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Notice of Annual Meeting of Shareholders and Proxy Statement |
June 7, 20185, 2020 | Dallas, Texas
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 Registrant ☑ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☑ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to §240.14a-12 | |
| Matador Resources Company | ||||
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Notice of Annual Meeting of Shareholders and Proxy Statement |
June 7, 20185, 2020 | Dallas, Texas
One Lincoln Centre
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
www.matadorresources.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 7, 20185, 2020
To the Matador Resources Company Shareholders:
Please join us for the 20182020 Annual Meeting of Shareholders of Matador Resources Company. The meeting will be held at the Westin Galleria, San Antonio Ballroom, 13340 Dallas Parkway, Dallas, Texas 75240, on Thursday,Friday, June 7, 2018,5, 2020, at 9:30 a.m., Central Daylight Time.
At the meeting, you will hear a report on our business and act on the following matters:
| (1) | Election of the |
| (2) | Advisory vote to approve the compensation of our named executive officers as described in the attached Proxy Statement; |
| (3) |
| Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, |
Any other matters that may properly come before the meeting. |
All shareholders of record at the close of business on April 13, 20189, 2020 are entitled to vote at the meeting or any postponement or adjournment of the meeting. A list of the shareholders of record is available at the Company’s offices in Dallas, Texas.
By OrderDepending on concerns about the novel coronavirus, orCOVID-19, we might hold a virtual annual meeting instead of holding anin-person meeting. We would publicly announce a determination to hold a virtual annual meeting in a press release available at our website,www.matadorresources.com, as soon as practicable before the Board of Directors,meeting. In that event, the annual meeting would be conducted solely virtually, on the above date and time, via live audio webcast. You or your proxyholder could participate, vote and examine our stockholder list at the virtual annual meeting by visitingwww.virtualshareholdermeeting.com/MTDR2020 and using your control number, but only if we decide to hold a virtual annual meeting.
By Order of the Board of Directors, |
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Joseph Wm. Foran |
Chairman and Chief Executive Officer |
| April
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YOUR VOTE IS IMPORTANT!
Whether or not you will attend the meeting, please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning your proxy card to the address listed on the card.
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Shareholders to Be Held on June 5, 2020:
Our Proxy Statement and the Annual Report to Shareholders for the fiscal year ended December 31, 2019 are available for viewing, printing and downloading athttps://materials.proxyvote.com/576485.
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2018 Proxy Statement| Matador Resources Company i
2020 Proxy Statement| Matador Resources Company i
Matador Resources Company
One Lincoln Centre
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
www.matadorresources.com
ii Matador Resources Company |2018 Proxy Statement
PROXY STATEMENT |
Matador Resources Company
One Lincoln Centre
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
www.matadorresources.com
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 7, 20185, 2020
This Proxy Statement is being mailed on or about April 26, 201823, 2020 to the shareholders of Matador Resources Company (“Matador” or the “Company”) in connection with the solicitation of proxies by the Board of Directors (the “Board”) of the Company to be voted at the Annual Meeting of Shareholders of the Company to be held at the Westin Galleria, San Antonio Ballroom, 13340 Dallas Parkway, Dallas, Texas 75240, on June 7, 2018,5, 2020, at 9:30 a.m., Central Daylight Time (the “Annual Meeting” or the “2018“2020 Annual Meeting”), or at any postponement or adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. The address of the Company’s principal executive office is One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.
If you are a shareholder of record, you may vote in person by attending the meeting, by completing and returning a proxy by mail or by using the Internet or telephone. You may vote your proxy by mail by marking your vote on the enclosed proxy card and following the instructions on the card. To vote your proxy using the Internet or telephone, see the instructions on the proxy form and have the proxy form available when you access the Internet website or place your telephone call.
The named proxies will vote your shares according to your directions. If you sign and return your proxy but do not make any of the selections, the named proxies will vote your shares: (i) FOR the election of the fivefour nominees for director as set forth in this Proxy Statement, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement (iii) for future advisory votes on executive compensation (the “Frequency Vote”) to occurEVERY YEARand (iv)(iii) FOR the ratification of KPMG LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2018.2020. Your proxy may be revoked at any time before it is exercised by filing with the Company a written revocation addressed to the Corporate Secretary, by executing a proxy bearing a later date or by attending the Annual Meeting and voting in person.
The cost of soliciting proxies will be borne by the Company. In addition to the use of postal services and the Internet, proxies may be solicited by directors, officers and employees of the Company (none of whom will receive any additional compensation for any assistance they may provide in the solicitation of proxies) in person or by telephone.
The outstanding voting securities of the Company consist of Common Stock.issued and outstanding common stock, par value $0.01 per share (the “Common Stock”). The record date for the determination of the shareholders entitled to notice of and to vote at the Annual Meeting, or any postponement or adjournment thereof, has been established by the Board as the close of business on April 13, 20189, 2020 (the “Record Date”). As of the Record Date, there were 109,263,103116,563,969 shares of Common Stock outstanding and entitled to vote.
The presence, in person or by proxy, of the holders of record of a majority of the outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting, but if a quorum should not be present, the meeting may be adjourned from time to time until a quorum is obtained. A holder of Common Stock will be entitled to one vote per share on each matter properly brought before the meeting. Cumulative voting is not permitted in the election of directors.
The proxy card provides space for a shareholder to abstain with respect to any or all nominees for the Board. The affirmative vote of a majority of the votes cast by holders of shares present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting is required for the election of each nominee for
20182020 Proxy Statement | Matador Resources Company 1
PROXY STATEMENT
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entitled to vote on the election of directors at the Annual Meeting is required for the election of each nominee for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes cast” means the number of votes cast “for” the election of such nominee exceeds the number of votes cast “against” such nominee. See “Corporate Governance—Majority Vote in Director Elections” for additional information regarding election of directors.
With respect to the Frequency Vote, because this vote isnon-binding, the choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
The other proposals require the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote at the meeting. Shares held by a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum. Other than with respect to the election of directors, and the Frequency Vote, an abstention will effectively count as a vote cast against the remaining proposals. Brokernon-votes on any matter as to which the broker has indicated on the proxy that it does not have discretionary authority to vote will be treated as shares not entitled to vote with respect to that matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.
2 Matador Resources Company | 20182020 Proxy Statement
PROXY SUMMARY
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This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully prior to voting. For more complete information regarding our 20172019 performance, please review our Annual Report on Form10-K for the year ended December 31, 2017.2019.
20182020 Annual Meeting of StockholdersShareholders
Date and Time: June 7, 2018, at 9:30 a.m., Central Daylight Time
Location: Westin Galleria, San Antonio Ballroom, 13340 Dallas Parkway, Dallas, Texas 75240
Record Date: April 13, 2018
Voting: Shareholders as of the close of business on the Record Date are entitled to vote. Each share of Common Stock is entitled to one vote at the Annual Meeting.
Voting Matters and Board Recommendation
Proposal | Board Recommendation | |||
Election of | FOR | |||
Advisory Vote to Approve Named Executive Officer Compensation (page | ||||
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Ratification of the Appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for | FOR | |||
20172019 Business Highlights
In 2017, Matador2019, we achieved record oil, natural gas and average daily oil equivalent production. In addition, Matadorwe increased itsour estimated total proved oil and natural gas reserves 44%17% as of December 31, 2017,2019, as compared to December 31, 2016.
Business highlights achieved during 2017 include the following:2018.
20182020 Proxy Statement | Matador Resources Company 3
PROXY SUMMARY
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Business highlights achieved during 2019 include the following:
A 26% increase in oil production from 11.1 million barrels (“Bbl”) of 8,000,000 sharesoil produced in 2018 to 14.0 million Bbl of our Common Stock. We received net proceeds of approximately $208.7 million (before expenses).oil produced in 2019.
A 29% increase in natural gas production from 47.3 billion cubic feet (“Bcf”) of natural gas produced in 2018 to 61.1 Bcf of natural gas produced in 2019.
A 27% increase in average daily oil equivalent production from 52,128 barrels of oil equivalent (“BOE”) per day, including 30,524 Bbl of oil per day and 129.6 million cubic feet (“MMcf”) of natural gas per day, in 2018, to 66,203 BOE per day, including 38,312 Bbl of oil per day and 167.4 MMcf of natural gas per day, in 2019.
| • | Net income (GAAP) of $87.8 million and Adjusted EBITDA(non-GAAP) of $610.8 million for the year ended December 31, 2019, as compared to net income (GAAP) of $274.2 million and Adjusted EBITDA(non-GAAP) of $553.2 million for the year ended December 31, 2018. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, seeAnnex A to this Proxy Statement. |
The formation of San Mateo Midstream II, LLC (“San Mateo”Mateo II”), a strategic joint venture with a subsidiary of Five Point Energy LLC (“Five Point”). The designed to expand our midstream assets that were contributed to San Mateo included (i) a cryogenic natural gas processing plantoperations in the Rustler Breaks asset areaDelaware Basin, specifically in Eddy County, New Mexico.
The increase of the borrowing base under our third amended and restated credit agreement (the “Black River Processing Plant”“Credit Agreement”); (ii) one salt water disposal well and a related commercial salt water disposal facility in from $850.0 million to $900.0 million.
The increase of the Rustler Breaks asset area; (iii) three salt water disposal wells and related commercial salt water disposal facilities inlender commitments under the Wolf asset area and (iv) substantially all related oil, natural gas and salt water gathering systems and pipelines in both the Rustler Breaks and Wolf asset areas (collectively, the “Delaware Midstream Assets”). We received $171.5 million in connection with the formation of San Mateo. In March 2018, we received an additional $14.7 million in performance incentives from Five Point and may earn up to an additional $58.8 million in performance incentives over the next four years. We continue to operate the Delaware Midstream Assets and retain operational control of San Mateo. The Company and Five Point own 51% and 49%credit facility of San Mateo respectively. Midstream, LLC (“San Mateo provides firm capacity serviceI,” and, together with San Mateo II, “San Mateo”) to us at market rates, while$375.0 million, using the accordion feature of such facility.
Recent Developments
In response to the outbreak of the novel coronavirus, orCOVID-19, along with the actions of Saudi Arabia, other members of the Organization of Petroleum Exporting Countries and Russia (“OPEC+”) and their effects on oil supply and demand and oil prices, in early March 2020, we modified our original 2020 plans to protect our balance sheet by reducing our expected capital spending significantly. We plan to reduce our operated drilling program from six to three rigs, lower certain operating costs and continue to pursue divestitures ofnon-core assets. We are currently evaluating multiple options to optimize our drilling and completions activities and plan to keep two of our three drilling rigs operating in the Stateline asset area in Eddy County, New Mexico, where we are expecting to drill a number of our high potential wells in 2020.
We are also beingevaluating other options for increasing our cash flow and further reducing operating and capital expenses, if necessary, to protect the balance sheet and our businesses until oil and natural gas prices improve. For instance, in March 2020, Mr. Foran voluntarily agreed to reduce his 2020 base salary by 25%, and our other executive officers and vice presidents voluntarily agreed to reduce their 2020 base salaries by 20% and 10%, respectively.
Environmental, Social and Governance (“ESG”) Initiatives (page 26)
We maintain an active ESG program and continued working in 2019 to improve upon our various ESG efforts. For instance, we significantly increased the number of our production facilities operating on electrical grid power, lowering emissions by removing on-site generators. We increased the volumes of produced water we recycled in the Delaware Basin as well as the volumes of both produced water and oil transported via pipeline, taking trucks off the roads. We also reduced the number of well pads built in 2019 through our use of batch drilling and longer laterals, reducing our surface footprint. Finally, we continued our commitment to a midstream service provider to third parties inproactive safety culture, with over 1.4 million employee man-hours and around our Wolf and Rustler Breaks asset areas.no lost time accidents since 2017.
4 Matador Resources Company |2020 Proxy Statement
PROXY SUMMARY |
Director Nominees (page 10)12)
Our Board currently has 11 members divided into three classes of directors, designated Class I, Class II and Class III. Directors are elected for three-year terms. The table below provides certain summary information about each nominee for director named in this Proxy Statement.
Name | Age | Director Since | Principal Occupation | Committee Memberships | ||||||||
William M. Byerley* | 64 | 2016 | Retired Partner, PricewaterhouseCoopers LLP (PwC) | A, CG | ||||||||
Julia P. Forrester* | 58 | 2017 | Associate Provost for Student Academic Services, Southern Methodist University | A, CG | ||||||||
Timothy E. Parker* | 43 | 2018 | Former Portfolio Manager and Analyst—Natural Resources, T. Rowe Price & Associates | A, CM, P, SPC | ||||||||
David M. Posner* | 64 | 2017 | President, EnVent Energy LLC | A, CG, OP | ||||||||
Kenneth L. Stewart* | 64 | 2017 | Chair—United States, Norton Rose Fulbright US LLP | CG, CM, P, SPC | ||||||||
Name | Age | Director Since | Principal Occupation | Committee Memberships | ||||||||
Joseph Wm. Foran | 67 | 2003 | Chairman and CEO, Matador Resources Company | E, CM, O, P | ||||||||
Reynald A. Baribault* | 56 | 2014 | Vice President / Engineering, NP Resources, LLC | A, ESCG, E, O, P, SPC | ||||||||
Monika U. Ehrman* | 42 | 2019 | Professor of Law and Faculty Director of Oil & Gas, Natural Resources, and Energy Center, University of Oklahoma College of Law | ESCG, O, P | ||||||||
Timothy E. Parker* | 45 | 2018 | Former Portfolio Manager and Analyst – Natural Resources, T. Rowe Price & Associates | A, CM, E, P, SPC | ||||||||
| * | Independent Director |
| A | Audit Committee |
| CM | Capital Markets and Finance Committee |
Executive Committee |
Environmental, Social and Corporate Governance Committee |
| O | Operations and Engineering Committee |
| P | Prospect Committee |
| SPC | Strategic Planning and Compensation Committee |
Executive Compensation Highlights (page 38)
Our compensation program is designed to reward, in both the short term and the long term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork, as:
teamwork;
mentoring future leaders within the Company to drive long-term shareholder value, value;
individual performance in light of general economic and industry-specific conditions, conditions;
relationships with shareholders and vendors, the ability to manage and enhance production from our existing assets, the ability to explore new opportunities to increase oil and natural gas production, the ability to identify and acquire additional acreage, the ability to improve total shareholder returns, the ability to increase year-over-year proved reserves, the ability to control unit production costs, the ability to pursue midstream opportunities, vendors;
level of job responsibility
industry experience and experience;
general professional growth.growth; and;
4 Matador Resources Company |2018 Proxy Statementthe ability to:
| ¡ | manage and enhance production from our existing assets;
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| ¡ | explore new opportunities to increase oil and natural gas production; |
| ¡ | identify and acquire additional acreage; |
| ¡ | improve total shareholder returns; |
| ¡ | increase year-over-year proved reserves; |
| ¡ | control unit production costs; and |
| ¡ | pursue midstream opportunities. |
Our Board has a “pay for performance” philosophy and recognizes the leadership of Mr. Joseph Wm. Foran, our Chairman and Chief Executive Officer, and our other executive officers in contributing to the Company’s success in 2017. Accordingly, approximately 90% of Mr. Foran’s 2017 total compensation was performance based. Details of our executive compensation are shown in the 2017 Summary Compensation Table on page 55.
20182020 Proxy Statement | Matador Resources Company 5
PROXY SUMMARY |
At our 2018 Annual Meeting of Shareholders (the “2018 Annual Meeting”), we received approximately 72% shareholder support for our executive compensation program. This level of support was a significant decrease from the average 99% level of support that we received at our three previous annual shareholder meetings. Our Board and management were disappointed with the 2018say-on-pay voting results, and the Strategic Planning and Compensation Committee and management jointly undertook an extensive review of the Company’s executive compensation program with input from our independent compensation consultant, Meridian Compensation Partners, LLC. The review included reaching out to shareholders representing approximately 50% of our outstanding stock (excluding stock held by our directors and officers).
As a result of this outreach, the Strategic Planning and Compensation Committee implemented numerous changes to our executive compensation program for 2018, 2019 and 2020, including the following:
In light of industry factors, our 2018say-on-pay voting results, shareholder feedback and the Company’s 2018 stock performance, Mr. Foran’s 2018 total compensation was reduced 27.0% from 2017 to 2018. In particular, his compensation pursuant to the Company’s annual cash incentive plan was reduced 35.5% from 2017 to 2018.
We transitioned from a long-term incentive compensation program for executive officers of 67% service-based restricted stock and 33% stock options to a program comprised of 50% service-based restricted stock units and 50% performance-based stock units, commencing with grants made in February 2019.
We eliminated discretionary bonuses for executive officers, commonly referred to within the Company as “Marlan” awards in honor of the late Marlan W. Downey (1931-2017), a long-time advisor to the Board. Such bonuses were historically awarded as a way to contemporaneously reward significant performance achievements by select officers and employees. While, consistent with feedback we received from our shareholders, we still believe in the value to the Company and our shareholders of such awards in motivating ournon-executive employees, no Marlan bonuses have been awarded to executive officers since our 2018 Annual Meeting, and the Board does not anticipate granting future Marlan bonuses to our executive officers.
As a result of our efforts in 2018 and 2019, support for our executive compensation program increased to approximately 97% at our 2019 Annual Meeting of Shareholders (the “2019 Annual Meeting”). Further detail regarding this outreach effort, and the changes we have made in response, are included in “Executive Compensation—Compensation Discussion and Analysis” beginning on page 39.
In early 2020, following the outbreak of the novel coronavirus, orCOVID-19, along with the actions of OPEC+ and their effects on oil supply and demand, oil prices and our stock price, Mr. Foran voluntarily agreed to reduce his 2020 base salary by 25%, and our other executive officers and vice presidents voluntarily agreed to reduce their 2020 base salaries by 20% and 10%, respectively. Furthermore, in determining the size of 2020 long-term incentive awards for executive officers granted in March 2020, the Strategic Planning and Compensation Committee and the independent members of the Board used a value of approximately $13 per share—reflecting the trading price of our Common Stock inmid-February before the coronavirus pandemic and precipitous drop in oil prices began to impact the price of our Common Stock—instead of the significantly lower grant date fair value, which approximated $2 per share.
Details of our executive compensation are shown in the 2019 Summary Compensation Table on page 57 and a thorough discussion of the above changes to our executive compensation program, for both 2019 and 2020, are included under “Executive Compensation—Compensation Discussion and Analysis” beginning on page 39.
6 Matador Resources Company |2020 Proxy Statement
INFORMATION ABOUT THE ANNUAL MEETING
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INFORMATION ABOUT THE ANNUAL MEETING
We are furnishing you this Proxy Statement in connection with the solicitation of proxies by the Board to be used at the Annual Meeting and any adjournment thereof. The Annual Meeting will be held on Thursday,Friday, June 7, 2018,5, 2020, at 9:30 a.m., Central Daylight Time. We are sending this Proxy Statement to our shareholders on or about April 26, 2018.23, 2020.
All references in this Proxy Statement to “we,” “our,” “us,” “Matador” or the “Company” refer to Matador Resources Company, including our subsidiaries and affiliates.
What is the purpose of the Annual Meeting?
At the Annual Meeting, shareholders will act upon the following matters outlined in the Annual Meeting notice, including the following:notice:
the election of the fivefour nominees for director named in this Proxy Statement;
an advisory vote to approve the compensation of our named executive officers as described herein;
any other matters that may properly come before the meeting.
What are the Board’s voting recommendations?
FOR the election of the fivefour nominees for director named in this Proxy Statement;
FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers; and
Who is entitled to vote?
Shareholders as of the close of business on April 13, 20189, 2020 are eligible to vote their shares at the Annual Meeting. As of the Record Date, there were 109,263,103116,563,969 shares of our Common Stock outstanding. Each share of Common Stock is entitled to one vote at the Annual Meeting.
Why did I receive a Notice Regarding the Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?
Securities and Exchange Commission (“SEC”) rules allow companies to furnish proxy materials over the Internet. We have elected to send a separate Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our shareholders instead of a paper copy of the proxy materials. This approach conserves natural resources and reduces the costs of printing and distributing our proxy materials while providing shareholders with a convenient way to access our proxy materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy of proxy materials, including a proxy card or voting instruction form, may be found in the Notice. In addition, shareholders may request to receive future proxy materials in printed form by mail or electronically by email by following the instructions in the Notice. A shareholder’s election to receive proxy materials by mail or email will remain in effect until the shareholder terminates it.
2020 Proxy Statement6| Matador Resources Company 7|2018 Proxy Statement
INFORMATION ABOUT THE ANNUAL MEETING
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How do I vote?
You may:
attend the Annual Meeting and vote in person; or
dial the toll-free number listed on the Notice, proxy card or voting instruction form provided by your broker.Easy-to-follow voice prompts allow you to vote your shares and confirm that your voting instructions have been properly recorded. Telephone voting will be available 24 hours a day and will close at 11:59 p.m., Eastern Daylight Time on June 6, 2018; or4, 2020;
| • | go to the websitewww.proxyvote.com and follow the instructions, then confirm that your voting instructions have been properly recorded. If you vote using the website, you can request electronic delivery of future proxy materials. Internet voting will be available 24 hours a day and will close at 11:59 p.m., Eastern Daylight Time on June |
if you received a paper copy of your proxy materials and elect to vote by written submission, mark your selections on the proxy card, date and sign it, and return the card in thepre-addressed, postage-paid envelope provided.
Why did I receive paper copies of proxy materials?
We are providing certain shareholders with paper copies of the proxy materials instead of a separate Notice. If you received a paper copy and would no longer like to receive printed proxy materials, you may consent to receive all future proxy materials electronically via email or the Internet. To sign up for electronic delivery, please follow the instructions provided in your proxy materials. When prompted, indicate that you agree to receive or access shareholder communications electronically in the future.
Will each shareholder in our household receive proxy materials?
Generally, no. To the extent you are receiving printed proxy materials, we try to provide only one set of proxy materials to be delivered to multiple shareholders sharing an address, unless you have given us other instructions. Any shareholder at a shared address may request delivery of single or multiple copies of printed proxy materials for future meetings by contacting us at:
Matador Resources Company
Attention: Corporate SecretaryInvestor Relations
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
Email: investors@matadorresources.com
Telephone:(972) 371-5200
We undertake to deliver promptly, upon written or oral request, a copy of proxy materials to a shareholder at a shared address to which a single copy of the proxy materials was delivered. Requests should be directed to the Corporate SecretaryInvestor Relations at the address or phone number set forth above.
Who will be admitted to the Annual Meeting?
Admission to the Annual Meeting will be limited to our shareholders of record, persons holding proxies from our shareholders, beneficial owners of our Common Stock and our employees. If your shares are registered in your name, we will verify your ownership at the meeting in our list of shareholders as of the Record Date. If your shares are held through a broker, bank or other nominee, you must bring proof of your ownership of the shares. This proof could consist of, for example, a bank or brokerage firm account statement or a letter from your bank or broker confirming your ownership as of the Record Date. You may also send proof of ownership to us at Matador Resources Company, Attention: Corporate Secretary, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240, or email: investors@matadorresources.com, before the Annual Meeting, and we will send you an admission card.
2018 Proxy Statement|8 Matador Resources Company 7|2020 Proxy Statement
INFORMATION ABOUT THE ANNUAL MEETING
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If I vote via telephone or the Internet or by mailing my Proxy Card,proxy card, may I still attend the Annual Meeting?
Yes.
What if I want to change my vote?
You may revoke your proxy before it is voted by submitting a new proxy with a later date (by mail, telephone or the Internet), by voting at the Annual Meeting or by filing a written revocation with our Corporate Secretary. Your attendance at the Annual Meeting will not automatically revoke your proxy.
What constitutes a quorum?
A majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. If you vote by telephone or Internet or by returning your Proxy Card,proxy card, you will be considered part of the quorum. The Inspector of Election will treat shares represented by a properly executed proxy as present at the meeting. Abstentions and brokernon-votes will be counted for purposes of determining a quorum. A brokernon-vote occurs when a nominee holding shares for a beneficial owner submits a proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power for that item and has not received instructions from the beneficial owner.
How many votes will be required to approve a proposal?
The affirmative vote of a majority of the votes cast by holders of shares of Common Stock present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting is required for the election of each nominee for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes” castvotes cast” means the number of votes cast “for” such nominee exceeds the number of votes cast “against” such nominee.
With respect to the advisory vote on the frequency of advisory votes to approve named executive officer compensation, because this vote isnon-binding, the choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
With respect to all other matters, the affirmative vote of the holders of a majority of the shares of Common Stock, present in person or represented by proxy and entitled to vote at the Annual Meeting, is required.
Shares cannot be voted at the Annual Meeting unless the holder of record is present in person or represented by proxy.
Can brokers who hold shares in street name vote those shares if they have received no instructions?
Under the rules of the New York Stock Exchange (“NYSE”), brokers may not vote the shares held by them in street name for their customers and for which they have not received instructions, except with respect to a routine matter. The only matter to be voted on at the Annual Meeting that is considered routine for these purposes is the ratification of the appointment of our independent registered public accounting firm. Accordingly, brokers may not vote your shares on any other matter if you have not given specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote will be counted.
How will you treat abstentions and brokernon-votes?
Shares of a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum. Other than with respect to the election of directors, and the Frequency Vote, an abstention will effectively count as a vote cast against the remaining proposals. Brokernon-votes on any
8 Matador Resources Company |2018 Proxy Statement
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matter, as to which the broker has indicated on the proxy that it does not have discretionary authority to vote, will be treated as shares not entitled to vote with respect to that matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.
2020 Proxy Statement| Matador Resources Company 9
INFORMATION ABOUT THE ANNUAL MEETING |
Who pays the solicitation expenses?
We will bear the cost of solicitation of proxies. Proxies may be solicited by mail or personally by our directors, officers or employees, none of whom will receive additional compensation for such solicitation. Those holding shares of Common Stock of record for the benefit of others, or nominee holders, are being asked to distribute proxy soliciting materials to, and request voting instructions from, the beneficial owners of such shares. We will reimburse nominee holders for their reasonableout-of-pocket expenses.
Where can I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting, and we will publish final results in a Current Report on Form8-K that will be filed with the SEC within four business days of the Annual Meeting. You may obtain a copy of this and other reports free of charge atwww.matadorresources.com, by contacting our Investor Relations Department at(972) 371-5200 or investors@matadorresources.com or by accessing the SEC’s website atwww.sec.gov.
Will the Company’s independent registered public accounting firm be available at the Annual Meeting to respond to questions?
Yes. The Audit Committee of the Board has approved KPMG LLP to serve as our independent registered public accounting firm for the year ending December 31, 2018.2020. Representatives of KPMG LLP will be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.
Where can I contact the Company?
Our mailing address is:
Matador Resources Company
Attention: Corporate SecretaryInvestor Relations
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
Our telephone number is(972) 371-5200.
2018 Proxy Statement|10 Matador Resources Company 9|2020 Proxy Statement
PROPOSAL 1
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PROPOSAL 1 | ELECTION OF DIRECTORS
The Board currently consists of 11 members. Our Boardmembers and is divided into three classes of directors, designated Class I, Class II and Class III, with the term of office of each director ending on the date of the third annual meeting following the annual meeting at which such director’s class was elected. The number of directors in each class will be as nearly equal as possible. The current Class I directors are Ms.William M. Byerley, Monika U. Ehrman, Julia P. Forrester Rogers and Messrs. William M. Byerley, Kenneth L. Stewart and George M. Yates.Stewart. The terms of Ms. ForresterRogers and Messrs. Byerley and Stewart are the Class I director nominees at the Annual Meeting, inwill each case, to hold officecontinue until the 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”) or his or her earlier death, retirement, resignation or removal. Mr. Yates’ term will expireMs. Ehrman was appointed to the Board following the 2019 Annual Meeting and is therefore a Class I nominee at the 2020 Annual Meeting at which time we anticipate that he will begin serving as an advisor to our Board.hold office until the 2021 Annual Meeting or her earlier death, retirement, resignation or removal. The Class II directors are Messrs. R. Gaines Baty, and Craig T. Burkert and Dr. Steven W. Ohnimus. TheMatthew P. Clifton, the terms of whom will each of Messrs. Baty and Burkert and Dr. Ohnimus will continue until the 20192022 Annual Meeting of Shareholders or his earlier death, retirement, resignation or removal. The Class III directors are Messrs. Joseph Wm. Foran, Reynald A. Baribault, Timothy E. Parker and David M. Posner. Messrs. Foran, Baribault and Parker and Posner were appointed to the Board following the 2017 Annual Meeting of Shareholders and are therefore Class III director nominees at the 2020 Annual Meeting, in each case, to hold office until the 20202023 Annual Meeting of Shareholders or his earlier death, retirement, resignation or removal. The terms of each of Messrs. Foran and BaribaultMr. Posner’s term will continue untilexpire at the 2020 Annual Meeting of Shareholders or his earlier death, retirement, resignation or removal.Meeting.
The Board believes that each of the director nominees possesses the qualifications described below in “Corporate Governance—Board Committees—Nominating Committee.” That is, the Board believes that each nominee possesses: (i)
deep experience at the policy making level in business, government or education; (ii)
the availability and willingness to devote adequate time to Board duties; (iii)
the character, judgment and ability to make independent analytical, probing and other inquiries; (iv)
a willingness to exercise independent judgment along with a willingness to listen and learn from others; (v)
business knowledge and experience that provides a balance with the other directors; (vi)
financial independence; and (vii) with respect to incumbent directors,
excellent past performance on the Board.
