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TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
| Filed by the Registrantý | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material under §240.14a-12 | |
| Cameron International Corporation | ||||
(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): | ||||
ý | No fee required. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: | |||
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o | Fee paid previously with preliminary materials. | |||
o | 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: | |||
| | Welcome to the Cameron International Corporation Stockholder Meeting |  |
To the Stockholders of Cameron International Corporation:
You are cordially invited to attend the Annual Meeting of Stockholders of Cameron International Corporation ("Cameron" or the "Company") to be held on Friday, May 16, 2014,8, 2015, at Cameron's corporate headquarters, 1333 West Loop South, Suite 1700, Houston, Texas, commencing at 10:00 a.m., Central Daylight Time.
At this year's Annual Meeting, you will be asked to vote on a number of items more fully addressed in our Notice of Annual Meeting of Stockholders, including the election of directors, ratification of the appointment of the Company'sour independent registered public accountants and approval of our 20132014 executive compensation.
We know that most of our stockholders will not be attending the Annual Meeting in person. As a result, Cameron's Board of Directors is soliciting proxies so that each stockholder has an opportunity to vote on all matters that are scheduled to come before the meeting.If you do not plan to attend, please vote your shares by Internet or by telephone, or, iftelephone. If you received our proxy material by mail, you may also vote by returning the accompanying proxy card, as soon as possible so that your shares will be voted at the meeting.card. Instructions on how to vote can be found in our Proxy Statement.
Your vote is important. At Cameron's last annual meeting, in May 2013,2014, approximately 9088 percent of our shares of common stock were represented in person or by proxy.
We welcomed H. Paulett Eberhart, Chief Executive Officer of CDI Corporation (NYSE:CDI), to our Board of Directors in December, 2013. Paulett's knowledge of technical industries, her experience in the oil and gas industry and her history of leadership in world-class organizations will be valuable to Cameron and its stockholders. We alsoI want to thankgive a special "thank you" to two of our Lead Director, David Ross,Directors, Shel Erikson and Baker Cunningham, who isare retiring this year, for histheir years of dedicated service and leadership on Cameron's Board. Shel was our Chief Executive Officer from 1995 until 2007 and our Chairman of the Board from 1996 until 2011. Baker has been a Director since 1996 and has served on the Compensation and Nominating and Governance Committees of the Board.
Thank you for your continued support of and interest in Cameron.
| Very truly yours, | ||
 | ||
| Jack B. Moore Chairman of the Board | ||
March |
2014 Proxy Statement
| | |  2015 Proxy Statement |
| | |   |
2014 Proxy Statement
Notice of Annual Meeting |
| May | Cameron Corporate Headquarters | |
| 10:00 a.m., CDT | 1333 West Loop South, Suite 1700 Houston, Texas 77027 |
Items of BusinessBusiness:
| 1. | To elect | |
| 2. | To ratify the appointment of Ernst & Young LLP as our independent registered public accountants for | |
| 3. | To conduct an advisory vote on our | |
| 4. | To transact any other business as may properly come before the meeting or any adjournment or postponement of the meeting. |
Record DateDate: March 21, 201411, 2015
Annual ReportReport: Cameron's Annual Report to Stockholders for the year ended December 31, 2013,2014, which is not a part of the proxy solicitation materials, is available on our website atwww.c-a-m.com/investors. If you received a printed copy of the proxy materials, a printed Annual Report was enclosed.
Notice Regarding the Availability of Proxy MaterialsMaterials: On or about March 31, 2014,27, 2015, we mailed to stockholders who have not elected to receive printed versions of our proxy materials a Notice informing them of the Internet availability of our 20142015 proxy materials and providing instructions on how to access those materials and vote.
Proxy VotingVoting: Stockholders of record may vote in person at the meeting, but may also appoint proxies to vote their shares in one of three ways, by:
| In Person | Internet | Telephone | QR Code | |||||
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| Attend the Annual Meeting in Houston | www.envisionreports.com/CAM Vote 24/7 | 1-800-652-VOTE (8683) | Cast your ballot, sign your proxy card and send by pre-paid mail | Scan this QR code with your mobile device Vote 24/7 |
Stockholders whose shares are held by a bank, broker or other holder of record may appoint proxies to vote their shares on their behalf as instructed by that bank, broker or other holder of record.
Any proxy may be revoked at any time prior to its exercise at the meeting by following the procedures described in the proxy solicitation materials.
| By Order of the Board of Directors, | ||
  | ||
Grace B. Holmes Vice President, Corporate Secretary and Chief Governance Officer | ||
March |
2014 Proxy Statement
| | | 2015 Proxy Statement |
2014 Proxy Statement
| 2015 Proxy Statement | | |
Proxy Summary Information |
This Summary is included to provide an introduction and overview of the information contained in this Proxy Statement. This is a summary only and does not contain all of the information we have included in our 20142015 Proxy Statement. You should refer to the full Proxy Statement that follows for more information about us and the proposals you are being asked to consider.
The graphs below provide a "snapshot" of our performance in 2013 versus2014 and the previous five years.four years for continuing operations, except for earnings per share which are provided in full. Information related to the Company's discontinued operations may be found in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
| ORDERS | REVENUE | OPERATING CASH FLOW | ||
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NET INCOME | DILUTED EPS | TSR/Y-E STOCK PRICE | ||
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2014 Proxy Statement i
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Proxy Summary Information |
The following table shows a comparison of our TSRtotal shareholder return ("TSR") performance with that of the weighted average TSR performance of our compensation peer group, the PHLX Oil Service Sector (Ticker Symbol: OSX), our performance peer group used to measure relative TSR performance for performance stock awards, and the S&P 500 for 20132014 and the previous years, along with a comparison of our CEO's total compensation to these performances for the same period.
COMPARISON OF CEO COMPENSATION TO TSR PERFORMANCE
| ii 2015 Proxy Statement | | |
2014 Performance and Executive Compensation Decisions
When determiningCameron's performance in 2014 showed improvement as evidenced by increases in a number of its year-over-year performance metrics and by a strong performance relative to peers.
Our absolute TSR, however, declined year-over-year due to the downturn in oil and gas activity beginning in 2014 and to the uncertainty of the macro environment affecting the oil and gas industry as a whole. Executive compensation earned for 2014 and compensation decisions made for 2015 reflect this dichotomy between improved performance and the decline in our absolute TSR year-over-year.
for a "windfall" annual incentive payout should the macro environment in which we operate experience an unanticipated turn-around in 2015. In order to our executives, the Compensation Committee, while recognizing the performance summarized in the "snapshot" charts above, took into consideration Cameron's 2013 TSR performance relative to that of its peer group and exercised negative discretion to reduce payouts, includingachieve higher than a reduction of 22.1%150% payout for EPS with respect to the CEO. This determination, when combined with 1) the Committee's acceptance of Management's recommendation that the executive leadership team forego payment of a portion of their target bonuses that would have been earned due to performance against the Safety goal, and 2) the failure to meet the corporate Employee Engagement goal, resultedan EPS target, we must have a 2015 TSR performance in the reductiontop quartile of our performance peer group.
For a full description of these and other executive compensation matters, please see the CEO's annual incentive compensation to 49.8%Compensation Discussion Analysis beginning on page 36 of target.this Proxy Statement.
Corporate Governance Highlights
Our governance principles and practices include a number of policies and structures that we believe are "best practices" in corporate governance, including:
ii 2014 Proxy Statement
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Proxy Summary Information |
Proposals for Stockholder Action
Below is a summary of the proposals on which you are being asked to vote. Please review the more complete information regarding these proposals included in this Proxy Statement.
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| For More Information | Board Recommendation | | ||||||||||
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| | Proposal 1: Election of Directors | Pages 5-18 |  For | | ||||||||
| | H. Paulett Eberhart Peter J. Fluor Douglas L. Foshee Rodolfo Landim Jack B. Moore Michael E. Patrick | Timothy J. Probert Jon Erik Reinhardsen R. Scott Rowe Brent J. Smolik Bruce W. Wilkinson | | |||||||||
| | | | | | | | | | | | | |
| | Proposal 2: | Page 30 | For | | ||||||||
| | Ratification of Appointment of Independent Registered Public Accountants for | | ||||||||||
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| | Proposal 3: | Page 34 | For | | ||||||||
| | Advisory Vote on our | | ||||||||||
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Recommendations of the Board of Directors Regarding the Proposals
Our Board unanimously recommends that you vote:
CommunicatingStockholder Communications & Engagement with the Board of Directors or Lead Director
Any interested partystockholder can communicate with our Board of Directors, any individual directorDirectors/Lead Director, or groups of directorswith our Lead Director individually by sending a letter addressed to either the Board of Directors as a whole, toor the individual director or to a group of directors,Lead Director, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027 or by email to stockholderservices@c-a-m.com.stockholderservices@c-a-m.com.
Governance documents, such as the Corporate Governance Principles, the Board Committee Charters, the Lead Director Charter, the Code of Ethics for Directors, the Code of Ethics for Senior Financial Officers, and the Code of Conduct for Employees, can be found in the "Governance" and "Compliance" sections under "Investors" of our website:www.c-a-m.com. Please note that documents and information on our website are not incorporated into this Proxy Statement by reference. These documents are also available in print at no cost in print by writing to the Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027 or by email to the address above.
| iv 2015 Proxy Statement | | |
Information about the Notice of Internet Availability of Proxy Materials
Pursuant to Securities and Exchange Commission ("SEC") rules and regulations, we have provided a notice regarding Internet access to our proxy materials, including our 20132014 Annual Report, to stockholders of record who have not elected to receive our proxy materials by mail. The Notice Regarding the Availability of Proxy Materials contains instructions on how you can access our proxy materials over the Internet as well as on how to request a printed copy. If you received such a notice, you will not receive a printed copy of our proxy materials unless you request one.
If you wish to receive our proxy materials by mail in the future, you can so choose by following the instructions in the Notice. Your election to receive proxy materials by email will remain in effect until you terminate it.
Stockholders who hold their shares in "street-name" (i.e., in the name of a bank, broker or other holder of record), will receive a Notice regarding the availability of proxy materials directly from their bank, broker or other holder of record.
Important Notice Regarding
Questions and Answers (page 61)
Please see the Availability of Proxy MaterialsQuestions and Answers section beginning on page 61 for important information about the proxy materials, voting, the annual meeting, Cameron documents, communications and the deadlines to submit stockholder proposals for the 20142016 Annual Meeting of StockholdersStockholders. Additional questions may be directed to Be Held on May 16, 2014the Corporate Secretary at (713) 513-3300 orstockholderservices@c-a-m.com
Our 2014 Proxy Statement and 2013 Annual Report are available free of charge on our website.Go towww.c-a-m.com, click on "Investors" and click on "Annual Reports and Proxy Statements".
2014 Proxy Statement iii
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Proxy Statement for the |
This Proxy Statement, and the accompanying proxy/voting instruction card ("proxy card"), are being made available to stockholders of record of Cameron International Corporation ("Cameron") by Cameron's Board of Directors (the "Board" or "our Board") in connection with its solicitation of proxies to be used at Cameron's 20142015 Annual Meeting of Stockholders scheduled to be held on May 16, 2014,8, 2015, or any postponements and adjournments thereof (the "Annual Meeting" or the "Meeting"). This Proxy Statement and any accompanying proxy card were first made available to stockholders beginning March 31, 2014.27, 2015.
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| PLEASE VOTE What are my voting choices for each of the proposals to be voted on at the 2015 Annual Meeting of Stockholders and what are the voting standards? | ||||||||
| | Proposal | Voting Choices and Board Recommendation | Voting Standard | | ||||
| Item 1: Election of Directors | ü vote in favor of all nominees; ü vote in favor of specific nominees; ü vote against all nominees; ü vote against specific nominees; ü abstain from voting with respect to all nominees; or ü abstain from voting with respect to specific nominees. The Board recommends a voteFOR each of the Director nominees. | Majority of shares of common stock represented and entitled to vote at the meeting | ||||||
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Item 2: Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accountants | ü vote in favor of the ratification; ü vote against the ratification; or ü abstain from voting on the ratification. The Board recommends a voteFOR the ratification. | Majority of shares of common stock represented and entitled to vote at the meeting | ||||||
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Item 3: Advisory Vote on our 2014 Executive Compensation | ü vote in favor of the advisory proposal; ü vote against the advisory proposal; or ü abstain from voting on the advisory proposal. The Board recommends a voteFOR the advisory proposal to approve executive compensation. | Majority of shares of common stock represented and entitled to vote at the meeting | ||||||
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| Attend the Annual Meeting in Houston | www.envisionreports.com/CAM Vote 24/7 | 1-800-652-VOTE (8683) | Cast your ballot, sign your proxy card and send by pre-paid mail | Scan this QR code with your mobile device Vote 24/7 | ||||
| Visit www.envisionreports.com/CAM. You will need the 15 digit number included in your proxy card, voter instruction form or notice. | Call 1-800-652-VOTE (8683) or the number on your voter instruction form. You will need the 15 digit number included in your proxy card, voter instruction form or notice. | Send your completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form. | You will need the 15 digit number included in your proxy card, voter instruction form or notice. |
For Additional Information
Please see "Questions and Answers about the Annual Meeting and Voting" on Page 61.
Important Date for 2016 Annual Meeting of Stockholders
2014Stockholder proposals and nominees for director(s) to be submitted for inclusion in our 2016 Proxy Statement 1pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934, as amended, must be received by us at our corporate offices by 5:30 p.m. CST on November 27, 2015.
Important Notice Regarding the Availability of Proxy Materials for the 2015 Annual Meeting of Stockholders to Be Held on May 8, 2015
Our 2015 Proxy Statement and 2014 Annual Report are available free of charge on our website. Go towww.c-a-m.com, click on "Investors" and click on "Annual Reports and Proxy Statements".
| 2 2015 Proxy Statement | | |
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Why am I receiving these materials?
A Notice of Annual Meeting of Stockholders or Notice Regarding the Availability of Proxy Materials has been provided to you because you are a Cameron stockholder and because the Board is soliciting your proxy to vote your shares at our upcoming Annual Meeting.
What is the purpose of the Annual Meeting?
At the Meeting, our stockholders will act on the matters outlined in the Notice of Annual Meeting of Stockholders on the cover page of this Proxy Statement.
Where can I find more information about proxy voting?
The SEC has created an educational website where you can learn more about proxy voting:www.sec.gov/spotlight/proxymatters.shtml.
Who is entitled to vote at the Meeting?
Owners of shares of the common stock of Cameron (the "Common Stock") at the close of business on March 21, 2014 (the "Record Date"), are entitled to vote at and participate in the Annual Meeting.
Participants in our retirement savings plans and our company-sponsored Individual Account Retirement Plan, (collectively, "Retirement Plans" or "Plans") may give voting instructions with respect to the Common Stock credited to their accounts in the Plans to the Plans' trustees who have the actual voting power over the Common Stock in the Plans.
What are the voting rights of holders of Common Stock?
Each outstanding share of Common Stock will be entitled to one vote on each matter to come before the Meeting.
What happens if additional matters are presented at the Meeting?
If another proposal is properly presented for consideration at the Meeting, the persons named in the proxy card will vote as recommended by the Board or, if no recommendation is given, these persons will exercise their discretion in voting on the proposal.
How can shares be voted?
Shares of Common Stock can be voted in person at the Meeting or they can be voted by proxy or voting instructions can be given, in one of three ways, by:
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The instructions for each are on the proxy card, in the Notice Regarding the Availability of Proxy Materials, or on the voting form enclosed with the proxy from the applicable trustee, bank or brokerage firm.
How will votes be counted?
For shares held in your own name, votes will be counted as directed, except when no choice for any particular matter is made. In that case, and only for the matter for which no choice is indicated, the shares will be voted as recommended by the Board unless the shares are held in one of the Retirement Plans. If held in one of these Plans, they will be voted in the same proportion as the other shares in the Retirement Plans have been voted.
For shares held indirectly through a bank, broker or other holder of record, unless you give your broker, bank or other holder of record specific instructions, your shares will not be voted on any of the proposals other than Proposal 2. Under the New York Stock Exchange ("NYSE") rules that govern voting by brokers of shares held in street name, brokers have the discretion to vote these shares only on routine matters, but not on non-routine matters, as defined by those rules. The only matter that will be voted on that is considered routine under these rules is Proposal 2, the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accountants for fiscal year 2014.
What vote is required for approval?
With regard to Proposal 1 (election of directors), the affirmative vote of the majority of the votes cast at the meeting is required by our Bylaws for the election of a director in an uncontested election.
The affirmative vote of the majority of shares of common stock of the Company represented and entitled to vote at the meeting is required for approval of Proposal 2 (ratification of the appointment of the independent registered public accountants) and Proposal 3 (advisory vote on 2013 executive compensation). The votes on Proposals 2 and 3, however, are advisory in nature and will not be binding on our company or the Board.
2 2014 Proxy Statement
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is a broker non-vote and what is the effect of a broker non-vote?
A "broker non-vote" occurs when a stockholder who holds shares indirectly does not give instructions to the holder of record on how the stockholder wants his or her shares voted, but the holder of record exercises its discretionary authority under the rules of the NYSE to vote on one or more, but not all, of the proposals. In such a case, a "broker non-vote" occurs with respect to the proposals not voted on. Shares represented by "broker non-votes" will, however, be counted in determining whether a quorum is present.
In the absence of instructions from the stockholder, the holder of record may only exercise its discretionary authority and vote the shares it holds as a holder of record on Proposal 2 (the ratification of the appointment of the independent registered public accountants), and does not have the discretionary authority to vote them on any of the other Proposals.
Therefore, if you are a street-name stockholder who holds shares indirectly, your shares will not be voted on any Proposal for which you do not give your broker, bank or other holder of record instructions on how to vote.
What is an abstention and what is the effect of an abstention?
If you do not desire to vote on any proposal nor have your shares voted as provided for in the immediately preceding answer, you may abstain from voting by marking the appropriate space on the proxy card or by following the telephone or Internet instructions. Shares voted as abstaining will be counted as present for the purpose of establishing a quorum and, with respect to Proposals 2 and 3, for the purpose of determining the number of votes needed for approval of the Proposals before the Meeting.
Abstentions will have the effect of a negative vote for Proposals 2 and 3.
What constitutes a quorum?
The presence at the Meeting of the holders of a majority of the shares of the Common Stock outstanding on the Record Date, in person or by proxy, will constitute a quorum,
permitting business to be conducted at the Meeting. As of the Record Date, 209,843,886 shares of Common Stock, representing the same number of votes, were outstanding. Therefore, the presence, in person or by proxy, of the holders of Common Stock representing at least 104,921,944 votes will be required to establish a quorum.
What shares will be considered "present" at the Meeting?
The shares voted at the Meeting, shares properly voted by Internet or telephone, and shares for which properly signed proxy cards have been returned will be counted as "present" for purposes of establishing a quorum. Proxies containing instructions to abstain on one or more matters, those voted on one or more matters and those containing broker non-votes will be included in the calculation of the number of votes considered to be present at the Meeting.
How can a proxy be revoked?
You can revoke a proxy at any time prior to a vote at the Meeting by:
Shares held indirectly in the name of a bank, broker or other institution may be revoked pursuant to the instructions provided by such institution.
Who will count the votes?
The Company has hired a third party, Computershare Trust Company, N.A., to determine whether or not a quorum is present at the Meeting and to tabulate votes cast.
Where can I find the results of the voting?
The voting results will be announced at the Meeting and filed on a Current Report on Form 8-K with the Securities and Exchange Commission ("SEC") within four business days following the Meeting.
2014 Proxy Statement 3
Security Ownership of Certain Beneficial Owners
The following table lists the stockholders known by us to have been the beneficial owners of more than 5% of the |   |
| Name and Address of Beneficial Owner | Number of Shares of Common Stock | Beneficial Ownership | Percent of Common Stock | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
BlackRock, Inc. | 14,781,952 | ( 1 ) | 6.2 | % | ||||||
FMR LLC | 12,577,213 | ( 2 ) | 5.3 | % | ||||||
The Vanguard Group | 11,895,513 | ( 3 ) | 5.0 | % | ||||||
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| Name and Address of Beneficial Owner | Number of Shares of Common Stock | Beneficial Ownership | Percent of Common Stock | | ||||||
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| The Vanguard Group | | |||||||||
| | 100 Vanguard Blvd | 13,305,022 | (1) | 6.73% | | |||||
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| | BlackRock, Inc. | | ||||||||
| | 40 East 52nd Street | 13,174,254 | (2) | 6.70% | | |||||
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| | State Street Corporation | | ||||||||
| | One Lincoln Street | 10,243,890 | (3) | 5.2% | ||||||
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Fidelity SelectCo, LLC ("SelectCo"), 1225 17th Street, Suite 1100, Denver, Colorado 80202, a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment
4 2014 Proxy Statement
| | | 2015 Proxy Statement 3 |
VOTING SECURITIES AND PRINCIPAL HOLDERS
Vanguard Investments Australia, Ltd. ("VIA"), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 148,638 shares or 0.06% of the Common Stock outstanding of the Company as a result of its serving as investment manager of Australian investment offerings.
2014 Proxy Statement 5
VOTING SECURITIES AND PRINCIPAL HOLDERS
Security Ownership of Management
The following table sets forth, as of December 31, 2013,February 18, 2015, unless otherwise noted, the number of shares of Common Stock beneficially owned (as defined by the SEC) by each current director, director nominee, and each executive officer named in the Summary Compensation Table included herein who is not also a director, and by all directors and executive officers as a group.
| Directors | Number of Shares of Common Stock Owned | Number of Shares That May Be Acquired By Options Exercisable Within 60 Days(1) | Total | Percent of Class | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
C. Baker Cunningham | 82,942 | 0 | 82,942 | * | |||||||||
H. Paulett Eberhart | 1,880 | 0 | 1,880 | * | |||||||||
Sheldon R. Erikson | 1,041,292 | 0 | 1,041,292 | * | |||||||||
Peter J. Fluor | 71,898 | 0 | 71,898 | * | |||||||||
Douglas L. Foshee | 33,362 | 0 | 33,362 | * | |||||||||
James T. Hackett | 7,790 | 0 | 7,790 | * | |||||||||
Rodolfo Landim | 11,819 | 0 | 11,819 | * | |||||||||
Jack B. Moore(2) | 306,613 | 872,883 | 1,179,496 | * | |||||||||
Michael E. Patrick | 58,256 | 0 | 58,256 | * | |||||||||
Jon Erik Reinhardsen | 28,058 | 0 | 28,058 | * | |||||||||
David Ross | 42,256 | 0 | 42,256 | * | |||||||||
Bruce W. Wilkinson | 36,598 | 0 | 36,598 | * | |||||||||
Executive Officers Named in the Summary Compensation Table Other Than Those Listed Above: | |||||||||||||
Charles M. Sledge(2) | 111,554 | 219,738 | 331,292 | * | |||||||||
John D. Carne(2) | 76,355 | 185,172 | 261,527 | * | |||||||||
William C. Lemmer(2) | 60,179 | 152,348 | 212,527 | * | |||||||||
James E. Wright | 55,771 | 139,685 | 195,456 | * | |||||||||
All directors and executive officers as a group (19 persons, including those named above) | 2,733,358 | 3,298,551 | 6,031,909 | 2.9 | |||||||||
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| Directors | Number of Shares of Common Stock Owned | Number of Shares That May Be Acquired By Options Exercisable Within 60 Days(1) | Total | Percent of Class | | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
| C. Baker Cunningham | | 81,738 | | 0 | | 81,738 | | * | | ||||||||||
| H. Paulett Eberhart | | 5,809 | | 0 | | 5,809 | | * | | ||||||||||
| Sheldon R. Erikson | | 1,045,221 | | 0 | | 1,045,221 | | * | | ||||||||||
| Peter J. Fluor | | 77,672 | | 0 | | 77,672 | | * | | ||||||||||
| Douglas L. Foshee | | 37,291 | | 0 | | 37,291 | | * | | ||||||||||
| James T. Hackett | | 11,719 | | 0 | | 11,719 | | * | | ||||||||||
| Rodolfo Landim | | 14,922 | | 0 | | 14,922 | | * | | ||||||||||
| Jack B. Moore(2) | | 367,380 | | 831,367 | | 1,198,767 | | * | | ||||||||||
| Michael E. Patrick | | 62,185 | | 0 | | 62,185 | | * | | ||||||||||
| Timothy J. Probert(3) | | 0 | | 0 | | 0 | | * | | ||||||||||
| Jon Erik Reinhardsen | | 31,987 | | 0 | | 31,987 | | * | | ||||||||||
| R. Scott Rowe(2) | | 46,491 | | 66,245 | | 112,736 | | * | | ||||||||||
| Brent J. Smolik(4) | | 0 | | 0 | | 0 | | * | | ||||||||||
| Bruce W. Wilkinson | | 40,527 | | 0 | | 40,527 | | * | | ||||||||||
| Executive Officers Named in the Summary Compensation Table Other Than Those Listed Above: | | ||||||||||||||||||
| Charles M. Sledge(2) | | 134,707 | | 272,719 | | 407,426 | | * | | ||||||||||
| Gary M. Halverson(2) | | 81,100 | | 97,952 | | 179,052 | | * | | ||||||||||
| William C. Lemmer(2) | | 79,145 | | 170,119 | | 249,264 | | * | | ||||||||||
| All directors and executive officers as a group (21 persons, including those named above) | | 2,157,428 | | 1,462,761 | | 3,620,189 | | 1.9 | |||||||||||
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6 2014 Proxy Statement
| 4 2015 Proxy Statement | | |
Our Certificate of Incorporation (the "Certificate") provides for the annual election of directors. Prior toAll of the authorized number of directors will stand for election at the May 2012, the2015 Annual Meeting. The Certificate provided for a Board divided into three classes, with members serving staggered three-year terms. In May 2012, our stockholders approved a Board-sponsored amendment to the Certificate declassifying the Board and providing for the annual election of all directors. Directors elected in 2013 and later are elected to one-year terms. Directors elected in May 2012 will fulfill their three-year terms pursuant to the terms of their re-election under the previous classified board structure. The CertificateIncorporation also provides for a Board of between five and fifteen members. The current number of authorized directors is twelve.13, although the size of the Board will be reduced to 11 prior to the Annual Meeting, as a result of the retirements of Sheldon R. Erikson and C. Baker Cunningham and the change in role of James T. Hackett to Advisory Director.
