Company pursuant
to the existing agreement, the Company agreed to release Enron Corp. from the
liabilities assumed related to the $13 million payment and the parties agreed to
indemnify each other in a manner consistent with a former agreement. Enron Corp.
also advanced the Company approximately $50 million to fund certain federal
income taxes related to the 1995 taxable year. The outstanding balance of this
advance was paid on August 16, 1999.
In December 1997, Enron Corp. and the Company entered into an Equity
Participation and Business Opportunity Agreement (the "Business Opportunity
Agreement"), which defined certain obligations that Enron Corp. owed to the
Company and relieved Enron Corp. from certain obligations to the Company that it
might otherwise have, including the obligation to offer certain business
opportunities to the Company.
In addition, the Company and Enron Corp. have in the past entered into
material transactions and agreements incidental to their respective businesses,
and they may be expected to enter into such transactions and agreements in the
future. Such transactions and agreements have related to, among other things,
the purchase and sale of natural gas and crude oil, hedging and trading
activities, the financing of exploration and development efforts by the Company,
and the provision of certain corporate services. During 1999, Enron Corp. and
its affiliates paid the Company approximately $79 million as a net result of the
foregoing described transactions and agreements. The Company believes that its
existing transactions and agreements with Enron Corp. have been at least as
favorable to the Company as could be obtained from other third parties, and the
Company intends that the terms of any future transactions and agreements between
the Company and Enron Corp. will be at least as favorable to the Company as
could be obtained from other third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires certain of the Company's executive officers and
directors and any persons who own more than 10% of the Common Stock to file
reports of ownership and changes in ownership concerning the Common Stock with
the SEC and to furnish the Company with copies of all Section 16(a) forms they
file. Based upon the Company's review of the Section 16(a) filings that have
been received by the Company, the Company believes that all filings required to
be made under Section 16(a) during 1999 were timely made.
15
<PAGE> 18
ITEM 2.
RATIFICATION OF APPOINTMENT OF AUDITORS
Pursuant to the recommendation of the Audit Committee, the Board of
Directors appointed Arthur Andersen LLP, independent public accountants, to
audit the consolidated financial statements of the Company for the year ending
December 31, 2000.
Ratification of this appointment shall be effective upon receiving the
affirmative vote of the holders of a majority of the Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting. Accordingly,
under Delaware law and the Restated Certificate of Incorporation and bylaws of
the Company, abstentions would have the same legal effect as a vote against this
proposal, but a broker non-vote would not be counted for purposes of determining
whether a majority had been achieved.
In the event the appointment is not ratified, the Board of Directors will
consider the appointment of other independent auditors. A representative of
Arthur Andersen LLP is expected to be present at the Annual Meeting and will be
available to make a statement if such representative desires to do so and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THIS PROPOSAL.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Shareholders may propose matters to be presented at shareholder meetings
and may also nominate persons to be directors. Formal procedures have been
established for those proposals and nominations.
PROPOSALS FOR 2001 ANNUAL MEETING
Pursuant to various rules promulgated by the SEC, any proposals of holders
of Common Stock of the Company intended to be presented at the Annual Meeting of
Shareholders of the Company to be held in 2001 must be received by the Company,
addressed to Patricia L. Edwards, Vice President, Human Resources,
Administration & Corporate Secretary (the "Secretary"), 1200 Smith Street, Suite
300, Houston, Texas 77002, no later than November 30, 2000, to be included in
the Company's proxy statement and form of proxy relating to that meeting.