TENURE
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PROPOSAL 1 |
 | Senior Leadership Experience |  | Energy Industry Experience | |||||
| Financial Expertise |
| Legal, Risk Management and ESG Experience | |||||
| Strategic Planning Expertise |  | Capital Markets Experience | |||||
The information provided below is biographical information about each of the nominees, as well as a description of the experience, qualifications, attributes or skills that led the Board to conclude that the individual should be nominated for election as a director of the Company.
| CEO, Matador Resources Company | Class
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Chairman of the Board
Director since:
Independent:
Age:
Committees: • • • Operations and Engineering • Prospect | Biographical Information: Mr. | |
Qualifications: As the founder, Chairman of the Board and Chief Executive Officer of Matador Resources Company, Mr. Foran provides Board leadership, industry experience and long relationships with many of our shareholders. |
1012 Matador Resources Company | 20182020 Proxy Statement
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| Vice President / Engineering, NP Resources, LLC | Class
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Director
Director since:
Independent: Yes
Age:
Committees: • • Prospect (Chair) • Audit • Environmental, Social and Corporate Governance • Executive • Strategic Planning and Compensation |
Mr. Baribault was | |
Qualifications: Mr. Baribault provides valuable insight to our Board |
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| Class I | ||
Director Director since: 2019 Independent: Yes Age: 42 Committees: • Environmental, Social and Corporate Governance • Operations and Engineering • Prospect | Biographical Information: Ms. Ehrman was appointed to the Board in 2019. She is Professor of Law, earning tenure in 2019, and Faculty Director of the Oil & Gas, Natural Resources, and Energy Center (ONE C) at the University of Oklahoma College of Law. Professor Ehrman also serves as Adjunct Associate Professor, Energy Management, at the University of Oklahoma Michael F. Price College of Business. Professor Ehrman joined the University of Oklahoma College of Law in 2013 as Associate Professor of Law. Prior to teaching, she served asin-house legal counsel for two oil and natural gas companies from 2008 to 2012 and as an associate oil and natural gas attorney at an international law firm from 2005 to 2008. Before law school, Professor Ehrman worked as a petroleum engineer in the upstream, midstream and pipeline sectors of the energy industry. In addition to serving on various oil and natural gas law committees, she also served as an Editor of the Oil and Gas Reporter for the Institute for Energy Law. She is the faculty advisor to the Oil and Gas, Natural Resources, and Energy Journal (ONE J), published by the University of Oklahoma College of Law. Professor Ehrman received her Bachelor of Science degree in Petroleum Engineering from the University of Alberta; J.D. from Southern Methodist University Dedman School of Law; and Master of Laws degree from Yale Law School. | |
Qualifications: Professor Ehrman provides valuable insight to our Board on our engineering and midstream operations as well as legal and governance matters. |
2020 Proxy Statement| Matador Resources Company 13
PROPOSAL 1 |
MR. TIMOTHY E. PARKER | Former Portfolio Manager and Analyst—Natural Resources, T. Rowe Price & Associates | Class III | ||
Lead Independent Director
Director since: 2018
Independent: Yes
Age:
Committees: • Capital Markets and Finance (Chair) • Audit • Executive •Prospect • Strategic Planning and Compensation | Biographical Information: Mr. Parker was appointed to the Board in 2018, serves as lead independent director and is chair of the Board’s Capital Markets and Finance Committee. Mr. Parker | |
Qualifications: Mr. Parker’s experience with a large institutional shareholder and his extensive familiarity with the capital markets provide the Company with valuable |
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2018 Proxy Statement| Matador Resources Company 11
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The affirmative vote of a majority of the votes cast by holders of shares present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting is required for the election of each nominee for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes” castvotes cast” means the number of votes cast “for” such nominee exceeds the number of votes cast “against” such nominee. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions and brokernon-votes will each be counted as present for purposes of determining the presence of a quorum.
The Board of Directors recommends that you vote FOR each of the nominees.
1214 Matador Resources Company | 20182020 Proxy Statement
PROPOSAL 1
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Directors Continuing in Office
Biographical information for our directors who are continuing in office is provided below.
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| CEO, R. Gaines Baty Associates, Inc. | Class
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2018 Proxy Statement| Matador Resources Company 13
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Deputy Lead Independent Director
Director since: 2016
Independent: Yes
Age:
Committees: • Strategic Planning and Compensation (Chair) • Environmental, Social and Corporate Governance • Executive • Nominating | Biographical Information: Mr. Baty was appointed to the Board in 2016, serves as deputy lead independent director and is chair of the Board’s Strategic Planning and Compensation Committee. Mr. Baty is Founder and CEO of R. Gaines Baty Associates, Inc., an executive search firm he founded in 1982. Mr. Baty has over 30 years of experience as an executive search consultant. In this role, he has provided companies across the country and in a variety of industries with executive search and advisory services. Mr. Baty has served as atwo-term President of the Society of Executive Recruiting Consultants and atwo-term President of the Independent Recruiter Group. Mr. Baty is also a published author. Mr. Baty received a Bachelor of Business Administration degree from Texas Tech University, where he was a letterman and captain of the football team. | |
Qualifications: Mr. Baty’s experience and expertise in executive leadership and development provide our Board with an important and unique perspective on these matters, and Mr. Baty assists the Board and the Company with recruitment, board administration, compensation and growth strategies. |
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MR. CRAIG T. BURKERT | CFO, ROMCO Equipment Co. | Class II | ||
Director
Director since: 2016
Independent: Yes
Age:
Committees:
• Audit • Environmental, Social and Corporate Governance • Marketing and Midstream • Nominating • Strategic Planning and Compensation | Biographical Information: Mr. Burkert was elected to the Board in | |
Qualifications: Mr. Burkert’s accounting and financial knowledge and leadership experience, coupled with his familiarity with the operations, information services and corporate governance of the Company, provide our Board with a valuable perspective on these matters and other business issues. |
2020 Proxy Statement| Matador Resources Company 15
PROPOSAL 1 |
MR. WILLIAM M. BYERLEY | Retired Partner, PricewaterhouseCoopers LLP (PwC) | Class I | ||
Director Director since: 2016 Independent: Yes Age: 66 Committees: • Audit (Chair) • Environmental, Social and Corporate Governance • Marketing and Midstream | Biographical Information: Mr. Byerley was appointed to the Board in 2016 and is chair of the Board’s Audit Committee. Mr. Byerley retired from PricewaterhouseCoopers LLP (PwC) in 2014. From 1988 through 2014, Mr. Byerley was a Partner with PwC, serving as an Assurance Partner on various audit engagements primarily for energy sector clients. From 1988 through 1990, Mr. Byerley served in the PwC National Office Accounting Services Group. Mr. Byerley received a Bachelor of Business Administration degree in 1975 and a Master of Business Administration degree in 1976, both from Southern Methodist University. He is a licensed Certified Public Accountant. | |
Qualifications: Mr. Byerley’s extensive experience in public accounting and longtime service to energy sector clients of PwC provide the Board with invaluable financial and accounting expertise, particularly for oil and natural gas companies, strong accounting and financial oversight and general industry knowledge. |
| MR. MATTHEW P. CLIFTON | Former Chairman and CEO, Holly Logistic Services, L.L.C. | Class II | ||
Director Director since: 2018 Independent: Yes Age: 68 Committees: • Marketing and Midstream (Chair) • Audit • Environmental, Social and Corporate Governance | Biographical Information: Mr. Clifton was appointed to the Board in 2018 and is chair of the Board’s Marketing and Midstream Committee. Mr. Clifton retired in November 2017 as Chairman of Holly Logistic Services, L.L.C (“HLS”), a subsidiary of HollyFrontier Corporation (“HFC”) and the general partner of Holly Energy Partners, L.P. (“HEP”). HEP is a publicly held master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry. Mr. Clifton had previously served as Chairman and Chief Executive Officer of HLS from 2004 through 2013, Executive Chairman of HLS from January 2014 to February 2014 and Chairman of the Board of HLS from February 2014 to November 2017. Mr. Clifton also served as President of Holly Corporation from 1995 to 2006 and Chief Executive Officer of Holly Corporation from 2006 until its merger with Frontier Oil Corporation in 2011 that formed HFC. Holly Corporation was an independent petroleum refiner and marketer that produced high value light products such as gasoline, diesel fuel, jet fuel and specialty lubricant products and had principal operations in the Delaware Basin. He served as Executive Chairman of HFC from 2011 until his retirement effective January 1, 2013. HFC is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. Mr. Clifton holds a Bachelor of Science degree in Accounting and Finance from St. Joseph’s University. | |
Qualifications: Mr. Clifton serves as a valuable resource for the Board with hisin-depth experience in the midstream oil and natural gas industry and his public company leadership. |
1416 Matador Resources Company | 20182020 Proxy Statement
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| Professor of Law, Southern Methodist University Dedman School of Law | Class
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Director
Director since:
Independent: Yes
Age:
Committees: • • | Biographical Information: Ms. Rogers was appointed to the Board in 2017 and is chair of the Board’s Environmental, Social and Corporate Governance Committee. Ms. Rogers is a Professor of Law at Southern Methodist University Dedman School of Law where she has been a member of the faculty since 1990, teaching and serving in various administrative positions. From 2015 through 2018, Ms. Rogers served as Associate Provost for Student Academic Services at SMU, overseeing International Student and Scholar Services, Study Abroad, the Center for Academic Development of Student Athletes, the President’s Scholars Program and the Hunt Scholars Program, among others. She has served in various administrative positions at SMU, including serving as Associate Dean for Academic Affairs for the 1995-1996 academic year and as Dean ad interim of the Dedman School of Law from June 2013 through June 2014. Before beginning her academic career at SMU, Ms. Rogers practiced law with Thompson & Knight LLP. Ms. Rogers holds a Bachelor of Science degree in Electrical Engineering from The University of Texas at Austin, graduating with highest honors, and a law degree from The University of Texas School of Law, graduating with high honors. She is a member of the Order of the Coif, and she received the highest score on the Texas bar exam following her graduation. More recently, she was elected as a member of the American Law Institute. | |
Qualifications: Ms. Rogers’ academic, administrative and legal experience provide our Board with a unique perspective on the Company’s business, operations and corporate governance. |
MR. KENNETH L. STEWART | EVP, Compliance and Legal Affairs, Children’s Health System of Texas | Class I | ||
Director Director since: 2017 Independent: Yes Age: 66 Committees: • Nominating Committee (Chair) • Capital Markets and Finance • Environmental, Social and Corporate Governance •
• Strategic Planning and Compensation | Biographical Information: Mr. Stewart was | |
Qualifications: Mr. Stewart’s extensive experience representing public companies, and particularly oil and natural gas |
20182020 Proxy Statement | Matador Resources Company 1517
PROPOSAL 1
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In addition to our Board, we have eightthree individuals with significant oil and natural gas, experience or legal accounting or other business experience who advise our Board on various matters. From time to time, we enter into various agreements with these individuals with respect to their service as advisors to our Board. Their business histories are described below:
Mr. Rick H. Fenlaw. Mr. Fenlaw is owner of Fenlaw Land Services, a company he founded in 1999 to provide title, leasing and curative professionals to upstream oil and natural gas clients, particularly in the Barnett Shale play. From 1990 through the formation of Fenlaw Land Services, Mr. Fenlaw operated a similar land services company, Rick Fenlaw & Associates, with a focus on East Texas and the Hardeman Basin. Through his companies, Mr. Fenlaw has employed up to 75over 100sub-brokers servicing his oil and natural gas clients. Mr. Fenlaw has worked as an independent petroleum landman since 1979. Prior to beginning his career as a landman, he played football for the St. Louis Football Cardinals. Mr. Fenlaw received a Bachelor of Journalism degree from theThe University of Texas inat Austin in 1977.
Mr. Scott E. King. Mr. King recently retired as Vice President—Exploration and Development of Petro Harvester Oil and Gas, LLC, having joined that company in October 2012. Mr. King joined Matador Resources Company at its founding in 2003 and served as Vice President—Exploration from 2003 to 2009 and Vice President—Geophysics and New Ventures from 2009 until 2012. He1977, where he was previously with Matador Petroleum Corporation, joining that company in December 1996 as Chief Geophysicist. Immediately prior to Matador Petroleum’s sale, Mr. King served as its Portfolio Manager and was responsible for recommending which drilling opportunities Matador Petroleum should pursue. Prior to joining Matador Petroleum, Mr. King worked for Enserch Corporation, a diversified energy company with interests in petroleum exploration and production, oilfield services, engineering design and construction, and natural gas transmission and distribution, as Team Leader for the Oklahoma Asset Group. Mr. King began his career in 1983 with Sohio Petroleum, an integrated energy company. Mr. King received a Bachelor of Science degree in Geology from Alfred University, Alfred, New York in 1981 and a Master of Science degree in Geophysics from Wright State University, Dayton, Ohio in 1983.
Ms. Tara W. Lewis. Ms. Lewis presently serves as a consultant to HEYCO Energy Group, Inc., previously serving as Vice President from 1998 to 2015. She previously served as Director of Internal Audit and Business Analysis at Apache Corporation and, prior to that role, spent more than 10 years with PwC, ultimately serving as Senior Tax Manager with the World Petroleum Group from 1993 to 1997. She also worked as a Resident Tax Specialist for the IPAA from 1991 to 1993. Ms. Lewis is Chairmancaptain of the International Committee of IPAA and serves on various civic boards, including The Arts Community Alliance (TACA) and Dallas Children’s Theater. Ms. Lewis is a licensed Certified Public Accountantfootball team in the State of Texas. She received a Bachelor of Arts degree in Accounting from Rice University and a law degree from the University of Houston Law School.1976.
Mr. Wade I. Massad. Mr. Massad served as a consultant to the Company and an advisor to the Board from 2010 to December 2011, when he was elected Executive Vice President—Capital Markets of the Company. He held that role until July 2012, when he resumed his role as a consultant to the Company and as an advisor to the Board. Mr. Massad is theCo-Founder andCo-Managing Member of Cleveland Capital Management L.L.C., a registered investment advisor and General Partner of Cleveland Capital L.P. and Rocky River Partners L.P., a private investment fundfunds focused onmicro-cap public and private equity securities established in October 1996. Previously, Mr. Massad was an investment banker with Keybanc Capital Markets and RBC Capital Markets, where he was the head of U.S. equity institutional sales from 1997 to 1998 and the head of U.S. Capital Markets business from 1999 to 2003. He also served on the firm’s executive committee. Mr. Massad serves on the board of the Investors Exchange Group, Inc. (IEX). Mr. Massad received a Bachelor of Arts degree in Business Management from Baldwin-Wallace University in 1989 and currently serves on its Board of Trustees.
Mr. Greg L. McMichael. Mr. McMichael served as a member of the Board of Matador Resources Company from 2004 to 2008. He presently serves on the board of directors for Denbury Resources, Inc. (NYSE: DNR). Mr. McMichael retired in October 2004 as Vice President and Group Leader—Energy Research of A.G. Edwards, Inc. In that capacity, he was responsible for overseeing all of the firm’s equity research in the Energy Sector, including integrated oils, exploration and production, oil service and master limited partnerships. Prior to joining
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A.G. Edwards, Mr. McMichael served as Managing Director of Equity Research at Hanifen, Imhoff, Inc., a Denver-based regional investment firm. He had previously served as Chief Executive Officer of a private oil and natural gas acquisition and production company heco-founded in 1987. Mr. McMichael is a member of the National Association of Corporate Directors, where he is currently a Leadership Fellow and serves on the board of the Colorado chapter. Mr. McMichael received a Bachelor of Arts degree in Political Science and Economics from Schiller International University (London) in 1973.
Dr. James D. Robertson. Dr. Robertson is a founder andco-managing partner of Salt Creek Petroleum, LLC, a privately-held company that explores for and produces oil and natural gas in conventional onshore plays in Texas. He is also founder and owner of Rannoch Petroleum LLC, an oil and natural gas investment and consulting firm based in Fort Worth, Texas. Prior to becoming an independent petroleum explorer, Dr. Robertson worked for ARCO for 25 years, serving as Vice President of Exploration for ARCO’s international division prior to his retirement from ARCO upon its acquisition by BP plc in 2000. Dr. Robertson has served as president of the Society of Exploration Geophysicists, chairman of the Fort Worth Chapter of the Society of Independent Professional Earth Scientists (SIPES) and as a national director of SIPES from 2012 to 2013. He is a licensed professional geoscientist in the State of Texas. Dr. Robertson received a Bachelor of Science degree in Geological Engineering from Princeton University and a PhD degree in Geophysics from the University of Wisconsin.
Mr.James A. Rolfe. Mr. Rolfe is Of Counsel at Elliott Sauter PLLC, a solo legalwhite collar and healthcare criminal defense boutique law firm he joined in 2018 following three years as a sole practitioner. Until 2015, he served as Of Counsel with Kendall Law Group, a Dallas, Texas law firm specializing in litigation that he joined in 2009. From 2005 to 2009, Mr. Rolfe served as Of Counsel with Fitzpatrick Hagood Smith & Uhl LLP, a boutique litigation firm. He worked as a sole practitioner in private practice from 1985 to 2005. From 1981 to 1985, Mr. Rolfe served as United States Attorney for the Northern District of Texas, having been appointed to that position by President Reagan. From 1979 to 1981, he worked in private practice following his serviceHe previously served as Assistant United States Attorney for the Northern District of Texas, a position he held from 1973 to 1979. Mr. Rolfe was Assistant District Attorney for Dallas County from 1969 to 1973. He began his public service in the role ofand Assistant City Attorney for the City of Dallas, which position he held from 1968 to 1969.Dallas. Mr. Rolfe served in the United States Army from 1959 to 1962. He received a Bachelor of Arts degree from Austin College in 1965 where he was a three-year letterman in basketball. He is a past president of Austin College’s alumni association and received its Distinguished Alumnus Award in 2000. He received his law degree from theThe University of Texas at Austin in 1968.
Mr. Michael C. Ryan. Mr. Ryan served as a member of the Board of
18 Matador Resources Company from February 2009 to June 2015. Prior to joining the Board, he served as an advisor to the Financial Committee (now the Capital Markets and Finance Committee) and frequently participated in Board planning and strategy sessions. Mr. Ryan is a private investor. From October 2004 to December 2015, he was a Partner and member of the Investment Committee at Berens Capital Management LLC, an investment firm based in New York. From February 1998 to June 2004, he worked with Goldman, Sachs & Co., a global investment banking and securities services firm, leading its West Coast international institutional equities business. In this role, he developed and built a team of professionals to advise large institutional clients on their global investment decisions. From 1995 to 1998, Mr. Ryan lived in Oslo, Norway, where he was a Partner at Pareto Securities, a Scandinavian-based securities firm where he led and built the institutional equities business into the United States and United Kingdom. From 1991 to 1994, Mr. Ryan represented multiple eastern European governments in the preparation, negotiation and sale of many of their largest state-owned companies. He began his career with Honeywell, Inc., which invents and manufactures technologies, including in the safety, security and energy areas, in 1983, working in the Systems and Research Center, which focused on advanced weapons development programs. Mr. Ryan received a Bachelor of Science degree from the University of Minnesota in 1983 and a Master of Business Administration degree from The Wharton School at the University of Pennsylvania in 1991.
|20182020 Proxy Statement| Matador Resources Company 17
CORPORATE GOVERNANCE
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The business affairs of Matador are managed under the direction of the Board in accordance with the Texas Business Organizations Code, the Company’s Amended and Restated Certificate of Formation (the “Certificate of Formation”) and its Amended and Restated Bylaws (the “Bylaws”), each as amended to date. The Board has adopted Corporate Governance Guidelines, which are reviewed annually by the Environmental, Social and Corporate Governance Committee of the Board. The Company has a Code of Ethics and Business Conduct for Officers, Directors and Employees (“Code of Ethics”), which is applicable to all officers, directors and employees of the Company. The Company intends to post any amendments to, and may post any waivers of, its Code of Ethics on the Company’s website to the extent applicable to an executive officer or a director of the Company. The Corporate Governance Guidelines and the Code of Ethics are available on the Company’s website atwww.matadorresources.com under the heading “Investors—“Investor Relations—Corporate Governance.”
The Board holds regular and special meetings and spends such time on the affairs of the Company as its duties require. During 2017,2019, the Board held 11eight meetings. The Board also meets regularly innon-management executive sessions in accordance with NYSE regulations. The Corporate Governance Guidelines provide that one of the Company’s independent directors should serve as lead independent director at any time when the chief executive officer serves as the chairman of the board. The lead independent director presides over thenon-management executive sessions, serves as a liaison between the chairman and the independent directors and performs such additional duties as the Board may otherwise determine and delegate. Because Mr. Foran serves as Chairman of the Board and Chief Executive Officer, our independent directors have appointed Mr. BaribaultParker to serve as lead independent director and Mr. Baty to serve as deputy lead independent director. In 2017,2019, all incumbent directors of the Company attended at least 75% of the meetings of the Board and the committees on which they served. It is our policy that each of our directors is expected to attend annual meetings of shareholders. OfAll of our 10 directors that continued in office through the 20172019 Annual Meeting nine attended the 2017 Annual Meeting.such meeting, except for one director, who was unable to attend due to health reasons.
The Board makes all determinations with respect to director independence in accordance with the NYSE listing standards and the rules and regulations promulgated by the SEC. The actual determination of whether a director is independent is made by the Board on acase-by-case basis.
In connection with its preparation for the Annual Meeting, the Board undertook its annual review of director independence and considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates. In making its determination, the Board applied the NYSE listing standards and SEC rules and regulations.
The Board reviewed the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. After this review, our Board determined that nine10 of our 11 current directors are “independent directors” as defined under the rules of the SEC and the NYSE: Ms. Forrester,Mmes. Ehrman and Rogers and Messrs. Baribault, Baty, Burkert, Byerley, Clifton, Parker, Posner and Stewart and Dr. Ohnimus.Stewart. No member of or nominee for our Board has a family relationship with any executive officer or other members of our Board.
Majority Vote in Director Elections
On December 21, 2016, the Board amended the Company’s Amended and Restated Bylaws (as so amended, the “Bylaws”) to implement a majority voting standard in uncontested director elections. Pursuant to the Bylaws, in an election of directors at a meeting of shareholders at which a quorum is present, (i) if the number of nominees exceeds the number of directors to be elected (a “contested election”), directors shall be elected by a plurality of the votes cast by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors at such meeting and (ii) in an election of directors that is not a contested election (an “uncontested election”), such as that being held at the Annual Meeting, directors shall be elected by a majority of
18 Matador Resources Company |2018 Proxy Statement
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the votes cast by the holders of shares present in person or
2020 Proxy Statement| Matador Resources Company 19
CORPORATE GOVERNANCE |
represented by proxy and entitled to vote on the election of directors at such meeting. For purposes of the Bylaws, in an uncontested election, a “majority of the votes cast” means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. Prior to the amendment of the Bylaws, directors were elected by a plurality of the votes cast, whether or not the election was a contested election.
In connection with the amendment to the Bylaws, the Board approved and adopted an amendment to the Company’s Corporate Governance Guidelines to implement a resignation policy for directors who fail to receive the required number of votes in an uncontested election in accordance with the Bylaws. Pursuant to the Corporate Governance Guidelines, as amended, in an uncontested election, any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election (a “majority against vote”) shall promptly tender his or her resignation following certification of the shareholder vote.
The Nominating Committee shall promptly consider the resignation offer and a range of possible responses based on the circumstances that led to the majority against vote, if known, and make a recommendation to the Board concerning whether to accept or reject such resignation. The Board shall act on the Nominating Committee’s recommendation and publicly disclose its decision with respect to such resignation offer within 90 days following certification of the shareholder vote. The resignation, if accepted by the Board, will be effective at the time specified by the Board when it determines to accept the resignation, which effective time may be deferred until a replacement director is identified and appointed to the Board.
Mr. Foran serves as Chairman of the Board and Chief Executive Officer of the Company. As stated in the Corporate Governance Guidelines, the Board does not believe that the offices of Chairman of the Board and Chief Executive Officer must be separate. The members of the Board possess experience and unique knowledge of the challenges and opportunities the Company faces. They are, therefore, in the best position to evaluate the current and future needs of the Company and to judge how the capabilities of the directors and senior managers can be most effectively organized to meet those needs. Given hisMr. Foran’s deep knowledge of the Company and experience in leading it, the Board currently believes that the most effective leadership structure for the Company is to have Mr. Foran serve as Chairman of the Board and Chief Executive Officer.
While Mr. Foran serves as Chairman of the Board and Chief Executive Officer, nine of 10all of ournon-employee directors are independent under the rules of the SEC and the NYSE. After considering the recommendations of our Strategic Planning and Compensation Committee, the independent directors determine Mr. Foran’s compensation. Further, the Company has five standing committees, and a lead independent director who is currently Mr. Baribault.(Mr. Parker) and a deputy lead independent director (Mr. Baty). The Board believes that each of these measures counterbalances any risk that may exist in having Mr. Foran serve as Chairman of the Board and Chief Executive Officer. For these reasons, the Board believes that this leadership structure is effective for the Company.
As lead independent director, Mr. BaribaultParker has the following roles and responsibilities:
chairs the executive sessions of thenon-management and independent directors;
leads the independent directors in the evaluation of the Chief Executive Officer;
facilitates communication among thenon-management and independent directors; and
acts as a liaison between thenon-management and independent directors and the Chief Executive Officer.
Mr. Baribault,Parker, as lead independent director, may also perform such other duties as the Board or the Environmental, Social and Corporate Governance Committee from time to time may assign, which may include, but are not limited to, the following:
help develop Board agendas and ensure critical issues are included;
determine quality, quantity and timeliness of information from management;
make recommendations about retaining consultants or advisors for the Board;
interview Board candidates;
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help improve communications and processes by and between management and the Board and the Chief Executive Officer.
Mr. Baty, as deputy lead independent director, may also carry out the above duties in the absence of or at the direction of Mr. Parker, as lead independent director.
The standing committees of the Board are the Audit Committee, Environmental, Social and Corporate Governance Committee, Executive Committee, Nominating Committee and Strategic Planning and Compensation Committee. The Board has also established the following advisory committees: Capital Markets and Finance Committee, Marketing and Midstream Committee, Operations and Engineering Committee and Prospect Committee. Each of the standing committees is governed by a charter, and a copy of the charters of each of these committees is available on the Company’s website atwww.matadorresources.com under the heading “Investors—“Investor Relations—Corporate Governance.” Director membership of all of our standing and advisory committees is identified below, as of April 13, 2018. Mr. Yates’ term as a director, and as a member of the committees noted below, will expire at the Annual Meeting.9, 2020.
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Audit Committee
The Audit Committee assists the Board in monitoring:
the integrity of our financial statements and disclosures;
our compliance with legal and regulatory requirements;
the qualifications and independence of our independent auditor;
the performance of our internal audit function and our independent auditor; and
our internal control systems.
In addition, the Audit Committee is charged with the review of compliance with our Code of Ethics.
During 2017,As of April 9, 2020, the Audit Committee met five times and as of April 13, 2018 consisted of Ms. Forrester, Messrs. Baribault, Burkert, Byerley, ParkerClifton and Posner and Dr. Ohnimus,Parker, each of whom is independent under the rules of
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the SEC and the NYSE. Mr. Byerley is the chair of the Audit Committee. SEC rules require a public company to disclose whether or not its audit committee has an “audit committee financial expert” as defined by applicable SEC rules and regulations. Our Board has determined that each of Messrs. Burkert, Byerley, Clifton and BurkertParker is an “audit committee financial expert.” During 2019, the Audit Committee met five times.
Environmental, Social and Corporate Governance Committee
The Environmental, Social and Corporate Governance Committee is responsible for periodically reviewing and assessing our Corporate Governance Guidelines and Code of Ethics and making recommendations for changes thereto to the Board, reviewing any other matters related to our corporate governance, unless the authority to conduct such review has been retained by the Board or delegated to another committee, and overseeing the process for evaluation of the Board and management. In 2020, the Environmental, Social and Corporate Governance Committee (formerly the Corporate Governance Committee), in conjunction with the Company’s CEO, was also delegated oversight authority with respect to ESG matters.
As of April 9, 2020, the Environmental, Social and Corporate Governance Committee consisted of Mmes. Ehrman and Rogers and Messrs. Baribault, Baty, Burkert, Byerley, Clifton, Posner and Stewart, each of whom is independent under the rules of the SEC and the NYSE. Ms. Rogers is the chair of the Environmental, Social and Corporate Governance Committee. During 2019, the Environmental, Social and Corporate Governance Committee met four times.
Executive Committee
The Executive Committee has authority to discharge all the responsibilities of the Board in the management of the business and affairs of the Company, except where action of the full Board is required by statute or by our Certificate of Formation or Bylaws, each as amended to date. As of April 9, 2020, the Executive Committee consisted of Messrs. Foran, Baribault, Baty and Parker. Mr. Foran is the chair of the Executive Committee. During 2019, the Executive Committee met two times.
Nominating Committee
The Nominating Committee has the following responsibilities:
identifies and recommends to the Board individuals qualified to be nominated for election to the Board; and
recommends to the Board the members and chair of each committee of the Board.
Pursuant to the Nominating Committee charter, no director may serve on the Nominating Committee if such director is subject tore-election to the Board at the next annual meeting of shareholders.
As of April 9, 2020, the Nominating Committee consisted of Ms. Rogers and Messrs. Baty, Burkert and Stewart, each of whom is independent under the rules of the SEC and the NYSE. Mr. Stewart is the chair of the Nominating Committee. During 2019, the Nominating Committee met seven times.
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The Board has also established a Shareholder Advisory Committee for Board Nominations (the “Advisory Committee”) that is charged with receiving and considering possible nominees for election to the Board by shareholders. Pursuant to the Advisory Committee charter, this committee is comprised of eight to 12 persons selected by the Nominating Committee and consists of at least:
two members of the Nominating Committee;
two former members of or special advisors to the Board;
two shareholders who beneficially own Common Stock having a market value of at least $1.0 million (such value to be based on the market value of the Common Stock immediately prior to designation of such shareholders to the Advisory Committee); and
two shareholders who have beneficially owned Common Stock continuously for at least the five years prior to such shareholder’s designation to the Advisory Committee.
The current members of the Advisory Committee are Ms. Rogers, Messrs. Stewart and Rolfe, Scott E. King, George M. Yates, J. Barry Banker, Joe E. Coleman, Kevin M. Grevey and Bobby K. Pickard. Messrs. King and Rolfe areco-chairs of the Advisory Committee.
The Advisory Committee makes recommendations based on its conclusions to the Nominating Committee for its consideration and review.
The Nominating Committee and the Advisory Committee consider individuals recommended by the Company’s shareholders to serve on the Board. In considering candidates submitted by shareholders, the Advisory Committee and the Nominating Committee take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Advisory Committee and the Nominating Committee, a shareholder must submit the recommendation in writing and must include the following information:
The name and address of the shareholder, evidence of the person’s ownership of Common Stock or derivatives, including the number of shares owned, a description of all arrangements or understandings regarding the right to vote shares of the Company, any short interest in any security of the Company, any rights to dividends that are separated or separable from the underlying shares, any proportionate interest in shares or derivatives held by a general or limited partnership whereby the shareholder is a general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and
The name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s consent to be a director if selected by the Nominating Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors.
The shareholder recommendation and information described above, and in more detail in our Bylaws, must be sent to the Corporate Secretary at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240 and must be received by the Corporate Secretary not fewer than 45 nor more than 75 days prior to the one year anniversary date of the date the Company’s proxy statement was mailed in connection with the previous year’s annual meeting of shareholders.
The Nominating Committee believes that a potential director of the Company must demonstrate that such candidate has:
a depth of experience at the policy-making level in business, government or education;
a balance with the business knowledge and experience of the incumbent or nominated directors;
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availability and willingness to devote adequate time to Board duties;
any unfilled expertise needed on the Board or one of its committees;
character, judgment and ability to make independent analytical, probing and other inquiries;
willingness to exercise independent judgment while remaining willing to listen and learn from the other directors and the Company’s staff; and
financial independence to ensure such candidate will not be financially dependent on director compensation.