The directors nominated for election for a one-year term at this Annual Meeting are: H. Paulett Eberhart, Peter J. Fluor, James T. Hackett,Douglas L. Foshee, Rodolfo Landim, Jack B. Moore, Michael E. Patrick, Timothy J. Probert, Jon Erik Reinhardsen, R. Scott Rowe, Brent J. Smolik and Bruce W. Wilkinson.
Our Bylaws provide that directors are elected by a majority of the votes cast in the election, except in the case where there are more director nominees than open board seats.seats, in which case plurality voting would apply. Should an incumbent director nominee be required, but fail, to receive a majority of the votes cast in the election, under the terms of our director resignation policy that director must submit his or her resignation to our Nominating and Governance Committee within five days of the election. The Committee will have 45 days from the election to accept or reject the resignation. In making its decision, the Committee may consider all factors it deems relevant, including the stated reason(s) why the stockholders voted against or withheld votes from the director's election or re-election, whether the underlying reason for the failure to receive a majority vote is a Cameron matter thatwhich could be cured, the qualifications of the director, and whether the resignation would be in Cameron's best interests and the best interests of our company and our stockholders. The full Board will then have an additional 30 days to consider the Committee's recommendation. The Board's decision and its reasons for that decision will be disclosed on a Current Report on Form 8-K filed with the SEC within four business days following the decision.
THE BOARD RECOMMENDS
that stockholders vote"FOR"
the election of each of the nominees.
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| |  2015 Proxy Statement 5 |
2014 Proxy Statement 7
Director Selection Process
The Nominating and Governance Committee is responsible for developing the Board's slate of candidates for director nominees for election by our stockholders, which the Committee then recommends to the Board for its consideration. The Committee customarily engages the services of a third-party search firm to assist in the identification or evaluation of director candidates.
The Nominating and Governance Committee determines the required selection criteria and qualifications for director nominees based uponon our needs at the time nominees are considered. The Committee determines these needs in relation to the composition of the Board evaluated as a whole. The Committee's primary objective is to assemble a group that can effectively work together using its diversity of experience and perspectives to see that our company is well managed and represents the interests of our company and our stockholders. The qualifications the Nominating and Governance Committee uses to judge and select director candidates, including diversity, are discussed under the caption "Director Selection Criteria," below.
Stockholders wishing to identify a candidate for director for future consideration may do so by sending the following information to the Nominating and Governance Committee, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027: (1) the name of the candidate and a brief biographical sketch and résumé; (2) contact information for the candidate and a
document evidencing the candidate's willingness to serve as a director, if elected; and (3) a signed statement as to the submitting stockholder's current status as a stockholder and the number of shares currently held.
The Nominating and Governance Committee assesses each candidate based upon the candidate's résumé and biographical information, willingness to serve, and other background information. This information is evaluated against the criteria set forth below and our specific needs at the time. Based upon this preliminary assessment, candidates may be invited to participate in a series of interviews. Following this process, the Nominating and Governance Committee determines which candidates to recommend to the Board for nomination for election by our stockholders at the next annual meeting. The Nominating and Governance Committee uses the same process for evaluating all candidates, regardless of how the candidates are brought to the attention of the Committee.
No candidates for director were submitted to the Nominating and Governance Committee by any stockholder in connection with the 20142015 Annual Meeting. Any stockholder desiring to present a director candidate for consideration by the Committee for inclusion in our Proxy Statement as a nominee of our Board for our 20152016 Annual Meeting mustis requested to do so prior to September 1, 2014,2015, in order to provide adequate time to duly consider the candidate.
Director Selection Criteria
A director candidate, at a minimum, must possess the abilitybackground and experience necessary to apply good business judgment and must be in a position to properly exercise his or her duties of loyalty and care.care properly. Candidates should be persons of high integrity who have exhibited proven leadership capabilities, experience with high levels of responsibilities within their chosen fields, and have the ability to quickly grasp complex principles of business and finance, and the complexities of a global industry subject to a myriad of laws and regulations. Candidates should have large public company experience and preferably experience in the energy or oilfield services industry, including operational experience, and hold or have held an established executive level position in business, finance or education. In general, qualified candidates who are currently serving as executive officers of unrelated entities would be preferred. The Nominating and Governance Committee will consider these same criteria for nominees whether identified by the Committee, by stockholders or by some other source. When current Board members are considered for nomination for
re-election, the Nominating and Governance Committee also takes into consideration their prior Board contributions, performance and meeting attendance records.
| 6 2015 Proxy Statement | | |
DIRECTOR NOMINEES
Cameron is a diverse, global enterprise that generates approximately half of its revenues from locations outside the U.S. We do business in over 300 locations, in more than 50 countries, with a workforce more than half of which is outside the U.S., spread over six continents. We translate our compliance materials into ten different languages. We believe diversity includes gender and race, but we also believe it includes geographical and cultural diversity. As a company that has expanded significantly outside the U.S., it is important to, and in the best interest of, our company to think in global terms and define diversity accordingly. WhileAlthough we believe that the primary criteria should be whether candidates have the qualifications, experience, skills and talents required to oversee the operations of a corporation as large and as complex as Cameron, we also believe that diversity is an important ingredient in a successful board mix. We believe diversity includes gender and race, but we also believe it includes geographical and cultural diversity. As a company that has expanded significantly outside the United States, it is important, and in the best interests of our Company, to think in global terms and define diversity accordingly. The Charter of
8 2014 Proxy Statement
DIRECTOR NOMINEES
our Nominating and Governance Committee provides that, when evaluating director candidates, consideration will be given to those otherwise qualified individuals who offer diversity of geographical and/or cultural background, race/ethnicity, and/or gender, and that any search firm retained to assist the Committee in identifying director candidates be instructed to seek out and include diverse candidates for consideration. Acting on the goal of having a diverse board:
Qualifications of Director Nominees and Continuing Directors
The Nominating and Governance Committee, and the Board havehaving determined that each of our current directorsdirector nominee meets the criteria that have been established for Board membership.
The names of the nominees for director and the continuing directors, including a description of each director's experience, qualifications and skills are on pages 10-21.
Director Nominees
Term Ending 2015
The Nominating and Governance Committeemembership has recommended, and the Board has nominated, the following nominees for election, in the case of Mr. Probert, and, in the case of the others, re-election as directors for a one-year termone year terms expiring at the Annual Meeting of Stockholders in 2015,2016, or when their successors are duly elected and qualified. If any director nominee is unable or unwilling to serve as a nominee at the time of the Annual Meeting, the persons named as proxies may vote either (1) for a substitute nominee
designated by the present Board to fill the vacancy or (2) for the balance of the nominees, leaving a vacancy. Alternatively, the Board may reduce the size of the Board. The Board has no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.
The names of the nominees for director, their principal occupations during the past five years, other directorships held within the past five years, and certain other informationdetails are set out below.
2014 Proxy Statement 9
| | | 2015 Proxy Statement 7 |
DIRECTOR NOMINEES
H. Paulett Eberhart | ||
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Current Directorships: •
•
Former Directorships Held During the Past 5 Years: •
• CDI Corporation • Fluor Corporation | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü
ü International Operations ü Former CEO ü
ü
Committee Assignments: • Audit | ||
H. Paulett Eberhart, | ||
Ms. Eberhart served as President, Americas, Senior Vice President, and President of Solutions Consulting at Electronic Data Systems Corporation (EDS, now part of Hewlett-Packard Company), an information technology and business process outsourcing company, where she held multiple senior-level financial and operational roles, including four | ||
EDS. Ms. Eberhart is a director of | ||
Ms. Eberhart has a Bachelor of Science degree in Business Administration, Accounting from Bowling Green State University in | ||
10 2014 Proxy Statement
| 8 2015 Proxy Statement | | |
DIRECTOR NOMINEES
Peter J. Fluor | ||
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Current Directorships: • Anadarko Petroleum Corporation • Fluor Corporation • Texas Crude Energy, Inc. Former Directorships Held During the Past 5 Years: • None | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Current CEO ü Advanced Degree ü Other Director Experience ü
Committee Assignment: • Compensation Committee, Chairman | ||
Peter J. Fluor, age | ||
He has a Bachelor of Science degree in Business and an M.B.A. from the University of Southern California. | ||
| | | 2015 Proxy Statement 9 |
2014 Proxy Statement 11
DIRECTOR NOMINEES
| Douglas L. Foshee | ||
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| Former Chairman, President and Chief Executive Officer of El Paso Corporation Current Directorships: • None Former Directorships Held During the Past 5 Years: • El Paso Corporation • El Paso Pipeline GP Company, L.L.C. | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Former CEO ü Advanced Degree ü Other Director Experience ü Corporate Governance Experience Committee Assignment: • Audit • Nominating and Governance Mr. Foshee, age 55, currently is owner of Sallyport Investments, LLC, a private investment firm. He was the Chairman and Chief Executive Officer of El Paso Corporation, formerly a natural gas and pipeline company, and a director of El Paso Pipeline GP Company, L.L.C., the general partner of El Paso's publicly traded master limited partnership, El Paso Pipeline Partners, L.P., until May 2012 when El Paso was acquired by Kinder Morgan, Inc. Mr. Foshee provides significant experience in the oil and gas industry and a significant depth of financial and corporate governance knowledge. He has held leadership and executive positions in the oilfield services sector, in which Cameron competes, and in finance. Mr. Foshee served as Executive Vice President and Chief Operating Officer and Executive Vice President and Chief Financial Officer of Halliburton Company. Prior to Halliburton, he was President, CEO and Chairman of Nuevo Energy Company, a publicly traded exploration and production company, and CEO and Chief Operating Officer of Torch Energy Advisors Inc., a privately held energy company. He held various positions in finance and new business ventures with ARCO International Oil and Gas Company and spent several years in energy banking. He served as a Trustee of AIG Credit Facility Trust, overseeing the U.S. government's equity interest in American International Group for the benefit of the U.S. Treasury, and was Chairman of the Federal Reserve Bank of Dallas, Houston Branch. He is on the Council of Overseers of the Jesse H. Jones Graduate School of Management at Rice University, Rice University's board of trustees and KIPP Houston's board of trustees. He also serves in positions of leadership in various charitable and non-profit organizations, including the Texas Business Hall of Fame Foundation, Central Houston, Inc. and the Houston Endowment. Mr. Foshee has an M.B.A. from the Jesse H. Jones School at Rice University, a Bachelor of Business Administration degree from Texas State University and is a graduate of the Southwestern Graduate School of Banking at Southern Methodist University. | ||
10  2015 Proxy Statement | | |
DIRECTOR NOMINEES
| Rodolfo Landim | ||
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| Controlling Partner and Managing Director of Mare Investimentos S.A. and Partner and Chief Executive Officer, Ouro Preto Oleo e Gas Current Directorships: • Mare Investimentos S.A. • Ouro Preto Oleo e Gas Former Directorships Held During the Past 5 Years: • Smith International, Inc. • Wellstream Holding PLC | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Current CEO ü Other Director Experience ü Corporate Governance Experience ü Engineering & Manufacturing Background Committee Assignment: • Audit Rodolfo Landim, age 57, is the Controlling Partner and Managing Director of Mare Investimentos S.A., a private equity and venture capital firm that seeks to invest in supply chain goods and services for the oil and gas sector in Brazil, and Partner and Chief Executive Officer of Ouro Preto Oleo e Gas, a Brazilian oil and gas company integrating business strategy and technical expertise to Brazil's exploration sector. He was elected to the Board in October 2011. He provides extensive experience in the oil and gas industry, particularly within the oilfield service sector. He has held leadership and executive positions in several Brazilian entities for over 30 years. He has served as President and Chief Executive Officer of OSX Brasil, an oil service company; Chief Executive Officer of OGX Petróleo e Gás Participaçöes S.A., the second largest Brazilian oil and gas company; Executive President of MMX Mineração & Metálicos S.A., a company operating in the mining, metal and logistics sectors. He also has served in various leadership positions with Petroleo Brasileiro S.A., a wholly owned subsidiary of Petrobras. He is a former director of Smith International, Inc. and Wellstream Holding PLC in the United Kingdom and several public and private companies in Brazil. He has a Bachelor of Science degree in Civil Engineering from Universidade Federal Do Rio De Janeiro, Petroleum Engineering Coursework from the University of Alberta, Edmonton, Alberta, Canada, and completed the Program for Management Development (PMD) at the Harvard Business School. | ||
| | | 2015 Proxy Statement 11 |
DIRECTOR NOMINEES
| Jack B. Moore | ||
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| Chairman and Chief Executive Officer of Cameron Current Directorships: • KBR, Inc. Former Directorships Held During the Past 5 Years: • None | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Current CEO ü Other Director Experience ü Corporate Governance Experience ü Manufacturing Background Committee Assignment: • None Jack B. Moore, age 61, is our current Chairman and CEO. He has a wealth of experience with Cameron and in the oilfield services sector in general. He has had positions of increasing responsibility throughout his career evidencing his leadership capabilities and his understanding of the business and financial complexities of a global manufacturing company. He served as Cameron's President until October 2014. He was named President and Chief Executive Officer in April 2008 and became Cameron's Chairman of the Board in May 2011. Prior to becoming our President and CEO, he was Cameron's Chief Operating Officer, the President of Cameron's Drilling & Production Systems group after starting as Vice President and General Manager of that group's Western Hemisphere operations. Before joining Cameron, he held various management positions, including Vice President, Eastern and Western Hemisphere Operations, of Baker Hughes Incorporated, where he was employed for 23 years. He currently serves on the Board of KBR, Inc., a technology-driven engineering, procurement and construction (EPC) company and defense services provider. He served on the board of Maverick Tube Corporation, a manufacturer of metal tubular goods for oil drilling, from 2005 until it was sold to Tenaris, S.A. in 2006. He serves on the board of the Petroleum Equipment Suppliers Association, where he served as Chairman of the Board, the National Ocean Industries Association, and the American Petroleum Institute. He also serves in positions of leadership in charitable and non-profit organizations, including Spindletop Charities, CanCare, Inc. and The University of Houston C.T. Bauer College of Business Dean's Executive Board. Mr. Moore has a Bachelor of Business Administration degree from the University of Houston and attended the Advanced Management Program at the Harvard Business School. | ||
| 12 2015 Proxy Statement | | |
DIRECTOR NOMINEES
| Michael E. Patrick | ||
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| Former Vice President and Chief Investment Officer of Meadows Foundation, Inc. Current Directorships: • Apptricity Corporation • VestU, LLC Former Directorships Held During the Past 5 Years: • BJ Services Company | |
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Skills and Qualifications: ü Financial Oversight ü Energy/Oilfield Services Experience ü Advanced Degree ü Other Director Experience ü Corporate Governance Experience Committee Assignments: • Audit, Chairman • Compensation Michael E. Patrick, age 71, brings to the Board and Cameron a depth of knowledge of the financial markets and matters of finance in general, as well as 20 years of experience as a director of oil and gas service companies. Until his retirement in 2010, he served as the Vice President and Chief Investment Officer of Meadows Foundation, Inc., a philanthropic association. He is a director of Apptricity Corporation which provides enterprise applications and services used to automate financial management, advanced logistics, supply chain, and workforce management. He is the founder and a principal of VestU, LLC, a web-based provider of investment education. He was a director of BJ Services Company, an oilfield services company acquired by Baker Hughes International in 2010, and The Western Company of North America, an oilfield services company acquired by and merged into BJ Services Company. He has a Bachelor of Arts degree from Harvard University and an M.B.A. from the Harvard Business School. | ||
| | | 2015 Proxy Statement 13 |
DIRECTOR NOMINEES
| Timothy J. Probert | ||
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| Former President of Strategy and Corporate Development of Halliburton Company Current Directorships: • True Oil LLC Former Directorships Held During the Past 5 Years: • El Paso Corporation | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Former CEO ü Other Director Experience ü Corporate Governance Experience Mr. Probert, age 63, is a Senior Advisor to First Reserve, a global private equity investment firm exclusively focused on energy. During 2014, Mr. Probert served as Strategic Advisor to the Chief Executive Officer of Halliburton and was a member of Halliburton's Executive Committee. Prior to that he served as its President of Strategy & Corporate Development from 2011 to 2014 during which time he also directed Halliburton's global technology portfolio. Prior to that, he was President of Halliburton's Global Business Lines, responsible for overseeing both Halliburton operating divisions from 2010 to 2011. Earlier in his career with Halliburton, he was President of Drilling & Evaluation Division. Prior to joining Halliburton, he was President and CEO of Ion Geophysical Corporation (formerly Input/Output), a provider of technology-driven solutions to the oil and gas industry, and before that spent 27 years with various operating units of Baker Hughes Incorporated, including as President of Baker Hughes Inteq. Mr. Probert is a director of True Oil LLC, a privately owned company with interests in the oil and gas, transportation and agriculture industries and a former director of El Paso Corporation, formerly a natural gas and pipeline company. Mr. Probert holds a Bachelor of Science degree in geology and geography from the University of London. | ||
| 14 2015 Proxy Statement | | |
DIRECTOR NOMINEES
| Jon Erik Reinhardsen | ||
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| President and Chief Executive Officer of Petroleum Geo-Services ASA Current Directorships: • AWilhelmsen Management AS • Telenor ASA Former Directorships Held During the Past 5 Years: • Höegh LNG Holdings Ltd. • Höegh Autoliners Holding AS | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Current CEO ü Advanced Degree ü Other Director Experience ü Corporate Governance Experience Committee Assignment • Nominating and Governance Jon Erik Reinhardsen, age 58, brings to the Board a unique geographical and cultural perspective and he provides executive-level knowledge of the oil and gas industry, the oilfield service sector, and experience with other global industries. He is President and Chief Executive Officer of Petroleum Geo-Services ASA (PGS), a company headquartered in Oslo, Norway, that provides a broad range of products to help oil companies find oil and gas reserves offshore worldwide, including seismic and electromagnetic services, data acquisition, processing, reservoir analysis/interpretation and multi-client library data. He has been a Vice President of Alcoa Inc. and President of its Primary Products Global Growth, Energy and Bauxite businesses. He has also held various senior-level positions, including Group Executive Vice President, with Aker Kvaerner ASA, a provider of engineering and construction services, technology products and integrated solutions. Mr. Reinhardsen's expertise with large-scale offshore projects while with PGS and Aker Kvaerner, similar in scope and complexity to Cameron's, is extremely helpful in Cameron's evaluation and execution of its subsea systems projects. He serves on the boards of AWilhelmsen Management AS, a privately owned investment company located in Oslo, Norway with holdings in shipping, retail, real estate, cruise vacations, and financial investments and Telenor ASA, a Norwegian multinational telecommunications company headquartered in Fornebu, Norway and publicly listed on the Oslo Stock Exchange. He is a former director of Höegh LNG Holdings Ltd. and Höegh Autoliners Holding AS. He has a Master of Science degree in Applied Mathematics/Geophysics from the University of Bergen, Norway and attended the International Executive Program at the International Institute for Management Development in Lausanne, Switzerland. | ||
| | | 2015 Proxy Statement 15 |
DIRECTOR NOMINEES
| R. Scott Rowe | ||
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| President and Chief Operating Officer of Cameron Current Directorships: • None Former Directorships Held During the Past 5 Years: • None | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Advanced Degree Committee Assignment • None R. Scott Rowe, age 44, was named President and Chief Operating Officer on October 1, 2014, with responsibility for Cameron's global operations: Subsea, Surface, Drilling, Valves and Measurement and Operational Excellence. Mr. Rowe joined Cameron in 2002 as Corporate Development Manager and has most recently served as a Vice President for Cameron and Chief Executive Officer for OneSubsea. Mr. Rowe has held other significant positions in both Drilling and Production Systems and Valves and Measurement, including President of the Subsea Systems division, President of the Engineered and Process Valves division, and Vice President and General Manager of the Distributed Valves division. Before joining Cameron, Mr. Rowe served in the U.S. Army and worked for Varco as a Project Manager. Mr. Rowe holds a B.S. degree in Engineering Management from the United States Military Academy (West Point) and an M.B.A. from the Harvard Business School. | ||
| 16 2015 Proxy Statement | | |
DIRECTOR NOMINEES
| Brent J. Smolik | ||
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| Chairman of the Board, President and Chief Executive Officer of EP Energy Corporation Current Directorships: • EP Energy Corporation Former Directorships Held During the Past 5 Years: • None | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Current CEO ü Other Director Experience ü Corporate Governance Experience Mr. Smolik, age 54, has been President, Chief Executive Officer and Chairman of the Board of Directors of EP Energy Corporation since August 2013. EP Energy is a North American oil and natural gas exploration and development company. He previously served as Chairman of the Board of Managers of EPE Acquisition from May 2012 to August 2013. He was previously Executive Vice President and a member of the Executive Committee of El Paso Corporation since November 2006. Mr. Smolik was President of ConocoPhillips Canada from April 2006 to October 2006. Prior to the Burlington Resources merger with ConocoPhillips, he was President of Burlington Resources Canada from September 2004 to March 2006. From 1990 to 2004, Mr. Smolik worked in various engineering and asset management capacities for Burlington Resources Inc., including the Chief Engineering role from 2000 to 2004. He was a member of Burlington's Executive Committee from 2001 to 2006. Mr. Smolik also serves on the boards of the American Exploration and Production Council and Producers for American Crude Oil Exports. Mr. Smolik received his Bachelor of Science in Petroleum Engineering from Texas A&M University. | ||
| | | 2015 Proxy Statement 17 |
DIRECTOR NOMINEES
| Bruce W. Wilkinson | ||
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| Former Chairman, President and Chief Executive Officer of McDermott International, Inc. Lead Director Current Directorships: • PNM Resources, Inc. Former Directorships Held During the Past 5 Years: • None | |
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Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Former CEO ü Advanced Degree ü Other Director Experience ü Corporate Governance Experience Committee Assignments: • Nominating and Governance, Chairman • Compensation Bruce W. Wilkinson, age 70, provides extensive experience to the Board as a result of having served as Chairman, President and Chief Executive Officer of McDermott International, Inc., a leading global engineering and construction company from 2000 to 2008. In addition to his knowledge of the oilfield services sector and governance matters affecting public corporations, Mr. Wilkinson's familiarity with the large-scale, complex projects undertaken by McDermott is valuable to Cameron's evaluation and execution of its subsea systems projects, which carry similar challenges of scope and complexity. He has served as Chairman and CEO of Chemical Logistics Corporation, a company formed to consolidate chemical distribution companies; President and CEO of Tyler Corporation, a diversified manufacturing and service company; Interim President and CEO of Proler International, Inc., a ferrous metals recycling company; and Chairman and CEO of CRSS, Inc., a global engineering and construction services company. He has also been a Principal of Pinnacle Equity Partners, L.L.C., a private equity group. He serves on the Board of Directors of PNM Resources Inc., a holding company of utilities based in New Mexico. He also serves in positions of leadership in charitable and non-profit organizations. Mr. Wilkinson has Bachelor of Arts and J.D. degrees from the University of Oklahoma and an LLM from the University of London. | ||
| 18 2015 Proxy Statement | | |
Article III, Section 11 of our Bylaws provides for the appointment of an Advisory Director who is invited to attend meetings for the purpose "of advising and counseling the members of the Board, but who shall not serve on any committee nor shall have the ability to vote on any action." We made use of this provision from 1996 to 2000, when one of our then-current directors was appointed Advisory Director. That Advisory Director was subsequently reelected as a regular director by our stockholders at our 2000 Annual Meeting.
Mr. Hackett is currently pursuing a theology degree at Harvard Divinity School. In order to complete his degree program, he anticipates becoming a full-time resident student for the 2015-2016 academic year. As a result, he has concluded he would not be able to commit the full time and attention required of a regular director during that period. Because (1) this is a temporary situation, and he would like to return to regular Board service after he completes his degree program, (2) the Board values his experience and contributions and believes it to be in Cameron's best interests to continue Mr. Hackett's involvement in Cameron's governance and the affairs of the Board, and (3) the Board currently intends to nominate him as a regular director nominee at our 2016 Annual Meeting of Stockholders, the Board approved the appointment of Mr. Hackett as an Advisory Director, pursuant to the Bylaw provision described above, for a term of one year commencing at the expiration of his current term as director at this year's Annual Meeting.