In addition to the SEC rules described in the preceding paragraph, the
Company's bylaws provide that for business to be properly brought before the
Annual Meeting of Shareholders, it must be either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise brought before the meeting by or at the direction of
the Board of Directors, or (c) otherwise properly brought before the meeting by
a shareholder of the Company who is a shareholder of record at the time of
giving of notice hereinafter provided for, who shall be entitled to vote at such
meeting and who complies with the following notice procedures. In addition to
any other applicable requirements for business to be brought before an annual
meeting by a shareholder of the Company, the shareholder must have given timely
notice in writing of the business to be brought before an Annual Meeting of
Shareholders of the Company to the Secretary of the Company. To be timely,
notice given by a shareholder must be delivered to or mailed and received at the
principal executive offices of the Company, 1200 Smith Street, Suite 300,
Houston, Texas 77002, no later than November 30, 2000. The notice shall set
forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting,
16
<PAGE> 19
(ii) the name and address, as they appear on the Company's books, of the
shareholder proposing such business, (iii) the acquisition date, the class and
the number of shares of voting stock of the Company which are owned beneficially
by the shareholder, (iv) any material interest of the shareholder in such
business, and (v) a representation that the shareholder intends to appear in
person or by proxy at the meeting to bring the proposed business before the
meeting. Notwithstanding the foregoing bylaw provisions, a shareholder must also
comply with all applicable requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations thereunder with
respect to the matters set forth in the foregoing bylaw provisions.
Notwithstanding anything in the Company's bylaws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures outlined above.
NOMINATIONS FOR 2001 ANNUAL MEETING AND FOR ANY SPECIAL MEETINGS
Only persons who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations of persons for election
to the Company's Board of Directors may be made at a meeting of shareholders (a)
by or at the direction of the Board of Directors or (b) by any shareholder of
the Company who is a shareholder of record at the time of giving of notice
hereinafter provided for, who shall be entitled to vote for the election of
directors at the meeting and who complies with the following notice procedures.
Such nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, notice given by a shareholder shall be delivered
to or mailed and received at the principal executive offices of the Company,
1200 Smith Street, Suite 300, Houston, Texas 77002, (i) with respect to an
election to be held at the Annual Meeting of Shareholders of the Company, on or
before November 30, 2000, and (ii) with respect to an election to be held at a
special meeting of shareholders of the Company for the election of directors,
not later than the close of business on the tenth day following the day on which
such notice of the date of the meeting was mailed or public disclosure of the
date of meeting was made, whichever first occurs. Such notice shall set forth
(a) as to each person whom the shareholder proposes to nominate for election or
re-election as a director, all information relating to the person that is
required to be disclosed in solicitations for proxies for election of directors,
or is otherwise required, pursuant to Regulation 14A under the Exchange Act
(including the written consent of such person to be named in the proxy statement
as a nominee and to serve as a director if elected); and (b) as to the
shareholder giving the notice (i) the name and address, as they appear of record
on the Company's books, of such shareholders, and (ii) the class and number of
shares of capital stock of the Company which are beneficially owned by the
shareholder. In the event a person is validly designated as nominee to the Board
of Directors and shall thereafter become unable or unwilling to stand for
election to the Board of Directors, the Board of Directors or the shareholder
who proposed such nominee, as the case may be, may designate a substitute
nominee. Notwithstanding the foregoing bylaw provisions, a shareholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth in the
foregoing bylaw provisions.
17
<PAGE> 20
GENERAL
As of the date of this proxy statement, the management of the Company has
no knowledge of any business to be presented for consideration at the meeting
other than that described above. If any other business should properly come
before the meeting, it is intended that the shares represented by proxies will
be voted with respect thereto in accordance with the judgment of the persons
named in such proxies.
The cost of any solicitation of proxies will be borne by the Company. In
addition to solicitation by use of the mails, certain officers and regular
employees of the Company may solicit the return of proxies by telephone,
telegraph or personal interview. Arrangements may also be made with brokerage
firms and other custodians, nominees and fiduciaries for the forwarding of
material to and solicitation of proxies from the beneficial owners of Common
Stock held of record by such persons, and the Company will reimburse such
brokerage firms, custodians, nominees and fiduciaries for reasonable out of
pocket expenses incurred by them in connection therewith.