In the case of an incumbent director, the Nominating Committee will also consider such director’s past performance on the Board.
The Nominating Committee or the Advisory Committee may identify potential nominees by asking, from time to time, current directors and executive officers for their recommendation of persons meeting the criteria described above who might be available to serve on the Board. The Nominating Committee or the Advisory Committee may also engage firms that specialize in identifying director candidates. As described above, the Nominating Committee and Advisory Committee will also consider candidates recommended by shareholders.
Once a person has been identified by the Nominating Committee or the Advisory Committee as a potential candidate, the Nominating Committee or the Advisory Committee will make an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Nominating Committee or the Advisory Committee determines that additional consideration is warranted, the Nominating Committee or the Advisory Committee will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate. In addition to the qualifications of a candidate, the Nominating Committee or the Advisory Committee will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees and the need for any required expertise on the Board or one of its committees. The Nominating Committee or the Advisory Committee also contemplates multiple dynamics that promote and advance diversity among the members of the Board. Although the Nominating Committee does not have a formal diversity policy, the Nominating Committee considers a number of factors regarding diversity of personal and professional backgrounds, gender, race, age, specialized skills and acumen and breadth of experience in energy exploration and production, midstream and marketing, executive leadership, accounting, finance or law. The Nominating Committee does not discriminate based upon race, religion, gender, national origin, age, disability, citizenship or any other legally protected status. The Nominating Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder.
Strategic Planning and CompensationExecutive Committee
In February 2018, the Board renamed the Compensation Committee as the Strategic Planning and Compensation Committee. The Strategic Planning and CompensationExecutive Committee has authority to discharge all the following responsibilities:
The Strategic Planning and Compensation Committee has the authority to delegate authority and responsibilities to subcommittees of its members, so long as the subcommittee consists of at least two members.
date. As of April 13, 2018,9, 2020, the Strategic Planning and CompensationExecutive Committee consisted of Messrs. Foran, Baribault, Baty Burkert, Parker and Stewart and Dr. Ohnimus, each of whom is independent under the rules of the SEC and the NYSE, a“non-employee director” pursuant to Rule16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and an “outside director” pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).Parker. Mr. BatyForan is the chair of the Strategic Planning and CompensationExecutive Committee. During 2017,2019, the Strategic Planning and CompensationExecutive Committee met 16two times.
Nominating Committee
The Nominating Committee has the following responsibilities:
identifies and recommends to the Board individuals qualified to be nominated for election to the Board; and
recommends to the Board the members and chair of each committee of the Board.
The Nominating Committee has the authority to delegate authority and responsibilities to subcommittees of its members, so long as the subcommittee consists of at least two members. Pursuant to the Nominating Committee Charter,charter, no director may serve on the Nominating Committee if such director is subject tore-election to the Board at the next annual meeting of shareholders.
As of April 13, 2018,9, 2020, the Nominating Committee consisted of Ms. Rogers and Messrs. Baty, and Burkert and Dr. Ohnimus,Stewart, each of whom is independent under the rules of the SEC and the NYSE. Mr. BurkertStewart is the chair of the Nominating Committee. During 2017,2019, the Nominating Committee met sixseven times.
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The Board has also established a Shareholder Advisory Committee for Board Nominations (the “Advisory Committee”) that is charged with receiving and considering possible nominees for election to the Board by shareholders. Pursuant to the Advisory Committee charter, this committee is comprised of eight to 12 persons selected by the Nominating Committee and consists of at least:
two members of the Nominating Committee;
two former members of or special advisors to the Board;
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two shareholders who have beneficially owned Common Stock continuously for at least the five years prior to such shareholder’s designation to the Advisory Committee.
The current members of the Advisory Committee are Ms. Rogers, Messrs. Burkert, McMichael, RyanStewart and Rolfe, Scott E. King, and Dr. Ohnimus andGeorge M. Yates, J. Barry Banker, Joe E. Coleman, Kevin M. Grevey and Bobby K. Pickard. Messrs. King and Rolfe areco-chairs of the Advisory Committee.
The Advisory Committee makes recommendations based on its conclusions to the Nominating Committee for its consideration and review.
The Nominating Committee and the Advisory Committee consider individuals recommended by the Company’s shareholders to serve on the Board. In considering candidates submitted by shareholders, the Advisory Committee and the Nominating Committee take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Advisory Committee and the Nominating Committee, a shareholder must submit the recommendation in writing and must include the following information:
The name and address of the shareholder, evidence of the person’s ownership of Common Stock or derivatives, including the number of shares owned, a description of all arrangements or understandings regarding the right to vote shares of the Company, any short interest in any security of the Company, any rights to dividends that are separated or separable from the underlying shares, any proportionate interest in shares or derivatives held by a general or limited partnership whereby the shareholder is a general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and
The name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s consent to be a director if selected by the Nominating Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors.
The shareholder recommendation and information described above, and in more detail in our Bylaws, must be sent to the Corporate Secretary at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240 and must be received by the Corporate Secretary not fewer than 45 nor more than 75 days prior to the one year anniversary date of the date the Company’s proxy statement was mailed in connection with the previous year’s annual meeting of shareholders.
The Nominating Committee believes that a potential director of the Company must demonstrate that such candidate has:
a depth of experience at the policy-making level in business, government or education;
a balance with the business knowledge and experience of the incumbent or nominated directors;
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availability and willingness to devote adequate time to Board duties;
any unfilled expertise needed on the Board or one of its committees;
character, judgment and ability to make independent analytical, probing and other inquiries;
willingness to exercise independent judgment yet willingnesswhile remaining willing to listen and learn from the other directors and the Company’s staff; and
financial independence to ensure such candidate will not be financially dependent on director compensation.
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In the case of an incumbent director, the Nominating Committee will also consider such director’s past performance on the Board.
The Nominating Committee or the Advisory Committee may identify potential nominees by asking, from time to time, current directors and executive officers for their recommendation of persons meeting the criteria described above who might be available to serve on the Board. The Nominating Committee or the Advisory Committee may also engage firms that specialize in identifying director candidates. As described above, the Nominating Committee and Advisory Committee will also consider candidates recommended by shareholders.
Once a person has been identified by the Nominating Committee or the Advisory Committee as a potential candidate, the Nominating Committee or the Advisory Committee will make an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Nominating Committee or the Advisory Committee determines that additional consideration is warranted, the Nominating Committee or the Advisory Committee will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate. In addition to the qualifications of a candidate, the Nominating Committee or the Advisory Committee will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees and the need for any required expertise on the Board or one of its committees. The Nominating Committee or the Advisory Committee also contemplates multiple dynamics that promote and advance diversity among the members of the Board. Although the Nominating Committee does not have a formal diversity policy, the Nominating Committee considers a number of factors regarding diversity of personal and professional backgrounds, gender, race, age, specialized skills and acumen and breadth of experience in energy exploration and production, midstream and marketing, executive leadership, accounting, finance or law. The Nominating Committee does not discriminate based upon race, religion, gender, national origin, age, disability, citizenship or any other legally protected status. The Nominating Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder.
Corporate Governance Committee
The Corporate Governance Committee is responsible for periodically reviewing and assessing our Corporate Governance Guidelines and Code of Ethics and making recommendations for changes thereto to the Board, reviewing any other matters related to our corporate governance, unless the authority to conduct such review has been retained by the Board or delegated to another committee, and overseeing the process for evaluation of the Board and management.
As of April 13, 2018, the Corporate Governance Committee consisted of Ms. Forrester, Messrs. Baribault, Baty, Burkert, Byerley, Posner and Stewart and Dr. Ohnimus, each of whom is independent under the rules of the SEC and the NYSE. Ms. Forrester is the chair of the Corporate Governance Committee. During 2017, the Corporate Governance Committee met three times.
Executive Committee
The Executive Committee has authority to discharge all the responsibilities of the Board in the management of the business and affairs of the Company, except where action of the full Board is required by statute or by our Amended and Restated Certificate of Formation or Bylaws, each as amended to date. The Executive Committee met once during 2017.
As of April 13, 2018,9, 2020, the Executive Committee consisted of Messrs. Foran, Baribault, Baty and Yates.Parker. Mr. Foran is the chair of the Executive Committee. During 2019, the Executive Committee met two times.
Capital Markets and FinanceNominating Committee
The Nominating Committee has the following responsibilities:
identifies and recommends to the Board formedindividuals qualified to be nominated for election to the Capital MarketsBoard; and Finance Committee in February 2018. The Capital Markets
recommends to the Board the members and Finance Committee provides oversightchair of each committee of the Company’s financial objectives, financial policies, capital structure and financing requirements. Board.
Pursuant to the Nominating Committee charter, no director may serve on the Nominating Committee if such director is subject tore-election to the Board at the next annual meeting of shareholders.
As of April 13, 2018,9, 2020, the membersNominating Committee consisted of Ms. Rogers and Messrs. Baty, Burkert and Stewart, each of whom is independent under the rules of the Capital MarketsSEC and Finance Committee were Messrs. Foran, Parker,the NYSE. Mr. Stewart and Yates. Mr. Parker is the chair of the Capital Markets and FinanceNominating Committee. During 2019, the Nominating Committee met seven times.
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The Board has also established a Shareholder Advisory Committee for Board Nominations (the “Advisory Committee”) that is charged with receiving and considering possible nominees for election to the Board by shareholders. Pursuant to the Advisory Committee charter, this committee is comprised of eight to 12 persons selected by the Nominating Committee and consists of at least:
two members of the Nominating Committee;
two former members of or special advisors to the Board;
two shareholders who beneficially own Common Stock having a market value of at least $1.0 million (such value to be based on the market value of the Common Stock immediately prior to designation of such shareholders to the Advisory Committee); and
two shareholders who have beneficially owned Common Stock continuously for at least the five years prior to such shareholder’s designation to the Advisory Committee.
The current members of the Advisory Committee are Ms. Rogers, Messrs. Stewart and Rolfe, Scott E. King, George M. Yates, J. Barry Banker, Joe E. Coleman, Kevin M. Grevey and Bobby K. Pickard. Messrs. King and Rolfe areco-chairs of the Advisory Committee.
The Advisory Committee makes recommendations based on its conclusions to the Nominating Committee for its consideration and review.
The Nominating Committee and the Advisory Committee consider individuals recommended by the Company’s shareholders to serve on the Board. In considering candidates submitted by shareholders, the Advisory Committee and the Nominating Committee take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Advisory Committee and the Nominating Committee, a shareholder must submit the recommendation in writing and must include the following information:
The name and address of the shareholder, evidence of the person’s ownership of Common Stock or derivatives, including the number of shares owned, a description of all arrangements or understandings regarding the right to vote shares of the Company, any short interest in any security of the Company, any rights to dividends that are separated or separable from the underlying shares, any proportionate interest in shares or derivatives held by a general or limited partnership whereby the shareholder is a general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and
The name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s consent to be a director if selected by the Nominating Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors.
The shareholder recommendation and information described above, and in more detail in our Bylaws, must be sent to the Corporate Secretary at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240 and must be received by the Corporate Secretary not fewer than 45 nor more than 75 days prior to the one year anniversary date of the date the Company’s proxy statement was mailed in connection with the previous year’s annual meeting of shareholders.
The Nominating Committee believes that a potential director of the Company must demonstrate that such candidate has:
a depth of experience at the policy-making level in business, government or education;
a balance with the business knowledge and experience of the incumbent or nominated directors;
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availability and willingness to devote adequate time to Board duties;
any unfilled expertise needed on the Board or one of its committees;
character, judgment and ability to make independent analytical, probing and other inquiries;
willingness to exercise independent judgment while remaining willing to listen and learn from the other directors and the Company’s staff; and
financial independence to ensure such candidate will not be financially dependent on director compensation.
In the case of an incumbent director, the Nominating Committee will also consider such director’s past performance on the Board.
The Nominating Committee or the Advisory Committee may identify potential nominees by asking, from time to time, current directors and executive officers for their recommendation of persons meeting the criteria described above who might be available to serve on the Board. The Nominating Committee or the Advisory Committee may also engage firms that specialize in identifying director candidates. As described above, the Nominating Committee and Advisory Committee will also consider candidates recommended by shareholders.
Once a person has been identified by the Nominating Committee or the Advisory Committee as a potential candidate, the Nominating Committee or the Advisory Committee will make an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Nominating Committee or the Advisory Committee determines that additional consideration is warranted, the Nominating Committee or the Advisory Committee will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate. In addition to the qualifications of a candidate, the Nominating Committee or the Advisory Committee will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees and the need for any required expertise on the Board or one of its committees. The Nominating Committee or the Advisory Committee also contemplates multiple dynamics that promote and advance diversity among the members of the Board. Although the Nominating Committee does not have a formal diversity policy, the Nominating Committee considers a number of factors regarding diversity of personal and professional backgrounds, gender, race, age, specialized skills and acumen and breadth of experience in energy exploration and production, midstream and marketing, executive leadership, accounting, finance or law. The Nominating Committee does not discriminate based upon race, religion, gender, national origin, age, disability, citizenship or any other legally protected status. The Nominating Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder.
Strategic Planning and Compensation Committee
The Strategic Planning and Compensation Committee has the following responsibilities:
assists the Board and the independent members of the Board (the “Independent Board”) in the discharge of their fiduciary responsibilities relating to the fair and competitive compensation of our executive officers;
provides overall guidance with respect to the establishment, maintenance and administration of our compensation programs, including stock and benefit plans;
oversees and advises the Board and the Independent Board on the adoption of policies that govern our compensation programs;
recommends to the Board the strategic, tactical and performance goals of the Company, including those performance and tactical goals that relate to performance-based compensation, including but not limited to goals for production, reserves, cash flows and shareholder value; and
in conjunction with the Company’s CEO, oversees management succession planning.
The Strategic Planning and Compensation Committee has the authority to delegate authority and responsibilities to subcommittees of its members, so long as any subcommittee consists of at least two members.
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As of April 9, 2020, the Strategic Planning and Compensation Committee consisted of Messrs. Baribault, Baty, Burkert, Parker and Stewart, each of whom is independent under the rules of the SEC and the NYSE and a“non-employee director” pursuant to Rule16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Mr. Baty is the chair of the Strategic Planning and Compensation Committee. During 2019, the Strategic Planning and Compensation Committee met eight times.
Capital Markets and Finance Committee
The Capital Markets and Finance Committee provides oversight of the Company’s financial objectives, financial policies, capital structure and financing requirements. As of April 9, 2020, the members of the Capital Markets and Finance Committee were Messrs. Foran, Parker and Stewart. Mr. Parker is the chair of the Capital Markets and Finance Committee.
Marketing and Midstream Committee
The Marketing and Midstream Committee provides oversight of the Company’s marketing and midstream activities, projects, joint ventures and plans. As of April 9, 2020, the members of the Marketing and Midstream Committee were Messrs. Burkert, Byerley, Clifton, Posner and Stewart. Mr. Clifton is the chair of the Marketing and Midstream Committee.
Operations and Engineering Committee
The Operations and Engineering Committee provides oversight of the development of our prospects, our drilling, completions and completion operations and our production operations and associated costs. In addition, the Operations and Engineering Committee provides oversight of the amount and classifications of our reserves and the design of our completion techniques and hydraulic fracturing operations and various other reservoir engineering matters. As of April 13, 2018,9, 2020, the members of the Operations and Engineering Committee were Ms. Ehrman and Messrs. Baribault, Foran Posner and Yates and Dr. Ohnimus. Dr. OhnimusPosner. Mr. Baribault is the chair of the Operations and Engineering Committee.
Prospect Committee
The Prospect Committee provides oversight of the technical analysis, evaluation and selection of our oil and natural gas prospects. As of April 13, 2018,9, 2020, the members of the Prospect Committee were Ms. Ehrman and Messrs. Baribault, Foran Parker, Stewart and Yates and Dr. Ohnimus.Parker. Mr. Baribault is the chair of the Prospect Committee.
Board’s Role in Risk Oversight
The Audit Committee has the responsibility to oversee the Company’s guidelines and policies to govern the process by which risk assessment and risk management are undertaken by management. The Strategic Planning and Compensation Committee has the responsibility to oversee that our incentive pay does not encourage unnecessary risk taking and to review and discuss the relationship between risk management policies and practices, corporate strategy and senior executive compensation.
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Environmental, Social and Governance Initiatives
We maintain an active ESG program and continued working in 2019 to improve upon our various ESG efforts. In 2020, the Environmental, Social and Corporate Governance Committee (formerly the Corporate Governance Committee), in conjunction with the Company’s CEO, was delegated oversight authority with respect to ESG matters.
Environmental |
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• Reducing emissions • Recycling, protecting and using water resources prudently • Eliminating trucking by transporting oil and water on pipe • Reducing our surface footprint with fewer pads and increased batch drilling |
Social |
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• Commitment to a proactive safety culture • Over 17,000 hours of employee continuing education in 2019 • Support for communities and charities where we live, work and operate • Over 1.4 million employeeman-hours and no lost time accidents since 2017 |
Governance |
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• Majority voting standard for election of our Board of Directors • Active shareholder outreach program, including discussion of compensation, governance, social, safety and environmental practices and disclosures • Anonymous whistleblower reporting program |
For more information regarding the Company’s ESG initiatives, please see the Company’s website atwww.matadorresources.com under the heading “Investor Relations—ESG.”
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Strategic Planning and Compensation Committee Interlocks and Insider Participation
Mr. Joe A. Davis (whose term as a director expired at the 2017 Annual Meeting), Mr. Gregory E. Mitchell (who resigned from the Board in July 2017) and Messrs. Baribault, Baty, Burkert, Parker and Stewart and Dr. Ohnimus served on the Strategic Planning and Compensation Committee during the last completed fiscal year.2019. None of these individuals is or was previously one of our officers or employees. None of our executive officers serve on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Strategic Planning and Compensation Committee. No member of our Board serves as an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. There were no compensation committee interlocks during 2017.2019. Mr. Baribault’ssister-in-law is an employee of the Company. For more information on this related party transaction, see “Transactions with Related Persons.”
The Board has established a process to receive communications from shareholders and other interested parties by mail. Shareholders and other interested parties may contact any member of the Board, any Board committee or the entire Board. To communicate with the Board, any individual director or any committee, of directors, correspondence should be addressed to the Board. All such correspondence should be sent “c/o Corporate Secretary” at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240. The Corporate Secretary will review and forward correspondence to the appropriate person or persons.
Any communications to the Company from one of the Company’s officers or directors will not be considered “shareholder communications.” Communications to the Company from one of the Company’s employees or agents will only be considered “shareholder communications” if they are made solely in such employee’s or agent’s capacity as a shareholder. Any shareholder proposal submitted pursuant to Rule14a-8 promulgated under the Exchange Act will not be viewed as “shareholder communications.”
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Executive Officers and Other Senior Officers of the Company
The following table sets forth the names, ages and positions of our executive officers and certain of our other senior officers at April 13, 2018:9, 2020:
Name | Age | Positions Held With Us | ||||
Executive Officers | ||||||
Joseph Wm. Foran | 67 | Chairman of the Board and Chief Executive Officer | ||||
Matthew V. Hairford | 59 | President | ||||
David E. Lancaster | 63 | Executive Vice President and Chief Financial Officer | ||||
Craig N. Adams | 53 | Executive Vice | ||||
Billy E. Goodwin | 62 | Executive Vice President and Chief Operating Officer—Drilling, Completions & Production | ||||
Van H. Singleton, II | 42 | Executive Vice President of Land | ||||
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Bradley M. Robinson | 65 | Executive Vice President of Reservoir Engineering and Chief Technology Officer | ||||
G. Gregg Krug | 59 | Executive Vice President—Marketing and Midstream Strategy | ||||
Other Senior Officers | ||||||
Christopher P. Calvert | 41 | Senior Vice President of Operations | ||||
W. Thomas Elsener | 35 | Senior Vice President of Reservoir Engineering and Senior Asset Manager | ||||
Bryan A. Erman | 42 | Senior Vice President andCo-General Counsel | ||||
Edmund L. Frost III, PhD | 45 | Senior Vice President of Geoscience | ||||
Robert T. Macalik | 41 | Senior Vice President and Chief Accounting Officer | ||||
Matthew D. Spicer | 52 | Senior Vice President and General Manager of Midstream | ||||
| 35 | Senior Vice President | ||||
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Brian J. Willey | 43 | Senior Vice President andCo-General Counsel | ||||
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The following biographies describe the business experience of our executive officers and certain of our other senior officers. Each officer serves at the discretion of our Board. There are no family relationships among any of our officers.
Executive Officers
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The following biographies describe the business experience of our executive officers and the senior officers listed above. Each officer serves at the discretion of our Board. There are no family relationships among any of our executive officers.
Executive Officers
Mr. Joseph Wm. Foran | ||
Chairman of the Board and Chief Executive Officer | Please see the biography of Mr. Foran on page 12 of this Proxy Statement. |
Mr. Matthew V. Hairford
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President | Mr. Hairford joined Matador Resources Company in July 2004 as its Drilling Manager. He was named Vice President of Drilling in May 2005; Vice President of Operations in May 2006; Executive Vice President of Operations in May 2009; and in November 2013 assumed the title of President. He was previously with Samson Resources, an exploration and production company, as Senior Drilling Engineer, having joined Samson in 1999. His responsibilities there included difficult Texas and Louisiana Gulf Coast projects, horizontal drilling projects and astart-up drilling program in Wyoming. The scope of this work ranged from multi-lateral James Lime wells in East Texas to deep wells in South Texas and South Louisiana. Mr. Hairford has drilled manygeo-pressured wells in Texas and Louisiana, along with normally pressured wells in Southwest Wyoming and East Texas. Additional responsibilities included a horizontal well program in Roger Mills County, Oklahoma at 15,000 feet vertical depth. Mr. Hairford has experience in air drilling, underbalanced drilling, drilling under mud caps and high temperature and pressure environments. From 1998 to 1999, Mr. Hairford served as Senior Drilling Engineer with Sonat, Inc., a global company involved with natural gas transmission and marketing, oil and natural gas exploration and production and oil services. His responsibilities included drilling Pinnacle Reef wells in East Texas and deep horizontal wells in the Austin Chalk field in Central Louisiana. From 1984 to 1998, Mr. Hairford served in various drilling engineering capacities with Conoco, Inc. His operational areas included the Appalachian Basin, Illinois Basin, Permian Basin, Texas Panhandle and Val Verde Basin. Mr. Hairford was selected as a member of a three-person team to explore the use of unconventional technologies to identify a potential step change in the drilling sector. Multiple techniques were evaluated and tested, including declassified defense department technologies. Additional Conoco assignments included both field and office drilling positions in Midland, Texas and Oklahoma City, Oklahoma. Earlier in his career with Conoco, Mr. Hairford was selected to participate in the Conoco Drilling Rig Supervisor Training Program in Houston, Texas. This program consisted of two years working a regular rotation as a drilling representative on rigs and as a drilling engineer in various domestic offices. Mr. Hairford began his career in 1984 with Conoco in a field production assignment in Hobbs, New Mexico. Mr. Hairford received his Bachelor of Science degree in Petroleum Engineering Technology from Oklahoma State University in 1984. He is an active member of the American Association of Drilling Engineers, the American Petroleum Institute and the Society of Petroleum Engineers. He is also a member of the board of the Texas Independent Producers and Royalty Owners (TIPRO). Mr. Hairford has also undertaken additional training through Stanford University’s Executive Education programs, including |
Mr. David E. Lancaster
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Executive Vice President and Chief Financial Officer | Mr. Lancaster joined Matador Resources Company in December 2003 and serves as Executive Vice President and Chief Financial Officer. Mr. Lancaster has served in several capacities since joining Matador, including Vice President of Business Development, Acquisitions and Finance from December 2003 to May 2005; Vice President and Chief Financial Officer from May 2005 to May 2007; and Executive Vice President and Chief Financial Officer since May 2007. He also served as Chief Operating Officer from May 2009 |
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| to May 2015. From August 2000 to December 2003, he was Marketing Manager for Schlumberger Limited’s Data & Consulting Services, which provided full-field reservoir characterization, production enhancement, multidisciplinary reservoir and production solutions and field development planning. In this position, he was responsible for global marketing strategies, business models, input to research and development, commercialization of new products and services and marketing communications. From 1999 to 2000, Mr. Lancaster was Business Manager, North and South America, for Schlumberger Holditch-Reservoir Technologies, the petroleum engineering consulting organization formed following Schlumberger’s acquisitions of S.A. Holditch & Associates, Inc. and Intera Petroleum Services. In this role, he was responsible for the business operations of 12 consulting offices throughout North and South America. Mr. Lancaster worked with Schlumberger for six years following its acquisition of S.A. Holditch & |
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| Associates, Inc. in 1997. He joined S.A. Holditch & Associates in 1980, and was one of the principals in the petroleum engineering consulting firm. Between 1980 and 1997, Mr. Lancaster held positions ranging from Senior Petroleum Engineer to Senior Vice President—Business Development. In this latter role, he was responsible for marketing and sales, as well as the company’s commercial training business. During most of his tenure at S.A. Holditch & Associates, Inc., Mr. Lancaster was a consulting reservoir engineer with particular emphasis on characterizing and improving production from unconventional natural gas reservoirs. For more than seven years during this time, he was the Project Manager for the Gas Research Institute’s Devonian Shales applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability, natural gas shale reservoirs. He was also the lead reservoir engineer for the Secondary Gas Recovery project sponsored by the Gas Research Institute and the U.S. Department of Energy, looking at ways to improve recovery from compartmentalized natural gas reservoirs in North and South Texas. Mr. Lancaster began his career as a reservoir engineer for Diamond Shamrock Corporation in 1979. Mr. Lancaster received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1979 and 1988, respectively, graduating summa cum laude. He has authored orco-authored more than 50 technical papers and articles, as well as numerous other published reports and industry presentations. He is a member of the Society of Petroleum Engineers, and he served as a charter member and former Vice Chairman of the Texas A&M University Petroleum Engineering Advisory Board. In 2014, Mr. Lancaster was inducted into the Texas A&M University Petroleum Engineering Academy of Distinguished Graduates. Mr. Lancaster is a Licensed Professional Engineer in the State of Texas. In 2017, Mr. Lancaster was named CFO of the Year—Upper Middle Market, Public by Dallas Business Journal and he was named to Institutional Investors’ 2018 and 2020All-American Executive Team for Midcap and Small Cap Companies, recognized as one of the top two Chief Financial Officers in Energy: Oil and Gas Exploration and Production. |
Mr. Craig N. Adams
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Executive Vice and Chief Operating Officer— Land, Legal & Administration | Mr. Adams joined Matador Resources Company in September 2012 as its Vice President and General Counsel. In July 2013, Mr. Adams was promoted to Executive Vice President—Land and Legal and became Executive Vice President—Land, Legal & Administration in June 2015. He assumed the role of Executive Vice President and Chief Operating Officer—Land, Legal & Administration in April 2019. Before joining Matador Resources Company, Mr. Adams was a partner with Baker Botts L.L.P. from March 2001 to September 2012 where he focused his practice on securities, mergers and acquisitions and corporate governance matters. He was a partner with Thompson & Knight L.L.P. from January 1999 to February 2001 and an associate from September 1992 to December 1998. Mr. Adams received a Bachelor of Business Administration degree in Finance from Southern Methodist University in 1988 and his law degree in 1992 from Texas Tech University School of Law, where he graduated magna cum laude and was a member of the Order of the Coif and a Comment Editor of the Texas Tech Law Review. |
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Mr. Billy E. Goodwin
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Executive Vice President and Chief Operating Officer— Drilling, Completions & Production | Mr. Goodwin joined Matador Resources Company in July 2010 as Drilling Manager. In September 2013 he was named Vice President of Drilling for the Company, and he was promoted to Senior Vice President—Operations in February 2016 and to Executive Vice President and Head of Operations in August 2017. He assumed the role of Executive Vice President and Chief Operating Officer—Drilling, Completions & Production in April 2019. He was previously with Samson Resources, a company he joined in 2001 to supervise the drilling of underbalanced multilateral horizontal wells. In his roles as Senior Drilling Engineer and Area Drilling Manager for Samson, Mr. Goodwin engineered and managed operations in the Permian Basin, South Texas, East Texas,Mid-Continent and Gulf Coast areas. Mr. Goodwin worked with Conoco, Inc. before joining Samson. He began his career in 1985 in Conoco’s production department before joining the drilling department in 1989. Mr. Goodwin has diverse horizontal operational experience both onshore and offshore, and both domestically and internationally, including in the Middle East, Southeast Asia and South America. Throughout his career, Mr. Goodwin has developed underbalanced drilling, managed pressure drilling anddrill-in casing techniques for normal andgeo-pressured environments. Mr. Goodwin received a Bachelor of Science degree in Petroleum Engineering Technology from Oklahoma State University in 1984. He is a member of the Society of Petroleum Engineers and the American Association of Drilling Engineers. Mr. Goodwin served in the United States Marine Corps. |
Mr.