As an Advisory Director, Mr. Hackett will continue to receive Board materials, will be invited to attend all Board meetings, and attend when possible, and will be asked to provide his perspective and opinions and be a resource to the Board. In accordance with the Bylaw provision and the approval of the Board, during his term as an Advisory Director, Mr. Hackett will be paid an annual Board retainer of $50,000.
| | | 2015 Proxy Statement 19 |
ADVISORY DIRECTOR
| James T. Hackett | ||
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| Former Chairman, President and Chief Executive Officer, Anadarko Petroleum Corporation
Current Directorships: • Fluor Corporation (until May 2015) •
• Enterprise Products Partners, LP • Riverstone Energy Ltd. Former Directorships Held During the Past 5 Years: • Anadarko Petroleum Corporation • Halliburton Company • Bunge, Ltd. | |
| | |
Skills and Qualifications: ü Executive Leadership and Financial Oversight ü Energy/Oilfield Services Experience ü International Operations ü Former CEO ü Advanced Degree and Former Professor of Finance ü
ü Corporate Governance Experience Committee • Audit • Compensation | ||
James T. Hackett, age | ||
Before joining Anadarko, Mr. Hackett served as President and Chief Operating Officer of Devon Energy Corporation following its merger with Ocean Energy, Inc. where he served as Chairman, President and Chief Executive Officer. Ocean Energy was a party to a merger in 1999 with Seagull Energy Corporation, where he was Chairman, Chief Executive Officer and President. He joined Seagull from Duke Energy Corporation, where he led its Energy Services Division as President. Prior to that, he was Executive Vice President of PanEnergy Corp. when the company merged with Duke Power Co. to create Duke Energy Corporation. | ||
Mr. Hackett is a director of Fluor Corporation and | ||
Mr. Hackett has a Bachelor of Science degree from the University of Illinois and an M.B.A. from the Harvard | ||
12 2014 Proxy Statement
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
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Continuing Directors — Term Ending 2015
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Composite Business Experience of Directors
The following table notes the breadth and variety of business experience that each of our directors brings to our company.
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| ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||||||
| ü | ü | ü | ü | ü | | |||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | H. Paulett Eberhart | ü | ü | ü | ü | ü | | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Peter J. Fluor | ü | ü | ü | ü | ü | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Douglas L. Foshee | ü | ü | ü | ü | ü | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | James T. Hackett | ü | ü | ü | ü | ü | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Rodolfo Landim | ü | ü | ü | ü | ü | | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Jack B. Moore | ü | ü | ü | ü | ü | | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Michael E. Patrick | ü | ü | ü | | | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Timothy J. Probert | ü | ü | ü | ü | ü | | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Jon Erik Reinhardsen | ü | ü | ü | ü | ü | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | R. Scott Rowe | ü | ü | ü | ü | | ü | | | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Brent J. Smolik | ü | ü | ü | ü | ü | | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | Bruce W. Wilkinson | ü | ü | ü | ü | ü | ü | ü | ü | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2014 Proxy Statement 21
| | | 2015 Proxy Statement 21 |
Corporate governance is typically defined as the system that allocates authority, duties and responsibilities among a corporation's stockholders, board of directors and management. The stockholders elect the directors and vote on various routine and extraordinary matters; thematters. The board of directors acts as a corporation's governing body and is responsible for oversight of the corporation's business and affairs and for hiring, overseeing, evaluating and compensating executive officers, particularly the chief executive officer ("CEO"); and management. Management is responsible for managing a corporation's day-to-day operations.
The business and affairs of our company are governed in accordance with the provisions of the Delaware General Corporation Law and our Certificate of Incorporation and Bylaws. Additionally, our Board has adopted written policies to further guide and regulate various actions.
Corporate Governance Principles
Our Corporate Governance Principles set out various rules and guidelines for self-governance and address such matters as the functions and duties of directors and the Board, the desired composition of our Board, various procedures and other matters, such as stock ownership guidelines.
Our Code of Ethics for Directors is designed to promote honest and ethical conduct and compliance with applicable laws, rules, regulations and standards. Our Board recognizes that no code of conduct and ethics can replace the thoughtful behavior of an ethical director, but such a code can focus attention on areas of ethical risk, provide guidance to help recognize and deal with ethical issues, and help to foster a culture of honesty and accountability. Our Board members certify their commitment to and compliance with the Code on an annual basis.
Our Code of Conduct applies to all of our employees and contractors and is designed to promote honest and ethical conduct and to articulate and provide guidance on our commitment to several key matters such as safety and health, protecting the environment, fair dealing, proper
stewardship of our products, use of company resources, and accurate communication about our finances and products. It also addresses the many legal and ethical facets of integrity in business dealings with customers, suppliers, investors, the public, governments and the communities in which we live and where we do business. Our Code of Conduct has been translated into more than ten languages and is distributed to our employees world-wide, who certify their commitment to and compliance with the Code on an annual basis.
Code of Ethics for Senior Financial Officers
Our Code of Ethics for Management Personnel, including Senior Financial Officers, is designed to promote honest and ethical conduct, proper disclosure of financial information, and compliance with applicable laws, rules and regulations by our officers and financial management. Our senior financial officers verify their commitment to and compliance with the Code on an annual basis.
Board's Role in Risk Oversight
Our Board has and exercises ultimate oversight responsibility with respect to enterprise risk assessment and to the management of the strategic, operational, financial and legal risks facing our company and its operations and financial condition. The Board is involved in setting our business and financial strategies and establishing what constitutes the appropriate level of risk for us and our business segments. Various committees of the Board provide assistance to the Board in its oversight of, among other things, risk assessment and risk management.
The
22 2014 Proxy Statement
| 22 2015 Proxy Statement | | |
CORPORATE GOVERNANCE
| | | | | |
| Oversight of Risk Management | ||||
• The Board oversees enterprise, strategic and operational risk management. • The Audit Committee assists the Board in its oversight of major financial risk exposures. • The Compensation Committee assists the Board with risks associated with compensation policies and practices. • The Nominating and Governance Committee provides assistance to the Board in the oversight of compliance risks. | ||||
| | | | | |
Since 1996, we have had stock ownership guidelines for our directors, and stock ownership requirements for our officers and other key executives. The Board adopted these guidelines and requirements in order to align the economic interests of our directors, officers and other key executives with those of our stockholders, generally, and to further focus attention on enhancing stockholder value. Under these guidelines, outside directors are expected to own shares of Common Stock within one year, and own shares of Common Stock with a value of at least $300,000 within three years of their election to the Board. Officers and other key executives are required to own Common Stock having a value between two and six times their base salaries, as is more fully described under the caption "Executive Compensation — Compensation Discussion and Analysis — Stock Ownership Requirements" on page 4749 of this Proxy Statement. Valuation for these purposes is calculated using current fair market value or cost, whichever is greater. Deferred stock units ("DSUs") owned by directors and restricted stock units ("RSUs") owned by officers and other key executives are included in the stock ownership calculation. All our directors and officers are in compliance with our stock ownership guidelines.
Hedging, Pledging and Derivative Policy
We have a written "Policy on Trades, Derivatives or Hedging Transactions, and Pledges by Directors, Officers and Key Employees" that, among other things, prohibits derivative or hedging transactions involving Common Stock, or the use of Common Stock as security, as collateral in a margin account, or as a pledge or other hypothecation.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board is composed entirely of independent directors. None of the members of the Committee during 20132014 or as of the date of this Proxy Statement is or has been an officer or employee of Cameron and no executive officer of Cameron has served on the compensation committee or board of any company that employed any member of the Company'sour Compensation Committee or the Board.
Policy on Related-Person Transactions
Our Board has adopted a written policy and procedures for the review of any transaction, arrangement or relationship in which the CompanyCameron is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% or greater stockholders (or their immediate family members) (each, a "related person") has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship (a "related-person transaction"), the related person must report the proposed transaction and the Board's Nominating and Governance Committee (for purposes of this Section, the "Committee") will review, and if appropriate, approve the proposed related-person transaction. Any related-person transaction that is ongoing in nature will be reviewed annually.
| | | 2015 Proxy Statement 23 |
CORPORATE GOVERNANCE
A related-person transaction will be considered approved or ratified if it is authorized by the Committee after full disclosure of the related person's interest in the transaction. As appropriate for the circumstances, the Committee will review and consider: the approximate dollar value of the amount involved; the related person's involvement in the negotiation of the terms and conditions, including the price of the transaction; the related person's interest in the related-person transaction; whether the transaction was undertaken in the ordinary course of our business; whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party; the purpose of, and the potential benefits to us of, the transaction; and any other information regarding the transaction or the related person in the context of the proposed transaction that the Committee determines to be relevant to its decision to either approve or disapprove the transaction.
The Committee will approve or ratify the transaction only if the Committee determines that, under all of the circumstances, the transaction is not inconsistent with Cameron's best
interests.
2014 Proxy Statement 23
CORPORATE GOVERNANCE
interests. The Committee may impose any conditions on the related-person transaction that it deems appropriate.
In addition to the transactions that are excluded by the instructions to the SEC's related-person transaction disclosure requirements, the Board has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related-person transactions for purposes of this policy:
transaction, and (4) the amount involved in the transaction equals less than 2% of our company's annual consolidated gross revenues; and
During 2013,2014, Mr. Erikson made personal use of Cameron-leased aircraft and reimbursed us for itsthe aggregate incremental operating costs. Mr. Erikson's reimbursements for flights taken in 20132014 were $290,928.$147,172. The use and reimbursement were consistent with our policy regarding use of Cameron-leased aircraft for personal travel by directors and senior vice presidents and above, and Mr. Erikson's use was approved and ratified by the Nominating and Governance Committee in accordance with the requirements of our Policy on Related-Person Transactions.
24 2014 Proxy Statement
| 24 2015 Proxy Statement | | |
The primary responsibility of the Board is to exercise governance over the affairs of our company and to establish delegations of authority to our management. It is also the Board's responsibility to provide oversight, counseling and direction to our management from the perspective of the long-term interests of our company and our stockholders. The Board's and its Committees' responsibilities include: (a)
financial statements and other public disclosures; and (h)
The Board has instructed the CEO, working with our other executive officers, to manage our business in a manner consistent with all applicable laws and regulations, our standards and practices, and in accordance with any specific plans, instructions or directions of the Board. The CEO and other members of management are responsible for seeking the advice and, in appropriate situations, the approval of the Board with respect to extraordinary actions to be undertaken by our company.
Our directors monitor our business and affairs through Board and Board Committee meetings, background and informational materials, presentations provided to them on a regular basis, and meetings with various of our officers and employees.
Each of our Board Committees is composed entirely of independent directors. Current Membership of the Committees is as follows:
| Committees | Independent Directors | Chair | ||
|---|---|---|---|---|
| | | | | |
| Audit | Michael E. Patrick | | ||
| H. Paulett Eberhart | ||||
Douglas L. Foshee | ||||
James T. | ||||
| Hackett* Rodolfo Landim | ||||
| | | | | |
| Compensation | ||||
| ||||
| C. Baker James T. Hackett* Michael E. Patrick Bruce W. Wilkinson | ||||
| | | | | |
| Nominating and Governance | Bruce W. Wilkinson | |||
| ||||
| C. Baker | ||||
| Cunningham* Douglas L. Foshee | ||||
Jon Erik Reinhardsen | ||||
| | | | |
| | | 2015 Proxy Statement 25 |
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Our Board of Directors currently has, and appoints the members of, three permanent Committees of the Board: the Audit Committee; the Compensation Committee; and the Nominating and Governance Committee. Each of these Committees operates pursuant to a written charter which can be found in the "Governance" section of our website atwww.c-a-m.com. As stated above, documents and information on our website are not incorporated into this Proxy Statement by reference. These documents are also available in print from theour Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas, 77027.
TheAudit Committee assists the Board in its oversight of the following matters:
For a full description of the Audit Committee's role and particularly its "Dutiesduties and Powers",powers, please see the Audit Committee's Charter available on our website. The Report of the Audit Committee addressing the Audit Committee's role with respect to our financial reporting process begins on page 31 of this Proxy Statement.
TheCompensation Committee is responsible for reviewing and making recommendations to the Board regarding compensation arrangements and benefit programs for our non-employee director compensation program. It is also responsible for the compensation plans and decisions for all our executive officers. ThePrior to making its compensation decisions regarding the CEO, the Compensation Committee is provided the performance review of the CEO conducted annually by the Nominating and Governance Committee and confers with all other independent directors in Executive Session before making its compensation decisions regarding the CEO.Session. The Compensation Committee also reviews and approves the compensation of the other executive officers, and, in addition, oversees compensation programs for non-executive officers and employees and supervises and administers theour compensation and benefits policies and plans ofplans. The Compensation Committee assists the Board in making decisions regarding compensation arrangements and benefit programs for our company.non-employee director compensation program by considering and making recommendations to the Board. The Compensation Committee is assisted in these matters by an independent compensation consultant, hired by and serving at the pleasure of the Committee.
Committee. The Compensation Committee also oversees executive development and succession planning, though sharing the responsibility for succession planning for the CEO with the Nominating and Governance Committee. A description of the Committee's role in determining executive compensation, including the CEO's compensation, and its use of an independent compensation consultant, is contained in "Executive Compensation — Compensation Discussion and Analysis," which begins on page 3536 of this Proxy Statement. A description of the Committee's role in determining non-employee director compensation is contained under the caption "Director Compensation," which begins on page 28 of this Proxy Statement.
The Compensation Committee also oversees executive development and succession planning, though sharing the responsibility for succession planning for the CEO with the Nominating and Governance Committee.
TheNominating and Governance Committee is responsible for, among other things, overseeing the development and periodic review of our policies and practices relating to corporate governance, including our Corporate Governance Principles, and for monitoring compliance with corporate governance rules and regulations, including our Code of Ethics for Directors and our Policy on Related-Person Transactions, and serves as our nominating committee. The Nominating and Governance Committee annually reviews the performance of the CEO, and assists the Board with succession planning for the CEO position. The Nominating and Governance Committee is responsible for reviewing and recommending to the Board director nominees, recommending committee assignments and leading the conduct of annual evaluations of the Board and its Committees and individual directors. The process for reviewing and recommending director nominees is described under the caption "Director Selection Process" on page 86 of this Proxy Statement. The Nominating and Governance Committee is responsible for overseeing the development and periodic review of our compliance policies and programs.
Chairman of the Board and Chief Executive Officer Positions. The Board believes it may be desirable and in the best interests of our company to combine these positions or to separate them depending on the circumstances. These positions were separated in 2008 to ensure an orderly transition when our Board appointed Mr. Moore, our then Chief Operating Officer, as CEO, and our former Chairman and CEO, Mr. Erikson, continued as Chairman of the Board. Effective May 3, 2011, these positions were once again combined when Mr. Erikson stepped down as Chairman and Mr. Moore was elected our Chairman as well as our CEO. The Board believes that the interests of our company and our stockholders are best served by having these positions combined at the present time.
Lead Director. The Board elects a lead director annually to preside over the Executive Sessions of the independent
26 2014 Proxy Statement
| 26 2015 Proxy Statement | | |
THE BOARD OF DIRECTORS AND ITS COMMITTEES
directors and to serve as a focal point for communications between the Board as a whole and management, as well as fulfill the other responsibilities set out in the Lead Director Charter available on our website at http://investors.c-a-m.com/governance-documents. The Board is of the opinion that it is appropriate to have a lead director whether the positions of Chairman and CEO are combined or separated. In May 2013,2014, the Board elected David RossBruce Wilkinson as Lead Director for the Board to serve until May 20142015 or until the election and qualification of a successor. In February 2014, the Board elected Mr. Wilkinson as Lead Director, effective February 20, 2014, to replace Mr. Ross, who is retiring from the Board at the Annual Meeting in May 2014. Mr. Ross also served as Chairman of the Nominating and Governance Committee from May 2013 until the February 2014 Board meeting when Mr. Wilkinson was appointed as Chairman of that Committee.
| | | | | |
| Board Leadership Structure | ||||
• Chairman of the Board and CEO: Jack B. Moore • Lead Independent Director: Bruce W. Wilkinson • Eleven Independent Directors | ||||
| | | | | |
Our Board believes that a majority of our directors should be independent, as defined under the standards adopted by the NYSE.New York Stock Exchange ("NYSE"). The Board makes an annual determination as to the independence of each of the directors. Under the NYSE standards, no director can qualify as independent unless the Board affirmatively determines that the director has no material relationship with our company that might interfere with the exercise of his or her independence from our management.
In evaluating each director's independence, the Board considers all relevant facts and circumstances in making a determination of independence. In particular, when assessing the materiality of a director's relationship with our company, the Board considers the issue not merely from the standpoint of the director, but also from the standpoint of persons or organizations with which the director has an affiliation. In its determination of independence, the Board reviewed and considered all relationships and transactions between each director, his or her family members or any business, charity or other entity in which the director has an interest, and Cameron, its affiliates, or any entity in which our senior management has an interest. As a result of this review, and based on the NYSE standards of independence, the Board affirmatively determined that Ms. Eberhart and each of Messrs. Cunningham, Fluor, Foshee, Hackett, Landim, Patrick, Reinhardsen, RossSmolik and Wilkinson are independent from Cameron and its management. In addition, the Board affirmatively determined that each of the members of the Audit Committee Ms. Eberhart and Messrs. Foshee, Hackett, Landim, Patrick and Ross, are independent under the additional standards for audit committee membership under SEC rules. Messrs. EriksonMoore and MooreRowe are not independent directors, as Mr. Erikson was an employee ofthey are currently Cameron until April 1, 2008 and Mr. Moore is currently one of our employees.
Meetings and Meeting Attendance
The Board and its Committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. Board and Committee agendas include regularly scheduled executive sessions for the independent directors to meet without management present. The Board's Lead Director leads the executive sessions of the Board, and the Committee Chairs lead those of the Committees. The Board has delegated various responsibilities and authority to the Board Committees as described in this Proxy Statement. Committees regularly report on their activities and actions to the full Board. Board members are permitted access to all of our employees outside of Board meetings. Board members periodically visit Cameron sites and events worldwide and meet with local management of those sites and at events.
During 2013,2014, our Board of Directors held seven meetings; the Audit Committee held sevennine meetings; the Compensation Committee held eightsix meetings; and the Nominating and Governance Committee held fivefour meetings. Attendance for all such meetings was 99%98%. Each director is expected to make a reasonable effort to attend all meetings of the Board, all meetings of the Committees of which such director is a member, and our annual meeting of stockholders. All of our directors attended our 20132014 Annual Meeting of Stockholders.
Any interested party desiring to communicate with our Board of Directors or any individual director may send a letter addressed to our Board of Directors as a whole or to individual directors, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027 or by email at stockholderservices@c-a-m.com. The Corporate Secretary has been instructed by the Board to screen the communications and promptly forward those to the full Board or to the individual director specifically addressed therein.
Internet Access to Principles, Codes, Policies and Charters
Our Corporate Governance Principles, Codes, Policies and Charters described above are available for review on our website atwww.c-a-m.com in the "Governance" and "Compliance" sections. Documents and information on our website are not incorporated into this Proxy Statement by reference.
2014 Proxy Statement 27
| | | 2015 Proxy Statement 27 |
The compensation program for our non-employee directors has been developed by the Compensation Committee, after consideration of the recommendations and competitive market data provided by FWC, whom the Compensation Committee has retained as its independent compensation consultant. The program has been approved by the full Board. The following sets out the components of the compensation program for our non-employee directors. Employee directors receive no additional compensation for serving on our Board:
Equity Grant Upon Initial Election* | $ | 250,000 | |
Annual Board Retainer | $ | 50,000 | |
Annual Equity Grant | $ | 250,000 | |
Lead Director Retainer | $ | 25,000 | |
Annual Committee Chair Retainer: | |||
Audit Committee | $ | 20,000 | |
Compensation Committee | $ | 15,000 | |
Nominating and Governance Committee | $ | 10,000 | |
Board/Committee Meeting Fee | $ | 2,500 | |
Telephonic Meeting Fee | $ | 1,000 |
| | | | | |
Equity Grant Upon Initial Election | $ | 250,000 | ||
| | | | | |
Annual Board Retainer | $ | 50,000 | ||
| | | | | |
Annual Equity Grant1 | $ | 250,000 | ||
| | | | | |
Lead Director Retainer | $ | 25,000 | ||
| | | | | |
Annual Committee Chair Retainer: | | |||
| | | | | |
Audit Committee | $ | 20,000 | ||
| | | | | |
Compensation Committee | $ | 15,000 | ||
| | | | | |
Nominating and Governance Committee | $ | 10,000 | ||
| | | | | |
Board/Committee Meeting Fee | $ | 2,500 | ||
| | | | | |
Telephonic Meeting Fee | $ | 1,000 | ||
| | | | | |
Equity grants, both the initial and annual, are made in the form of deferred stock units, or DSUs. One quarter of each year's annual equity grant is earned and vests at the end of each quarter of service as a director during that year. Vested DSUs are payable in Common Stock at the earlier of three years from the grant date or the end of Board tenure, unless electively deferred by the director for a longer period. Directors may elect to receive their Board and Committee Chair retainers in cash or defer them under our Deferred Compensation Plan for Non-Employee Directors. Deferral can be made for such periods of time as selected by the director and can be made into Common Stock or cash, at the director's election. No above-market interest or preferential earnings, as defined for purposes of the SEC's disclosure rules applicable to proxy statements, are credited or paid on cash deferrals.
28 2014 Proxy StatementDirectors are eligible to use company-leased aircraft for personal travel, provided they reimburse us for the incremental operating cost of any such use. Spouses of directors are invited to our annual off-site Board meeting. Directors are reimbursed by us for the cost of their spouses' travel to and from that meeting.
| 28 2015 Proxy Statement | | |
DIRECTOR COMPENSATION
Equity grants, both the initial and annual, are made in the form of deferred stock units, or DSUs. One quarter of each year's annual equity grant is earned and vests at the end of each quarter of service as a director during that year. Vested DSUs are payable in Common Stock at the earlier of three years from the grant date or the end of Board tenure, unless electively deferred by the director for a longer period. Directors may elect to receive their Board and Committee Chair retainers in cash or defer them under our Deferred Compensation Plan for Non-Employee Directors. Deferral can be made for such periods of time as selected by the
director and can be made into Common Stock or cash, at the director's election. No above-market interest, as defined for purposes of the SEC's disclosure rules applicable to proxy statements, is credited or paid on cash deferrals.
Directors are eligible to use company-leased aircraft for personal travel, provided they reimburse us for the incremental operating cost of any such use. Spouses of directors are invited to our annual off-site Board meeting. Directors are reimbursed by us for the cost of their spouses' travel to and from that meeting.
The following table provides compensation information for 20132014 for each non-employee director:
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value & Non-Qualified Deferred Compensation Earnings(2) | All Other Compensation ($) | Total ($) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
C. Baker Cunningham | 91,000 | 250,000 | -0- | -0- | -0- | -0- | 341,000 | ||||||||||||||
H. Paulett Eberhart | 19,167 | 104,152 | -0- | -0- | -0- | -0- | 123,319 | ||||||||||||||
Sheldon R. Erikson | 64,500 | 250,000 | -0- | -0- | -0- | -0- | 314,500 | ||||||||||||||
Peter J. Fluor | 95,000(3) | 250,000 | -0- | -0- | -0- | -0- | 345,000 | ||||||||||||||
Douglas L. Foshee | 87,000 | 250,000 | -0- | -0- | -0- | -0- | 337,000 | ||||||||||||||
James T. Hackett | 81,000(3) | 250,000 | -0- | -0- | -0- | -0- | 331,000 | ||||||||||||||
Rodolfo Landim | 72,750 | 250,000 | -0- | -0- | -0- | -0- | 322,750 | ||||||||||||||
Michael E. Patrick | 111,500(3) | 250,000 | -0- | -0- | -0- | -0- | 361,500 | ||||||||||||||
Jon Erik Reinhardsen | 74,500 | 250,000 | -0- | -0- | -0- | -0- | 324,500 | ||||||||||||||
David Ross | 122,000 | 250,000 | -0- | -0- | -0- | -0- | 372,000 | ||||||||||||||
Bruce W. Wilkinson | 91,000 | 250,000 | -0- | -0- | -0- | -0- | 341,000 | ||||||||||||||
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value & Non-Qualified Deferred Compensation Earnings(2) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
C. Baker Cunningham(4) | | 86,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 336,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
H. Paulett Eberhart(5) | | 79,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 329,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sheldon R. Erikson(4) | | 64,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 314,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Peter J. Fluor(3)(4) | | 91,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 341,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Douglas L. Foshee(6) | | 88,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 338,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
James T. Hackett(3)(7) | | 90,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 340,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rodolfo Landim(4) | | 79,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 329,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Michael E. Patrick(4) | | 111,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 361,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jon Erik Reinhardsen(4) | | 74,500 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 324,500 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Brent J. Smolik(8) | | -0- | | -0- | | -0- | | -0- | | -0- | | -0- | | -0- | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bruce W. Wilkinson(4) | | 110,250 | | 250,000 | | -0- | | -0- | | -0- | | -0- | | 360,250 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2015 Proxy Statement 29 |
Ernst & Young LLP has served as our independent registered public accountants since 1995. The Audit Committee has appointed Ernst & Young LLP as our independent registered public accountants for the year ending December 31, 2014.2015. A vote will be held on a proposal to ratify this appointment at the Meeting. While there is no legal requirement that this proposal be submitted to stockholders, the Board believes that the selection of independent registered public accountants to audit theour financial statements of the Company is of sufficient importance to seek stockholder ratification.
In accordance with our Bylaws, the eventadoption of this proposal requires the affirmative vote of a majority of the shares of Common Stock present in person or by proxy and entitled to vote on the proposal at the Annual Meeting. Because abstentions are counted as present for purposes of the vote on this proposal, but are not votes cast"FOR" this proposal, they have the same effect as votes "AGAINST" this proposal. Broker non-votes will have no effect on this vote. In the event such a majority is not voted in favor of the ratification of the appointment of Ernst & Young LLP, the Audit Committee may reconsider the appointment. The Audit Committee retains the discretion to appoint a new independent registered public accounting firm at any time if the Audit Committee concludes that such a change would be in the best interests of Cameron.
The fees billed by Ernst & Young LLP for services rendered for 2013 and 2014 are set out on page 33 of this Proxy Statement.