By Order of the Board of Directors,
PATRICIA L. EDWARDS
Vice President, Human Resources,
Administration
& Corporate Secretary
Houston, Texas
March 30, 2000
18
<PAGE> 21
[EOG RESOURCES LOGO]
EOG RESOURCES, INC.
<PAGE> 22
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR proposals 1 AND 2.
1. ELECTION OF DIRECTORS (see reverse):
FOR WITHHELD
[ ] [ ]
2. Ratification of appointment of independent accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In the discretion of the proxies named herein, the proxies are
authorized to vote upon other matters as are properly brought before
the meeting.
Change of Address/
Comments on [ ]
Reverse Side
All as more particularly described in
the Proxy statement relating to such
meeting, receipt of which is hereby
acknowledged.
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
Signature: ____________ Date: _________
Signature: ____________ Date: _________
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
[EOG RESOURCES LOGO]
YOUR VOTE IS IMPORTANT. You may vote in any one of the following three ways:
VOTE BY MAIL. Complete, date, sign and mail this proxy card in the enclosed
postage-paid envelope.
VOTE BY PHONE. Call toll-free, 1-877-PRX-VOTE (1-877-779-8683) 24 hours a
day, 7 days a week from the U.S. and Canada to vote your proxy.
VOTE VIA THE INTERNET. Access the website at http://www.eproxyvote.com/eog
24 hours a day, 7 days a week.
If you vote by phone or via the Internet, please have your social security
number and proxy card available. The sequence of numbers appearing in the box
above just below the perforation, and your social security number are necessary
to verify your vote. A phone or Internet vote authorizes the named proxies in
the same manner as if you marked, signed and returned the proxy card.
IF YOU VOTE BY PHONE OR VOTE USING THE INTERNET, THERE IS NO NEED
FOR YOU TO MAIL BACK YOUR PROXY CARD.
<PAGE> 23
[EOG RESOURCES LOGO]
p PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
EOG RESOURCES, INC. FOR ANNUAL MEETING ON MAY 9, 2000
R
The Undersigned hereby appoints Mark G. Papa, Barry Hunsaker, Jr., and
O Patricia L. Edwards, or any of them, and any substitute or substitutes, to
be the attorneys and proxies of the undersigned at the Annual Meeting of
X Shareholders of EOG Resources, Inc. (the "Company") to be held at
2:00 p.m., Houston time, on Tuesday, May 9, 2000, in the La Salle "A"
Y Ballroom of the Doubletree Hotel at Allen Center, 400 Dallas Street,
Houston, Texas, or at any adjournment thereof, and to vote at such meeting
the shares of stock of the Company the undersigned held of record on the
books of the Company on the record date for the meeting.
ELECTION OF DIRECTORS, NOMINEES: (change of address/comments)
Fred C. Ackman, Mark G. Papa, Edward
Randall, III, Edmund P. Segner, III, ------------------------------------
Frank G. Wisner
------------------------------------
------------------------------------
------------------------------------
(If you have written in above
space, please mark the corresponding
box on the reverse side of this
card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOKES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
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SEE REVERSE
SIDE
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IF YOU NEED ASSISTANCE IN ANY OF THE FOLLOWING AREAS:
o DIVIDEND CHECKS-ADDRESS CHANGES-LEGAL TRANSFERS
o CONSOLIDATION OF ACCOUNTS - ELIMINATE MULTIPLE ACCOUNTS FOR ONE HOLDER
AND CERTAIN DUPLICATE SHAREHOLDER MAILINGS GOING TO ONE ADDRESS.
(Dividend checks, annual reports and proxy materials would continue to
be mailed to each shareholder.)
JUST CALL OUR TRANSFER AGENT'S TELEPHONE RESPONSE CENTER:
(800) 519-3111 OR (201) 324-1225
OR WRITE TO:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
A DIVISION OF EQUISERVE
P.O. BOX 2500
JERSEY CITY, NJ 07303-2500
INFORMATION ABOUT OUR COMPANY CAN BE FOUND ON OUR WEBSITE: WWW.EOGRESOURCES.COM