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Land | Mr. Singleton joined Matador Resources Company in August 2007 as a Landman and was promoted to Senior Staff Landman in 2009 and then to General Land Manager in 2011. In September 2013, Mr. Singleton became Vice President of Land for the Company, and he was promoted to Executive Vice President of Land in February 2015. Prior to joining Matador, Mr. Singleton founded and was President of VanBrannon and Associates, LLC and Southern Escrow and Title of Mississippi, LLC from 1998 to 2003, which provided full-spectrum land title work and title insurance in Mississippi, Louisiana, Texas and Arkansas. From 2003 until joining Matador in 2007, he served as general manager of his family’s real estate brokerage in Houston, Texas. Mr. Singleton received a Bachelor of Arts degree in Criminal Justice from the University of Mississippi in 2000. He is an active member of the American Association of Professional Landmen, the New Mexico Landman Association, the Permian Basin Landman Association and the Dallas Association of Petroleum Landmen. |
Mr. Bradley M. Robinson | ||
| Executive Vice President of Reservoir Engineering and Chief Technology Officer | Mr. Robinson joined Matador Resources Company in August 2003 as our Vice President of Reservoir Engineering until his promotion to Senior Vice President of Reservoir Engineering in February 2016. He assumed the additional role of Chief Technology Officer in May |
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| applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability natural gas reservoirs and horizontal natural gas wells. During his career, he has worked all over the world, including the United States, Canada, Venezuela, Colombia, Mexico, Egypt, the North Sea, Russia and Indonesia, among other locations. Mr. Robinson began his career in 1977 with Marathon Oil Company, serving as an Associate Production Engineer and later as a Reservoir Engineer in Midland. Mr. Robinson received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1977 and 1986, respectively. He has authored orco-authored more than 30 technical papers and articles appearing in industry publications. Mr. Robinson is a member of the Society of Petroleum Engineers and is a Licensed Professional Engineer in the State of Texas. He served as Chairman of the Dallas Section of the Society of Petroleum Engineers in 2011 and 2012. He also received the 2013 Engineer of the Year Award presented by the Dallas Section of the Society of Petroleum Engineers and the 2013 Completions Optimization and Technology award presented by theMid-Continent region of the Society of Petroleum Engineers. |
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Mr. G. Gregg Krug
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Marketing and Midstream Strategy | Mr. Krug joined Matador Resources Company in April 2012 as its Marketing Manager. In September 2013 he was named Vice President of Marketing for the Company and Vice President of Longwood Gathering & Disposal Systems, LP, and he was promoted to Senior Vice President—Marketing and Midstream in February 2016. He was promoted to Executive Vice President—Marketing and Midstream Strategy in April 2019. He has overall responsibility for Matador’s marketing activities of its oil and natural gas, as well as responsibility for all business aspects for Longwood Gathering & Disposal Systems, LP. Previously, Mr. Krug was with Unit Petroleum Company, an exploration and production company based in Tulsa, Oklahoma, as Marketing Manager, having joined in 2006. He and his staff were responsible for marketing, gas measurement, contract administration and production reporting in their core areas of Oklahoma, the Texas Panhandle, East Texas and Northwestern Louisiana. From 2005 to 2006, Mr. Krug served as Marketing Manager with Matador Resources Company. From 2000 to 2005, Mr. Krug served as Gas Scheduling Supervisor with Samson Resources in Tulsa, Oklahoma where he and his staff were responsible for scheduling natural gas sales as well as procurement of natural gas supply on Samson-owned gathering systems. From 1983 to 2000, Mr. Krug served with The Williams Companies in various capacities including in the Kansas Hugoton Field in Ulysses, Kansas and Tulsa, Oklahoma for Williams Natural Gas Pipeline and on the trading floor in Tulsa, Oklahoma for Williams Energy Services Company. Mr. Krug received a Bachelor of Business Administration degree from Oklahoma City University in 1996. |
Other Senior Officers
Mr. Robert T. Macalik. Mr. Macalik joined Matador Resources Company in July 2015 as Vice President and Chief Accounting Officer. He was promoted to Senior Vice President and Chief Accounting Officer in November 2017. He has more than 10 years of experience in public accounting with significant experience in the upstream oil and natural gas industry. From 2012 to 2015, Mr. Macalik worked at Pioneer Natural Resources Company as Corporate Controller and, previously, as Director of Technical Accounting and Financial Reporting. At Pioneer, Mr. Macalik supervised corporate accounting and financial reporting functions. Prior to joining Pioneer, he was a Senior Manager with PricewaterhouseCoopers (PwC), joining the public accounting firm in 2002. During his tenure with PwC, Mr. Macalik conducted and managed audits for various companies, primarily public companies in the oil and natural gas industry, and managed numerous client relationships. Mr. Macalik received a Bachelor of Arts degree in History, a Bachelor of Business Administration degree and a Master of Professional Accounting degree all from The University of Texas at Austin in 2002. He is a licensed Certified Public Accountant in the State of Texas.
Mr. Christopher P. Calvert | ||
Mr. Matthew D. Spicer. Mr. Spicer joined Matador Resources Company in March 2014 as Senior Representative of Business Development and was promoted to Manager of Business Development and then General Manager of Midstream later in 2014. In October 2015, Mr. Spicer was promoted to Vice President and General Manager of Midstream. Prior to joining the Company, Mr. Spicer served as the Director of Flight Operations forL-3 Unmanned Systems, also serving in various roles including as Program Manager and in Business Development during his tenure withL-3, which began in 2011. Mr. Spicer served in the United States Marine Corps from 1991 to 2014, both in active duty and as a reservist, before his retirement as a Lieutenant Colonel in 2014. Mr. Spicer also served as a first officer with American Airlines from 2000 to 2003 following his active duty in the United States Marine Corps. Mr. Spicer received a Bachelor of Science degree in Manufacturing Engineering Technology from Central Michigan University in 1991.
Ms. Kathryn L. Wayne. Ms. Wayne was one of the original employees of Matador Resources Company and has served as the Company’s Controller and Treasurer since 2003. She was promoted to Vice President, Controller and Treasurer in February 2017. She was previously with Matador Petroleum Corporation, joining the company in 1991. Immediately prior to its sale, Ms. Wayne was Senior Revenue Accountant, and her duties included supervision of the revenue accounting staff, management of the revenue distribution process and preparation of monthly accruals and various required regulatory reports. Ms. Wayne began her career with Mobil Oil Corporation, where she held various positions in the gas accounting department. Ms. Wayne received a Bachelor of Arts degree in Accounting from Texas A&M University in 1983. She is recognized by the Council of Petroleum
| Senior Vice President— Operations | Mr. Calvert joined Matador Resources Company in October 2014 as a Senior Completions Engineer. In July 2018 he was named Vice President of Completions for the Company, and he was promoted to Senior Vice President—Operations in October 2019. Prior to joining Matador, Mr. Calvert worked as a Staff Reservoir Engineer in Chesapeake Energy Corporation’s South Texas—Eagle Ford group focusing on A&D evaluations and production and completions optimization. At Chesapeake, Mr. Calvert also held roles as a Senior Asset Manager responsible for completions and operations in the Niobrara Shale, a Senior Completions Engineer responsible for Bakken/Three Forks development and a Senior Operations Engineer focused on production and facility optimization on the Texas Gulf Coast. Prior to Chesapeake, Mr. Calvert worked as an Operations Engineer for Williams Production Company, now WPX Energy. In addition to his oil and natural gas industry experience, Mr. Calvert has worked in corporate financial controls as an internal Sarbanes-Oxley compliance auditor. Mr. Calvert received Bachelor of Science degrees in Finance and Petroleum Engineering from the University of Wyoming in 2002 and 2008, respectively. He is a member of the Society of Petroleum Engineers. |
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Mr. W. Thomas Elsener | ||
Accountants Societies (COPAS) as an Accredited Petroleum Accountant (APA). She is an active member of COPAS and served a three-year term on the COPAS APA Board of Examiners.
| Senior Vice President— Reservoir Engineering and Senior Asset Manager | Mr. Elsener joined Matador Resources Company in April 2013 as an Engineer. In June 2017, he was promoted to Vice President—Engineering and Asset Manager, and he was promoted to Senior Vice President—Reservoir Engineering and Senior Asset Manager in October 2019. Mr. Elsener has served in several capacities since joining Matador, including Asset Manager for Rustler Breaks and Antelope Ridge, Team Leader for South Texas and Team Leader for East Texas and Northwest Louisiana. Prior to joining Matador, Mr. Elsener served in various engineering roles at Encana Oil & Gas (USA) in Dallas, Texas from 2007 to 2013, including reservoir, completions, drilling, business development and new ventures. While at Encana, Mr. Elsener was involved with the exploration and development of assets in the Barnett shale, Deep Bossier, Haynesville shale and other new domestic ventures. Mr. Elsener received a Bachelor of Science degree in Petroleum Engineering from Texas A&M University in 2007. He is a member of the Society of Petroleum Engineers. |
Mr. Bryan A. Erman. Mr. Erman joined Matador Resources Company in January 2016 as itsCo-General Counsel. In August 2016, Mr. Erman was promoted to Vice President andCo-General Counsel. Prior to joining Matador, Mr. Erman was a Partner at Carrington, Coleman, Sloman & Blumenthal, L.L.P. in Dallas, having joined the firm in 2010. From 2003 to 2010, he was an associate in the Dallas and Washington, D.C. offices of Baker Botts L.L.P. Mr. Erman’s practice focused on litigation matters, including oil and natural gas, securities and other commercial litigation, as well as corporate governance matters. Before attending law school, Mr. Erman worked for Oklahoma Governor Frank Keating. Mr. Erman received a Bachelor of Arts degree in Political Science in 1999 from the University of Oklahoma. He received his law degree in 2003 from Southern Methodist University School of Law, where he graduated cum laude and was a Hatton W. Sumners Scholar, a member of the Order of the Coif and an Articles Editor on the SMU Law Review.
Mr. Bryan A. Erman | ||
Mr. Brian J. Willey. Mr. Willey joined Matador Resources Company in February 2014 as its Deputy General Counsel. In January 2016, Mr. Willey was appointed asCo-General Counsel, and he was promoted to Vice President andCo-General Counsel in August 2016. Prior to joining Matador, Mr. Willey was an attorney with Dean Foods Company where he most recently served as Vice President, Chief Counsel—Corporate. Before Dean Foods, Mr. Willey served as a senior associate in the Dallas office of Baker Botts L.L.P. Mr. Willey’s practice focused on corporate matters, including mergers and acquisitions, public and private securities offerings, venture capital transactions and SEC compliance matters as well as board of director and corporate governance matters. Mr. Willey received a Bachelor of Science degree in Accounting in 2002 from Brigham Young University. He received his law degree in 2005 from The University of Texas School of Law, where he graduated with High Honors and was a member of the Order of the Coif in addition to being named a Chancellor and an Associate Editor on the University of Texas Law Review. Mr. Willey also served a church mission in the Philippines from 1995 to 1997.
| Senior Vice President and Co- General Counsel | Mr. Erman joined Matador Resources Company in January 2016 as itsCo-General Counsel. In August 2016, Mr. Erman was promoted to Vice President andCo-General Counsel. He became Senior Vice President andCo-General Counsel in July 2018. Prior to joining Matador, Mr. Erman was a Partner at Carrington, Coleman, Sloman & Blumenthal, L.L.P. in Dallas, having joined the firm in 2010. From 2003 to 2010, he was an associate in the Dallas and Washington, D.C. offices of Baker Botts L.L.P. Mr. Erman’s practice focused on litigation matters, including oil and natural gas, securities and other commercial litigation, as well as corporate governance matters. Before attending law school, Mr. Erman worked for Oklahoma Governor Frank Keating. Mr. Erman received a Bachelor of Arts degree in Political Science in 1999 from the University of Oklahoma. He received his law degree in 2003 from Southern Methodist University Dedman School of Law, where he graduated cum laude and was a Hatton W. Sumners Scholar, a member of the Order of the Coif and an Articles Editor of the SMU Law Review. |
Dr. Edmund L. Frost III. Dr. Frost Joined Matador Resources Company in August 2014 as a Senior Geologist. In July 2015, he was promoted to Chief Geologist, and in June 2017, he was promoted to Vice President of Geoscience. In 2011, Dr. Frost joined the Bureau of Economic Geology at the University of Texas at Austin as a Research Associate. While at the University of Texas, his research focused on unconventional resource development in the Delaware Basin and in the Austin Chalk-Eagle Ford system. Dr. Frost began his career in the Subsurface Technology Group at ConocoPhillips in 2007, where he worked a variety of international and domestic basins. Dr. Frost received a Bachelor of Science degree in Geology from the University of Colorado at Boulder in 1998 and a PhD degree in Geology in 2007 from the University of Texas at Austin. Dr. Frost has authored several peer-reviewed papers, conducted multiple industry presentations and led a number of industry field trips in the Delaware Basin.
Dr. Edmund L. Frost III | ||
Mr. W. Thomas Elsener.Mr. Elsener joined Matador Resources Company in April 2013 as Senior Staff Engineer. He served as Team Leader of various of the Company’s asset areas beginning in April 2014, including Rustler Breaks and Antelope Ridge, South Texas and East Texas/North Louisiana before being promoted to Senior Area Asset Manager in September 2016. Mr. Elsener was promoted to Vice President—Engineering and Asset Manager in June 2017. Prior to joining Matador, Mr. Elsener served in various engineering roles at Encana Oil & Gas (USA) from 2007 to 2013, including reservoir, completions, drilling, business development and new ventures. Mr. Elsener received a Bachelor of Science degree in Petroleum Engineering in 2007 from Texas A&M University. He is a member of the Society of Petroleum Engineers.
| Senior Vice President of Geoscience | Dr. Frost joined Matador Resources Company in August 2014 as a Senior Geologist and in July 2015 was promoted to Chief Geologist. In June 2017, he was promoted to Vice President of Geoscience, and in July 2019, Dr. Frost was promoted to Senior Vice President of Geoscience. Prior to joining the Company, Dr. Frost worked at the Bureau of Economic Geology at The University of Texas at Austin as a Research Associate, a role he began in 2011. While at The University of Texas, his research focused on unconventional resource development in the Delaware Basin and in the Austin Chalk-Eagle Ford system. Dr. Frost began his career in the Subsurface Technology Group at ConocoPhillips in 2007, where he worked a variety of international and domestic basins. Dr. Frost received a Bachelor of Science degree in Geology from the University of Colorado at Boulder in 1998 and a PhD degree in Geology in 2007 from The University of Texas at Austin. Dr. Frost has authored several peer-reviewed papers, conducted multiple industry presentations and led a number of industry field trips in the Delaware Basin. |
Mr. James R. Basich. Mr. Basich joined Matador Resources Company in March 2016 as Director, IT Corporate Applications. In November 2017, he was promoted to Vice President and Managing Director—IT. He has more than 25 years of experience in information technology with the majority of this experience in the upstream oil and natural gas industry. Prior to joining Matador, Mr. Basich was IT Director, Corporate Applications at Apache Corporation. In this role he was responsible for the application development and support for finance, human resources, land, legal, administrative and marketing functions. Mr. Basich joined Apache Corporation in 2003 as Senior Manager, Corporate Applications. From 1995 until 2003, Mr. Basich served as a Practice Manager for
Mr. Robert T. Macalik | ||
| Senior Vice President and Chief Accounting Officer | Mr. Macalik joined Matador Resources Company in July 2015 as Vice President and Chief Accounting Officer. He was promoted to Senior Vice President and Chief Accounting Officer in November 2017. He has more than 10 years of experience in public accounting with significant experience in the upstream oil and natural gas industry. From 2012 to 2015, Mr. Macalik worked at Pioneer Natural Resources Company as Corporate Controller and, previously, as Director of Technical Accounting and Financial Reporting. At Pioneer, Mr. Macalik supervised corporate accounting and financial reporting functions. |
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| Prior to joining Pioneer, he was a Senior Manager with PricewaterhouseCoopers (PwC), joining the public accounting firm in 2002. During his tenure with PwC, Mr. Macalik conducted and managed audits for various companies, primarily public companies in the oil and natural gas industry, and managed numerous client relationships. Mr. Macalik received a Bachelor of Arts degree in History, a Bachelor of Business Administration degree and a Master of Professional Accounting degree all from The University of Texas at Austin in 2002. He is a licensed Certified Public Accountant in the State of Texas. |
Oracle Corporation. In this role he was responsible for several enterprise-wide software implementations for various clients in the upstream oil and natural gas and manufacturing industries. Before joining Oracle Corporation, Mr. Basich held positions with PricewaterhouseCoopers (PwC) in their Petroleum Special Practice Unit and with ORYX Corporation. Mr. Basich received a Bachelor of Business Administration degree in Information Systems and Quantitative Business Analysis from Baylor University in 1988.
Mr. Matthew D. Spicer | ||
| Senior Vice President and General Manager of Midstream | Mr. Spicer joined Matador Resources Company in March 2014 as Senior Representative of Business Development and was promoted to Manager of Business Development and then General Manager of Midstream later in 2014. In October 2015, Mr. Spicer was promoted to Vice President and General Manager of Midstream. He became Senior Vice President and General Manager of Midstream in July 2018. Prior to joining the Company, Mr. Spicer served as the Director of Flight Operations forL-3 Unmanned Systems, also serving in various roles including as Program Manager and in Business Development during his tenure withL-3, which began in 2011. Mr. Spicer served in the United States Marine Corps from 1991 to 2014, both in active duty and as a reservist, before his retirement as a Lieutenant Colonel in 2014. Mr. Spicer also served as a first officer with American Airlines from 2000 to 2003 following his active duty in the United States Marine Corps. Mr. Spicer received a Bachelor of Science degree in Manufacturing Engineering Technology from Central Michigan University in 1991. |
Mr. Glenn W. Stetson | ||
| Senior Vice President of Production and Asset Manager | Mr. Stetson joined Matador Resources Company in August 2014 as a Production Engineer, and in July 2015, he was promoted to Asset Manager. Mr. Stetson was promoted to the role of Vice President and Asset Manager in July 2018 before being promoted to his current role as Senior Vice President of Production and Asset Manager in October 2019. Prior to joining Matador, Mr. Stetson worked at Chesapeake Energy Corporation from 2008 to 2014, holding multiple positions in both the production and completions departments. Most of his time at Chesapeake was spent in the Barnett shale in North Texas, although he also spent some time working in northern Pennsylvania managing the northeast portion of Chesapeake’s Marcellus shale operated production. Mr. Stetson graduated Cum Laude from Oklahoma State University in 2007, receiving a Bachelor of Science degree in Mechanical Engineering Technology. Mr. Stetson is a Licensed Professional Engineer in the State of Oklahoma. |
Mr. Brian J. Willey | ||
| Senior Vice President and Co- General Counsel | Mr. Willey joined Matador Resources Company in February 2014 as its Deputy General Counsel. In January 2016, Mr. Willey was appointed asCo-General Counsel, and he was promoted to Vice President andCo-General Counsel in August 2016. He became Senior Vice President andCo-General Counsel in July 2018. Prior to joining Matador, Mr. Willey was an attorney with Dean Foods Company where he most recently served as Vice President, Chief Counsel—Corporate. Before Dean Foods, Mr. Willey served as a senior associate in the Dallas office of Baker Botts L.L.P. Mr. Willey’s practice focused on corporate matters, including mergers and acquisitions, public and private securities offerings, venture capital transactions and SEC compliance matters as well as board of director and corporate governance matters. Mr. Willey received a Bachelor of Science degree in Accounting in 2002 from Brigham Young University. He received his law degree in 2005 from The University of Texas School of Law, where he graduated with High Honors and was a member of the Order of the Coif in addition to being named a Chancellor and an Associate Editor on the Texas Law Review. Mr. Willey also served a church mission in the Philippines from 1995 to 1997. |
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PROPOSAL 2| ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act, the Company seeks anon-binding advisory vote from its shareholders to approve the compensation of its Named Executive Officers (as defined below) as described in this Proxy Statement.
As discussed under the “Executive Compensation—Compensation Discussion and Analysis” section of this Proxy Statement (“CD&A”), we believe the Company’s future success and the ability to create long-term value for our shareholders depends on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe that our success also depends on the continued contributions of our Named Executive Officers. The Company’s compensation system plays a significant role in its ability to attract, motivate and retain a high quality workforce. As described in the CD&A, the Company’s compensation program for Named Executive Officers is designed to reward, in both the short term and the long term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and achievement of our objectives.
In addition, we reward qualities that we believe help achieve our business strategies such as:
This proposal provides shareholders the opportunity to endorse or not endorse the Company’s executive compensation program through approval of the following resolution:
“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”
The above-referenced CD&A and accompanying disclosures appear on pages 38 to 6365 of this Proxy Statement.
Because this is an advisory vote, it will not be binding upon the Board. However, the Strategic Planning and Compensation Committee and the independent members of theIndependent Board (the “Independent Board”) will take into account the outcome of the vote when considering future executive compensation arrangements.
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The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve this resolution on anon-binding basis. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Brokernon-votes will be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.
During our 20122018 Annual Meeting, of Shareholders, our shareholders approved anon-binding, advisory proposal to hold advisory votes to approve our executive compensation every year. In consideration of the results of this advisory vote, the Board has adopted amaintained its policy of providing for annual advisory votes to approve executive compensation. Pursuant to applicable rules, the Company is required to hold another advisory vote on the frequency of future advisory votes to approve executive compensation at the Annual Meeting. Accordingly, Proposal 3 of this Proxy Statement is anon-binding advisory vote on the frequency of such advisory votes to approve executive compensation. Unless the Board modifies its currentthis policy, after consideration of the results of the advisory vote under Proposal 3, the next advisory vote to approve executive compensation following this vote will be held at our 20192021 Annual Meeting of Shareholders.Meeting.
The Board of Directors recommends that you vote FOR approval of this resolution.
2018 Proxy Statement| Matador Resources Company 33
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PROPOSAL 3 | ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act, the Company seeks anon-binding advisory vote from its shareholders regarding the desired frequency for holding future advisory votes to approve the compensation of our Named Executive Officers as described in our annual proxy statements.
This proposal gives shareholders the opportunity to express their views as to whether the advisory vote on the Company’s Named Executive Officer compensation program should occur every year, every two years or every three years. Because this vote is advisory, it will not be binding upon the Board. However, the Board will take into account the outcome of the vote when deciding the frequency of futurenon-binding advisory votes on the Company’s executive compensation.
The Board recommends that anon-binding advisory vote to approve the compensation of our executive officers as disclosed in the Company’s proxy statements occur every year.
While the Board believes this recommendation is appropriate at this time, shareholders are not voting to approve or disapprove this recommendation, but are instead asked to provide an advisory vote on whether thenon-binding advisory vote on the approval of the Company’s Named Executive Officer compensation should be held every year, every two years or every three years. The choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
The Board of Directors recommends that you vote for “1 YEAR” on this proposal.
34 Matador Resources Company | 20182020 Proxy Statement
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PROPOSAL 43 | RATIFICATION OF THE APPOINTMENT OF KPMG LLP
The Audit Committee has appointed KPMG LLP (“KPMG”) as the independent registered public accounting firm of the Company for the year ending December 31, 2018,2020, and the Board has directed that such appointment be submitted to our shareholders for ratification at the Annual Meeting.
The Company has been advised by KPMG that the firm has no relationship with the Company or its subsidiaries other than that arising from the firm’s engagement as auditors.
If the shareholders do not ratify the appointment of KPMG, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so.
The Company has been advised that representatives of KPMG will be present at the Annual Meeting and will be available to respond to appropriate questions and make a statement if they desire to do so.
Fees of Independent Registered Public Accounting Firm for Fiscal Years 20172019 and 20162018
The following table presents fees for professional audit services rendered by KPMG for the audit of the Company’s annual financial statements for the years ended December 31, 20172019 and 2016,2018, and fees for other services rendered by KPMG during that period:those periods:
| 2017 | 2016 | 2019 | 2018 | |||||||||||||
Audit fees | $ | 1,584,000 | $ | 1,174,970 | $ | 1,440,017 | $ | 1,469,000 | ||||||||
Audit-related fees | — | — | — | — | ||||||||||||
Tax fees | — | — | — | — | ||||||||||||
All other fees | — | — | — | — | ||||||||||||
Total | $ | 1,584,000 | $ | 1,174,970 | $ | 1,440,017 | $ | 1,469,000 | ||||||||
Services rendered by KPMG in connection with the fees presented above were as follows:
Audit Fees
For fiscal year 2017,2019, audit fees consisted of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements, procedures related to registration statements and consultation on significant accounting matters. Audit fees also included fees paid to KPMG by San Mateo for the audit of its 2019 financial statements.
For fiscal year 2018, audit fees consisted of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements, including for inclusion in the prospectus related to our October 2017May 2018 equity offering and the offering memoranda related to our 2018 senior notes offerings, and providing the underwriters of such offering with comfort letters on certain information contained, or incorporated by reference, in the prospectus.
For fiscal year 2016, audit fees consisted of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements, including for inclusion in each prospectus related to our 2016 equity offerings and our offering memorandum related to our 2016 senior notes offering, and providing the underwritersinitial purchasers, respectively, of such offerings with comfort letters on certain information contained, or incorporated by reference, in eachthe prospectus or offering memorandum,memoranda, as applicable. Audit fees also included fees paid to KPMG by San Mateo I for the audit of its 2018 financial statements.
2020 Proxy Statement| Matador Resources Company 35
PROPOSAL 3 |
Audit-Related Fees
We did not incur any audit-related fees in 20172019 or 2016.
2018 Proxy Statement| Matador Resources Company 35
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2018.
Tax Fees
We did not incur any fees for tax advice, planning and other services in 20172019 or 2016.2018.
All Other Fees
We did not incur any other fees in 20172019 or 2016.2018.
The Audit Committeepre-approves all audit and permissiblenon-audit services provided by KPMG. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has authorized the chair of the Audit Committee topre-approve audit and permissiblenon-audit services provided by KPMG up to $750,000. Pursuant to this delegation, the decisions of the chair must be presented to the Audit Committee at its next meeting.
We are a standing committee comprised of independent directors as currently defined by SEC regulations and the applicable listing standards of the NYSE. The Board has determined that at least one of the members of the Audit Committee is an “audit committee financial expert” as defined by applicable SEC rules and regulations. We operate under a written charter adopted by the Board. A copy of the charter is available free of charge on the Company’s website atwww.matadorresources.com under “Investors—“Investor Relations—Corporate Governance.”
We annually select the Company’s independent registered public accounting firm. If the shareholders do not ratify the appointment of KPMG LLP at the Annual Meeting, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so.
Management is responsible for the Company’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board (the “PCAOB”) and issuing a report thereon. As provided in our charter, our responsibilities include the monitoring and oversight of these processes.
Consistent with our charter responsibilities, we have met and held discussions with management and the independent registered public accounting firm. In this context, management and the independent registered public accounting firm represented to us that the Company’s consolidated financial statements for the fiscal year ended December 31, 20172019 were prepared in accordance with U.S. generally accepted accounting principles. We reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm and discussed with the independent registered public accounting firm matters required to be discussed by Auditing Standard No. 1301: Communications with Audit Committees.the applicable requirements of the PCAOB and the SEC.
The Company’s independent registered public accounting firm has also provided to us the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee, and we discussed with the independent registered public accounting firm that firm’s independence.
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PROPOSAL
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Based upon our reviews and discussions with management and the independent registered public accounting firm and our review of the representation of management and the report of the independent registered public accounting firm to the Audit Committee, we recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form10-K for the year ended December 31, 20172019 filed with the SEC.
Audit Committee,
William M. Byerley, Chair
Reynald A. Baribault
Craig T. Burkert
JuliaMatthew P. Forrester
Steven W. OhnimusClifton
Timothy E. Parker*Parker
David M. Posner
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required for the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the year ending December 31, 2018.2020. If the shareholders do not ratify the appointment of KPMG, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so. Abstentions will have the effect as a vote cast against the proposal.
The Board of Directors recommends that you vote FOR the ratification of the appointment
of KPMG as the Company’s independent registered public accounting firm for the
year ending December 31, 2018.2020.
20182020 Proxy Statement | Matador Resources Company 37
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Compensation Discussion and AnalysisDear Fellow Shareholders,
In this Compensation Discussion and Analysis, or CD&A, we discuss our compensation objectives, our decisions and the rationale behind those decisions relating to compensation for our principal executive officer, our principal financial officer and our other three most highly compensated executive officers for 2017. This CD&A provides a general description of our compensation program and specific information about its various components.
Named Executive Officers
Throughout this discussion, the following individuals are referred to as the “Named Executive Officers” and are included in the Summary Compensation Table and other compensation tables that follow:
Executive Summary
We are an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Our current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. We also operate in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, we conduct midstream operations, primarily through our midstream joint venture, San Mateo, in support of our exploration, development and production operations and provide natural gas processing, oil transportation services, natural gas, oil and salt water gathering services and salt water disposal services to third parties.
We are a growth oriented company with the objective of increasing assets and shareholder value over an extended period of time. We compete successfully with much larger companies in the Delaware Basin for assets, resources, services, personnel and expertise on a daily basis. In order to meet these competitive challenges, we have attempted to establish a strong culture of character, teamwork, continuous improvement, recruitment oftop-tier talent, leadership and mentorship. The Strategic Planning and Compensation Committee (referred(the “Compensation Committee”) of the Board, thank you for partnering with us and entrusting Matador with your hard-earned capital. We and the Board take our responsibilities to you very seriously—we are always eager to hear from our shareholders, and we pledge to continue to listen to your views and respond, as appropriate.
At the Company’s 2018 Annual Meeting, the support for oursay-on-pay proposal decreased from the average 99% level we had experienced in recent years to 72%. In light of these disappointingsay-on-pay results, shortly after the 2018 Annual Meeting, the Board and Compensation Committee began taking important steps to both understand the decrease in shareholder support for our executive compensation program and to improve our program in order to further align executive compensation with shareholder expectations.
The most significant step in this process was an extensive outreach effort to our shareholder base. All told, we reached out to shareholders representing approximately 50% of our outstanding stock (excluding stock held by our directors and officers) in an effort to provide them a meaningful opportunity to help us improve our executive compensation program in 2018, 2019, 2020 and beyond.
We heard from many of you and, as a result of those discussions, in 2018 we began implementing the following changes to our executive compensation program:
In consideration of industry factors, the 2018say-on-pay vote and the Company’s 2018 stock performance, Chairman and Chief Executive Officer Joseph Wm. Foran’s total compensation was reduced by 27.0% for 2018, including a 35.5% reduction in annual bonus compensation.
We transitioned from a mix of long-term incentive compensation for executive officers of 67% service-based restricted stock and 33% stock options in 2018 to 50% service-based restricted stock units and 50% performance-based stock units in 2019. By replacing the stock option component with performance stock units, we further aligned executive compensation with long-term performance.
We eliminated discretionary bonuses for executive officers, commonly referred to within this Executive Compensation sectionthe Company as “Marlan” awards in honor of the “Compensation Committee”)late Marlan W. Downey (1931-2017), a long-time advisor to the Board. Such bonuses have historically been awarded to contemporaneously reward impressive performance achievements. No Marlan bonuses have been awarded to executive officers since our 2018 Annual Meeting, and the Independent Board does not anticipate granting future Marlan bonuses to our executive officers.
At our 2019 Annual Meeting, support for our executive compensation program returned to the levels we were accustomed to, reaching approximately 97% as a result of, among other items, the above changes to the program made since the 2018 Annual Meeting.
In early 2020, following the outbreak of the novel coronavirus, orCOVID-19, along with the actions of OPEC+ and their effects on oil supply and demand, oil prices and our stock price, Mr. Foran voluntarily agreed to reduce his 2020 base salary by 25%, and our other executive officers and vice presidents voluntarily agreed to reduce their 2020 base salaries by 20% and 10%, respectively.
These are just a few of the changes we have soughtimplemented since hearing from so many of you, many of which took full effect over the past year. We look forward to establish aongoing dialogue with our shareholders and to demonstrating responsiveness to your feedback, including by continuing to improve our executive compensation structure designedprogram.
We are honored to preserve this cultureserve on your behalf and develop and retain our current and future leaders.hope you will join us at the 2020 Annual Meeting of Shareholders.