It is expected that representatives of Ernst & Young LLP will be present at the Meeting and will be available to answer questions and discuss matters pertaining to the Report of Independent Registered Public Accounting Firm contained in the financial statements incorporated by reference in the Company'sour Annual Report on Form 10-K for the year ended December 31, 2013.2014. Those representatives will have the opportunity to make a statement if they desire to do so.
The fees billed by Ernst & Young LLP for services rendered for 2012 and 2013 are set out on page 33THE BOARD RECOMMENDS that stockholders vote"FOR"
the ratification of this Proxy Statement.appointment.
| 30 | |  |
30 2014 Proxy Statement
The Audit Committee's role in ourCameron's corporate governance is summarized under the caption "The Board of Directors and its Committees" beginning on page 25 above.The Audit Committee's role with respect to ourCameron's financial reporting process is set out in this Report.Report.
Our Audit Committee is currently composed of sixfive directors, independent and otherwise qualified, as required by the NYSE, and operates under a written charter approved by the Board and available for review on ourCameron's website.
With respect to the financial reporting process, ourCameron's management is responsible for the adequacy of ourCameron's financial statements, internal controls and financial reporting processes.
processes. The independent registered public accountants are responsible for: (1) performing an independent audit of ourCameron's consolidated financial statements and expressing an opinion as to whether those financial statements fairly present the financial position, results of operations and cash flows of our companyCameron in accordance with generally accepted accounting principles in the United States, and (2) expressing their opinion as to the effectiveness of ourCameron's internal control over financial reporting. The Audit Committee is responsible for monitoring and overseeing these processes and otherwise assisting the directors in fulfilling their responsibilities relating to corporate accounting, reporting practices and reliability of ourCameron's financial reports.
| Functions | Duties and Powers | Actions | ||||
|---|---|---|---|---|---|---|
| | | | | | ||
The functions of the Audit Committee with respect to • Quality and integrity of our financial statements; • Scope and adequacy of • Independence and performance of • Cameron's compliance with legal and regulatory requirements related to the filing of, and disclosures included in, periodic reports containing Cameron's quarterly and annual financial statements. | The duties and powers of the Audit Committee in this area include: • Appointing, overseeing, evaluating and, when appropriate, discharging • Reviewing the scope and adequacy of the internal audit function, plans and significant findings; |
| ||||
|
Meeting with management and with the independent registered public accountants to review the scope, procedures and results of the audit, the appropriateness of accounting principles and disclosure practices, and the adequacy of | To be in a position to accept Cameron's 2014 consolidated financial statements, the Audit Committee took a number of steps, including: • Approving the scope of Cameron's internal and independent audits; • Meeting with | • Reviewing the audited financial statements with management, including a discussion of our critical accounting policies, practices and procedures, the reasonableness of significant judgments and the clarity of disclosures in the financial statements, and receiving management's representation that our financial statements were prepared in accordance with U.S. generally accepted accounting principles; and |
2014 Proxy Statement 31
| | | 2015 Proxy Statement 31 |
AUDITED-RELATEDAUDIT-RELATED MATTERS
| Functions | Duties and Powers | Actions | ||
|---|---|---|---|---|
| | | | | |
• Meeting with management and the internal auditors and independent registered public accountants to review Cameron's internal controls, including computerized information; • Reviewing with management • Reviewing significant changes in accounting standards and legal and regulatory matters that may impact the financial statements; • Overseeing • Conferring independently with the internal auditors and the independent registered public accountants in carrying out these duties and responsibilities. | • Recommending to the Board of Directors the inclusion of the audited consolidated financial statements in Cameron's Annual Report on Form 10-K for the year ended December 31, 2014; and • Discussing with |
Based on the Audit Committee's discussions with management, the director of internal audit and ourthe independent registered public accountants, and the Audit Committee's review of the representations of management and reports of ourCameron's independent registered public accountants to the Audit Committee, the Audit Committee approved the inclusion of the audited consolidated financial statements in ourCameron's Annual Report on Form 10-K for the year ended December 31, 2013,2014 filed with the SEC.
AUDIT COMMITTEE,
Michael E. Patrick,Chairman
H. Paulett Eberhart
Douglas L. Foshee
James T. Hackett
Rodolfo LandimDavid Ross
32 2014 Proxy Statement
| 32 2015 Proxy Statement | | |
AUDITED-RELATEDAUDIT-RELATED MATTERS
Audit Committee Financial Experts
Our Board has determined that all sixfive of the members of our Audit Committee, Ms. Eberhart and each of Messrs. Foshee, Hackett, Landim Patrick, and Ross,Patrick, are "audit committee financial experts," as that term is used in SEC regulations.
Principal Accounting Firm Fees
The following table sets forth the U.S. dollar equivalent fees billed or to be billed by our principal accounting firm, Ernst & Young LLP, for services rendered for the years ended December 31, 20132014 and 2012.2013.
| | Year Ended December 31 | ||||||
|---|---|---|---|---|---|---|---|
| | 2013 ($) | 2012 ($) | |||||
Audit Fees(1) | 5,533,200 | 4,427,443 | |||||
Audit Related Fees: | |||||||
Benefit plan audits | 104,950 | 91,055 | |||||
Other | 353,328 | 153,735 | |||||
| | | | | | | | |
| 458,278 | 244,790 | |||||
Tax Fees: | |||||||
Tax compliance, consulting and advisory services | 1,687,617 | 1,630,506 | |||||
| | | | | | | | |
TOTAL | 7,679,095 | 6,302,739 | |||||
| Year Ended December 31 | ||||||||
| | | | | | | | | |
| 2014 ($) | 2013 ($) | |||||||
| | | | | | | | | |
Audit Fees(1) | | 8,205,334 | | 5,533,200 | ||||
| | | | | | | | | |
Audit-Related Fees: | ||||||||
| | | | | | | | | |
Benefit plan audits | | 207,062 | | 104,950 | ||||
| | | | | | | | | |
Other | | 306,080 | | 353,328 | ||||
| | | | | | | | | |
| | 513,142 | | 458,278 | ||||
| | | | | | | | | |
Tax Fees: | ||||||||
| | | | | | | | | |
Tax compliance, consulting and advisory services | | 1,978,569 | | 1,687,617 | ||||
| | | | | | | | | |
TOTAL | | 10,697,045 | | 7,679,095 | ||||
| | | | | | | | | |
The Audit Committee performs an annual review and approves the scope of services and proposed fees of our principal accounting firm. The Audit Committee concluded that the provision of services, other than audit services, in 20132014 was compatible with maintaining the accounting firm's independence from us.
Pre-approvalPre-Approval Policies and Procedures
An Audit Committee policy requires advance approval of the Committee for all audit and audit-related services as well as tax and other services performed by the independent registered public accountants. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously approved with respect to that year, the Audit Committee must approve the permitted service before the independent registered public accountant is engaged to perform it. The Audit Committee has delegated to the Chairman of the Audit Committee authority to approve permitted services, provided that the Chairman reports any such decisions to the Audit Committee at its next regular meeting. None of the services related to the Audit-Related Fees or Tax Fees reflected in the table above were approved by the Audit Committee pursuant to the waiver of pre-approval provisions set forth in the applicable rules of the SEC.
2014 Proxy Statement 33
| | | 2015 Proxy Statement 33 |
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 enables stockholders to vote, on an advisory basis, to vote on whether they approve the annual compensation of our executive officers. This vote is commonly referred to as a "Say-on-Pay" vote. The Act requires an advisory vote to be conducted at least once every three years. Our stockholders expressed a preference for an annual advisory vote.vote in 2011. In accordance with this preference, we are providing our stockholders the opportunity to cast an advisory vote on 2013'sour 2014 executive compensation. It is currently expected that the next opportunity for stockholders will be given an opportunity to cast an advisory vote on this topic annually, with the next opportunity occurring in connection withexecutive compensation will be at our annual meeting in 2015.2016.
As described in detail under the caption "Executive Compensation — Compensation Discussion and Analysis" (the "CD&A") below, ourOur executive compensation programs areprogram is designed to align the interests of our named executive officers ("NEOs") with the interests of our stockholders. Under these programs, our executive officers are rewarded for the achievement of specific annual, long-term corporate and strategic goals and increases in stockholder value. Please read the CD&A beginning on page 35 for additional details about our executive compensation programs.
The Compensation Committee continually reviews the compensation programs for our executive officers to ensure they achieve the desired goals of aligning our executive compensation structure with stockholders' interests, generally, and current market practices. Please see the Summary to our CD&A on page 35 forthis program, a description of decisions and changes made to our executive compensation program during 2013 as a result of these reviews.
A significant part of our executive compensation is performance-based, linking pay to our financial results. Performance-basedOur executive officers are rewarded for the achievement of specific annual and long-term goals, as well as increases in stockholder value. For example, performance-based compensation made up more than 66%approximately three quarters of our CEO's 2013 total compensation and more than 57% of
our other NEOs2014 total compensation. In 2013,Please read the performance measures"Executive Compensation — Compensation Discussion and Analysis" (the "CD&A") which follows, beginning on page 36, for additional details about our annual incentive awards were: earnings per share, excluding special charges; cash flow from operations for corporate officers; and business unit earnings before interest and taxes and business unit cash flow for officers responsible for operating units; safety; and employment engagement as measured by voluntary attrition rates. We also provide a significant part of executive compensation in long-term equity incentives inprogram.
The Compensation Committee continually reviews our executive compensation program to ensure it achieves the formdesired goals of stock options, which have value only toaligning our executive compensation with stockholders' interests and current market practices.
THE BOARD RECOMMENDS
a vote"FOR" the extentapproval of an increase in the value of our Common Stock, and in the form of Performance-Based Restricted Stock Units ("PRSUs"), which are not earned unless performance targets are met or exceeded and do not vest, absent the exceptions described on pages 56-57, earlier than three years after the award is made. The performance measures for our 2013 PRSUs were return on invested capital ("ROIC") and TSR.
2014 executive compensation.
We are requesting your approval of the 20132014 compensation of our NEOs as describedexecutive officers named in this Proxy Statement, includingas described under "Executive Compensation — Compensation Discussion and Analysis," and in the compensation tables and the related narrative disclosure.disclosure which follow. This vote is not intended to address any specific item of compensation, but rather the overall compensation of theour named executive officers.officers for 2014.
In accordance with our Bylaws, the adoption of this proposal requires the affirmative vote of a majority of the shares of Common Stock present in person or by proxy and entitled to vote on the proposal at the Annual Meeting. Because abstentions are counted as present for purposes of the vote on this proposal, but are not votes "FOR" this proposal, they have the same effect as votes "AGAINST" this proposal. Broker non-votes will have no effect on this vote.
This Say-on-Pay vote is advisory, and therefore is not binding on Cameron, the Board or the Compensation Committee. The final decision on the compensation and benefits of our NEOsexecutive officers remains with the Board and the Compensation Committee. However, the Board and the Compensation Committee valuevalues your opinion as a stockholder, and, to the extent there is any significant vote against the NEO compensation of the executive officers named in this Proxy Statement, the Board and the Committee will consider the stockholders' concerns, and the Committee will evaluate whether any actions are necessary to address those concerns.
| 34 | | |
34 2014 Proxy Statement
We have reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on such review and discussions, we recommended to the Board of Directors that thissuch Compensation Discussion and Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE,
Peter J. Fluor,Chairman
C. Baker Cunningham
James T. Hackett
Michael E. Patrick
Bruce W. Wilkinson
| | | 2015 Proxy Statement 35 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This CD&A explains our executive compensation philosophy and practices and, in particular, those for our named executive officers or "NEOs." Our NEOs are our Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, as well asand our threetwo other most highly compensated executive officers in 2013.2014. As used in this CD&A, the "Committee" refers to the Compensation Committee of the Board.
The following is a list of our NEOs by name and position for 2013:2014:
| Name | Position | |
|---|---|---|
| | | |
| Jack B. Moore | Chairman | |
| | | |
| Charles M. Sledge | Senior Vice President and Chief Financial Officer | |
| | | |
| R. Scott Rowe | ||
| | | |
| William C. Lemmer | Senior Vice President and General Counsel | |
| | | |
| Gary M. Halverson | Senior Vice President and President, | |
| | | |
Our executive compensation philosophy is based on the premise that the most effective executive compensation program is one designed to encourage and reward achievement of specific annual, long-term and strategic goals. ItsOur program's design reflects this belief and is intentionally weighted in favor of performance-based compensation. ItsThe goal of the program is to align the interests of our executive officers with those of our stockholders, for the purpose of achieving the ultimate objective of increasing stockholder value by rewarding performance that meets or exceeds established goals, with the ultimate objective of increasing stockholder value.goals.
The total direct compensation of our executives is a mix of base salary, annual incentives and long-term incentives. We believe we have an appropriate balance between fixed and variable pay, cash and equity, corporate and business unit goals, and financial and non-financial goals. The benefits provided to our executive officers are generally the same as those broadly available to all our U.S. salaried employees, except for a nonqualified deferred contribution plan made available to more highly compensated employees, including executives and NEOs, and is intended to restore benefits of income deferral that would otherwise be lost due to federal tax limitations using the same funding formula used for eligible employees. Perquisites include only financial planning services and the opportunity for senior vice presidents and higher ranked officers to use company-leased aircraft for personal travel provided they reimburse us for the incremental operating costs.
2014 Proxy Statement 35
| 36 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAMKey Features of our Executive Compensation Program
| WHAT WE DO | WHAT WE DON'T DO | |||||
|---|---|---|---|---|---|---|
| | | | | | | |
| ü | Tie a Majority of Executive Compensation to Performance |   | ||||
| | | | | | | |
| ü | Have Oversight by Independent Compensation Committee | | ||||
| | | | | | | |
| ü | Receive Guidance from an Independent Executive Compensation Consultant | | ||||
| | | | | | | |
| ü | Have Time-Based Vesting Requirements for Earned Performance-Based Equity Awards | | ||||
| | | | | | | |
| ü | Require Significant Stock Ownership | | No Repricing Underwater Stock Options | |||
| | | | | | | |
| ü | Have a Compensation Clawback Policy | | No Hedging, Pledging or Derivative Transactions involving Cameron Securities | |||
| | | | | | | |
| ü | Have "Double-Trigger" Change-in-Control Severance Benefits | |||||
| | | | | | ||
| ü | ||||||
| Review Tally Sheets and Review Compensation Related Risk Assessment | ||||||
| | | | | | | |
| ü | Conduct Annual "Say-on-Pay" Votes | |||||
| | | | | | | |
The remainder of the Compensation Discussion and AnalysisCD&A is organized into six parts, as follows:
| Part I | — | |||
| Part II | — | Executive Compensation Objectives and Design | ||
| Part III | — | Roles and Responsibilities | ||
| Part IV | — | Executive Compensation Decision-Making Process | ||
| Part V | — | Executive Compensation Elements and Mix | ||
| Part VI | — | Other Matters Affecting Our Executive Compensation |
Part I — Company Performance
In 2013, Cameron had
Part I — 2014 Performance and Executive Compensation |
Cameron's performance in 2014 showed improvement as evidenced by increases in a record year for orders and revenues, up 13% and 16%, respectively, from the prior year and ended the year with a record backlog, up 34% from the prior year. In addition, we repurchased a record number of shares during 2013, returning $1.5 billionits year-over-year performance metrics and by a strong performance relative to investors. Please seepeers.
On a comparative basis to our peers, our TSR2014, as well as for the three-year period of 20112012 through 20132014, ranks in the 54th percentile.upper third quartile of our compensation peer group.
Our absolute TSR, however, declined year-over-year due to the downturn in oil and gas activity beginning in 2014 and to the uncertainty of the macro environment affecting the oil and gas industry as a whole. Executive compensation earned for 2014 and compensation decisions made for 2015 reflect this dichotomy between improved performance and the decline in our absolute TSR year-over-year.
| | | 2015 Proxy Statement 37 |
EXECUTIVE COMPENSATION
For a full description of these and other executive compensation matters, please see the CD&A beginning on page 36 of this Proxy Statement.
The following table showstables show a comparison of our TSR performance for 2014 and the prior five years, with that of of:
36 2014 Proxy StatementCOMPARISON OF CEO COMPENSATION TO TSR PERFORMANCE
COMPARISON OF OTHER NEOS' AVERAGE COMPENSATION TO TSR PERFORMANCE
| 38 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
COMPARISON OF CEO COMPENSATION TO TSR PERFORMANCE
COMPARISON OF OTHER NEOS' AVERAGE COMPENSATION TO TSR PERFORMANCE
2014 Proxy Statement 37
Purpose. The purpose of our executive compensation program is to provide us with a means to:
Pay-For-Performance.Pay-for-Performance. Our executive compensation program is designed to align our compensation goalsincentives with the operating and performance goals and metrics chosen by our Board for the purpose of drivingto drive long-term stockholder value creation. The design makes a significant portion of total direct compensation contingent upon performance against these goals. Our NEOs' targeted total direct compensation can be earned only if performance targets established by the
Compensation Committee are met. The elements of our executive compensation that pay only against performance are the:
We consider these elements of executive compensation to be performance-based compensation which is "at risk" because our annual incentives and performance-based equity awards can be earned only if pre-determined levels of performance are achieved against approved goals, and our stock options provide value only if and to the extent there is an increase in the value of our Common Stock during the option term. Although our RSUs have a performance hurdle, we do not classify them as performance compensation for the purpose of a pay-for-performance discussion.
The following charts show that over 66%74.3% of the 20132014 total direct compensation of our CEO, and over 59%67.8% of the average compensation of our other NEOs, was performance-based compensation:
Targeted Toto Median. Our program targets the level of cash compensation (made up of base salaries and annual incentives) and long-term equity incentive grant value at the median of what the Committee and its independent compensation consultant consider to be "competitive market levels." The Committee considers the median of these "competitive market levels" to be the appropriate guidepost for achieving our compensation objectives.
A median "competitive market level" is developed annually for each executive officer by the Committee's independent compensation consultant and set out in its annual report on executive compensation to the Committee.consultant. It is developed by comparing each executive officer's compensation withto that of officers in similar positions with (1) our peer companies and with those(2) companies in the manufacturing industry in general. Peer group
data is taken from SEC filings and industry data is taken from Mercer and Aon Hewitt Associates. When reviewing compensation levels against the survey data, the Committee considers only the aggregated survey data provided by the surveys. The identity of the individual companies comprising the survey data is not disclosed to, or considered by, the Committee in its evaluation process and, the Committee does not consider the identity of the companies comprising the survey data to be material for this purpose.
In the case of our CEO, Chief FinancialOperating Officer and our Executive Vice President,Chief Financial Officer, peer company data is given a 75% weighting and industry data a 25% weighting; for our fourth highest NEO, peer company data is given a 25% weighting and industry data are weighted 50% each;75%; and, for the fifth NEO, theindustry data is given a 100% weighted. The weightings are employed to reflect the comparability of the position matches at each level, as the more a comparable position appears in peer SEC filings, the greater the weight given peer data.
| | | 2015 Proxy Statement 39 |
EXECUTIVE COMPENSATION
The industry data is typically lower than peer group data, resulting in our "median competitive market levels" being lower than if derived solely from peer data alone.
38 2014 Proxy Statement
EXECUTIVE COMPENSATION
Peer Group.Groups. The Committee selected two different peer groups for two different purposes, a compensation peer group for the purpose of benchmarking and making executive compensation comparisons and a performance peer group used by the Committee when making "competitive market-level" comparisonsfor measuring our relative TSR performance for PRSU award purposes.
Our compensation peer group is composed of publicly traded oilfield services and equipment manufacturing companies selected by the Committee because they are generally of similar size and complexity, and are those companies with whom we compete in the labor market to attract and retain qualified executives. They include, but are not limited to, the same companies which we use for performance comparisons in our Annual Report.
The compensation peer group used in 2012 for decisions affecting 20132014 compensation wasis composed of the following 15 companies, as selected and approved by the Compensation Committee taking into account the recommendations made by the Committee's independent compensation consultant:consultant, an annual peer-of-peers review, and the peer groups used by certain proxy advisors:
| Compensation Peer Group | ||
| Baker Hughes Incorporated | Dover Corporation Ensco plc Flowserve Corporation FMC Technologies, Inc. Halliburton Company McDermott International, Inc. Nabors Industries, Inc. | |
| National Oilwell Varco, Inc. | ||
Noble Corporation | ||
Oil States International, Inc. Parker-Hannifin Corporation | ||
Schlumberger Limited | ||
Transocean Ltd. | ||
Weatherford International | ||
| Ltd | ||
Eight of the 15 companies in our compensation peer group are included, along with us, in the PhiladelphiaPHLX Oil Service Sector Index (OSX)(Ticker Symbol: OSX). The companies in our compensation peer group companies not included in the OSX are Dover Corporation, Ensco plc, Flowserve Corporation, FMC Technologies Inc., McDermott International, Inc., Noble Corporation, Inc. and Parker-Hannifin Corporation. These companies were included because they
are manufacturing companies serving the same or similar markets as Cameron. Of the six OSX companies not included in our compensation peer groups, two, Core Laboratories NV and Oceaneering International, Inc., were not included because they are in such sufficiently different businesses from us that the Committee does not consider them peers, and the three others,other four, Diamond Offshore Drilling, Inc., Helmerick & Payne, Inc., Rowan Companies plc and Tidewater, Inc., were not included even though they share some business characteristics with Cameron, because they are drilling companies and thecompanies. The Committee concluded that including them would cause drilling companies, to be over weighted in the overall group at the expense of manufacturing companies. The remaining OSX company not included in our 2013
Following the Committee's annual review of the compensation peer group during 2014, the Committee added Superior Energy Services, Inc. and removed McDermott International, Inc. and Oil States International, Inc., has been included in our 2014 from the compensation peer group replacing Diamond Offshore Drilling, Inc., another drilling company. Theused for making compensation decisions in 2015. This was done in order to have a peer group of companies more comparable to us in terms of size and type.
Our performance peer group is the OSX. This index was selected by the Committee replaced Diamond Offshore Drilling, Inc.because it is a published industry index composed of companies with Oil States International, Inc.whom we compete in 2013 for 2014 following a review of a list of peer-of-peers andthe capital market. It is also the peer group used by certain proxy advisors.
The Committee views the former and current peer group appropriate for the purpose of benchmarking executive compensation. For purposes of benchmarking our companystock performance however, other peer groups have been deemed more appropriate. For example, the peer comparison utilized for purposes of benchmarking Cameron's TSR is the OSX.graph in our Annual Report to Stockholders. The TSR goal and the useselection of the OSX companies to serve as the comparisonbench-mark group for the relative TSR performance of our companyCompany is discussed in Part V of this CD&A under the caption "Long-term"Long-Term Incentives — Performance Awards" on pages 4547 and 48 of this Proxy Statement.
Part III — Roles and Responsibilities |
Part III — Roles and Responsibilities
Role of the Compensation Committee. The Compensation Committee makes all compensation decisions regarding our executive officers, including our NEOs, except in the case of our CEO.NEOs. The Committee confers with all the other independent directors in Executive Session of the Board before making its decisions regarding the compensation of our CEO.
The following are the principal functions of the Committee with respect to executive compensation:
and the recommendation of the Committee's independent compensation consultant;
| 40 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
by the CEO, competitive data and the recommendation of the Committee's independent compensation consultant;
2014 Proxy Statement 39
EXECUTIVE COMPENSATION
Role of Independent Compensation Consultant. The Committee is assisted by an independent compensation consultant retained by the Committee on an annual basis. Frederick W. Cook & Co. Inc. ("FWC") is currently serving in that role. The independent compensation consultant reports to and acts at the direction of the Compensation Committee. FWC provides no services for management or the Compensation Committee that are unrelated to the duties and responsibilities of the Committee.
FWC prepared a 20132014 Report on Executive Compensation, an annual review of our executives' compensation program, for the Compensation Committee. The Report focuses on the Company'sour executive compensation program's effectiveness in supporting our business strategy, its reasonableness and competitiveness as compared to the compensation practices of our peer group and other manufacturing companies, and the Company'sour relative performance versus itsour peers. It covers each element of total compensation of executive officers, and compares them to data gathered from proxy statements and SEC filings of our peer group companies and from apublicly available compensation surveysurveys of the manufacturing industry conducted by Towers WatsonMercer and Aon Hewitt Associates. It calculates competitive market levels of compensation for each executive officer. It analyzes the cost and potential dilution to our stockholders of equity incentives and compares them to those of our peer group, and reports on the carried interest equity ownership of each of theour executive officers, including both shares owned
directly and owned indirectly through outstanding equity grants.
Independence of Compensation Consultant. The Committee has the sole authority to retain or terminate its compensation consultant.consultant and other advisors. The compensation consultant's role with us is limited to executive compensation matters and no such services are performed unless at the direction of and/or with the approval of the Committee. In connection with its engagement of FWC, the Committee considered various factors bearing on FWC's independence, including the amount of fees paid by us to FWC in 20132014 and the percentage of FWC's total revenues they represented; FWC's policies and procedures for preventing conflicts of interest and compliance with those procedures; any personal and business relationship of any FWC personnel with any of the Committee members or our executive officers; and FWC's policies prohibiting stock ownership by FWC personnel engaged in any Cameron matter and compliance with those policies. After reviewing these factors, the Committee determined that FWC is independent and that its engagement did not present any conflict of interest.
Role of CEO in the Compensation — Decision Process.CEO. Our CEO periodically reviews the performance of other executive officers, including the other NEOs, with the Committee for the Committee's use when making decisions regarding compensation and other matters, including succession planning. He submits proposals on performance objectives for annual incentive compensation and for long-term incentive grant values. He offers recommendations to the Committee on executive compensation program design and on compensation components for individual executive officers. Our CEO also regularly attends Compensation Committee meetings and provides his perspectives, judgment and recommendations on matters being considered by the Committee. He does not offer recommendation on his own compensation, nor does he attend meetings where his compensation is being discussed.
| | | 2015 Proxy Statement 41 |
Part IV — Executive Compensation Decision-Making ProcessTable of Contents
EXECUTIVE COMPENSATION
Part IV — Executive Compensation Decision-Making Process |
Advisory Vote Onon Executive Compensation. When considering the executive compensation program and executive compensation decisions, the Committee takes into account the most recent stockholder advisory vote on executive compensation and the comments and policies of stockholders and proxy advisory firms expressed in conjunction with that vote or otherwise. The 20132014 advisory vote passed with 96.78%95.92% of the votes cast in favor. In 2011, our stockholders expressed a preference for an annual advisory vote on executive compensation and the Board has approved and included an advisory vote for this year's Annual Meeting.
Tally Sheets. In addition to a review of the Report on Executive Compensation prepared by the Committee's
independent compensation consultant, each year the Committee reviews a "tally sheet" that, which itemizes the total compensation of each of our executive officers, including the NEOs, for the pastprior two years and the estimated minimum, target and maximum total compensation that could be earned by each during the current year the tally sheet is prepared depending on whether, and to what extent, performance-based compensation is earned. The Committee considers the appropriateness and the amounts of each element, the mix of the elements and the overall amount of total compensation when making its decisions on both the compensation program as a whole and the compensation to be paid each executive for the coming year.
40 2014 Proxy Statement
EXECUTIVE COMPENSATION
Risk Considerations.Mitigation. Our compensation philosophy is to emphasize pay-for-performance and to place a significant amount of total compensation at risk for the reasons discussed above. The Committee selects both short-term goals as well as operational and strategic goals that will drive performance over time. To mitigate against any risk that performance pay might cause, the Committee and the Board have adopted stock ownership requirements and a clawback policy, and the Committee has placed time-vesting requirements on earned PRSUs in order to drive a balanced focus between short-term and long-term focus. Additionally, as explained under the caption "Board's"Corporate Governance — Board's Role in Risk Oversight" on pages 22-2322 and 23 of this Proxy Statement, the independent compensation consultant and the Committee perform an annual assessment of our compensation policies and practices, including all incentive programs, to determine whether the risks arising from those policies and practices could be considered reasonably likely to have a material adverse effect on our company. Based on their review, the independent compensation consultant and the Committee concluded that our compensation policies and practices do not create risks that are reasonably likely to have such an effect.
Other Considerations. When making compensation decisions with respect to each of our executive officers, including our NEOs, in addition to the items discussed above, the Committee also considers:
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Part V — Executive Compensation Elements and Mix |
Part V — Executive Compensation Elements and Mix
Base Salary. Each of our executives earns a base salary for services rendered during the year. Base salaries are paid to provide executive officers with a market-competitive minimum level of annual earnings. Base salary ranges are determined for each executive position based on job responsibilities, required experience, general market competitiveness and internal comparisons. Base salaries, along with all other elements of compensation, are reviewed annually by the Committee at its fall meeting, giving consideration to:
The Committee reviews base salaries at its meeting in the Fall, with any change approved at that meeting taking effect the following April.
Based on its evaluation of these factors, during its annual review of executive salaries at its October 20122013 meeting, the Committee made the following adjustments to 2013the 2014 base salaries of Messrs. Sledge and Lemmer which became effective April 1, 2013:2014. The Committee also made the first change in Mr. Rowe's Base Salary when he was selected to become President of OneSubsea, effective January 1, 2014. The second change to Mr. Rowe's Base Salary occurred in conjunction with his promotion to President and Chief Operating Officer in September, 2014. The change to Mr. Halverson's occurred at the same time in recognition of his value to Cameron and the wider role he had been assigned when made president of our Drilling Systems group in addition to our Surface Systems Engineering Group.
| 2013 Base Salaries | 2014 Base Salaries | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | ||||||||||
Name | 2012 ($) | 2013 ($) | % Change | 2013 ($) | 2014 ($) | % Change | ||||||||||
| | | | | | | | ||||||||||
Jack B. Moore | 1,125,000 | 1,125,000 | 0.0 | 1,125,000 | 1,125,000 | 0.0 | ||||||||||
| | | | | | | | ||||||||||
Charles M. Sledge | 580,000 | 630,000 | 8.6 | 630,000 | 652,100 | 3.5 | ||||||||||
John D. Carne | 700,000 | 730,000 | 4.3 | |||||||||||||
| | | | | | | | ||||||||||
R. Scott Rowe | 380,000 | 450,000 | 18.4 | |||||||||||||
| | 606,900 | 25.9 | |||||||||||||
| | | | | | | | ||||||||||
William C. Lemmer | 520,000 | 540,000 | 3.8 | 540,000 | 556,200 | 3.0 | ||||||||||
James E. Wright | 435,000 | 453,000 | 4.1 | |||||||||||||
| | | | | | | | ||||||||||
Gary M. Halverson | 450,000 | 560,400 | 24.5 | |||||||||||||
| | | | | | | | ||||||||||
As a result of the Committee's evaluation of the factors discussed above at its October 20132014 meeting, the
2014 Proxy Statement 41
EXECUTIVE COMPENSATION
Committee made the followingcertain base salary adjustments to 2014 base salaries,be effective April 1, 2014:2015. Due to the changes and uncertainties in the macro-environment affecting us and our peers, competitors and customers, such adjustments, together with all planned salary increases for 2015, have been postponed indefinitely. The table below sets out the base salaries of the NEOs for 2015.
| 2014 Base Salaries | 2015 Base Salaries | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | ||||||||||
Name | 2013 ($) | 2014 ($) | % Change | 2014 ($) | 2015 ($) | % Change | ||||||||||
| | | | | | | | ||||||||||
Jack B. Moore | 1,125,000 | 1,125,000 | 0.0 | 1,125,000 | 1,125,000 | 0.0 | ||||||||||
| | | | | | | | ||||||||||
Charles M. Sledge | 630,000 | 652,100 | 3.5 | 652,100 | 652,100 | 0.0 | ||||||||||
John D. Carne | 730,000 | 730,000 | 0.0 | |||||||||||||
| | | | | | | | ||||||||||
R. Scott Rowe | 606,900 | 606,900 | 0.0 | |||||||||||||
| | | | | | | | ||||||||||
William C. Lemmer | 540,000 | 556,200 | 3.0 | 556,200 | 556,200 | 0.0 | ||||||||||
James E. Wright | 453,000 | 468,900 | 3.5 | |||||||||||||
| | | | | | | | ||||||||||
Gary M. Halverson | 560,400 | 560,400 | 0.0 | |||||||||||||
| | | | | | | | ||||||||||
Annual Incentive Compensation. Our stockholder-approved Management Incentive Compensation Plan ("MICP"), which was approved by our stockholders in 2011, provides each of our executive officers and other key management employees an opportunity to earn incentive compensation annually based on performance against pre-established objectives. These objectives are set by the Committee and are based on our Board-approved operating plan and budget. Annual incentive compensation is offered to incentivize the performance of our company-wide, business units, and individual annual objectives as well as to reflect competitive practice.
MICP Target Award Opportunities. The Committee, taking into consideration peer group and industry competitive practices, the advice and recommendations of the Committee's independent compensation consultant, and the recommendations of the CEO for positions other than his own, establishes a target-award opportunity for each
executive expressed as a percentage of base salary. Our target values are set at or near the market-median target percentages for similar positions within our peer group.percentages. Target awards are expressed as a percentage of base salary and the target awards for our NEOs for 20132014 and 20142015 are set out below.
MICP Target-Award Opportunities | MICP Target-Award Opportunities | MICP Target-Award Opportunities | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | |||||||
(% of base salary) | (% of base salary) | (% of base salary) | |||||||||
| | | | | | |||||||
Name | 2013 | 2014 | 2014 | 2015 | |||||||
| | | | | | |||||||
Jack B. Moore | 115% | 120% | 120% | 125% | |||||||
| | | | | | |||||||
Charles M. Sledge | 80% | 80% | 80% | 80% | |||||||
John D. Carne | 85% | 85% | |||||||||
| | | | | | |||||||
R. Scott Rowe | 85% | 90% | |||||||||
| | | | | | |||||||
William C. Lemmer | 70% | 70% | 70% | 70% | |||||||
James E. Wright | 65% | 65% | |||||||||
| | | | | | |||||||
Gary M. Halverson | 75% | 75% | |||||||||
| | | | | | |||||||
Setting the Performance Objectives. Performance objectives are set by the Committee for each year based on proposals submitted to the Committee by the CEO. The CEO's
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EXECUTIVE COMPENSATION
proposals, and ultimately the performance objectives selected, are based on and designed to encourage achievement of our annual performance goals set out in our Board-approved annual operating plan and budget, as well as business strategies for that year. The Committee also considers overall market conditions, the industry environment and our positionsposition in each of our respective business lines when setting performance objectives.
20132014 MICP Performance Objectives.
The Committee selected the following performance objectives for 20132014 for all MICP participants, including NEOs:
| Performance Objective | Target Objective | Purpose | |||
|---|---|---|---|---|---|
| | | | | | |
| | | These objectives are considered to be | ||
Earnings Per Share ("EPS")* | $3.80 | the principal indicators of financial performance | |||
Cash Flow from Operations | $1B | and drivers of stockholder value. | |||
| | | | | |
| On-Time Delivery | 85% | This objective is considered to be a key component of customer satisfaction and engagement. | |||
| | | | | | |
| Safety | Our employees are critical to our success | ||||
| Total Recordable Incident Rate ("TRIR") | .75/100 employees | and their health and safety need to be a | |||
| | | foremost focus of management. | |||
| | |
the effective use of cash received from Schlumberger Limited as part of the creation of OneSubsea, the effect of stock repurchases, acquisitions, divestitures and restructuring costs, and the effect of the Venezuelan currency devaluation.
For executives with operating unit responsibilities, the Committee also selected unit earnings before income taxes ("EBIT") and unit cash flow performance as objectives in order
42 2014 Proxy Statement
EXECUTIVE COMPENSATION
to make a portion of their incentive compensation dependent on performance of their specific unit.
As in prior years, the Committee set a return on equity ("ROE") hurdle of 7%. If the hurdle was not met or exceeded, any bonus payment otherwise earned would have been reduced by 50% for all participants.
20142015 Performance Objectives. For 2014,2015, the Committee again chose EPS, consolidated EBIT, and cash flow from operations as the financial performance objectives for all corporate executives, including the CEO for the same reasons theyearnings and cash flow targets were chosen as 20132014 performance objectives, and for executives with operating unit responsibilities the Committee chose EPS, operating unit EBIT and unit cash flow.
The Committee also maintained a TRIR goal for 2014.2015. For executives with corporate responsibilities, the target objective is a company-wide TRIR goal. For executives with operating unit responsibilities, the TRIR objective is operating unit specific and an improvement over that unit's individual history. The Committee also addedmaintained an on-time-delivery measure as a performance goal company-wide orfor executives with operating unit specific, as applicable, as our Company considers thisresponsibilities and added a Selling, General and Administrative (SG&A) cost reduction goal for corporate executives.
In order to be a key componentallow the Committee the opportunity to exercise the maximum possible discretion when determining award payouts to NEOs while maintaining deductibility under Section 162(m) of customer satisfaction and engagement.
Thethe Internal Revenue Code, the Committee instituted aestablishes an annual baseline performance hurdle underfor the MICP for thefull funding of the annual incentive compensation for NEOs subject to Section 162(m) of the Internal Revenue Code.NEOs. For 2014 the baseline performance hurdle iswas the achievement of positive earnings. If the performance hurdle iswas met, the incentive compensation pool will beis funded at the maximum opportunity for each NEO. If the hurdle is not met, the NEOs willwould not earn any annual incentive compensation. IfShould the performance hurdle be met and the compensation pool fully funds,funded, the Committee will then consider applyingapplies negative discretion when determiningto determine the actual awards to be made to each NEO, taking into consideration such matters as our actual performance against the MICP performance objectives for 2014, the individual NEO's performance and contributions, and other factors.factors in the Committee's discretion.
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Weighting of Performance Objectives. The Committee decides what the percent of the target award or weighting will be for each of the Performance Objectives.
2013 Weighting. For 2013, the Committee weighted the EPS, cash flow from operations, TRIR and voluntary attrition rate objectives for corporate executives at 60%, 20%, 10% and 10%, respectively, to ensure management was focused on earnings, cash generation, safety and employee engagement. For executives with operating unit responsibilities, the weighting for EPS, unit EBIT, unit cash flow, unit TRIR, and unit voluntary attrition rate was 30%, 30%, 20%, 10% and 10%, respectively.
| | Weighting of Performance Objectives Corporate Executives | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | |
| | CAMERON | |||||||||
| | | | | | | | | | | |
| | EPS | Cash Flow | On-Time Delivery | TRIR | SG&A Cost Reduction | |||||
| | | | | | | | | | | |
| 2014 | 50% | 20% | 20% | 10% | N/A | |||||
| | | | | | | | | | | |
| 2015 | 50% | 20% | 10% | 10% | 10% | |||||
| | | | | | | | | | | |
2014 Weighting. For 2014, the Committee weighted EPS at 50%, cash flow from operations at 20%, TRIR at 10% and on-time-delivery at 20% for corporate executives and, for executives with operating unit responsibilities, the Committee weighted 25% for EPS, 25% for unit EBIT, 20% for unit cash flow, and 10% for TRIR and 20% for on-time-delivery.
| | Weighting of Performance Objectives Business Unit Executives | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | |
| | CAMERON | BUSINESS UNIT | ||||||||
| | | | | | | | | | | |
| | EPS | EBIT | Cash Flow | On-Time Delivery | TRIR | |||||
| | | | | | | | | | | |
| 2014 | 25% | 25% | 20% | 20% | 10% | |||||
| | | | | | | | | | | |
| 2015 | 25% | 25% | 20% | 20% | 10% | |||||
| | | | | | | | | | | |
Setting Achievement Levels.Performance and Payout. The Committee establishes the percent of a target award that can be earned at different performance levels. Minimum, target and maximum payout levels are set out below.
For 2013,2015, because of the challenges posed by the uncertain macro-environment at the time during which goals for the year must be set, the Committee setchanged the performance level that must be achievedcurves, widening the performance range and lowering the threshold payments, building a range of +/–2.5% around the goal target for maximumwhich performance within this range would result in a target payout for EPSthose financial objectives. In order to prevent the potential for a windfall payout in the event of an unexpected turnaround in the oil and EBIT at 115% and cash flow from operations at 125%. For 2014,gas business in 2015, the Committee raisedapproved a provision that would require Cameron to perform in the maximumtop quartile of our performance peer group in order to receive a payout level forin excess of 150% of target EPS and EBIT to 120%, and lowered the cash flow from operations maximum payout level to 120%.performance.
Performance Level Achieved | |||||
2013 | 2014 | % of Target Award Earned | |||
Less than 80% | Less than 80 | % | 0 | ||
80% | 80 | % | Minimum 50 | ||
100% | 100 | % | Target 100 | ||
(EPS) 115% | 120 | % | Maximum 200 | ||
(EBIT) 115% | 120 | % | Maximum 200 | ||
(Cash Flow) 125% | 120 | % | Maximum 200 | ||
| | Performance & Payout | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
| | 2014 | 2015 | |||||||||
| | | | | | | | | | | | |
| Objectives | Performance | Percentage of Target Payout | Performance | Percentage of Target Payout | |||||||
| | | | | | | | | | | | |
| Financial | Less than 80% of Target | | 0% | Less than 75% | | 0% | |||||
EPS* | 80% | | 50% | 75% | | 37.5% | |||||
EBIT | 100% | | 100% | 97.5-102.5% | | 100% | |||||
Cash Flow | 120% | | 200% | 125% | | 200%* | |||||
| | | | | | | | | | | | |
| On-Time Delivery | Less than 75% OTD | | 0% | Less than 75% OTD | | 0% | |||||
| | 75% | | 50% | 75% | | 50% | |||||
| | 85% | | 100% | 85% | | 100% | |||||
| | 95% | | 200% | 95% | | 200% | |||||
| | | | | | | | | | | | |
| Safety | More than 0.81 TRIR | | 0% | More than 0.68 TRIR | | 0% | |||||
| | 0.81 | | 50% | 0.68 | | 50% | |||||
| | 0.75 | | 100% | 0.57 | | 100% | |||||
| | 0.69 | | 200% | 0.46 | | 200% | |||||
| | | | | | | | | | | | |
The maximum amount that can be earned under the MICP for any year is capped at 200% of target bonus even when performance exceeds the maximum. Under the MICP, no additional sum can be earned or "banked" for subsequent years.
2014 Proxy Statement 43
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EXECUTIVE COMPENSATION
Certifying Performance. During the first quarter, following year-end and the completion of our financial statement audit, our company'sCompany's and each unit's actual performance against the established goals is computed. The 20132014 results for EPS, cash flow forfrom operations, safety and employee engagementon-time delivery are set out in the table below.
| 2013 Performance Attained | ||||||||||||||||||
| Target | Actual | Performance Achieved | Payout Attainment | Weight | Payout Result | ||||||||||||
EPS | $ | 3.94 | $ | 3.20 | 81.20% | 53.16 | % | 60 | % | 31.90% | ||||||||
Cash Flow From Operations | $ | 600M | $ | 889M | 148.20% | 200.00 | % | 20 | % | 40.00% | ||||||||
TRIR (Safety) | 0.81% | 0.83% | 97.59% | 79.42 | % | 10 | % | 7.94% | ||||||||||
Employee Engagement | 7.90% | 9.14% | Below Minimum | 0.00 | % | 10 | % | 0.00% | ||||||||||
TOTAL PERFORMANCE | 79.84% | |||||||||||||||||
| | 2014 Performance Attained | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | |
| | Target | Actual | Performance Achieved | Payout Attainment | Weight | Payout Result | |||||||||||
| | | | | | | | | | | | | | | | | | |
EPS | $ | 3.80 | $ | 3.99 | 105 % | | 125 % | 50% | | 62.5% | |||||||
| | | | | | | | | | | | | | | | | | |
Cash Flow From Operations | $ | 1,000M | $ | 1,293M | 129.3% | | 200 % | 20% | | 40.0% | |||||||
| | | | | | | | | | | | | | | | | | |
TRIR (Safety) | | 0.75 | | 0.69 | Above Max | | 200 % | 10% | | 20.0% | |||||||
| | | | | | | | | | | | | | | | | | |
On-Time Delivery | | 85% | | 76.9% | 90.5% | | 59.5% | 20% | | 11.9% | |||||||
| | | | | | | | | | | | | | | | | | |
TOTAL PERFORMANCE | | | | | | | | | | 134.4% | |||||||
| | | | | | | | | | | | | | | | | | |
Approving Payouts.
Employee Engagement Goal. In assessingWhen determining and approving payouts for 2014 MICP performance, relative to the employment engagement goal for participants with company-wide responsibilities, we discovered that the baseline measure of attrition due to voluntary termination was set based on an incomplete dataset. This error was not discovered until after the target percentage had been recommended to and approved by the Committee. When measuring against goal performance at year-end, the result showed performance level that failed to achieve the minimum threshold of 80%. Because meaningful progress had been made against this goal, we re-evaluated the underlying data and discovered the error made in the goal setting process. We found that had the correct dataset been used, or had the error been discovered and corrected prior to management's recommendation and the Committee's approval of the goal, the correct target for this goal would have been 8.83% rather than 7.9%, and a performance payout level would have been 111.67%. After an explanation, the Committee exercised its discretion underapproved payouts derived from the terms of the MICP, and adjusted awards by restoring the 11.17% of target bonuses that would have been lost for all MICP participants having the company-wide (versus operating unit) employee engagement goal as a result of this error.performance against goals. The Committee did not, however, make this adjustment for the NEOs subjectmade no discretionary changes to the company-wide
employee engagement goal, including the CEO. The Committee did "restore" a like portion of the MICP award to one of the NEOspayouts determined in accord with the company-wide goal by approving a one-time, discretionary bonus outside of the MICP for this NEO. See footnote 10 of the Summary Compensation Table on page 50.
Safety Goal. The Committee accepted Management's proposal that, in spite of Cameron having achieved 98% of its safety goal, the executive leadership team, which includes the NEOs, would forego any payout related to that metric, which decreased these executives' payouts by 7.94 percent.descriptions above.
CEO Payout Determination. The Committee, in recognition of our company's TSR performance in relation to our peer group in 2013, exercised negative discretion when determining payout and reduced the payout to the CEO by 22.1% of target award.
The table below shows the difference between the "pro forma" MICP 2013 payments to the NEOs, payments that performance levels achieved would have resulted in absent Committee action, and the 2013 payouts actually approved by the Committee. The sums paid out are also disclosed in the "Non-Equity Incentive Compensation Plan" column of the Summary Compensation Table on page 49.
| 2013 MICP Payouts | ||||||||||||||||||||||
| Target Award (%) of Base Salary | Target Payout ($) | Performance Attained (%) | Discretion ($) | Calculated Payout ($) | Actual Payout (%) | Actual Payout ($) | |||||||||||||||
Jack B. Moore | 115.00 | 1,293,750 | 79.84 | (388,643 | ) | 1,032,930 | 49.80 | 644,288 | ||||||||||||||
Charles M. Sledge | 80.00 | 494,000 | 79.84 | (143,398 | ) | 394,410 | 49.80 | 246,012 | ||||||||||||||
John D. Carne | 85.00 | 614,125 | 106.85 | 0 | 656,193 | 106.85 | 656,193 | |||||||||||||||
William C. Lemmer | 70.00 | 374,500 | 79.84 | (29,735 | ) | 299,001 | 71.90 | 269,265 | ||||||||||||||
James E. Wright | 65.00 | 291,525 | 113.31 | (58,305 | ) | 330,327 | 93.31 | 272,022 | ||||||||||||||
| 2014 MICP Payouts | ||
|---|---|---|
| | | |
| Payout ($) | ||
| | | |
Jack B. Moore | 1,814,400 | |
| | | |
Charles M. Sledge | 695,106 | |
| | | |
R. Scott Rowe | 525,946 | |
| | | |
William C. Lemmer | 519,404 | |
| | | |
Gary M. Halverson | 409,047 | |
| | | |
44 2014 Proxy Statement
EXECUTIVE COMPENSATION
Long-Term Incentives.The purpose of our long-term equity awards is to support the achievement of our long-term goals. They are also intended to align compensation of executives and other key management employees with the interests of our long-term stockholders by providing incentives tied to our long-term success and increases in share price and stockholder value.
Our long-term incentive program is administered under our Equity Incentive Plan, which was approved by our company's stockholders in 2013. The Committee, after discussions with our independent compensation consultant, determines the aggregate target value for the long-term incentives to be granted to the executive officers as a group and individually. The Committee makes its determinations giving consideration to:
The tables below sets out target long-term incentive grant value established for each of our NEOs for 20132014 and 2014.2015.
| Target Long-Term Incentive Grant Value | |||||||||||
| Target Long-Term Incentive Grant Value | Target Long-Term Incentive Grant Value | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | |||||||
NEO | 2013 Value | 2014 Value | 2014 Value | 2015 Value | |||||||
| | | | | | |||||||
Jack B. Moore | 6,400,000 | 6,800,000 | 6,800,000 | 7,100,000 | |||||||
| | | | | | |||||||
Charles M. Sledge | 2,200,000 | 2,200,000 | 2,200,000 | 2,250,000 | |||||||
John D. Carne | 2,200,000 | 1,000,000 | |||||||||
| | | | | | |||||||
R. Scott Rowe | 1,300,000 | 2,500,000 | |||||||||
| | | | | | |||||||
William C. Lemmer | 1,700,000 | 1,700,000 | 1,700,000 | 1,765,000 | |||||||
James E. Wright | 1,350,000 | 1,350,000 | |||||||||
| | | | | | |||||||
Gary M. Halverson | 1,350,000 | 1,700,000 | |||||||||
| | | | | | |||||||
The increase in the target long-term incentive grant value of Messrs. Rowe and Halverson was due to Mr. Rowe's promotion and Mr. Halverson's assignment of greater responsibility during 2014.
Long-termLong-Term Incentive Vehicle Mix. For both 20132014 and 2014,2015, the Committee chose the following long-term incentive grant mix:
The Committee determined this is the appropriate mix as it focuses equally on three-year objectives and on long-term
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EXECUTIVE COMPENSATION
growth in share value, while placing a lesser, though still significant, emphasis on retention and continuity. Individuals may be granted more or less than the target amounts for their positions, based on individual performance, past grant history, employment retention considerations, internal equity, and the Committee's evaluation of future promotability.
PRSUs have a three-year vesting period and stock options and RSUs vest over a three-year period with one-third of the award vesting per year beginning on the first anniversary of the grant date.
The Committee has historically approved annual long-term incentive awards at its fall meeting, which is scheduled at least one year in advance. The Committee prefers this "mechanical" approach to selecting the grant date, rather than a "discretionary" approach, as it avoids having to make arbitrary judgments regarding timing of awards. To the extent newly hired or promoted executives receive an initial award of stock options, the options are priced at the closing price on a date no earlier than their actual start or approval date.
Performance Awards. PRSUThe Committee awards PRSUs to drive performance against Committee established goals over a three-year period. They are intended to serve two purposes: (1)not only encourage and reward performance against establishedthese goals and (2)but to also assist in retention of key employees, as any PRSUs earned by performance cliff vest three years from the date of grant. BothGenerally, both the performance and continued employment requirements must be satisfied in order for the executive to earn a payout under the award. For a description of the consequences of a termination of employment before the end of the performance period, see "Consequences of Early Termination on Outstanding Equity Awards" on page 54. The performance goals are established by the Committee no later than its first meeting of the year.initial year of the performance period.