Sincerely,
|  | |
| Timothy E. Parker | R. Gaines Baty | |
| Lead Independent Director | Chair, Strategic Planning and Compensation Committee |
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis, or CD&A, provides a general description of our compensation program and specific information about its various components for the following “Named Executive Officers” for 2019:
Joseph Wm. Foran, Chairman of the Board and Chief Executive Officer;
Matthew V. Hairford, President;
David E. Lancaster, Executive Vice President and Chief Financial Officer;
Craig N. Adams, Executive Vice President and Chief Operating Officer—Land, Legal & Administration; and
Billy E. Goodwin, Executive Vice President and Chief Operating Officer—Drilling, Completions & Production.
2017 Business2019 Highlights
Our Board has a “pay for performance” philosophyIncreased Production and recognizes the leadership of Mr. Foran and our executive officers in contributing to the Company’s achievements. Revenues
The year ended December 31, 20172019 was a year highlightedmarked by many accomplishmentsstrong operational and increasing value forfinancial results across the Company. The charts below show the five-year growth experienced by both our shareholders.exploration and production business and our midstream business. As seenshown below, our third-party midstream services revenues have experienced significant growth since the formation of San Mateo I in the table on page 48, total shareholder return was one of the key metrics tied to our Named Executive Officers’ 2017 annual incentive compensation. The below chart shows the Company’s total shareholder return in 2017 as compared to its 2017 peer group (see “—Use of Peer Group Market Data in 2017” for a list of companies in our 2017 peer group).2017.
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Increased Oil, Natural Gas and Oil Equivalent Production
Both totalWe increased our average daily oil equivalent production andfrom the Delaware Basin approximately 23% to 55,599 BOE per day (84% of total oil equivalent production were identified by the Compensation Committee and the Independent Board as key metrics tied to our Named Executive Officers’ 2017 annual incentive compensation. In 2017, we produced 7.9 million Bbl of oil, a Company record and an increase of 54%production), as compared to 5.1 million Bbl of oil produced in 2016. We also produced 38.2 Bcf of natural gas, an increase of 25% from 30.5 Bcf of natural gas produced in 2016. Our total oil equivalent production for 2017 was 14.2 million BOE, another Company record and an increase of 40%, as compared to 10.2 million BOE for 2016. The increase in oil and natural gas production was primarily attributable to our ongoing delineation and development drilling activities in the Delaware Basin throughout 2017, but also to production from five operated wells we completed and turned to sales in the Eagle Ford shale late in the second quarter and early in the third quarter of 2017. Oil production comprised 55% of our total production (using a conversion ratio of oneincluding 35,184 Bbl of oil per six Mcfday (92% of total oil production) and 122.5 MMcf of natural gas) for 2017,gas per day (73% of total natural gas production), in 2019, as compared to 50% for 2016. The charts below show our production growth over the past five years.45,237 BOE per day (87% of total oil equivalent production), including 28,026 Bbl of oil per day (92% of total oil production) and 103.3 MMcf of natural gas per day (80% of total natural gas production), in 2018.
Increased Oil and Oil Equivalent Reserves
At December 31, 2017, our estimatedEstimated total proved oil and natural gas reserves were 152.8252.5 million BOE including 86.7 million Bbl of oil and 396.2 Bcf of natural gas,at December 31, 2019, which was a Company record and an increase of 44%17% from 105.8215.3 million BOE including 57.0 million Bbl of oil and 292.6 Bcf of natural gas, at December 31, 2016.2018.
Our
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EXECUTIVE COMPENSATION |
The charts below show our total proved oil reserves grew 52% to 86.7 million Bbl at December 31, 2017 from 57.0 million Bbl at December 31, 2016. Our proved natural gas reserves increased 35% to 396.2 Bcf at December 31, 2017 from 292.6 Bcf at December 31, 2016. This growth in oil and natural gas reserves at December 31, 2017, December 31, 2018 and December 31, 2019 and a breakdown of total reserves among our various operating areas.
Financing Transactions
We accomplished several important financing transactions in 2019 that increased our operational flexibility and opportunities, while preserving the strength of our balance sheet and improving our liquidity position. These transactions included:
the amendment of the Credit Agreement to increase the borrowing base to $900.0 million, which was further amended in February 2020 to increase our elected borrowing commitment from $500.0 million to $700.0 million;
the increase of the lender commitments under San Mateo I’s credit facility to $375.0 million, using the accordion feature; and
the conversion of approximately $21.9 million ofnon-core assets to cash during 2019. These properties were primarily attributablelocated in South Texas and Northwest Louisiana and East Texas but included a small portion of our leasehold in anon-operated area of the Delaware Basin.
Midstream Highlights
On February 25, 2019, we announced the formation of San Mateo II, a strategic joint venture with a subsidiary of Five Point Energy LLC (“Five Point”) designed to expand our ongoing delineation and development drilling activitiesmidstream operations in the Delaware Basin, during 2017.specifically in Eddy County, New Mexico. San Mateo II is owned 51% by us and 49% by Five Point. As part of this transaction, we dedicated to San Mateo II acreage in the Stebbins area and surrounding leaseholds in the southern portion of the Arrowhead asset area (the “Greater Stebbins Area”) and the Stateline asset area pursuant to15-year,fixed-fee agreements for oil, natural gas and salt water gathering, natural gas processing and salt water disposal. In addition, Five Point has committed to pay $125.0 million of the first $150.0 million of capital expenditures incurred by San Mateo II to develop facilities in the Greater Stebbins Area and the Stateline asset area. Five Point has also provided us the opportunity to earn deferred performance incentives of up to $150.0 million over the next several years as we execute our operational plans in and around the Greater Stebbins Area and the Stateline asset area, plus additional performance incentives for securing volumes from third-party customers.
San Mateo achieved strong operating results in 2019 as compared to 2018, highlighted by (i) increased third-party midstream services revenues, (ii) increased natural gas gathering and processing volumes, (iii) increased water gathering and water disposal volumes and (iv) increased oil gathering volumes. San Mateo initiated construction on an additional 200 MMcf per day of designed natural gas processing inlet capacity as part of the expansion of San Mateo’s cryogenic natural gas processing plant in Eddy County, New Mexico (the “Black River Processing
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At December 31, 2017, proved developed reserves included 37.0 million BblPlant”), which is anticipated to be placed in service during the summer of oil2020 and 190.1 Bcf of natural gas, and proved undeveloped reserves included 49.8 million Bbl of oil and 206.1 Bcf of natural gas. Proved developed reserves and proved oil reserves comprised 45% and 57%, respectively, of ourwould bring the total proved oil and natural gas reserves at December 31, 2017. Proved developed reserves and proved oil reserves comprised 41% and 54%, respectively, of our total proved oil and natural gas reserves at December 31, 2016. The charts below show our total proved oil and natural gas reserves at December 31, 2015, December 31, 2016 and December 31, 2017 and a breakdown of total reserves among our various operating areas.
Operational Highlights
We completed and began producing oil and natural gas from 86 gross (59.6 net) wells in the Delaware Basin in 2017, including 65 gross (56.1 net) operated and 21 gross (3.5 net)non-operated wells. We also added to and upgraded our acreage position in the Delaware Basin during 2017. As a result, at December 31, 2017, our total acreage position in the Delaware Basin had increased to approximately 199,600 gross (114,000 net) acres, primarily in Loving County, Texas and Lea and Eddy Counties, New Mexico. This significant increase in acreage greatly exceeded the threshold, target and maximum goals established by the Compensation Committee and the Independent Board under the 2017 annual incentive program.
Overall, we have been pleased with the aggregate performancedesigned inlet capacity of the wells we have drilled and completed, or participated in as anon-operator, thus far in our seven main asset areas in the Delaware Basin—the Wolf and Jackson Trust asset areas in Loving County, Texas, the Rustler Breaks and Arrowhead asset areas in Eddy County, New Mexico and the Antelope Ridge, Ranger and Twin Lakes asset areas in Lea County, New Mexico. As a result, our Delaware Basin properties have become an increasingly important component of our asset portfolio. Our average daily oil equivalent production from the Delaware Basin increased approximately 85%Black River Processing Plant to 29,463 BOE per day (76% of total oil equivalent production), including 18,023 Bbl of oil per day (84% of total oil production) and 68.6460 MMcf of natural gas per day (66% of totalday. San Mateo also initiated plans to construct large diameter natural gas production),gathering lines southward from the Greater Stebbins Area and northward from the Stateline asset area to connect these areas with the Black River Processing Plant. During 2019, San Mateo added four commercial salt water disposal wells, two in 2017, as comparedthe Rustler Breaks asset area and two in the Greater Stebbins Area, and placed into service one additional commercial salt water disposal well in the Rustler Breaks asset area in the first quarter of 2020, bringing San Mateo’s designed salt water disposal capacity to 15,941 BOEapproximately 335,000 Bbl per day (57% of total oil equivalent production), including 10,395 Bbl of oil per day (75% of total oil production) and 33.3 MMcf ofday.
During 2019, San Mateo received an increased natural gas per day (40% of totalgathering and processing commitment from an existing natural gas production),customer, plus other interruptible volumes, obtained significant additional acreage dedications from existing salt water customers and added an acreage dedication from a new oil customer. At certain times near the end of the third quarter and early in 2016.the fourth quarter of 2019, as a result of increased throughput from existing natural gas processing customers, San Mateo was operating the Black River Processing Plant at greater than 95% of the then-current designed inlet capacity of 260 MMcf per day.
Financing ArrangementsCompensation Program Objectives
On October 10, 2017, we completedOur Board has a public offering of 8,000,000 shares“pay for performance” philosophy and recognizes the leadership of our Common Stock, receiving proceedsexecutive officers in contributing to the Company’s achievements. Our future success and the ability to create long-term value for our shareholders depend on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. In furtherance of approximately $208.7 million (before expenses). A portionthese goals, our executive compensation program is designed to meet the following key objectives:
to be fair to both the executive and the Company and be competitive with comparable positions at companies in our peer group;
to attract and retain talented and experienced executives in light of the proceedsintense competition for talent in our industry and areas of operation, including from this offering were used to acquire approximately 6,600 net acres of additional leaseholdpeers and minerals inlarger industry competitors;
to align the Delaware Basin at a total acquisition cost of approximately $38 million and to fund certain midstream initiatives and opportunities. The remaining proceeds have been and are expected to be used for other midstream development, leasehold and mineral acquisitions and general corporate purposes, including to fund a portioninterests of our currentexecutives with the interests of our shareholders and future capital expenditures.with the performance of our Company for long-term value creation;
Haynesville/Cotton Valley 19.0 MMBOE 22% Eagle Ford 19.0 MMBOE 22% Delaware Basin 47.1 MMBOE 55% Haynesville/Cotton Valley 13.1 MMBOE 12% Eagle Ford 13.3 MMBOE 13% Delaware Basin 79.4 MMBOE 75% Haynesville/Cotton Valley 11.4 MMBOE 8% Eagle Ford 12.4 MMBOE 8% Delaware Basin 129.0 MMBOE 84%to provide financial incentives to our executives to achieve our key corporate and individual objectives with an appropriate mix of fixed and variable pay;
to foster a shared commitment among executives by coordinating their corporate and individual goals; and
to provide compensation that takes into consideration the education, professional experience, knowledge, commitment and dedication that is specific to each job and the unique qualities the executive possesses.
Investor Outreach and Compensation Program Changes
At the Company’s 2018 Annual Meeting, support for our executive compensation program decreased from the average 99% level that we received at our three previous annual shareholder meetings to approximately 72%. In response to this lower than anticipated shareholder support, we implemented an extensive shareholder outreach program, reaching out to shareholders representing approximately 50% of our outstanding stock (excluding stock held by our directors and officers). This outreach effort, which began in 2018 and has continued through 2019 and early 2020, was led by the directors serving as lead independent director and as the chairs of our Compensation Committee and Environmental, Social and Corporate Governance Committee. Among the feedback we received, shareholders expressed concern over alignment of executive compensation with the Company’s long-term performance, the lack of performance-based equity compensation for executives and the use of discretionary bonuses and fully vested equity awards.
In conjunction with this shareholder outreach effort and in direct response to much of the feedback received, the Compensation Committee and management undertook an extensive review of the Company’s executive compensation program, along with industry best practices, with input from our independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”). As a result, we implemented certain changes to
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EXECUTIVE COMPENSATION
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Midstream Joint Ventureour compensation program, which are described in more detail below. We value feedback from our shareholders and expect to continue our shareholder outreach program on an ongoing basis.
On February 17, 2017, we announced the formation of San Mateo, a strategic joint venture with a subsidiary of Five Point and contributed the Delaware Midstream Assets to San Mateo. We received $171.5 million in connection with the formation of San Mateo. In March 2018, we received an additional $14.7 million in performance and may earn up to an additional $58.8 million in performance incentives over the next four years. We continue to operate the Delaware Midstream Assets and retain operational control of San Mateo. The Company and Five Point own 51% and 49% of San Mateo, respectively. San Mateo continues to provide firm capacity service to us at market rates, while also being a midstream service provider to third parties in and aroundAt our Wolf and Rustler Breaks asset areas.
Objectives of Our Compensation Program
Our future success and the ability to create long-term value2019 Annual Meeting, support for our shareholders depends on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe that our success also depends on the continued contributions of our Named Executive Officers. Our executive compensation program is designedreturned to providethe levels we were accustomed to, reaching approximately 97% as a comprehensive compensationresult of, among other items, the various changes to the program to meetmade since the 2018 Annual Meeting.
Our Compensation Committee and Independent Board considered the input received as part of the shareholder outreach efforts described above when implementing the following objectives:changes to our executive compensation program.
What We Heard | What We Did | |
| Improve alignment of executive compensation with the Company’s long-term performance | • Approximately 85% of Mr. Foran’s 2019 total compensationas calculated in the Summary Compensation Table was variable and at risk. •Performance stock units (“PSUs”) represented approximately 50% of the total 2019 equity award targeted value granted to the Named Executive Officers (see below). | |
| Incorporate performance-based awards into executive equity compensation program | • We transitioned from a long-term incentive mix for executive officers of 67% service-based restricted stock and 33% stock options to approximately 50% service-based restricted stock units (“RSUs”) and approximately 50% PSUs, commencing with grants made in February 2019. • The PSU equity component introduced as part of our executive officers’ equity compensation in 2019 provides for settlement of between 0% and 200% of the total target PSUs subject to the award based on achievement of a relative total shareholder return performance metric over a three-year performance period from January 1, 2019 through December 31, 2021. If our absolute total shareholder return over such performance period is negative, no more than 100% of the PSUs (the target level) will vest. |
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What We Heard | What We Did | |
| Limit use ofoff-cycle discretionary bonuses and fully-vested equity awards | • Discretionary bonuses commonly referred to within the Company as “Marlan” awards in honor of the late Marlan W. Downey (1931-2017), a long-time advisor to the Board, were historically awarded as a way to contemporaneously reward significant performance achievements by select officers and employees. •No Marlan bonuses have been awarded to executive officers since our 2018 Annual Meeting, and the Board has determined to cease its practice of awarding Marlan bonuses to executive officers. •No fully-vested equity awards have been granted to executive officers since 2018, and the Board has determined that itwill not grant fully-vested equity awards to executive officers. • We adopted a new Annual Cash Incentive Plan (the “2019 Incentive Plan”) that provides that the Compensation Committee and Independent Board may make adjustments for individual executive officers for exceptional performance and attainment of certain strategic goals. For the 2019 short-term incentive program, our Independent Board capped this adjustment for each executive officer. |
What Our Compensation Program Is Designed to RewardBest Practices
Our compensation program is designed to reward, in both the short term and the long term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork, mentoring future leaders within the Company to drive long-term shareholder value, individual performance in light of general economic and industry-specific conditions, relationships with shareholders and vendors, the ability to manage and enhance production from our existing assets, the ability to explore new opportunities to increase oil and natural gas production, the ability to identify and acquire additional acreage, the ability to improve total shareholder returns, the ability to increase year-over-year proved reserves, the ability to control unit production costs, the ability to pursue midstream opportunities, level of job responsibility, industry experience and general professional growth.
What We Do: | What We Don’t Do: | |||||
✓ | We pay for performance—approximately | × | We prohibit hedging of Company stock | |||
✓ | We | × | We do notgross-up excise taxes for severance or change in control payments | |||
✓ | We engage an independent compensation consultant | × | We do not guarantee bonuses | |||
✓ | We | × | We do not reprice stock options without shareholder approval | |||
✓ | We conduct annual risk assessments of compensation practices | × | We have no defined benefit or supplemental executive retirement plans | |||
✓ | We conduct shareholder engagement to gather feedback on compensation practices and hold an annualsay-on-pay vote | × | We discourage and limit pledging of Company stock | |||
Elements of Our 20172019 Compensation Program and Why We Paid Each Element
We view the various components ofOur executive compensation as related but distinct generally with a significant portion of total compensation reflecting our “pay for performance” philosophy. In particular, our program places a considerable amount of an executive’s compensation at risk in the form of incentive or equity-based compensation, which can be variable from year to year, and we believe there isyear. We also seek to provide an appropriate balance between annual incentives and long-term incentives to ensure that aneach executive is motivated to consider longer-term Company performance in preference to short-term results.
For 2017, our management compensation program was comprised of the following six elements:
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For 2019, our management compensation program was comprised of the following primary elements. |
| 2019 Element | Why We Paid This Element | |||
| Base Salary | • Fixed level of cash compensation | • Compensates each executive for his assigned responsibilities, experience, leadership and expected future contributions | ||
| Annual Short-Term Incentive Payments | • Variable, annual, performance-based cash compensation | • Focuses and motivates management to achieve key corporate and individual objectives • Rewards achievements over the prior year | ||
| Restricted Stock Units | • Approximately 50% of targeted total long-term equity award value • Vest ratably in annual installments over three years from grant • Settle in cash | • Directly aligns executive and stockholder interests by tying the cash received on settlement to the Company’s stock • Retains executives over vesting period • Cash settlement avoids dilution of Common Stock | ||
| Performance Stock Units | • Approximately 50% of targeted total long-term equity award value • Vest between 0% and • If relative total shareholder return is above target but absolute total shareholder return is negative, payout is capped at target (100%) | • Focuses executives on the • Settlement in shares of the Company’s stock increases alignment between executives and | ||
| Severance and Change of Control | • Specified severance pay and benefits | • Provides an incentive for • Provides a measure of financial security in the event | ||
| Other Benefits | • Broad-based 401(k) retirement, | • Provides market competitive benefits • Protects employees against catastrophic loss and encourage a healthy | ||
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Consistent with our compensation program objectives, we provide our executive officers with a significant portion of their total compensation in the form of variable, rather than fixed, compensation. The percentages shown below reflect each executive’s compensation as calculated in the Summary Compensation Table.
Role of the Independent Board, Compensation Committee and Management
The Compensation Committee hasannually evaluates each of the authority, at our expense,Company’s executive officers, including Mr. Foran, and recommends to retainthe Independent Board the proposed compensation structure for each of the executives, including salary, equity and terminate independent third-partynon-equity incentive compensation. Based on such recommendations, the Independent Board sets Mr. Foran’s compensation consultantseach year. Mr. Foran consults with and provides recommendations to the Compensation Committee and Independent Board regarding the compensation structure for each of the other expert advisors. See “—RoleNamed Executive Officers. Based on the recommendations of the Compensation Committee and Mr. Foran, the Independent Board sets the other Named Executive Officers’ compensation each year. The members of the Independent Board are required to be independent pursuant to the listing standards of the NYSE and the rules and regulations promulgated by the SEC.
As part of their annual evaluations, the Compensation Consultant” below.Committee:
conducts an analysis of the Company’s annual performance relative to any performance criteria or targets established under the 2019 Incentive Plan and recommends to the Independent Board the amount of final annual incentive awards;
reviews and recommends the form of and number of shares to be awarded pursuant to long-term incentive compensation awards, including vesting terms, performance metrics, performance peer groups and other material provisions of such awards;
reviews executive officer compensation levels as compared to the Company’s peers;
reviews and recommends any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof; and
reviews and recommends any deferred compensation arrangement, retirement plan, other benefits and perquisites.
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In addition, the Compensation Committee confirms at least annually that our compensation policies and practices do not encourage unnecessary risk taking and reviews and discusses the relationship between risk management, corporate strategy and senior executive compensation. The Compensation Committee considered,considers, in establishing and reviewing our compensation program, whether the program encourages unnecessary or excessive risk taking and has concluded that it does not and is not reasonably likely to have a material adverse effect on us. Several features of our program reflect sound risk management practices. Base salaries are fixed in amount and thus do not encourage risk taking. While annual executive bonusesshort-term incentive payments are tied to management’s achievements during the previous fiscal year, they also take into account multiple performance criteria based on the executive’s individual performance and are within the discretion of the Independent Board. Thus, the Compensation Committee believes that our bonusshort-term incentive awards appropriately balance risk and the desire to focus executives on specific short-term goals important to the Company’s success, and that they do not encourage unnecessary or excessive risk taking. In addition, the Compensation Committee believes that our current equity compensation program provides an appropriate balance between the goals of increasing the price of our Common Stock and avoiding potential risks that could threaten our growth and stability due to the fact that stock optionsthe RSUs and service-based restricted stock typicallyPSUs vest over three or four years.
With regard to all of the Named Executive Officers, the Compensation Committee recommends to the Independent Board:
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The Compensation Committee annually evaluates Mr. Foran’s compensation, including setting and evaluating corporate goals and objectives applicable to his compensation. Based upon these evaluations, the Compensation Committee makes recommendations to the Independent Board regarding Mr. Foran’s annual compensation, including salary, bonus and equity incentive compensation. The members of the Independent Board are required to be independent pursuant to the listing standards of the NYSEyears and the rules and regulations promulgated by the SEC. As part of their annual evaluation, the Compensation Committee:
On an annual basis, after consultation with Mr. Foran, the Compensation Committee reviews and makes recommendations to the Independent Board on the evaluation of and compensation structure for the other Named Executive Officers. After considering the evaluation and recommendations of Mr. Foran, the Compensation Committee evaluates the performance of the other Named Executive Officers and makes recommendations to the Independent Board regarding the annual compensation of such Named Executive Officers, including salary, bonus and equity andnon-equity incentive compensation.
The Compensation Committee also takes into account the outcome of the most recent advisory vote from our shareholders, which was approved with approximately 99% support at our 2017 Annual Meeting, when considering executive compensation arrangements. Given this high level of support, the Compensation Committee did not make any adjustments to the overall structure of our compensation program in 2017.
After considering the recommendations of Mr. Foran with regard to the other Named Executive Officers, as part of the Compensation Committee’s annual review and recommendation to the Independent Board regarding the compensation of the other Named Executive Officers, the Compensation Committee reviews and recommends the same items described in the list above with respect to Mr. Foran.total shareholder return.
In addition, pursuant to its charter, the Compensation Committee reviews and recommends to the Independent Board any proposals for the adoption, amendment, modification or termination of our incentive compensation, equity-based plans andnon-equity based plans.
Role of the Independent Compensation Consultant
During the third quarter of 2017, theThe Compensation Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent executive compensation advisory firm. Prior to the engagement of Meridian, the Compensation Committee had engaged Pay Governance LLC as its independent executive compensation advisory firm. As the Compensation Committee’s independent executive compensation advisory firm, Meridian provides assessments of the competitiveness of the Company’s executive compensation levels and practices relative to relevant executive labor markets and performs other tasks as requested by the Compensation Committee. For 2017,2019, the Compensation Committee assessed the independence of both Meridian and Pay Governance LLC pursuant to applicable SEC and NYSE rules and concluded that neither Meridian’s nor Pay Governance LLC’s engagement by the Compensation Committee raiseddid not raise any conflictconflicts of interest.
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Use of Peer Group Market Data in 2017
Our independent compensation consultant benchmarks the pay levels of our officers against a group of competitor companies in the oil and natural gas exploration and production sector (the “Peer Group”). UponIn connection with its annual review, the initial selection ofCompensation Committee and Independent Board adopted the following new Peer Group in late 2015,2019, which was used in setting 2019 compensation levels:
Callon Petroleum Company Centennial Resource Development, Inc. Cimarex Energy Co. Diamondback Energy, Inc. Encana Corp. (now Ovintiv Inc.) Jagged Peak Energy Inc. | Laredo Petroleum, Inc. Oasis Petroleum, Inc. Parsley Energy, Inc. SM Energy Company WPX Energy, Inc. |
Following the peers represented competitorsOctober 2019 announcement of the merger of Jagged Peak Energy Inc. into Parsley Energy, Inc., Jagged Peak Energy Inc. was no longer considered in determining any elements of executive compensation. In addition to considering companies in the oil and natural gas exploration and production sector, with one or more of the following characteristics: comparable revenue size (approximately $280 million to $1.7 billion); comparable market capitalization (approximately $1.3 billion to $4.3 billion); similar operating areas (particularly the Delaware Basin); and similar growth profile. The Compensation Committee also considered company size characteristics such as assets, enterprise value and Independent Board adoptedmarket value when approving the Peer Group. As of December 31, 2019, the Peer Group for 2016 and determined thathad a median market capitalization of $1.89 billion, compared to the Company’s market capitalization of $2.1 billion at such date, placing the Company at the 51st percentile of the Peer Group. The Peer Group remained appropriate for 2017. Thealso includes certain companies includedwith operations in the Peer Group for 2017 are as follows:
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The Compensation CommitteePermian Basin that face similar opportunities and Independent Board, with advice from the independent compensation consultant, review the Peer Group on an annual basis.challenges that we face. The Peer Group is used by the Compensation Committee and the Independent Board in setting Named Executive Officer salaries, annual bonusshort-term incentive award opportunities, long-term incentive awards and target total direct compensation levels. The
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Compensation Committee and Independent Board use this data to inform itstheir pay decisions as one data point among many others, including Company performance, individual performance, experience and responsibilities, leadership and professional growth.
20172019 Base SalarySalaries
In early 2017,2019, based on the recommendations of Mr. Foran (other than with regard to his base salary), the Compensation Committee recommended, and the Independent Board approved, the following 20172019 base salaries for our Named Executive Officers.
Executive Officer | 2018 Base Salary | 2019 Base Salary | ||||||
Joseph Wm. Foran | $ | 1,100,000 | $ | 1,200,000 | ||||
Chairman of the Board and Chief Executive Officer | ||||||||
Matthew V. Hairford | $ | 660,000 | $ | 700,000 | ||||
President | ||||||||
David E. Lancaster | $ | 625,000 | $ | 680,000 | ||||
Executive Vice President and Chief Financial Officer | ||||||||
Craig N. Adams | $ | 600,000 | $ | 660,000 | ||||
Executive Vice President and Chief Operating Officer—Land, Legal & Administration | ||||||||
Billy E. Goodwin | $ | 575,000 | $ | 660,000 | ||||
Executive Vice President and Chief Operating Officer—Drilling, Completions & Production | ||||||||
The Independent Board determined raises for each Named Executive Officer were warranted based upon each Named Executive Officer’s individual contributions to, among other items, (i) items:
the Company’s record oil, natural gas and average daily oil equivalent production for 2016 (each of which were subsequently exceeded in 2017), (ii) 2018;
the significant additions to the Company’s Delaware Basin acreage position throughout 2016, (iii) 2018, including 8,400 gross and net acres acquired in the September 2018 Bureau of Land Management New Mexico Oil and Gas Lease Sale;
the Company’s continued improvement in operational efficiencies throughout 2016 and (iv) 2018;
the Company’s record reserves for 2018;
the significant progress made ingrowth of our midstream operationsbusiness in 2016.2018, highlighted by San Mateo’s execution of numerous accomplishments; and
Executive Officer | 2016 Base Salary | 2017 Base Salary | ||||||
Joseph Wm. Foran | $ | 900,000 | $ | 1,000,000 | ||||
Chairman of the Board and Chief Executive Officer | ||||||||
Matthew V. Hairford | $ | 550,000 | $ | 600,000 | ||||
President | ||||||||
David E. Lancaster | $ | 475,000 | $ | 550,000 | ||||
Executive Vice President and Chief Financial Officer | ||||||||
Craig N. Adams | $ | 475,000 | $ | 525,000 | ||||
Executive Vice President—Land, Legal & Administration | ||||||||
Billy E. Goodwin | $ | 425,000 | $ | 500,000 | ||||
Executive Vice President and Head of Operations | ||||||||
the completion of several key financing arrangements in 2018 that improved our liquidity and capital structure.
20172019 Annual Incentive Compensation
The Company sponsors and maintainsWe adopted the Amended and Restated Matador Resources Company Annual2019 Incentive Plan for Management and Key Employees, effective as of January 1, 2016 (the “Incentive Plan”), which was
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approved by our shareholders at the 2016 Annual Meeting.2019. The 2019 Incentive Plan is designed to link executive decision-makingdecision making and performance with the Company’s goals, reinforce these goals and ensure the highest level of accountability for the success of the Company as a whole.
The 2019 Incentive Plan is intended to advance the interests of theadvances Company and its shareholdersshareholder interests by providing the Company with an additional means by which it canto (i) sustain and enhance itsthe culture of personal commitment on the part of its executives, select managers and key employees in the continued growth, development and financial success of the Company and (ii) encourage them to remain with, and devote their best efforts to, the business of, the Company, thereby advancing the interests of the Company and its shareholders.Company. The 2019 Incentive Plan provides for the granting of awards of incentive compensation that may be paid to a participant upon satisfaction of specified performance goals for a particular performance period.
The Incentive Plan was designed in a manner such that awards were intended to satisfy In addition, the requirements of “qualified performance based compensation” within the meaning of Section 162(m) of the Code so that the Company could take federal income tax deductions for any “qualified performance-based compensation” paid under the Incentive Plan to certain individuals who are covered by the deduction limitations of Section 162(m) of the Code for annual compensation paid to such individuals that is in excess of $1.0 million. For taxable years beginning after December 31, 2017, this “qualified performance based compensation” exemption has been repealed for all but certain grandfathered compensation arrangements that were in effect as of November 2, 2017. The rules and regulations promulgated under Section 162(m) are complicated and subject to change and the scope of relief for grandfathered arrangements is currently uncertain. As such, there can be no assurance that any compensation awarded or paid in prior years will be fully tax deductible. However, we have currently elected to continue our use of the Incentive Plan as currently structured for 2018 as we feel that the plan fits well within our “pay for performance” philosophy and drives our executives to achieve our short-term and long-term performance objectives.
The Incentive Plan establishes a performance goal for all participants with the creation of a performance pool, which is equal to 3.5% of Adjusted EBITDA; provided that Adjusted EBITDA equals or exceeds $50.0 million (the “Adjusted EBITDA Pool Goal”). For these purposes, Adjusted EBITDA is defined as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset-retirement obligations, property impairments, unrealized derivative gains and losses, certain othernon-cash items andnon-cash stock-based compensation expense and net gain or loss on asset sales and inventory impairment, of the Company and its subsidiaries, determined on a consolidated income basis. If the Adjusted EBITDA Pool Goal is reached or exceeded, the2019 Incentive Plan provides that the maximum amount that would be payable to each participant is according to the allocation formula set forth in the table below. TheCompensation Committee and Independent Board upon the recommendationmay make adjustments for individual executive officers for exceptional performance and attainment of the Compensation Committee, may use negative discretion to reduce the amount paid to a participant below the maximum amounts shown in the table.
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In the Independent Board’s discretion, supplemental performancecertain strategic goals (the “Performance Goals”“Discretionary Adjustment”), in addition to the Adjusted EBITDA Pool Goal set forth above, may be established by the Independent Board for each year. Such Performance Goals can be used by the Independent Board in determining the award payable to a participant, but in no event may the Independent Board increase the amount of an award payable to a participant above the maximum award payable set out in the table above. For 2017, the Chair of the Compensation.
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Performance Goals
For 2019, the chair of the Compensation Committee met with Pay Governance LLC (as predecessor to Meridian)Meridian and management to determinediscuss potential criteria for the Performance Goals.performance goals. Based on these meetings, the Chairchair of the Compensation Committee proposed certain preliminary performance criteriagoal categories for consideration as the Performance Goals for 2017.2019. The Compensation Committee then met with Pay Governance LLCMeridian and management to review the proposed criteria.performance goals. The categories of these performance goals reflect the continuation of the Compensation Committee’s strategic shift initiated several years ago from primarily growth-oriented performance goals to performance goals that incentivize capital efficiency and returns, in addition to growth-oriented goals. As a result of these meetings, the Compensation Committee recommended and the Independent Board determined to use the following performance categories and threshold, target and maximum levelsperformance goals for establishing the Performance Goals for 2017 in determining whether to exercise negative discretion in reducing the amount paid to a participant below the maximum amounts:2019, which were each achieved above target, as shown below:
2017 Performance Goals | Threshold | Target | Maximum | Actual Results | Actual Results as Percent of Target | |||||
Oil production (millions of Bbl) | 6.9 | 7.05 | 7.2 | 7.85 | 111% | |||||
Total production (millions of BOE) | 12.4 | 12.7 | 13.0 | 14.2 | 112% | |||||
Cash operating costs per BOE, excluding interest ($/BOE)(1) | $16.35 | $16.15 | $15.85 | $14.41 | Exceeded | |||||
Acreage acquisition (net acres)(2) | 5,000 | 10,000 | 15,000 | 25,000+ | 167%+ | |||||
Adjusted EBITDA (millions of $)(3) | $255.0 | $265.0 | $275.0 | $336.1 | 127% | |||||
Total shareholder return vs. Peer Group | Upper 50% | Upper 35% | Upper 25% | Upper 25% | Exceeded |
2019 Performance Goals | Threshold | Target | Maximum | Actual Results | Assessment | |||||
Oil production (millions of Bbl) | 12.9 | 13.1 | 13.3 | 14.0 | Exceeded maximum | |||||
Return on average capital employed (ROACE)(1) | 16.0% | 18.0% | 21.0% | 20.5% | Approached maximum | |||||
San Mateo Adjusted EBITDA (millions of $)(2)(3) | $80.0 | $90.0 | $100.0 | $96.3 | Exceeded target | |||||
Net Debt/Adjusted EBITDA(2)(4)(5) | 2.7x | 2.4x | 2.1x | 2.3x | Exceeded target | |||||
Total 2019 shareholder return vs. Peer Group | Upper 75% | Upper 33% | Upper 25% | Upper 25% | Achieved maximum | |||||
Adjusted Operating Expenses per BOE(6) | $13.75 | $13.25 | $12.75 | $11.98 | Exceeded maximum |
| (1) | ROACE is anon-GAAP financial measure included herein solely as a reference point under the 2019 Incentive |
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Adjusted EBITDA is anon-GAAP financial measure included herein solely as a reference point under the 2019 Incentive |
In making recommendations regarding the potential payment guidelines under the 2017 Performance Goals, the Compensation Committee reviewed the Pay Governance LLC recommendations and recommendations of management regarding target payment guidelines. Based on the review of the Pay Governance LLC recommendations and the management recommendations, which took into account the differing responsibilities of each Named Executive Officer by the Compensation Committee and the Independent Board, the target payment guidelines set forth below were adopted.
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| (5) | Attributable to Matador Resources Company shareholders. |
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Pursuant to the2019 Incentive Plan, the amount of any annual award could be greater or less than theOpportunities
In making recommendations regarding potential 2019 annual incentive opportunity outlined above based on achievement of the Performance Goals; provided, however, that no award could exceed the maximum bonus payable under the Incentive Plan, as determined based upon achievement of the Adjusted EBITDA Pool Goal.
In February 2018,opportunities for our Named Executive Officers, the Compensation Committee reviewed Meridian’s recommendations and the Independent Board concluded that the Company had achieved Adjusted EBITDArecommendations of $336.1 million,management regarding proposed target opportunities. Based on such review, which is in excess of the $50.0 million Adjusted EBITDA Pool Goal. After takingtook into account (i) the achievementdiffering responsibilities of each Named Executive Officer and peer group data, where available, for bonus levels for comparable positions, the Adjusted EBITDA Pool Goal, (ii) the Company’s 2017 results in light of the Performance Goals, (iii) the2019 target annual incentive opportunities set forth below were approved.
Participant | Target Annual Incentive Opportunity as % of 2019 Base Salary | |||
Joseph Wm. Foran | 110.0 | % | ||
Matthew V. Hairford | 90.0 | % | ||
David E. Lancaster | 85.0 | % | ||
Craig N. Adams | 80.0 | % | ||
Billy E. Goodwin | 80.0 | % | ||
Our Independent Board also determined to cap the Discretionary Adjustment for each Named Executive Officer and (iv) other information with regard toat 30% of the each Named Executive Officer, the Compensation Committee recommended to the Independent Board theOfficer’s total 2019 annual cash awards listed below for each Named Executive Officer under the Incentive Plan. The Independent Board approved such annual cash awards, which were paid to the Named Executive Officers in the first quarter of 2018. Adjusted EBITDA is anon-GAAP financial measure included herein solely as a reference point under the Incentive Plan. For a definition of Adjusted EBITDA when used as a financial metric and a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, seeSchedule A to this Proxy Statement.
Executive Officer
| Percentage of
| Maximum Bonus
| 2017 Incentive
| % of 2017 Base Salary
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Joseph Wm. Foran | 30.0 | % | $ | 3,528,662 | $ | 3,000,000 | 300.0 | |||||||||
Matthew V. Hairford | 17.5 | % | $ | 2,058,386 | $ | 1,030,000 | 171.7 | |||||||||
David E. Lancaster | 17.5 | % | $ | 2,058,386 | $ | 935,000 | 170.0 | |||||||||
Craig N. Adams | 17.5 | % | $ | 2,058,386 | $ | 840,000 | 160.0 | |||||||||
Billy E. Goodwin | 17.5 | % | $ | 2,058,386 | $ | 800,000 | 160.0 | |||||||||
Discretionary Bonuses
The Independent Board has discretionary authority under the 2012 Plan (as defined below) to reward executives for particular accomplishments at times and in amounts that the Independent Board approves, upon the recommendation of the Compensation Committee. For further discussion of such discretionary “Marlan” bonuses, see “—Elements of Our 2017 Compensation Program and Why We Paid Each Element” above. In the first and fourth quarters of 2017, the Compensation Committee recommended, and the Independent Board approved, discretionary cash “Marlan” bonuses to certain of our Named Executive Officers in recognition of each officer’s efforts in connection with the formation of San Mateo in February 2017 (in the amounts of $500,000, $125,000, $125,000, $175,000 and $50,000, respectively, for each of Messrs. Foran, Hairford, Lancaster, Adams and Goodwin) and the Company’s October 2017 public equity offering (in the amounts of $450,000, $150,000, $200,000, $200,000 and $50,000, respectively, for each of Messrs. Foran, Hairford, Lancaster, Adams and Goodwin), respectively. These bonuses are reflected in the “Bonus” column of the Summary Compensation Table below.incentive payment.
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In June 2017,2019 Performance Results
The Compensation Committee then assessed the Company’s 2019 results in light of the performance goals and the following individual performance milestones for each Named Executive Officer when determining appropriate short-term incentive award amounts:
| Individual Performance Milestones | ||
Joseph Wm. Foran Chairman and Chief Executive Officer | •Collaborated with the Board and other executive officers to createand maintain an effective team culture throughout each level of Matador’s organization that has built value through (1) selective acreage acquisitions, (2) traditional oil and natural gas operations growing organically through the drill bit and (3) expanding midstream operations in Matador’s various asset areas • Provided direction and leadership throughout Matador in developing and executing Matador’s strategy and operational plan in 2019, which resulted in record operational and midstream results, including ¡17% reserves growth ¡27% oil equivalent production growth ¡9% total revenue growth •Provided leadership to the Board, including recommending to the Nominating Committee a highly qualified Board candidate with additional expertise and experience and improving the Board’s function and processes • Directed the Company’s collective efforts to convert approximately $21.9 millionofnon-core assets to cash • Worked with other executive officers and directors to expand the vision and strategy for Matador’s midstream operations, including the negotiations for the San Mateo II joint venture and the expansion of the San Mateo system •Oversaw the collaborative management of the Company’s balance sheet and strong financial position, including through an increase in the borrowing base under the Credit Agreement • Led firmwide focus on attracting, training and retaining talent, encouraging employee and director engagement and aligning our strategy and operational plan throughout the organization • Directed efforts to develop and maintain relationships with directors, shareholders, vendors and other key stakeholders with the assistance of other executive officers | |
Matthew V. Hairford President | •Oversaw the team efforts that resulted inrecord daily oil equivalent productionand anincrease of 27% in 2019 • Directed the work of the Company’s field personnel and the implementation of the Company’s health, safety and environmental initiatives and interacted with shareholders and directors on financial matters • Worked with other executive officers to contain costs while maintaining and improving relationships with key vendors • As Chairman of the Board and President of San Mateo, led the Company’s midstream efforts to, among other items, ¡Form San Mateo II, expanding our midstream operations in Eddy County, New Mexico |
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| Individual Performance Milestones | ||
¡ Achieve strong operating results, highlighted by increased third-party midstream services revenues, natural gas gathering and processing volumes, water gathering and disposal volumes and oil gathering volumes ¡ Secure increased third-party commitments or dedications, such that the Black River Processing Plant operated at95% of its designed inlet capacity at certain times near the end of the third quarter and early in the fourth quarter of 2019 | ||
David E. LancasterExecutive Vice President and Chief Financial Officer | •Led the collective effort to manage the Company’s balance sheet and improve the Company’s already strong financial position through ¡Anincrease of the borrowing base under the Credit Agreement to $900 million ¡An increase of the lender commitments underSan Mateo I’s credit facility to $375.0 million using the accordion feature • Responsible for the Company’s financial modeling, guidance and relationships with financial institutions, shareholders, bondholders, equity and bond analysts and public markets • As a distinguished petroleum engineer, provided oversight and quality control to the Company’s exploration and development activities and its reserve studies | |
Craig N. Adams | • Coordinated and oversaw the general legal matters of the Company through the management of the Company’s legal staff •Managed the Company’s legal and land efforts to convert approximately $21.9 millionofnon-core assets to cash •Responsible for coordinating administrative functions of the Company, including Board functions and interaction with management, office facilities and the oversight of the Company’s human resource activities and departmental efficiencies •Helped implement the Company’s ESG initiatives | |
Billy E. Goodwin | •Led the Company’s collaborative drilling, completions and production activities, managing approximately $672 million of capital expenditures in 2019 related to the Company’s operations in its primary operating areas, resulting in ¡17% reserves growth ¡27% oil equivalent production growth • Worked with other executive officers and staff members to innovate and to increase capital efficiencies by drilling longer laterals, using central facilities and multi-well pads and reducing costs, while maintaining and improving relationships with key vendors • Directed theMaxOps program to increase drilling, completions and production experience among our engineering staff and theMaxCom program to ensure coordination of drilling and completion operations • Oversaw team efforts to drill salt water disposal wells in connection with the expansion of San Mateo’s salt water gathering and disposal systems |
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The Compensation Committee also reviewed with Mr. Foran the individual performance of the other Named Executive Officers to make a determination as to whether any individual Named Executive Officer merited a short-term incentive payment above or below the payout level determined for the Named Executive Officers generally. The Compensation Committee took into consideration the individual performance milestones listed above as well as additional contributions to the achievement of Company-wide goals. Based on this review, the Compensation Committee recommended, and the Independent Board awarded, Mr. Foran aone-time equity grant of 87,757 shares of Common Stock targeting a value of approximately two times Mr. Foran’s 2017 base salary. The grant date fair value of this stock award was $2,057,902. These shares of Common Stock were vested at the date of grant. Given Mr. Foran’s instrumental role in the Company’s significant accomplishments in the first half of 2017, including (i) the formation of San Mateo with a joint venture valuation of $500 million, (ii) record average daily oil, average daily natural gas and average daily oil equivalent production in the first quarter of 2017 and (iii) anall-time high in oil, natural gas and total proved reserves at March 31, 2017, the Independent Board believed Mr. Foran was entitled to additional compensation. While the Compensation Committee and Independent Board deliberated a cash award, the Compensation Committee recommended, and the Independent Board approved, an award of Common Stock in order to further align Mr. Foran’s interests with those of the Company’s shareholders and to incentivize future performance.
2017 Long-Term Incentive Compensation
The Board maintains the Matador Resources Company Amended and Restated 2012 Long-Term Incentive Plan (the “2012 Plan”), which was approved by our shareholders on June 10, 2015. The 2012 Plan permits the granting of long-term equity and cash incentive awards, including the following:
After receiving recommendations from the Compensation Committee, the Independent Board administers the 2012 Plan. For 2017, the Compensation Committee met with Pay Governance LLC (as predecessor to Meridian) and management regarding the appropriate types and amounts of equity grants based on differing levels of responsibilitydetermined that each of the Named Executive Officers and made recommendationsperformed at a high level in 2019 contributing to the Company’s success. However, the Compensation Committee did not recommend that the Independent Board. PursuantBoard make any Discretionary Adjustment to the 2012 Plan, all time-based restricted stock and restricted stock units issued thereunder must vest no earlier thanannual cash awards for any Named Executive Officer.
Based on a pro rata basis over a three-year period; otherwise, the shares subject to such restricted stock and restricted stock units will be deemed “exempt shares” subject to a cap under the 2012 Plan of 10% of the total shares authorized thereunder.
In February 2017,assessment, the Compensation Committee recommended andto the Independent Board awarded,the annual equitycash awards ofnon-qualified stock options and restricted stock tolisted below for each Named Executive Officer.Officer under the 2019 Incentive Plan. The Independent Board approved such annual cash awards, which were paid to the Named Executive Officers in February 2020. Consistent with the recommendation of the Compensation Committee, the annual cash awards reflected no Discretionary Adjustment for individual executive officers for exceptional performance and attainment of certain strategic goals.
Executive Officer | Target Award Payable under 2019 Incentive Plan | Maximum Award Payable under 2019 Incentive Plan | 2019 Incentive Plan Actual Award | Actual Award as % of Target Award | ||||||||||||||||
Joseph Wm. Foran | $ | 1,320,000 | $ | 2,640,000 | $ | 2,510,000 | 190.2 | % | ||||||||||||
Matthew V. Hairford | $ | 630,000 | $ | 1,260,000 | $ | 1,200,000 | 190.5 | % | ||||||||||||
David E. Lancaster | $ | 578,000 | $ | 1,156,000 | $ | 1,100,000 | 190.3 | % | ||||||||||||
Craig N. Adams | $ | 528,000 | $ | 1,056,000 | $ | 1,005,000 | 190.3 | % | ||||||||||||
Billy E. Goodwin | $ | 528,000 | $ | 1,056,000 | $ | 1,005,000 | 190.3 | % | ||||||||||||
2019 Long-Term Incentive Compensation
In February 2019, after consulting with Meridian and management and considering shareholder feedback, the Compensation Committee recommended that we transition from a long-term incentive mix for executive officers of 67% service-based restricted stock and 33% stock options to 50% service-based cash-settled RSUs and restricted stock were50% PSUs. The Independent Board granted such awards in order toFebruary 2019. These long-term equity awards facilitate retention of our Named Executive Officers, incentivize positive future results and further align the interests of our Named Executive Officers with those of the Company’s shareholders. The table below provides the key terms of the February 20172019 equity awards.
Key Terms | Non-Qualified Stock Options | Restricted Stock | ||
Targeted percentage of total award value | 50% | 50% | ||
Vesting terms | Three years ratably on each anniversary | Three years ratably on each anniversary | ||
Exercise price | $27.26 (closing price on grant date) | — | ||
Term of option | Six years | — | ||
Rights to receive dividends and vote | No | Yes |
Key Terms | Restricted Stock Units | Performance Stock Units | ||
Targeted percentage of total | 50% | 50% | ||
Vesting terms | Three years ratably on each anniversary | Following three-year performance period ending December 31, 2021 | ||
Performance metric | N/A | Relative total shareholder return |
5052 Matador Resources Company | 20182020 Proxy Statement
EXECUTIVE COMPENSATION
|
The number of shares underlying each grant the grant date fair value and the approximatetarget value of the 20172019 annual equity grants as a percentage of 2017 base salary are set forth in the table below.
Participant | Stock Options | Restricted Stock | Grant Date Fair Value | % of 2017 Base Salary | Restricted Stock Units | Target Performance Stock Units | Targeted Value | |||||||||||||||||||||
Joseph Wm. Foran | 144,686 | 55,943 | $ | 3,049,997 | 305 | % | 113,379 | 113,379 | $ | 4,000,000 | ||||||||||||||||||
Chairman of the Board and Chief Executive Officer
| ||||||||||||||||||||||||||||
Matthew V. Hairford | 93,927 | 36,317 | $ | 1,979,992 | 330 | % | 59,524 | 59,524 | $ | 2,100,000 | ||||||||||||||||||
President
| ||||||||||||||||||||||||||||
David E. Lancaster | 82,211 | 31,786 | $ | 1,732,990 | 315 | % | 53,855 | 53,855 | $ | 1,900,000 | ||||||||||||||||||
Executive Vice President and Chief Financial Officer
| ||||||||||||||||||||||||||||
Craig N. Adams | 68,500 | 26,486 | $ | 1,443,998 | 275 | % | 48,186 | 48,186 | $ | 1,700,000 | ||||||||||||||||||
Executive Vice President—Land, Legal & Administration
| ||||||||||||||||||||||||||||
Billy E. Goodwin | 55,739 | 21,552 | $ | 1,174,997 | 235 | % | 48,186 | 48,186 | $ | 1,700,000 | ||||||||||||||||||
Executive Vice President and Head of Operations
| ||||||||||||||||||||||||||||
The Independent Board approved the total targeted value for the year for each Named Executive Officer and then converted that value into an aggregate number of units based on the closing price of our Common Stock on the date prior to the date of grant. The units were then granted 50% in the form of RSUs and 50% in the form of PSUs (at target). The newly introduced PSU equity component provides for settlement of between 0% and 200% of the total target PSUs subject to the award based on our total shareholder return relative to the total shareholder return of a specified peer group over a three-year performance period from January 1, 2019 through December 31, 2021. If our absolute total shareholder return over such performance period is negative, no more than 100% of the PSUs may vest. The applicable percentage of vested units is shown below with respect to each percentile ranking.
Company’s Relative Total Shareholder Return Percentile Ranking
| Percentage of Target Units That Will Vest | |
0
| 0%
| |
10th
| 20%
| |
20th
| 40%
| |
30th
| 60%
| |
40th
| 80%
| |
50th
| 100%
| |
60th
| 120%
| |
70th
| 140%
| |
80th
| 160%
| |
90th
| 180%
| |
100th
| 200%
| |
2020 Proxy Statement| Matador Resources Company 53
EXECUTIVE COMPENSATION |
The peer group used for determination of the Company’s relative total shareholder return is as follows, which is the same as the Company’s 2019 Peer Group:
Callon Petroleum Company Centennial Resource Development, Inc. Cimarex Energy Co. Diamondback Energy, Inc. Encana Corp. (now Ovintiv Inc.) Jagged Peak Energy Inc. | Laredo Petroleum, Inc. Oasis Petroleum, Inc. Parsley Energy, Inc. SM Energy Company WPX Energy, Inc. |
Due to the merger of Jagged Peak Energy Inc. into Parsley Energy, Inc. in early 2020, Jagged Peak Energy Inc. will no longer be considered in determining the Company’s relative total shareholder return under the PSUs.
2020 Compensation
The information provided in this CD&A focuses primarily on the compensation program in effect during 2019 and the Compensation Committee’s analysis and decision-making process undertaken with respect to the 2019 compensation program. It is important to note that all decisions with respect to 2019 executive compensation were made in or prior to February 2020 and based on the Company’s strong 2019 performance. In particular, both the quarter and year ended December 31, 2019 were the best in the Company’s history. In 2019, the Company increased its oil and natural gas production and proved oil and natural gas reserves to all-time highs, maintained its focus on improving operational and capital efficiencies and continued to grow and increase its cash flows. At the same time, the Company reduced its capital expenditures for drilling, completing and equipping wells while keeping its unit operating costs flat as compared to 2018. Finally, at the time these executive compensation decisions were made, the NYMEX West Texas Intermediate oil price was over $50 per Bbl.
Since that time, the emergence of the novel coronavirus, or COVID-19, as a global pandemic has significantly reduced demand for oil and natural gas, and escalating tensions between Saudi Arabia and Russia regarding OPEC+ oil production have resulted in a substantial decrease in oil and natural gas prices. The severity of these events has caused the Compensation Committee to review their impact on the oil and natural gas industry and the broader economy to ensure executive compensation is aligned with the interests of our shareholders in today’s operating environment.
In further support of our compensation philosophy and objectives and in response to these challenging market conditions, in March 2020, the Compensation Committee, in conjunction with Mr. Foran, reviewed the previously approved 2020 base salaries for executive officers and proposed Board compensation. The Compensation Committee and Mr. Foran specifically focused on the impact of COVID-19 and the actions of Saudi Arabia, Russia and other OPEC+ countries on the trading price of our Common Stock.
In light of these developments, the Company was the first in the oil and natural gas industry to publicly announce reductions in executive compensation when Mr. Foran voluntarily agreed to reduce his 2020 base salary by 25% and the Board agreed to reduce their compensation by 25%, too. Our other executive officers also voluntarily agreed to reduce their 2020 base salaries by 20%. Furthermore, in determining the size of 2020 long-term incentive awards for executive officers granted in March 2020, the Compensation Committee and Independent Board used a value of approximately $13 per share—reflecting the trading price of our Common Stock in mid-February before the coronavirus pandemic and precipitous drop in oil prices began to impact the price of our Common Stock—instead of the significantly lower grant date fair value, which approximated $2 per share. The Compensation Committee is continuing to assess whether further changes to our 2020 executive compensation program are warranted.
Benefits
We offer a variety of health and welfare programs to eligible employees, including the Named Executive Officers. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, pharmacy, dental, disability and life insurance. We also have a 401(k) plan for eligible employees, including the Named Executive Officers, to which we contribute 3% of the employee’s eligible compensation, which is subject to limits established by the Code, and have the discretion to contribute up to an additional 4% of the employee’s eligible compensation as adollar-for-dollar matching contribution with respect to his or her elective deferral contributions. The discretionarydollar-for-dollar match is subject to vesting based upon years of service to the Company and the limits on the compensation that may be considered for purposes of calculating matching contributions.under the Code. In addition, we provide long-term care insurance for certain of our executive officers.
Accounting and Tax Considerations
Section 162(m) of the Code limits the deductibility for individual compensation paid to certain covered employees of a corporation exceeding $1.0 million in any taxable year. For taxable years commencing on or before December 31, 2017, there was an exception to this limitation for certain “qualified performance-based compensation.” For taxable years beginning after December 31, 2017, this exemption has been repealed for all but certain grandfathered compensation arrangements that were in effect as of November 2, 2017. Awards under the Incentive Plan were historically structured to comply with this exemption. However, the rules and regulations promulgated under Section 162(m) are complicated and subject to change and the scope of relief for grandfathered arrangements is currently uncertain. As such, there can be no assurance that any compensation awarded or paid in prior years will be fully tax deductible. Furthermore, to maintain flexibility in compensating our executive officers in a manner designed to promote varying corporate goals, we have not adopted a policy requiring all compensation to be tax deductible.
Termination of Employment Arrangements
Employment Agreements
In contemplation of our initial public offering, on August 9, 2011, we entered into employment agreements with Messrs. Foran, Hairford and Lancaster. In March 2014, we entered into an employment agreement with Mr. Adams in substantially the same form as that of Messrs. Foran, Hairford and Lancaster, and effective
2018 Proxy Statement|54 Matador Resources Company 51|2020 Proxy Statement
EXECUTIVE COMPENSATION
|
February 2016 weSeverance and Separation Arrangements
Employment Agreements
We have entered into an employment agreement with Mr. Goodwin in substantially the same form as that of Mr. Adams. The principal difference in Mr. Adams’ and Mr. Goodwin’s employment agreements as compared to the employment agreementswith each of Messrs. Foran, Hairford and Lancaster is that Mr. Adams’ and Mr. Goodwin’s agreements do not include a “modified single trigger” that would have allowed them to receive a “change in control” payment if they terminated their agreements without “good reason” within 30 days prior to or 12 months after a change in control.
our Named Executive Officers. Under the employment agreements, if a termination of employment occurs pursuant to one of the following events:
the Named Executive Officer dies;
the Named Executive Officer is totally disabled;
we mutually agree to end the employment agreement;
we dissolve and liquidate; or
the term of the employment agreement ends,
we will pay the Named Executive Officer the average of his annual bonus, which includesnon-equity incentive compensation, for the prior two years,pro-rated based on the number of complete or partial months completed during the year of termination.
Also, under the employment agreements, if one of the following occurs:
the Named Executive Officer’s employment is terminated other than (i) as set forth above, (ii) by us for just cause or (iii) in connection with a “change in control” as described below; or
the Named Executive Officer terminates his employment for “good reason,”
if the Named Executive Officer is Mr. Foran, we will pay him twice his base salary and twice the average of his annual bonus for the prior two years; if the Named Executive Officer is Messrs. Hairford, Lancaster, Adams or Adams,Goodwin, we will pay him 1.5 times his base salary and 1.5 times the average of his annual bonus for the prior two years; and if the Named Executive Officer is Mr. Goodwin, we will pay him an amount equal to his base salary plus an amount equal to the average of his annual bonus for the prior two years.
Finally, under the employment agreements of Messrs. Foran, Hairford and Lancaster, upon a “changewhich were entered into in control” and2011, if we terminate the Named Executive Officer within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate a Named Executive Officercontrol” without just cause or the Named Executive Officer terminates his employment with or without “good reason,”reason” during such period, we will pay him three times his base salary and three times the average of his annual bonus for the prior two years. These agreements were entered into prior to our initial public offering. At that time, we believed a “modified single trigger” was appropriate given the Company’s size, early stage of development and strong growth aspirations. Since that time, however, we have ceased to use “modified single triggers” in executive employment agreements, and we intend to exclusively use “double triggers” going forward, as we have since 2014. The agreement entered into with Mr. Adams in March 2014 and the agreement entered into with Mr. Goodwin effective February 2016 however, each include a “double trigger” such that upon a “change in control” andif we terminate either executive within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate either executivecontrol” without just cause or he terminates his employment with “good reason,” we will pay Mr. Adams or Mr. Goodwin three times his base salary and three times the average of his annual bonus for the prior two years and we will pay Mr. Goodwin two times his base salary and two times the average of his annual bonus for the prior two years. In addition, if Messrs. Foran, Hairford, Lancaster, Adams or Goodwinany of our Named Executive Officers are terminated or terminate their employment as set forth above in connection with a “change in control,” all equity awards of such Named Executive Officer vest immediately prior to such termination.
52 Matador Resources Company |2018 Proxy Statement
|
For purposesdefinitions of “change in control,” “good reason” and “just cause,” please see the employment agreements, “change in control” is defined as a change in control event for purposesagreement of Section 409A of the Code, which is generally defined as follows:
For purposes of the employment agreements, “good reason” means:
For purposes of the employment agreements, “just cause” means:most recent Annual Report on Form10-K.
Equity Plans
For equity grants under the 2012 Long-Term Plan and its predecessor,the Matador Resources Company 2019 Long-Term Incentive Plan (the “2019 Long-Term Plan,” and, together with the 2012 Long-Term Plan, the “Long-Term Plans”), other than the PSUs, vesting upon a “change in control” for the Named Executive Officers mirrors the terms of their employment agreements.
The PSUs vest upon a “change in control” provisionsbased on performance achieved through the date of such change in the employment agreements and the equity grants under the 2012 Plan and its predecessor help prevent management from being distracted by rumored or actual changescontrol, as it is anticipated that a change in control. The “change in control” provisions provide:control would make achievement of relative total shareholder performance impractical to measure.
20182020 Proxy Statement | Matador Resources Company 5355
EXECUTIVE COMPENSATION
|
The “change in control” provisions in the employment agreements and the equity grants under the Long-Term Plans help prevent management from being distracted by rumored or actual changes in control. The “change in control” provisions provide:
incentives for those Named Executive Officers to remain with us despite the uncertainties of a potential or actual change in control;
assurance of severance payments for terminated Named Executive Officers; and
access to equity compensation after a change in control.
Stock Ownership Guidelines
We have adopted stock ownership guidelines for the following officers in the following designated amounts:
Chairman and Chief Executive Officer—shares equal to five times base salary;
President—shares equal to five times base salary;
Executive Vice Presidents—shares equal to two and 1/2 times base salary;
Senior Vice Presidents—shares equal to two times base salary; and
Vice Presidents and Executive Directors—shares equal to one and 1/2 times base salary.
Each of the foregoingNewly appointed officers has five years from the later of the date of the closing of our initial public offering andhave until the fifth anniversary of his or her appointment as an officer of the Company inwithin which to achieve the stock ownership position. Shares that count toward the stock ownership guidelines include time-lapsetime-based restricted shares that are still restricted and any shares held in trust by the officer or his immediate family over which he has direct beneficial ownership interest.shares. Shares that will not count toward the stock ownership guidelines include shares underlying unexercised stock options, unexercised stock appreciation rights, RSUs that provide for settlement in cash and performance-based awards for which the performance requirements have not been satisfied.