For 2013both 2014 and 2014,2015, 40% of each officer's target long-term incentive grant value is made up of PRSUs. The target number of PRSUs subject to any individual award was determined by dividing 40% of the long-term grant value targeted for that individual by the "grant date fair value" of the awards. See Footnote No. 2 to the Summary Compensation Table for the calculation of the "grantgrant date fair value."
The numberFor both 2014 and value of PRSUs granted for 2013 and 2014 that can actually be earned is determined by performance against the goals established by2015, the Committee and can range from 0 to 200%chose two performance goals for PRSUs: 50% of the target value.
The 2013 and 2014 PRSUs were divided as follows: 50% witheach grant was given an ROIC goal, and 50% with a TSR goal.
EXECUTIVE COMPENSATION
The following table summarizes how performance against the 2014 ROIC goal was measured.
| ||||
| ||||
| ||||
|
The Committee chose TSR as a goal in order to directly align the interests of our executives with those of our stockholders. Performance against the TSR goal is determined by comparing the performance of our TSR with that of the OSX over the three yearthree-year performance period of the PRSUs. The Committee determined that the OSX is an appropriate benchmark against which to compare our TSR performance for the reasons discussed above in "Peer Groups."
The number and value of PRSUs for 2014 and 2015 that can actually be earned is determined by performance against the goals established by the Committee and can range from 0 to 200% of the target value, depending upon performance.
The following table summarizes how performance against the relationship between ourROIC goal is measured, and with the exception noted below the table, how the TSR performance when compared with that of the OSX index.goal is measured.
| | Performance & Payout | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
| | 2014 | 2015 | |||||||||
| | | | | | | | | | | | |
| Objective | Performance Against Goal | Percentage of Target Payout | Performance Against Goal | Percentage of Target Payout | |||||||
| | | | | | | | | | | | |
| ROIC | Less than 85% | | 0% | Less than 75% | | 0% | |||||
| | 80% | | 50% | 75% | | 37.5% | |||||
| | 100% | | 100% | 100% | | 100% | |||||
| | 120% | | 200% | 125% | | 200% | * | ||||
| | | | | | | | | | | | |
| TSR | Underperforms OSX by 16.67% or more | | 0% | Less than 25th Percentile | | 0% | |||||
| | Underperforms OSX by less than 16.67% | | 50% | 25th to 50th Percentile | | 50-99% | * | ||||
| | Performs=OSX | | 100% | 50th to 80th Percentile | | 100-199% | |||||
| | Outperforms OSX by 33.3% | | 200% | 80th Percentile or greater | | 200% | |||||
| | | | | | | | | | | | |
| | | |||
| ||||
| ||||
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EXECUTIVE COMPENSATION
In the event our TSR is negative, any payout would be capped at Target irrespective of our ranking relative to the OSX companies' performance.
For the PRSUs granted in 2012 with a three-year performance period of 2012 through 2014, 75% of which had an ROIC goal and 25% of which had a TSR goal, the performance level attained was determined as follows:
| 2012-2014 PRSU Payout | ||||||
|---|---|---|---|---|---|---|
| | | | | | | |
| Objectives | Percent of Award Earned | Weight | Payout | |||
| | | | | | | |
| ROIC | 93.6% | 75% | 70.2% | |||
| | | | | | | |
| TSR | 100.0% | * | 25% | 25.0% | ||
| | | | | | | |
| | | | 95.2% | |||
| | | | | | | |
Stock Options. Stock optionThe Committee awards are intendedstock options to make a portion of executive officers' total direct compensation contingent on long-term stock price appreciation. In October 2012 and 2013, each executive officer, including the NEOs, received an award of stock options for the years 20132014, and in October 2014 respectively.for 2015. The number of options for each individual award was determined by dividing 40% of the long-term incentive grant date fair value targeted for that individual by the grant date fair value of a stock option. See Footnote No. 3 to the Summary Compensation Table for the calculation of the "grant date fair value."
The exercise price for all our stock option awards, including those for 20132014 and for 2014,2015, is equal to the closing share price on the date of grant.
The Committee has historically approved annual awards of stock options at its Fall meeting, which is scheduled at least one year in advance. The Committee prefers this "mechanical" approach to selecting the grant date, rather than a "discretionary" approach, as it avoids having to make
arbitrary judgments regarding timing of awards. To the extent newly hired or promoted executives receive an initial award of stock options, such options are priced at the closing price on a date no earlier than their actual start or promotion date.
Stock options vest over a three-year period, with one-third of the options vesting per year, beginning on the first anniversary of the grant date. Stock options have a ten-year term. For treatment of vesting upon certain termination events such as retirement or death within the three-year vesting period, see the discussion following the Grants of Plan-Based Awards table on page 51.
Restricted Stock Units. Awards ofThe Committee awards RSUs are intended to encourage and promote retention. The number of RSUs for any individual award was determined by taking 20% of the long-term incentive grant value targeted for that individual and dividing it by the closing price of the Company's stockour Common Stock on the date of grant. The
RSU awards for both 2013 and 2014 will cliff vest over a three-year period, with one-third vesting per year beginning on the first anniversary of the grant. grant date.
To ensure that certain deduction limits under Section 162(m) of the Internal Revenue Code not apply to RSU awards (see "Tax Implications of Executive Compensation" on page 48)50), RSU awards for our executive officers, including our NEOs, require that we generate more than $50 million of net income in the year following the year in which the grant is made (e.g., awards made in October 20122014 for 20132015 require more than $50 million of net income in 2013)2015) as a condition to the RSUs being earned and eligible for vesting. For treatment of vesting upon certain termination events such as retirement or death within the three-year vesting period, see the discussion following the Grants of Plan-Based Awards table on page 51.
Benefits, Retirement Programs and Perquisites. We provide our executive officers with benefits and perquisites that the Committee has concluded are reasonable to assist in attracting and retaining qualified executives. TheThese benefits are generally the same as those broadly available to all our U.S. salaried employees, except for a nonqualified deferred compensation plan made available to our more highly compensated employees, including NEOs and other executives. This plan is intended to restore benefits of income deferral that would otherwise be lost due to federal tax limitations using the same funding formula used for other eligible employees. Perquisites include only financial planning services and the opportunity for senior vice presidents and higher ranked officers to use company-leased aircraft for personal travel provided they reimburse us for the incremental operating costs. Each year, the Committee reviews each year the appropriateness of both the nature and type of benefits and perquisites, and the associated values and costs.
Benefits and Retirement Programs. We provide our executive officers, including our CEO and the other NEOs, the same health and welfare benefits that are broadly available to our U.S. non-union employees, with no additional related benefits, programs or special features.
In addition to our Retirement Savings Plan, which is a qualified deferred compensation plan under Section 401(k) of the Internal Revenue Code of 1986, as amended ("Code"), and in which all U.S. employees, including executive officers, who meet the age, service and other requirements of the plan are eligible to participate, we offer a deferred compensation plan to more highly compensated employees, including executives. We do not provide defined benefit plans to executive officers.
46 2014 Proxy Statement
EXECUTIVE COMPENSATION
Our Deferred Compensation Plan is a nonqualified deferreddefined contribution plan. It is designed to allow deferral of income from base salary and annual bonus and company contributions that could have been made under our Retirement Savings Plan but for IRS limitations on deferrals of compensation into a tax-qualified plan. There is no "above-market" interest or preferential earnings element credited on any deferred compensation as defined in applicable SEC rules relating to disclosures on proxy statements.
Mr. Carne was a participant in the pension plan provided to our U.K. employees, but his participation was frozen as of the time he transferred from the U.K. to the U.S. in 2002, and he took distribution of his plan balance in September of 2013.
Perquisites. In 2013, ourOur executive officers, including the NEOs, wereare eligible to receive financial planning services.
The Committee believes it is in the interest of our companyCompany to assist executives in the handling of their personal finances, particularly tax filing obligations, to prevent them from being a distraction to the executive or an embarrassment to us. The cost of such services is imputed to the executive as income.
Our executive officers are reimbursed for the cost of spousal travel if there is a business purpose for the spouse to
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EXECUTIVE COMPENSATION
accompany the executive to a function or event. The cost of any such travel is imputed to the executive as income. The CEO and ExecutiveCOO and Senior Vice Presidents are also eligible to use company-leased aircraft for personal travel, provided they reimburse us for the incremental operating cost of any such use. There are no
We do not provide any tax gross-ups for any reported income related to such perquisites.
The cost to us of all benefits and perquisites provided to our executive officers is included in the Committee's independent compensation consultant's competitive analysis and in the annual "tally sheet"tally sheet presentation to the Committee on total compensation paid to executives.
Part VI — Other Matters Affecting Our Executive Compensation |
Part VI — Other Matters Affecting Our Executive Compensation
Clawback of Incentive Compensation. We have an executive compensation clawback policy. Under that policy, which has been incorporated into awards under our annual and long-term incentive plan, Management Incentive Compensation Plan, and Equity Incentive Plan,plans, should any executive officer commit fraud or intentional wrongdoing thatwhich results in a required financial restatement, we have the right to recover incentive and performance compensation paid or awarded to such executive officer within the past five years for the year restated and for the two years prior to any year of restatement.
Prohibition of Derivative, Hedging, and Pledging Transactions. We have a policy which regulates the trading in our securities by directors, officers and key employees. In addition to dealing with such matters as quarterly blackouts and Rule 10b5-1 trading, it prohibits derivative and hedging transactions involving Cameron securities and also prohibits pledging and otherwise using Cameron securities as collateral and holding Cameron securities accounts that are margined.
Stock Ownership Requirements. In addition to stock ownership guidelines for directors described under the caption "Corporate Governance — Stock Ownership Guidelines" on page 23 of this Proxy Statement, we have stock ownership requirements for executives and other key employees. Within three years of being appointed an executive or other key employee of our company, or being promoted to a position requiring increased ownership, the executive or employee is required to directly own Common Stock having a market value or cost basis, whichever is higher, equal to at least the following multiple of his or her base salary:
| Level | Base Salary Multiple | |
|---|---|---|
| | | |
Chairman and CEO | 6 | |
| | | |
| 4 | |
| | | |
Senior Vice President | 3 | |
| | | |
Vice President | 2 | |
| | | |
All Other Executive Long-Term Incentive Program Participants | 2 | |
| | | |
All NEOs meet or exceed their ownership requirement. All others subject to this requirement meet or exceed their ownership requirement or are within the three-year period given to achieve compliance. The ownership interests of the NEOs individually, and executives as a whole, are set out in "Security Ownership of Management" on page 64 of this Proxy Statement.
Employment, Severance and Change-in-Control ArrangementsArrangements.
Employment Contracts. We have no employment contracts with any of our executive officers, except for the change-in-control agreements described below.officers.
Executive Severance Policy. We have an Executive Severance Policy for all executive officers, including the NEOs. The Policy provides for salary continuation for 12 months for a covered executive if such executive's employment with our company is terminated by us for any reason other than cause. Participation in the annual incentive plan is prorated through the last day of employment and determined based on achievement of the goals and objectives established for the applicable year, but no entitlements are earned during the severance period. The amount of these payments, had any of the NEOs been terminated for any reason other than cause on December 31, 2013,2014, is set out under the caption "Payments Under Executive Severance Policy" beginning on page 5758 of this Proxy Statement.
We provide executive severance because we recognize the impact on individuals of our need to be able to freely make changes at the executive level, and of the relatively more difficult employment transition encountered when executive-level employees are terminated with possibly little orto no notice.
2014 Proxy Statement 47
EXECUTIVE COMPENSATION
Change-in-Control Agreements. We have change-in-control agreements with 1620 executive officers, including each of the NEOs. Payment under each of these agreements would only be made if the executive officer were to be terminated in connection with a change in control ("double trigger"). The agreements are described, and the payment that would have been made had an NEO been terminated on December 31, 20132014 in connection with a change in control are outlined, under the caption "Payments Uponupon Termination Inin Conjunction Withwith Change Inin Control" on page 56pages 58-60 of this Proxy Statement.
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EXECUTIVE COMPENSATION
We recognize that, as is the case with many publicly held corporations, the possibility of a change in control may arise and that such possibility, and the uncertainty and questions it may raise among our executive officers, may cause a distraction and result in the departure of one or more of them to our Company's and our stockholders' detriment. The Committee has determined that it is in the best interests of our company and our stockholders to help assure the continuation of service by certain executive officers, and to reinforce and encourage their attention and dedication to their assigned duties without distraction in circumstances arising from the possibility of a change in control. The Committee believes it important, should we or our stockholders receive a proposal for or notice of a change in control, or consider one ourselves, that we maintain a sound and vital management team and our executives be able to assess and advise our Company as to whether such transaction would be in the best interests of our company and our stockholders, and to take such other action regarding the transaction as our Board of Directors determines to be appropriate, without being influenced by the uncertainties of their own situations. We also believe that entering into change-in-control agreements with some of our executive officers has helped us attract and retain the level of executive talent needed to achieve our goals.
The elements of the severance benefits and the amounts of each were approved by the Committee at the time the
agreements were entered into, or most recently modified, based on the Committee's assessment of what was appropriate and competitive at that time. As a result, in prior years the Committee: reduced the severance benefits provided by our change-in-control agreements by eliminating equity grants as one of the elements of payment upon a change-in-control; reduced the annual incentive compensation portion to the larger of any award earned in the last three years or target award, and eliminated tax gross-up payments in agreements entered into since 2009. In 2012, the Committee, in conjunction with and as a consequence of executive officers being placed into two different compensation groups, also changed the multiplier used to determine the severance benefits so that the multiplier for severance benefits for certain of our executive officers including the NEOs,with agreements dated prior to 2012, remains at 3,three, but for the other executive officers, including some NEOs, is now 2 or 1.two and, in other cases, one.
Tax Implications of Executive Compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1 million on the amount of annual compensation that may be deducted by us in any year with respect to an NEO. Certain performance-based compensation subject to performance criteria approved by stockholders is not subject to this deduction limitation and, as a result, annual incentive compensation paid pursuant to our Management Incentive Compensation Plan and stock options, RSU and PRSU awards granted under our Equity Incentive Plan generally willare intended to qualify as performance-based compensation and should be deductible.
The Committee is mindful of the limitation and has structured the various elements of our executive compensation to fall within the limit or the exception. The Committee and/or the Board of Directors, however, may from time to time, in circumstances deemed appropriate, award compensation that may not be deductible, in order to, in their judgment, compensate executives in a manner commensurate with performance and the competitive market for executive talent.
48 2014 Proxy Statement
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EXECUTIVE COMPENSATION
The following table sets forth the compensation earned for services rendered to us by our NEOs, including Mr. Moore, our CEO, for the fiscal year ended December 31, 2013, by Mr. Moore, our CEO; Mr. Sledge, our CFO; and the other NEOs.2014.
Some differences in the compensation of our named executive officersNEOs result from the fact that our compensation philosophy is to pay competitively by position. In order to determine competitive levels, the independent compensation consultant, at the direction of the Compensation Committee, benchmarks each position against employees holding similar positions in our peer group and in the manufacturing industry in general. Our compensation policy and benchmarking practices are explained in the CD&A section of this Proxy Statement.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2)(4)(5) | Option Awards ($)(1)(3)(4) | Non-Equity Incentive Plan Compensation ($)(6) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(7)(8) | Total ($) | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($)(2)(3)(5)(6) | | Option Awards ($)(1)(4)(5) | | Non-Equity Incentive Plan Compensation ($)(7) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(8) | | All Other Compensation ($)(9) | | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Jack B. Moore | 2013 | 1,125,000 | 0 | 3,919,852 | 2,719,985 | 644,288 | 231,647 | 304,309 | 8,945,081 | | 2014 | | | 1,125,000 | | | 0 | | | 4,139,894 | | | 2,839,314 | | | 1,814,400 | | | 128,053 | | | 217,626 | | | 10,264,287 | ||||||||||||||||||||||||||||||||||||||
Chairman, President | 2012 | 1,110,125 | 0 | 3,839,938 | 2,559,995 | 1,763,428 | 164,947 | 213,231 | 9,651,664 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
and CEO | 2011 | 1,045,808 | 0 | 2,839,973 | 2,559,989 | 697,135 | (11,280 | ) | 216,798 | 7,348,423 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chairman and | | 2013 | | | 1,125,000 | | | 0 | | | 3,919,852 | | | 2,719,985 | | | 644,288 | | | 231,647 | | | 304,309 | | | 8,945,081 | |||||||||||||||||||||||||||||||||||||||||||||||
| CEO | | 2012 | | | 1,110,125 | | | 0 | | | 3,839,938 | | | 2,559,995 | | | 1,763,428 | | | 164,947 | | | 213,231 | | | 9,651,664 | |||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ��� | | | | | | ||||||||||||||||||||||||||||
Charles M. Sledge | 2013 | 617,500 | 0 | 1,319,937 | 879,991 | 246,012 | 184,452 | 137,892 | 3,385,784 | | 2014 | | | 646,490 | | | 0 | | | 1,329,921 | | | 899,780 | | | 695,106 | | | (15,359) | | | 110,797 | | | 3,666,735 | ||||||||||||||||||||||||||||||||||||||
Sr. Vice President & | 2012 | 570,375 | 0 | 1,520,169 | 879,993 | 590,894 | 110,402 | 103,860 | 3,775,693 | | 2013 | | | 617,500 | | | 0 | | | 1,319,937 | | | 879,991 | | | 246,012 | | | 184,452 | | | 137,892 | | | 3,385,784 | ||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2011 | 530,423 | 0 | 895,967 | 799,988 | 265,185 | (32,520 | ) | 112,651 | 2,571,694 | | 2012 | | | 570,375 | | | 0 | | | 1,520,169 | | | 879,993 | | | 590,894 | | | 110,402 | | | 103,860 | | | 3,775,693 | |||||||||||||||||||||||||||||||||||||
John D. Carne | 2013 | 722,500 | 0 | 879,960 | 999,992 | 656,193 | 296,303 | 293,611 | 3,848,559 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice | 2012 | 689,125 | 300,000 | &zwsp; (9) | 1,319,949 | 879,993 | 809,105 | 138,322 | 178,435 | 4,314,929 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President | 2011 | 644,192 | 0 | 1,039,982 | 879,993 | 365,006 | 19,922 | 142,828 | 3,091,923 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
| R. Scott Rowe President and COO | | 2014 | | | 486,338 | | | | | | 1,019,919 | | | 999,744 | | | 525,946 | | | 14,741 | | | 103,019 | | | 3,149,707 | |||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
William C. Lemmer | 2013 | 535,000 | 41,832 | &zwsp; (10) | 1,019,883 | 679,996 | 269,265 | 503,685 | 115,527 | 3,165,188 | | 2014 | | | 552,088 | | | 0 | | | 1,032,899 | | | 705,828 | | | 519,404 | | | 151,815 | | | 102,270 | | | 3,064,304 | |||||||||||||||||||||||||||||||||||||
Sr. Vice President & | 2012 | 513,700 | 0 | 1,340,191 | 679,995 | 496,702 | 229,577 | 88,172 | 3,348,337 | | 2013 | | | 535,000 | | | 41,832 | | | 1,019,883 | | | 679,996 | | | 269,265 | | | 503,685 | | | 115,527 | | | 3,165,188 | ||||||||||||||||||||||||||||||||||||||
General Counsel | 2011 | 487,415 | 0 | 855,948 | 719,998 | 211,192 | (31,733 | ) | 101,247 | 2,344,067 | | 2012 | | | 513,700 | | | 0 | | | 1,340,191 | | | 679,995 | | | 496,702 | | | 229,577 | | | 88,172 | | | 3,348,337 | |||||||||||||||||||||||||||||||||||||
James E. Wright | 2013 | 448,500 | 0 | 806,935 | 539,985 | 272,022 | 55,869 | 105,319 | 2,228,630 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sr. Vice President & | 2012 | 431,625 | 0 | 829,969 | 539,988 | 422,125 | 37,395 | 100,239 | 2,361,341 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President, Valves & Measurement | 2011 | 414,362 | 0 | 683,938 | 559,989 | 333,275 | 7,518 | 82,517 | 2,081,599 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
| Gary M. Halverson Sr. Vice President | | 2014 | | | 475,031 | | | 0 | | | 879,876 | | | 679,833 | | | 409,047 | | | 48,106 | | | 100,878 | | | 2,592,771 | |||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
| Name | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | ||||||||||
Jack B. Moore | 1,279,950 | 2,559,900 | 5,119,800 | 1,359,965 | 2,719,930 | 5,439,860 | ||||||||||
| | | | | | | | ||||||||||
Charles M. Sledge | 439,980 | 879,960 | 1,759,920 | 439,977 | 879,954 | 1,759,908 | ||||||||||
John D. Carne | 439,980 | 879,960 | 1,759,920 | |||||||||||||
| | | | | | | | ||||||||||
R. Scott Rowe | 259,962 | 519,924 | 1,039,848 | |||||||||||||
| | | | | | | | ||||||||||
William C. Lemmer | 339,948 | 679,895 | 1,359,790 | 339,969 | 679,937 | 1,359,874 | ||||||||||
James E. Wright | 269,993 | 539,985 | 1,079,970 | |||||||||||||
| | | | | | | | ||||||||||
Gary M. Halverson | 269,963 | 539,925 | 1,079,850 | |||||||||||||
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EXECUTIVE COMPENSATION
| Name | Company Contributions to Retirement Savings Plan ($) | Company Retirement Contributions to NQ DC Plan ($) | Company Match Contributions in NQ DC Plan ($) | Total Other Annual Compensation attributable to retirement benefits ($) | Company Contributions to Retirement Savings Plan ($) | Company Retirement Contributions to NQ DC Plan ($) | Company Match Contributions in NQ DC Plan ($) | Total Other Annual Compensation attributable to retirement benefits ($) | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | |||||||||||||
Jack B. Moore | 22,950 | 79,003 | 158,006 | 259,959 | | 23,400 | | 45,279 | | 90,557 | | 159,236 | ||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
Charles M. Sledge | 22,950 | 28,602 | 57,204 | 108,756 | | 23,400 | | 18,975 | | 37,950 | | 80,325 | ||||||||||||||
John D. Carne | 22,950 | 38.298 | 76,596 | 137,844 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
| R. Scott Rowe | | 23,400 | | 14,577 | | 29,155 | | 67,132 | ||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
William C. Lemmer | 22,950 | 23,301 | 46,602 | 92,853 | | 23,400 | | 18,096 | | 33,681 | | 75,177 | ||||||||||||||
James E. Wright | 22,950 | 18,469 | 36,938 | 78,357 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
| Gary M. Halverson | | 23,400 | | 11,245 | | 22,489 | | 57,134 | ||||||||||||||||||
| | | | | | | | | | | | | | ||||||||||||||
| Name | Spousal Travel ($)(1) | Excess Life ($) | Welfare Benefits ($)(2) | Relocation Expense ($) | Financial Planning Services ($) | Total Other Annual Compensation attributable to welfare benefits and perquisites ($) | Spousal Travel ($)(1) | Excess Life ($) | Welfare Benefits ($)(2) | Financial Planning Services ($) | Total Other Annual Compensation attributable to welfare benefits and perquisites ($) | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | |||||||||||||||||||
Jack B. Moore | 7,934 | 7,524 | 18,921 | — | 9,971 | 44,350 | | 26,426 | | 7,524 | | 16,133 | | 8,307 | | 58,390 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | |||||||||||||||||||
Charles M. Sledge | 0 | 1,021 | 18,387 | — | 9,728 | 29,136 | | 0 | | 1,710 | | 19,104 | | 9,658 | | 30,472 | |||||||||||||||||||
John D. Carne | 11,344 | 10,246 | 14,606 | 109,723 | 9,848 | 155,767 | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | |||||||||||||||||||
R. Scott Rowe | | 7,055 | | 1,037 | | 18,285 | | 9,510 | | 35,887 | |||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | |||||||||||||||||||
William C. Lemmer | 3,431 | 7,390 | 2,534 | — | 9,319 | 22,674 | | 0 | | 14,641 | | 3,045 | | 9,407 | | 27,093 | |||||||||||||||||||
James E. Wright | 560 | 2,056 | 14,355 | — | 9,991 | 26,962 | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | |||||||||||||||||||
Gary M. Halverson | | 14,847 | | 4,505 | | 14,487 | | 9,906 | | 43,745 | |||||||||||||||||||||||||
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50 2014 Proxy Statement
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EXECUTIVE COMPENSATION
Grants of Plan-Based Awards in Fiscal Year 20132014
The following table provides information on non-equity incentive plan awards, stock options PRSUs and Restricted Stock UnitsRSUs granted, and the grant date fair value of these awards.
| Committee | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(4) | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | Committee | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Name | Award Type | Grant Date(1) | Approval Date(4) | Threshold ($)(3) | Target ($)(3) | Maximum ($)(3) | Units (#) | Options (#) | Awards ($/Sh) | Awards ($)(4) | Award Type | Grant Date(1) | Approval Date | Threshold ($)(3) | Target ($)(3) | Maximum ($)(3) | Units (#) | Options (#) | Awards ($/Sh) | Awards ($)(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||
Jack B. Moore | Annual MICP | 1/1/2013 | 02/19/2014 | 646,875 | 1,293,750 | 2,587,500 | | Annual MICP | | 1/1/2014 | | 2/18/2014 | | 675,000 | | 1,350,000 | | 2,700,000 | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Performance RSU | 1/1/2013 | 10/17/2012 | 45,449 | 2,559,900 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual RSU | 10/17/2013 | 10/16/2013 | 20,932 | 1,359,952 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Option | 10/17/2013 | 10/16/2013 | 168,004 | 64.97 | 2,719,985 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | PRSU | | 1/1/2014 | | 10/16/2013 | | | | | | | | 45,283 | | | | | | 2,719,930 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual RSU | | 10/16/2014 | | 10/15/2014 | | | | | | | | 24,665 | | | | | | 1,419,964 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual Option | | 10/16/2014 | | 10/15/2014 | | | | | | | | | | 195,727 | | 57.57 | | 2,839,314 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||
Charles M. Sledge | Annual MICP | 1/1/2013 | 02/19/2014 | 247,000 | 494,000 | 988,000 | | Annual MICP | | 1/1/2014 | | 2/18/2014 | | 258,596 | | 517,192 | | 1,034,384 | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Performance RSU | 1/1/2013 | 10/17/2012 | 15,623 | 879,960 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual RSU | 10/17/2013 | 10/16/2013 | 6,772 | 439,977 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Option | 10/17/2013 | 10/16/2013 | 54,354 | 64.97 | 879,991 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John D. Carne | Annual MICP | 1/1/2013 | 02/19/2014 | 307,063 | 614,125 | 1,228,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performance RSU | 1/1/2013 | 10/17/2012 | 15,623 | 879,960 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Option | 10/17/2013 | 10/16/2013 | 61,766 | 64.97 | 999,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | PRSU | | 1/1/2014 | | 10/16/2013 | | | | | | | | 14,650 | | | | | | 879,954 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual RSU | | 10/16/2014 | | 10/15/2014 | | | | | | | | 7,816 | | | | | | 449,967 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual Option | | 10/16/2014 | | 10/15/2014 | | | | | | | | | | 62,026 | | 57.57 | | 899,780 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||
| R. Scott Rowe | | Annual MICP | | 1/1/2014 | | 2/18/2014 | | 189,158 | | 378,315 | | 756,630 | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | PRSU | | 1/1/2014 | | 10/16/2013 | | | | | | | | 8,656 | | | | | | 519,924 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual RSU | | 10/16/2014 | | 10/15/2014 | | | | | | | | 8,685 | | | | | | 499,995 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual Option | | 10/16/2014 | | 10/15/2014 | | | | | | | | | | 68,917 | | 57.57 | | 999,744 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||
William C. Lemmer | Annual MICP | 1/1/2013 | 02/19/2014 | 187,250 | 374,500 | 749,000 | | Annual MICP | | 1/1/2014 | | 2/18/2014 | | 193,231 | | 386,461 | | 772,922 | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Performance RSU | 1/1/2013 | 10/17/2012 | 12,071 | 679,895 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual RSU | 10/17/2013 | 10/16/2013 | 5,233 | 339,988 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Option | 10/17/2013 | 10/16/2013 | 42,001 | 64.97 | 679,996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James E. Wright | Annual MICP | 1/1/2013 | 02/19/2014 | 145,763 | 291,525 | 583,050 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performance RSU | 1/1/2013 | 10/17/2012 | 9,587 | 539,985 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual RSU | 10/17/2013 | 10/16/2013 | 4,155 | 269,950 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Option | 10/17/2013 | 10/16/2013 | 33,353 | 64.97 | 539,985 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | PRSU | | 1/1/2014 | | 10/16/2013 | | | | | | | | 11,320 | | | | | | 679,937 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual RSU | | 10/16/2014 | | 10/15/2014 | | | | | | | | 6,131 | | | | | | 352,962 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual Option | | 10/16/2014 | | 10/15/2014 | | | | | | | | | | 48,656 | | 57.57 | | 705,828 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||
| Gary M. Halverson | | Annual MICP | | 1/1/2014 | | 2/18/2014 | | 178,137 | | 356,274 | | 712,548 | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | PRSU | | 1/1/2014 | | 10/16/2013 | | | | | | | | 8,989 | | | | | | 539,925 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual RSU | | 10/16/2014 | | 10/15/2014 | | | | | | | | 5,905 | | | | | | 339,951 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Annual Option | | 10/16/2014 | | 10/15/2014 | | | | | | | | | | 46,864 | | 57.57 | | 679,833 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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2014 Proxy Statement 51
| | | 2015 Proxy Statement 53 |
EXECUTIVE COMPENSATION
Stock options and RSUs vest over a three-year period with one-third of the options vesting per year beginning on the first anniversariesanniversary of their date of grant. PRSUs cliff vest three years from date of their grant. The impact of termination and change in control on vesting and exercisability of stock options, as well as the vesting of RSUs and PRSUs, is set out below:
| Consequences of Early Termination on Outstanding Equity Awards | |||||||
Stock Options | RSU/PRSUs | ||||||
| | | | | | | | |
| Termination Circumstances | Vesting | Exercise Rights | Vesting | ||||
| | | | | | | | |
| Voluntary | Ceases | 90 days | Ceases | ||||
| | | | | | | ||
| Age 65 with 10 years of service | Continues | Grant Term | Continues | ||||
| | | | | | | ||
| Age 60 with 10 years of service | Continues(1) | Lesser of 3 years or Grant Term | Continues(1) | ||||
| | | | | | | ||
| Death | Accelerates(2) | Lesser of 3 years or Grant Term | Accelerates(2) | ||||
| | | | | | | ||
| Disability | Accelerates(2) | Lesser of 3 years or Grant Term | Accelerates(2) | ||||
| | | | | | | ||
| Reduction in Force | Continues(1) | Continues(1) | |||||
| | | | | | | ||
| For Cause | All vested and unvested | N/A | Ceases | ||||
| | | | | | | ||
| Change-in-Control and Successor does not Assume the Award or Grant New Award | Accelerates | Grant Term | Accelerates(3) | ||||
| | | | | | | ||
52 2014 Proxy Statement
| 54 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-End
The following table presents information about outstanding stock option awards classified as "exercisable" and "unexercisable" as of December 31, 2013,2014, for our CEO, Chief Operating Officer, Chief Financial Officer and the threetwo other NEOs, as well as RSU and PRSU awards to the NEOs that were not yet vested as of December 31, 2013.2014. The awards approved by the Committee in October 2013,2014, that can be earned by 20142015 performance, were granted effective January 1, 20142015 and are, therefore, not included in this table, but will be reflected in the "Outstanding Equity Awards at Fiscal Year-End" table in our 20152016 Proxy Statement.
| Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Name | Option Grant Date(1)(2) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Restricted Stock Grant Date(1)(3) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Option Grant Date(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Restricted Stock Units/ Performance Units Grant Date(2) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Jack B. Moore | 11/13/2008 | 205,516 | 0 | 22.30 | 2015 | 10/20/2010 | 8,666 | 515,887 | | 11/13/2008 | | 82,798 | | 0 | | 22.30 | 2015 | | 11/16/2011 | | 8,326 | | 415,884 | ||||||||||||||||||||||||||
| 11/06/2009 | 180,000 | 0 | 39.24 | 2016 | 11/16/2011 | 16,653 | 991,353 | |||||||||||||||||||||||||||||||||||||||||
| 10/20/2010 | 315,000 | 0 | 42.81 | 2017 | 01/01/2012 | 51,440 | 3,062,223 | |||||||||||||||||||||||||||||||||||||||||
| 11/16/2011 | 117,945 | 58,972 | 51.24 | 2021 | 10/18/2012 | 22,836 | 1,359,427 | |||||||||||||||||||||||||||||||||||||||||
| 10/18/2012 | 54,422 | 108,843 | 56.05 | 2022 | 01/01/2013 | 45,449 | 2,705,579 | |||||||||||||||||||||||||||||||||||||||||
| 10/17/2013 | 0 | 168,004 | 64.97 | 2023 | 10/17/2013 | 20,932 | 1,246,082 | |||||||||||||||||||||||||||||||||||||||||
| | | 11/06/2009 | | 177,452 | | 0 | | 39.24 | 2016 | | 01/01/2012 | | 53,067 | | 2,650,697 | ||||||||||||||||||||||||||||||||||
| | | 10/20/2010 | | 312,665 | | 0 | | 42.81 | 2017 | | 10/18/2012 | | 15,224 | | 760,439 | ||||||||||||||||||||||||||||||||||
| | | 11/16/2011 | | 176,917 | | 0 | | 51.24 | 2021 | | 01/01/2013 | | 45,449 | | 2,270,178 | ||||||||||||||||||||||||||||||||||
| | | 10/18/2012 | | 108,844 | | 54,421 | | 56.05 | 2022 | | 10/17/2013 | | 20,932 | | 1,045,553 | ||||||||||||||||||||||||||||||||||
| | | 10/17/2013 | | 55,489 | | 112,515 | | 64.97 | 2023 | | 01/01/2014 | | 45,283 | | 2,261,886 | ||||||||||||||||||||||||||||||||||
| | | 10/16/2014 | | 0 | | 195,727 | | 57.57 | 2024 | | 10/16/2014 | | 24,665 | | 1,232,017 | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Charles M. Sledge | 11/15/2007 | 2,272 | 0 | 44.01 | 2014 | 10/20/2010 | 2,750 | 163,708 | | 11/13/2008 | | 0 | | 0 | | 22.30 | 2015 | | 11/16/2011 | | 2,602 | | 129,970 | ||||||||||||||||||||||||||
| 11/06/2009 | 62,000 | 0 | 39.24 | 2016 | 11/16/2011 | 5,204 | 309,794 | |||||||||||||||||||||||||||||||||||||||||
| 10/20/2010 | 99,900 | 0 | 42.81 | 2017 | 01/01/2012 | 16,072 | 956,766 | |||||||||||||||||||||||||||||||||||||||||
| 11/16/2011 | 36,858 | 18,428 | 51.24 | 2021 | 10/18/2012 | 11,183 | 665,724 | |||||||||||||||||||||||||||||||||||||||||
| 10/18/2012 | 18,708 | 37,414 | 56.05 | 2022 | 01/01/2013 | 15,623 | 930,037 | |||||||||||||||||||||||||||||||||||||||||
| 10/17/2013 | 0 | 54,354 | 64.97 | 2023 | 10/17/2013 | 6,772 | 403,137 | |||||||||||||||||||||||||||||||||||||||||
John D. Carne | 11/15/2007 | 2,272 | 0 | 44.01 | 2014 | 10/20/2010 | 3,333 | 198,413 | |||||||||||||||||||||||||||||||||||||||||
| 11/06/2009 | 2,548 | 0 | 39.24 | 2016 | 11/16/2011 | 5,724 | 340,750 | |||||||||||||||||||||||||||||||||||||||||
| 10/20/2010 | 121,100 | 0 | 42.81 | 2017 | 01/01/2012 | 17,681 | 1,052,550 | |||||||||||||||||||||||||||||||||||||||||
| 11/16/2011 | 40,544 | 20,271 | 51.24 | 2021 | 10/18/2012 | 7,850 | 467,311 | |||||||||||||||||||||||||||||||||||||||||
| 10/18/2012 | 18,708 | 37,414 | 56.05 | 2022 | 01/01/2013 | 15,623 | 930,037 | |||||||||||||||||||||||||||||||||||||||||
| 10/17/2013 | 0 | 61,766 | 64.97 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| | | 11/06/2009 | | 62,000 | | 0 | | 39.24 | 2016 | | 01/01/2012 | | 16,582 | | 828,271 | ||||||||||||||||||||||||||||||||||
| | | 10/20/2010 | | 99,900 | | 0 | | 42.81 | 2017 | | 10/18/2012 | | 6,899 | | 344,605 | ||||||||||||||||||||||||||||||||||
| | | 11/16/2011 | | 55,286 | | 0 | | 51.24 | 2021 | | 01/01/2013 | | 15,623 | | 780,369 | ||||||||||||||||||||||||||||||||||
| | | 10/18/2012 | | 37,415 | | 18,707 | | 56.05 | 2022 | | 10/17/2013 | | 6,772 | | 338,261 | ||||||||||||||||||||||||||||||||||
| | | 10/17/2013 | | 18,118 | | 36,236 | | 64.97 | 2023 | | 01/01/2014 | | 14,650 | | 731,768 | ||||||||||||||||||||||||||||||||||
| | | 10/16/2014 | | 0 | | 62,026 | | 57.57 | 2024 | | 10/16/2014 | | 7,816 | | 390,409 | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
| R. Scott Rowe | | 11/13/2008 | | 1,952 | | 0 | | 22.30 | 2015 | | 01/01/2012 | | 6,218 | | 310,589 | ||||||||||||||||||||||||||||||||||
| | | 11/06/2009 | | 2,548 | | 0 | | 39.24 | 2016 | | 10/18/2012 | | 1,189 | | 59,391 | ||||||||||||||||||||||||||||||||||
| | | 10/20/2010 | | 13,300 | | 0 | | 42.81 | 2017 | | 01/01/2013 | | 7,101 | | 354,695 | ||||||||||||||||||||||||||||||||||
| | | 11/16/2011 | | 20,732 | | 0 | | 51.24 | 2021 | | 10/17/2013 | | 4,001 | | 199,850 | ||||||||||||||||||||||||||||||||||
| | | 10/18/2012 | | 17,007 | | 8,503 | | 56.05 | 2022 | | 01/01/2014 | | 8,656 | | 432,367 | ||||||||||||||||||||||||||||||||||
| | | 10/17/2013 | | 10,706 | | 21,412 | | 64.97 | 2023 | | 10/16/2014 | | 8,685 | | 433,816 | ||||||||||||||||||||||||||||||||||
| | | 10/16/2014 | | 0 | | 68,917 | | 57.57 | 2024 | | | | | | | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
William C. Lemmer | 11/15/2007 | 2,272 | 0 | 44.01 | 2014 | 10/20/2010 | 2,750 | 163,708 | | 11/13/2008 | | 0 | | 0 | | 22.30 | 2015 | | 11/16/2011 | | 2,341 | | 116,933 | ||||||||||||||||||||||||||
| 11/06/2009 | 2,548 | 0 | 39.24 | 2016 | 11/16/2011 | 4,683 | 278,779 | |||||||||||||||||||||||||||||||||||||||||
| 10/20/2010 | 99,900 | 0 | 42.81 | 2017 | 01/01/2012 | 14,466 | 861,161 | |||||||||||||||||||||||||||||||||||||||||
| 11/16/2011 | 33,172 | 16,586 | 51.24 | 2021 | 10/18/2012 | 9,399 | 559,522 | |||||||||||||||||||||||||||||||||||||||||
| 10/18/2012 | 14,456 | 28,911 | 56.05 | 2022 | 01/01/2013 | 12,071 | 718,587 | |||||||||||||||||||||||||||||||||||||||||
| 10/17/2013 | 0 | 42,001 | 64.97 | 2023 | 10/17/2013 | 5,233 | 311,520 | |||||||||||||||||||||||||||||||||||||||||
James E. Wright | 11/15/2007 | 2,272 | 0 | 44.01 | 2014 | 10/20/2010 | 2,266 | 134,895 | |||||||||||||||||||||||||||||||||||||||||
| 11/06/2009 | 18,333 | 0 | 39.24 | 2016 | 11/16/2011 | 3,642 | 216,808 | |||||||||||||||||||||||||||||||||||||||||
| 10/20/2010 | 81,800 | 0 | 42.81 | 2017 | 01/01/2012 | 11,252 | 669,832 | |||||||||||||||||||||||||||||||||||||||||
| 11/16/2011 | 25,800 | 12,900 | 51.24 | 2021 | 10/18/2012 | 4,817 | 286,756 | |||||||||||||||||||||||||||||||||||||||||
| 10/18/2012 | 11,480 | 22,958 | 56.05 | 2022 | 01/01/2013 | 9,587 | 570,714 | |||||||||||||||||||||||||||||||||||||||||
| 10/17/2013 | 0 | 33,353 | 64.97 | 2023 | 10/17/2013 | 4,155 | 247,347 | |||||||||||||||||||||||||||||||||||||||||
| | | 11/06/2009 | | 2,548 | | 0 | | 39.24 | 2016 | | 01/01/2012 | | 14,924 | | 745,454 | ||||||||||||||||||||||||||||||||||
| | | 10/20/2010 | | 74,900 | | 0 | | 42.81 | 2017 | | 10/18/2012 | | 5,710 | | 285,215 | ||||||||||||||||||||||||||||||||||
| | | 11/16/2011 | | 49,758 | | 0 | | 51.24 | 2021 | | 01/01/2013 | | 12,071 | | 602,946 | ||||||||||||||||||||||||||||||||||
| | | 10/18/2012 | | 28,912 | | 14,455 | | 56.05 | 2022 | | 10/17/2013 | | 5,233 | | 261,388 | ||||||||||||||||||||||||||||||||||
| | | 10/17/2013 | | 14,001 | | 28,000 | | 64.97 | 2023 | | 01/01/2014 | | 11,320 | | 565,434 | ||||||||||||||||||||||||||||||||||
| | | 10/16/2014 | | 0 | | 48,656 | | 57.57 | 2024 | | 10/16/2014 | | 6,131 | | 306,243 | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
| Gary M. Halverson | | 11/13/2008 | | 0 | | 0 | | 22.30 | 2015 | | 11/16/2011 | | 1,170 | | 58,442 | ||||||||||||||||||||||||||||||||||
| | | 11/06/2009 | | 2,548 | | 0 | | 39.24 | 2016 | | 1/1/2012 | | 7,461 | | 372,677 | ||||||||||||||||||||||||||||||||||
| | | 10/20/2010 | | 42,400 | | 0 | | 42.81 | 2017 | | 10/18/2012 | | 2,378 | | 118,781 | ||||||||||||||||||||||||||||||||||
| | | 11/16/2011 | | 24,879 | | 0 | | 51.24 | 2021 | | 1/1/2013 | | 7,101 | | 354,695 | ||||||||||||||||||||||||||||||||||
| | | 10/18/2012 | | 17,007 | | 8,503 | | 56.05 | 2022 | | 10/17/2013 | | 4,155 | | 207,542 | ||||||||||||||||||||||||||||||||||
| | | 10/17/2013 | | 11,118 | | 22,235 | | 64.97 | 2023 | | 1/1/2014 | | 8,989 | | 449,001 | ||||||||||||||||||||||||||||||||||
| | | 10/16/2014 | | 0 | | 46,864 | | 57.57 | 2024 | | 10/16/2014 | | 5,905 | | 294,955 | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||
| | | 2015 Proxy Statement 55 |
EXECUTIVE COMPENSATION
| Grant Date | Option Vesting Schedule | Remaining Vesting Dates | ||
|---|---|---|---|---|
| | | | | |
| 10/18/2012 | One-third vests each year for three years from date of grant | 10/18/2015 | ||
| | | | | |
| 10/17/2013 | One-third vests each year for three years from date of grant | 10/17/2015 10/17/2016 | ||
| | | | | |
| 10/16/2014 | One-third vests each year for three years from date of grant | 10/16/2015 10/16/2016 10/16/2017 | ||
| | | | | |
| Grant Date | RSU Vesting Schedule | Remaining Vesting Dates | ||
|---|---|---|---|---|
| | | |||
| 10/18/2012 | One-third vests each year for three years from date of grant | 10/18/ 01/01/2016 | ||
| | | | | |
| 10/17/2013 | One-third vests each year for three years from date of grant | 01/01/2017 | ||
| | | | | |
| 10/ |
Proxy Statement 53
EXECUTIVE COMPENSATION
| One-third vests each year for three years from date of grant | 01/01/2017 01/01/2018 | |||
| | | |||
| Grant Date | PRSU Vesting Schedule | Remaining Vesting Dates | ||
|---|---|---|---|---|
| | | |||
| 01/01/2013 | Vests three years from date of grant (performance-based) | 12/31/2015 | ||
| | | | | |
| 01/01/2014 | Vests three years from date of grant (performance-based) | 12/31/2016 | ||
| | | | | |
Option Exercises and Stock Vested
The following table provides additional information about the value realized by the persons named in the Summary Compensation Table on option exercises and stock award vesting during the year ended December 31, 2013.2014.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | |||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
Jack B. Moore | 160,000 | 3,289,739 | 77,629 | 4,382,933 | | 127,601 | | 5,291,498 | | 51,859 | | 3,087,166 | ||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
Charles M. Sledge | 68,212 | 1,648,996 | 28,363 | 1,615,795 | | 2,272 | | 33,217 | | 18,300 | | 1,085,765 | ||||||||||||||
John D. Carne | 158,847 | 3,296,086 | 30,449 | 1,719,151 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
| R. Scott Rowe | | 42,952 | | 1,179,407 | | 5,027 | | 295,408 | ||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
William C. Lemmer | 169,181 | 3,677,759 | 28,103 | 1,601,115 | | 27,272 | | 861,350 | | 17,445 | | 1,034,867 | ||||||||||||||
James E. Wright | 51,728 | 1,103,597 | 22,279 | 1,257,872 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||
| Gary M. Halverson | | 35,724 | | 1,246,840 | | 7,195 | | 428,318 | ||||||||||||||||||
| | | | | | | | | | | | | | ||||||||||||||
The following table discloses the years of credited service, and the actuarial present value of the accumulated pension benefits as of September 10, 2013, the date Mr. Carne took distribution of his plan assets. Mr. Carne, who retired at the end of February 2014, was our only NEO with a pension benefit. Please see Footnote 8 to the Summary Compensation Table on page 50 for more information on why one of our NEOs was entitled to a pension.
| Name | Plan name | Number of years of credited service | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
John D. Carne | UK Retirement Plan | 12 | $ | 657,695 | &zwsp;(1) | $ | 657,695 | |||||
54 2014 Proxy Statement
| 56 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
Nonqualified Deferred Compensation
Under our Deferred Compensation Plan, a participant can defer up to 20% of his/her base salary and up to 75% of his/her annual incentive bonus each year. We make matching contributions under the Deferred Compensation Plan on behalf of each participant in an amount equal to 100% of the amount deferred up to the first six percent (6%) of the excess, if any, of a participant's "qualified compensation," as defined under our Deferred Compensation Plan, over the compensation limit applicable under Section 401(a)(17) of the Internal Revenue Code. Both the participant deferrals and matching contributions are fully vested at all times. In addition, each year we make retirement contributions under our Deferred Compensation Plan in an amount equal to a percentage of compensation that mirrors the amount it makespercentage of compensation used for retirement contributions under our Retirement Savings Plan. These retirement contributions become vested under our Deferred Compensation Plan after three years of service. Our Deferred
Compensation Plan is funded by means of a rabbi trust to allow participants to make investment choices similar to those available under our Retirement Savings Plan.
Participants are not permitted to make withdrawals from our Deferred Compensation Plan prior to their termination of employment. Upon a participant's termination of employment, the participant's vested benefits may, at the option of the participant, be distributed in a single lump-sum payment or in annual installments between two and five years. If the participant is a "Specified Employee" as defined in our Deferred Compensation Plan, however, payment of his or her lump-sum or first installment will be delayed for six months.
The following table discloses contributions, earnings, withdrawals or distributions and balances of each of our CEO, Chief Financial Officer and the three other NEOs under our Nonqualified Deferred Compensation Plan during 2013.2014. The amounts set out in this table are included in payments reported in the Summary Compensation Table.
Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings/Losses in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 31, 2013 ($)(1) | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings/ Losses in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 31, 2014 ($)(1) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | ||||||||||||||||
Jack B. Moore | 193,966 | 237,009 | 231,647 | 0 | 2,339,030 | | 130,549 | | 135,836 | | 128,053 | | 0 | | 2,734,557 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | ||||||||||||||||
Charles M. Sledge | 59,545 | 85,805 | 184,452 | 0 | 1,207,883 | | 43,750 | | 56,925 | | (15,359) | | 0 | | 1,293,853 | |||||||||||||||||
John D. Carne | 82,425 | 114,894 | 296,303 | 0 | 1,924,479 | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | ||||||||||||||||
| R. Scott Rowe | | 33,738 | | 43,732 | | 14,741 | | 0 | | 345,627 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | ||||||||||||||||
William C. Lemmer | 100,870 | 69,903 | 503,685 | 0 | 2,438,117 | | 79,835 | | 51,777 | | 151,815 | | 0 | | 2,722,042 | |||||||||||||||||
James E. Wright | 42,381 | 55,406 | 55,869 | 0 | 632,057 | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | ||||||||||||||||
| Gary M. Halverson | | 30,533 | | 33,734 | | 48,106 | | 0 | | 1,187,706 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | ||||||||||||||||
| Name | Company Retirement Contributions to NQ DC Plan ($) | Company Match Contributions to NQ DC Plan ($) | Company Retirement Contributions to NQ DC Plan ($) | Company Match Contributions to NQ DC Plan ($) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | |||||||
Jack B. Moore | 79,003 | 158,006 | | 45,279 | | 90,557 | ||||||||
| | | | | | | | | |||||||
Charles M. Sledge | 28,602 | 57,204 | | 18,975 | | 37,950 | ||||||||
John D. Carne | 38,298 | 76,596 | ||||||||||||
| | | | | | | | | |||||||
| R. Scott Rowe | | 14,577 | | 29,155 | ||||||||||
| | | | | | | | | |||||||
William C. Lemmer | 23,301 | 46,602 | | 18,096 | | 33,681 | ||||||||
James E. Wright | 18,469 | 36,938 | ||||||||||||
| | | | | | | | | |||||||
| Gary M. Halverson | | 11,245 | | 22,489 | ||||||||||
| | | | | | | | | |||||||
2014 Proxy Statement 55
| | | 2015 Proxy Statement 57 |
EXECUTIVE COMPENSATION
Potential Payments upon Termination or Change in Control
The following describes potential payments that would be made to our NEOs under our plans and arrangements in the event of termination or a change in control.