Until each of the above officers reaches the stock ownership level required of his or her position, such officer must hold at least 50% of all “net shares” received through restricted stock or RSU vesting or realized through stock option exercises. For this purpose, “net shares” means all shares retained after applicable withholding of any shares for tax purposes. Messrs. Foran, Hairford, Lancaster, Adams and GoodwinAdditionally, upon the vesting of restricted stock or RSUs or the exercise of stock options, each ownofficer must hold the net shares for a minimum of 12 months following such vesting or exercise, or until his earlier retirement. As of December 31, 2019, each Named Executive Officer owned shares in excess of the applicable minimum requirement set forth in the stock ownership guidelines.guidelines, and Mr. Foran held shares with a value equal to approximately 75 times his 2019 base salary.
Anti-Hedging and Anti-Pledging Policies
Pursuant to the Company’s insider trading policy, the Company prohibits hedging of its securities by directors, officers or employees. Specifically, no such person shall purchase or sell, or make any offer to purchase or offer to sell, derivative securities relating to the Company’s stock, whether or not issued by the Company, or financial instruments that are designed to hedge or offset any decrease in the market value of the Company’s stock (including but not limited to prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engage in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Company equity securities (a) granted to such person by the Company as part of the compensation of such person; or (b) held, directly or indirectly, by such person. The insider trading policy also restricts directors and executive officers from pledging more than 25% of his or her holdings of the Company’s stock without the prior written consent of the Environmental, Social and Corporate Governance Committee.
Strategic Planning and Compensation Committee Report
We have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) ofRegulationS-K and based on such review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Strategic Planning and Compensation Committee,
R. Gaines Baty, Chair
Reynald A. Baribault
Craig T. Burkert
Steven W. Ohnimus
Timothy E. Parker*Parker
Kenneth L. Stewart
5456 Matador Resources Company | 20182020 Proxy Statement
EXECUTIVE COMPENSATION
|
The following table summarizes the total compensation awarded to, earned by or paid to Messrs. Foran, Hairford, Lancaster, Adams and Goodwin for 2017, 20162019, 2018 and 2015.2017. This table and the accompanying narrative should be read in conjunction with the CD&A, which sets forth the objectives and other information regarding our executive compensation program.
Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation | Total | Year | Salary | Bonus(1) | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Wm. Foran | 2017 | $ | 1,000,000 | $ | 950,000 | $ | 3,582,908 | $ | 1,524,990 | $ | 3,000,000 | $ | 22,489 | (5) | $ | 10,080,387 | 2019 | $ | 1,200,000 | $ | — | $ | 4,293,663 | $ | — | $ | 2,510,000 | $ | 24,646 | (5) | $ | 8,028,309 | ||||||||||||||||||||||||||||||||||||||||||||||||
Chairman of the Board and Chief Executive Officer | 2016 | $ | 900,000 | $ | 800,000 | $ | 1,413,450 | $ | 1,292,703 | $ | 1,575,000 | $ | 22,251 | $ | 6,003,404 | 2018 | $ | 1,100,000 | $ | 300,000 | $ | 2,666,659 | $ | 1,333,330 | $ | 1,936,000 | $ | 23,331 | $ | 7,359,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 800,000 | $ | 750,000 | $ | — | $ | 3,586,811 | $ | 1,080,000 | $ | 21,795 | $ | 6,238,606 | 2017 | $ | 1,000,000 | $ | 950,000 | $ | 3,582,908 | $ | 1,524,990 | $ | 3,000,000 | $ | 22,489 | $ | 10,080,387 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew V. Hairford | 2017 | $ | 600,000 | $ | 275,000 | $ | 990,001 | $ | 989,991 | $ | 1,030,000 | $ | 22,802 | (6) | $ | 3,907,794 | 2019 | $ | 700,000 | $ | — | $ | 2,254,174 | $ | — | $ | 1,200,000 | $ | 23,502 | (6) | $ | 4,177,676 | ||||||||||||||||||||||||||||||||||||||||||||||||
President | 2016 | $ | 550,000 | $ | 200,000 | $ | 479,880 | $ | 438,882 | $ | 908,000 | $ | 22,452 | $ | 2,599,214 | 2018 | $ | 660,000 | $ | 100,000 | $ | 1,399,976 | $ | 699,991 | $ | 900,400 | $ | 21,112 | $ | 3,781,479 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 500,000 | $ | 125,000 | $ | — | $ | 682,293 | $ | 563,000 | $ | 22,452 | $ | 1,892,745 | 2017 | $ | 600,000 | $ | 275,000 | $ | 990,001 | $ | 989,991 | $ | 1,030,000 | $ | 22,802 | $ | 3,907,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Lancaster | 2017 | $ | 550,000 | $ | 325,000 | $ | 866,486 | $ | 866,504 | $ | 935,000 | $ | 18,900 | (7) | $ | 3,561,890 | 2019 | $ | 680,000 | $ | — | $ | 2,039,489 | $ | — | $ | 1,100,000 | $ | 19,600 | (7) | $ | 3,839,089 | ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2016 | $ | 475,000 | $ | 250,000 | $ | 372,990 | $ | 341,132 | $ | 784,000 | $ | 18,550 | $ | 2,241,672 | 2018 | $ | 625,000 | $ | 100,000 | $ | 1,266,653 | $ | 633,327 | $ | 850,000 | $ | 19,250 | $ | 3,494,230 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 425,000 | $ | 175,000 | $ | 146,301 | $ | 339,753 | $ | 470,000 | $ | 18,550 | $ | 1,574,604 | 2017 | $ | 550,000 | $ | 325,000 | $ | 866,486 | $ | 866,504 | $ | 935,000 | $ | 18,900 | $ | 3,561,890 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Craig N. Adams | 2017 | $ | 525,000 | $ | 375,000 | $ | 722,008 | $ | 721,990 | $ | 840,000 | $ | 21,181 | (8) | $ | 3,205,179 | 2019 | $ | 660,000 | $ | — | $ | 1,824,804 | $ | — | $ | 1,005,000 | $ | 21,881 | (8) | $ | 3,511,685 | ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President — | 2016 | $ | 475,000 | $ | 350,000 | $ | 372,990 | $ | 341,132 | $ | 665,000 | $ | 20,831 | $ | 2,224,953 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 425,000 | $ | 200,000 | $ | 146,301 | $ | 339,753 | $ | 385,000 | $ | 20,831 | $ | 1,516,885 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and Chief Operating Officer — Land, Legal & Administration | 2018 | $ | 600,000 | $ | 100,000 | $ | 1,133,331 | $ | 566,664 | $ | 790,000 | $ | 21,531 | $ | 3,211,526 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | $ | 525,000 | $ | 375,000 | $ | 722,008 | $ | 721,990 | $ | 840,000 | $ | 21,181 | $ | 3,205,179 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Billy E. Goodwin | 2017 | $ | 500,000 | $ | 100,000 | $ | 587,508 | $ | 587,489 | $ | 800,000 | $ | 18,900 | (7) | $ | 2,593,897 | 2019 | $ | 660,000 | $ | — | $ | 1,824,804 | $ | — | $ | 1,005,000 | $ | 19,600 | (7) | $ | 3,509,404 | ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and | 2016 | $ | 425,000 | $ | 165,000 | $ | 296,655 | $ | 271,310 | $ | 595,000 | $ | 18,550 | $ | 1,771,515 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | (9) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and Chief Operating Officer — Drilling, Completions & Production | 2018 | $ | 575,000 | $ | 50,000 | $ | 999,979 | $ | 499,988 | $ | 840,000 | $ | 19,250 | $ | 2,984,217 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | $ | 500,000 | $ | 100,000 | $ | 587,508 | $ | 587,489 | $ | 800,000 | $ | 18,900 | $ | 2,593,897 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Reflects ad hoc discretionary “Marlan” bonuses awarded by the Independent Board to recognize such Named Executive Officer’s contributions to certain transactions and accomplishments of the Company. As a result of feedback received during shareholder outreach efforts following the 2018 Annual Meeting, the Board has ceased to award its executive officers with such Marlan bonuses. See “—Compensation Discussion and Analysis— |
| (2) | Reflects the grant date fair value of RSUs, PSUs, restricted stock or Common Stock awards, as applicable, computed in accordance with FASB ASC Topic 718. |
| (3) | Reflects the grant date fair value of option awards computed in accordance with FASB ASC Topic 718. Our policy and assumptions made in the valuation of the stock options are contained in Note 2 and Note |
| (4) | Represents awards pursuant to the Amended and Restated Matador Resources Company Annual Incentive |
| (5) | Consists of |
| (6) | Consists of |
| (7) | Reflects 401(k) matching contributions as described in “—Compensation Discussion and Analysis—Benefits.” |
| (8) | Consists of |
20182020 Proxy Statement | Matador Resources Company 5557
EXECUTIVE COMPENSATION
|
Grants of Plan-Based Awards Table
The following table sets forth certain information regardingnon-equity awards granted by the Independent Board pursuant to the 2019 Incentive Plan and stockawards of PSUs and option awardscash-settled RSUs granted by the Independent Board pursuant to the 2012 Long-Term Plan during the year ended December 31, 20172019 to the Named Executive Officers below:
Estimated Future Payouts UnderNon-Equity Incentive | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options(2) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards |
Estimated Future Payouts UnderNon-Equity Incentive |
Estimated Future Payouts | All Other
| Grant Date Fair Value of Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
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Name
| Grant Date
| ($)
| ($)
| ($)
| (# shares)
| (# shares)
| ($/share)
| ($)
| Grant Date
| ($)
| ($)
| ($)
| (#)
| (#)
| (#)
| (# shares) | ($)
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Joseph Wm. Foran |
| —
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| —
| —
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| 3,528,662
|
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| —
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|
| —
|
|
| —
|
|
| —
|
|
| 660,000
|
|
| 1,320,000
|
|
| 2,640,000
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| 2/15/17
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| —
| —
|
| —
|
|
| 55,943
|
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| —
|
|
| —
|
|
| 1,525,006
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| —
|
|
| 144,686
|
|
| 27.26
|
|
| 1,524,990
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 113,379
|
|
| 226,758
|
|
| —
|
|
| 2,267,580
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 6/1/17
|
| —
| —
|
| —
|
|
| 87,757
|
|
| —
|
|
| —
|
|
| 2,057,902
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 113,379
|
|
| 2,026,083
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew V. Hairford
|
| —
|
| —
| —
|
| 2,058,386
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 315,000
|
|
| 630,000
|
|
| 1,260,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| 36,317
|
|
| —
|
|
| —
|
|
| 990,001
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 59,524
|
|
| 119,048
|
|
| 1,190,480
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| —
|
|
| 93,927
|
|
| 27.26
|
|
| 989,991
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 59,524
|
|
| 1,063,694
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Lancaster
|
| —
|
| —
| —
|
| 2,058,386
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 289,000
|
|
| 578,000
|
|
| 1,156,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| 31,786
|
|
| —
|
|
| —
|
|
| 866,486
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 53,855
|
|
| 107,710
|
|
| —
|
|
| 1,077,100
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| —
|
|
| 82,211
|
|
| 27.26
|
|
| 866,504
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 53,855
|
|
| 962,389
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Craig N. Adams
|
| —
|
| —
| —
|
| 2,058,386
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 264,000
|
|
| 561,000
|
|
| 1,056,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| 26,486
|
|
| —
|
|
| —
|
|
| 722,008
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 96,372
|
|
| —
|
|
| 963,720
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| —
|
|
| 68,500
|
|
| 27.26
|
|
| 721,990
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 861,084
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Billy E. Goodwin
|
| —
|
| —
| —
|
| 2,058,386
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 264,000
|
|
| 561,000
|
|
| 1,056,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| 21,552
|
|
| —
|
|
| —
|
|
| 587,508
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 96,372
|
|
| —
|
|
| 963,720
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/15/17
|
| —
| —
|
| —
|
|
| —
|
|
| 55,739
|
|
| 27.26
|
| �� |
| 587,489
|
|
| 2/13/19
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 861,084
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | See “—Compensation Discussion and Analysis— |
| (2) | Represents PSUs that provide for settlement of between 0% and 200% of the total target shares subject to the award based on achievement of a relative total shareholder return performance metric over a three-year performance period from January 1, 2019 through December 31, 2021. If our total shareholder return over such performance period is negative, no more than 100%, the target level, of the PSUs may vest. See “—Compensation Discussion and Analysis—2019 Long-Term Incentive Compensation.” The |
| (3) | Represents RSUs that provide for settlement in cash. See “—Compensation Discussion and Analysis—2019 Long-Term Incentive Compensation.” |
5658 Matador Resources Company | 20182020 Proxy Statement
EXECUTIVE COMPENSATION
|
Outstanding Equity Awards at December 31, 20172019
The following table summarizes the total outstanding option awards at December 31, 20172019 for each Named Executive Officer:
Option Awards
| Option Awards
| |||||||||||||||||||||||||||||||||||||||
Name
| Number of Securities Underlying Unexercised Stock Options (#) Exercisable
| Number of Securities Underlying Unexercised Stock Options (#) Unexercisable
| Option Exercise Price
| Option Expiration Date
| Number of Securities Underlying Unexercised Stock Options (#) Exercisable
| Number of Securities Underlying Unexercised Stock Options (#) Unexercisable
| Option Exercise Price
| Option Expiration Date
| ||||||||||||||||||||||||||||||||
Joseph Wm. Foran
|
| 10,147
|
|
| 10,147
|
| $
| 19.71
|
|
| 2/10/19
|
|
| 228,571
|
|
| —
|
| $
| 22.01
|
|
| 1/20/20
|
| ||||||||||||||||
|
| 34,188
|
|
| 34,188
|
| $
| 23.40
|
|
| 3/6/19
|
| |||||||||||||||||||||||||||||
|
| —
|
|
| 228,571
|
| $
| 22.01
|
|
| 1/20/20
|
|
| 105,000
|
|
| —
|
| $
| 21.66
|
|
| 2/26/20
|
| |||||||||||||||||
|
| —
|
|
| 105,000
|
| $
| 21.66
|
|
| 2/26/20
|
|
| 27,451
|
|
| —
|
| $
| 27.72
|
|
| 4/29/20
|
| |||||||||||||||||
|
| 13,725
|
|
| 13,726
|
| $
| 27.72
|
|
| 4/29/20
|
|
| 15,465
|
|
| —
|
| $
| 15.00
|
|
| 2/18/21
|
| |||||||||||||||||
|
| —
|
|
| 235,465
|
| $
| 15.00
|
|
| 2/18/21
|
|
| 96,457
|
|
| 48,229
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||
|
| —
|
|
| 144,686
|
| $
| 27.26
|
|
| 2/14/23
|
|
| 35,161
|
|
| 70,324
|
| $
| 29.68
|
|
| 2/15/24
|
| |||||||||||||||||
Matthew V. Hairford
|
| 10,000
|
|
| —
|
| $
| 9.00
|
|
| 2/21/20
|
|
| 62,857
|
|
| —
|
| $
| 22.01
|
|
| 1/20/20
|
| ||||||||||||||||
|
| 58,750
|
|
| —
|
| $
| 8.21
|
|
| 3/7/18
|
|
| 10,000
|
|
| —
|
| $
| 9.00
|
|
| 2/21/20
|
| |||||||||||||||||
|
| 2,537
|
|
| 2,537
|
| $
| 19.71
|
|
| 2/10/19
|
|
| 5,882
|
|
| —
|
| $
| 27.72
|
|
| 4/29/20
|
| |||||||||||||||||
|
| 23,077
|
|
| 23,077
|
| $
| 23.40
|
|
| 3/6/19
|
|
| 79,942
|
|
| —
|
| $
| 15.00
|
|
| 2/18/21
|
| |||||||||||||||||
|
| —
|
|
| 62,857
|
| $
| 22.01
|
|
| 1/20/20
|
|
| 62,618
|
|
| 31,309
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||
|
| 2,941
|
|
| 2,941
|
| $
| 27.72
|
|
| 4/29/20
|
|
| 18,459
|
|
| 36,920
|
| $
| 29.68
|
|
| 2/15/24
|
| |||||||||||||||||
|
| —
|
|
| 79,942
|
| $
| 15.00
|
|
| 2/18/21
|
| |||||||||||||||||||||||||||||
|
| —
|
|
| 93,927
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||||||||||||||
David E. Lancaster
|
| 15,000
|
|
| —
|
| $
| 9.00
|
|
| 2/21/20
|
|
| 30,000
|
|
| —
|
| $
| 22.01
|
|
| 1/20/20
|
| ||||||||||||||||
|
| 62,500
|
|
| —
|
| $
| 8.21
|
|
| 3/7/18
|
| |||||||||||||||||||||||||||||
|
| 3,805
|
|
| 3,805
|
| $
| 19.71
|
|
| 2/10/19
|
| |||||||||||||||||||||||||||||
|
| 10,684
|
|
| 10,684
|
| $
| 23.40
|
|
| 3/6/19
|
|
| 15,000
|
|
| —
|
| $
| 9.00
|
|
| 2/21/20
|
| |||||||||||||||||
|
| —
|
|
| 30,000
|
| $
| 22.01
|
|
| 1/20/20
|
|
| 3,922
|
|
| —
|
| $
| 27.72
|
|
| 4/29/20
|
| |||||||||||||||||
|
| 1,961
|
|
| 1,961
|
| $
| 27.72
|
|
| 4/29/20
|
|
| 62,137
|
|
| —
|
| $
| 15.00
|
|
| 2/18/21
|
| |||||||||||||||||
|
| —
|
|
| 62,137
|
| $
| 15.00
|
|
| 2/18/21
|
|
| 54,807
|
|
| 27,404
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||
|
| —
|
|
| 82,211
|
| $
| 27.26
|
|
| 2/14/23
|
|
| 16,701
|
|
| 33,404
|
| $
| 29.68
|
|
| 2/15/24
|
| |||||||||||||||||
Craig N. Adams
|
| 3,171
|
|
| 3,171
|
| $
| 19.71
|
|
| 2/10/19
|
|
| 30,000
|
|
| —
|
| $
| 22.01
|
|
| 1/20/20
|
| ||||||||||||||||
|
| 12,900
|
|
| 12,901
|
| $
| 23.40
|
|
| 3/6/19
|
|
| 3,922
|
|
| —
|
| $
| 27.72
|
|
| 4/29/20
|
| |||||||||||||||||
|
| —
|
|
| 30,000
|
| $
| 22.01
|
|
| 1/20/20
|
|
| 62,137
|
|
| —
|
| $
| 15.00
|
|
| 2/18/21
|
| |||||||||||||||||
|
| 1,961
|
|
| 1,961
|
| $
| 27.72
|
|
| 4/29/20
|
|
| 45,666
|
|
| 22,834
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||
|
| —
|
|
| 62,137
|
| $
| 15.00
|
|
| 2/18/21
|
|
| 14,943
|
|
| 29,888
|
| $
| 29.68
|
|
| 2/15/24
|
| |||||||||||||||||
|
| —
|
|
| 68,500
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||||||||||||||
Billy E. Goodwin
|
| 5,516
|
|
| 5,517
|
| $
| 22.66
|
|
| 3/16/19
|
|
| 49,419
|
|
| —
|
| $
| 15.00
|
|
| 2/18/21
|
| ||||||||||||||||
|
| —
|
|
| 34,286
|
| $
| 22.01
|
|
| 1/20/20
|
|
| 37,159
|
|
| 18,580
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||
|
| —
|
|
| 49,419
|
| $
| 15.00
|
|
| 2/18/21
|
|
| 13,185
|
|
| 26,371
|
| $
| 29.68
|
|
| 2/15/24
|
| |||||||||||||||||
|
| —
|
|
| 55,739
|
| $
| 27.26
|
|
| 2/14/23
|
| |||||||||||||||||||||||||||||
The following table provides the vesting dates for unvested stock options as of December 31, 2019:
Vesting Date
| Joseph Wm. Foran
| Matthew V. Hairford
| David E. Lancaster
| Craig N. Adams
| Billy E. Goodwin
| ||||||||||||||||||||
2/15/20
|
| 48,229
|
|
| 31,309
|
|
| 27,404
|
|
| 22,834
|
|
| 18,580
|
| ||||||||||
2/16/20
|
| 35,162
|
|
| 18,460
|
|
| 16,702
|
|
| 14,944
|
|
| 13,185
|
| ||||||||||
2/16/21
|
| 35,162
|
|
| 18,460
|
|
| 16,702
|
|
| 14,944
|
|
| 13,186
|
| ||||||||||
Total Unvested Stock Options
|
| 118,553
|
|
| 68,229
|
|
| 60,808
|
|
| 52,722
|
|
| 44,951
|
| ||||||||||
20182020 Proxy Statement | Matador Resources Company 5759
EXECUTIVE COMPENSATION
|
The following table provides the vesting dates for unvested stock options as of December 31, 2017:
Vesting Date
| Joseph Wm. Foran
| Matthew V. Hairford
| David E. Lancaster
| Craig N. Adams
| Billy E.
| |||||||||||||||
1/21/18
|
| 228,571
|
|
| 62,857
|
|
| 30,000
|
|
| 30,000
|
|
| 34,286
|
| |||||
2/11/18
|
| 10,147
|
|
| 2,537
|
|
| 3,805
|
|
| 3,171
|
|
| —
|
| |||||
2/15/18
|
| 48,228
|
|
| 31,309
|
|
| 27,403
|
|
| 22,833
|
|
| 18,579
|
| |||||
2/27/18
|
| 105,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||
3/7/18
|
| 34,188
|
|
| 23,077
|
|
| 10,684
|
|
| 12,901
|
|
| —
|
| |||||
3/17/18
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 5,517
|
| |||||
2/15/19
|
| 48,229
|
|
| 31,309
|
|
| 27,404
|
|
| 22,833
|
|
| 18,580
|
| |||||
2/19/19
|
| 235,465
|
|
| 79,942
|
|
| 62,137
|
|
| 62,137
|
|
| 49,419
|
| |||||
4/30/19
|
| 13,726
|
|
| 2,941
|
|
| 1,961
|
|
| 1,961
|
|
| —
|
| |||||
2/15/20
|
| 48,229
|
|
| 31,309
|
|
| 27,404
|
|
| 22,834
|
|
| 18,580
|
| |||||
Total Unvested Stock Options
|
| 771,783
|
|
| 265,281
|
|
| 190,798
|
|
| 178,670
|
|
| 144,961
|
| |||||
The following table summarizes the total outstanding restricted stock awards, cash-settled RSUs and PSUs at December 31, 20172019 for each Named Executive Officer:
| Stock Awards | |||||||||||||||||||||||||||||||||
| Stock Awards | |||||||||||||||||||||||||||||||||
Name
| Number of Shares or Units of Stock That Have Not Vested (#)
| Market Value of Shares or Stock That
| Award Type | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Unearned Shares, Other Rights That Have Not Vested (#) | Equity Incentive Plan of Unearned Shares, Other Rights That Have Not Vested(1) ($) | ||||||||||||||||||||||||||
Joseph Wm. Foran
|
| 158,720
|
| $
| 4,940,954
|
|
| Restricted stock; RSUs
|
|
| 191,925
|
|
| 3,448,892
|
|
| —
|
|
| —
|
| ||||||||||||
|
| PSUs
|
|
| —
|
|
| —
|
|
| 113,379
|
|
| 2,037,421
|
| |||||||||||||||||||
Matthew V. Hairford
|
| 72,463
|
| $
| 2,255,773
|
|
| Restricted stock; RSUs
|
|
| 103,076
|
|
| 1,852,276
|
|
| —
|
|
| —
|
| ||||||||||||
|
| PSUs
|
|
| —
|
|
| —
|
|
| 59,524
|
|
| 1,069,646
|
| |||||||||||||||||||
David E. Lancaster
|
| 70,076
|
| $
| 2,181,466
|
|
| Restricted stock; RSUs
|
|
| 92,903
|
|
| 1,669,467
|
|
| —
|
|
| —
|
| ||||||||||||
|
| PSUs
|
|
| —
|
|
| —
|
|
| 53,855
|
|
| 967,774
|
| |||||||||||||||||||
Craig N. Adams
|
| 61,267
|
| $
| 1,907,242
|
|
| Restricted stock; RSUs
|
|
| 82,472
|
|
| 1,482,022
|
|
| —
|
|
| —
|
| ||||||||||||
|
| PSUs
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 865,902
|
| |||||||||||||||||||
Billy E. Goodwin
|
| 41,329
|
| $
| 1,286,572
|
|
| Restricted stock; RSUs
|
|
| 77,832
|
|
| 1,398,641
|
|
| —
|
|
| —
|
| ||||||||||||
|
| PSUs
|
|
| —
|
|
| —
|
|
| 48,186
|
|
| 865,902
|
| |||||||||||||||||||
| (1) | The market value presented is based upon achievement of the 50th percentile under the PSU award agreements with 100% of target units vesting, calculated based upon the closing price of our Common Stock on December 31, 2019 of $17.97 per share. |
The following table provides the vesting dates for restricted stock, RSUs and PSUs outstanding as of December 31, 2017:2019:
Vesting Date
| Joseph Wm. Foran
| Matthew V. Hairford
| David E. Lancaster
| Craig N. Adams
| Billy E.
| |||||||||||||||
1/21/18
|
| —
|
|
| —
|
|
| 4,375
|
|
| 4,375
|
|
| —
|
| |||||
2/11/18
|
| —
|
|
| 1,269
|
|
| 1,903
|
|
| 1,586
|
|
| —
|
| |||||
2/15/18
|
| 18,647
|
|
| 12,105
|
|
| 10,595
|
|
| 8,828
|
|
| 7,184
|
| |||||
3/7/18
|
| 8,547
|
|
| 2,885
|
|
| 5,342
|
|
| 2,150
|
|
| —
|
| |||||
4/30/18
|
| —
|
|
| —
|
|
| 1,804
|
|
| 1,804
|
|
| —
|
| |||||
2/15/19
|
| 18,648
|
|
| 12,106
|
|
| 10,595
|
|
| 8,829
|
|
| 7,184
|
| |||||
2/19/19
|
| 94,230
|
|
| 31,992
|
|
| 24,866
|
|
| 24,866
|
|
| 19,777
|
| |||||
2/15/20
|
| 18,648
|
|
| 12,106
|
|
| 10,596
|
|
| 8,829
|
|
| 7,184
|
| |||||
Total Unvested Shares
|
| 158,720
|
|
| 72,463
|
|
| 70,076
|
|
| 61,267
|
|
| 41,329
|
| |||||
Vesting Date
| Award Type
| Joseph Wm. Foran
| Matthew V. Hairford
| David E. Lancaster
| Craig N. Adams
| Billy E. Goodwin
| ||||||||||||||||||
2/13/20
|
| RSUs
|
|
| 37,793
|
|
| 19,841
|
|
| 17,951
|
|
| 16,062
|
|
| 16,062
|
| ||||||
2/15/20
|
| Restricted stock
|
|
| 18,648
|
|
| 12,106
|
|
| 10,596
|
|
| 8,829
|
|
| 7,184
|
| ||||||
2/16/20
|
| Restricted stock
|
|
| 29,949
|
|
| 15,723
|
|
| 14,226
|
|
| 12,728
|
|
| 11,231
|
| ||||||
2/13/21
|
| RSUs
|
|
| 37,793
|
|
| 19,841
|
|
| 17,952
|
|
| 16,062
|
|
| 16,062
|
| ||||||
2/16/21
|
| Restricted stock
|
|
| 29,949
|
|
| 15,723
|
|
| 14,226
|
|
| 12,729
|
|
| 11,231
|
| ||||||
12/31/21
|
| PSUs
| (1)
|
| 113,379
|
|
| 59,524
|
|
| 53,855
|
|
| 48,186
|
|
| 48,186
|
| ||||||
2/13/22
|
| RSUs
|
|
| 37,793
|
|
| 19,842
|
|
| 17,952
|
|
| 16,062
|
|
| 16,062
|
| ||||||
Total Unvested Shares and Units
|
| 305,304
|
|
| 162,600
|
|
| 146,758
|
|
| 130,658
|
|
| 126,018
|
| |||||||||
| (1) | The date shown reflects the end of the performance period established by the PSU award agreements. The PSUs vest upon the Compensation Committee’s certification of the achievement of the performance goal, which must occur within 60 days of completion of the performance period. The number of units shown assumes achievement of the 50th percentile under the PSU award agreements with 100% of target units vesting. |
5860 Matador Resources Company | 20182020 Proxy Statement
EXECUTIVE COMPENSATION
|
Option Exercises and Stock Vested
The following table provides information on the stock options exercised and stock awards that vested for each Named Executive Officer during 2017:2019:
Option Awards
| Stock Awards
| Option Awards
| Stock Awards
| |||||||||||||||||||||||||||||||||||||
Name
| Number of Shares
| Value
| Number of
| Value
| Number of Shares Acquired on Exercise (#)
| Value Realized on Exercise
| Number of Shares Acquired on Vesting (#)
| Value Realized on Vesting
| ||||||||||||||||||||||||||||||||
Joseph Wm. Foran(1)
|
| 255,208
|
| $
| 3,914,818
|
|
| 127,757
|
| $
| 2,959,502
|
| ||||||||||||||||||||||||||||
Joseph Wm. Foran
|
| 220,000
|
| $
| 769,600
|
|
| 142,827
|
| $
| 2,700,509
|
| ||||||||||||||||||||||||||||
Matthew V. Hairford
|
| 91,250
|
| $
| 1,630,163
|
|
| 25,000
|
| $
| 563,500
|
|
| —
|
| $
| —
|
|
| 59,821
|
| $
| 1,135,628
|
| ||||||||||||||||
David E. Lancaster
|
| 105,000
|
| $
| 1,887,400
|
|
| 30,000
|
| $
| 676,200
|
|
| —
|
| $
| —
|
|
| 49,686
|
| $
| 944,268
|
| ||||||||||||||||
Craig N. Adams
|
| 40,000
|
| $
| 726,800
|
|
| 15,000
|
| $
| 338,100
|
|
| —
|
| $
| —
|
|
| 46,423
|
| $
| 881,260
|
| ||||||||||||||||
Billy E. Goodwin
|
| 18,750
|
| $
| 276,375
|
|
| —
|
| $
| —
|
|
| —
|
| $
| —
|
|
| 38,191
|
| $
| 725,404
|
| ||||||||||||||||
Mr. Foran or his affiliate paid the Company a total of $3.3 million to cover the exercise price of the 220,000 options noted above and paid a total of $0.3 million in related tax liability. No tax liability was incurred by Mr. Foran upon the vesting of the restricted stock noted above because, upon each grant of restricted stock, Mr. Foran made elections under the Code to be taxed upon grant instead of upon vesting. Pursuant to such elections, upon the granting of such restricted stock awards in 2016, 2017 and 2018, Mr. Foran paid a total of $1.0 million in taxes attributable to the restricted stock that vested in 2019.
Potential Payments upon Termination or Change in Control
2012 Plan and its PredecessorLong-Term Incentive Plans
Equity awards under the 2012 Plan and its predecessorLong-Term Plans, other than the PSUs, vest upon a “change in control” for the Named Executive Officers according to the terms of their employment agreements described below.
Pursuant to the terms of the PSU award agreements, upon a “change in control,” the Named Executive Officer would vest in the number of PSUs that would have otherwise vested based on the Company’s performance through an abbreviated performance period that ends immediately prior to the effective date of such change in control.
For definition of “change in control,” please see the 2012 Long-Term Plan and 2019 Long-Term Plan, as applicable, each of which is included as an exhibit to the Company’s most recent Annual Report on Form10-K.
Employment Agreements
As described under “Termination of Employment“—Compensation Discussion and Analysis—Severance and Separation Arrangements—Employment Agreements,” in contemplation of our initial public offering, on August 9, 2011, we entered into employment agreements with Messrs. Foran, Hairford and Lancaster. In addition, in March 2014, we entered into an employment agreement with Mr. Adams, and effective February 2016, we entered into an employment agreement with Mr. Goodwin. We amended Mr. Goodwin’s employment agreement in August 2018. The principal difference in Mr. Adams’ and Mr. Goodwin’s employment agreements as compared to the employment agreement of Messrs. Foran, Hairford and Lancaster is that Mr. Adams’ and Mr. Goodwin’s agreements do not include a “modified single trigger” that would have allowed them to receive a “change in control” paymentseverance if they terminated their agreements without “good reason” within 30 days prior to or 12 months after a change in control. Pursuant to the terms of the employment agreements, we may be required to make certain payments to one or more of our Named Executive Officers upon the occurrence of certain events resulting in such Named Executive Officer’s
2020 Proxy Statement| Matador Resources Company 61
EXECUTIVE COMPENSATION |
termination. The employment agreements do not provide forgross-ups for excise taxes on severance or other payments in connection with a change in control. For a detailed description of the events that may trigger such payments, see “—Compensation Discussion and Analysis—Termination of EmploymentSeverance and Separation Arrangements—Employment Agreements.”
The employment agreements each contain anon-disclosure of confidential information provision that requires each Named Executive Officer to maintain, both during and after employment, the confidentiality of information used by such Named Executive Officer in the performance of his job duties.
Additionally, each of the employment agreements contains anon-competition provision, pursuant to which Messrs. Foran, Hairford, Lancaster, Adams and Goodwin have agreed that: (i) for six months following termination by us for total disability, or by such Named Executive Officer for good reason, or (ii) for 12 months, or 24 months with respect to Mr. Goodwin, following termination (a) by us for just cause, (b) by such Named Executive Officer other than for good reason or (c) in connection with a change in control, such Named Executive Officer shall not, without our prior written
2018 Proxy Statement| Matador Resources Company 59
|
consent (not to be unreasonably withheld if the Named Executive Officer’s employment is terminated by the Named Executive Officer other than for good reason), directly or indirectly: (x) invest in (other than investments in publicly-owned companies which constitute not more than 1% of the voting securities of any such company) a competing business with significant assets in the restricted area (each as defined below), or (y) participate in a competing business as a manager, employee, director, officer, consultant, independent contractor or other capacity or otherwise provide, directly or indirectly, services or assistance to a competing business in a position that involves input into or direction of such competing business’s decisions within the restricted area.
For purposes of the employment agreements:
“competing business” means any person or entity engaged in oil and natural gas exploration, development, production and acquisition activities;
“significant assets” means oil and natural gas reserves with an aggregate fair market value of $25 million or more; and
“restricted area” means aone-mile radius of any oil and natural gas reserves held by us as of the end of the Named Executive Officer’s employment, plus any county or parish where we have significant assets as of the end of the Named Executive Officer’s employment. See the
For definitions of “change in control,” “good reason” and “just cause” set forth in “—Compensation Discussion and Analysis—Terminationcause,” please see the employment agreement of Employment Arrangements—Employment Agreements.”
Furthermore, other than Mr. Foran’s employment agreement, each employment agreement contains an anti-solicitationanon-solicitation provision, pursuant to which, during the restricted periods described above, subject to certain exceptions, Messrs. Hairford, Lancaster, Adams and Goodwin shall not, without our prior written consent, solicit for employment or a contracting relationship, or employ or retain any person who is or has been, within six months prior to such time, employed by or engaged as an individual independent contractor by us or our affiliates or induce or attempt to induce any such person to leave his or her employment or independent contractor relationship with us or our affiliates.
For the Named Executive Officer to receive any severance payments described below for termination by us without just cause, by the Named Executive Officer for good reason or, following a change in control, by us without cause or by the Named Executive Officer with good reason, with respect to Mr. Adams and Mr. Goodwin, or with or without good reason, with respect to Messrs. Foran, Hairford and Lancaster, the Named Executive Officer must comply with the applicablenon-disclosure,non-competition andnon-solicitation provisions described above.
62 Matador Resources Company |2020 Proxy Statement
EXECUTIVE COMPENSATION |
Finally, as a condition to receiving any severance payments and other payments under their respective employment agreements, each Named Executive Officer is required to execute a separation agreement and release in favor of us.
60 Matador Resources Company |2018 Proxy Statement
|
To describe the payments and benefits that are triggered for each event of termination, we have created the following table estimating the payments and benefits that would be paid to each Named Executive Officer under each element of our compensation program assuming that such Named Executive Officer’s employment agreement terminated on December 31, 2017,2019, the last day of our 20172019 fiscal year. In all cases, the amounts were valued as of December 31, 2017,2019, based upon, where applicable, $31.13$17.97 per share (the closing price of our Common Stock on December 29, 2017, the last trading day of the year)such date). The amounts in the table below are calculated as of December 31, 20172019 pursuant to SEC rules and are not intended to reflect actual payments that may be made. Actual payments that may be made willwould be based on the dates and circumstances of the applicable event.
Payment Upon Termination
| Payment Upon Change in Control or Termination
| |||||||||||||||||||||||||||||||||||||||
Named Executive Officer
| Category of Payment
| Upon Death or Total Disability(1)
| Upon Mutual Agreement or Dissolution/ Liquidation(1)
| Termination by Us Without Just Cause or by Named Executive Officer for Good Reason(1)
| Termination Following a Change in Control Without Cause or by Named Executive Officer With or Without Good Reason(2)
| |||||||||||||||||||||||||||||||||||
Category of Payment
| Upon Death or Total Disability(1)
| Upon Mutual Agreement or Dissolution/ Liquidation(1)
| Termination by Us Without Just Cause or by Named Executive Officer for Good Reason(1)
| Termination Following a Executive Officer With or Without Good Reason(2)
| Change in
| |||||||||||||||||||||||||||||||||||
Joseph Wm. Foran
| Salary
| $
| —
|
| $
| —
|
| $
| 2,000,000
| (3)
| $
| 3,000,000
| (4)
| Salary
| $
| —
|
| $
| —
|
| $
| 2,400,000
| (4)
| $
| 3,600,000
| (5)
| $
| —
|
| |||||||||||
| Bonus
|
| 2,373,000
| (6)
|
| 2,373,000
| (6)
|
| 4,746,000
| (7)
|
| 7,119,000
| (8)
|
| —
|
| |||||||||||||||||||||||||
| Vesting equity(9)
| ||||||||||||||||||||||||||||||||||||||||
| Restricted stock
|
| —
|
|
| —
|
|
| —
|
|
| 1,411,472
|
|
| —
|
| |||||||||||||||||||||||||
| Bonus
|
| 3,162,500
| (5)
|
| 3,162,500
| (5)
|
| 6,325,000
| (6)
|
| 9,487,500
| (7)
| RSUs
|
| —
|
|
| —
|
|
| —
|
|
| 2,037,421
|
|
| —
|
| ||||||||||||
| Vesting equity
|
| —
|
|
| —
|
|
| —
|
|
| 12,804,814
| (8)
| PSUs
|
| —
|
|
| —
|
|
| —
|
|
| 2,037,421
|
|
| 2,037,421
|
| ||||||||||||
| Total
| $
| 3,162,500
|
| $
| 3,162,500
|
| $
| 8,325,000
|
| $
| 25,292,314
|
| Total
| $
| 2,373,000
|
| $
| 2,373,000
|
| $
| 7,146,000
|
| $
| 16,205,313
|
| $
| 2,037,421
|
| ||||||||||||
Matthew V. Hairford
| Salary
| $
| —
|
| $
| —
|
| $
| 900,000
| (9)
| $
| 1,800,000
| (4)
| Salary
| $
| —
|
| $
| —
|
| $
| 1,050,000
| (10)
| $
| 2,100,000
| (5)
| $
| —
|
| |||||||||||
| Bonus
|
| 1,206,500
| (5)
|
| 1,206,500
| (5)
|
| 1,809,750
| (10)
|
| 3,619,500
| (7)
| Bonus
|
| 1,100,200
| (6)
|
| 1,100,200
| (6)
|
| 1,650,300
| (11)
|
| 3,300,600
| (8)
|
| —
|
| ||||||||||||
| Vesting equity
|
| —
|
|
| —
|
|
| —
|
|
| 4,699,378
| (8)
| Vesting equity(9)
| |||||||||||||||||||||||||||
| Total
| $
| 1,206,500
|
| $
| 1,206,500
|
| $
| 2,709,750
|
| $
| 10,118,878
|
| Restricted stock
|
| —
|
|
| —
|
|
| —
|
|
| 782,629
|
|
| —
|
| ||||||||||||
| RSUs
|
| —
|
|
| —
|
|
| —
|
|
| 1,069,646
|
|
| —
|
| |||||||||||||||||||||||||
| PSUs
|
| —
|
|
| —
|
|
| —
|
|
| 1,069,646
|
|
| 1,069,646
|
| |||||||||||||||||||||||||
| Total
| $
| 1,100,200
|
| $
| 1,100,200
|
| $
| 2,700,300
|
|
| 8,322,521
|
| $
| 1,069,646
|
| |||||||||||||||||||||||||
David E. Lancaster
| Salary
| $
| —
|
| $
| —
|
| $
| 825,000
| (9)
| $
| 1,650,000
| (4)
| Salary
| $
| —
|
| $
| —
|
| $
| 1,020,000
| (10)
| $
| 2,040,000
| (5)
| $
| —
|
| |||||||||||
| Bonus
|
| 1,147,000
| (5)
|
| 1,147,000
| (5)
|
| 1,720,500
| (10)
|
| 3,441,000
| (7)
| Bonus
|
| 1,025,000
| (6)
|
| 1,025,000
| (6)
|
| 1,537,500
| (11)
|
| 3,075,000
| (8)
|
| —
|
| ||||||||||||
| Vesting equity
|
| —
|
|
| —
|
|
| —
|
|
| 3,908,220
| (8)
| Vesting equity(9)
| |||||||||||||||||||||||||||
| Total
| $
| 1,147,000
|
| $
| 1,147,000
|
| $
| 2,545,500
|
| $
| 8,999,220
|
| Restricted stock
|
| —
|
|
| —
|
|
| —
|
|
| 701,693
|
|
| —
|
| ||||||||||||
Craig N. Adams
| Salary
| $
| —
|
| $
| —
|
| $
| 787,500
| (9)
| $
| 1,575,000
| (4)
| |||||||||||||||||||||||||||
| RSUs
|
| —
|
|
| —
|
|
| —
|
|
| 967,774
|
|
| —
|
| |||||||||||||||||||||||||
| Bonus
|
| 1,115,000
| (5)
|
| 1,115,000
| (5)
|
| 1,672,500
| (10)
|
| 3,345,000
| (7)
| ||||||||||||||||||||||||||||
| PSUs
|
| —
|
|
| —
|
|
| —
|
|
| 967,774
|
|
| 967,774
|
| |||||||||||||||||||||||||
| Vesting equity
|
| —
|
|
| —
|
|
| —
|
|
| 3,590,831
| (8)
| ||||||||||||||||||||||||||||
| Total
| $
| 1,025,000
|
| $
| 1,025,000
|
| $
| 2,557,500
|
| $
| 7,752,241
|
| $
| 967,774
|
| |||||||||||||||||||||||||
| Total
| $
| 1,115,000
|
| $
| 1,115,000
|
| $
| 2,460,000
|
| $
| 8,510,831
|
| ||||||||||||||||||||||||||||
Billy E. Goodwin
| Salary
| $
| —
|
| $
| —
|
| $
| 500,000
| (11)
| $
| 1,000,000
| (3)
| |||||||||||||||||||||||||||
| Bonus
|
| 830,000
| (5)
|
| 830,000
| (5)
|
| 830,000
| (5)
|
| 1,660,000
| (6)
| ||||||||||||||||||||||||||||
| Vesting equity
|
| —
|
|
| —
|
|
| —
|
|
| 2,658,827
| (8)
| ||||||||||||||||||||||||||||
| Total
| $
| 830,000
|
| $
| 830,000
|
| $
| 1,330,000
|
| $
| 5,318,827
|
| ||||||||||||||||||||||||||||
2020 Proxy Statement| Matador Resources Company 63
EXECUTIVE COMPENSATION |
Payment Upon Change in Control or Termination
| ||||||||||||||||||||||
Category of Payment
| Upon Death or Total Disability(1)
| Upon Mutual Agreement or Dissolution/ Liquidation(1)
| Termination by Us Without Just Cause or by Named Executive Officer for Good Reason(1)
| Termination Following a Executive Officer With or Without Good Reason(2)
| Change in
| |||||||||||||||||
Craig N. Adams
| Salary
| $
| —
|
| $
| —
|
| $
| 990,000
| (10)
| $
| 1,980,000
| (5)
| $
| —
|
| ||||||
| Bonus
|
| 947,500
| (6)
|
| 947,500
| (6)
|
| 1,421,250
| (11)
|
| 2,842,500
| (8)
|
| —
|
| |||||||
| Vesting equity(9)
| ||||||||||||||||||||||
| Restricted stock
|
| —
|
|
| —
|
|
| —
|
|
| 616,119
|
|
| —
|
| |||||||
| RSUs
|
| —
|
|
| —
|
|
| —
|
|
| 865,902
|
|
| —
|
| |||||||
| PSUs
|
| —
|
|
| —
|
|
| —
|
|
| 865,902
|
|
| 865,902
|
| |||||||
| Total
| $
| 947,500
|
| $
| 947,500
|
| $
| 2,411,250
|
| $
| 7,170,423
|
| $
| 865,902
|
| |||||||
Billy E. Goodwin | Salary
| $
| —
|
| $
| —
|
| $
| 990,000
| (10)
| $
| 1,980,000
| (5)
| $
| —
|
| ||||||
| Bonus
|
| 947,500
| (6)
|
| 947,500
| (6)
|
| 1,421,250
| (11)
|
| 2,842,500
| (8)
|
| —
|
| |||||||
| Vesting equity(9)
| ||||||||||||||||||||||
| Restricted stock
|
| —
|
|
| —
|
|
| —
|
|
| 532,739
|
|
| —
|
| |||||||
| RSUs
|
| —
|
|
| —
|
|
| —
|
|
| 865,902
|
|
| —
|
| |||||||
| PSUs
|
| —
|
|
| —
|
|
| —
|
|
| 865,902
|
|
| 865,902
|
| |||||||
| Total
| $
| 947,500
|
| $
| 947,500
|
| $
| 2,411,250
|
| $
| 7,087,043
|
| $
| 865,902
|
| |||||||
| (1) | Amounts due upon death, total disability, mutual agreement, dissolution or liquidation, termination by us without cause or termination by Named Executive Officer for good reason are payable in a lump sum on the 60th day following the date of termination unless otherwise required by Section 409A of the Code. |
| (2) | Amounts due following a change in control are payable in a lump sum on the date which immediately follows six months from the date of termination or, if earlier, within 30 days |
| (3) | Pursuant to the terms of the PSU award agreements, upon a “change in control,” the Named Executive Officer would vest in the number of PSUs that would have otherwise vested based on the Company’s performance through an abbreviated performance period that ends immediately prior to the effective date of such change in control. The amount shown assumes achievement of the 50th percentile under the PSU award agreements with 100% of target units vesting. |
| (4) | Represents two times such Named Executive Officer’s base salary as of the termination date. |
Represents three times such Named Executive Officer’s base salary as of the termination date. |
Represents the average annual amount of bonuses, including pursuant to the 2016 Incentive Plan and the 2019 Incentive Plan, paid to such Named Executive Officer with respect to the prior two calendar years |
Represents two times an amount equal to the average annual amount of bonuses, including pursuant to the 2016 Incentive Plan and the 2019 Incentive Plan, paid to such Named Executive Officer with respect to the prior two calendar years |
2018 Proxy Statement| Matador Resources Company 61
| (8) | ||
|
| Represents three times an amount equal to the average annual amount of bonuses, including pursuant to the 2016 Incentive Plan and the 2019 Incentive Plan, paid to such Named Executive Officer with respect to the prior two calendar years |
The employment agreements provide for accelerated and full vesting of unvested incentive awards held by |
Represents 1.5 times such Named Executive Officer’s base salary as of the termination date. |
Represents 1.5 times an amount equal to the average annual amount of bonuses, including pursuant to the 2016 Incentive Plan and |
6264 Matador Resources Company | 20182020 Proxy Statement
CHIEF EXECUTIVE OFFICER PAY RATIO
|
CHIEF EXECUTIVE OFFICER PAY RATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K (“Item 402(u)”), we are providing the following information regarding the ratio of the annual total compensation of our median-compensated employee (as described below) and that of our Chairman and Chief Executive Officer, Joseph Wm. Foran. We believe that the pay ratio reflected below is a reasonable estimate calculated in a manner consistent with Item 402(u).
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pursuant to SEC rules, we are using the same median employee for the 2019 pay ratio calculation as we used in our 2018 pay ratio disclosure. We determined that there were no changes to our employee population or compensation arrangements in 2019 that we reasonably believe would significantly affect our pay ratio disclosure if the same median employee was used. While our total employee population grew by approximately 17% from December 31, 2018 to December 31, 2019, we determined that such growth would not have a significant impact on our pay ratio disclosure, as our new employees were proportionately distributed among all compensation levels. Pursuant to Item 402(u), we identified the median-compensated employee of all our employees (other than the CEO)Mr. Foran) using our employee population as of December 15, 2017,2018, which consisted of 213259 employees (all of which are located in the United States), and using a compensation measure of total cash compensation, consisting of total base pay and bonuses earned during the year ended December 31, 2017.2018. The compensation measure was consistently applied to all employees. Compensation was annualized on a straight-line basis for employees who did not work all of 2017.2018.
Using this methodology,After identifying the median-compensated employee using the consistently applied compensation measure, we identified a median employee. In calculating such employee’s annual total compensation, we determined that the selected employee’s compensation was anomalous because the employee did not receive an award of equity in 2017, although such awards are widely distributed throughout the Company. As permitted by Item 402(u), due to the anomalous nature of the employee originally identified, we substituted another employee with substantially similar compensation. We then calculated that employee’s 2019 annual total compensation in the same manner as the Named Executive Officers’ total compensation, as reported in the Summary Compensation Table.
For 2017,2019, the annual total compensation of our median-compensated employee was $179,344,$198,876, and the annual total compensation of Mr. Foran was $10,080,387,$8,028,309, as reported in the Summary Compensation Table. Based on this information, for 2017,2019, the ratio of Mr. Foran’s annual total compensation to the annual total compensation of our median-compensated employee was estimated to be 5640 to 1.
2018 Proxy Statement| Matador Resources Company 63
|
Name
| Fees Earned or Paid in Cash ($)
| Stock Awards(1) ($)
| All Other Compensation ($)
| Total ($)
| ||||||||||||||||
Reynald A. Baribault(2)
|
| 190,000
|
|
| 206,713
|
|
| —
|
|
| 396,713
|
| ||||||||
R. Gaines Baty
|
| 80,750
|
| 206,713 |
| —
|
|
| 287,463
|
| ||||||||||
Craig T. Burkert
|
| 88,000
|
|
| 206,713
|
|
| —
|
|
| 294,713
|
| ||||||||
William M. Byerley
|
| 89,000
|
|
| 206,713
|
|
| —
|
|
| 295,713
|
| ||||||||
Joe A. Davis(3)
|
| 28,500
|
|
| 67,818
|
|
| —
|
|
| 96,318
|
| ||||||||
Julia P. Forrester(4)
|
| 63,161
|
|
| 172,610
|
|
| —
|
|
| 235,771
|
| ||||||||
David M. Laney(5)
|
| 24,500
|
|
| 67,818
|
|
| —
|
|
| 92,318
|
| ||||||||
Gregory E. Mitchell(6)
|
| 46,250
|
|
| 206,713
|
|
| —
|
|
| 252,963
|
| ||||||||
Steven W. Ohnimus
|
| 88,000
|
|
| 206,713
|
|
| —
|
|
| 294,713
|
| ||||||||
David M. Posner(7)
|
| 38,532
|
|
| 133,978
|
|
| —
|
|
| 172,510
|
| ||||||||
Carlos M. Sepulveda, Jr.(8)
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||
Kenneth L. Stewart(9)
|
| 60,411
|
|
| 172,610
|
|
| —
|
|
| 233,021
|
| ||||||||
George M. Yates
|
| 69,000
|
|
| 206,713
|
|
| —
|
|
| 275,713
|
| ||||||||
|
| |||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
64 Matador Resources Company |2018 Proxy Statement
|
During 2017, we targeted ournon-employee directors’ compensation to approximate the 50th percentile of the Peer Group. During 2017, our director compensation program was comprised of the following:
If a director was appointed or elected to the Board at any time following the 2017 Annual Meeting but prior to the 2018 Annual Meeting, such director would be granted the applicable percentage of the 2017 RSU Award detailed below, effective on the date of such director’s appointment: (i) if a director was appointed or elected to the Board within 90 days after the 2017 Annual Meeting, such director would be entitled to receive 100% of the 2017 RSU Award; (ii) if a director was appointed or elected to the Board more than 90 days but 180 or fewer days after the 2017 Annual Meeting, such director would be entitled to receive 75% of the 2017 RSU Award; (iii) if a director was appointed or elected to the Board more than 180 days but 270 or fewer days after the 2017 Annual Meeting, such director would be entitled to receive 50% of the 2017 RSU Award; and (iv) if a director was appointed or elected to the Board more than 270 days after the 2017 Annual Meeting but prior to the 2018 Annual Meeting, such director would be entitled to receive 25% of the 2017 RSU award.
For 2017, the Board determined that, effective immediately prior to the election of the nominees for director at the 2017 Annual Meeting, the vesting of all outstanding RSUs granted prior to the 2017 Annual Meeting and held by a director or advisor to the Board (the “Outstanding RSUs”) would be automatically accelerated immediately prior to, and on the date of, such director’s or advisor’s termination of service (as defined in, and pursuant to, the 2012 Plan), subject to certain exceptions.
In addition, we reimbursed our directors for travel, lodging and related expenses incurred in attending Board and committee meetings.
20182020 Proxy Statement | Matador Resources Company 65
DIRECTOR COMPENSATION
|
Name
| Fees Earned or Paid in Cash ($)
| Stock Awards(1) ($)
| All Other Compensation ($)
| Total ($)
| ||||||||||||||||
Reynald A. Baribault(2)
|
| 194,500
|
|
| 134,992
|
|
| —
|
|
| 329,492
|
| ||||||||
R. Gaines Baty(3)
|
| 122,167
|
|
| 134,992
|
|
| —
|
|
| 257,159
|
| ||||||||
Craig T. Burkert
|
| 70,000
|
|
| 134,992
|
|
| —
|
|
| 204,992
|
| ||||||||
William M. Byerley
|
| 99,167
|
|
| 134,992
|
|
| —
|
|
| 234,159
|
| ||||||||
Matthew P. Clifton
|
| 70,581
|
|
| 134,992
|
|
| —
|
|
| 205,573
|
| ||||||||
Monika U. Ehrman(4)
|
| 23,081
|
|
| 133,061
|
|
| —
|
|
| 156,142
|
| ||||||||
Julia P. Forrester Rogers
|
| 84,000
|
|
| 134,992
|
|
| —
|
|
| 218,992
|
| ||||||||
Timothy E. Parker(5)
|
| 132,667
|
|
| 134,992
|
|
| —
|
|
| 267,659
|
| ||||||||
David M. Posner
|
| 84,000
|
|
| 134,992
|
|
| —
|
|
| 218,992
|
| ||||||||
Kenneth L. Stewart
|
| 85,000
|
|
| 134,992
|
|
| —
|
|
| 219,992
|
| ||||||||
| (1) | All stock awards represent RSUs with a value based on the fair market value of the RSUs on the date of grant. RSUs granted for 2019-2020 service vest immediately prior to the election of the nominees for director at the 2020 Annual Meeting. See “—Compensation for 2019-2020.” As of December 31, 2019, each individual who served as a director during 2019 held the following outstanding unvested stock awards, all of which were RSUs. |
Name | Outstanding Stock Awards | ||||
Reynald A. Baribault | 9,279 | ||||
R. Gaines Baty | 9,279 | ||||
Craig T. Burkert | 9,279 | ||||
William M. Byerley | 9,279 | ||||
Matthew P. Clifton | 8,395 | ||||
Monika U. Ehrman | 8,395 | ||||
Julia P. Forrester Rogers | 8,862 | ||||
Timothy E. Parker | 8,395 | ||||
David M. Posner | 8,395 | ||||
Kenneth L. Stewart | 8,862 | ||||
| (2) | Mr. Baribault served as lead independent director until July 2019. The lead independent director receives an additional cash retainer of $100,000 annually. |
| (3) | Mr. Baty began serving as deputy lead independent director in July 2019. The deputy lead independent director receives an additional cash retainer of $50,000 annually. |
| (4) | Ms. Ehrman was appointed to the Board on August 30, 2019. Because she was appointed to the Board within 90 days after the 2019 Annual Meeting, upon her appointment, Ms. Ehrman was granted 8,395 RSUs, the same number of RSUs that the other members of the Board received on June 6, 2019. The difference in value shown in the table is attributable to the difference in the fair market value of the RSUs on the respective dates of grant. |
| (5) | Mr. Parker began serving as lead independent director in July 2019. The lead independent director receives an additional cash retainer of $100,000 annually. |
66 Matador Resources Company |2020 Proxy Statement
DIRECTOR COMPENSATION |
Compensation for 2018-20192019-2020
BeginningFor the period commencing at the 20182019 Annual Meeting and until the 20192020 Annual Meeting, ournon-employee directors’ compensation program has been adjustedwas as set forth below based on the increased size of the Company and the corresponding demands on directors’ time:below:
annual cash retainer of $60,000;
cash meeting fee of $1,000 per day for each day of Board and committee service;
the chair of each of the Audit Committee will receivebelow committees received the following additional, annual cash retainer:
Committee | Retainer | ||||
Operations and Engineering | $ | 50,000 | |||
Prospect | $ | 50,000 | |||
Audit | $ | 35,000 | |||
Strategic Planning and Compensation | $ | 35,000 | |||
Environmental, Social and Corporate Governance | $ | 15,000 | |||
Nominating | $ | 15,000 | |||
Capital Markets and Finance | $ | 15,000 | |||
Marketing and Midstream | $ | 15,000 | |||
the lead independent director received an additional cash retainer of $25,000 annually and $100,000;
the chairs of the Strategic Planning and Compensation Committee, the Corporate Governance Committee, the Nominating Committee, the Operations and Engineering Committee, the Prospect Committee and the Capital Markets and Finance Committee will each receivedeputy lead independent director received an additional cash retainer of $15,000 annually;$50,000; and
If a director iswas appointed or elected to the Board at any time following the 20182019 Annual Meeting but prior to the 20192020 Annual Meeting, such director will bewas granted the applicable percentage of the 20182019 RSU Award detailed below, effective on the date of such director’s appointment: (i) if a director iswas appointed or elected to the Board within 90 days after the 20182019 Annual Meeting, such director shall bewas entitled to receive 100% of the 20182019 RSU Award; (ii) if a director iswas appointed or elected to the Board more than 90 days but 180 or fewer days after the 20182019 Annual Meeting, such director shall bewas entitled to receive 75% of the 20182019 RSU Award; (iii) if a director iswas appointed or elected to the Board more than 180 days but 270 or fewer days after the 20182019 Annual Meeting, such director shall bewas entitled to receive 50% of the 20182019 RSU Award; and (iv) if a director iswas appointed or elected to the Board more than 270 days after the 20182019 Annual Meeting but prior to the 20192020 Annual Meeting, such director shall bewas entitled to receive 25% of the 20182019 RSU award. As noted in the table above, Ms. Ehrman was appointed to the Board within 90 days after the 2019 Annual Meeting and received 100% of the 2019 RSU Award.
In addition, we will continue to reimburse our directors for travel, lodging and related expenses incurred in attending Board and committee meetings.
In early 2020, following the outbreak of the novel coronavirus, orCOVID-19, along with the actions of OPEC+ and their effects on oil supply and demand, oil prices and our stock price, the Board voluntarily agreed to reduce its compensation by 25%. The Board is continuing to assess its compensation and has not yet determined all of the components or amounts of the 2020-2021 non-employee director compensation program.
2020 Proxy Statement| Matador Resources Company 67
DIRECTOR COMPENSATION |
Director Stock Ownership Guidelines
TheOurnon-employee directors are expected to follow our voluntary stock ownership guidelines fornon-employee directors. Within three years of becoming a director, eachnon-employee director will beis expected to own $250,000 of Common Stock and continue to hold such shares while serving as a director. AllAs of December 31, 2019, all directors ownowned in excess of $250,000 of Common Stock or expectwere on track to meet the guidelines within three years of becoming a director. Shares that count toward the stock ownership guidelines include RSUs and any shares held in trust by the director or his or her immediate family over which he or she has direct beneficial ownership interest. Shares that do not count toward the stock ownership guidelines include shares underlying unexercised stock options and unexercised stock appreciation rights.RSUs.
Our advisors to the Board are compensated with stock and/or cash awards based upon meeting attendance or as otherwise agreed to pursuant to consulting arrangements with such advisors. We reimburse our advisors to the Board for travel, lodging and related expenses incurred in attending Board and committee meetings. The advisor compensation of Ms. Lewis and Messrs.Mr. Rolfe and King is the same as for thenon-employee directors as described above.
6668 Matador Resources Company | 20182020 Proxy Statement
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
|
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2017.2019.