Our executive officers, as well as our more highly compensated employees, will be entitled to payment of their account balances under both our 401(k) Plan, as well as our Nonqualified Deferred Compensation Plan, following termination for any reason. These plans are more fully described in the CD&A under the caption "Benefits, Retirement Programs and Retirement Programs"Perquisites" on page 46pages 48 and 49 of this Proxy Statement, and the balances of the NEOs in our nonqualified plans are set out in the "Nonqualified Deferred Compensation" table on page 55.57. Our executive officers, as well as any other employees with an outstanding award under our Equity Incentive Plan, if 60 years of age or older, are entitled following termination for any reason other than cause, unless they violate the one-year non-compete provision in our award agreements, to continued vesting of RSUs and PRSUs and to an extended exercisability period for stock options, and, if 65 years of age or older, to continued vesting of stock options as well as RSUs and PRSUs and to exercisability during the full life of their stock options. This plan is described in detail in the CD&A under the caption "Long-Term Incentives" beginning on page 4546 of this Proxy Statement.
We do not have a supplemental executive retirement plan, or SERP, nor do we provide any continuing perquisite or health care benefits.
Payments Underunder Executive Severance Policy
As discussed in the CD&A, we have an Executive Severance Policy under which all of the NEOs would be entitled to 12 months' salary continuation were they to be terminated by us for reasons other than cause, death, disability or retirement. They would also be entitled to a pro-rata portion of any annual incentive award earned during the year of termination. The
following are the payments that would have been made to the NEOs if their employment had been involuntarily terminated on December 31, 2013.2014.
| Name | Salary Continuation ($) | Earned MICP ($) | Total ($) | Salary Continuation ($) | Earned MICP ($) | Total ($) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | ||||||||||
Jack B. Moore | 1,125,000 | 644,288 | 1,769,288 | | 1,125,000 | | 1,814,400 | | 2,939,400 | |||||||||||
| | | | | | | | | | | | ||||||||||
Charles M. Sledge | 630,000 | 246,012 | 876,012 | | 646,490 | | 695,106 | | 1,314,596 | |||||||||||
John D. Carne | 730,000 | 656,193 | 1,386,193 | |||||||||||||||||
| | | | | | | | | | | | ||||||||||
| R. Scott Rowe | | 486,338 | | 525,946 | | 1,012,284 | ||||||||||||||
| | | | | | | | | | | | ||||||||||
William C. Lemmer | 540,000 | 269,265 | 809,265 | | 552,088 | | 519,404 | | 1,071,492 | |||||||||||
James E. Wright | 453,000 | 272,022 | 725,022 | |||||||||||||||||
| | | | | | | | | | | | ||||||||||
| Gary M. Halverson | | 475,031 | | 409,047 | | 884,078 | ||||||||||||||
| | | | | | | | | | | |||||||||||
Payment Uponupon Change in Control with Continued Employment
Long-term incentive awards made prior to October 2012 provided for accelerated vesting of equity awards upon a change in control. In October 2012 the eventCommittee changed the grant terms so that all awards made from October 2012 are subject to a "double trigger". All awards made prior to October 2012 have fully vested. As a result, there would be no payment due as a consequence of a change in control that did not result in termination, recipients of awards under our long-term incentive plan made prior to those approved in October 2012 would be entitled to the accelerated vesting of stock options, RSUs and PRSUs pursuant to the terms of their award agreements. Awards approved in October 2012 and 2013 are subject to a "double trigger." The intent of the Committee is to have all awards from October 2012 forward be subject to a "double trigger" and the definition of change in control in the award agreements is the same as the definition of change in control in our change-in-control agreements, a discussion of which can be found in the next section on page 57, except that a change in control resulting from a merger or consolidation as defined in part (iii) of the definition would not occur unless our stockholders immediately prior to the transaction own less than 50% of the outstanding voting securities of the surviving or resulting corporation or entity immediately after the transaction.with continued employment.
56 2014 Proxy Statement
EXECUTIVE COMPENSATION
The following table sets out the value of acceleration, on December 31, 2013, that would occur in the event of a change in control under the terms of our long-term incentive awards.
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Payments Uponupon Termination in Conjunction with Change in Control
As discussed in the CD&A, we have change-in-control agreements with Messrs. Moore, Sledge, Carne,Rowe, Lemmer and Wright,Halverson, as well as with 16 other executive officers. The change-in-control agreements entitle the executive, if the executive is discharged without "cause" or resigns for "good reason" in conjunction with or within two years of a "change in control," to a payment equal to in the case of the NEOs but not in the case of certain other executive officers, three times the suma multiple of: (i) base salary; (ii) the higher of the officer's target annual incentive award for the year of termination or highest such award earned by the officer during any of the past three years; and (iii) the value of annual benefits and perquisites. Our long-term incentive plan entitlesThe multiple varies from 3X to 1X, depending on when the executive to accelerated vesting of optionsagreement was entered into and in the event of a tender offer, the right to tender his or her shares of Common Stock to us, including those acquired by the exercise of stock options following an accelerated vesting, in proportion to the total number of shares actually tendered and at the tender offer price or fair market value of any exchanged security. The change-in-control agreementsjob level. Agreements entered into prior to 2009 had a multiple of 3X, and those entered into since have a 2X for positions classified as a "Tier 1" executive, which NEOs would be, and a 1X for others. Agreements with Messrs. Moore, Lemmer and Sledge have a 3X multiple as they predated the change in policy. The agreements with Messrs. Rowe and Halverson have a 2X as they were entered into after the change. In addition, certain agreements, including those with Messrs. Moore, Sledge and Lemmer, provided that, if any payments made under the agreement would cause the applicable executive to be
| 58 2015 Proxy Statement | | |
EXECUTIVE COMPENSATION
subject to an excise tax because the payment is a "parachute payment" (as defined in the Internal Revenue Code), then we will pay the executive an excise tax premium in a sufficient amount to make the executive whole with respect to any additional tax that would not have been payable but for the excise tax provision. Although we had agreed to provide a "tax gross-up" in pre-2009agreements which pre-dated the change of policy in the 2009 agreements because we had determined
the appropriateness of the amount of the severance payment to be received by the terminated executive should be net of any special or additional excise taxes, the Compensation Committee has discontinued this feature for any agreements entered into since 2009.2009, which include those of Messrs. Rowe and Halverson.
"Cause" means (i) a conviction by a court of competent jurisdiction, from which no further appeal can be taken, of a felony grade crime involving moral turpitude, or (ii) a willful failure to perform substantially one's duties with our company (other than a failure due to physical or mental illness) which is materially and demonstrably injurious to us. No act or failure to act will be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that the action or omission was in, or not opposed to, our best interests.
"Good reason" for termination includes any of the following events that occur without the executive officer's consent: a change in status, title(s) or position(s) as an officer of our company that is not a promotion; a reduction in base salary; termination of participation in an ongoing compensation plan; relocation; failure of a successor of our company to assume the objectives under the agreement; termination by us other than for cause; prohibition from engaging in outside activities permitted by the agreement; or any continuing material default by us in the performance of our obligations under the agreement.
A "change in control" of our company will occur, for purposes of these agreements, if (i) any person is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)1934, as amended (the "Exchange Act")), directly or indirectly, of our securities representing 20% or more of the combined voting power of our outstanding voting securities, other than through the purchase of voting securities directly from us through a private placement; (ii) the current members of the Board, or subsequent members approved by two-thirds of the current members, no longer comprise a majority of the Board; (iii) our company is merged or consolidated with another corporation or entity and our stockholders own less than 70% of the outstanding voting securities of the surviving or resulting corporation or entity; (iv) our company is merged or consolidated with another corporation or entity and the consideration paid is part or all cash equivalent in value equal to 31% or more of our outstanding voting securities; (v) a tender offer or exchange offer is made and consummated by a person other than our company for the ownership of 20% or more of our voting securities; or (vi) there has been a disposition of all or substantially all of our assets.
The following table sets out the payments that would be made in the event any of the NEOs had been terminated on December 31, 2013,2014, as a result of a change in control of our company, for reasons other than cause, death, disability or
2014 Proxy Statement 57
EXECUTIVE COMPENSATION
retirement, or if the officer terminated for "good reason," based on the assumptions set out below.
| | | 2015 Proxy Statement 59 |
EXECUTIVE COMPENSATION
Payments upon Termination in Conjunction with Change in Control
| Accelerated Vesting of Outstanding Awards | | | Accelerated Vesting of Outstanding Awards | |||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Name | Cash Severance Payment ($) | Benefits/ Perquisites ($)(1) | Stock Options ($)(2) | Restricted Share Units ($)(3) | Performance Stock Units ($)(4) | Excise Tax Gross-Up Payment ($) | Total ($) | Cash Severance Payment ($) | Benefits/ Perquisites ($)(1) | Stock Options ($)(2) | Restricted Share Units ($)(3) | Performance Stock Units ($)(4) | Excise Tax Gross-Up Payment ($) | Total ($) | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Jack B. Moore | 8,865,284 | 86,677 | 867,652 | 4,112,749 | 5,767,802 | 0 | $ | 19,700,164 | | 8,818,200 | | 68,343 | | 0 | | 3,453,893 | | 4,532,063 | | 0 | | 16,872,499 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Charles M. Sledge | 3,662,682 | 84,344 | 282,969 | 1,542,363 | 1,886,803 | 0 | $ | 7,459,161 | | 4,041,618 | | 82,830 | | 0 | | 1,203,246 | | 1,512,136 | | 0 | | 6,839,830 | ||||||||||||||||||||||
John D. Carne | 4,617,315 | 73,360 | 298,247 | 1,006,474 | 1,982,587 | 0 | $ | 7,977,983 | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
R. Scott Rowe | | 2,265,690 | | 63,150 | | 0 | | 693,056 | | 787,062 | | 0 | | 3,808,958 | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
William C. Lemmer | 3,110,106 | 35,559 | 238,108 | 1,313,529 | 1,579,748 | 0 | $ | 6,277,050 | | 3,226,812 | | 32,724 | | 0 | | 969,779 | | 1,168,380 | | 0 | | 5,397,695 | ||||||||||||||||||||||
James E. Wright | 2,625,375 | 73,037 | 186,835 | 885,806 | 1,240,546 | 0 | $ | 5,011,599 | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
Gary M. Halverson | | 1,961,400 | | 53,346 | | 0 | | 679,720 | | 803,696 | | 0 | | 3,498,162 | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||
Assumptions:
58 2014 Proxy Statement
| 60 2015 Proxy Statement | | |
Why am I receiving these materials? |
A Notice of Annual Meeting of Stockholders or Notice Regarding the Availability of Proxy Materials has been provided to you because you are a Cameron stockholder and because the Board is soliciting your proxy to vote your shares at our upcoming Annual Meeting.
What is the purpose of the Annual Meeting? |
At the Meeting, our stockholders will act on the matters outlined in the Notice of Annual Meeting of Stockholders on the cover page of this Proxy Statement.
Where can I find more information about proxy voting? |
The SEC has created an educational website where you can learn more about proxy voting:www.sec.gov/spotlight/proxymatters.shtml.
Who is entitled to vote at the Meeting? |
Owners of shares of our Common Stock of at the close of business on March 11, 2015 (the "Record Date"), are entitled to vote at and participate in the Annual Meeting.
Participants in our retirement savings plans and our company-sponsored Individual Account Retirement Plan (collectively, "Retirement Plans") may give voting instructions with respect to the Common Stock credited to their accounts in those plans to the plans' trustees who have the actual voting power over the Common Stock in those plans.
What are the voting rights of holders of Common Stock? |
Each outstanding share of Common Stock will be entitled to one vote on each matter to come before the Meeting.
What happens if additional matters are presented at the Meeting? |
If a proposal is properly presented for consideration at the Meeting, the persons named in the proxy card will vote as recommended by the Board or, if no recommendation is given, these persons will exercise their discretion in voting on the proposal.
How can shares be voted? |
Shares of Common Stock can be voted in person at the Meeting or they can be voted by proxy or voting instructions can be given, in one of three ways, by:
 Internet |  Telephone |  Mail |
The instructions for each are on the proxy card, in the Notice Regarding the Availability of Proxy Materials, or on the voting form enclosed with the proxy from the applicable trustee, bank or brokerage firm.
How will votes be counted? |
For shares held in your own name, votes will be counted as directed, except when no choice for any particular matter is made. In that case, and only for the matter for which no choice is indicated, the shares will be voted as recommended by the Board unless the shares are held in one of the Retirement Plans. If held in one of those plans, they will be voted in the same proportion as the other shares in the Retirement Plans have been voted.
For shares held indirectly through a bank, broker or other holder of record, unless you give your broker, bank or other holder of record specific instructions, your shares will not be voted on any of the proposals other than Proposal 2. Under the NYSE rules that govern voting by brokers of shares held in street name, brokers have the discretion to vote these shares only on routine matters, but not on non-routine matters, as defined by those rules. The only matter that will be voted on that is considered routine under these rules is Proposal 2, the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accountants for fiscal year 2015.
What vote is required for approval? |
With regard to Proposal 1 (election of directors), the affirmative vote of the majority of the votes cast at the meeting is required by our Bylaws for the election of a director in an uncontested election.
The affirmative vote of the majority of shares of Common Stock represented and entitled to vote at the meeting is required for approval of Proposal 2 (ratification of the appointment of the independent registered public accountants), and Proposal 3 (advisory vote on 2014
| | | 2015 Proxy Statement 61 |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
executive compensation). The votes on Proposals 2 and 3, however, are advisory in nature and will not be binding on our Company or the Board.
What is a broker non-vote and what is the effect of a broker non-vote? |
A "broker non-vote" occurs when a stockholder who holds shares indirectly does not give instructions to the holder of record on how the stockholder wants his or her shares voted, but the holder of record exercises its discretionary authority under the rules of the NYSE to vote on one or more, but not all, of the proposals. In such a case, a "broker non-vote" occurs with respect to the proposals not voted on. Shares represented by "broker non-votes" will, however, be counted in determining whether a quorum is present.
In the absence of instructions from the stockholder, the holder of record may only exercise its discretionary authority and vote the shares it holds as a holder of record on Proposal 2 (the ratification of the appointment of the independent registered public accountants) and does not have the discretionary authority to vote them on any of the other Proposals.
Therefore, if you are a street-name stockholder who holds shares indirectly, your shares will not be voted on any Proposal other than Proposal 2 for which you do not give your broker, bank or other holder of record instructions on how to vote.
What is an abstention and what is the effect of an abstention? |
If you do not desire to vote on any proposal nor have your shares voted as provided for in the immediately preceding answer, you may abstain from voting by marking the appropriate space on the proxy card or by following the telephone or Internet instructions. Shares voted as abstaining will be counted as present for the purpose of establishing a quorum and, with respect to Proposals 2 and 3, for the purpose of determining the number of votes needed for approval of the Proposals before the Meeting.
Abstentions will have the effect of a negative vote for Proposals 2 and 3.
What constitutes a quorum? |
The presence at the Meeting of the holders of a majority of the shares of the Common Stock outstanding on the Record Date, in person or by proxy, will constitute a quorum,
permitting business to be conducted at the Meeting. As of the Record Date, 192,863,113 shares of Common Stock, representing the same number of votes, were outstanding. Therefore, the presence, in person or by proxy, of the holders of Common Stock representing at least 96,431,557 votes is required to establish a quorum.
What shares will be considered "present" at the Meeting? |
The shares voted at the Meeting, shares properly voted by Internet or telephone, and shares for which properly signed proxy cards have been returned will be counted as "present" for purposes of establishing a quorum. Proxies containing instructions to abstain on one or more matters, those voted on one or more matters and those containing broker non-votes will also be included in the calculation of the number of votes considered to be present at the Meeting.
How can a proxy be revoked? |
You can revoke a proxy at any time prior to a vote at the Meeting by:
Shares held indirectly in the name of a bank, broker or other institution may be revoked pursuant to the instructions provided by such institution.
Who will count the votes? |
We have hired a third party, Computershare Trust Company, N.A., to determine whether or not a quorum is present at the Meeting and to tabulate votes cast.
Where can I find the results of the voting? |
The voting results will be announced at the Meeting and filed on a Current Report on Form 8-K with the SEC within four business days following the Meeting.
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The Board does not know of any business that will properly come before the Meeting other than the proposals above. If any other business should properly come before the Meeting, it is intended that the shares represented by proxies will be voted in accordance with the judgment of the persons named in the proxies.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires our directors and executive officers, and persons who own more than ten percent of our Common Stock, to file with the SEC and the NYSE initial reports of beneficial ownership on Form 3 and changes in such ownership on Forms 4 and 5. Based on oura review of the copies of such reports, or written representations made to us by certain reporting persons, (1) Form 5s for 2013that no other reports were required, all Section 16(a) filing requirements applicable to be filed for Peter J. Fluor, Charles M. Sledge,our directors, officers and Christopher A Krummel to report transactions pursuant to non-qualified excess benefit plans that should have been reported on Form 4; (2) Mr. Lemmermore than 10% beneficial owners were complied with during the year ended December 31, 2014, except Steven W. Roll filed a Form 4 reporting an3 that did not include a stock option exercise on February 14, 2013 that was due on February 8, 2013; and (3) we believe that during 2013, our other directors, executive officers and stockholders with holdings greater than ten percent complied with all applicable Section 16(a) filing requirements.grant in his holdings.
Stockholder Proposals and Nominations for the 20152016 Annual Meeting
In order for a stockholder to be eligible to submit a proposal or nomination to our 20152016 annual meeting of stockholders, the stockholder must be a stockholder of record both when submitting the proposal or nomination and on the record date for that meeting.
form of proxy for the 20152016 annual meeting of stockholders, according to our Bylaws, the notice must be in proper form and received by our Corporate Secretary at our principal executive offices no earlier than February 15, 2015,7, 2016, and no later than March 17, 2015.
To be in proper written form, a stockholder's notice of a proposal must set forth as to each matter the stockholder 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, (ii) the name and record address of such stockholder, (iii) a description of the full economic interest of such stockholder in our company which would include, but is not limited to, the class or series and number of shares of capital stock of our company which are owned beneficially and of record by such stockholder, and whether such interest is subject to or the result of any short position, synthetic swap, or forward shares, (iv) an undertaking to provide an update on the information regarding economic interest required by the preceding part as of 10 days prior to the meeting and no later than 7 days prior to the meeting, (v) a description of all arrangements or understandings between the stockholder and any other person or persons (including their names) in connection with the proposal of such business by the stockholder and any material interest of the stockholder in such business, and (vi) an acknowledgement that such stockholder must appear in person at the annual meeting in order to bring such business before the meeting.
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OTHER BUSINESS & ADDITIONAL INFORMATION
To be in proper written form, a stockholder's notice of a director nomination must set forth (a) as to each person whom the stockholder proposes to nominate for election as a
2014 Proxy Statement 59
OTHER BUSINESS & ADDITIONAL INFORMATION
director (i)(1) the name, age, business, address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of our company which are owned beneficially and of record by the person, and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, and (b) as to the stockholder giving the notice (i) the name and record address of the stockholder, (ii) a description of the full economic interest of such stockholder in our company which would include, but is not limited to, the class or series and number of shares of capital stock of our company which are owned beneficially and of record by such stockholder, and whether such interest is subject to or the result of any short position, synthetic swap, or forward shares, (iii) an undertaking to provide an update on the information regarding economic interest required by the preceding part as of 10 days prior to the meeting and no later than 7 days prior to the meeting, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (v) an acknowledgement that such stockholder must appear in person at the annual meeting in order to nominate the persons named in its notice, and (vi) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the related rules and regulations of the SEC. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
Our company hasWe have provided proxy materials to banks, brokers, and other financial fiduciaries and requested that such materials be promptly forwarded to the beneficial owners of Common Stock. Cameron has retained AST Phoenix AdvisorsDF King to assist with the solicitation of proxies for a fee not to exceed $9,000, plus reimbursement for out-of-pocket expenses. In addition, solicitation of proxies may be made by our directors, officers or employees for no additional compensation. The cost of soliciting proxies and related services will be borne by us.
Electronic Delivery of Proxy Statement and Annual Report
Stockholders who received printed copies of the proxy materials can elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail. You can choose this option and save Cameron the cost of producing and mailing these documents, reduce the amount of mail you receive and help preserve environmental resources.
You may sign up for this option by:
If you choose to view future proxy statements and annual reports over the Internet and you are a street-name stockholder as of the applicable record date, you will receive an email message next year containing the Internet address to use to access Cameron's proxy statement and annual report. The email also will include instructions for voting over the Internet. You will have the opportunity to opt out at any time by following the instructions onwww.icsdelivery.com. You do not have to re-elect Internet access each year.
Householding of Annual Meeting Materials
In accordance with notices previously sent to many of the street-name stockholders who share a single address, only one annual report and proxy statement is being delivered to that address unless contrary instructions from any stockholder at that address were received. This practice, known as "householding," is intended to reduce our printing and postage costs. However, any such street-name stockholder residing at the same address who wishes to receive a separate copy of this proxy statement or the accompanying annual report to stockholders may request a copy by contacting the bank, broker or other holder of record or by contacting us by telephone at 713-513-3300 or by mail at 1333 West Loop South, Suite 1700, Houston Texas 77027. We will deliver promptly upon written or oral request a separate copy of the proxy statement and annual report to a stockholder at a shared address to which a single copy of the proxy statement and annual report was delivered. Street-name stockholders who are currently receiving householded
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OTHER BUSINESS & ADDITIONAL INFORMATION
materials may revoke their consent, and street-name stockholders who are not currently receiving householded materials may request householding of our future materials, by contacting Automatic Data Processing, Inc., either by calling toll free at 1-800-542-1061
60 2014 Proxy Statement
OTHER BUSINESS & ADDITIONAL INFORMATION
or by writing to Broadridge, Attn: Householding Department, at the return address noted on your voter instruction card. If you revoke your consent you will be removed from the "householding" program within 30 days of Broadridge's receipt of your revocation, and each stockholder at your address will receive individual copies of our future materials.
If you share an address with another stockholder and have received multiple copies of our proxy materials, you may write or call us at the address set forth in the preceding
paragraph to request delivery of a single copy of these materials.
A list of stockholders of record will be available for examination at our corporate headquarters during normal business hours for a period of ten days prior to the Meeting.
ANNUAL REPORT TO STOCKHOLDERS AND ANNUAL REPORT ON FORM 10-K
We are mailing our 20132014 Annual Report to Stockholders who elected to receive a printed copy of this Proxy Statement. Additional copies of Cameron's Annual Report to Stockholders and its Annual Report on Form 10-K for the year ended December 31, 2013,2014, are available without charge from our Investor Relations Department, 1333 West Loop South, Suite 1700, Houston, Texas 77027, 713-513-3300.
Our SEC filings, including our 20132014 Annual Report on Form 10-K, are available online at no charge atwww.c-a-m.com, Investor Relations,Investors, SEC filings, or through the Securities and Exchange Commission's Web sitewebsite atwww.sec.gov.
| By Order of the Board of Directors, | ||
Grace B. Holmes Vice President, Corporate Secretary & Chief Governance Officer |
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2014 Proxy Statement 61
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Using a black ink pen, mark your votes with an X as shown in |
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X 021EVA 1 U PX + Annual Meeting Proxy Card |
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A Proposals — The Board recommends a vote FOR Proposals 1 through 3.
1. To elect seven director nominees to our Board of Directors:
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B Non-Voting Items
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C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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01TA9C
Cameron International Corporation
2014 Annual Meeting of Stockholders10:00 a.m. CDT
May 16, 2014
Cameron’s Corporate Headquarters1333 West Loop South, Suite 1700Houston, Texas 77027
Agenda
· Call to order
· Election of Directors
· Ratification of Appointment of Independent Registered Public Accountants for 2014
· Approval, on an Advisory Basis, of our 2013 Executive Compensation
This is your proxy. Your vote is important. It is also important that your shares are represented at this meeting, whether or not you attend the meeting in person. To make sure your shares are represented, we urge you to complete and mail the proxy card.
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on Friday, May 16, 2014. The Proxy Statement and Annual Report to Stockholders are available at www.envisionreports.com/CAM.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
Proxy — Cameron International Corporation
Proxy for 2014 Annual Meeting of Stockholders
Solicited on Behalf of the Board of Directors - May 16, 2014
The undersigned stockholder(s) of Cameron International Corporation (“Cameron”) appoints each of Jack B. Moore and Grace B. Holmes proxy, with full power of substitution, to vote all shares of stock which the stockholder(s) would be entitled to vote if present at the Annual Meeting of Stockholders of Cameron on Friday, May 16, 2014, at 10:00 a.m. CDT at Cameron’s corporate headquarters, 1333 West Loop South, Suite 1700, Houston, Texas, and at any adjournment thereof, with all powers the stockholder(s) would possess, if present. The stockholder(s) hereby revokes any and all proxies previously given with respect to such meeting.
This proxy will be voted as specified on the reverse side, but if no specification is made, it will be voted: FOR the election of each nominee for director (H. Paulett Eberhart, Peter J. Fluor, James T. Hackett, Jack B. Moore, Michael E. Patrick, Jon Erik Reinhardsen, and Bruce W. Wilkinson); FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accountants for 2014; FOR approval, on an advisory basis, of our 2013 executive compensation; and in the discretion of the proxy on other matters as may properly come before the Meeting or any adjournment thereof.
This card also constitutes voting instructions for any shares held for the stockholder in the Cameron Retirement Savings Plan and Cameron-sponsored Individual Account Retirement Plans, as described in the Notice of Meeting and Proxy Statement.
(Please sign and date on the reverse side.)
